Well, we’ve just raised the US Debt “Limit” to $16,400,000,000,000.00 and rising. (Yes, it’s really $16.39xxx but I’m rounding; not that it matters.)
This is why I find Republicans “sucky”
Sporadically I have folks assert I’m some kind of hard core conservative Republican. I protest that I’m not, and trot out a list of things where my beliefs are clearly in the “independent” camp and not at all in line with the Republicans; but it does no good. I get painted as Republican anyway. No, I don’t have a problem with many Republican positions (mostly financial / business ones) just like I’m often fine with various Democratic positions (mostly social ones – like women ought to own their own bodies and having a war on drug users is kind of stupid). But, at the end of the day, I find both parties more “sucky” than not. I am, absolutely, an Independent. I pick MY position on each issue, I do not subscribe to ANY party “platform” and find the whole “planks” metaphor tiresome. In this case, it’s the Republicans I’m blaming.
I can hear someone thinking: “But it’s Obama and the Democrats that wanted to raise the debt ‘limit’ and the House Republicans voted against it!” And that is exactly why.
Think back to the end of 2011. We had a “debt limit crisis” and congress could neither vote to RAISE it, nor vote to LEAVE IT AS IS. It was a potential SHTF moment, and they could only duck. Congress appointed a Stuporcommittee to hide behind. Even number of Dimocrats and Republicrims. They “cut a deal”. The deal raised the debt limit “just this once” (or so it was painted in the news of that time). The reality is what we see today. The “deal” had some Kabuki Theatre in it. The Republicans sold their soul for theatre.
Today we have the Senate voting to raise the debt “limit”. A few weeks ago we had the House voting NOT to raise the debt limit. The Senate is dominated by Dimocrats. The House is dominated by Republicrims. They were acting as Republicans, prior to the “debt deal”; now we see their true colors. The reason is “the deal”. You see, prior to “the deal” it took both houses voting to spend to raise the debt “limit”. The voters put Republicans in the House for the purpose of controlling spending and putting a brake on the more radical leanings of “Obama and the Dims”. So what did they do? They voted to give away that power and authority. In “the deal”, they chose to have the theatre of voting against the debt “limit” rise, while knowing full well debt would rise. It was a way to provide a back-door debt limit rise agreement, while getting the theatre of a show-vote against it.
So, you see, the Republicrims happily conspired with the Dimocrats to keep on spending like crazy and to hand all control on that spending to the President and the Senate in exchange for being able to posture as though they were really against it.
For lying and abuse of process, the Repulicrims get the blame for this debt increase. (And any future ones that happen under this same set of rules).
Look, you Bozo’s (no offense meant to honest hard working clowns…) you were elected to have a spine and vote not to run, hide, pretend, play kabuki theatre, and most certainly not to LIE to the public. And if you think this is anything other than a flat out lie then you are prone to self delusion as well. Knowing full well that the senate is Democrat dominated, you handed THEM the keys to the vault because you wanted that outcome.
So just watch the various Republicrims posture and complain about those Horrible Spendy Democrats – and every single time remember that it was the Republicans who handed them the keys to vault and said “Here, you drive; I’d rather sit in the back and complain about what’s on the radio.”
In related news, Gold is rising nicely…
Has a nice chart of gold. It shows a new “buy” signal as of some week or two ago and is now above the moving averages.
Here’s the live chart. You can also see that Silver is taking off even faster:
In related news, The Fed announced that until 2014 they are going to hold yields down near nothing. (Formally they said to expect the Fed Funds Rate to hang around 1/4% for the foreseeable future, that being about 2014).
THAT means that ‘savers’ can expect to be screwed for at least 2 more years and inflation in everything you buy, but not in your wages to pay for it, will continue. (Thus the jump in all things metal and real).
Yes, we’re all “Speaking Japanese” now. Back a few decades ago Japan tried the “Keep central bank funds rate near zero” strategy. It resulted in what is euphemistically called “The Lost Decade”… But hey, who needs to learn from the past or from watching others. We’re absolutely certain that “This Time Is Different” and “We are better and brighter” than they were.
So, OK, “Never Fight The Fed” and The Fed has said it’s a Risk On world and that the dollar is not going to hold value longer term. We know that the Euro is also in for a long rough ride. That points to “other currencies” and other locations and it points to Real Assets and Things With Yield.
I’ll be cooking up a longer posting over the weekend, but for now what all this means in summary is: Look at metals and minerals (all of them), oils and energy stocks, land and REITS, and ANYTHING with a large and stable dividend. “Resource Currencies” such as the Canadian and Australian Dollar have an advantage (though you still have to watch out for home grown stupidity by THEIR governments – so pick Canada over Australia right now) as will more out of the way places like New Zealand (that has risen from 50 cents / $NZ to 80 cents (US) per $NZ already). It also argues for Russia doing better (modulo THEIR “sovereign risk” issues – and that they have a ‘flaky customer base’ in the Euro zone right now…) and for places that are producers of resources in general to benefit (so Chile has a nice future, as does Brazil – if THEY can reduce their urge to Socialism and their new more socialist President can be limited).
At any rate, the summary is “risk on world” and “assets & dividends”. Stocks tend to rise then (though often not enough to overcome the incipient inflation) but I’m expecting the “real stuff” to do better. With Treasuries at fractional percents for the foreseeable future, expect things like utilities and tobaccos with high dividends to benefit. Wisdom Tree has a nice line of ETFs with a dividend focus and that would be a reasonable place to start looking.
All in all, we have a generally “Progressive” government bent at the moment, a clear willingness to bugger the $Dollar and raid the piggy banks of the nation for the benefit of the government, and The Fed is happy to be complicit as are the Repulicans. So time for a Real Assets bias and a OUTUS Dividends bias (Out Of The US) or at a minimum a bias to dividends in the US that are inflation protected.
Sidebar On Energy
Natural Gas started the week at about $2.20 and rose to about $2.5 before falling again. This is incredibly cheap. This will make production of chemicals in the USA relatively cheap and also will push toward using more natural gas for things like electricity generation and trucking. There will be many ‘plays’ develop in this area, but one is CLNE the T.Boone Pickens company that is building natural gas gas stations and doing conversions of long haul trucking to natural gas. That chart shows a new run taking off too:
Realize that this can be a fairly volatile stock, but it is likely to grow long term (while the wobbles can also be traded). So “buy the dips” and expect that any oil shock will also reflect here (in either direction).
Here is a chart of the chemical names. DD is Dupont. DOW is Dow Chemical. EMN is Eastman Chemical. Vs. GLD and SPY as benchmarks.
So, is everything all rosy now? Nope. Wage growth is still problematic and hiring is still not doing well. Overall we have a lot of risks still in front of us. This is NOT a broad endorsement of all stocks. For example, Panama is expanding the Panama canal to bypass the rails (for carry of goods from China to the East Coast). As that completes, California ports will “take a hit”. (Gee, folks looking for ways to avoid California costs and taxes… I wonder why… /sarcoff>)
So in a year or three, rails will suffer some lost haulage and we’re likely to see some reduced long haul trucking as well. But that will be a few years out. For now the Rails are hauling coal to ship to China and the long haul truckers are eying cheaper natural gas as fuel.
OK, enough for today, more when I do the next WSW. For now you can look at the last one, and “click through” it to the charts in the infrastructure postings to survey “what’s hot and what’s not”. While the ‘news flow’ is generally about the potential for a ‘dip’ soon as things have run up a bit off a bottom: Remember the rule about bottoms… Price crosses the SMA stack then returns to touch it from the top side. That’s the safest buy point. I’ll buy a partial position on the expectation of a crossover (as a trade) then can double it if the position performs as expected and we have the SMA stack crossover. If it’s already had a crossover and is NOT at the SMA stack (but above it), you can still do the ‘scaling in’ wiht 1/2 a position now (so if it just keeps running you have some position) but if it returns to the SMA stack you ‘fill out the position’ then with a buy of the other 1/2. The general market rule is “buy the dips, sell the rips”; but sometimes the “rips” can be ripping for a fairly long time. Right NOW the fast money traders are bidding things up on The Fed news, and I’d expect a bit of a dip in a few days, but remember too that at the end of each month “new money” flows in from folks with investment plans at work. Buying now and selling in the first few days of February would be a reasonable trade expectation. In any case, exact timing can come from reading the charts. What we know is that real stuff is going to beat bonds and $US for the next couple of years.