Paper Gold Ain’t as Good as the Real Thing

Posted on February 14, 2014 by MN Gordon

Paper Gold Ain’t as Good as the Real Thing
By Doug French, Contributing Editor, Casey Research

For the first time ever, the majority of Americans are scared of their own federal government.  A Pew Research poll found that 53 percent of Americans think the government threatens their personal rights and freedoms.

Americans aren’t wild about the government’s currency either.  Instead of holding dollars and other financial assets, investors are storing wealth in art, wine, and antique cars.  The Economist reported in November, “This buying binge… is growing distrust of financial assets.”

But while the big money is setting art market records and pumping up high-end real estate prices, the distrust-in-government script has not pushed the suspicious into the barbarous relic.  The lowly dollar has soared versus gold since September 2011.

Every central banker on earth has sworn an oath to Keynesian money creation, yet the yellow metal has retraced nearly $700 from its $1,895 high.  The only limits to fiat money creation are the imagination of central bankers and the willingness of commercial bankers to lend. Continue reading →

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Ventures Into Sophism

Posted on February 11, 2014 by MN Gordon

Last week, while everyone was busy watching the stock market wildly convulse about, something noteworthy occurred.  Oil prices eclipsed $100 per barrel.  Moreover, oil prices are up about 5 percent so far this year.

“Oil futures rallied on Friday, tacking on nearly 3 percent for the week after briefly topping $100 a barrel shortly before the close of the trading session on the New York Mercantile Exchange,” reported MarketWatch.

Phil Flynn, senior market analyst at Price Futures Group, called it “a risk-on rally.”  The trite term risk-on, if you don’t recall, means investors have a higher tolerance for risk.  In other words, according to Flynn, rising oil prices are a sign investors are bullish.

Quite frankly, we’re not sure how Flynn came to this conclusion.  But we suppose calling it a “risk-on rally” made him feel smart.  Nonetheless, from our vantage point we see plenty of risks appearing on the horizon to be weary of.

For instance, today, new Fed Chair Janet Yellen delivers her first testimony to the House of Representatives.  On Thursday, she’ll follow it up with some words for the Senate.  Without a doubt, the stock market will watching intently and will quickly decide if she botches it or not. Continue reading →

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How to Retire a Decade Early

Posted on February 7, 2014 by MN Gordon

The stock market’s got ants in its pants.  After crashing 326 point on Monday, the DOW jumped up 72 points on Tuesday.  Then, on Wednesday, after dropping 100 points early on, the DOW finished the day about where it started.  Yesterday, it was back to the races…the DOW ran up 188 points.

Watching these wild price swings can put a retirement investor on edge.  Another decline like 2002 or 2008 could mean another decade – or more – of the daily grind.  What a revolting thought.  For what could be worse than another ten years of the corporate slog?

We don’t mean to be gloomy.  But, the fact is, all the fun’s been taken out of doing business these days.  Creativity and gut style management has been replaced with spreadsheets, charts, and margin metrics.

Doing good work, delivering for clients, and earning a profit is no longer acceptable.  Performance must be tracked, measured, and managed in such minute detail that the actual work is a secondary factor.  Do you know what we mean? Continue reading →

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Pray for Rain

Posted on February 4, 2014 by MN Gordon

Here in the Golden State everything’s brown.  The hillsides are dry and the scrubland vegetation’s a giant tinderbox.  Sierra snowpack is only 12 percent of normal…the lowest it’s ever been since California began keeping records in 1960.

The wildfires don’t ordinarily arrive until fall.  Not until summer and the dry Santa Ana winds have blown through.  Yet this year’s far from ordinary.  The fires came in January.

The San Gabriel Mountains went up in a blaze several weeks ago.  We marveled from the 21st floor of a Figueroa Street skyscraper as a thick layer of black smoke drifted across the Los Angeles basin and down to the Long Beach harbor.  An incandescent sunset over San Pedro Bay guided us as we traversed our way home in the evening.

“This could potentially be the driest water year in 500 years,” said University of California Paleoclimatologist B. Lynn Ingram.  Obviously, we weren’t around when Columbus discovered the new world.  But we can tell you, in strictly scientific terms, it’s drier than a baked prune. Continue reading →

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