Financial Sense Blog

One of the disturbing things about trying to understand the US economy is the sense that official statistics don’t match personal experience. They seem to be lying to us, in other words, and more blatantly all the time; hence the popularity of honest analysts like John Williams at ShadowStats.com.

To counter the increasing demands that government reduce its micromanagement of the economy, last week the Obama Administration offered a fig leaf in the form of a white paper entitled "Reforming America's Housing Finance Market." In addition to marking the official end of the Bush era "ownership society," where increasing the level of home ownership was a national priority, the document contains a recommended regulatory overhaul of the Federal Housing Authority (FHA) as well as Fannie Mae and Freddie Mac (together known as Government Sponsored Enterprises "GSE's"), that intends to bring the share of government owned home loans from the current 95% to 40% over the next 5-7 years.

Fed Chairman Bernanke used his Feb. 9 congressional testimony to reiterate the Fed’s view about the sustainability of the economic recovery. Bernanke’s key point is that we need to see the jobs before we change the policy. Will we?

The numbers for silver demand are starting to make some market-watchers nervous. The U.S. Mint sold over 6.4 million silver Eagles in January, more than any other month since the coin’s introduction in 1986. China’s net imports of silver quadrupled in 2010, to 122.6 million ounces, roughly 13.7% of global production. Meanwhile, mine production can’t meet worldwide demand; the only way demand gets fulfilled is from scrap supply.

Martin Armstrong has stated his expectations for Gold and the PM Sector to fall into the June period and to continue to correct into October based on his Economic Confidence Model. The fractal work that I do off of the 70’s Precious Metals Bull market and other areas of the charts does not agree with his expectations. Thus, in this writing I take a look at how the Precious Metals Sector has performed in reference to Mr. Armstrong’s Model “bottoms” themselves.

A variety of technical analyses all clearly indicate that the S&P 500′s run is by no means over. Here are some charts and an analysis of what they mean for the markets, the U.S. dollar and gold.

America continues to face a true national tragedy as tens of millions of unemployed people have been literally discarded because of big business outsourcing to China, India, and elsewhere. Worse yet, the unemployment statistics are manipulated every month in a cruel hoax to make it look like the unemployment rate is far lower than it really is. A high unemployment rate is embarrassing and would depress workers and business psychology, so workers are surgically removed from the labor force and hidden from view.

A discussion of the reasons for the growing disconnect that has developed over the past 6 months between WTI and Brent Crude prices.

The International Energy Agency needn’t bother exhorting OPEC to pump more oil to fuel a global economy that now burns a record 87 million barrels a day. Confidential cables from the U.S. embassy in Saudi Arabia released recently by Wikileaks confirm what others have long suspected: OPEC’s kingpin producer, Saudi Arabia, has little more to give.

Rising prices driven by speculation is not the same as organic inflation, and diverting national income to the banks will not create organic inflation.