When You Should Buy Stocks

Posted on May 31, 2011 by MN Gordon

“Bad times have a scientific value.  These are occasions a good learner would not miss.” – Ralph Waldo Emerson

Markets Make Opinions

“Market’s make opinions,” say the old timers.  But what are the opinions to be made by this ambivalent market?  Are stocks rolling over for a great fall?  Or are they taking a breather for the next leg up?

No one really knows for certain.  Nevertheless, the opinions out there range as far and wide as Wilshire Boulevard.  “Invest in HUGE Bull Market,” screams one headline.  “Two Big Reasons to Worry About Stocks,” cautions another.

An old friend recently told us he’s bullish.  Obviously, the market’s made his opinion…it’s had a nice run over the last two years.  Here at the Economic Prism we find this reason enough to be bearish.  Market’s go up and they go down.  After going up and up over the last two years stocks will eventually go down…at least they should.

So far the adage to “sell in May and go away” has been a valuable insight.  May is almost behind us and stocks, as measured by the S&P500, have fallen 2.6 percent – the most since last August.  While one month does not make a trend…it could mark a turning point.  In good time we’ll know… Continue reading →

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Why Gold Is Going Higher

Posted on May 27, 2011 by MN Gordon

Several weeks ago the gold market took it on the chin…falling from $1,540 per ounce on May 4 to about $1,480 per ounce on May 17.  Since then gold has quietly been making its way back up the charts. Yesterday it hit sold for around $1,520.

Gold has been in a bull market since early 2001 when it traded for under $275 an ounce.  Back then no one would have thought it anyway possible for gold to rise 560 percent over the next decade.  Remember, that was back when gold was still a barbarous relic from an earlier, less sophisticated time.  Paper money, and a central banker’s power to manage it, was going to bring about the great paradise.

Now, scarcely a decade into the new millennium, it is paper money that’s on the run.  The value of paper, along with the elites who control it, have been debauched by an abundance of monetary shams…namely over issuances in the name of economic stimulus.

The other big trend over the millennium’s first decade has been the massive transfer of wealth from west to east.  This big trend is most obviously evident in the rise of China…now the world’s second largest economy, and rapidly closing on the United States as the planet’s top dog. Continue reading →

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When the U.S. Treasury Bond Bubble Finally Explodes

Posted on May 24, 2011 by MN Gordon

The U.S. government borrows more than $40,000 per second.  You’d think running up the credit cards at such a rate would be great fun.  Yet, as far as we’ve made out, there’s nothing much fun about it.

Who knows?  Perhaps within the beltway, where the mountebanks in Washington go about bankrupting the nation by doling out free drugs to the populace, it’s one heck-of-a good time.

For those of us who aren’t loaded on prescription meds, however, a stench emanates from D.C. like wafting odor from freshly laid horse puckey.  Somehow, Congressmen believe if they borrow just a little bit more, and saddle us up with more debt and more idiotic laws, everything will be hunky-dory.

According to Treasury Secretary Timothy Geithner, the United States borrows $125 billion per month.  “With that amount,” notes Reuters, “the United States could buy each of its more than 300 million residents an Apple Inc. iPad.”

Depending on your idea of a good time, a free iPad courtesy of the government may help win over your vote.  But for those who stop to think, and consider their kids will be paying for it – plus interest, the thought of a government sponsored iPad is an insult not a benefit.  Likewise, free drugs should be an insult too. Continue reading →

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The Magic World of Guaranteed Retirement Accounts

Posted on May 20, 2011 by MN Gordon

The pursuit of ignominy is nondiscriminatory.  For it’s with equal opportunity that each individual’s granted the occasion to act a buffoon.  Most rare is the man who heeds the calling, ascends to the highest ranks of public office, and preserves his dignity.  More often, he takes his cue, steps center stage, and behaves like an utter jackass.

For example, here in the land of fruits and nuts confessions of the former Governator’s secret love child with the family maid were plastered across the Los Angeles Times this week.  No kidding…it’s been quite a hoot.

But even more hilarious were front page pictures of the unshaven Dominique Strauss-Kahn, head of the International Monetary Fund, and who was to be the next President of France, doing the perp walk in a New York courthouse for alleged sex crimes against a hotel maid.  What a week… Could a Hollywood screen writer have come up with better cheap entertainment than this?

We don’t doubt it…but no comedic fiction could’ve caused a pother in Paris quite like the images of France’s favorite son handcuffed and jailed.  For this alone, the cheap entertainment’s been priceless. Continue reading →

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