A few years ago local Chinese municipalities had little debt. Today they have a $1.7 trillion mountain of it, nearly all of it financing economically non-viable projects in the name of "stimulus". The proposed "solution" of course is to roll the debt over, while adding still more to the debt mountain, hoping things will get better.
The period since 2010 has been largely characterized by a fragile underlying global economy coupled with a persistently overvalued stock market (though to varying degrees). We've seen little during this period but the effect of a hot potato being repeatedly passed from speculatively overvalued, overbought, overbullish market conditions driven by massive central bank interventions, to credit strains and emerging economic weakness nearly the instant those interventions are even temporarily suspended.
2012 will be the 11th time in my short life that I will be able to participate in the choosing of a president of the United States. While it may just be me, it seems like each and every election is cast as the most important election of our time and a defining moment for the American Experiment.
While the US oil supply situation may be a little better, the world supply situation is still very bad, and oil prices are still very high around the world. In the past month, three major peer-reviewed journals have published articles relating to limited world oil supply. I'll tell you why all three are significant.
My previous analysis of the Iranian crisis focused on whether Israel or the United States will preemptively attack Iran’s nuclear facilities. This question does not require us to investigate which course of action is right or wrong, strategically sound or unsound. The question is whether a certain military action will be taken or not.
When U.S. citizens had gold ownership returned to them in 1974 after 40 years, they were informed by government that gold ownership was a privilege, not a right! What does this imply to you?
To say that complacency has reigned in the last few months is an understatement. Volatility as measured by the CBOE Volatility Index (VIX) has fallen 60% since October and 20% since the start of 2012.
Worldwide, an incredible tower of debt has been under construction since President Nixon's 1971 default on the gold obligations of the US government. His decree severed the redeemability of the dollar for gold and thus eliminated the extinguisher of debt. Debt has been growing exponentially everywhere since then.
For the first time since 2010, we are seeing key relationships within the metals market in a bullish position which indicates precious metals may be setting up for a big first half move, particularly when both gold and silver bullion and the HUI are closer to oversold levels than overbought and would have to rally considerably before risk rises for a major overbought correction.
We would note to this that it is not possible to know when the US might 'turn into Greece'. Greek interest rates suggested that there would be no trouble whatsoever for many years – until they didn't anymore. Granted, the US is unlikely to be beset by similar problems in the near future.