Archive - Jan 4, 2013 - Blog entry

If anybody should be labeled a lunatic, it should be the Democrats and those that are encouraging these unsound financial spending policies.

Something is going on that reeks of the dreaded phrase, “this time, it’s different”: secret discussions in Germany.

While the cost of living has become a problem for some in the US (courtesy of the Fed’s inflationary policies) it’s become a real nightmare for many in the emerging markets where as much as 50% of income is spent by consumers on food.

Most people are missing the boat regarding the Netflix/SEC tangle as the more relevant issue is the seemingly “selective disclosure” on Facebook by the Netflix CEO.

The far more substantial risk from the pending budget negotiations remains as does the appalling US national debt and unfunded liability situation – both of which offer long term support to gold and silver.

The market lustily greeted the deal that U.S. Congress passed to raise taxes on the wealthy and spare the middle and lower income earners.

However, the very necessary cutting of budgets in various sectors, military and domestic, will no doubt fuel many more political battles as the nation’s finances continue to deteriorate.

Gold fell $20.20 or 1.2% in New York yesterday and closed at $1,664.50/oz. Silver slipped to as low as $29.972 and finished with a loss of 2.55%.

Gold in US Dollars (1 Month) – (Bloomberg)

A/k/a the Gethnoid...

Bottom line: The coin is a phony solution to a real problem.

US dollar gains have been extended for the third session. The euro has been sold down to almost $.1.30 after testing $1.33 on Wed. More stale longs may be forced out on a break of $1.2985, which corresponds to a 50% retracement of the advance from the mid-Nov low near $1.2660 and the 50-day moving average. Sterling's decline is even more dramatic. It has come off hard since setting a 17-month high on Wed near $1.6380. It has now been pushed below $1.6040, which the 61.8% retracement of its rally from mid-Nov low near $1.5830. Sterling has also slipped below the 50 and 100-day moving averages for the first time in seven weeks.