Financial Sense Blog

With gold reaching an all-time high, which by the way no other asset class can boast, some may be wondering if the bull market in gold is over as it has exceeded its prior peak. In terms of determining bubbles or significant peaks, relative valuation analysis has proven effective in identifying bubbles. As will be shown in the article below, no matter how you want to slice it, I believe gold is by no means close to a bubble, and can easily rally to higher triple-digit figures in the months and years ahead.

It looks to me like we could be forming the end of a blow-off rally. It’s difficult to measure how high stocks could go from here, but there are some clear shifts in volume, world market trends, and sector rotation that are signaling this bullish trend is coming to an end over the short to intermediate-term.

The shade of Thucydides, formerly an Athenian general and historian, languished in Hades for 24 centuries; and having intercourse with other spirits, was perturbed by an influx into the underworld of self-described historians professing to admire his History of the Peloponnesian War. They burdened him with their writings, priding themselves on the imitation of his method, tracing the various patterns of human nature in politics and war...

The markets have corrected since peaking in the middle of October and there appears to be a decisive rift in the financial community between the bulls and the bears, with the bears calling for an end to the rally off the March lows while the bulls maintain that we remain in a cyclical bull market.

On the Web Site giftedkids.about.com we find an article titled "How (Not) to Argue with Gifted Children," by Carol Bainbridge, who explains that gifted children "are often compared to lawyers." They argue rules and they argue consequences. This raises a smile on those of us whose parents would never entertain arguments of any kind from children, however "gifted."...

Much was made in June about the Dow non-confirmation as the Dow Jones Industrial Average exceeded its May high while the Dow Jones Transportation Average did not. The non-confirmation was not an early warning sign that the market rally was finished, but rather warned of a short-term correction that ended with the Dow non-confirmation later resolved in late July as both averages exceeded their June highs.

Reality can destroy the dream; why shouldn't the dream destroy reality?

George Moore

1852-1933, Irish Writer

In the first chapter of Russell Kirk's The Roots of American Order we read the following statement: "Our own society, like that of any other people, is held together by what is called an 'order.'" Without order, society doesn't cohere. Instead, it flies apart, breaks up, and disintegrates. And, I would argue, a process of disintegration has been underway in the United States for many years...

As part of the next arms reduction treaty between superpowers, the United States has tentatively agreed to unprecedented Russian access to American nuclear missile sites. According to published accounts, Russian weapons inspectors will be given an open door to American nuclear sites in order to monitor the number of missiles and warheads...

It’s been a year since the fallout from the Lehman Brothers collapse that rocked the markets, pushing market volatility to an extreme. The market volatility that was witnessed last fall is not something many of today’s current market participants have ever experienced, a generational type collapse that one would have to turn back the clock to the Great Depression to find a similar environment.