Due to travel this week, the blog will remain relatively sparse in commentary.

GMR Portfolio Surges Higher : +42% YTD profits = $38,298 + YTD pending profits = $33,298  —> Tranch #1 : +48% ; Tranch #2 : +36% ; Overall : +42% apt —> markers : SP500 @ 1042 | HUI @ 426 | DJI @ 9605

We have been asked about managed accounts by readers.  If you are interested in having either equity or FX managed accounts, please contact via email.  We will contact you thereafter.

I had heard Geraint’s interview on the BBC a long time ago and finally remembered to get this up … if you want to know how the financial markets really work, and why so much greed out there, just give this book a read.  Very disconcerting to say the least.  Some of us are honest and forthright but that seems to be such a “quaint” characteristic these days…

• New World Order of Finances Emerges : GMR Letter reported over 6 months ago on the credit outlook going forward  … we now read : “It means much less risk-taking, at least for a number of years to come — a decade or two. That will be evident in less credit and more costly credit. If you are a household or a business, it will cost you more, and it will be more difficult to get that credit.”

• Books to Curl Up With : ‘Dr. Doom’ Might Have Spared Bear, Saved $34 Trillion How Kaufman told us, reminded us and many still flipped condos…
• Obama is going “all out”, or in poker, “all in”, with his health plan – this I fear will end in tears because it goes against what many people actually seem to be saying of having a clear 2-track option.  I’m not an expert by any means, but when a bankrupt country plans even more socialism, the outcome can only be even more socialism ergo taxes must rise and this will brake both a strong US Dollar and US growth as taxes mean less consumption and more fear.  This speech does not look like compromise but rather a “throwing down of the gauntlet” – my way or the highway. Just a note : we have fully socialized medicine here in Europe – to a certain degree it is a blessing but a nightmare.  Corruption is rampant, the government is in bed with so many of the providers via lobbying and the government dictates how much of your salary – yes, salary – goes directly to the govt system.  So yes, you are covered, but the freedom to choose is limited, can take a long time to get appointments and certainly one has no access to experts – because many do not accept patients from the govt healthcare system.  Caveat emptor !

• it’s not my job or even in my interest to approve or deny this article, BUT this was sent to me by readers – this guy has been posting on all the big portal sites for years… is he a mini-Madoff fraud ? Mr. Moscrip obviously thinks so.  And just checking out of curiosity, his Dow Theory Analysis site is now OFFLINE. hmmmmm….
• European Opening :  DAX and FTSE reached new year highs, Oil is up over $72, USD is down on the Euro to 1.4582
• Miners are back up this morning
• Our 3 Trades from Monday evening : down 3% while overall the GMR Portfolio is up by another $3000 ; if miners stay up trades should ideally come back into line ; stop losses remain in place ; surge in Gold over $1000 looks strained to say the least… trend is up however ; silver has been outperforming gold but one would not know it by looking at the PM equities … yes they are up but still no “mad rush” by far… and yesterday many of the gold and precious metal equities were the biggest losers on the TSX !
• OPEC decides to do nothing and hold output ; Brazil’s offshore finding may be double BPs recent find in Gulf of Mexico … Peak Oil ?  Oil sands galore, multi-billion barrel new finds … it may be a while before any real change is coming in the oil sector or world supply worries…(Brazil Oil Find Could Hold 2bn Barrels) Brazil’s prospects of becoming a leading oil producer increased on Wednesday when the national oil company Petrobras reported that the Guará field contained the equivalent of 1.1bn to 2bn barrels of recoverable oil and gas.

♦ I have said a number of times that base metals are still looking good and the near future copper contract looks further bullish ; waiting for a break over 3 … should launch many of the copper equities ; GMR Portfolio is adding a new entry here

♦ Bank of England will likely do nothing today and hold rates – will they follow Sweden and go to negative interest rates ?

♦ What are “they” smoking over at Recovery-Green-Shoots Central ?    CONSUMER CREDIT For release at 3 p.m. (Eastern Time)   September 8, 2009  : Consumer credit decreased at an annual rate of 10-1/2 percent in July 2009. Revolving credit decreased at an annual rate of 8 percent, and non-revolving credit decreased at an annual rate of 11-3/4 percent. *USD: (Consumer Credit Falls USD 21.6bn in July) Total U.S. consumer credit fell by a record USD 21.6bn in July while June’s decline was bigger than previously thought.  July consumer credit outstanding fell at a 10.4% annual rate to USD 2.47tn. It was forecasted to drop by USD 4.0 bn in July. Consumer credit has now declined for six consecutive months. Nonrevolving credit plunged a record USD 15.4bn while revolving credit dropped USD 6.1bn.  How can this be a consumer driven growth recovery when across the board consumers are saving more and consuming less ?   How does consumption equate to a “robust economy” ? … as we are incessantly told by economists.   Bullsh** .  Savings and investments in industry are the basis of robustness … not spending on trinkets.   Markets did not care – except for maybe gold – it did not rally as there is no inflation component anywhere to be seen… except, of course, for the trillions being printed in the shadows…

• It’s pointless to argue with the markets – they climb a bit higher even with fundmentals looking worse or just as bad as they have been – BUT, as we know, FEAR is a strong emotion in the markets … and the human mind is like a short-term sieve … it forgets.  So now, the FEAR is to “miss the boat” on this rally.  People want and need and are hunting for yield – anything to re-coup losses.  And people are scared of inflation returning.  Who wouldn’t be – debts and deficits are now reaching 2-digit trillions… and the fiddler plays on. Central Banks keep easing, pumping, etc.

• The short-term trades we put on Monday are slightly down as the anticipatory jump in gold has yet to follow through…the companies are solid … and so were the technical setups.  We are currently down 1.5% but will stay with them this week unless something unforeseen happens.  Mental Stop Losses have not been anywhere met yet, so lets stick with these for now.
• Risk appetite remains as EURJPY and EURUSD signal no major pullbacks while the IMF says “world recovery” is underway …  Oil is up over $71 today while gold and silver linger / struggle to show any big movements … that’s ok.  The surprise has been, for me at least, that copper equities and base metals are surging more than silver/gold equities.  I am putting out a new base metal recommendation soon which I think looks solid and is 80% off the 2008 high.  Buy low.

• Bartels sees that markets are looking for a 20% correction – I wont dispute her ideas because I have been saying other technical indicators did not look good either but obviously many, including me, were too earlier and took profits about 1 – 2 weeks ago.   video

The sports update of the day goes to Russian oligarchs who lost billions in the commodity meltdown and now are looking to golf courses (whatever) to get them out of the rough (pun intended).   Da.

Currency Crash Possible :  The dollar will weaken and the U.S. risks seeing a crash of the currency unless it does more to control the deficit and reduce debt, said New York University Professor Nouriel Roubini, who predicted the financial crisis.            “If markets were to believe, and I’m not saying it’s likely, that inflation is going to be the route that the U.S. is going to take to resolve this problem, then you could have a crash of the value of the dollar,” Roubini said in an interview today in Cernobbio, Italy. “The value of the dollar over time has to fall on a trade-weighted basis, but not necessarily relative to euro and yen.”

“We are at a cross-road,” Kenneth Rogoff, a Harvard University professor and former chief economist for the International Monetary Fund in Washington, said in an interview last week. “If the Obama Administration fails to rein in the long-term budget deficits, the dollar is set to decline for decades.”     Nobody likes the Dollar

♦ in Hot Pepper 06.09 – HP7 we warned about the support levels on the US Dollar … please review.  Today we see USD at 77.23.  A sustainable break below the levels in that HP would likely signal some serious PM rises…

♦ Gold and Silver are considerably up today

• We have repeatedly warned about Commercial Real Estate … well read on

• USD continues to weaken but certainly not yet enough warrant a full blown run into gold but that is certainly what may happen.  The semi-conundrum remains of higher gold and higher equity prices in parallel but the biggest 800 lb. gorilla in the room remains the USD and its basic fundamentals as a so-called reserve currency.

• Currencies & Commodities As hybrid cars gobble rare metals, shortage looms
• Currencies & Commodities UN wants new global currency to replace dollar
• Currencies & Commodities Gold futures hit $1,000/oz as investors seek refuge
• News English Missing Lehman Lesson of Shakeout Means Too Big Banks May Fail – Red Flag
• News English Analysts warn new Government’s policies could drive Japan into economic abyss

• Yes, the US payrolls are looking better on the “official numbers”, yet we know that the other set of real numbers not much in the press is somewhat different … but, indeed, the Federal Reserve said it was around 17% unemployed.  But the markets dont care because they see the chart below and scream “recession is over” and continue to rally.  Rally on !

• The regional banking index looks like a “robust green shoot recovery” is a fallacy, a phantasy.  This does in no way look robust or indicative of consumer lending… As I forewarned of quite a while back, governments around the world have entered a “liquidity trap” pure and simple … the entire “system” is now dependent upon Central Bank created credit and debt just to stay alive – governments have started giving away money to consumers in Cash for Clunkers, Cash for Old Appliances, and likely more tax give-aways… this is laying the foundation for worse to come

Judge Napolitano on Glenn Beck: Everything the US Government Runs is Bankrupt!

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♦ Labour Day : markets in US and Canada are closed

♦ Today, USD weakening to 1.4348 against Euro but a bit stronger against JPY – if EURUSD can cross over to 1.445 we should have a run up to 1.475 possibly testing 1.48  ;  risk appetite looks still good therefore I do have some doubts on robust gold trading – here a viewpoint on gold and silver and oil ; we are putting on a few speculative trades but likely will not add them to the GMR Portfolio.   Kiener is very bullish on gold – he has been for years !

• Signs of Weakness Emerge in the equities … but things right now actually look supportive overall especially when reviewing yesterdays GMR PF Update and the indicators therein.
• FT reports that Saudi Arabia has upped oil supply nearly 50% to 12.5m/barrels per day capacity but is only outputting 8.5m/day to “groom” the price and keep it higher near $70  – the entire world’s energy is run by the OPEC monopoly more or less … and therefore one can imagine their “influence peddling” at the highest levels…

“After much stimulus bailout and a bazooka, the U.S. and the U.K. still face significant imbalances and challenges. The green shoots look more like yellow weeds to me.” N. Roubini

• Oil looks weak(er) and may target $60 shorter-term if there is equity downturn ; this may be gold negative as oil and gold often track each other closely – obviously last week it did not follow that rule whatsover as gold jumped and oil fell.  OPEC meets on Wednesday and that is like herding a group of cats – nearly impossible.  But if all think we are in a recovery then oil prices may remain quite stable in terms of not announcing any supply cuts – if anything, recovery talk would tend to talk up oil prices … which is gold positive.
• Michael Moore …. he’s coming back on 02 October  CAP ITAL ISM – A Love Story
  

Video:Gold Rush by Many Investors Could Push Price Up to $1,200

Video:Charles Biderman – Insiders sell sell sell $$$$$$$$$$$$$:The Concord Coalition Plausible Baseline $14 trillion

Fleck:Why this rally might head into fall After recovery, stocks face sell-off and ‘an environment with twists and turns’

We have repeated our stance often in the GMR Letter, that the longer term fundamentals,to our way of thinking, look positive.   We also repeat here that investing in a trend like commodities in a strong currency tends to boost overall performance accordingly because the “kicker” comes from the FX conversion.    The banks in Canada are more solid than in Obama-Geithner-Bernanke Land – the land of massive stimulus.

Canada has minerals, agriculture, gold, oil – what else do you want ?

The CAD has been correcting a bit lately, but with China making inroads into the Canadian resource sectors, this will likely boost the CAD and diversify its offtake agreement with others than just the US.     We may in 2010 again see a push to USDCAD parity – especially with a strong possibility for weakness in the US Dollar (the big unknown hanging over the markets now…)  So far CAD is up +22%