By: Bill Bonner & The Daily Reckoning Crew - 19 May, 2006
-Nothing is born under the sun that doesn't die in the shade...the wildest profits are made from the weirdest investments during a bubble... -In gold we trust...continue executing the Trade of the Decade as we've instructed since 2001... -The three stages of a bull market...the poor Brits flounder in absurdity along with their American cousins...and more! Full Story
By: Peter Schiff, Euro Pacific Capital, Inc. - 19 May, 2006
This week Wall Street finally began to acknowledge the possibility that all is not necessarily sanguine on the inflation front after all. This rather reluctant and long over do admission of the obvious came as a result of a .3% increase in April’s core CPI, .1% greater than what had been expected. Though traders routinely ignore far more significant negative surprises with respect to headline inflation numbers, they are not as forgiving when it comes to the sacrosanct “core.” Full Story
By: Mark "Be Free" Skousen & The Daily Reckoning Crew - 18 May, 2006
-A whole nation of geniuses...a soft landing in the housing market? -Gold may have gotten ahead of itself...nothing fails like success... -How to be an "a-hole"...the stuff that Middle America is made of...and more! Full Story
I want to emphasize that this silver/gold liquidation is very blatant and very bullish for silver, when it is completed. You don’t have to be Albert Einstein to see what the dealers are doing, or know their real motive. For long term investors of all types, retail and institutional alike, I would like to reaffirm my suggestion that gold only investors take advantage of the dealers’ actions and the aberration in the silver/gold spread to establish long term silver positions, using gold as a source of funds. This applies particularly to those institutional investors with gold ETF positions and no silver ETF positions. Full Story
By: Roland Watson, New Era Investor - 18 May, 2006
Most readers will be familiar with the great hyperinflation of Weimar Germany. Indeed, it is often held up as the icon of what can go drastically wrong when government throws off all restraint as regards to the production of fiat money. I do not need to labour the point much as to how billions and then trillions of marks were literally not worth the paper they were printed on and how workers had to be paid by the hour lest their wages rapidly lost purchasing power in the brief time between being paid and spending that same money. Full Story
One would have to be a dunce to believe that our omnipotent Government would permit a wholesale default on the residential mortgage market. Now, with illegal aliens being pulled under the Fannie and Freddie Mac umbrella of mortgage guarantees, the sub-par quality of loans takes another leap into un-creditworthiness. Full Story
By: Byron W. King & The Daily Reckoning Crew - 17 May, 2006
-Having the courage to grab the bull by the horns...how do you know when it's time to get in, and time to jump off? -GM lays off thousands of Americans - and hires in India...an economic "Code Red"... -The perfect ingredients for a plunging dollar...it's all about timing...and more! Full Story
By: Richard Daughty, The MOGAMBO GURU - 17 May, 2006
Total Fed Credit was up only $1.6 billion last week, and while the custody holdings of foreign banks at the Fed was up a strong $9.2 billion last week, I chose to start off the lecture by dryly saying "The big news, to me, is that the dollar has started collapsing. There are so many ugly ramifications of this that I would not even know where to begin. So, let me merely say that the dollar falling is Unalloyed Bad News (UBN), which means that you and your family are all doomed to die horrible financial deaths, screaming in pain and anger, and let it go at that." Full Story
The consequences of a rapidly declining dollar are not yet fully understood by the American public. The long-term significance has not sunk in, but when it does there will be political hell to pay in Washington. Our relative wealth as a nation is measured in dollars, and the steady erosion of the value of those dollars means we will all be poorer in the future. The artificial stimulation of our economy through cheap money comes with a price. When dollars are abundant, they are worth less. Full Story
"Record oil and metals prices increase inflation concerns" was the headline in a May 15 Financial Times article that summarized the number one economic worry today. With inflation becoming an even bigger concern than normal, it’s time to examine the options faced by the nation’s financial controllers to tame this unruly beast in the months ahead. In light of recent indications, it will come as no great surprise that one of these options is an escalation of warfare in the Middle East. We’ll look at how likely this scenario is and how it would be used to subdue inflationary pressures. Full Story
A watchful day, albeit one with a resurgent bullion threatening to chew up naysayers and hock them into a spittoon, Jim French-style. Unable to find much to trade myself, much less to inspire, I swapped louche videos with pen-pals on my e-mail joke list. You know who you are. Otherwise, it was a swell day to dodge trouble. Full Story
By: Gary Shilling & The Daily Reckoning Crew - 16 May, 2006
-One of the most expensive clean ups in history - and it doesn't even involve oil or saving wildlife...we've created mortgage monsters... -Find out what our small-cap superstar has up his sleeve...homebuilders aren't feeling very enthused by the housing market... -Dismal days for the dollar...Addison as a character from Chitty, Chitty, Bang, Bang?...and more! Full Story
By: The Mogambo Guru & The Daily Reckoning Crew - 15 May, 2006
-A Republican Senator that put his copy of Empire of Debt to good use...national debt has increased 50 percent since 1999... -The importance of cleaning up our own messes...the swindle that is modern medicine... -Counterproductive antibiotics...a day with Père Fréchette...and more! Full Story
By: Peter Schiff, Euro Pacific Capital, Inc. - 15 May, 2006
The mainstream of economic thinking holds that China will continue to finance America’s current account deficit indefinitely because American consumption is vital, if not critical, to the survival of China’s export driven economy. While I have written several commentaries exposing the fallacy of this argument (most notably “Even Stephen Roach has it Wrong” available here), I thought one more analogy might be helpful. Full Story
The Old Testament Book of Genesis, describes the gold of Havilah as ‘good’. That suggests that in other places it might be ‘bad’. One could think immediately of four reasons for the difference. The first would be the ‘richness’ or ‘grade’ of a deposit. Is it high or low? The second would be the ‘accessibility’ or depth at which it lies. Is it shallow or deep? This would determine the ease of getting it out. The third might be the method used to raise the capital. Is it equity or debt? If the latter, what are the hidden costs? Finally - and often forgotten in all the excitement – could be the nature of the land surrounding the find. Is it friendly or hostile? Full Story
As anticipated, the Fed maintained it’s official party line Wednesday. And although many are confused about what the future holds, not the least of which is Mr. Bernanke himself, it should be noted that Greenspan’s Fed is still fully operational because he left no other choice in the matter. That is to say not only was he holding a gun to your head in terms of having to play the inflation game (think haste economy) when he was in office, but because of the increasingly risky credit related practices Easy allowed in overextending an already exhausted larger degree business cycle, Ben has no choice but to follow (inflate) or die now too until the jig is up on a more permanent basis. Full Story
By: Bob Chapman, The International Forecaster - 14 May, 2006
The central banks creators of fiat currencies have made one of their stupidest mistakes ever trying to buy time. That is by eliminating M3. What they did was expedite the upward moves in gold and silver. Granted both were ready to move higher anyway, but the criminals that they are they had to do what they wanted to do. Ever since the announcement last fall that M3 was to be terminated, gold and silver have been on a tear. The result is the paper suppression of the gold market is finally and mercifully coming to an end. Full Story
While it appears that the Dow has put in several multi year highs they are not true highs because the US dollar itself has lost so much of its value that jus to break even the Dow would have to trade 20% plus higher. If we use Gold or silver to price the Dow then the Dow would have to trade almost 60% higher just to match its old all time high. This clearly illustrates how the masses are being fleeced while being led to believe that everything is fine and dandy. The phrase “it’s like taking candy from a kid” comes to mind. Full Story
By: John Mauldin, Millenium Wave Advisors - 14 May, 2006
This week we look at the links between the US trade deficit, the low savings rate in the US, home prices, and interest rates, all in an effort to answer the question: "Do trade deficits matter?" I think I will offer a few practical, if simple, insights to the matter. Full Story
The idiocy of free trade as we know it is becoming clear today as our trade deficits mount, our ability to manufacture falls, and the administration is busy trying to deliberately destroy the value of the dollar – all in order to make up for counterproductive, ruinous, undemocratic, and costly “free trade” policies. Full Story
I’ve been dissing General Motors for years, baffled as to why anyone would choose a GM car over a Japanese model unless out of pure patriotism. Lately, the auto manufacturer has been busy rearranging the deck chairs on the Lusitania, preparing for a day when it will have to compete not only against the Japanese, but against a Chinese assembly line capable of cranking out well equipped luxury cars for under $25k. It seems obvious at this point that GM -- and Ford, and Chrysler – will not be able to shrink fast enough to meet the threat head-on, even in bankruptcy. Full Story
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