Saturday, April 30, 2011

$XAU:$GOLD - Weekly Candlesticks

This is a comparison of the Philly gold stock index ($XAU) and Gold. The ratio has been on a steady decline for years as gold has outperformed the gold mining companies. Remember, mining companies are businesses with their own unique set of risks and problems ranging from labor issues to having to deal with the darlings at the EPA and so much more. The solid black line is the 200 week moving average for this ratio and it has been falling for quite some time even as gold has rallied. Put another way, the doubting Thomas's are wrong to worry about weak gold mining shares as a tell on the future prospects for gold. I say keep buying the actual gold and stay away from the mining shares.

$XAU:$GOLD - Weekly Candlesticks: "



Sunday, April 10, 2011

Trump for President?

My early impression: He's got some scalding rhetoric and a few interesting ideas.

However, "The Donald" has already dropped a lead bomb by suggesting the US default on its debt. He would never propose such an idea if knew that 60% of the debt, according to the US Treasury, is owned by Americans in Social Security, military funds, pension funds, mutual funds, etc. Defaulting on our own debt would be akin to shooting one's self in the foot with a nuclear bomb. He apparently thinks China is the biggest US debt holder and that this would be a good way of screwing them when it would end up being a hands on the ankles moment for most every American. It's actually the US that holds a majority of its debt. (ponzi). He may be a businessman, but he clearly doesn't understand that the US can't simply file for bankruptcy as he has done for some of his businesses in the past. He has a sullied financial legacy in my book. 

I'm still open minded, however (since it's early in the 2012 game), but Trump's default on the debt talk has been pretty dumb and simply betrays the arrogance of an elite who will say anything to feed his need for adulation and to eventually get votes should he really run. I think it's a stretch to say that he's telling it like it is. He's telling it like it is in "Donald's World", which just might be a little different from the world in which we live.  

If you want a businessman in the White House, think a guy by the name of Herman Cain.

Can't wait to see how many subscribers I lose Monday when this is auto emailed to them. Woo Hoo.

Saturday, April 9, 2011

Drug Money Makes the World Go 'Round

No wonder Warren Buffett calls Wells Fargo "my kind of bank". Wells owns Wachovia which had a $400 bln business with Mexican drug lords. Sadly, it takes a British paper to connect the dots, though the NY Times gets a little credit for doing some stories on this. Remember, we have fractional reserve banking, so yanking $400 bln out of just one bank = zapping trillions in liquidity. Imagine this on an industry wide scale. This video paints some details. So does this article:

It may very well be that  this talk of the banking crisis being caused by a sudden evaporation of drug money is merely conspiratorial hoo ha. But one thing remains true, is that nearly $400 billion in drug laudering actvity did take place at Wachovia and that only a small fine was paid and NO arrests made.