oly's 4 part orm. worth the read.

O.K... Oly has kindly given permission to re-print these 4 chapters all in one post, long read but well worth it. Apologies to original author about spacing on some words, but the filter has been sensitized since original postings..

Thanks again Oly,


Chapter1...

Oh Zen, what can I say in few words? let me try.
But first a little HISTORY so u can see where im coming from.

History

(1) US takes USD off the gold standard in 1971 so they can print money as they like. Grand conspiracy begins but its roots go back to the Old Book.

(2) DJIA bull market starts in 1980 from a DJIA base sub 800.

(3) NKY and Japan collapses in debt black hole mega-deflation post 1991 crash and threatens to plunge the globe into major DEFLATIONERY depression.
This should have come around 1993 IMO and allowed to run its natural course ..... it have been relatively painless cf whats coming now instead.

(4) US presses the warp-speed button on their printing presses coincident with a global smoke and mirrors act on why the USD is the safest haven for any residual
liquidity from Japan's cashout. 1991 Irak Mark 1 demonstrates the military capability to endorse this view.

(5) Instead of global recession circa 1993 when DJIA bull was Fibo 13 years of age and sitting at circa 3300-3600 level, 4 times higher than start of its ascendency, massive liquidity expansion etc soaks up residual Jap liquidity and others follow suit, fuelling the major breakout into hyperspace of DJIA thru 3600 pivot level and culminating in the Dionyssian for another Fibo 8
years to the 2000-2001 D/T - highs circa 11600.

(6) Game moves to sabotaging the baby EURO with a "Balkans War" in 99 adds the final push of US markets to hyperspace in Y2K ........EVERYONE wanted USD so they bought everything in the US and the USFed continued to accommodate with monopoly money supply expansion at around 30% pa.

(7) During the last phases of the US bull, gold was debased to "worthless relic" status and "agents" assigned to keep it under stranglehold thru
derivatives market about 10 times the size of physical .... they kept shorting it with monopoly money supplied from uncle as required

(8) All of above made the US the #1 debtor nation using the globe's liquidity to finance its expansion, with full knowledge that at any time all they had to do was begin devaluation of the currency (print more) to
devalue the foreign debt whilst holding all the forex. Reckon the L/T strategy for this originated with the 1971 removal of the gold standard.

(9) However the beast developed a mind of its own and greed set in coupled with a new generation of yuppies handling the world's money and who hadnt
ever experienced a major bear market thinking that their (false) compass (unlike our goodship Compass:) only always pointed north ....... A series of new and more complex and interlinked derivatives markets evolved creating a total VIRTUAL market LARGER than the REALITY one and fuelled by electronic credits / fiat paper with NO HISTORICAL backing (like GOLD previously) apart from a promise of some intrinsic value givenby the printers toting new words of mass deception with guns primed offering deals u cant refuse.

Thats the basic evolution ..... con the world that the US is the only place to invest in ...... suck in forex liquidity thru smoke and mirrors for ransom......print as much paper IOUs as u need in exchange with full
knowledge that all u have to do later is devalue the debt by printing more paper ........... and so much more.

BUT they insulted Nature and the Twelve Olympians with their arrogance and falsehood and making the unforgiveable mistake of believing their own words !!!

Control was lost and the bubbles began burrsting ......tech boom based on hot air; USDX as the reality of the megacon emerged; DJIA and friends as the control was lost and the greed turned to fraud and lies at all levels ..........with the "worst" yet to come.

The USD is so intermeshed with all other paper and virtual instruments / derivatives etc that the whole world is now at risk of financial meltdown ,
waiting for the first rat to make the first move which knocks over the dominoes.

DJIA is now less relevant than SPX cos they just keep changing the components to suit the window dress. The beast has become too big to control and is on the verge of cutting loose. Check out Puplava's Perfect
Storm series in financialsense.com for details of how these things have evolved and how they threaten to torpedo the system from any one of many
independent directions .... "rogue events".

So whats ahead? ..... In my opinion of course. And my opinion first came as Delphic clarity thru the cosmic smoke circa April 2000 when the NDX failed
to hold the 4200 support level signalling confirmation of the mega-reversal ..... some 8 years realistically too late tho IMO... the DJIA etc completed its
double top in 2001 and started its "A" wave down to its Oct 12 02 low.

We now have

(1) The world flooded with intrinsically worthless IOUs called USD whilst the US continues to vacuum in forex albeit at a declining rate;

(2) A 2 bill USD / day need of foreign funds influx to continue funding the US deficits and keep the USD from collapsing to nothing and taking the foreigners reserves holdings down with it....hence they continue feeding it
...they have to;

(3) A complex derivatives mess which no-one really knows how to untangle nor what would happen or how to cope WHEN some event finally pulls the plug
.....everything dissolves and disappears into electronic space .... and it only needs the first domino to fall .....

...THATS why the relatively miniscule GOLD derivatives market (albeit 10 times larger than actaul physical markets) is so important to keep under check, cos any uncontrolled breakout from its capping can bring the whole virtual system down ..... And it is estimated the total DERIVATIVES market size is around 90 trillion bucks atm ..... I dont think anyone really knows any more;

(4) The whole middle class of the western world conned into participating in this paper and "e" virtual madness of liquidity since its 1993 beginnings now totally hocked to the hilt per ballooning mortgage debt assuming their property values are gonna keep going up forever and with no savings to fall back on in case it dont ......... the fall in US Fed rates to
historical lowest from DJIA "A" wave lows was another move to pump liquidity to keep the system afloat after equity market crash threatened to pull the
system plug ........extreme measures for extreme dangers.......cover yr debts by taking more cheap debt ......cheap for now ...... compounding further the "extremity".

(5) USD in downtrend and hence COMMODITIES in uptrend ...they can print all the paper they like but commodities / resources are finite ......why should OPEC give up its precious stuff for worthless paper ..... they gotta keep adjusting the price to keep pace with the increasing worthlessness of this paper ........ same will apply for all commodities as the proverbial hits the fan .... look at metals prices over last coupla years;

(6) The yanks using their military might to enforce foreign and economic policy ... extreme conditions require extreme measures and intense smoke and
mirrors .... enter Irak 2 at Fib 13 years after Irak 1 ...... wonder if anyone has studied the Fibonacci relevance to timing of global conflicts (?) .... check out the cosmics too :)

(7) China licking its lips picking up assets in exchange for the worthless bits of US paper it increasingly holds from riding the USD to ensure ongoing increase in global market share...already on a global resources
shopping spree ....holding its currency like a millstone around the USD neck to maintain this advantage ........ exporting deflation to the world keeping prices low and shutting down the competition.

(8) M u s l i m world thinking C hr is tia ns are disciples of the underworld .... and we sure have given them cause to think this way ........ what ever happened to "truth, justice" and superman looking after the meek? .....at least the good US public is starting to believe they have been conned and starting to demand answers .... whilst we are too busy worrying about the footy to bother;

(9) Global property bubbles in hyper mode fuelled by irresponsibly low interest rates' death wish, with plebs over-extended and now facing increasing rates. Bubble ready to burst.

(10) Emerging evidence of US pension fund deficiencies making the good people increasingly aware of the fraud, lies, incompetency, smoke and mirrors extending to and threatening their own future economic wellbeing.
Wonder if we r gonna start seeing such here as well.

(11) An increasing number of born agains holding the reins of power and the trigger on the big guns believeing not only that Armageddon is coming but anxious to do the right thing and urge it along!!! Its these guys who actually vote cos their preachers tell them to how and when .... most others dont care. Its these same non-Olympians tho who acquit their preacher of 36 counts of alleged fraud causing billions of bucks of innocents' savings being wiped ......... he had his "faith in J C" for Zeus' sakes !!!

Ahhhh where are the days of Olympian glory. No hang-ups. Battles for glory in the name of Aries with pauses for games of glory in the name of all Olympians. Celebrations in Dionyssos' name with mandatory attention to Aphrodites willing maidens. Sailing the Med in rowboats challenging the Fates. Honour, truth, justice, humility ..... LIVING and FEASTING on the wonders of Nature whilst bowing in humility to her Omnipotence ! Instead we disgrace and insult her and tempt her merciless wrath which is about to be unleashed.

Thats the background Zen ........... I am disgusted with it all, so will go to the gym to cleanse my mood.

Next chapter will explain why our good ship Compass, true to Olympian ideals, is indeed our sturdy ARK, ship-shape and seaworthy to protect Olympians from the impending perfect storms about to be unleashed by Mother Nature preparing to cleanse the crimes and humiliations being committed against her.

These are MY ramblings of course and may not be yours.

I need a drink of ambrosia and a puff of cosmic smoke.


....ends...

Chapter 2....


URSA MAJORIS born y2000/1

Likely age : Fibo 13 years following Fibo 21 years of the previous Bull.

Likely Mode : 5 primary Elliott Waves A-B-C-D-E

Lets talk DJIA cos I have all the figures in memory ...tho they have changed the nature of this beast .... when one component does not perform, it is simply replaced by another which does. Tho SPX is the more appropriate representative .... will also use.

So far (and dont forget straight from memory so dont quibble about minor inaccuracies) :

"A" primary bear wave completes in 5 moves to Oct 12 2002 low DJIA 7200. Size of move approx 3400 points. Major pivots along the way ........ the Grand ORM pivot 7930-8150 IDL-EOD levels Sep 23, 2001, the first trading day post 9/11 closure. The mega-line in the sand tho was at 9800 where it hit twice and on third attempt sliced thru in June/July 2002 heading straight line to the low within about 4 months. The 9800 level remains the line in the sand for CURRENT market too ..... corrsponds to around SPX 1125

"B" megasuckers rally wave can be seen as either beginning from there at 7200 or more likely after a double bottom at DJIA 7400 Mar 2003. 3 distinct rally waves with top last March 2005 at SPX 1229, with lower top either side of it completing the triple top.
Many believe we should have rallied back to the 61.8% Fibo rterce level of 1254 and i too gave it a chance. But last attempt seems to have failed and recent failure to hold DJIA 10400 makes me believe we have indeed seen the high last March and "C" megabear has already sneaked outa his cave and starting to clear his sleepy eyes. Irak 2 smoke and mirrors extended life of this babybull prob by a year. Cosmics and lunar phases etc were deadly with the turns.

"C" Ursa Majoris Hunger Wave .....otherwise known as ORM asset deflation wave ..... or YEE .....yuppie extinction event. .....................current

IMO it seems to have crept in when no-one was looking around the Mar equinox 05 (sure nailed an interim XAO peak at least) and recent winter solstice /full moon nailed the next turn. Suspect we are in C-1-3 about to confirm after a bounce or two circa DJIA 9800 .... where I think we are headed for now, given the 10400 line in the sand only held momentarily for a deadcat bounce so far.

Naturally no-one will be concerned and even call it a healthy correction, if/when it bounces off the 9800/50 ORM major pivot ..where it crashed thru around 3 years ago. HOWEVER, if it doesnt hold, FEAR and PANIC will indeed set in and confirmation of C-1-3 will be at hand. Some Cosmics show an AUG focus coming up, with another around NOV or so.

Whenever the timing confirms, IMO we are already at the beginnings of megabear-C asset deflation wave and the gates of hades are about to open in a debt default induced black hole akin to japan 1991+. This is DEFLATIONERY and IMO, thats why the yanks aint worried about oil price moving up ..... in fact suspect they would WANT this to add a little inflation into the system whilst maintaining control cos if it got outa hand it could even trigger the economy tripping over into an uncontrollable megabear C .......... Mother Nature's revenge of mortals tampering with natural cycles.

IMO megabear C asset deflation wave will trigger with a move thru DJIA 9800 ORM pivot and will not pause til it reaches the ORM megapivot 7930-8150 band. That may be the end of C-1 .... and that could be seen in WEEKS from now.

C-2 rally would prob take it back to some EW / Fibo retrace level u know, the std 32, 50 or 62% bounce levels .... but 9800 ORM pivot would stop it IMO. Other poss resitances would be 9150 and 9500 ...past important turn points.

C-3 is the crash wave .... and crashes dont happen without surprise. On the lookout later for it withinthe grand ORM. The likely low for C-3 which has to be greter than C-1 which is prob gonna be around 2400 points size, would have to crunch it below the "A" low of 7200 ........maybe as low as 6600 or even lower.

C-4 rally then and followed by final C-5 wipout of the EXCESSES of this pseudo bull market from 1993-2001.............and since IMO the "natural" high should have been circa 3600 / 1993 level, a wipeout of the last 8 years excesses of the pseudobull would see it back to that level fo final "C" low.

3600 also has a "harmonic" feel to it given x 2 = the 7200 "A" wave low.

So MY target for megabear C asset deflation wave is 3600 or so and my "timing" expectation is over next coupla years .... unless some mortal adjustments are imposed by way of another "Irak".

What happens during this DEFLATIONERY phase if indeed it does eventuate?

(1) DEBT DEFAULT BLACK HOLE EXPANDS to suck in equities, bonds and property values ...... causing

(2) increasing unemployment, economic depression, falling commodity prices, falling gold price, falling PER ratings of PRODUCERS AS WELL as falling EARNINGS per se, massive reduction of ASX list, increasing crime etc etc etc

(3) INCREASING INTEREST RATES competing for the residual liquidity

In asset deflation megabear C , ORM motto is "CASH IS KING AND DEBT IS DEATH" Hence my own personal ORM 80 / 20 rule having already liquidated all investments progressively over last year or so. And NOT cos i believ in the long term "worth" of paper money, but in a debt default induced black hole, even paper has some worth as asset values disappear into thin air or into e-virtual space.

And if I am right and this is what happens to REAL asset classes, just imagine what happens to VIRTUAL "e" pseudo asset classes. Say what ?

Margins are called so the marines of the market driving it are first wiped out .... the margin traders. And in an uncontrlled domino fallout, even HEDGING in DERIVATIVES inc CFDS are WORTHLESS cos the issuers of such VIRTUAL instruments just shut their doors and claim Chapter 11. Ever tried to battle it out with a market maker when the trade goes against him? It aint pretty let alone fair. Thats why i gave up THAT suckers game long ago. OK so long as things are orderly and they can hedge your hedges, but when Ursa Majoris wreaks havoc, they are only promises aint worth the paper they AINT even written on.

So, even IF u believe in cash is king philosophy, take care WHERE your cash is held. Top 3 banks spread for mine (I dont like NAB) and put a bit in a safety deposit box in case accounts are frozen and gov bonds given ..... u may not have access to yr account but they cant stop access to yr safety deposit box. Go one step further and keep a bit of this cash in legal tender AUD gold coins if u can get yr hands on any, tho that aint gonna be important until AFTER megabear C ends.

Survival of the fittest, most flexible, debt free Olympians with sharp cleavers patiently waiting for the remaining baby bulls left standing.

Meanwhile tho, baby Olympian CMR moves to toddler stage and begins its fiddling lessons amidst the flames of Rome. THATS why I only use PER 6 and not the current norm PER 12.

And granted, "E" of PER will be coming down in USD-denominated metal price terms, but being a commodity currency, AUD will also be coming down with the metal prices. Our Olympian leaders have not left this poss unhedged either ..... look at the L/T prices used for the project financials basis ... about 30% under spot. ANZ merchant bankers must be thinking in similar terms too cos they target an AUD 0.66 by EOY.

Of course this is simplistic cos there will be competeing drivers at differnt times in different parts of the world during this loss of control and deflation of the last decades worth of hot air across all asset classes. And then there will be paper devaluations beginning at differnt times at diff places to try and compete for fast shrinking global economic pie and residual liquidities. It will be history in the making and u might have to rely on pro-active Olympian economics instead of reactive conventional economics to stay ahead of the herd.

Mentality during megabear C is PRESERVATION OF CAPITAL, cos there will be NO wealth creation during this phase. If u lose ONLY 30% of yr realisable worth and are liquid enuff to pick up residual assets at 10c in the dollar, then u r effectively 7 times relatively better off in the following up cycle.

Dont know what im talking about u might think? Check yr history 1929-32- 39 ........thats how the rockefellas and JP Morgans quantum-leaped while the plebs were suffering. But u gotta be nimble footed and realise the banks will NOT BE OFFERING EASY MONEY during this time .......u gotta alraedy be cashed up and patient.

Ive seen it several times so far since my POS early trading edecuation days. The symptons now are the same .... but its gonna be MUCH BIGGER this time. And the pity about all this is the young middle class generation which hasnt experienced a real bear market cos there hasnt been one since pre 1980 !!! So they have been conned by the spivs (the major lenders being the most irresponsible) and wont know how to cope when it happens.,

Thats my thinking for next coupla years , maybe to around 2008/9. And I try to keep all possies covered. For now 80 cash (inc some metal) / 20 CMR riing out CMR's organic emerging growth during my expected asset deflation phase, preparing then for the tsunami surf wave ride of a lifetime .... if we are still standing financially ..... somewhat protected by ARK CMR.

Chapter 2 is about ASSET PRESERVATION and damge control .......... megabear C .........asset deflation wave.

Chapter 3 next (maybe over the weekend) is "D" wave rally, fuelled by Kondratieff commodity/resources/gold supercycle "C" wave .......... fuelled by paper currency devaluations trying to pump prime deflated economies back to their feet.

Stay with me Zenmammon cos I wont be writing this again ....


...ends...


chapter 3 ....


Schnitzel, we are already in WW3. The antagonists are the USD against the rest inc :

(1) Gold .... whose Biblical role as being the ONLY currency (along with silver) acknowledged by the holy ones. In 1971 decadent mortals lowered it from its pedestal and conspiringly developed a series of derivative instruments to hold it down whilst raising the printing press in its place. Even as recently as y2000 they tried to impose a "barbaric relic" status. However this didnt stick and it now behaves like a CURRENCY biding its time for when it regains its status as being the only true currency. Meanwhile the battles rage on this front against USDX but the USFed and its agents maintain control by virtue of the size of the virtual market created around the physical. I suspect that whilst the Fed was debasing it in the eyes of plebs, it was accumulating it in exchange for worthless paper for future "use". No-one outside knows the status of US gold reserves. Any new stable order of currency after the dust settles must have a gold standard reinstated for credibility. Malaysia wants a new golden dinaar following the teachings of the Koran and Mexico wants a new silver peso as its currency basis. Such moves are further new battlefronts in WW3 against the USD. Altho the gold derivatives market is prob the smallest of the major virtual markets, it alone poses a major threat as a prime detonator in torpedoing the USD. Hence the aggressive controls imposed by the main agents GS, ML, BOA with unlimited ammo supplied by the USFed. Their days are numbered.

(2) EURO ..... born in 1999 creating a new battlefront at ER 1.175 USD (thats prob the main support to current downwave) Immediately counter-attacked with the US-aggresively inspired "Balkans War" sending it reeling towards its lows around 0.85 ..... the outflows into USD adding fuel to the orgy of DJIA and friends' final blowout in y2000. After a tech rise to the 1.40 mark which I called accurately based anticipated gold price levels (my call then 445 from 320) from the lows of both, it is now under attack again giving the USD and US equity, bond, property markets temporary reprieve once again. EURO itself is only a FIAT paper and doomed ultimately with the rest. Recent breakout of gold from EUR 350 shackles caused a stir that gold was rearing its head beyond simple relative "currency" status like the rest, but has since been capped again with further manipulations down in the yellow metal's perceived value. In the "cash is king" deflation phase all currencies inc gold will react in unison against a firming USDX ...happening now.

(3) China ..... the biggest single threat to USD as it continues to export deflation whilst holding its currency set to a USD standard. Yanks really dont want to see a sharp decoupling of the RMB/USD set. Maintains economic competitiveness expanding its global economy market share at the expense of the West, fuelling its middle class expansion ..... now est to be some 150 mill of the 1.3 bill pop...... and using the same intrinsically worthless USD credits to buy out global assets inc resources and now even US companies. As the Chinese middle class expands, hunger for resources increases. Soon and just like the US in past global recessions, there will be enough internal demand from its expanding wealthy middle class to make it less dependent of the world. Military might will increase with economic. Even now it is too big to challenge militarily one would think. The RMB will eventually become the global reserve currency. RMB remains intrinsically undervalued cf USD even now to tune of around 30-40%. Best investment for mine is to acquire Chinese residency by marriage and invest in Chinese assets as Rupe recently did Property in Southern China looks attractive to me. Meanwhile China continues its battlefront undermining the USD per exporting deflation to the world.

(4) Eurozone expansion .... attacked in 1999 by the Balkans "War", undermined at the UN in Irak Mark 2, undermined recently by attacking the credibility of the Euro. Longer term megathreat to USD if/once it gets its act together. Historic experience makes them very cautious re inflation but current politics threatening to destabilise. UK retains its covert US-agent role by refusing to support the Euro. With the depletion of North Sea oil revenues tho, its only a matter of time the poms will jump ship. The poms caused the last global depression by doing same with interest rates torpedoing the US economy in 1929. Churchill pulled the plug on prosperity in his role as Chancellor of the Exchequer at the time. All was forgotten in the later red herring called WW2. Russia holds the key to future health with its increasingly expanding role as supplier of natural resources to Eurozone and increasingly paid in EUROS !!!! Such a move was trigger for Irak 2 invasion ..... stupid SH decided to openly challenge the USD by trying to switch to payment in EUROS for his oil. Such a threat to the USDX could not go unanswered and espesh since other motives existed coincident. Next major military global conflict may be between US and Eurozone rather than China ..... that comes later. In fact Olympian Nostra foresees something along those lines. Russia's role increasingly challenges the USD. Russian hardliners remember the insults imposed in 1996 "empire" dissolution. Russian rouble collapse in 1997 almost brought down the US equity markets per the LTCM margin possies in roubles .... everyone conveniently forgets that a single event as such caused a s/t collapse of around 20% in the DJIA. The USFed had to intervene to hold the financial system together. They said they would NEVER intervene again. But thats ALL they have been doing ever since !!!! Russia remains a loose cannon and poses extreme danger to the USDX.

(5) OPEC .........the current OVERT battlefront ..... tho methinks it is not the truth showing. Saudi Arabia remains a puppet of the US. The sheiks would be wiped out without US "protection" akin to the mob MO. Military presence in neighbour Irak is essential to maintaining some control over ME oil, not so much in Irak, but moreso in SA. However the sheikhs might be playing a double covert role. Either way for now, high oil price is necessary to providing a little inflation in the system and covering the reality that DEFLATION is the immediate concern. Controlled elevated price of oil remains a key. Extreme move EITHER way poses a major threat to USD. All it takes is a few pounds of plastic and up goes a refinery and up goes oil price to 100 bucks .........and the global economy stops. Tightrope for the smoke and mirrors magicians to continue walking a long. An uneasy "relationship" remains.

(6) M u s l i m World. No major threat unless it is co-ordinated per terror (SA oil refinery targets best effect), imposition of Koran inspired golden currencies affecting the balnce of the gold derivatives markets, I r a n challenging the US resolve. Terror is being coralled by taking the front to Irak. The words of mass deception have created a convenient red herring to take the public focus off the real problems at home. Danger remains in the mobility of small nukes or bio possibilities at any time anywhere. There is no control over this. One has to hope that even terror is a controlled event and maybe all antagonists have common ground to not allow this to escalate to uncontrolled stage. Wildcard. Lotsa plebs working for Allah ..... but WHO does A l l ah work for ????????? Thats a chapter in itself. Lets just say OPEC is main agent and atm seems to be honour amongst thieves prevailing. Lets hope the balance remains.

(7) Nature .....now we come to the MAIN battle front against the USD. Chaps 1 and 2 deal with the insults committed by mortals and their MO. Cosmic cycles will occur no matter what, cos human nature doesnt change. Cyclically we are due for a cleanout of capitalism ....simply done thru debt default. Greed and Fraud are Nature's agents. Deficiencies current in trade, government and pensions overwhelm ability of mortals to satisfactorily address without reliance on those printing presses again. There is no co-ordianted plan to address. Herein lies the largest and most immediate threat to the USD and the derivatives dominoes wait ready to roll. The greatest weakness lies in the failure of those same mortals to accept the perilous state of their existence. Further danger lies in new geopolitical fronts being opened to take the focus and urgency away from the real threats. There aint no uncoordinated "easy" Iraks left to make an example of. It has been 2 generations since the last time Nature brought reality back to uncontrollable greed.

We remember the mistakes of our parents but not those of our grandparents. S_V_Crumb cites the "hard times " of the late 80s early nineties. What hard times? All I can remeber was diving outa the market on the day of the 87 crash, recovering my liquidity over next 2 years in CommmBank at around 17% at call and picking and choosing the resources remnants at the Jan 1991 double bottom to later register a great return period cashing out in 96 just ahead of the Asian crisis. Timing is EVERYTHING to yr risk/reward ...and time to re-assess yr status is now given the threats.

We are indeed already in WW3 .......the world against the USD. At the monment the battles rage in favour of the USD ...but IMO its is running out friends and more imporatntly outa TIME against Mother Nature. Loss of control in any one of the battlefronts cited above could trigger a sharp reversal of USDX from current rally (USDX 92 seems a natural major resistance looming) and the sheer number of possible triggers raising their heads has gotta influence a betting man's decisions. A plunging USDX will cause massive dumping and repatriation of all classes of investments outa the US inc equities, bonds, property and herald in Puplava's Perfect Storm ...a MUST read. Thats the MEGABEAR ASSET DEFLATION wave ORM is on the lookout for.

I could be wrong but Ima betting man and play it the way I see it. Nailing the background global drivers is more important to me than daytrading according to short term charts. Alerting yas to the POSSIBILITIES and to the likely TRIGGERS might help yas make yr own decisions as to what insurance policies u may wish to place in yr investment exposure. My focus is on asset PRESERVATION to ride out whatever heads our way and still be around to take advantage of the opportunity of a lifetime when the dust settles. IF I am wrong, no harm done to take a little care. A little opportunity lost is a small price to pay for life protection if Im right. We will know soon enough. DJIA 9800 break is the first main ALERT.

Above refers to megabear C still. Kondratieff C-UPwave next chapter.

Nice to see baby break the buck while Ive been writing this. When/where is our first dollar party Olympians ?


....ends...


Chapter 4...

Ok , i had a drink and a puff of cosmic smoke and now looking into the glass again. Have given yas reasons why i think megabear C is nigh, the reasons for the mess, the possible triggers to stay alert for, the possible evolution of Ursa Majoris wreaking destruction thru all classes of assets, the possible targets based fibo/cosmics/olympian analysis .... and yes, the good stuff will go down the drain with the bathwater as it too is cashed in to pay the debts of the bad stuff.

Asset preservation is the name of the game during this DEFLATIONERY wave where CASH IS KING and held at call at higher interest rates in the 3 major banks only with a bit under the bed and a bit inc the golden insurance policy in the safety deposit box. Likely timing is anytime from now... AUG and NOV poss danger times next Likley duration is 2 years ......... IFFFFFFFFFFFFF I am on the ball.

(A) So WHAT IFF I am right ?

Well ORM no debt, 80 cash / 20 CMR Olympian scout MO keeps ya sleeping nites and alert to the firesales due at the end of it.

Unemploymeent will increase, debt default will abound, there will be no easy money on offer from the banks, consumer demand will be a memory, yuppies will be forced outa their Port Melbourne town houses and back to their parents' homes, psychology will dampen to say the least. Interest rates will rise in competition for remaining liquidity and further feed the rot. Olympians will head for sunnier places far from the madding crowds ...probably adrift the Med with their select crews and mobile laptops, keeping one eye on the welfare of the 3 main banks their funds are mostly kept in.

Re listed companies :

(1) Mature stocks' earnings will FALL ......AND

(2) Price Earnings RAtios will ALSO be downramped by the prevailing mood to something akin PER 7 average (from current PER 14) to compete with the lack of demand and higher interest rates likely.

Consider a 50% reduction in earnings coupled with a halving in PER gradings ....... theres ya 70% fall in the share index.

Consider also the US SPX is currently trading at around 20 times earnings. Maybe my DJIA 3600 prime C-5 target is a bit generous ?

(3) Specs will hibernate into deep freeze hoping their existing funds can meet listing requirments to ride out the rot ....... IFFFF they ARE capable of raising more funds, it will mean existing shareholders will be diluted to insignificance ..... cheap shells will abound.
Half will disappear off the boards and into distant memory. The other half into spiv's hands.

If u think this is fantasy, well let me tell u I have LIVED thru this four times in my trading history but to varying degrees. Megabear C in current market would set new standards.

*******What happens then ?

Well as global market pie shrinks, there will be pump priming panic attempts around the world in competition for the remains.

(1) Currencies will devalue in attempt to stimulate depressed economies.

(2) Countries with less to lose will fare relatively better

(3) Countries with lower employment costs will fare better .......... bringing home the TRUE meaning of globalisation the west has been "complaining" about ..... west will fall to meet the east instead of east rise to meet the west. They who complain should beware what they seek to gain.

(4) Resources demand and hence prices will initially fall with global demand slowdown and less competitive mines will close down. Efficiencies will improve in survivors as cost reductions ensue both naturally and imposed. However, weakening currencies will buffer price earnings declines in the leaner and meaner survivors. Remember that once a mine closes , it takes considerable time to re-open again. The surviving producers will reap the benefits of the subsequent turnaround.

(5) Increased pump priming attempts per currency devaluations with interest rates managed to manage the rate of fall will outstrip falling commodity prices due to slowing demand, to point where commodities and resources wld bottom and reverse first.

(6) Since commodities/resources are priced in USD and it would take major changes over considerable time to change this structure, and since the USD is likely to suffer most during a global slowdown cos of its current debt / deficits postion, CRB index values will begin to rise in real terms with plunging USD ..... espesh as other currencies joined in the musical chairs of paper devaluations.

(7) Likely derivatives domino wipeouts would add further impetus to the evolution of a wholesale dumping of paper mentality in favour of hard assets ......... the beginnings of the Kondratieff supercycle "C" upwave.

Pause here ........ a megabear C downer would crunch all asset classes and trigger the Kondratieff "B" retrace wave. Ensuing paper devaluations / pump priming would trigger the Kondratieff "C" supercycle upwave.

Kondratieff resources cycle began in 1999 and is expected to run its historical usual 15 years. It is a metals / resources / war cycle. 1999 start saw the "Balkans War". Then we had Irak 2. Now we are poss entering a pause in hostilities with corresponding retrace in commodities. Later pump priming after a megabear C downer may also include another "stimulatory" war .... Iran? N.Korea?

Kondratieff-C is a resources boomwave and capable of fuelling the general "D" wave rally of the broader market. But since resources sector is only a small part of broader market, even a major rampant resources bull in the surviving cost efficient producers would only part rally the broader market in technical retrace to the megabear"C" crunchwave.

Likely timing IMO for this K-C wave is end megabear C downer sometime around 2007/8 and roaring into a 2010/11 peak. then pause during megabear E and final move to some kinda D/T by its end circa 2014.

K-C is a cost push INFLATIONERY component ....... soaring resources/metal prices for surviving olympian producers fuelled by devaluing paper currencies.

An inflationery K-C coincident with depressed asset value megabear-C and ensuing flatline D and E in broader markets, gives us our severe STAGFLATIONERY period likely for western economies holding major debt possies ahead ...... US, Oz

Gold will do its own thing in K-C as it decouples from the alternative to USD paper currency defacto role it presently retains and assumes its possie as king of the kids as USD money supply is once again moved into hyperdrive.

So long as ORDER is maintained and the financial world as we know it survives thru this without derivatives markets implosions throwing us into chaos, gold will prob hit USD 2000 / oz some time 2010-2014, and maybe even assume some kinda role as USD standard again to stop the rot.

If on the other hand we have derivatives dominos the order of the day, gold sovereigns may end up being the only legal tender for buying our bags of rice. A hedge to this poss is to keep some gold coins as insurance just in case , as well as plant fruit tress and a vegie patch in our back yards. Back in 1987, I recall a broker mate of mine suggest the only hard assets of value in the world ahead were gonna be the 3 "B's" ..... bullion, bullets and barbed wire. Bit harse at this stage and coming from a wealthy man as he ........but that comment has remained in my mind since.

I subscribe to order being maintained but also true globalisation emerging at the end of this megabear viz equality but at a lower level for the west.

*******How does this affect CMR ????

So long as CMR achieves its modest schedule of conservative production and expansion, it will be in the envious position of being one of the lowest cost / highest earnings ratio producers on the Board.

At equivalent 3.5% Cu grade from top 20 meters surface open pits in simple heap leach in middle of infrastructure with plant payback less than 1 year and lotsa reserves, CMR is sitting very pretty.

And even a PER 6, appropriate to a megabear C downer, based conservative metals prices / AUD buffer and preferred supplier status likely, it is the best I can find on the Board atm and hence my own hedge against coming adversity I expect.

Risks remain in delays in approvals / project financing and getting caught by the megabear C. Rewards far outweigh the risks given current market cap in relation to PER 6 expectations on STARTER project alone.

Producing ex oxides thru any market downturn puts CMR in the further enviable possition of being able to pick upo the pieces of failed pseudo Olympians around it. At modest 50 mill pa earnings expectations over min 6 and prob 10 or greater years, it will be in a possie to pay considerable dividends thru any period of adversity whilst building its own warchest. A reduced number of resources producers candidtaes means that some of our industry's super money would find its way into CMR, prob providing better than my PER 6 expectations even in a downer market.

Likely fall in AUD /USD would proba provide better earnings results than I have allowed for.

Steady growth thru any C-downer wave would set it up for the ride of its life with a likely K-C following as the bear wiped out much of the competition available to attract public investment funds.

Sulphides expansion within a K-c inflationery metals wave coincident with its mature oxides production would set it into warp-drive with the megabear D rally wave. U would want us to also have a GOLDEN flavour at that time. K-C would provide CMR with the drivers to take full advantage.

*****And what if Im wrong ?

Hallelujah brothers amen !!!! If we just mosey on down the road with no major hurdles .... then expect the most even faster. If China keeps booming away and metal prices keep moving up, we will still have a falling USD cos of defits etc but in an ordelry fashion. And likely PER 10 wld be used instead of super-conservative 6 ...and even out to PER 15 once the longlife sulphides project came into full swing. We wld prob still get a K-C upwave but based on real demand instead of paper devaluation driven....tho that too wld still prob coincide.

Case 2 of course is preferred cos no-one wants to see pain. But i keep thinking of those virtual derivative markets stacking up[ like dominos, and whatever the final outcome, feel better holding equity in hard assets suite .........about 8 differnt metals at last count ........providing us with flexibility and making us a likely PRIORITY target for a great white at any time.

And as Huntleys cite, the "speculative" tag gets dropped with project finance. .... and thats gotta be getting pretty close now....and THATS when the instos start looking forbig licks ...and there aint likely to be enough to satisfy them.

Bit rushed at end but can answer specific questions as u ask them.

Dont forget my priority still remains CASH and looking for the comfort trigger to move some of that back into resources.


END OF ORM.....

Cheers TCG