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Financial news I consider important, with my opinion, which is worth as much as you paid for it.
Please click HERE to read a synopsis of my view of the financial situation.

Sunday, February 28, 2010

Ron Paul

The Federal Reserve has the authority to buy the debt of any foreign government, which in turn the US Taxpayer must cover losses.

This is a key point the Federal Reserve Bank, a PRIVATE institution, can "tax and spend without representation" of the common citizen. This is the heart of the issue, which unfortunately, when corrected, will be painful like removing a deadly cancerous tumor allowed to grow for years.

Unfortunately, Ron Paul's passion comes across like hes a nutcase, which is somewhat true. But the heart of his questioning is right, if the taxpayer must cover losses, the books must be made public.

Saturday, February 27, 2010

Thursday, February 25, 2010

Same Question, different day, down or up?

Who knows, market can go much higher, but I have been in the camp of lower since Jan 19th. The market rarely does anything in a "straight line" and what we saw recently was a counter trend rally.

Another tidbit is Elliot Wave International, one of the services I pay for, states we are the most "overbought" since Sept 16, 2009. While this doesn't prove the market is heading lower, any extremes are usually corrected back to the mean. Therefore it is more likely.

For more information on this statement, and a chart, see Slope of Hope. I didn't get reprint permissions. So I am still holding shorts, waiting for the other shoe to drop.
The question is, can the jan 19th highs hold and the next leg is down, possibly catastrophic wave c.
From WebSurfinMurf's Financial Blog

Wednesday, February 24, 2010

News Update

Keep in mind folks, this is news summary in last day or so. The news is like this EVERY DAY. I just don't have the strength to read and create summaries like this. It's outright depressing.

S&P Cuts Ratings On 2,861 Classes Of Prime Jumbo-Backed RMBS - My Spin - I thought this was just a subprime issue. Jumbo loans? wow. That is going to hurt!

Fitch Downgrades Greece's Biggest Banks On Government Concerns - My Spin - Germany should cut Greece loose, they lied when they entered the EU with help of Goldman Sachs by doing some fancy paper shuffling to reduce their debt load. Kick them to the curb save the Euro. Of course, I doubt that will happen, so the Euro isn't going to be a good place to be as Greece, Spain, Italy, all start falling like dominoes and the weak leaders cave to cover all losses punishing those who have savings.

Gallup:Nearly 20% of U.S. workers underemployed - My Spin - The government has unemployment under 10%, with sketchy stats on underemployment. This poll statistic seems more real to me than government headline numbers......

Q4 Report: 11.3 Million U.S. Properties with Negative Equity - My Spin - people are crazy, walk away. Why pay for an "asset" that is worth less than you owe? I bet many of these same people buy items on sale.....why bother, pay list and give Macy's a 10% bonus for doing a good job.

Harvard’s Rogoff Sees Sovereign Defaults, ‘Painful’ Austerity - My Spin, hey Rogoff, check my blog, I was a bit early predicting sovereign defaults in Jan 2009...and again in Jan 2010, ur late to the party. Nice to see reality joining mainstream....

The FDIC is up to 702 banks with $402.8 billion in assets on the watch list, 8.7% of all lenders. My spin - The scary thing is I bet not 1 top 10 bank is on the list, and assets in top banks dwarf the 700 banks. But don't worry, FDIC has unlimited funds right?

FDIC is out of money, starting borrowing to pay off failed banks debts - My Spin - yea, well, I hope the FDIC can borrow 500 billion more to cover those banks on the watch list.

Citigroup Warns Customers It May Refuse To Allow Withdrawals in Texas - my spin - How nice Citi is giving advance warning it may refuse access to your own funds. I wonder if the law didn't prevent them from doing this in other states would they warn everyone........

Greenspan Calls Crisis ‘By Far’ Worst Ever, Recovery Uneven - My Spin - Greenspan, shut the #@$% up. You ran this runaway train for decades, and now in the final few years your prodigy Bernanke is at the helm, your going to comment how bad it is? #@$% you.

Tuesday, February 23, 2010

OneWest bank makes money from home shortsales

OneWest purchased assets FDIC seized from IndyMac. They purchased mortgages at 70% of face value, and Helocs at 58%. The FDIC threw in that they would cover 80 to 95% of losses from short sales from the face price, not the paid price (70% of original value). This of course instantly builds in a nice bonus for OneWest to sell houses at a loss, since the difference is paid by the US Taxpayer from the higher price.

The complete video showing how this works is listed here (click). The real life example they give is summarized here:
Home total loan amount is $485,200, including missed payments.
Face value of loan is 478,000, OneWest paid * 70% = $334.600.
Underwater homeowner offers 241,000 for the house.
FDIC agreement takes 485,200 - 241,000 = $244,200 "loss" * FDIC refund of 80% = 195,360

So OneWest takes in 241,00 + 195,360 = 436,360, on a house they paid for 3/20/09 334,600, for profit of 101,760.

As the video asks why should banks modify loans? The answer they shouldn't. Wait for the government to intervene and the banks will get a bonus from the government.

OneWest can sell houses at any price, and they will make money.
And you know what? They should should take every nickel they can from the taxpayer. If the taxpayer didn't want to give away money like this, pressure would be put on Washington to stop looting the future of this country.

UPDATE: 2/22/10, This video apparently got notice, allegations filed in the Eastern District of U.S. Bankruptcy Court claim that OneWest can make more money by foreclosing than by keeping borrowers in their homes.

Thanks to my father for the link.

Monday, February 22, 2010

This week in Charts, and market may be going higher

I got to tell ya, I am questioning any rationale for market to head lower. Gary of the Smart Money tracker makes more sense to me than the chartists. He makes a case for MUCH higher before the terminal phase sets in. His rationale is good, and even McHugh (another chartist) who remains bearish has their own indicators flipping to a buy.

Only Elliot Wave International still is bearish with no wiggle for bullish.

I am waiting for S&P500 to break above 1,150. A break above that and I got to re-evaluate what the heck I am doing in the market. I may just need to find "religion" with Gary. Gary can't know the future either, but if we break that, he is the last man standing out of over 8 services I pay for. He alone says we go up much higher.

And that has me even more worried. I have this urge to go with the underdog. And out of all the subscriptions I pay for and blogs I read only Gary is it for the significant higher level.

In any event, for now, I'm nervous for either direction, still slanted for lower, slowly buying gold miners (small) just as a hedge for being catastrophically wrong. Also Fridays strength is REAL worrisome for me on the down slant. Fed increased rates, IMF to sell gold, and the markets brushed it off.

If you want to go long or short, really, I can't critique anyone. For me, SPX 1,150 is my guidepost for now. And a break below SPX 1,060 tells me Gary is wrong. It's a race to which hits first and determines for me who I continue to follow for the next few months if not years. For now, the charts.

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

Saturday, February 20, 2010

Paul Volcker Tells it like it is

Mr. Volcker has the best track record for killing inflation and tight monetary policy. I have written about him before. My attitudes for the American financial future would be optimistic (after first year of blood letting) if he was put into a position of power.

Below is a video, cut (censored) by CNN, the best copy I could find was a camcorder recording of the interview. A must watch.

Notice that Mr. Volcker repeats what this blog has said, need to force companies to take losses, cuts in spending, enforce fiscal discipline, enforce the law. That is the only way for long term gain. What we are doing daily is kick the can, which will make the US economy flounder for years.

Friday, February 19, 2010

One-Two Punch, Fed rate hiked, IMF selling gold, USD rises

The Federal Reserve announced at the close Thursday it will be increasing the cost of emergency funds by rising the rate by 0.25 a percentage point. A really small hike so in the scheme of life it isn't a big deal. But the symbolism may be stronger.

The markets rallied into the close Thursday is not accident, that was the market makers (in my opinion) pumping stocks to prepare for the "bad"news. Gold/resources stay out of the way, and I am glad I was so jittery to join into gold stocks. Between IMF announcing selling gold, and US "signaling" protecting the dollar, gold should take some hits.

But like anything, we'll see how far things play out, just "for now" stocks lower, gold lower, USD higher. Remember, a strong USD is GOOD. A strong dollar means cheaper imports including oil, food, metals, and yes, most manufactured good (sigh) such as computers, cars, etc.

A weak dollar over a long term would mean gas above 5 bucks a gallon, etc.

Depressing historical statistics for last 20 years

Mish has a good article titled Law of Diminishing Returns of Credit Expansion, I recommend as a must read. I borrowed one image that speaks volumes below. Notice in the last 20 years job growth has halted, personal wealth, GDP, and S&P 500 growth is on the decline.

From WebSufinMurfs FinancialBlog2

Thursday, February 18, 2010

Corrective Rally over?

I have blogged quite a bit that I am watching "chartists" on market direction. To me this is a critical test, if the chartists are correct SPX will NOT see a value of 1,150, and the decline will resume. If this test fails, I may give up on chartists completely.

Gary of the Smart Money Tracker not only likes gold, while but thinks the SPX goes much higher. I did put my toe in for gold, but no way in heck I am going long general stock market here. 72% rally in 10 months is impressive, a 117% rally in about 15 month is possible (anything is), but I can't do it.

The chartists seem to believe the "rebound" is about over, and the "catastrophic wave c" should resume.

I guess we'll know within a month who was right.

IMF to Begin On-Market Sales of Gold

The International Monetary Fund (IMF) today announced that it will shortly initiate the on-market phase of its gold sales program. This is the second phase of the total sale of 403.3 metric tons approved by the Executive Board in September 2009 (see Press Release No. 09/310). The first phase was set aside exclusively for off-market sales to official holders. A total of 212 metric tons was sold during this phase, comprising sales to the Reserve Bank of India see Press Release No. 09/381), the Bank of Mauritius (see Press Release No. 09/413), and the Central Bank of Sri Lanka (see Press Release No. 09/431).

The total amount remaining to be sold is 191.3 metric tons. In accordance with the priority of avoiding disruption of the gold market, the on-market sales will be conducted in a phased manner over time. This follows the approach adopted successfully by the central banks participating in the Central Bank Gold Agreement. Participants in the agreement have noted that the Fund’s sales can be accommodated under the agreed ceilings of 400 tons annually and 2,000 tons in total during the five years starting on September 27, 2009. The initiation of on-market sales does not preclude further off-market gold sales directly to interested central banks or other official holders. Such sales would reduce the amount of gold to be sold on the market.

The IMF will continue to provide regular updates on progress with the gold sales through its normal reporting channels.

What does this prove gold is over valued? Hardly. What it shows to me is the IMF needs cash or wants gold valuation to remain depressed. Once bag of tricks are exhausted (there is only so much gold you can sell until your out....) gold may rise in value in an out-of-control fashion.

For today, next week, we'll see if this matters. But one thing is for sure, nobody wants gold to appreciate, it helps show under-confidence in printing tons-o-paper. If faith in paper currency is ever shaken, natural resources is the place to be.

Wednesday, February 17, 2010

This short week in Charts

I deliberately didn't do the this week in stocks chart because I suspected Tuesday would bring surprises. The market is making some significant gains, and it looks like much higher.

I am trying to not get ping-ponged and join the bull again, but stay cautiously bearish. A break above SPX 1150 will be significant for me. It will signal me listening to Gary of the smart money tracker and putting a MUCH lower emphasis on chartists.

I did buy some gold miners on the open Tuesday. Some charts below

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

Tuesday, February 16, 2010

Short week with OPEX

Saturday is options expiration once again, and we are in a short trading week. While I do believe the markets are going to head much lower, I can't but help but think......what if they don't go much lower.

This blog has covered 100's of reasons why the market is sick, and is not destined to explode higher. But I can't take the chance of being 100% wrong on this one. So I am starting, to buy 100 here and there, probably weekly, various natural resource stocks in gold and some ETF's. Gary of the Smart Money tracker is getting my ear, I think he is wrong on the timing. But I know its harder to get in AFTER something jumps up. So I need to get in a little now.

I am still shorting, but a break above SPX 1150 tells me I am wrong, a break below SPX 1050 is a confirmation we are going lower. I know thats a pretty silly statement but you need to set points to reflect ahead of the move. Otherwise you get in a rut of watching...and praying....for the market to do something different.

For now, I suspect the markets have more upside, possibly SPX 1,110, enough to get the bulls salivating for new highs. But I think the market won't get there. I lightened on some shorts, trying to play it slow.

So we'll see what this week brings us, and I am very curious about how we end Friday. if Friday ends on an upswing, I may take a shot at adding to shorts for the Monday open.

If Greece is allowed to fail that could tilt things, but I susepct the countries will bankrupt themselves trying to avoid market crashing....therefore ensuring later bonds crashing.

My god, I need a new hobby. Chess anyone?

Monday, February 15, 2010

Markets off Monday

Markets are off, and I'll take a little break also.
For me, the cross roads is gold now, or gold later. Gary of the smart money tracker as always makes excellent points for gold now, read on:

Sunday, February 14, 2010

Lack of law enforcement used to cause fiscal crisis

Naked short selling is outright illegal. The US Government's lack of law enforcement is the root cause of the timing of the 2008 crash, as this video painstakingly outlines. I DISAGREE blaming hedge funds! Hedge Funds serves a legitimate function. What the problem is LAW Enforcement! I don't like the twisting of what happened and blaming hedge funds in this video series.

I didn't check any of the facts in this video. But assuming the naked short selling data is true, the lack of law enforcement is a big problem, as well as dark pools, Credit Default Swaps, and other financial transactions performed without regulation.

Video mentions blog deepcapture, click to read.

Friday, February 12, 2010

NJ may be turning a corner, Gov Christie

* Christie plans to cut NJ Transit subsidy
* Christie to freeze $1.6 billion in NJ spending

Speech from Gov Christie, see bold for highlights.

Twenty three days ago, I was honored to take the oath of office as your governor and promised you and the people of New Jersey a new direction. The old ways of doing business have not served the people well, I said, and I asked for your help in bringing about change.

Today, I have called you together because it is time to take the first major – and urgent -- step in delivering the change we promised, in the critically important area of the state budget.

New Jersey is in a state of financial crisis. Our state’s budget has been left in a shambles and requires immediate action to achieve balance. For the current fiscal year 2010, which has only four and one-half months left to go, the budget we have inherited has a two billion dollar gap. The budget passed less than eight months ago, in June of last year, contained all of the same worn out tricks of the trade that have become common place in Trenton, that have driven our citizens to anger and frustration and our wonderful state to the edge of bankruptcy.

What do I mean exactly? This year’s budget projected 5.1 % growth in sales tax revenue and flat growth in corporate business tax revenues. In June of 2009, was there anyone in New Jersey, other than in the department of treasury, who actually believed any revenues would grow in 2009-2010? With spiraling unemployment heading over 10%, with a financial system in crisis and with consumers petrified to spend, only Trenton treasury officials could certify that kind of growth. In fact, sales tax revenue is not up 5%, it is down 5.5 %; and corporate business tax revenue is not flat, it is down 8%. Any wonder why we are in such big trouble? Any question why the people don’t trust their government anymore and demanded change in November? Today, we must make a pact with each other to end this reckless conduct with the people’s government. Today, we come to terms with the fact that we cannot spend money on everything we want. Today, the days of Alice in Wonderland budgeting in Trenton end.

Click here to read full speech.

For me, it is refreshing for a politician to paint an accurate picture and call the outright make-believe of budgets into reality. Time will tell if Mr. Christie is really going to lead the change. I for one will vote for him even if he only gets 1/2 of the cuts he tries for. That is more than any other politician I read about trying to get fiscally responsible.

And to all you Keynsian economists that say cutting spending will throw NJ into a greater recession, I say, your nutz. What will make a HEALTHIER environment is end the fiction, get back to reality and start rebuilding the fantasy is better than trying to extend the fantasy. You have only to look at any person or corporation, is it better a person who is broke borrows more to keep the party going? Or get responsible?

Short term its always better to be reckless, the right thing is always harder, but longer term always better.

Thanks to Happy John for a RARE piece of good news in the sea of irresponsible politicians and regulators.

Thursday, February 11, 2010

Whats up with gold

The valuation of gold is at an interesting crossroad right here, look at the first image below. Gold is struggling to maintain the trend line established in 2008. If you are optimistic on gold prices, now is not a bad time to SLOWLY buy (in case your wrong). Gold miners (GDX) I would like to see priced around 38 to bring the optimist out in me on starting to buy. However if gold does stabilize here, not sure if GDX Will go lower than 40.

If you want to jump on the natural resource/fear play/currency devaluation play, then plan for gold to go down to 800, gdx to 28, and buy with that as your "almost worst case" for purchasing. As Gary of the smart money tracker points out, Gold is in a bull market since 2005, so buying at any time should eventually reward you.

I want to say now is the time to load the boat, but I can't help but think the markets take another leg lower before possibly firming up. And if that happens, I cant see GDX maintaining value.

In the end, its up to you, there is a million opinions, but only one that counts.
From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

Tuesday, February 9, 2010

More Free Money, to everyone but the shrinking middleclass

Article sent by Ray Murphy to me, commentary on the Fed "exit strategy" for the all the money creation/injection into the system.

Banks are required to keep a certain percentage of their assets in cash at the Federal Reserve. Any cash above this required amount is "excess reserves," and the Fed is currently paying 0.25% interest on these reserves. The Fed's exit plan will call for increasing this interest rate, to encourage the banks to keep more money in excess reserves instead of lending it into to the economy and thus expanding the money supply.
In the process of increasing interest paid on reserves, the Fed will be paying banks even more not to lend. In the process, it will be giving banks yet another way to take nearly free money from the taxpayer and give it back to the government at a higher rate--and then pocket the difference.

If the Fed does raise rates paid, it is an indication to me that all is NOT well, and this accounting trick is a way the Fed can print money and give directly to banks. I think all companies should become a bank holding company, sign over their assets to the Fed at face value in exchange for "reserves", then hold them there to get paid money on that face value.

Remember, the assets themselves, houses, etc, are still in use. So the collateral is on paper only, a pretty nifty trick. Bottom line is its raw printing of cash and handing it out. Not as bad as Zimbabwe, but a slippery slope, and in the long term will lead to currency devaluation.

Bottom line is, government unions are getting full pay without any sacrifice, millions are on multi-year unemployment, , banks getting free money any which way that can be devised, government itself is bigger than ever and spending more than ever. Why not just give every person in America 20K in free money?

I'll tell you why not, because there always has to be a loser and that is going to continue to be the middle class. Be careful for being OK with taxing the crap out of people who make more than 250K, when the currency devalues and your income rises (not fast enough to outpace costs), you will on paper be the rich person. The higher tax level will start just above the middle class, so it will be the first to get crushed when costs rise.

Monday, February 8, 2010

This week in Charts

I may not be able to make blog posts between now and Thursday. I have quite a busy schedule. I did lighten my shorts, and put some stops on, to make sure I don't lose any short gains while unavailable. Overall I will still keep some shorts on. Buying GDX here is probably a good play, I'll start to add a little, but be sure to set a stop-loss. I still think gold has more correction here, but I also hate to sit out completely if the train is starting to roll.

Gary of the smart money tracker seems to be positioning the gold bull is resuming. I can't completely diversify that the stock market rallied over 70% just 11 months ago's low. And that a greater correction has to occur.

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

Sunday, February 7, 2010

China is NOT the savior of the world...yet

America may have lead the world in ficticious financial "innovation, with many other countries following American's lead. But China doesn't want to be outclassed, to me they are going for the gold on economic malfeasance. China is a world success story,but the standard thinking it will be a growth story is in jeopardy. For example, in 2015 the Chinese demographics will start to shift, driven by China's "one child per couple" policy.

But for now, it looks like China has been doing everything possible to ensure their on-paper economic numbers are met. But reality may be a tad bit different. But this video is a MUST watch if you want to know about the state of China. A great quote "China has built a 5x5 office space for every man, woman, and child in china'. Now if that isn't a sign of overbuilding, I don't know what is.

Also see Mish on Nonperforming Loans in China Rise to "Trillions of Renminbi"

Friday, February 5, 2010

Counter arguement the bull market will resume

Gary over at the Smart Money Tracker has some interesting comments on bull market resuming. Read his thoughts by clicking here.

Pretty much everyone can make an argument for any direction. I am not dismissing Gary, more like dismissing myself. In any event best to get variety of thoughts and go with the one that you like best.

Market Comments

For back history of where the markets are at, and where they are going, read my post on market top Jan 21st and what catastrophic wave c is.

By no means am I convinced the market will crash or make a beeline to zero. But I do think we may have seen the market top for years to come this past month. I am 100% short across the board as of January 21st. Then again, I was 100% short August 2009, and I think probably 3 more times since then. I guess if I do this 50 times, one time I'll be right.

If you like gold/gold miners, GDX at 38-35 is not crazy, but for me, I'll wait for this shakeout to play out.

All eyes will be before the market opens Friday for the jobs report. I think there may be a -900,000 jobs "adjustment" for all the "fictitious birth/death" model for 2009 games played.

Good luck. 2010 will not be a picnic for any investor.

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

Thursday, February 4, 2010

Counter argument to corporations ruled as people

This video was sent to me, I didn't ask if the reader minded posting his name, so you know who you are.

In any case, this is a pretty good argument against what may be an over-reaction by me and others by the supreme court ruling I posted earlier today.

I say I agree with this video actually, but there probably has to be SOME regulation on the distribution of unlimited funds. I would find it acceptable that at the end of a message, a list of "credits" are flashed on the largest money funder's for the message.

In any case, watch for more context on the debate.

Corporations are ruled as same rights as people

The US Supreme Court ruled corporations have the same rights as people, specifically around Free Speech. The amount of money that corporations will exert on politicians will now escalate and dwarf any citizen funding campaigns. Politicians will not need support of citizens, except at the polls. And given two choices, both funded by companies and not by the people, the results will represent the companies.

UPDATE: Same day, downgraded wording from:
I consider this a Financial Ground Zero moment, just as the repeal of Glass-Steagall act in 1999 and the decision to back Fannie Mae and Freddie Mac with unlimited funds by the US government. For more information and to become active to turn this action around, see more at http://freespeechforpeople.org/

I consider this a POTENTIAL Financial Ground Zero moment. Watch this counter argument by clicking here. For more information and to become active to turn this action around, see more at http://freespeechforpeople.org/

Thanks to my brother Ray for the link

Wednesday, February 3, 2010

US Debt Rating

Greece is under pressure with it's credit rating, and looks to be the next country reaching critical mass.

"Moody's Investors Service said Tuesday that unless the U.S. government makes more moves to decrease the budget deficit or the economy improves more than anticipated, the government's "Aaa" bond rating will eventually be put under pressure."

HA! There is no way in heck Moody's downgrades the US rating until its obvious to everyone it should have been downgraded months ago.

And there lies the problem, the US is spending without restraint using every last bit of credit it can soak out of the world. It is relying on if it fails it would hurt too much, so the world must support it. Also it's a case of the other guys looks worse, so support the US.

But that blatant abuse of the position the US enjoys is exactly why it will eventually fail if it doesn't turn around. And there is no way Moody's is the first to blow the horn. Nice try Moody's but stating the obvious isn't doing your job. Doing your job is to downgrade US bonds when it is appropriate, and I doubt that you will do that.

Who wants to go down in history of being the last straw before the damn breaks? And a bond crisis will make 2008 look like a party.

Tuesday, February 2, 2010

Obama proposes 3.8 Trillion dollar budget

At this point, lets drop the word "budget" to open-house spending spree. There is no budget here. Also predicting 1.5 Trillion dollar deficit out of the 3.8 Trillion dollar spending spree. And this is PROJECTED! What if, things go afoul? Maybe a large bank fails? There is no room for error. This above all things makes be believe Gary Savage of The Smart Money Tracker is right on gold. I just can't see this level of irresponsibility with the US Dollar valuation to go unchecked. To see how bad fiscally the US is today, before this bill is passed, check out the US Debt clock. Also check out US debt compared to all the world governments combined. And any administration who makes such a proposal, I am now glad the health care bill was stopped. This bill shows there is no reality check in Washington. What is happening is all the "extra" wealth went to private corporations and the public will see living standards shrink.

I am disgusted, and the public is starting to show fringes of anger, which is good. What is needed is enough anger to curb this spending. Everyone's life savings is in jeopardy if the dollar is broken due to recklessness. And if that happens, it isn't Obama's, Geithner, or Bernanke's fault. It is ours for being passive as the groundwork was laid.

With that said, this has nothing to do with the market valuation or gold for the next 3-6 months.

Monday, February 1, 2010

This week in Charts

Another Monday, another week in charts to help keep perspective.

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

US Debt

Even though the markets may pull back, or advance wildly, there is one troubling aspect to the fiscal picture, US Government Debt. There is something about paying 700 billion in interest annually to pay for the existing debt owed at the lowest interest rates in a generation, that just screams train wreck.

It's like the government has followed it's citizens in over-spending while it's credit cards aren't maxed. Does anyone thing that it will end better for the government than the millions of citizens being evicted from homes they can't afford or credit cards they can't pay?

I ran across an interesting article at Forbes titled "The Global Debt Bomb", which is worth a read. In the article there are a few graphs, which I am a sucker for.

I am lifting one image from that article, to hopefully intrigue you to clicking through to read more. Of the projected total WORLD debt issuance by ALL governments, the USA is issuing 45% of all debt. That is stunning. What happens if the US issues 55%? 75%? The point is there has to be a saturation point and it may not be that far off.

Once saturation hits, and it will, that will be the time to jump into natural resources. The goal will be to maintain savings in something that over the long haul retains value relative to costs. And when that wall gets hit, interest rates will rise and housing will fall, as the cost to pay for debt rises.

I'm fun at parties.

From WebSufinMurfs FinancialBlog2

Thanks to reader Ryan Swan for the link.