The payroll tax fiasco that played out this week in Congress is proof of the old axiom when your enemy is destroying himself don’t get in his way. The Republican leadership did a fine job of getting outmaneuvered at every turn by a president widely thought a weak negotiator. Continue reading
Is sustainable growth even an option?
Some say sustainable growth is a contradiction in terms. My 8th grade science teacher said nothing goes up forever. Hmm.
The problem with the perpetual growth fantasy is that when the world has accumulated so much debt that its major economies are incapable of growing even at a rate sufficient to service that debt, not only does the growth dynamic run into reverse, but the debt deflation dynamic ensures protracted and painful economic contraction. More
Bernanke sees the future
In a 2004 paper titled “Conducting Monetary Policy at Very Low Short-Term Interest 
Rates” Fed Chairman Bernanke discusses not only the possibility of purchasing corporate assets (bonds and stocks), but emphasizes that one other security class which the Fed may be inclined to acquire and has an explicit authority to do so, are foreign government bonds.
So four years before the crash our intelligentsia knew that rates would fall to near zero for a protracted period (or why write the paper?). Wonder what else they know and aren’t telling?
Change in Korea
A leadership change in North Korea may open the door down the road for change in the status quo. What is clear today is there is only one candidate for president who will make it his buisness to rescue the 30,000 US military hostages at the DMZ. Say what you will about Ron Paul and his policies, it is high time America’s finest are brought home! Not only from Korea, but Germany as well.
Posted in Politics
Leave a comment
Bipartisanship Obama style
With tax and benefits legislation on the line, to say nothing of the Keystone XL pipeline, actions speak louder than words.
”President Obama has not met with Republican leaders in Congress for 145 days, choosing instead to visit 20 states for 34 policy addresses and 34 campaign speeches.” Richard Wolf USA Today.
While the official campaign has not started yet, Obama’s has been running since December 2008.
Bullish tobacco
Who would have thought the best performing sector in stocks over the last 10 years is tobacco? Even with the considerable political voodoo of world governments tobacco is on a roll with a year to date gain of 21%. It is also the strongest performing sector during the last five years and second to Mining on a ten year view. Go figure. More
Posted in Uncategorized
1 Comment
Christ is Christmas
It is OK to privately celebrate Christ on Christmas, to pray at Christmas supper, but it is somehow wrong to say Merry Christmas ? Those who wish to turn Christmas into some winter solstice celebration display a massive arrogance and insensitivity. How do they imagine that their feelings are more important than anyone elses’?
The birth of Jesus Christ and his incredible teachings changed the world. After all we measure years as before and after Him. His message of a God that loves you and cares about you electrified a world filled with gods that tolerate you and view you as a bearer of gifts. On December 25th we celebrate the birth of Jesus Christ with family, friends and community. We show that love by giving gifts and acting with Christian charity. This is the day we celebrate the birth of the man who changed the world. His name is Jesus and it is time to put Christ back in Christmas.
Posted in Laus Deo
Leave a comment
Stocks fall, gold crashes
Stocks fell today because there were more sellers than buyers. Old joke. However, fundamentals have not changed, rather some folks singing happy songs got whacked by reality today. When you need cash, anything in the house goes on the block.
Crumbling Eurozone fundamentals have not disappeared. Crude prices fell due to rising supplies from Libyan fields coming online, Saudi production and weak demand. Gold fell due to lack of inflation and a rising Dollar. Stocks fell because they have priced in 119% of 2013 earnings in spite of signs of economic stagnation.
The gold bull is not over, but prices may churn sideways for a while as the world moves into the dollar, whose fundamentals are not much better than the Euro. However, the dollar still has reserve value in times of uncertainty. Gold support levels have been broken, and weak hands are selling out. As a result prices may churn sideways for a time. However, the very uncertainty that drove gold sellers today will drive gold buyers in the future.
While the European debt/bank drama plays out, hold gold. It is the only game in town 
for capital preservation, and that is far more important than interest. Don’t get caught up trying to beat the money center trading desks and central banks at the trading game, that is a rigged deck. The brave can buy more on the break, while the cautious can buy strength on the way past $1,700.
If investing were easy anyone could do it. Hang in there.
Capitalism and the Fed
Separate risk from gain, obliterate transparency and choke the market with zero interest rates, and you’ve not only destroyed capitalism, you’ve also destroyed the economy by rewarding the most venal, corrupt, fraudulent and capital-destroying players while stranding the prudent on an island of opacity where the true price of assets, credit and risk cannot be discovered. More…
