Thursday, March 06, 2008

Two out of Three (thus far this week) aint bad

Last Sunday (in previous post) I made three predictions for the week ahead.

1) I stated we would probably see Silver break the $20 mark
2) I predicted Gold would likely break the $1,000 mark
3) I felt strongly that Equities would fall below Key Support levels

Well, thus far (I still have 1 day to go) I'm two for three:

Silver Broke $20 the very next day after my post:

Gold is still flirting w/the $1K mark. Lets see what tomorrow brings

DOW has fallen through key downside support (support was 12,060); next downside support at 11,630 -- then the bottom falls out

S&P broke below key downside support (was 1,316);
next downside support at 1,270 -- then the bottom falls out

Two bonus charts follow -- for shits and grins, as they both follow nicely with my long-term dollar sacrificing/hyper-inflationary scenario:

US Dollar Index has fallen off a cliff --Lowest EVER

Oil is reaching for the sky! -- Highest EVER!!




Andrea said...

I'm a stay at home mom of 4 small boys and my husband and I have been watching to economy fairly closley (and enjoying your blog - thank you!) and are in agreement of the future economic earthquake to come. Aside from buying as much silver as we can afford (gold is too much!), what do you recommend to prepare for the times ahead and how long do you think it will last??
Should we be preparing to grow our own food and stock up on items to barter with (toilet paper, etc.)? In your opinion, what is the time frame before it all hits the fan?? I've already noticed that the 10lb bag of flour I normally buy went from $4 to $8.18!! Is now the time to stock up or do you think a hyperinflationary economy is still a few years away??

Randy said...


Thanks for the kind words--glad you enjoy it.

I think we are merely seeing the first wave here. Eventually, the Fed and US Gvt will resort to bank, housing, bond and financial system bailouts/monetization schemes. That is when the fireworks will really begin...

Additionally, we still have a 3% FFR today. We'll easily see below 2% by the end of this year and possibly below 1% next. This is going to kill the US Dollar!

Should you stock up? We'll, I really don't think prices are going lower, so if you have the cash and storage space, I think it's probably quite prudent to do so.

Should we prepare to grow food? World food supplies are at a 50 year low and demand is increasing. Might be a good idea.

Honestly, I really don't know how bad this thing is going to get, but I do know that Inflation will rage and the deep recession/potential depression will be the most difficult experience many of us will ever experience in our lifetimes.

I just hope we are able to keep essential services and social order throughout.


Anonymous said...

woman running the bakery said that the cost of flour has doubled, sugar and other supplies are up!

stay-at-home mom of 4 boys is buying silver!

Ben Jones describes foreclosures exceeding sales in California. CNN says home equity just dropped below 50% first time since 1945.

Housing market in Ottawa is still strong, sales increasing, moderate price increases. Over 350 cm (=137 inches) of snow so far with another 50 cm this weekend.

God bless America.

45north said...

anonymous9:07 is me

Todd Zimish said...

Hello all,
Great blog Randy. I've caught myself checking it a lot lately.
In relation to what Andrea was writing about, I also believe our standards of living are going to change over the next 3 years or so. But, we shouldn't just focus on the potential negatives. In our business we have been getting phenomenal deals on rental properties. We have more maintenance work than we've had in 4 years and will be adding another person today (I hope). We will have to get back to some basics to make ends meet. We will continue gardening and will actually try to have some backyard chickens. People kinda think I'm crazy I think but I'd rather be safe than sorry. I guess what I'm saying is that we should try to look at things from a different point of view and take advantage of these wonderful times our gov't is thrusting upon us.
Have a good one!

Randy said...

Thanks Todd,

Regarding your comment: "But, we shouldn't just focus on the potential negatives."

Personally, I'm trying to open eyes here. I believe the masses are still (for the most part) living in fantasyland and most are completely oblivious to what is starting to take hold. Without knowledge/advice, millions will be woefully unprepared when the economic shit-storm hits.

I have to agree with you--better crazy and prepared than complacent and hungry.

Later, and thanks again... Randy


I guess not


another ruff week.