where to begin.....
Currently, gold fundamentals are good. Demand exceeds supply. Even at current prices - production is falling in most countries: South Africa, Australia and Germany.
The US dollar is under pressure because of budget and trade deficits. To wit, the US is burning $10,000 per second financing it's current debt load of 8 trillion and change (that's 600k a minute, 3.6 million per hour, or 864 million per day). We are borrowing/printing a few billion a day to stay in business. The US has stopped publishing M3 data??
I hear a lot of rhetoric that we are going to stop raising rates a few more quater points down the road. WAKE UP!!! If our interest rates don't continue to go up, - the dollar is going to tank, Japanese and Asians stop financing America and we are no shit, Tapioca (tits up, out of business, fubed.....)
People forget that in the 80's. Yes, not that long ago - interest rates were 19% (last time gold was $500). That means a $250.000 mortgage payment goes from say $1600 a month payment to $3995 a month. Over 80% of all Ammericans are on a fixed income . Over 60% of all mortgages in california last year were interest only mortgages. 23% of all real estate purchases in america were on spec. There is a glut of housing and a huge demograpic of people relying on current real estate valuations to finance their retirement ambitions.
We are spending 200 million a day in Iraq in a war that makes no sense (now close to 250 billion spent on this liitle escapade). 50+% of americans hate it's current leader who has, incidentally, pissed off just about every country on the entire earth.
The yield curve is inverted. A 10 year bond has a lower yield then a 2 year bond which can only mean big money is betting that locking in a shitty rate for 10 years (4.5%) is a better bet then having any money invested short term because the outlook for the near future is dismal.
Oil is heading for a hundred bucks a barrel. GM is going bankrupt along with Ford. Apparently , paying 70$ per hour in wages/benefits and $2500 per car in legacy costs aint working.
The annual savings rate of the average american is to my best recollection, negative.
I am perplexed as to why equities are nearing highs. As far as I can tell, this could extend into the new year, but how could it possibly be sustainable??
Ladies and gentlemen. We are in deep doo doo in my opinion. When gold dipped back under 500$ into support, i backed the truck up...... I'll see you at $1000 an ounce. Buy as much silver and gold as you can fit in your mattress.
Vote Quimby
