Headlines

Mueller remarks put Barr back in harsh spotlight

The US slipped to third place in a ranking of most competitive countries

Shock: Man sets himself on fire outside White House ...

Alan Dershowitz: ‘Shame on Mueller,’ he ‘revealed his personal bias’

Israel headed into elections again as Netanyahu fails to form government

Portugal becomes first euro zone country to issue dent on China’s market

Poll: Biden 18-point lead on Dem field ...

Limbaugh calls Mueller remarks an ‘abomination of the justice system’

Pelosi calls Facebook a ‘willing enabler’ of Russian election meddling

Corporations were the biggest buyers of stock during the bull market, but now they’re selling

NOT AGAIN! Bernie backers see DNC-media sabotage ...

Schiff: Mueller’s statements don’t move needle on impeachment

Why is Gold in the Toilet?

The price of gold has dropped today $93, as I write this, to $1409 per ounce ... down from $1803 last August ... and an all-time high of $1920 in September of 2011.  That is almost a 27% decline and is causing a lot of consternation among the gold bugs and panic among those schlemiels who bought gold after listening to those high-pressure ads on television.  Now the question is, why has this "guaranteed investment" gone sour,  I can offer four reasons:

1) The price of gold has been anticipating the return of rampant inflation as a result of the U.S. Federal Reserve Bank and other central banks around the world printing new money as fast as they can get the paper delivered to their mints.  Like any speculative market, the price of gold was discounting the future and, when the "future" doesn't occur on schedule, things can get messy.  Ben Bernanke's interest rate manipulations and a continued weak U.S. economy/employment picture has kept a lid on inflation  ... which has pushed back the date of the big payoff for U.S. gold bugs.

2) Since there are significant carrying cost to owning gold (storage fees, margin interest cost, no dividends, and steep selling discounts), an unloading of same was almost destined due to the drawn-out timing of the expected "rally." (The price of gold in Japan, based on the recent and dramatic quantitative easing of the yen, is hitting new highs.  This maybe is another gold market bubble in the forming.)

3) Because of the austerity measures being imposed on some European Monetary Union members, there is considerable pressure on these central banks to sell gold reserves to meet their debt obligations.  Apparently last Friday, Cyprus was the first country to crack under the strain and either is or will be selling off significant amounts (tons) of gold.  Are Spain, Portugal, Italy, Greece, and Ireland to follow?

4) Independent of these three fundamental factors, clearly technical factors are now ruling the roost.  If speculators, such as hedge funds, see the price of gold plummeting, they head for the exits, elbows akimbo.  Small private investors often get crushed in the stampede.

So, dear readers ... gold now is in the toilet ... and may stay there until there are real signs of inflation rearing its ugly head again.  When might this occur?  I am not that good at predicting things.  But, I can safely say that, when it does occur, it will probably be lightning fast.

Afterward: as of 10:30 on 4/15/13 gold is selling for $1342 per ounce.

The High Cost of Linguica

The European Union and the International Monetary Fund (IMF) have agreed to bail out the Portuguese economy to the tune of some $116 billion. See: Portugal Bailout  This is after the fact that these same parties had bailed out (with almost equally large largess) Greece and Ireland last year.  Now, seeing that the U.S. Federal Reserve Bank in large part back in 2008-2009, bailed out the major European banks (see Bernanke's Secret) and that the United States is a major contributor to the IMF (See: U.S and the IMF), it seems that the United States is once again handing our (over-extended) credit card to the rest of the world. 

Not only is the United States expected to pay the very high cost of defending the free world, but now, it seems, we must pick up the tab for their profligate social-engineering policies too.  Enough!

America for Sale

Of all things, the Japanese yen just hit an historic high against the dollar!  And Europe, with all its many troubles (the credit ratings of Portugal, Spain, Greece, and Ireland have all recently been downgraded ... with more to come) still enjoys a strong euro.  One can only conclude that George Soros and his ilk still believe that the United States is not about to fix its fiscal situation any time soon.  And Ben Bernanke is keeping our interest rates effectively at zero (and flooding the world with dollars) in order to stabilize the U.S. financial sector (primarily mortgage debt) here at home.

All this dollar weakness comes with a cost ... which the United States is beginning to pay.  This cost is that foreign companies are beginning to use their strong(er) currencies to buy up American companies.  Anheuser Busch (Budweiser) is now owned by a Belgium company. Coors Brewing is now owned by a Canadian company.  Citigroup is substantially owned by mideast sovereign-wealth funds.  And now the New York Stock Exchange is about to fall to a German company.  And this trend is bound to continue.

And, while Obama is vacationing in Brazil this weekend with his family, rumor has it that a "For Sale" sign is being installed on the White House lawn.