The policies of the politicians have been to inflate, inflate, and inflate some more. And they have been quite successful in doing that. Since the Federal Reserve was created in 1913, the dollar has lost something like 97% of is purchasing power. So the boys controlling the printing presses have done quite well in their creation of deflation, except for a period of time in the 1930s when the purchasing power rose considerably. 

Perhaps it’s because I’m no spring chicken myself any more. But over the years, I have come to understand that those who have lived a few years longer and have experienced more of life can very often offer valuable information to younger folks. Since my father passed away at the age of 85 on Dec. 31, 2009, I have frequently recalled many bits of wisdom he passed along to me that I have incorporated into my value system. When we are very young—from about our early teens through early twenties, we think we know it all. Then after we have had our heads bashed in a few times, we learn we are quite ignorant. Even the more stubborn among us finally start to pay attention to the older, wiser folks among us. 

Following is a brief summary of key markets by Roger Wiegand, who I partner with in the production of Trader Tracks, which Roger writes for investors who are inclined to trade. The following is excerpted each week from Trader Tracks letter. This is one small part of Roger’s weekly publication titled Trader Tracks, which is available through Taylor Hard Money Advisors, Inc. Trader Tracks (Call 718-457-1426.)

Our Model Portfolio finished last week, well off its highs for this “B” wave up, which hit a high on January 8, 2010.

Despite the unprecedented “stimulus” asset prices around the globe have not been able to pull up to their 2008 highs.

What an interesting mix of guests were booked for the most recent episode of “Turning Hard Times Into Good Times”. We had a well educated author that believes our universities are turning our people into non thinking socialists. Also, a precious metals coin dealer and a president of a junior coal miner.

Since Nixon took us off the international gold standard in 1971, spending by the U.S. government as well as individuals and corporations has run amok. Martin Gross, author of “National Suicide” reports that government is not only spending trillions of dollars it doesn’t have and thus sentencing our children to a life of poverty, but its programs are in many instances downright fraudulent. 

Although we don’t account for cash in our Model Portfolio, I continue to keep a fair amount of cash in my own IRA because I do indeed believe the gold shares will get taken down with the market as a whole when the next major decline hits us in this secular bear market that began either in 2000 or 2007 depending on how you look at it. 

To me, Exter’s view makes a lot of sense, because when you stop to think about it, every effort to inflate a currency when that currency is a liability currency rather than an asset currency like silver or gold, brings with it ever more debt. That is true, because in a fiat currency system, debt is the raw material from which money is created. So it’s not exactly as if money is created out of thin air, as most gold bugs like to say. Fiat money is in fact created from debt, and debt is the very thing that is leading to a major credit contraction in the first place!  

The message in the title above is one I have been proclaiming for some time now. I fully believe we are in a horrendous secular bear market for stocks and for asset prices in general. That longer term trend has, I believe not visible to most people because only recent experience takes on a sense of reality. So for example, there is a complacency in the markets now that did not exist in the winter and spring of 2009. Yet, if you take a look at the longer term picture, you see the pathology of our global economy continuing to play itself out. Unless we can keep from getting caught up in the moment and view what is going on from 32,000 ft. up, the secular direction of events is obscured from our vision. What we try to do in this newsletter as well as my radio show is provide the vision from 32,000 ft. up to help you see the longer term picture.

I believe the direction of the market is down from here in the long term but could have some months of rally left. Technical analyst and associate Roger Wiegand, tracks more short and intermediate term indicators that can help determine trading strategies. In the following article Roger gives data that looks to a weak market.

“I think the big question for most market participants is whether or not the market is putting in a medium-term bottom. The evidence is truly mixed, and I can make a case for either side of the argument; however, we have sell signals on both the daily and weekly charts, so, for now I think I will focus on the evidence supporting a further decline. 

So, it looks like the major problem in Greece and many other countries is excessive debt and in specific by the governments. People have been promised early retirement and to be taken care of by the government. Now in default, the citizens of Greece are revolting against the idea of taking cuts in their promised benefits. Moving retirement from 61 to 62 years of age didn’t even set well. U.S. citizens and their government better take a good look at these countries in default and those heading the same way. I include the U.S. in that group unless drastic measures are taken now. Read on to see what Congressman Ron Paul had to say about Greece.