What is lumber telling us?
CIGA Eric

What is lumber telling us about the near-term strength of the economic recovery?

Lumber Futures Continuous Contract and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:

Many uphold the view that housing is the key to economic recovery insomuch that affords consumers to ability to borrow and consume – the engine of US growth. Further declines in lumber prices implies a weak housing market. A weak housing market implies a faltering economy.

Infinite QE will not be withdrawn as long as the economy/housing continues to weaken. Infinite QE will drive the dollar lower. As goes the dollar, so goes gold in the inverse.

I will be watching lumber closely during the bearish setup.

More…

Jim,

The greatest shortcoming of the human race is our inability to understand the exponential function.

Please look at this great video. It explains in a few words all the challenge we are facing in the next decades.

We must understand the consequences when we see a % growth figure in the newspaper such as % growth of money supply, % growth of debt, % growth of energy demand…

After several decades of steady growth of total (public and private) debt it is now easy to understand that this madness has to stop one day and very soon or like you say we must think of "QE to infinity".

Best regards,
CIGA Christopher

Dear Christopher,

Think about the doubling concept, and the huge growth in OTC derivatives plus the budget deficit.

God help us all. They have killed us.

Regards,
Jim

Jim,

I agree.

I believe that your last commentary toward the attack of debt, thus, an indirect assault on the currencies behind them, represents the highest realization of warfare as described by Sun Tzu in Art of War.

The highest realization of warfare is to attack the enemy’s plans;

Next is to attack their alliances;
Next is to attack their army;

And the lowest is to attack their fortified cities.

We must assume that the level of secrecy implies that the plans have changed? Does this mean that the dollar, fiat money in its present state, is no longer defendable? If so, a new currency, a single currency must be formed with highest potential for wide acceptance by the West. This must be done in secret so that enemies do not have time to adapt to the weakness of the plan.

The form is easy, but acceptance is not. Does acceptance come during a period of perceived prosperity or turmoil? If it is the latter, watch out. The latter, however, carries the consequences of angering the masses. Masses that, when organized, have the potential to change all of the rules despite the best of plans.

CIGA Eric

Dear Mr. Sinclair,

My father, being a businessman with a career that has spanned through the mid-1960’s up thru the current time, has often sparred with me in my belief that the dollar (known to him as "cash" through the early years) is not the pre-eminent means of savings. Although he has a portion of his wealth allocated to precious metals and precious metals equities, the position is somewhat small relative to his net worth.

I have often informed him that what I see being the end result of this "fiscal takeover" is a cash-less society where currency only exists in the form of a computer entry and is only accessible via electronic form. Therefore any entity who saved cash in any form outside the banking system basically loses everything. Do you see this as part of the result of the current actions taking place, particularly those noted in today’s commentary?

Best Regards,

Your Friend,
CIGA Marc

Dear Marc,

YES!

Regards,
Jim