Financial Sense Blog

The following is commentary that originally appeared at treasurechests.info for the benefit of subscribers on Tuesday, June 15th, 2010.

The global economic recovery is not looking good. The G-8 meeting this weekend saw divisions that could lead [as the I.M.F. put it] to losses of trillions of dollars and millions of jobs. Now it is reported that Mr. Bernanke and his close allies at the board in Washington are worried by signs that the U.S. recovery is running out of steam.

You see denial and human nature go hand in hand. We never seem to want to acknowledge the direness of what we are facing. In the alternative… we also tend to ignore the good things around us, what keeps us going, and what makes life, well life.

“We are scary, scary owners of euros,” – John Taylor, lead manager for world’s largest currency fund, Bloomberg News, June 28. The number one Bloomberg heading this morning says, “…Dollar Rally Buckles..”. I mentioned the bankster game of pumping the news with the other side of their trade. Read that sentence again. Unlike the rest of the world’s investors, the banksters don’t talk up their trading book. They talk up yours!

Europe strengthens on paper but how long will that last? Also, Australia has a new Prime Minister. Kevin Rudd has gone showing how dangerous it was to even propose the Super Mining Tax, let alone implement it. Changes are afoot, will they be the right ones for this mining nation?

World leaders are meeting in Toronto, Canada, this weekend and the protests have begun. They’ll be discussing how they can manage to save the global economy. Gold will be a topic, but not admitted.

Well, we can’t say we did not warn everyone; for a long time now we have been stating that this recovery is all smoke and mirrors. Worse yet we proved that the Dow has not put in one single new high in the past 52 weeks in our article titled Dow's new highs, all lies. When priced in other commodities such as Gold, the Dow is in a clear down trend.

Most people breathed a sigh of relief as the economic crisis of early 2009 came and went. Another Great Depression had been avoided, or so people thought. After they got over their initial, late 2008 shock, the U.S. Treasury Department and Federal Reserve Bank got the job done, albeit in the worst way, creating enough liquidity to prevent a financial “seizure,” at the cost of worsening the deficit.

It was a non stop sell off last week in equities as the SP500 sold down 4 days straight with a small move up on Friday. While investors were cashing out of stocks, we saw that money move into the big shiny yellow safe haven - Gold.

Living realistically is not something anyone wants to do in an election year, and it may be especially difficult for the Baby Boomer generation to grasp, along with their children. Over the last two decades as wages swelled, and job prospects were unlimited, the Baby Boomers became accustomed to living well beyond their means.