No Recession In US?

We are in a very volatile environment with bouts of inflation and deflation fears going up yearly. Given that the federal government has, depending on various estimates, $70 – $200 trillion in off-balance sheet debt and obligations over the next couple of decades, we are seeing inflation much higher than reported in the grocery store, gas pumps and elsewhere. So, when politicians say, ah, look companies are showing tremendous profits, and no worries, Christmas is around the corner so shipping will double, and as for oil prices, well look, they have come down. Everything is stabilized, even if you don’t have a job to get to work. Now that Apple products are hotter than ever and tech is humming, and if people need money QE3 QE4, QE5, QE100 will be available with Uncle Ben to stave off recession. But with that many little green pieces of paper floating around, how much is any one of them going to be worth? Read More→

To get the facts on gold correctly, gold is not a bubble. While there are central banks to solve the problems of rising uncertainty, fears have shorted gold in these few days. But as the debt continues rising daily, without remedy, we haven’t seen real inflation as of yet! Rates remain low and easy money is available to banks. Credit issues will make it harder for banks to lend thus, making higher inflation likely. Read More→

Today’s economic stagnation is reminiscent of the Roman Empire’s slow collapse. Rome reached its zenith in the 2nd century, and then as fortunes slowly declined. Even after they tried to revive it, by the 3rd century the monetary economy had collapsed. Read More→

Gold soars to record highs. Rallying against all currencies, AP reports, “Gold is the reciprocal of the world’s faith in the world’s central banks,” says Jim Grant, editor of Grant’s Interest Rate Observer, and right now, “the world is in a pickle.” Read More→

The world will be watching the Merkel and Sarkozy economic policy meeting today to bolster the situation in the Eurozone. Meanwhile, Swiss rumors continue to monopolize the severe franc over-devaluation. Whether to peg the franc against the Euro, now nixed by the SNB (Swiss National Bank), the lame decision reached on new measures and no pegging, did little to change anything. The Swiss franc went up like crazy in the past year as investors ran for its safety. Then, as it ballooned, it sent the country’s currency spiraling. Read More→

The Federal Reserve admitted the economy is close to stalling. With the economy tanking, banks in the business of lending are not lending to stabilize the financial system despite their bail outs credit remains tight. No wonder to the average persons on the street are shaking their heads in looking at the entire economy system and saying its crazy. Fears are justified over loosing homes: don’t or can’t buy and banks don’t lend. Although mortgage rates are low, housing is 25% down from last year. That is one enormous quarter! With no signs of easing, real estate level could easily pop over by next year. Stock markets could roll over and start their way down. Then, as people get really scared, all the real estate levels will start popping. When people have to pull back, can’t refinance their homes or trade up for a larger home, at that point the real estate bubble stops and pops. The wind is moving in that direction, which will further crush the economy. These are not doomsday scare tactics, but facts of reality being dealt in present day economy.

On the flip side, Felix Zulauf, who was profiled in this week’s Barron’s, says what others are, to get into gold because we are in deflation cycle like Japan. Looking at his prediction, it seems to align with the Financial Times. Although there is a plus and a minus for everything, because everything comes in waves of cycles in life, gold cycle has just begun to run on a wave that will ring in history.

It’s fascinating, just how the bull market in the 70’s drew tremendous interest. Everybody, even the gold haters were watching that bull market with keen interest. By the 1999’s it moved again upward. In 2002 gold broke at $300 and the corral opened for the golden bulls.

Ravenous for information, it further bought my attention as to why the giant shift in the central banks and gold. Back in 1971 to 1980 Central Banks were selling gold not buying. In the 90’s gold was manipulated. Central Banks realized the less they sell the higher the price of gold. But by 2000, they couldn’t stop the golden bull. In 2009 they were going to sell 4 million ounce of gold, but this reversed itself, and instead of selling, the Central Banks brought 15 million dollars worth of gold. It simply proved that governments around the world had begun to distrust the dollar.

But while the enormous shift in gold began, it didn’t include Asian gold buyers like China, Iran and others that are still buying under the table with no official numbers because it is not reported to the World Bank or the IMF. In fact, there are new headlines about Iran accumulating gold to get rid of dollar reserve. “Iran bolsters gold reserves to cut exposure to dollar” reports the Financial Times. So, it actually gets reported, but only by the news media, not to the World Bank, the IMF or the World Gold Council. So this is a big game changer to bring an attention to, because it’s going to the greatest bull market in history! To back this up, there is no country immune to the US Dollar. If it catches a cold it is contagious, which means the rest of the world will be sick. As the Eurozone further moves to disbandment, it’s not a pretty picture out there. Adding more debt to an already large debt usually leads to defaults and bankruptcies. Argentine and Greece are good examples of this.

“Precious metals are just coming up and are still undervalued and not close to fair value. The Dow Gold Ratio proves that gold is still undervalued so this bull market will continue. Gold has been rising for 10 straight years, its still very undervalued,” says Regal Asset Team of Analyst. With the missing ingredients for house recovery and Euro debt crisis, Zulauf is basically saying, get into precious metals now, it’s a safe and sane asset protection that will keep you well.

Two years without a budget, and still haven’t a clue as to what is really going on beneath the surface of America’s troubled economy. Despite valiant efforts, confidence in the country has plummeted.

When governments intervene in a marketplace, believing that monetary policy is the best method of ensuring economic growth and stability using fiat currency, the result is an economic nosedive. New worries continue about economic weakness in heavyweight markets eroding an already troubled global sector. Economic ministers in Asia have predicted a slowdown in all regions. In China and Japan the banking system and their politically-sensitive inflation figures prove an economic decline. Prediction by the same ministers for the coming months in one or two years ahead the uncertainties will continue, and the world economic situation will be even more severe. With turmoil in the financial markets showing less then dismal growth, the battle against a potential recession and depression prolong each global community’s action as they try to muddle through. Read More→

It seems lawless, how the largest and most diverse exchange in the world has sailed under the protective flag of ‘reducing exposure’, using the same method to punish gold as they did to silver. As of Friday morning, CME, Chicago Mercantile Exchange group raised gold margin requirements 22%. Although a 22% hike is nowhere near the 84% hike silver had, with the US government collaboration playing the role of short term traders, had forced the correction to buy some time until things get “better.” Fortunately, with the hand of the government involvement, CME has just done gold a favor! Read More→

The mechanical beast in the economy continues to enslave the markets. Unable to align the financial system, a world panic is ensuing. As one tremble after another shakes the market, people are scrambling for safety. Investors reach for the safety raft of gold instead of US treasuries, which yields moved even lower despite the S&P downgrade of the US credit rating. Those who disputed gold as a life raft aren’t too happy today for not preparing. Read More→