[With debt spinning wildly out of control and the States threatening to revolt against the tyranny of Washington, we asked some frequent contributors to the Rick’s Picks forum how they thought the nation would look five years from now.  In the essay below, John Skerencac finds these times too volatile to predict, other than to say that some very dramatic changes are surely coming. On the positive side, he sees a nascent revival of America’s manufacturing sector and a trend toward fiscal austerity. But if we fail, he says, there’s always the “Mad Max” option. RA]

Rick was nice enough to ask me to write a short essay stating my view of what the world will look like five years from now. Perhaps with enough of us engaging in an intelligent exchange of ideas, we might help each other make better decisions about where to allocate our resources. First, in my opinion, Congress will continue to ignore the ever growing budget deficit until outside forces compel them to take action. Scenarios for this include:

• Enough States stand up to D.C. and make it obvious that the votes are there to bring down the Federal government via Constitutional Convention or 10th Amendment nullification.
• The Federal Reserve’s three-card monte game of buying Treasuries somehow comes undone, causing an interest rate spike that creates havoc in the economy.
• The world finally repudiates the Dollar as a reserve currency, leaving us no choice but to make draconian cuts.

…..read “The Positive Side” HERE

I have a good friend named John who has a very poignant expression when things look bleak and markets rally, as soon as he gets short.  He will say to me, “Hey don’t worry.  It’s all good,” sardonically making light of those making money on the long side when he (and I) think the market is staring into the abyss.  The magic of Mr. Market’s discounting process can be extremely frustrating.

All you have to do to forecast markets is get inside the heads of every individual player and understand his rationale and irrational side…that’s all.  According to F.J. Chu, from his book, “Paradigm Lost,” he reveals how easy this game really is…

The unique and fascinating nature of the markets is due to the centrality of Being—the mind of the investor, many investors, and in its totality the mind of the market.  Its uniqueness has to do with the way the investor stands out within time an in relation to time.  In every trade (or every click of the mouse) the past, present, and future all converge in one instant in one physical space.  The unique character of each investor’s mind—in infinite variations of reason and emotion, fear and greed—finds its expression in the cascade of market prices. 

We know that Mr. Market, through the minds of all these individual players, is continuously discounting what we know:

– Japan disaster
– Libya civil war
– Egypt unknown
– Ireland banking problems
– Greece debt
– Portugal debt
– China growth deceleration 
– Emerging market inflation
– US money madness
– Somali pirates

…..read more HERE

Exploration Firing On All Cylinders

I’ve been getting a lot of flack in the press … from some readers … an even some of my subscribers for remaining short-term bearish on the metals.

Hardly surprising, when you consider that the vast majority of investors and analysts get most markets wrong, the majority of the time … buying way too often near highs, and selling out near lows. Especially when they’re so emotional about markets like precious metals.

So today, I want to give you even more details on why I am bearish on the precious metals now. But please keep in mind that on a long-term basis, I am more bullish on precious metals and commodities, in general, than ever before!

For the time being, though, I repeat my warnings: The recent excitement and accelerated move up in the precious metals is fraught with dangers. Soon, they will tank hard, and many investors will take a shellacking.

Reasons …

First, on a yearly basis, even the strongest bull markets rarely move up more than 11 years in a row on an annual closing basis, without taking a major pause.

old’s previous bear market bottomed in July 1999 at a closing low of $252.80. Counting 11 years forward means gold’s first major annual closing high should have occurred in 2010. And that’s precisely what happened.

In other words, on a closing basis, gold fulfilled an 11-year cycle high in 2010. Gold’s bull market will last much longer, as long as 21 years, but not without a major pause occurring on the tail end of the first 11-year move up.

So even though gold has now made a new intra-year 2011 high, odds strongly favor that we will see lower prices in the months ahead. The same applies to silver.

Second, gold and silver are extremely overbought on both the monthly and weekly charts.

Consider this weekly chart of gold as an example.

….view chart & more commentary & charts HERE

http://www.grandich.com/2011/03/live-chicken-speaks/