American Indian proverb says:If the horse you are riding drops dead, it´s a good time to dismount"...

The Gold trading seems dead, no energy for weeks, narrow trading range. It’s obvious that many important market participants, being unstrung, said good-bye to gold in order to join in the trend-stable equities

Gold may still reach the 1545 in March / April 2013 which is the strongest monthly down indicator!

Gold may not do much before August/September 2013

Old trading rule "Consolidations at the lows break to the downside"

In these whipsaw markets of the last few weeks, it probably just might confuse any trader.

It is said that death and taxation are the only certainties in life.

Historical record makes it appear certain that, universally, power corrupts the human mind, and the greater the power, the greater the corruption.

Phil Mickelson pointed out that his taxes had reached 63% of his annual income and that, as a result, he was contemplating moving to a lower-tax state than California. For daring to want to keep more of his earnings than the state, which sinks not a single putt for its share, he was soundly pilloried in the press.

o There will never be complete clarity on who the enemy is (unless you live in a Muslim country, in which case the uniforms of the Western crusaders conveniently identify them).

o The next attack can come literally anywhere in the world and in any form.

It is nearly impossible to anticipate or to respond in any way other than with ineffective surgical strikes or blunt-force invasions.

Thus, every new attack, or perceived new threat, results in a new set of actions pretty much made up on the spot to punish the perps and counter the next attack. To name one relatively tame example, the act of a single Jihadist fitting a bomb in his sneakers resulted in the loss of countless of hours, and more than a little dignity, when the bureaucrats instituted a requirement that John Q. Sheeple must remove his shoes in order to board a plane.

In addition, because these governments have no idea where the next attack is likely to occur or what form it will take, the perfect-worlder bureaucrats increasingly in charge of Western governments have begun to exercise the precautionary principle to the point of dangerous absurdity.

One might counter the gun waving of today's military by theorizing that the most effective way of eliminating the Jihadist threat would be to pull all the troops out of the Middle East and to stop the constant meddling in the affairs of those countries. As this thesis is unprovable without actually taking the measure in order to gauge its effectiveness, the military-industrial complex and the headline-grabbing politicians and their bureaucratic stooges are free to dismiss it out of hand and continue to layer on the countermeasures they believe will head off the threats of further attacks.

"Why do you want me to go through an X-Ray machine in order to travel?" you might ask a TSA agent.

"Because we're at war with the terrorists, and it's our job to keep the public safe!"

"But I'm not a terrorist!"

"Oh, yeah? Prove it. Starting by stepping into the X-Ray machine."

The real consequences, however, will be felt only after the next large-scale attack. After that, the ardent advocates of the precautionary principle will kick their machinations into high gear, and you won't be able to sneeze without first getting permission.

(Somewhat related is the idea that schools should be turned into day-visit penitentiaries complete with metal detectors, bullet-proof glass, and armed guards, further inculcating the culture of paranoia and fear that now exists in the US. Managing by exception, a key tenet of the precautionary principle - and attacks on schools are very much the exception - is never a good idea. But that won't stop the US from turning its schools into mini-Camp Feds.)

All you can really do is recognize it for what it is and, more importantly, recognize the direct consequences to you and your family in the months and years just ahead.

So, what else do we know now?

The United States is perilously close to becoming a one-party, socialist state. As a result of winning the last election, President Obama, a man whose ego needs no encouragement, may come to believe he has a mandate and will try to become far more than a token president - to wit, the first black elected to the office. Instead, he'll try to become the first among firsts. The socialists in charge have effectively taken over medical services, are now focusing on taking away guns, and, based on the comments made during Obama's inauguration speech, are planning to continue pushing the agenda of radical environmentalism, which, in turn, is a fulcrum point into more regulations on private business.

In other words, the country is either headed for certain ruin as the productive class becomes further outnumbered by the recipient class and then turned into little more than tax cows, and the equivalent of Atlas Shrugs occurs. Or we have a whopping good crash that chases the socialists out from the shadows.

Note that either scenario involves a crash. Which begs the follow-on question: how will the government react when things go off the rails?

1. In the United States, the government is just a couple of ticks away from turning the de facto capital controls currently in place into those of a more hardened type. With the new FACTA foreign financial assets reporting regulations now in effect, all the necessary functionality is in place, leaving only a quick turn of the knobs to dial in punitive tax levels on such holdings or take some similar action to make the "unpatriotic" act of daring to move assets offshore into one that is also distinctly ill-advised.

Then there is the inevitable grab for the trillions of dollars now in US pension plans, something that Doug has warned about for years. A recent story out of Bloomberg a couple of weeks ago sure looks like a straw in the wind to me. And I quote.

The U.S. Consumer Financial Protection Bureau is weighing whether it should take on a role in helping Americans manage the $19.4 trillion they have put into retirement savings, a move that would be the agency's first foray into consumer investments.

"That's one of the things we've been exploring and are interested in in terms of whether and what authority we have," bureau director Richard Cordray said in an interview. He didn't provide additional details.

All that's missing is the next stock market crash, and this initiative will rise to the fore. That the Sheeple will fall right in line with the logic of a government takeover of the pensions can be understood by looking at a number of surveys showing the majority of Americans don't have any real savings.

One study by the Employee Benefits Research Institute found that 56% of US workers have less than $25,000 saved. And that's workers. Fully 54% of folks who have actually retired also report that they have less than $25,000 to live on.

What this means is that over 50% of Americans are either currently, or will someday soon, be wards of the state. So, that's something else we know.

"The democracy will cease to exist when you take away from those who are willing to work and give to those who are not."
Thomas Jefferson

The global economic recovery is a fiction.

Over the past week, it was revealed that Eurozone unemployment has now reached an all-time high to this point in the crisis... and real GDP has gone negative in the US. Wait a sec, some of you might say, that sure doesn't look like a recovery!

And you'd be right. Despite throwing literally trillions of dollars in new debt at the debt crisis (anyone else see something wrong with that logic?), the global economy continues to struggle.

prediction going forward is that Congress will make no major changes to the deficit until the dollar weakens and interest rates rise, forcing action. The Fed is monetizing at the rate of a trillion dollars a year, which covers 80% of the deficit. For now, the Fed has bailed out the federal deficit so politicians don't need to do anything.

The economy has been driven by Fed bubble blowing: first the stock market dot-com bubble (Internet stocks attracted day traders), then the housing bubble (flippers and the meme that real estate never goes down), and now a massive bond bubble (there's no other safe place to put your money). The collapse of the biggest bubble ever in bonds will start once confidence in the Fed is lost in seeing that they can't keep rates suppressed forever.

The weak GDP report suggests the Fed will keep its attempt to pump up the economy, even as each QE program is having less and less effect. Simply put, as the government won't cut its deficits, the Fed will keep up the QE because there is no exit strategy from this mess. As rates begin to rise, the deficit will become unmanageable due to the rising scale of interest payments. But this debt bubble will burst because low interest rates cannot be forced forever. If history is any guide, the time will come when Fed stimulus will decrease confidence in the dollar more than it helps the economy, and at that point the deficit-boosted economy will collapse. The slowing GDP is an early warning we will be keeping a close eye on.

In North Korea, the people are told that the Jong family are one tick off from being deities and believe it. In the US and Europe, people are told that debt issuance and money printing without end is the "solution" to the financial crisis and believe that too.

The bottom line on today's musings is that it really behooves us all to revisit our beliefs and kick the tires on our assumptions, looking for some kernel of observable truth that we can use to guide us through the challenges ahead.

Wherever possible, try to align your finances and your life with reality. While that may make you subject to periodic losses and inconveniences as popular delusions and the madness of crowds push markets, and countries, in unsustainable directions - in time, you'll come out on top.

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If you're not familiar with the work of Steven Wright, he's the humorist who once said, "I woke up one morning, and all of my stuff had been stolen and replaced by exact duplicates." His mind sees things differently than most of us do; here are some of his gems:

1 - I'd kill for a Nobel Peace Prize.

2 - Borrow money from pessimists - they don't expect it back.

3 - Half the people you know are below average.

4 - 99% of lawyers give the rest a bad name.

5 - 82.7% of all statistics are made up on the spot.

6 - A conscience is what hurts when all your other parts feel so good.

7 - A clear conscience is usually the sign of a bad memory.

8 - If you want the rainbow, you got to put up with the rain.

9 - All those who believe in psychokinesis, raise my hand.

10 - The early bird may get the worm, but the second mouse gets the cheese.

11 - I almost had a psychic girlfriend... but she left me before we met.

12 - OK, so what's the speed of dark?

13 - How do you tell when you're out of invisible ink?

14 - If everything seems to be going well, you have obviously overlooked something.

15 - Depression is merely anger without enthusiasm.

16 - When everything is coming your way, you're in the wrong lane.

17 - Ambition is a poor excuse for not having enough sense to be lazy.

18 - Hard work pays off in the future; laziness pays off now.

19 - I intend to live forever... so far, so good.

20 - If Barbie is so popular, why do you have to buy her friends?

21 - Eagles may soar, but weasels don't get sucked into jet engines.

22 - What happens if you get scared half to death twice?

23 - My mechanic told me, "I couldn't repair your brakes, so I made your horn louder."

24 - Why do psychics have to ask you for your name?

25 - If at first you don't succeed, destroy all evidence that you tried.

26 - A conclusion is the place where you got tired of thinking.

27 - Experience is something you don't get until just after you need it.

28 - The hardness of the butter is proportional to the softness of the bread.

29 - To steal ideas from one person is plagiarism; to steal from many is research.

30 - The problem with the gene pool is that there is no lifeguard.

31 - The sooner you fall behind, the more time you'll have to catch up.

32 - The colder the x-ray table, the more of your body is required to be on it.

33 - Everyone has a photographic memory; some just don't have film.

34 - If at first you don't succeed, skydiving is not for you.

35 - If your car could travel at the speed of light, would your headlights work?