The press attributed this week’s rise in gold to benign causes. The end of the world seems to have been postponed – indefinitely. Bloomberg reported that a clear majority of those polled thought the world economy was recovering.
Both gold and silver had their lows early in the trading day on Thursday morning. The low in gold was during Globex trading when the New York bullion banks have the run of things…when their counterparty is a gold trader on his cell phone in Western Samoa someplace. Anyway, the low for gold was shortly before Sydney opened on Thursday morning…and the low for silver occurred a few hours later.
Last week, the European Central Bank squared its shoulders and joined ranks of the damned. The Times of London reported that in joining up with the US Federal Reserve Bank and the Bank of England, the European Central Bank “pulled out all the stops” in their drive to revive their economies.
The economic geniuses in the White House and the US Federal Reserve are compromising US interest rates for no good reason. Much of the money the Treasury borrows and the Fed prints is being shovelled into the most worthless projects on the planet – what we here at Notes like to call “Project Prop-Up.”
You may have noticed that most of my articles are pretty in depth and lengthy. A fellow IDE editor recently pointed that out and issued a challenge … “I bet you ten bucks you can’t write a one page essay.”
Benn Steil, who is on the Council of Foreign Relations and an editor of an economics journal, is writing in the Financial Times, see, and his essay has the catchy headline “Keynes and the Triumph of Hope over Economics”, which is so terrifically profound and funny at the same time that I laughed out loud, which was unfortunate, as I had just taken a big bite of a yummy chilidog and it sprayed all over the place as a result of my mighty guffaw.
The current economic conditions certainly do not provide any comfort for investors. So, if the economic news remains poor for the foreseeable future, should investors rule out the potential for a significant recovery in asset prices?
ust a week to go now before Barack Obama finally gets his feet under the Oval Office desk. Priority #1: Getting the much-discussed economic stimulus package pushed through Congress and approved.
A few weeks ago, when the U.S. Federal Reserve announced a strategy designed to bring down long-term interest and home mortgage rates through unlimited Treasury bond purchases, government debt staged a spectacular rally.
Because the government (in our case, through its proxy the Federal Reserve) creates excessive amounts of money and credit…the poor must consume less, and the money they spend flows to the rich guys who borrowed the money in the first place!