I hope those of you with any assets to
protect are watching. Tragically GM
appears to be going down. It's debt got cut
again to deeper junk, and GMAC's paper is
under watch. Copper is at all time highs,
and there is not enough copper in the
warehouses to cover the paper shorts,
which could lead to turmoil in the paper
metals market. Gold is at a 17 year high and
has been sitting there, perhaps preparing to
go higher. Silver is also at multi month
highs. The dollar is not doing badly which
means these price peaks are also
happening in nearly all paper faith based
currencies. According to the NYT, high end
Manhatten apartments are down over thirty
percent in average price and all apartments
are down 17 percent over the last three
months from the previous period. The FEd
continues to talk hawkishly about raising
rates at the front door while flooding the
repo pool and buying mortage paper at the
back door. Fannie Mae still has not come
out with last years financial figures and the
stock is tanking. The home builders are
also declining with massive insider selling.
Mortgage banks that I watch such as First
third, and Washington Mutual have had
significant declines. CNBC, the ultimate
touters, are finally starting to use the S
word, Stagflation. Unfortunately, thirty years
of wreckless crredit expansion on a
worldwide scale can have only one result,
according to Mises, Hyak, and Rothbard.
and now even warnings from mainstream
types like Volker. The result is here. You
can call it Stagflation, but I think the
unfortunate unemployed guy at the grocery
checkout would call it a
HyperinflationaryDepression, or maybe just
plain Misery. Gold performs well in this
environment.
Compassion, bravery, understanding,
calmness, wisdom, preparedness, and
grounding will be needed by all of us to
bring ourselves and those around us
through the difficult times that lie ahead.
Tonight, in Asia, the breakout above 17
year highs towards 25 year highs appears
to be underway. Attempts to contain the
price of gold by central banks determined to
maintain faith in paper, nay ensue, however
the amount of physical gold the central
banks have remaining may be insufficient.
Some gold and silver and related mining
stocks may be wise insurance at this time..