Friday, February 22, 2013

Why Gold is down

The Fed released a statement that they might discontinue quantitative easing (i.e., money printing).  Even though nobody believes the Fed would do this, somehow this supposedly caused a panic of gold selling, which was not at all market manipulation.   Not at all.  ;-)

Take a look at that 16 trillion dollar national debt number ticking to the right . . . there is NO WAY the Fed can let interest rates rise, because then the government would have to actually pay interest on that debt.

Gold pushed through a technical level called the "death cross" when the 50 day moving average went below the 200 day moving average at about 1,660.  That is about as reliable as Tarot Cards, but weak hands that bought gold recently would have set stop-loss orders there at and also at 1,600.

If you look at a ten year chart, gold has been going sideways for about a year.  look what happened last time it went sideways for a year (2008)  it then went from 800 to over 1900 in three years.  I think the third big wave is coming.

Macro Economics

Tuesday, February 19, 2013

GDP forcasts

Every year, the Congressional Budget Office predicts the economy to recover "next year".  Reminds me of how the Soviets always blamed the bad crops on the weather.  It's comical.

Thursday, February 14, 2013

The farce continues

In last year's State of the Union address, the President promised a "mortgage fraud task force".  In short, it didn't happen.

Banks reached an $8.5 billion settlement to compensate people who lost their homes due to fraud commuted by banks (so-called "robo-signing").  After allowing the banks to waste almost $2 billion of the settlement paying their own consultants to review mortgage files, the government is now allowing the banks to just go ahead and decide for themselves which (former) homeowners deserve compensation.

You can't make this stuff up!

Stealth Inflation

Although officially inflation has been under 2%, in reality it's higher.  Food and energy is not included in "core" inflation: after all, who needs those things!  Also, cheaper goods are routinely substituted for more expensive ones in the official basket of goods used to track inflation.

Instead of increasing prices, producers reduce the amounts (by changing to metric units, for example)

Now horse meat is being sold as beef in Europe.