Pirate Poop # 11

Exclusive to STR

Selected poop follows; your mileage may vary.

China Is Eating Our Lunch

'By creating demand for dollars, the steps should ease pressure for a further rise in the yuan generated by China's record trade surplus and investment inflows.'

This is a tactical move in a long-term strategy. The yuan will continue to rise and the dollar will continue to fall, but this move will be touted as good news for the U.S. today. It means very little in the long run, other than now the Chinese will be able to more easily convert their very substantial forex holdings into currencies other than dollars before the dollar crashes. China is preparing for the inevitable by appearing to create demand for dollars today, when really it is creating the mechanism to dump dollars in the future. Shrewd move.

Hoarding Pennies by Paul van Eeden

'With the rising price of copper there has been a buzz lately that the time may be ripe for hoarding copper pennies. To wit, the price of copper has risen from $0.60 to $3.50 (almost 500%) in less than five years and from $1.50 to $3.50 (133%) in barely more than one year. It is understandable that people are starting to think about hoarding pennies; but it is also complete folly.'

Sell! by Eric J. Fry

'The month of May has arrived, which means it's time to pay homage to one of our favorite Wall Street adages: 'Sell in May and go away.' For more than 50 years, according to the Stock Trader's Almanac, U.S. stocks have performed poorly between the beginning of May and the end of October.'

Fastest Rise in Federal Spending Since FDR by Paul M. Weyrich

What the Price of Gold Is Telling Us by Ron Paul

Detroit Is History

GM is much like the USG ; both are doomed. GM will fail first because unlike the USG , it can't create "money" out of thin air, its creditors will demand payment, it has very good competition, and private unions are socialist dinosaurs. GM actually produces a product, but the USG only produces worthless ink on paper, high taxes, wealth redistribution, criminals, massive spending, enormous deficits, tyranny, and war. Pirates work for themselves, not for the USG .

IMF Says Currency Changes Needed to Fix Imbalances

'Restoring balance in the global economy will require simultaneous shifts in demand and exchange rates, including a significant fall in the US dollar and a rise in some Asian currencies, the International Monetary Fund said on Wednesday.' No, really?

Russian Gold Reserves Up Again

Buffett Wants to Dump Cash

Run Your Car on Scrap Metal

Brew Your Own Gas

Support Your Local Coin Dealer

Warning Flags Flutter on Economy

Quote For The Week

'If you haven't yet bought silver with every spare dollar you can scrape up, I can only ask when you're going to 'trust the force, Luke.' Last summer, despite the worried look in my wife's eyes, I refinanced our house mortgage, taking out $100,000, all of which I invested in gold, silver and palladium stocks. That $100,000 has become $250,000 today. I expect it to pay off the mortgage altogether before summer's end. Once again, I am her knight in shining armor.' ~ Edgar J. Steele

Summary

Recent news reports suggest that the end of the beginning of the gold rush is near, with several years to go before the beginning of the end of the current secular bull market. While some mainstream pundits have recently come around to gold, the sheeple still can't even spell it. Pirates will (and should) keep buying metal.

I expect silver to lead the way into the coming rush to metal, but I also expect that the vast majority of latecomers will miss the silver boat altogether. There is still time to get onboard, but most sheeple will not. Instead, some will sit on depreciating currency, losing at least 8% annually, thinking that they are 'saving' and 'getting rich' by also paying income tax on their meager money market fund dividends.

Most will only attempt to make the move to metal after it is too late, when the dollar drops another 30% and the price of silver is over $20. By then, silver will be in very short supply; good luck trying to buy any then. I have already had difficulties buying metal the past several weeks due to very high volume. You should expect much more of the same.

Down days? What down days? The best that you may see in the near future are several flat days in a row. I fully expect that there will be many more up days than down days for the rest of the year, but what do I know? I know what is important to know: the dollar is doomed, as is our house-of-cards economy built on worthless paper and massive debt. What else do you need to know?

The Pirate's Mantra: any day that you can convert ink on paper into real money is a good day; if it's also a down day, then it's a great day.

~ ~ ~

A Pirate's View of the News by JCN

Reading today's news makes it clear that we are not going to get much past 2010 without a total meltdown. The next President is going to have to run on a free lunch platform to win, but there is no such thing. We have officially bitten off more than we can chew in the Middle East and now cannot even get out. The public is so used to having government solve their problems and save them from their own stupid actions that they will never take no for an answer. Increasing national and private debt, the falling dollar, and increasing oil prices are going to make no an unpleasant, yet necessary, answer.

The issues in election 2008 will be:

• More money for the war(s).

• More money for pills; we are convinced that if enough pills are made available for free, we will all live forever.

• More money to rebuild cities that nature has decided are in the wrong place.

• More money to save people who are stupid enough to use drugs.

• More money for people who are stupid enough to have more children than they can afford.

• More money to support people who have not learned any useful employment skills.

• More money to support people who smoke, drink, overeat, and don't exercise.

• More money to throw down the black hole of public education.

• More money to support illegal aliens.

• More money so that public office seekers can buy more votes for more crap like the stuff listed above.

More money for this, that, and the other thing; the people demand it! The sheeple don't understand that we don't really make anything or export anything but debt. The money is either going to have to come from China'who we are threatening'or from taxes.

Since the sheeple don't have anything, the whole thing is going to implode. Let's hope the blow is a fatal one, an economic bullet in the head, leaving the weak, the unprepared, and the non-productive to wander off into the dark to die. The rest will form new tribes and new nations. Let's just get it over with.

JCN is a retired naval officer who now makes an honest living as an arms dealer.