Financial Sense Blog

The White House might be gaping in shock that the U.S. federal court overturned the six-month drilling moratorium, but it really isn’t all that surprising. Amid the finger pointing and political posturing, the Obama administration seems to have missed a vital detail – the U.S. oil industry is in a spot of bother.

The following chart shows the inflation adjusted S&P Composite from 1871 through June, 2010. We highlight three secular bear markets and a fourth that may be forming. The rose colored arrows and months listed are the amount of time it took for the market to get back to its former high.

You have heard that loan growth is one of the critical elements of economic growth. The last recession saw total outstanding loans plummet as banks tightened up their credit standards and credit demand fell. So far, business loans remain weak indicating business of all sizes are not looking for more credit.

Inflationary risks have seemingly fallen out of the mindset of many investors recently, with the European debt crisis causing many to reevaluate their outlook for global economic growth in concert with record low headline CPI numbers being released.

U.S. stock futures are called higher this morning as investors look forward to a positive earnings season. Late yesterday Alcoa kicked off earnings season by reporting a $136 million profit on stronger-than-anticipated 22% revenue growth. Shares climbed after the report helping to drive the Dow higher.

In my last article Bear's Beware I warned that shorts were running the risk of getting caught in an explosive rally as the intermediate cycle was due to bottom. Well, it did bottom and bears have watched their profits quickly evaporate as the market has surged out of the intermediate cycle low.

When the end-game began, gold was $35 per ounce. Today, gold is $1200. When the end-game is over, gold will be far higher.

Our past Presidents often expressed wisdom beyond their times In a rare opportunity, I was able to interview some past Presidents about things going on today that were concerns in their day as well. The interviews include George Washington, Dwight Eisenhower, Andrew Jackson, Woodrow Wilson, Franklin Roosevelt, and John F. Kennedy. What an interesting group of leaders for me to have the privilege of interviewing.

Looking back at one of my observations about the primary trend, I wanted to update one of the indicators I’ve been watching, namely volume. The basic idea is that volume expands in the direction of the main trend and contracts in the counter trend. Up until June 8th, volume had been expanding while the market climbed higher and contracted when the market fell. At this point, I see that trend has reversed.

When gold is written about as money, it means different things to different people. Money is, after all, what most people see as a means of exchange; you use money to pay for goods and services, simply that.