Financial Sense Blog

When a child loses a tooth, we talk about the tooth fairy. When it comes to Christmas, we prefer to speak of Santa Claus; at Easter, it is the Easter Bunny. On Halloween we dress our children as ghosts and goblins, and send them off to collect candy. For World War III, we have the Strategic Arms Reduction Fairy. We make up stories to cover the nakedness (and sometimes the barrenness) of our spirit...

I’ve been thinking about recoveries - revisited. Actually I’ve been thinking about my second post-operative return to normal, Creston Booster Days 2009, and the status of the US recovery. Some recoveries are immediate and automatic while others take time and a lot of effort and input.

It appears our self-serving bureaucracy thinks they can keep fooling the markets indefinitely, where now they have resorted to attempting to ratchet stocks higher against precious metals. Of course the funny part of it all is as you know from our last meeting precious metals charts are telling us it will take hyperinflation to keep equities moving higher however, as the dollar ($) decline is getting stretched to say the least.

With the S&P 500 up more roughly 50% from the March lows and sporting a price-to-earnings (P/E) ratio of 18.37, the market is clearly no longer cheap as the low hanging fruit has been plucked by Mr. Market.

Many have been asking what is going to happen with gold and silver this month, and I maintain it is a tough call. The September month is usually pretty positive for the metals. In fact, there have been several articles talking about the last chance to buy gold under $1000.

For weeks we have been looking for a correction, and a time or two we experienced some trepidation that the bull market might be over, but all the market has done is produce a series of minor pullbacks.