Financial Sense Blog

The stock market is a machine that captures the scale-invariant outline of Mother Nature’s “dark energy” turntable.

Trying to pick a winning trade in the foreign exchange market is similar to judging a “reverse beauty” contest. In other words, one must be able to identify the least ugly currency among its peers, at any given moment in time. All paper currencies are considered to be ugly, when compared to the “king of currencies” – Gold, since the central bankers are apt to print vast quantities of fiat currency, at the behest of government officials who have appointed them to run the printing presses.

Everything is not OK as indicated by the debt markets. Gold is technically vulnerable at this time as explained. Strong reversal expected for gold to be triggered by events to come.

Within the next 20 years, the most profound changes in economic history will sweep the globe. The economic chaos and turbulence that we are now experiencing are merely the opening salvos in what will prove to be a long, disruptive period of adjustment.

The euro has weakened due to the debt issues of Spain, Greece and other countries but this weakness has been served as a catalyst for some Emerging European countries.

Perma-shills have been claiming of late that the stock market is now trading at an enticing valuation. Their main evidence for this, as they are fond to claim, is that the forward Price to earnings multiple is 12 times next year’s earnings for the S&P 500. And, of course, a 12 PE multiple makes stocks cheap and the overall market a buy.

Almost everybody who follows financial markets has heard about climbing the "wall of worry": the time when prices head up bullishly, but no one quite believes in the rally, so there's more worry about a fall than a rise.

China is 2-3 weeks away from being ONE FULL YEAR into it's most recent bear market leg. Amazingly, despite the old retrospectoscope pointing out that the Shanghai Stock Exchange Composite Index ($SSEC) peaked on August 4th of 2009, people are still looking to the "miracle growth story" of China to lead the world out of its slump. This goes to show how long the average investor can be deceived into thinking a burst bubble can re-inflate. It is the same scenario as people wanting to believe the housing market was coming back last year. Or this year. Or next year. Ain't gonna happen, folks, so move along.

Having completed an interview with a past President, Dwight D Eisenhower, I had asked about taxes and paying down the debt of WW II. He guided me to President Kennedy and his advice about taxes. Regardless of your feelings about any of the Presidents I chose to interview, some that I disagreed with on several issues, also demonstrated wisdom in some things and tax advice from President Kennedy is something I can see wisdom in.

The economic relationships between gold, fiat money, inflations, interest rates and central bank activity are evaluated with a generous supply of charts. The visual feast starts in 1971 binding gold and fiat money together in a battle for dominance where Official Gold Reserves are not off limits in achieving the objectives of the managers of fiat money.