Archive - Dec 6, 2009 - Blog entry

To us, the confirmation hearings last week before the Senate Banking Committee only reaffirm in our minds that Benjamin Shalom Bernanke does not deserve a second term as Chairman of the Board of Governors of the Federal Reserve System.

Graham Turner is an outsider. In his view, the Japanese experience offers a frightening glimpse into our future, with deflation, where the prices of assets such as houses and shares are locked into a downward spiral, becoming entrenched. If that happens, conventional policy measures, such as reducing interest rates and pushing through huge increases in government spending, can fail, as indeed they have in Japan.

Gold fell for the first time during last week, off 4% on Friday to $1,162.40 an ounce, the biggest drop since Dec. 1, 2008 after the new U.S. jobs data showed unexpected strength. While gold has some underlying support from central banks and investment funds, there are some indications suggesting gold is moving mostly on momentum, and that a deeper correction may be due.

On the surface, the decrease in unemployment and the increase in factory orders seem encouraging. But if we dig a little deeper, the numbers tell a different story. Much of these "gains" relate to stimulus and aren't real and will dissipate once stimulus wears off.

Wouldn't it be ironic if the market put in a top on the good news that "America is back"?

The US Taxpayer has long been the dumbest, richest investor around. You know the kind – a little overweight, with cheery disposition, not understanding how he’s been “over-served” when in slurred speech he thanks the bar tender for the sales receipt on which he signs his name – plus adding a generous gratuity – for his “new good friends”.
With politicians in charge, the “average” person with a job, a family, and a “real” life never had a chance.