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Straight Talk with Frank Barbera: Time to Seek Defense Against ‘Hyper-Stagflation’

"Straight Talk" features thinking from notable minds that the PeakProsperity.com audience has indicated it wants to learn more about. Readers submit the questions they want addressed and our guests take their best crack at answering. The comments and opinions expressed by our guests are their own.

This week's Straight Talk contributor is Frank Barbera, one of the top experts on precious metal mining companies and editor of the respected Gold Stock Technician newsletter. In his analysis for investors, Frank overlays a macro outlook on top of highly-rigorous technical analysis, and employs a market-timing based approach to reduce the inherent volatility within this high-beta sector. For many years Frank has also managed private equity capital, most notably for the Caruso Fund, with particular focus on precious metals, energy and currencies.

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1. How do you view gold and silver prices at current levels?

Gold and Silver both look to be in fairly good shape technically, with Gold still acting exceptionally robust.

Straight Talk with Frank Barbera: Time to Seek Defense Against ‘Hyper-Stagflation’

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1. How do you view gold and silver prices at current levels?

Gold and Silver both look to be in fairly good shape technically, with Gold still acting exceptionally robust.

The Dance of the Big, Round Number

PREVIEW

As expected, the “dance of the big, round number” is underway, with the Dow flirting with 12,000 all week, plunging under it, bounding over it, bouncing off of it, and then landing on it to end the week. My view is that a stock market rebound is likely over the next couple of weeks, but this view is based on charts and momentum and liquidity, not economic fundamentals, which are deteriorating.

The macro view here is that much of the value to be found and prices to be seen in various credit markets and the stock market is really just a reflection of the belief that the system will be bailed out. “Too big to fail” is now an operating maxim applied equally to the next Lehman wanna-be and Greece. All of the big players took appropriate notice of the actions of the monetary and fiscal authorities to prevent big institutions from suffering the fate of their poor risk management practices and investment decisions.

The faith that nobody (of any substance) will be allowed to fail is now a pronounced feature of our markets and partially explains the elevated prices we are currently seeing in nearly everything. Another major component of these elevated prices is the excessive liquidity that the Fed, ECB, BOE, and Japanese central bank continue add to the markets

However, we are now less than two weeks away from the end of the second round of quantitative easing (QE II), and everyone should be concerned with the impact that the loss of this liquidity will have on various markets. I think the early warning signs are already in place.

First, the fundamentals.

The Dance of the Big, Round Number

PREVIEW

First, the fundamentals.

Ready, Set, Plunge!

PREVIEW

The economic data coming out now is really quite dismal. What appeared to be a reasonable, if unspectacular, recovery is now in serious doubt. Even more notable is that the economy remains this weak despite all the trillions in stimulus and Fed balance sheet expansion.

The stock market reacted badly to the news, shedding roughly 1.5% on each index, with the Dow closing below the big, round number 12,000.

Here are my thoughts and observations about the past week’s stock market performance and recent economic and monetary news that drove the recent losses.

Ready, Set, Plunge!

PREVIEW

The stock market reacted badly to the news, shedding roughly 1.5% on each index, with the Dow closing below the big, round number 12,000.

Here are my thoughts and observations about the past week’s stock market performance and recent economic and monetary news that drove the recent losses.

Argentina: A Case Study in How An Economy Collapses

“When you ask any Argentinean person what concerns them the most, the first thing they’re going to be telling you is the crime problem. And the second one is the financial problem. Those are by far the top concerns the average Argentinean person has, and I think that eventually it will happen in the U.S.A.,…

Argentina: A Case Study in How An Economy Collapses

Introducing ‘Off The Cuff with Mish & Chris’

PREVIEW

Today we’re introducing something new that we think you’ll enjoy.

From time to time, in between the long hours Chris spends compiling his in-depth reports or preparing for interviews, I’m able to coax him to put down the keyboard. These fun, fascinating moments are one of the best perks of my job: I get to chew the fat with Chris about interesting developments of the day and hear his unfiltered, work-in-progress thinking.

I feel kind of guilty about my good fortune here. I know there are many of you who would dearly love this opportunity to sit down informally, one-on-one with Doc M and just watch his brain run. So, we’re going to try to give our enrolled members the best substitute for this experience we can – actually, a bit better.

Better because we’re recruiting someone of Chris’ intellectual horsepower for him to spar with. My ego might be bruised if it weren’t another of my personal heroes: Mike “Mish” Shedlock, proprietor of the very popular and extremely well-regarded econoblog, Mish’s Global Economic Trend Analysis.

Introducing ‘Off The Cuff with Mish & Chris’

PREVIEW

Today we’re introducing something new that we think you’ll enjoy.

Understanding The Endgame

PREVIEW

Understanding The Endgame

Wednesday, June 8, 2011

Executive Summary

Greece as a case-study in sovereign debt collapse
Why peak oil assures we will not be able to pay our debts
Understanding the dynamics of a future of less/no growth
Steps we as individuals need to be taking in preparation
How to preserve purchasing power during the coming market rout

Part I – Death by Debt

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II – Understanding The Endgame

How might the end game for a debt crisis play out? We need look no further than one of the PIIGS for our answers.

Greece

Greece is in immediate danger of defaulting on its sovereign debt. As one of the charts in Part I makes clear, the pain of such a default will land primarily on German, French, and UK banks. Sure, they can probably kick the can down the road a bit longer, but it won’t change anything.

The levels of Greek sovereign debt alone are far beyond anything that can reasonably be repaid, even under very aggressive growth scenarios.

Understanding The Endgame

PREVIEW

Understanding The Endgame

Wednesday, June 8, 2011

Executive Summary

Greece as a case-study in sovereign debt collapse
Why peak oil assures we will not be able to pay our debts
Understanding the dynamics of a future of less/no growth
Steps we as individuals need to be taking in preparation
How to preserve purchasing power during the coming market rout

Part I – Death by Debt

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II – Understanding The Endgame

How might the end game for a debt crisis play out? We need look no further than one of the PIIGS for our answers.

Greece

The levels of Greek sovereign debt alone are far beyond anything that can reasonably be repaid, even under very aggressive growth scenarios.

Death By Debt

One of the conclusions that I try to coax, lead, and/or nudge people towards is acceptance of the fact that the economy can’t be fixed. By this I mean that the old regime of general economic stability and rising standards of living fueled by excessive credit are a thing of the past. At least they…

Death By Debt

Argentina: A Case Study in How An Economy Collapses – Part 2

PREVIEW

(Part 2 of Chris’ interview with FerFAL, which focuses on smart steps an individual can take in preparation before an economic collapse, is only available to enrolled users.)

Argentina: A Case Study in How An Economy Collapses – Part 2

PREVIEW

(Part 2 of Chris’ interview with FerFAL, which focuses on smart steps an individual can take in preparation before an economic collapse, is only available to enrolled users.)

Part 2 of Arnie Gundersen Interview: Protecting Yourself If the Situation Worsens

PREVIEW

Arnie Gundersen Interview (Part II): Protecting Yourself If the Situation Worsens Friday, June 3, 2011 Executive Summary Identifying the health dangers from radiation & contamination Steps those living in Japan and the US West Coast should be taking today Precautions to take with food The implications of radioactive seawater Urgent steps to take in a…

Part 2 of Arnie Gundersen Interview: Protecting Yourself If the Situation Worsens

PREVIEW

Exclusive Arnie Gundersen Interview: The Dangers of Fukushima Are Worse and Longer-Lived Than We Think

"I have said it's worse than Chernobyl, and I’ll stand by that. There was an enormous amount of radiation given out in the first two to three weeks of the event. And add the wind blowing inland. It could very well have brought the nation of Japan to its knees. I mean, there is so…