On Forests and Trees

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I am afraid I don’t have much to say about gold & silver lately. Prices seem stagnant again. This is where the 2x & 3x ETFs will nibble away at your position. I have been sitting out any trading for a few weeks now. Gold finding support again here at 08 and silver at . My charts show these as solid support levels AND the AU 62% fib retracement levels and 50% level in silver. Chart painting? Fundamentals? I'd sure wait for some distinct movement one way or the other before trading.

(Disclaimer: past performance is indicative of future returns with Dr. J's trading advice--you will not make any fiat to brag about.)

And if you just stack. Now is a good tome to keep stacking

The unemployment report will be released in about 20 minutes. The news correspondent, reading her script, expects it to come in at 5%. OK, whatever. Stock algos will react. gold algos will react--just the way they are all planned to react within the data-driven mechanisms that pass for our market. Since the FED rate decision mak hang on this data point, I expect it will be spun as "good news."

Edit: Whoa! a big jobs miss... Gold up? Futures down? Is this a reality check? we'll see if they can put out their fires by the end of the session...

But I have been thinking about the future and pondering why it can be a struggle to prepare at times. Do I focus on prepping and forget to live my life? Do I focus on life with the family today and ignore the future? Do I blow of long-term planning at work and just go in day to day? With such dark clouds on the horizon, how is a person to respond? Actually, storms pass. What we face is worse than that… This <insert metaphor> may not pass.

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About 20 years ago I was working at an Intel Plant in Albuquerque NM on a construction crew. We were working overtime (58 per week) and everyone was making tons of money. Times were good (or so I thought). I was younger and still learning how to be a construction manager—how to motivate a crew to work steady all day, efficiently, without too much grumbling. I treated my crew with respect… that worked pretty well. At lunchtime each day, many of us would leave the plant and drive a mile to one of the fast food places up the road. Often we would be a few minutes late coming back. You know what happened next. A general contractor superintendent got pissed off, counting minutes and multiplying by hourly wages. They “reacted.” They made a new rule: Anyone who comes back from lunch late will be fired. The next day, our General Foreman was sitting in a chair at the front gate with a clipboard taking names, but apologizing to the guys saying that this was just a warning. The larger picture revealed that we were short-handed already, working overtime, and there simply were not enough qualified journeymen around the southwest willing to come to Albuquerque to staff the job properly. Management’s reaction was wrong. They should have responded with a more sensible policy to solve the problem—like simply docking pay for late-lunchers. They began to erode the goodwill of travelers like me who came to town for the overtime pay. The new policy was dropped after two days and nobody was terminated. But damage had been done. At least those Intel managers listened to the General Foreman’s complaint that the policy was undercutting the morale of the workforce and changed their policy. Too often, leaders will not admit to a mistake.

Wise people think and respond in due time out of their good sense. Foolish people react immediately out of their emotions. Yet, many of us who are not foolish, fail to act wisely. We remain preoccupied with our daily problems and tend to adopt reactive, emotional solutions. Our preoccupation with day to day business keeps us from slowing down and recognizing the larger trends, issues and challenges. It’s that “preoccupation” that has concerned me lately. Why is it so damn difficult to sit down, tune out the daily problems and look into the future? Once you do, you don’t have to be a prophet or a seer to recognize a sensible response to the many possible futures. And when you are able to see it, I find that it becomes much easier to stop reacting and start responding to the likely future in a manner that will actually do us some good.

But worse than those short-sighted, over- reactive managers at that Intel plant, are people who won’t even look at the future, who bury their head in the sand and will only consider their weekly paycheck and what they plan to do this weekend.

I watch students react every semester at school. Stress levels rise. They cannot see the usefulness of a class or assignment. And they procrastinate, go drinking, sleep, or react in some way that rewards their emotions immediately. Several weeks later, they are in trouble and end up dropping a class or two. Eventually, many of these drop out of college. My own daughter was headed down this road a couple of years ago. We had a long talk and thankfully she saw the light. I am also facing my own response to a leaky heart valve that may require open heart surgery. My gut reaction is “No.” But I have to ask myself if the risks and discomfort of recovery are worth a longer and better quality of life. I need to respond, not react. I don’t like the look of the trees on this one. Must step back and look at the forest.

If you view of the forest is not informing your inspection of the trees, and consequently your daily, weekly and annual decisions, then you are in trouble. Our long term goals must inform our day to day decisions of how to spend our time, energy and resources. What is valuable to you? Family? Security?

Sociologists are the backward looking prophets. They ask questions, then study the past looking for answers, find something, notice and identify the trends and then predict the future. It does not take dreams, visions, or voices to see ahead.

Frankly, I see trouble. Perhaps not next week… though I will admit that a precipitating event could crash this precariously balanced system of fiat and debt, sending the whole world into financial lockdown. What is more likely, and certainly inevitable is the slow descent into debt-laden poverty. And I suspect many are waking up, but do not know what to do about it.

I have been noticing an apparent trend lately: Young people living as migrant workers, following agricultural or other jobs, living in cars and tents, or homeless shelters, working when and where they can. They are out of the system, working under the table, no payroll taxes, no rent, no utilities, little responsibility except to show up and work. I have another friend who sells fancy tea at outdoor markets and tourist hotspots. He hires a crew of these kids (20-something) to process and package his tea. They roll up the dirt road to his southwest desert home in a group of ugly cars, two dogs, and a home-made trailer and go to work (I call them the Mad Max crew). At the end of the day, they get paid in cash and drive out of town into the national forest to camp for the night.

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Driving back to Ohio last week, we saw many hitchhikers and came across a crew of rough looking youth in New Mexico traveling to California. My daughter went over and talked to them while we gassed up. They are simply working their way west, living on money solicited other travelers. Hmmm… checked out of the system and getting by. Perhaps they have more foresight than others like my daughter’s “Goth” friend at college who will graduate with a psychology degree and 100K in debt.

I have also noticed an increasing number of homeless people begging on the street-corners and in store parking lots. They look able-bodied to me. Yet I wonder what these people will do in a currency collapse. More likely, what will they do as their ranks swell with more beggars as the economy declines and there are fewer kind-hearted people handing them a few dollars out their car windows.

I think we all know what they will do.

And they may know also, planning to go a step beyond begging to taking what they feel ought to be theirs. And what will the Welfare, EBT, SNAP, disability ranks do as the economy is no longer able to support all that extra weight? I already sense resentment from them. Just yesterday, I made an absent minded mistake in the parking lot and inconvenienced a carload of them for five seconds. That earned me an abusive tongue lashing even as I said “Sorry” as we passed. How will they treat me when things get tough? And in my own city, the large Native American population mostly ignores the rest of us. But from time to time, a bitter comment is spoken recalling how whites stole their land in the 1890s. As the system deteriorates, I suspect a movement will arise in the Native American communities to take back what was once theirs.

So here we are, at best with idiot leaders—uneducated, incompetent, short-sighted. Nothing is getting fixed because they have not tried to fix anything. They put band-aids on broken legs. At worst, we have evil leaders plotting the demise of this economy and the depopulating of the planet.

Notice the forest and make plans for a different future. Not tomorrow, I hope, but likely within the decade. Thank God we still have time to prepare.

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Key Economic Events Week of 8/15

8/15 8:30 ET Empire Fed Manu Idx
8/15 10:50 ET Goon Waller
8/16 8:30 ET Housing Starts
8/16 9:15 ET Cap Ute and Ind Prod
8/17 8:30 ET Retail Sales
8/17 9:30 ET Goon Bowman
8/17 2:00 ET July FOMC minutes
8/18 8:30 ET Philly Fed Manu Idx
8/18 10:00 ET LEIII
8/18 1:20 ET Goon George
8/18 1:45 ET Goon Kashnkari
8/19 9:00 ET Goon Barkin

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