So I will keep this brief.
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Gold has been on a tear, and even Silver has woken from its slumber for US$ holders. What is even more astonishing is that this has occurred in the midst of a US$ rally. Gold is at a new record for folks in the U.K., and I think a new record for the Euro (if not, it is close). What gives?
The U.S. Treasury market had it's worst week on record last week. Perhaps money is coming out of that market. If that were to happen in any significant way, Gold could be much higher.
I have been long Gold and Silver, and have been selling covered calls along the way. I will continue to add my savings to my Gold and Silver holdings, not Treasuries, and will buy on dips and sell the calls.
Silver has underperformed Gold for several years. This will not continue forever.
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The equity markets are threatening to break out, though we are now "in no man's land". Markets can disassociate from economic conditions, but not for long. Let nothing get away from you. If you are wrong, be gone.
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The "Tax Crisis" in California is just getting going. California will need a BIG Federal bailout, no "ifs ands or buts". If you are counting on a pension from the State of California you need to make contingency plans right away.
New York and perhaps Florida are not far behind.
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Wall Street's model of the 1990's and 2000's is irretrievably broken. Somebody should get ahold of John Thain and clue him in.
Thain justified paying huge bonuses to his minions by claiming:
“You have to believe there’s value in the franchise,” he said. “If you don’t pay your best people, you will destroy your franchise.”The problem is his assumption was incorrect. There is NO VALUE in the franchise - just look at Bank of America's stock price and the fact that the ONLY reason it is not ZERO is that the bank received $20 billion in taxpayer money just last week. This is where a healthy dose of DENIAL comes in handy. After all, how can Thain be a "brainy master of the universe" if he and his team have no value?
During the 1990's and 2000's Wall Street's elitist scumbag's actually BELIEVED they were really, genuinely smarter than everybody else, and deserved 8 and even 9 figure compensation packages (I am not lumping in hedge fund managers in here. You might hate them for reasons even you are not sure of, but the hedgies did not take in 1 cent of taxpayer money). Those compensation packages will now be paid for, over time, by the lumpen proletariat - now permanently enslaved to pay for divorce lawyer fees, breast implants, million dollar bar mitzvah's for the kids, salon visits, etc...
Hell of a system.
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Obama's administration will have no impact on the economy in hist first term. More on this in my next post. (My sympathies to the "true believers"... Geitner (in for Paulson, who may have been all over the map but kept the banking system from collapsing... and yes I know a lot of the money was stolen in the form of bonuses, just remember MOST of the money was stolen by John Q. Public in the form of mortgages and loans folks had NO INTENTION of ever paying back) was on Bush's team, as was Bernake, who I think has handled things brilliantly...) Feel free to email me INTELLIGENT points of view that differ from my conclusions, but spare me the "true believer" BS.
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I have read several articles about "Peak Demand" for petroleum. As in demand for Oil will never be greater than it was in 2007.
Duh!!
This is a silly debate. Demand can NEVER exceed supply. EVER. And as old Willie famously said:
"A rose by any other name, would smell as sweet".
Does it matter which came first, the chicken or the egg? The economy will drop oil will drop the economy will drop oil will drop the economy will drop oil will drop the economy...
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Stay tuned.
Mentatt (at) yahoo (d0t) com
3 comments:
No, Obama's stimulus will have no positive effect in his first term.
Does Obama even want the stimulus plan to work? I underdstand that, according to the Congressional Budget Office, only $26 billion is to be spent this fiscal year, and only 1/3 by the end of 2010. If time is of the essence, then the money should come sooner than later. Or is this urgency just a cover to get the biggest barrel of pork and welfare legislation ever conceived into law before the public has a chance to digest it?
Regards,
Coal Guy
It is something to think about.
I hope congress does so before flying off half cocked.
Obama is hurrying only because America is telling him to hurry. Obama already has his "Herbert Hoover" (Bush), and has told the public that things will get worse before they get better. The public is in love with this guy and his family (which compensates for 400 years of slavery and oppression of the blacks). Obama doesn't have to hurry much. He's got alllll his excuse ducks in a row.
Now, as for the year 2012 ...
(And I still think you are wrong about supply and demand of oil. Demand CAN exceed supply if you tap the stored oil reserves. It depends how you define supply.)
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