Gold Editorials & Commentary

Now that the sound of cork-popping and other signs of celebrating the New Year, and the new record highs in the price of gold, are dying down, some questions arise the answering of which brooks no delay. How high is high?

For members of Congress desperate to avoid recession, the takeaway message that Fed Chairman Bernanke delivered in his testimony this week was that a successful stimulus package needs to be rapid and targeted.

In my letters dating back to the beginning of 2007, I selected a credit spread between Junk Bonds and Treasuries (buy Treasuries, short Junk Bonds) as my #1 best, lowest risk SURE THING trade.

The Sovereign Wealth Fund (SWF) movement has begun to expand in a powerful manner, and will not go away.

This is not the time to get bogged down with minor details, and thus risk losing sight of the big picture, which is that gold is now in a powerful uptrend that has a lot further to run.

Holding onto its "all is well" bias like a terrified cowboy on an enraged bull, Wall Street has managed to convince itself, and much of the world, that inflation is a non-issue.

The US system has been the dog led by the financial sector tail, as the tail wags the dog, for over two decades.

The Obvious Is Obviously Wrong

GLD - on buy signal.

Some years ago Gordon Brown, then UK Minister of Finance, was asked at a dinner party why he had allowed the UK to sell 60% of the country's gold reserves from 1999 to 2002.

As our economic ship continues to spring leaks, the goldilocks crowd still clings to the false belief that the Fed can easily keep us afloat with a few more rate cuts.

What a terrific start to the year for gold! When you see a breakout to new highs on the 1st trading day of the year like this for a commodity it normally signals further strong gains as the year continues.

EDITOR NOTE: My Spanish needs work, since 'Tonterias' was misspelled in the title, which prompted a couple corrections from Latino readers. Disculpame!

The Kondratieff Wave

Summary and Conclusions

Almost unanimously, the indicator charts are signalling the imminent emergence of a new ballgame.

The battle between bulls and bears seems to be centred around the two trendlines which have been drawn on the daily chart of the Dow Jones Industrial Index chart below (courtesy Bigcharts.com)

EDITOR NOTE: Fitch Ratings contacted me to make a clarification on last week's article, that they have not covered a debt rating on ACA Capital since 2004.

Season's greetings, wishing you all peace and profits in the New Year.

GLD - on sell signal.

Among those rational enough to perceive the looming economic downturn, a heated debate has arisen that centers on whether the slowdown will be accompanied by inflation or deflation.

The hidden bond insurers used by Wall Street firms are in the news, especially ACA Capital and MBIA. Implications are huge, with monumental ripple effects. Financial press reporting of the bond insurers is woefully inadequate.

Of course - to any Wall Street power broker, economist, or US policy maker, this headline means the equivalent of “Only Space Aliens Can Halt Teenage Pregnancies”. In other words, it’s a total non-sequitur to them.

From close up, there is no making sense of what is happening in the markets today. Certainly, in all the years of my involvement in and around the markets I have never seen such confusion at the coalface.

We don’t normally look at fundamentals in these Gold Market updates, but it is worth stopping for a moment to consider the implications of the latest stroke of genius announced last week by the Fed in its desperate attempts to prevent a credit crunch, as it has

This week's announcement by the Fed that it will create a new mechanism to provide funding for credit challenged banks has been lauded by Wall Street as an innovative approach to solving the credit crisis.

Like a petulant child raging around because it got one candy when it expected two, the market threw a tantrum yesterday when it only got a quarter of a percent rate cut yesterday when it was hoping for more - but what good would it have done if rates had been c

An avalanche comes in 2008. Its wreckage will hit both the USEconomy and banking world.

GLD - on sell signal.

Without question, the Bush administration's mortgage rescue plan will exacerbate, not alleviate, the problems in the housing market.