Financial Sense Blog

With Gold and Silver going into hibernation at least temporarily our attention this week focused on trading Oil, currencies and forex. The snap reversal in Oil left many traders wondering what they missed. What was that secret line that the big boys knew so well and you didn't?

"The theory of Communism,” wrote Karl Marx and Friedrich Engels, “may be summed in one sentence: Abolish all private property.” When the Communists took over Russia in 1917 they attempted to practice Marx and Engel’s “theory.”

As the global economy attempts to wean itself from dependence on oil, it will search for viable alternatives.

One of the key debates among investors at the moment is that of greater macro inflation versus deflationary forces. Go ahead and check out investment message boards/forums focusing on gold, commodities in general, housing, etc., and the debate is hot and furious.

The world of investing is increasingly a world of frantic action, of high leverage and short attention spans, of a desperate search for the “next big thing.” There is a great fuss made in the financial media over quarterly results, and mass exaltation if results beat expectations by a penny. There is constant chatter regarding “sector rotation” and “market timing.”

A powerful force is at work to transfer your wealth to others. Something far more pernicious and dangerous to your financial health than the "cartel" or other boogie men. It is called "the market" and simply put, its job is to get you wrong! If that doesn't quite hang in a literary sense, think of all the ways you can be wrong. You can be short in a rally, long in a sell off, sitting on the sidelines in a blowoff move, underweight or overweight, early or late. All of these positions are just plain wrong.

According to Thursday’s Wall Street Journal, “petroleum products shipped by the world’s top oil exporters fell 2.5 percent last year, despite a 57 percent increase in prices…” We are told, further, that leading petroleum producers are using more oil for themselves.

“A trend in motion, will stay in motion, until some outside force, knocks it off its course!” After watching the parabolic rise in crude oil prices, doubling from a year ago to above $130 a barrel last week...

The shares of KeyCorp fell 10.4% today, hurt by news of a doubling of loan loss estimates and a downbeat outlook from Ohio’s third-largest bank. That weighed on the bellwether KBW Bank Index, which fell 1.7%, and the S&P financial sector, which lost 0.7%.