HSL / Newsletter Sample

Uncle's Notes
December 2007

••• Ron Paulites quote from Mahatma Gandhi to describe their campaign: "First they ignor e U, then they laugh at U, then they fight U, then U win."

189 major mortgage companies have gone bust. And counting! •••• Cash is coming back. – U pay with cash or U don’t buy. Credit will be hard to get/use/trust. – Credit cards are a coming bust. They were always a bad idea. They encourage overspending, debt, fraud & theft, & make govt tracking easy. ••• US govt idea to freeze ARMS interest rates is well meant, but can’t solve mortgage problem, partly because most of major banks are de facto insolvent. Historically, all price freeze attempts have not just failed, but increased the problem. ••• Central Banks have little control over economies now. Only marginally in interest rates—which take months to take effect. Mkts set rates not CB’s. They can’t control or see into derivatives.•••• Latest corp earnings down 25% on balance. Trim your stk positions. Good stks get punished by the weak in rece ssions. Hold mines, bullion & non-US$ govt bonds.

Proposed taxes on non-domiciles in UK will see an exodus of several thousand expats. Welcome to PT world.••• Swiss franc becoming an int’l favourite, as in 70’s. Buy SwFr on pos pull-back to 84-86 vs US$. ••• NYSE is being helped by foreigners buying US stocks to get rid of their US $’s at better prices than they get if exchange for euros, etc. Ditto re NY apts; 25% of buyers are non-US. Cheap vs EU. ••• Bob Chapman rightly says “The problem is the information we’re collecting in our knowledge economy is the wrong [ie, incorrect] info.” World depends on data/reports from govt & big biz; both have axes to grind & the truth is ground to dust. Further, this flawed info is reported by a media that has its own agenda. Our best truth-tools are charts. Not perfect, but in general they filter out the PR & BS. Follow charts in many areas to get reality & forecastability.

To see the future see my pg 1 cartoon forecast in HSL640 (May 9, 2004, reprinted in HSL Jr Sept 3, 06). It has been the most accurate prediction of this decade I’ve seen & is as valid today as in 04. Perhaps my lucky best. Stagflation (a word I coined decades ago) is today. Deflation is tomorrow & recession/depression the day after that. U don’t need a crystal ball; U have HSL . •••• 1984 in real life: BBC has created a Ministry of Truth, & Geo. Entwistle is the Controller of Knowledge. Tis well meant& needed in this world of scarce truth, but this has a 1984 copycat ring to it. Columnist Stefan Stern asks“Wa s George Orwell a satirist or clairvoyant?”

The Net & Blogs in particular are a mixed blessing. Anyone, with zero credentials or publication history, can spew forth on the Net & U can’t check it. They are vapour, smoke. Printed publications act as gatekeepers with high costs that filter out the puff-addicts. The Net isn’t all junk mail, but quality is rare. We need the Net for freedom’s sake, but using it requires great discretion & cynicism.••• Whither the US$? 1. 2-tier $, internal/ external. Or 2. US$ force-merged by neo cons with Mex peso & C-$, all replaced by Amero. Or 3. $ disintegrates into a 3rd world currency. Details in next HSL Jr.


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