Where the Big Lessons will be Learned

Posted on June 28, 2013 by MN Gordon

Reading the headlines of this week’s data reports tells the story of a strong, robust economy.  According to the Commerce Department announcement on Tuesday, single-family home “sales increased 2.1 percent to a seasonally adjusted annual rate of 476,000 units – the highest level since July 2008.”

But that’s not all.  We also got word on Tuesday that U.S. consumer confidence is also at a five year high.  AP reports…

“The Conference Board, a New York-based private research group, said Tuesday that its consumer confidence index jumped to 81.4 in June.  That’s the best reading since January 2008.  And it is up from May’s reading of 74.3, which was revised slightly downward from 76.2.”

Yesterday the Commerce Department confirmed that people are earning more money.  On top of that, they’re using their increased proceeds to buy more stuff… Continue reading →

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What Are Reasonable Gold Market Expectations?

Posted on June 25, 2013 by MN Gordon

What Are Reasonable Gold Market Expectations?
By Jeff Clark, Senior Precious Metals Analyst, Casey Research

The historical record shows that those who get washed out during big corrections miss the greatest buying opportunities of a bull market.

With that as context, what can we expect from gold moving forward?  Let’s start with the short term…

Full market capitulation is underway.  Headlines about gold are almost universally negative today, and all about selling.  This feeds on itself, and the process may not be over.  In this kind of environment, prices will overshoot to the downside.  In other words, the bottom may not be in.

What if we get more short-term pain? Continue reading →

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Notes from Cabo San Lucas

Posted on June 21, 2013 by MN Gordon

The native inhabitants of Cabo San Lucas, the Pericú, had a rough go of it in their twilight years.  First they were overrun by Hernán Cortés and his Spanish Conquistadores in the 16th century.  Then, two centuries later, Jesuit missionaries told them what position to make love in.

Naturally, the Pericú revolted against the Jesuits.  But the combination of combat deaths and old world diseases irreversibly thinned out their population.  By the late 18th century they were culturally extinct.

When Hatsutaro, a Japanese castaway whose adventures were chronicled in the book Kaigai Ibun, landed in Cabo San Lucas in 1842, there were only two houses and about twenty inhabitants.  As far as we can tell, the place continued in slumber for the next 60 years.  In the early 20th century, however, the fishing trade brought development to the area.  Then, by the mid-20th century, Cabo San Lucas had become a popular vacation destination and the coastline was dotted with large scale tourist developments. Continue reading →

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Ingesting Rabbit for Supper

Posted on June 18, 2013 by MN Gordon

All of the sudden boring old government bonds have become real interesting.  For over the last six weeks a remarkable new awareness has come over the credit market…

If you can believe it, interest rates don’t always go down.  In fact, sometimes they go up.

“In the last six weeks, benchmark 10-year U.S. Treasury note yields have surged to 2.19 percent, from 1.60 percent at the beginning of May,” reports Reuters.

“As a result the market has seen a sharp outflow from bond funds and notable lack of demand in Treasury bond auctions.  The fund outflows and the rise in volatility offer a worrying glimpse of how markets are likely to behave as the Fed works to scale back its enormous monetary stimulus of the U.S. economy.”

Our guess is that as the Fed tapers and turns interest rates will rise – a lot! Continue reading →

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