I’ve been out of the loop for sometime. I’ll explain later in my post.

1)BSC bailout was a bailout of JPM. If you are looking for a catalyst for gold to trade $2000 this is it. If this takeover ever sees a courtroom the world will see that JPM is too big to fail. Understand that BSC was massively short sub-prime Q4 and Q1. It was widely reported that JPM was on the other side. BSC was slated to report the Monday after they were “dissolved.” The mark-to-market of their sub-prime portfolio would have killed JPM. That was unacceptable. Rumors were started, put buying went to the moon and they were done. Yet, inexplicably, the discount window was opened to brokerages that Monday. Why not the Friday before to save BSC??? So the buyout is $2, yet the stock traded above that and the JPM raises the bid to $10. All the analysts said the stock was worth nothing. Why would JPM raise the bid??? They cannot allow this to go to a courtroom and have the books opened.  This bears watching, no pun intended.

2) This should be a good year for the pms. I fully expect $2000 gold this year. $Silver? (insert number here, no clue.) The consolidation in the gold stocks has been brutal but should end this year. I use RGLD as my barometer and its triangle is ending.  I have no explanation for the juniors, does anyone?

3)Trading advice. When you have the volatility that we have in the markets today, you must learn to trade options and you must be a buyer unless you have very deep pockets. FNM almost doubled in two weeks. That is an opportunity that doesn’t come along often. So if you have your core holdings in gold stocks have a look around for opportunities elsewhere but I would avoid the common, that way you know what you can lose. Also, have a look at most active options. YHOO has a site dedicated to it. If you see a stock there that looks out of the ordinary then you might want to play.

4)I had a look at the last 12 expirations in the $HUI, 8 were negative. The next expiration should not see the type of wipeout we had, however, if we approach an expiration after a nice rise, BUY SOME PUTS for a nickel or a dime that look like they have no shot. It makes the wipeout very easy to swallow when you see a put go from a nickel to a dollar. Play the game the criminals play and you’ll keep your emotions in check.

5) I expect the markets to rally off and on for the rest of the year and then get killed in 2009. The world changed this year and it will take a little while for the investing world to realize that structured finance is officially toast.

6)I still haven’t figured out how it is that the investing world cannot create a buying panic in Silver. Somehow Nigerian emails make it to everyone’s inbox but I haven’t seen an email yet about a silver shortage. Hmmm…..anyone?

7)The panic buying on the short end of the curve is a flight by the wealthy out of the likes of ARS and MBS. It could continue for a very long time.

8)Nevada home prices have declined 40% since July 2005 and most homes still sit.

 I’ve been working very closely with an RFID company (AIDO) in which I have a very big investment. We are working on getting RFID tags in tires for safety reasons and for tracking. Tire theft is a big deal. Look at the contract that ABX signed a few months back and you will see why. We are very active in China because  they are very worried about quality. Ultimately all tires will have these tags as I believe the gov’t will mandate it for recall purposes. Since MICH and GY are our partners, competition does not exist.

I am also working with a man that takes up most of my time who can completely eliminate toxic gases from any combustion engine and any smokestack. The capital investment to get his project off the ground is huge. However, with all the talk about global warming, you would think the world would beat a path to his door. That is not the case and we have spoken to everyone, Congress, Al Gore, Kleiner Perkins, GM, GE, etc. So while everyone talks a big game on global warming, most could care less. (It’s a money-maker, plain and simple.) BTW he can build a car that runs on a battery that charges itself and never needs gasoline. Don’t worry about peak oil, he could eliminate the need for gasoline but I’m not sure the world wants it. I know XOM doesn’t.

I’ll try and update in the months to come. Hope everyone is well and keep an eye on that RGLD triangle, that’s my cue!