Friday, September 30, 2011

The Solution To Social Security

The following video outlines the new Social Security reform bill.  Its most effective tax incentive will be for seniors who bungee jump off cliffs.

With the budget committee hard at work to remove $1.5 trillion from our federal deficit, I would imagine some of these ideas are being discussed.

ECRI Leading Economic Indicators

After not confirming (correctly) all last year that the United States had re-entered recession, Lakshman Achuthan from the Economic Cycle Research Institute spoke with CNBC this morning confirming that the US has now entered in recession.  It is a "done deal."  "It is based on dozens of indicators and there is a "contagion among the indicators."

My view is that the United States entered a depression in December of 2007, which it has not left.  A depression has periods of temporary growth/recovery and contraction/recession as seen last in the United States in the 1930's.  The most recent artificial recovery based on government transfer payments and printed currency has already begun to subside and the next leg down will soon begin to move with force.

Thursday, September 29, 2011

The Media And Gold

Best interview of the year in terms of comedic value comes from the lovely Bridget who tries to explain the current gold sell off.

"Gold is backed by nothing, while the dollar is backed by our government and the Federal Reserve."

Oh, no Bridget. Is this really the information the public is receiving when they go home at night? 

For those newer to this site (and Bridget), the US dollar is backed by nothing.  It is a piece of paper that has no intrinsic value.  Gold is backed by 5,000 years of history as money, and it has intrinsic value in that it is scarce and cannot be digitally printed using a computer at the Federal Reserve.

Future Tense Changes

As long time readers have noticed, the web site has taken on a new look over the past week.  I have had a desire to enhance the page for a while and finally put some time into getting it done.

There are tabs at the top of the page such as "Recommended Reading" and "Today's Market News and Media."

Recommended Reading will be for readers who are looking to further enhance their understanding of the financial markets and economics.  In addition to the top books of the year and the classics, I will be adding a book review on the most recent book that I have read. 

Today's Market News and Media will be a content heavy site for those hungry for additional information on what is happening right now.  I review hundreds of articles, videos, and radio shows daily, and I will filter and post the most important on that tab.

More tabs will be coming, and I will discuss them when they arrive.

In addition, you now see there is advertising on the page.  After great debate, I have decided to include banner ads for companies that I both endorse and/or use personally.  For example, the number one question I am asked is where should I purchase gold and silver?

I have held metals at Goldmoney since the fall of 2005.  I believe in the company and have recommended it for both family and friends who have now opened accounts.  You can now find a link to set up a Goldmoney account directly on this page through the banner ad on the right.

I am a reader (Barnes and Nobles),  I read the Wall Street Journal every morning, and I study Mike Maloney's work (Wealth Cycles) because I feel he has an incredible understanding of monetary history and the financial markets.  Banner links are now placed to the left of the site to access these resources.

As always, thank you for the readership from those around the world.  The website is closing in on 50,000 views and is now consistently getting 3,000 to 4,000 visitors monthly.  The rate of growth continues to rise rapidly.

Your financial education will be extremely important over the coming years, and I hope to continue to be a resource for enhancing your education.

Tuesday, September 27, 2011

Gold Pull Back In Perspective

For those new to the gold market, the following chart provides a review of the major gold pull backs since the secular bull market began in 2000.

Gold pulled back 20% from its highs a few weeks ago, touching the lower $1,500's in early Sunday morning trading.

A secular bull market moves in 4 stages and typically lasts 15 - 20 years.

1. Pessimism
2. Skepticism
3. Optimism
4. Euphoria

We are currently in stage 3, optimism, for the current secular bull market in gold.  I would speculate that we reach stage 4 sometime between 2012 - 2015.  This is the point in a bull market when the general public begins to enter the market in force, seen in Internet stocks from 1998 - 2000, real estate from 2004 - 2006, and in bonds today which are currently in a massive bubble.

There will continue to be massive pull backs along the way, and we may see gold hammered again even harder as the European Union moves closer to financial collapse.

Those that understand market cycles will continue to add physical metal to their positions as the weak hands are shaken off again and again.

For additional content on secular cycles, you can review articles I wrote during the last major gold correction (34%) during the financial crisis of 2008:

The Psychology of a Bull

4 Phases of the Bull

Monday, September 26, 2011

Shanghai Raises Silver Margins 20%

Friday night, after silver's epic 17% single day decline, I discussed some of what transpired in What Happened To Silver?  Most of the discussion focused around the margin hikes at the CME.

This morning in Asian trading with silver already reeling, the Shangai gold exchange announced a 20% margin hike for silver.

Silver was again crushed again, falling another 15% in overnight trading.

The beat down is a dream scenario for investors who are not leveraged in the silver market and can enter the market again today with available cash to purchase physical metal.

This is like finding a pair of running shoes you would love to own but thought were too expensive, only to find out that you can now buy them on massive discount at a small shop down the road because the owner mismanaged his finances and now has to liquidate all his inventory.

Hope for more liquidations and more of the strong assets to go on sale.