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This past Saturday, Rick Ackerman was interviewed by Al Korelin of The Korelin Economics Report. During the interview, Rick discussed the economy and offered his views on the gold market. The full eight-segment show may be heard here.

If you've ever suspected that Wall Street stacks the statistical deck to boost share prices, here's an academic paper that explains exactly how it is done.  The author, Wim Grommen, a Rick's Picks reader from the Netherlands, goes as far as calling the constant recalculating and rejiggering of the Dow Industrial Average a pyramid scheme.  Click here for the complete study, which explains how, from a mathematician's perspective, the Crash of 1929, as well as the exponential rise of U.S. stocks during the 1990s, were brought on by bogus math.

From our globetrotting friend Jonathan Auerbach, here's an excerpt from Auerbach & Grayson's latest report: "The resounding reversal in the primary trend of the US Dollar is the cornerstone of a bearish litany of technical evidence which resonates with the ominous plangency of 2008, and strongly reinforces our longstanding belief that significant downside remains for risky assets. Importantly, the resurgence of the US Dollar is not simply a function of the Euro’s failings, but rather a global phenomenon which should provide another significant headwind for equities and dollar denominated commodities if historical economic relationships hold. Finally, our analysis of many of the major macro proxies for risk, including Copper, China (H-shares), and the Australian Dollar, suggests that the selling may just be getting started."   For the full report, click here.

A note from my friend Doug Behnfield, Boulder-based financial advisor, explains why he has been so keen on Treasury strips: "[A recent article in the Wall Street Journal discussed] the performance year to date on long dated 0% Coupon Treasury Bonds. My favorite, the August 3039 Principle Strip is up about 39% YTD. That compares to gold up 31%. The yield to maturity on that issue is currently 3.65%. As an aside, gains on gold do not receive long term capital gain tax treatment and Treasury Strips do. Only the accrued interest is subject to federal tax in taxable accounts. In addition, the gain amount that you see on your statement in taxable accounts does not include that interest. As a result, the total return in taxable accounts must be calculated by adding the phantom income back in for the holding period. IRA accounts do not adjust the cost basis up for Strips, so the gain percentage on IRA statements reflects the total return. That is somewhat confusing, so please call if you would like a more in depth explanation. "David Rosenberg stated yesterday in his letter that based on the current interest rate on the 10 year Treasury (1.99%) and the expressed desire on the part of the FED to flatten the yield curve, the target for the very long term bonds is between 2% and 2.25%. Explicit in that projection is the very high likelihood that we are re-entering into a recession. If this were to occur, (a drop in rates exceeding 1%) the long strip would appreciate more than 40% from current levels. For these reasons, I recommend that we hold onto our Treasury Strips a bit longer."

Here's the peerless Mark Steyn, writing about London's riots in his latest column: Several readers wrote to taunt me for not having anything to say on the London riots. As it happens, Chapter Five of my book is called "The New Britannia: The Depraved City." You have to get up pretty early in the morning to beat me to Western Civilization's descent into barbarism. Anyone who's read it will fully understand what's happening on the streets of London. The [debt] downgrade and the riots are part of the same story: Big Government debauches not only a nation's finances but its human capital, too.  This is the logical dead end of the Nanny State. When William Beveridge laid out his blueprint for the British welfare regime in 1942, his goal was the "abolition of want" to be accomplished by "co-operation between the State and the individual." In attempting to insulate the citizenry from life's vicissitudes, Sir William succeeded beyond his wildest dreams. As I write in my book: "Want has been all but abolished. Today, fewer and fewer Britons want to work, want to marry, want to raise children, want to lead a life of any purpose or dignity." The United Kingdom has the highest drug use in Europe, the highest incidence of sexually transmitted disease, the highest number of single mothers, the highest abortion rate. Marriage is all but defunct, except for William and Kate, fellow toffs, upscale gays and Muslims. From page 204: "For Americans, the quickest way to understand modern Britain is to look at what LBJ's Great Society did to the black family and imagine it applied to the general population." The complete essay can be found by clicking here.

http://vimeo.com/27498226 Please note that this corrects an erroneously published earlier version. Sorry for the inconvenience - MJ With the Dow in an apparent 200+ point dead-cat bounce, we looked for real-time trading opportunities in the E-Mini S&Ps, Gold, Silver and Silver Wheaton. We also determined that Bank of America’s low on Monday at 6.31 had come within spitting distance of a major Hidden Pivot support.

Baja Mining (BAJFF), initially recommended for purchase at 1.32, is the subject of an upbeat report published August 4 by Haywood Securities. My source notes the following highlights: "Annual production during the first 6 years of full production is expected to average 125 Mlb of copper, 3.7 Mlb of cobalt, and 25,400 tonnes of zinc sulphate monohydrate (100% basis). Our model includes a life-of-mine average total copper cash cost of US$0.40/lb net of cobalt and zinc credits, which places the project within the lower half of the global copper cost curve. "Baja's portion of this production is 70%. Baja has less than 400 million shares fully diluted and the project a minimum mine life (albeit at somewhat lower grades) of 25 years. "I think that Haywood's price targets are very conservative at current copper prices." *** At the moment, Baja shares are getting savaged due to the steep decline of copper prices.  The stock today is trading beneath $1 for the first time since last October and, based on Hidden Pivot analysis, could fall to as low as 0.55, a midpoint support.  I would judge the selling to be egregiously overdone at that point -- even moreso than it is now.  Nonetheless, let the buyer beware.  This was not a "hot tip" as far as I was concerned, but rather the considered opinion of an analyst whose acumen, if not timing, have impressed me in the past. -- RA

Someone mentioned during yesterday's impromptu trading session that those born under the sign of Leo (as I was, on July 30, along with Schwarzenegger, Lisa Kudrow and Peter Bogdanovich) might be in for a rough time, at least for a while. Since I had just read a horoscope that predicted just the opposite, let me share it with you here: "This could be an incredible period of creativity for you. In addition, romantic feelings and desires to both give and receive affection are powerful. Growth for you this month can come from developing deep feelings of devotion for those in your personal life as well as profound compassion for the pain and suffering of others even if you don’t know them on a personal basis." To access the full text of astrologer Rio Olesky's monthly analysis, click here.

On Thursday morning, with the stock market collapsing, we conducted another of our live impromptu webinar sessions for Rick's Picks subscribers. As stocks were plummeting, we looked for trade entries and potential swing lows in a number of vehicles, including Gold, Crude Oil and the E-Mini S&Ps. Check out this video if you want to see Hidden Pivot Analysis at work, turning the panic, fear and confusion of most everyone else into valuable information that was easy to use.