Financial Sense Blog

Insight from a Master

When John Hathaway spoke at the Casey’s Gold and Resource Summit in October, many of the audience came away feeling like they were listening to Doug Casey, with his contrarian views, bold statements, and laying much of the blame for our current problems at the feet of government. Read what John, a seasoned investment pro and manager of the famously successful $1.4 billion Tocqueville Gold Fund, has to say about gold, precious metals stocks, and the future of the U.S. dollar.

November Consumer Price Index

No surprises, contained inflation

The Consumer Price Index (CPI) rose 0.1% in November following a 0.2% gain in the prior month. The CPI has risen 1.1% from a year ago compared with a 1.8% gain in the 12-month period ended November 2009. Energy prices increased only 0.2% in November vs. a 2.6% gain in October.

Chinese Take-Out (of the US Economy)

The Chinese really must think the American strategy and behavior to be braindead and self-destructive. The US helped them assemble a manufacturing industry, replaced US income with debt, and finally faces the Grim Reaper in a national episode of systemic failure. The US leadership is as stupid and mindless as the population is driven by compulsive consumption over the cliff, as the nation faces ruin.

Russia's Natural Gas Development

SITUATION: In early 2009, Russia inaugurated its first liquefied natural gas (LNG) plant for East Asia at Sakhalin. After ramping up to three times its initial capacity, it will supply roughly 5% of world LNG. It is currently expected that Japan will receive two-thirds of initial exports with the rest going to South Korea and North America.

Cap & Trade - A Train Wreck

What to do with carbon based emissions? I have no clue. I’m not sure Congress does either. They will be more confused than ever after reading a recent CBO report on the topic.

Unintended Consequences

Thoughts from the Frontline Weekly Newsletter

Correct me if I'm wrong, but I seem to remember that one of the reasons for QE2 was to lower rates on the longer end of the US yield curve. Clearly, that has not happened? Today we look at come of the unintended consequences of monetary policy, turn our eyes briefly to consumer debt, and wonder about deflating incomes. There are a lot of very interesting things to cover. (This letter will print long, but there are a lot of graphs. Usual amount of copy.)

Bad Breadth

I've noted before that at intermediate turning points we will usually see breadth diverge from price.

Consumer Confidence, Trade Balance and Federal Budget Data

Last Friday signals long term bearish outlook for the stock market

As illustrated below, each of these three economic indicators are reported in the media headlines in the aggregate, that is, their sum. Because the first two were better – up and improved, respectively – compared to the month before, the financial media, and especially permabull TV talking heads, claim they are bullish indicators for the stock market, but none is: all three are bearish for the stock market as we demonstrate here.

Missing The Point?

Good morning. With speculation running rampant about what he might or might not say regarding QE2, the state of the economy, inflation, and most importantly, the sudden spike in bond yields, Ben Bernanke decided to take a page out of his predecessor's book and said very little. Instead of addressing the improvement in the economic data or the defiant behavior of bond yields, Gentle Ben stuck to the script and will likely have the Fed just keep on keepin' on in terms of buying bonds.

The Fed's Final Days

The temple of paper money is under seige

In 2008, America suffered a massive economic heart attack. Its doctors, thought to be the world’s best, believed the US to be in good health, having recovered from a similar though smaller crisis in 2000.

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