The great pullback

The great pullback, the recession reversal is now underway.
Trillions in credit is vaporising, money pulled back, investors forced to sell, investors keeping to essentials and musts.
The great trick of the worlds central banks, money out of nothing, is being exposed as a hoax, for now.
The tricks will work again later, slightly modified, as they have since 1913.
Now it turns out 15% of the world watched the Olympic opening, but it turns out those gigantic fireworks footprints we where baffled by in the opening where fake.
We watched in disbelief as we say it, amazed. Now it turns out our disbelief was justified. They only faked it on tv to make sure it was visible the organizers say, it is not important they claim. But it is important, because perceiving is believing. It is important for a rational man to remain rational that what he senses is accurate.
If the fireworks are fake, this means something. If trillions of dollars are created out of nothing, this means something.
Bread and circus, give them that.

Gold fell to USD 811 this morning, this is more than 20% down from the USD 1037 top about where we told you to sell. This has surprised many of our readers as they have bought gold in anticipation of “the end” being right around the corner. Well, “the end” is still some time off and gold can and will fall before than, and rise for that matter. For now, gold is still in a asset bubble, and the recession will bring it down further. We have told you this repeatedly. But you should accumulate some gold coins regardless, for safety.
The USD has showed impressive strength, some of golds fall is directly related to this, some to the recession based sell off.
In time the USD will fall again, but remember that for every seller there is a buyer and vice versa. So currencies and assets do not rise or fall in straight lines, investors are betting against each other, having each others lunches.
The US stock market has had a good run as well, this will reverse sooner. The good numbers presented lately is a smoke and mirrors game. It is fake numbers, lying, cheating, giving all input the benefit of any doubt to the upside. This can only go on for one or two quarters before the truth comes out, it will at the latest come out when the final 2008 numbers are presented early 2009.
Massive losses, massive massive losses lay before us. Stay put.

We are planning to spend Christmas in Gran Canaria this year as last, more and more friends are finding that Gran Canaria is the easiest route to good food and great weather from northern Europe. The crowd coming down this year us larger and better than ever. This year we will organize to have people come down. Maspalomas is the place, any hotel in the neighborhood is good.

To sum it up again:
Stay in cash. Do nothing.

Hans Jørgen Lysglimt
August 12. 2008. Oslo, Norway. hans@farmann.no

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