"Kip's VRA financial newsletter is a MUST read for every saavy investor in this country. Disregard it at your own peril. His mantra is my mantra: Buy Gold and China. Sell short on pretty much everything else. Kip Herriage's newsletter is my financial Bible."

--Wayne Allyn Root
2008 Libertarian Vice Presidential candidate
Author, "The Conscience of a Libertarian"

Twitter: @kherriage

Twitter: @kherriage

Karl Bessey

Mary Dee

Mike Budny 

VRA Update: Trading Strategy - From Now to Year End

The markets sold off aggressively on Monday, with the Dow losing 179 points, or 1%, and each major index suffering similar percentage losses.

We've been highly overbought for some time, but this correction looks to be much more about the future of interest rates. More specifically, this weakness is about the FED and the month of December...will they in fact raise rates, following their meeting on Dec 15th and 16th. 

You may remember my thoughts...but let's put them in one place, just to be clear:

First, after waiting 9 1/2 years to raise rates, I see NO WAY that the FED would raise rates just 9 days prior to Christmas ...a borderline insane decision that would ruin far more than just the "spirit" of the shopping season. 

Can't you just hear business leaders, from all over the country, saying the following right after holiday sales stink (once again), with the stock prices of retailers having also collapsed in price: 

"Ms. Yellen, retailers all over the country depend on a solid holiday shopping season for as much as 75% of their annual revenues and profits. The FED's decision to raise rates...for the first time in almost a decade and incredibly, just one week prior to Christmas...has completely destroyed our hopes of turning a profit."

In reality, turning a profit would be most retailers last thought...staying in business would quickly become their primary concern.

Second, assuming I am correct...and I am confident enough to use 90% as my figure...here's the most likely outcome over the next 2-3 weeks...including another prediction that no one else sees coming today:

1) The stock market will continue to work off its overbought condition, with additional selling pressure coming from those that mistakingly believe a rate hike WILL take place.

2) At some point in the next 15-30 days, and on the heels of heavy selling pressure in the markets, the FED will do something that will stun the "experts". 

Without even waiting for their December meeting, Yellen will make a special announcement to the world that "a December rate increase is OFF the table"...hoping against hope that their confusing indecision and God-awful timing, has not already ruined the holiday shopping season. 

Should the above scenario play itself out, everyone reading this will want to STAY FROSTY:

1) Make sure you are positioned for profits on the way down

2) As the markets drop, from their current overbought levels to oversold, use that weakness to take profits on your short positions, then reverse course and go very long stocks.

Obviously, we'll use the VRA Trading & Investing System to ensure we are positioned correctly. 

If my predictions hold up, we can use this advance game plan to book some incredible profits (on top of the 830% in net gains for 2015).

Until next time, thanks again for reading...


PS; I honestly cannot believe that seasoned veteran after seasoned market veteran is now saying the FED will raise rates in December. Do they not have calendars? Do they not have common sense???

I know the FED makes huge mistakes all the time...with their 1000+ economists on the payroll...but raising rates for the first time in a decade...just before the holidays?? 

Insanity is the word that comes to mind...but hey, I'm sure the FED will make their decision based purely on the "data" and without any thoughts whatsoever on how a rate hike might affect the stock market :))



VRA Update: Is the Housing Market Really Strong?

VRA Update: Is the Housing Market Really Strong?

Oct 29, 2015

Literally every market analyst has been saying the same thing; the housing market is strong, and it's telling us that the economic recovery is in good shape. Certainly, the FED has been making this their case for higher rates....but is it actually the case? 

Clearly, it WAS the case for most of 2015...as the chart below makes clear...UNTIL late August, more specifically until that big 8/24 sell off that took the Dow down 1100 points in a single day.

In what I believe could be a most important disconnect, the HGX (housing index) is down more than 8% in the last two months, while the stock market has rallied back sharply. Troubling sign for the US economy, and likely an advance indicator of where stocks are headed.

In fact, pending home starts were just released, and for the second straight month they missed expectations, and by a wide margin. Instead of a positive 1% number, we got -2.3%...the lowest level for the past 12 months. 

As we've seen in the recent past, as goes housing, so goes the economy. Unless this chart can turn up, US economic growth will continue to lag expectations. In other words....no FED rate hike.

Instead of a FED rate hike, we will almost certainly begin to hear talk about additional economic stimulus, and even MORE QE. Hard to imagine for most, I know...but this is what a global economic crisis looks like...as it begins to unfold. Sadly, this is a preview of our economic future to come.

Let's keep a close eye on this chart of housing...looks very much like it is rolling over.




Class Warfare, Pandering - Success is the Fresh Target

If you watched the debate last night, you likely saw what I saw. The level of class warfare was astounding...even for this group of populist, vote panderers. Success was under attack...and it looks to only get worse. Here's the deal; if you've worked hard your entire life to make something of yourself, and after 20-30 years of 10-12 hour days, finally find yourself making a "comfortable" income, maybe even a business owner with employees...congratulations...you are now part of the "elite class", and you owe FAR more than the 30% plus each year that you've already paid in taxes, each and every year.

And here you thought this entire time that you were just working your butt off so that you, your family and your employees would have a shot at living the American dream...shame on you, Mr/Ms Greedy.
You ARE the 1%...and if you don't feel guilty about your prosperity, then you are a heartless, sub-human...and you must make amends. Think they were targeting only billionaires? Continue being naive if you life, but when the brackets are "adjusted" for those families making more than 150k/year, think back to this VRA Update. Like the Roman empire, it's just a matter of time until taxes MUST be increased on all...just so we can continue making the interest payments on our government debt. 

As to these Lilly-white, find a tanning salon candidates, I kept waiting for someone to make the following points:

1) each candidate on stage has been on the public teat for 90% (minimum) plus of their adult life. Owning and operating a successful business is the very last thing they have experience with. Maybe that's why they hate successful business people so much...they have NO clue what it actually takes to build something of their own...they prefer taking other peoples stuff. 
2) incredibly, even on those low government salaries, they've each somehow managed to amass great wealth (yes, even Bernie...compared to the have-nots he loves to compare himself to). Talk about perverse capitalism. It's actually called socialism...where gov. office holders have both the power and the money...while claiming to be "one of us".
3) For a party that talks about their singular commitment to diversity, I don't recall seeing any non-whites onstage for the Dems last night. Hmm...if I'm not mistaken, Republican debates seem to have more of that rainbow look to them. Carson (black), Cruz (Hispanic), Rubio (Cuban), and Jindal (Indian)...add in Fiorina for gender diversity...and only a blind person could make the claim that Dems are the party committed to diversity. Of course, no one in the media will ever make this point...but you know if the roles were reversed, the media would be all over it.
I can point out tons of flaws in Republican candidates as well...one of them will likely lead us into WW3 in the not too distant future, and of course Wall Street and banks have been out of control for decades...but last night was a disgrace for the great America that I know. Many of my friends...each highly successful, hard working and intelligent, believe that it's very likely too late to reverse things. They fear our best days are behind us, and Roman Empire part 2 is just around the corner. 

I'm an optimist at heart...but after last night, my glass feels a bit half-empty. Populism is always easy...but it's also incredibly lazy and intellectually disingenuous. 



VRA Update: Miners, Dow Jones And Overbought Levels - What To Do


I'm talking about precious metals and the miners...of which we already own (Gold/Silver, miners and ETF's). So, I guess I'm saying I want to load up even more.

I'll walk you through my thinking next, but this is also a good time for a "portfolio mindset check".

These are most valuable exercises...for all of us...whether veterans or newbies.

Now, your first thought about the miners might be "yuck...the last 3.5 years have been brutal...next subject, please". Believe me, I get it...but that mindset would also be a mistake...a huge one in my view.

Let's revisit the past...admittedly, this applies more to longer term VRA Subscribers, but everyone can benefit from it. Over the years, VRA Subscribers have made a fortune in the precious metals and mining space. In my second-ever VRA Update, I recommended gold and silver ($350/oz, $5/oz)...back in 2003...with gains of roughly 380%. Not too bad...but it gets MUCH better.

We also bought/sold a large number of mining stocks over the last 12 years, with over 2500% in gains to show for it. We made more than 1350% in Ivanhoe Mines, in two trades (now Turqoise). We used the same approach with Vista Gold (NYSEMKT:VGZ), Newmont Mines (NYSE:NEM) and Silver Standard (NASDAQ:SSRI), etc.

My educated guess is that your default mindset on the miners is less than positive...that's your call...but my job is to position you for major gains. Take a look at this 1 year chart on GDX (mining ETF):

First...yes, GDX is highly overbought...buying the miners at current prices could result in short term buyers remorse. However, it's also clear (to me) that this brutal bear market in the miners is over (which will only be confirmed once we are well above the 200 dma, and headed higher still). Let me also make this point; gold/silver could drop another 25% in price, yet the miners would STILL be cheap...just based on long term historical trading correlations.

I'll have more when the timing is right...but you can bet your bottom dollar that we will be adding to mining positions. Just in case you haven't noticed, the world is awash in debt, far more QE is on the way, and our politicians have little will-power for fiscal constraint. The only true currencies on the planet WILL win out...that's been the case for thousands of years...and as gold/silver begin to ramp higher, the leverage from the miners will result in stunning moves.

(click to enlarge)


Here's the short term, macro picture on the broad market...in this case, the Dow Jones:

(click to enlarge)

Notice the horizontal blue line that I have drawn above...the Dow has reached significant overhead resistance, which has also come with every indicator that I follow reaching overbought levels. Yes, the worst of this bear market is over...sure looks that way to me...but we are still well below the 200 dma, and new buyers at these levels are taking a much higher risk than they likely have any idea.

Overbought markets can certainly become even more overbought...but again, the reversal risks at these levels are high.

Until next time, thanks again for reading...



VRA Update: ABYSMAL September Jobs Report - More QE On the Way!

Thank You Bear Market Rally!

Oct 02, 2015

Good Friday morning all. ABYSMAL is me being nice...Septembers job creation figures of just 142,000 new jobs came in a full 60,000 lower than the estimates. In addition, and this is just as big, both July and August job figures were revised lower by a total of 59,000 jobs.

Yes, the "official" rate was left unchanged at 5.1%, but we know that this number is as phony as Caitlyn Jenner's drivers license. NO WAY the FED can raise rates now...the question now becomes, what exactly has Janet Yellen been smoking??

I hate to pat myself on the back...but as I've pointed out a couple of times in the past, how is it that the FED has more than 1000 economists on their payroll...each with PHD's and making well into the 6 figures, when a guy with a bachelors degree (business) from Sam Houston State Univ. is able to make far more accurate economic/interest rate forecasts??

For those that may not know much about SHSU, I can share that we Bearcats are a feisty bunch...we are named after the great General Houston himself, after all...but it's also safe to say that we're not commonly known as the Harvard of the South. Regardless, I have consistently said for years that the FED will be forced to launch far MORE QE going forward...rather than less...and any talk of raising rates is just wishful thinking. Folks, in no time at all, we could be right back in a recession...this is NOT when you raise rates. Maybe its just me, but this seems like a simple concept.


Dow futures were up close to 100 points before the number, but following the surprise (the market hates surprises) we saw a complete about face, with losses of 200 points + at the open.

The question we have to ask ourselves now is; was that it for the bear market rally? Are we about to drop more than 2000 points (as my article yesterday discussed)?

I do not think so. First, the markets remain highly oversold...this doesn't mean that we cannot drop further from here, but with most investors overtly bearish, the odds are against a massive drop from current levels. But hell yes...I will be watching closely, should we need to exit our new leveraged ETF positions.

But here's what I believe might be more likely; once the markets settle...and everyone realizes that higher rates are now several months away, and that easy money policies are likely here to stay, stocks may well find their footing and begin to move higher.

And has that ever happened today...following the opening losses of 230 points, the market has spiked sharply...with current Dow gains of 70 points. 

Current gains in the VRA Portfolio will soon push us past 2000% in net profits since beginning of 2014. Imagine how well we will do when stocks enter bull market territory again...

Have a great weekend all.