Have we seen this show before? The overture sure sounds familiar.

You may have heard that this week, especially yesterday, was a big shock for several commodities including the three that Matty Boy, Investment Advisor to the Stars* follows closely for no good reason other than habit, gold, silver and crude oil. Silver in particular took a massive blow, from about $48 an ounce to slightly less than $36 an ounce, losing roughly 25% of its value in the space of 24 hours. The percentage hits that gold and crude took were much smaller, about 4.5% for gold and 14% for crude. All three still are trading at prices higher than they sold for on New Year's Day.

I bring this up because there was something like this at the end of March 2008. All three commodities were riding high but then took a big single week bump, with silver taking the biggest hit. This was the beginning of the end of the party for the metals, while crude oil rallied back and went to nominal high price records of over $140 a barrel just before joining the other prettier but not as important commodities in free fall. Within six months, we found out that the world economy had been secretly married to degenerate gamblers for several decades, and like all degenerate gamblers everywhere, they eventually hit that very bad streak, bankrupting the world's economy as well as themselves.

Here's my theory. I cannot vouch that it is anything like the truth, but it does sound plausible, which I must advise as Matty Boy, Mathematician is a very long distance from the actual truth. In 2008, the margin calls in the derivatives market were being cashed in, and the losers needed to pay their bad bets in Credit Default Swaps (CDS) and Colateralized Debt Obligations (CDO), so they started cashing out other successful bets, the profits they had seen in the commodities markets. These successful bets weren't even close to covering their losses, so over the next six months a hell of a lot of investors were moving off their positions in silver and gold, some handing it over straight to their creditors, others speculating in the only winning game in town at that time, crude oil futures. When crude hit the high end of its roller coaster ride and began to fall precipitously, the last slot machine in the casino that was paying off went bust and it was a flat out panic, which the public was informed about when Bush and Hank Paulson told us they need $700 billion like RIGHT THE FUCK NOW or everything would simply stop working.

Again, I have no idea if that is the case right now, but I am certain of one thing. The problems in the derivatives markets have NOT been fixed. There is still no limit to how much credit the big banks can get in this insane casino, and some may be in the stinky position Bear Stearns was in when it died, $30 of bets on the table for ever $1 of actual assets they had on hand.

The people running the show these days, followers of that disgusting homonculus Alan Greenspan, himself a follower of an even more disgusting homonculus Ayn Rand, tell us there is no way to regulate the markets. Recall that 30 years ago, the Hunt brothers tried to corner the silver market and took a beating. They didn't take the entire world economy with them, but Paul Volcker, who was then head of the Fed, thought the situation was serious enough to institute a rule that banks weren't allowed to lend money to speculators.

Now it's the banks themselves that are lending money to speculators on their own payroll and the free market fetishists in charge of the world economy see nothing wrong with this.

If you are the sort of person who prays, now would be a good time to start.

Crazy, but calmer.

Matty Boy, Investment Advisor to the Stars*, is still keeping track of the financial situation despite the fact he does not have two nickels to rub together, and I'm not talking about the gold plated nickels seen at the lower part of this picture. I'm talking nickel plated nickels or pure nickel nickels or whatever alloy they are passing off as nickel nowadays.

For anyone who isn't sure who was in office when things went nuts and then crashed and burned, here's a quick rundown of what happened to gold, silver and oil in the past few years.



2007
Gold +34.9%
Silver +17.4%
Crude Oil +74.8%

2008
Gold +1.4%
Silver -30.0%
Crude Oil -61.8%

2009
Gold +27.1%
Silver +49.8%
Crude Oil +57.1%

2010 (nine months)
Gold +20.3%
Silver +31.1%
Crude Oil +2.7%

There's a lot of talk about the people who sell gold to an unsuspecting public, but it's actually a pretty good investment, though not when you buy coins as the company Glenn Beck shills for recommends. If we have another 2008, and those who are given to praying should pray that we don't, gold tends not to crash and burn like other investments. Still, since the crash ended, silver has steadily outperformed gold. Before things went to hell, about 50 ounces of silver bought an ounces of gold. At the bottom of the investment crash, it took 80 ounces of silver to buy an ounce of gold. Now the ratio is 60 to 1 and improving in silver's favor as both commodities climb.

The "nice" part of the investment world right now is that crude oil is off the roller coaster. It's bounced around in a range from about $70 to $85 a barrel this year, which might seem high by the standards of the beginning of the century when people thought $50 a barrel was the end of the world, but it's nothing like the $140 a barrel nonsense from 2008 before the crash and it no longer shows much correlation to the gold and silver prices, thank Odin.

Metals are supposed to be the investment for speculators. The life blood of the world economy, not so much.

And then there's the other weird worldwide speculation market, currencies. The dollar was very, very strong at the end of last century, trading as the USD index at around 120 points. During the early part of the last decade, it began to plummet, and at its lowest the USD index was around 70. It rebounded to around 85 after the 2008 crash, but it's slipping again and is below 80.

The USD index measures the dollar again a mix of currencies. The strongest elements in that mix are the pound, the euro and the yen. A few years ago, the euro and the pound were beating up the dollar. Now, the greenback has rebounded against those big currencies. The big currency that is now beating up the dollar is the yen. Usually, a yen and a penny are about at an equal footing. Today, 84 yen buys a dollar. That's as strong as the yen has been in a very long time.

The yen is the big winner right now as a currency investment, but an odd mix of other currencies are doing well against the buck. The Aussies, Brazilians, Canadians and Swiss are all near ten year records against the greenback. The Chinese, who don't really believe in completely unrestricted capitalism, bless their little Commie hearts, often don't let the yuan float in value in the day to day currency market. For years, they set the price and a dollar bought 8.25 yuan. In late 2005, they let the yuan float and it became more expensive. In 2008, they decided that was enough fun and the price became stable at about 6.8 yuan for a dollar. It's starting to show downward movement again, currently at 6.68 yuan.

I hear you ask, Matty Boy, Investment Advisor to the Stars*! What can I do to profit in these uncertain times? When I hear this, I immediately know... you are new around here. Matty Boy's broke-assedness is not just because he has decided to work as a teacher when budgets are being slashed. The last good investment he pulled off was selling his Activision stock as soon as he could back in the 1980s, and that was done just because he wanted some extra walking around money.

Pretty much, you are on your own.

*Matty Boy, Investment Advisor to the Stars, knows no stars. Any star he might know in passing would not be stupid enough to ask him for investment advice. If Matty Boy says silver looks good, you should probably look at pork belly futures. His track record is only slightly better than the Chicago Cubs, who last won the World Series in 1908 and are already mathematically eliminated from contention in 2011, even though the season has not started yet.

A very chalky round of 16.

In the round of 16, known as los octavos in Spanish, the first place finisher in one group plays the second place finisher from a different group. Odds should favor the team that finished first, and that's how it's played out in five out of six of the matches so far.

When did it not work out? Here's a hint. The United States won their group.

Oopsie.

There are only two more matches tomorrow, and while it makes sense to favor the first place teams, one never knows. Paraguay won their group because Italy sucked so bad, but they are playing the upstart Japanese, who were expected to finish last in their group, but instead surprised both Denmark and Cameroon, and only lost to the Netherlands 1-0. In the other game, Spain plays Portugal. The Spanish should be favored, but they are a team that often shines but fails to win the whole enchilada, and some people are impressed with how dominant Portugal was against North Korea.

I'm going to go out on a limb. The Portuguese are good at beating up on cripples, but that doesn't mean the Spanish. Spain by at least two goals in regulation.

I'll go out on another limb. I'll vote against the chalk and send Japan into the quarterfinals, based on the fact that Japan had two wins and one loss, while Paraguay played it safe, winning once and drawing twice. Japan wins in regulation.

You heard it hear first. Go put all your money on it, unless you have already read the posts with the label Matty Boy - Investment Advisor to the Stars*.

In which case, save your money. You betta off.