Commodities in a Recession/Depression By Dr. Russell McDougal  Dear Reader,
Those of us who believe our lying eyes instead of their cheating heart (see Part 3 of my D Word series) fully understand the depression concept. What does a severe economic downturn mean to the commodity sector? Let’s go there. The following question from IDE reader Linda sums it up nicely: Love your articles. No BS spin which the media continually gives us. If we really go into a depression, I believe we are rapidly heading that way, same as Japan, same reasons. What will happen to the price of Gold and Silver? Will they go down too? Your sentiments greatly appreciated. Thank you, Linda. We are currently in a depression unless the feds are successful in changing what the definition of what one “is.” They will undoubtedly try. Our current fiat system is so fragile that such tomfoolery is necessary. If our economy were built on production, savings, honest markets, and real money,the story would be different. Those days are gone. Even my esteemed buddy, Andy Gordon, theorizes we’re now in a commodity bubble. Every time commodities show a bit of inertia, the bubble prognosticators venture forth en masse. The last time this transpired, about a year ago, I wrote a three-part series entitled “Are We in a Commodity Bubble?” (click here for Part 1, Part 2, and Part 3). It certainly didn’t turn out to be one then, as the CRB has since taken flight. Why aren’t we in a commodity bubble presently? If you’ve read my series on fiat money, you clearly understand the end results of excess monetary printing. The Fed loves to print money. They are inflators by charter. Most people would do the same if they could generate trillions in profits. It’s a cushy franchise. This ocean of money has to go somewhere! Since 1982, it has predominately gone into financial assets like stocks and bonds. They are also called “paper assets.” A soaring stock market has been the result of too much funny money. A real estate bubble has as well. Everyone is happy when their apparent net worth is flying high. Too bad it isn’t that simple. If it were, we could all become wealthy via money printing. It is no different than the guy who just received a five-percent raise and is elated. Unfortunately, his living standard has declined by more than that amount due to Fed practices. Fiat money appeals to the something-for-nothing crowd. Politicians get an open season. Hot money always goes somewhere. Those closest to the money spigot are the primary beneficiaries. That is the beauty of the present system for cronies within the axis of weasels. It’s a juicy trough. Everyone gets to eat cake (rice cakes, though, because wheat and eggs are too expensive). Can hot money flow into commodities? Yes, absolutely it can. Hot money can flow into tulip bulbs, Louisiana land, tech stocks, or condos. It doesn’t break my heart that it’s now finding a few tangible assets. You cannot talk about bubbles without recognizing the biggest bubble in world history. I’m speaking of the U.S. dollar. It is held in unfathomable quantities across the globe. It’s been the world’s reserve currency since 1944. Nobody across the globe could get enough of them. Until now. Abuses have turned the tide. Honest money advocates call the overseas bucks “bigfloat.” They are out and about, but they will be prevented from coming home to roost. The suckers took them and they’ll have to live with them. They will not be allowed to buy up what little productivity the U.S. still has. Ever hear the expression regarding banks and debts? If you owe the bank a significant amount of money, you have a problem. If you owe the bank a ton of money, they have a problem. The U.S. owes foreigners and foreign governments trillions of dollars. Methinks bigfloat ain’t coming home. It’s called exchange and capital controls. Stay tuned. Is there some hot money from hedge funds coming into commodities? Yes, certainly. Does that mean that commodities are in a bubble that’s going to pop? This one might deflate to a degree but it’s not likely to pop. Tangible assets, commodities included, are the antidote to fiat excesses. Money is moving into them, especially gold and silver, because they serve as historic protections against government abuses. Does that sound like a bubble or a growth industry to you? The U.S.-centered depression is a direct result of ongoing Federal Reserve policies. They placed zero restraints on their greedy elitist buddies. Bear Stearns is a perfect example with their current bailout. Alan Greenspan doesn’t wear Coke-bottle glasses because he has keen economic vision. He was the madam of a whorehouse too big even for Texas. The new guy still wears a training bra. Monetary abuses drive gold and silver bull markets. These clowns are now attempting to ramp up the monetary abuses in order to put out a fire caused by monetary abuses. Hello! We’ll see some ongoing froth in commodities. They will also be subject to official dampening. Still, the commodity bull market isn’t going away any time soon. Looks like another series is under way. Invest Resourcefully, Rusty P.S. To let me know what you thought of today's article, send an e-mail to: feedback@investorsdailyedge.com. [Ed. Note: Dr. Russell McDougal has dedicated years of study and investing in the natural resources exploration sector. During that time he has closed out DOZENS of gains of 500%... 1,000%... 2,000% and more! Currently he is sitting on multiple thousand percent winners, including one stock that is up a whopping +5,000%. And for a select group of investors, Rusty has agreed to share his secrets of success... and his top stock recommendations. Click here to learn more... ] The Descending Triangle By Charles Delvalle When you’re watching a bear market unfold, you might prematurely look for a bottom that might not exist. What I want to show you today is a chart pattern that can confirm the continuation of a bear market. That way, you can short, being sure that the stock or index has further down to go. You also avoid buying into a false bottom. The pattern I’m talking about is called a descending triangle. 
A descending triangle consists of two things. First, a straight support line that’s been touched more than once by the stock (or index). The second thing you need is a downward sloping trendline that acts as proven resistance. As this pattern progresses, buyers come in at the support line, thinking they’ve found a deal and take the stock higher. But the buyers get weak toward the top, and selling brings the stock back to its resistance. Every time the buyers take over, they end up taking the stock up less and less, showing a lack of conviction for higher prices. Once the stock or index crosses under its support line for more than two days, the downtrend has continued and you should be able to profitably bet on lower prices. As you might have noticed, this pattern is exactly what the Dow Jones is in now. If the Dow continues along this pattern and breaks under 11,750 with conviction, then you can be sure that the Dow will head lower. INTERNAL ENDORSEMENT Winners Cherry Pick!
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