Morning Audibles

December 1st... Momo Monday I guess... But the S&P did close November below TNTSNBN, so, as Carl Spackler (and perhaps ahab) would be fond of saying "We have that going for us"...

I want to say, I'm thankful for all the thoughts (and debate, sort of) on what was "supposedly" the INFLATION/DEFLATION issue last evening (which is a topic that is unavoidable from time to time)...

What I liked best (and why I'm devoting a thread topic to it), is that it occurs to me that when well informed people end up in this discussion, it evolves into a multi-facted reasoning campaign by all parties... It is IMPORTANT that I said "evolves" there (not "de-volves")... Rather than speak hypothetically here, I'm going to go back to yesterdays thread (AMEN-RA's CORNER), and bullet point some of the things I liked)...

- wunsacon (12:19)... I'm not going to paste your whole comment here... But I think you framed what I'm trying to say here... That the words "inflation" and "deflation" mean different things to different people... So at the end of the day, people can spill a lot of words identidying their POV as to how they see these things affecting their lives, and the world as they see it... Then, someone else can talk about something rather different... In the end, the "story" that each one has can play out in just the way they see it... It's like scripting out, or handicapping a football game... In the end, you "see it" playing out a certain way... It may actually end up being played that way, but the outcome you predicted (which team covered the spread, and which didn't) may end up different, even though the script ran true)...

Anyway... If anyone missed the thread comments (and has time), I'd recommend going back and reading the various points... I'm going to clarify some of my views here... That were not expressed directly

- Many of you have perhaps been reading lately, that CV has been becoming MORE BULLISH on PM's lately (especially silver)... I want to point out that it's VERY DIFFICULT for me to have this posture (because I also like to use "technical analysis" - and most signs are pointing to these PRICES (in gold & silver) as being rich at the moment... Bottom line?... Yes, I think there will be a doozy of a correction (especially silver), but I'm wondering, now, from WHERE that correction might start... I can't help but sensing that, going forward, say, a decade, the chart isn't simply "setting itself up" for an even larger move in the future... I feel it's catching up on lost time (pointing the way - so to speak)... To make a comparison, I got some gold in 2004/5... When markets got crazy in 2008, and gold dipped back in the $600's, I'd considered getting more then... Then came $800's... Then $1,000... Well, I'm still waiting for that "correction" that never seems to want to come... So it has me wondering about silver (which, to me, still has some "catch-up" to play in its traditional PRICE relationship with gold  - something that goes back thousands of years)...

- My interest in PM's has NOTHING TO DO with either inflation or deflation... It simply has to do with... I think these prices are going to go up... In the process, they'll "correct" as well... Without getting into any arguments about it, I think if someone "non-chalantly" bought gold (or silver) in 1999 during the dot com rage (and buried it in the ground and forgot about it), they'd be a lot happier TODAY than someone who tried to trade stocks, or flip houses)... Even better, they voided all those transaction taxes...

- My interest in PM's DOES have to do with the fact that they are easy to BARTER with across time (because generally, the market will make a universal attempt to fix a price on these, and more importantly, they are generally people who might want to OBTAIN them from you at any given time)... THAT'S WHY THEY HAVE VALUE (BECAUSE THERE ALWAYS SEEM TO BE PEOPLE WHO WANT THEM - whether they're Sumerians, Egyptians, King Solomon, Templars, FDR, or Joe Schmoe)... OTOH - & as it turns out, people DON'T ALWAYS seem to want to have equity shares in "pets.com", junk bonds, or even HOUSES for crying out loud...

- You want to OWN what people want to OWN... It seems crazy, I know, that people WANT TO OWN NFLX & AAPL shares at the moment... I'm fairly sure that the "staying power" of the "wanting to own" those two issues won't be as long as either gold or silver (which has gone on as long as civilized man has existed)...

- What's interesting, now... Is that the banks (who have their hands involved in controlling $$ and the flow of money - basically DON'T WANT YOU TO OWN either gold or silver)... Their "bets" lean the other way... They'd prefer that the prices of these things fall... That is an interesting dynamic (because the banks were willing participants in just about all OTHER types of asset bubbles (like stocks & housing), where they could participate in the illusion of wealth by "loaning you the money" for a house, or allowing you to buy stocks on margin (where they were bigger whales at the point of market tops and could profit by going the other way as soon as the last guy was in)... The biggest nightmare of the banks are people off the street NOT BORROWING to obtain physical gold & silver... Instead, simply obtaining it from vendors...

- If one can extrapolate the logic that the Fed is doing its QE2 maneuvering in an effort to bolster asset prices... (Note: that's not a difficult extrapolation because Bernanke & Greenspan have basically "said it")... Then, for me, there's NO CONFIDENCE that ANY asset class has any value at all... I don't care if POMO operations, and the like, have any artificial effect whatsoever on markets... What's MORE interesting to me is the idea that, if TPTB "think" this is what's needed... Then basically they're TERRIFIED of a collapse... That "terror" they feel gets tossed about on blogs (such as this one), but I can all but guarantee you that hardly ANYONE has gone to any lengths to prepare themselves for what would happen if the bottom were to drop out...

- So I've come to the conclusion that NO MATTER WHAT (and no matter how people bitch about their "freedoms")... Basically, to a man, most are on board with what levers the Fed and central bankers are pulling... I don't blame people for thinking that way... Many, have kids, & families and such that would really take an unprepared hit if this LIFESUPPORT were to be removed... It may effect people in ways that they'd never even considered... Their mothers & fathers (or elderly relatives), who count on pensions & social security, may suddenly become destitute... So add a few more people to your list of individuals to be concerned about... Most TRADERS here see this as, perhaps, an opportunity... But let me tell you, removing this life support from the Fed would put a serious crimp into those operations...

- Now take that argument to the next level... If people are carping (yet are "silently" on board with what the Fed is doing - and let me tell you, the likelihood is that anyone NOT NAMED "Grizzly Adams" is probably on board with some sort of airbag system in the car)... Then there is some "hypocrisy" going on... I'll let that be... But my first set of plans, then, needs to be "how do I protect myself in the "die by a thousand paper cuts" scenario?...

- That, I believe, becomes a PRICE issue... Why? Because for more than 30 years, "growth" seemed to magically be obtained by financial engineering... If the "market" is not going to permit winners & losers in that form of capitalism, then the "market" is going to have to go back to the old fashioned way of GROWTH through the fruits of production... In a planet of 6 billion (and growing), that requires a lut of STUFF... Speculators will always want to "own" that stuff (and there are hardly any ways left for the small guy to stay ahead of price increases in a competitive labor environment)...

One that does not see that dynamic playing out will fall incrementally behind... As I mentioned in the other thread... There are FEWER seats in the first class section of the train... So what have been the "standards" of the so-called MIDDLE CLASS, going forward, are likely to be lowered... Plenty more room in the caboose (or lower sections of the ship)... That DOESN'T mean it needs to be a dreary existence though :-)

See? There was plenty of food around to be had during the Great Depression!