Financial Sense Blog

Last week the gold vigilantes launched their attack by nominating me for their annual "Moron of the Year" award after my earlier Financial Sense article "RIP Goldrush" (see FSO archives) was belatedly recycled into a popular pro-gold, pro-GATA newsletter and used to whip me mercilessly for having the temerity to suggest that "markets fluctuate; sometimes violently".

Critical to US households ahead, in my mind, is liquidity. Just as this issue is now life or death for the commercial and investment banks. Although the Street appears myopically focused on this very issue when it comes to the Fed, the US financial system and its key players, they should be equally as focused on US households when it comes to the question of liquidity.

In October of 2007 the S&P 500 made a marginal all time high, and almost immediately turned tail and headed downward. From peak to trough, the S&P 500 went from about 1550 to a temporary bottom of just above 1250 in March 2008.

Oil inventories fell short of expectations last week. Supplies fell 5.32 million barrels to 320.4 million while analysts were anticipating a build. The market immediately responded and oil jumped on the release of the information and closed at $133.21 on the floor of the New York Mercantile Exchange.

Lord Chelmsford’s center column comprising 1800 British soldiers, primarily the 1st and 2nd battalions, the 24th Regiment of Foot (later the South Wales Borderers) together with an irregular cavalry unit and auxiliary forces from the Natal Native Contingent, a force of 4000 crossed the Buffalo River into Zululand on 11 January 1879 to signal the start of the Zulu Wars.

In an age where governments of every political stripe distort economic data to promote their own self-interests, it’s hardly surprising that they present inflation statistics that are wildly at odds with the reality faced by consumers and businesses, and regarded with utter disbelief.

Inflation – where? According to the data released this morning, prices are not going up. Now everyone has an opinion about prices – yes food/energy prices are rising rapidly and they are purchased often by everyone.