Financial Sense Blog

Prior to adding to our risk exposure, we would like to see some improvement in several risk-on/risk-off ratios. The three risk-on vs. risk-off ratios below can assist in monitoring the health of the current rally.

Wholesale gold prices hovered in a tight range just below $1780 an ounce for most of Tuesday morning in London, just below a new 2012 spot market high touched yesterday following comments from US Federal Reserve policymakers.

FrankenMarket was fed a heaping helping of unsound and inflationary monetary policy at the last FOMC meeting. Buying un-payable legacy debt with newly printed money is nothing if not intensely inflationary.

It is broadly illegal to place into the market an order that one does not intend to execute. That is, you cannot place an order into the market intended to goad someone else into acting, or through any other device attempt to manipulate price except through a bona-fide offer to buy or sell the security in question.

In early July, Japan set a premium price for solar energy that was three times the rate of conventional power. This meant utility companies would be paid three times more for electricity sourced from solar. It's widely expected that the premium will ignite the use of solar power - and solar uses a lot of silver.

Economic data the world over indicate that a global economic slowdown is well underway. Central banks have already responded with fresh stimulus, as anticipated by financial markets. But just as the economic recovery of 2009-2011 was largely artificial and, thus, disappointing in key respects, so the unfolding slowdown is going to result in a few nasty surprises.

The market opened higher and then spiked higher a half hour into trading. The catalyst for the aggressive move came in response to better than expected numbers form the September ISM index. The number came in at 51.5 against an expectation of 49.7.

There's a belief among certain economists – and the wider population – that if the government takes a more active role in the economy, the social outcome can be improved. Dr. Lacy Hunt, executive VP of Hoisington Investment Management Company (HIMCO), says it's a false belief… and he has proof to back it up. An unprecedented buildup of debt, he shows, can only lead to one outcome: a drop in Americans' standard of living.

We just completed a three-week visit to France. Paris and the French countryside remain as lovely as ever. On the surface, life in France seems normal, with shops, restaurants and hotels full, traffic heavy, and tourism intense. Indeed, arrivals at Charles de Gaulle Airport were so numerous that it took over an hour to get through passport control. However, the country is in the grip of a growing malaise.

I used to have a deputy who said that the FHA mortgage insurance funds were where mortgages went to die. That was, however, before the creation of MERS, derivatives and the explosion of mortgage fraud during the 1990's which in combination with the “strong dollar policy” engineered what I have referred to as a financial coup d’etat.