Buy Gold Co.

Financial uncertainty reigns as the Obama administration moves to “fundamentally change America”.   Fortunately America is waking up as evidenced by the people’s  vote this past Tuesday.  Thank God for the Massachusetts vote, where the tea party was reborn during this period where financial uncertainty reigns.

There Is No Rest Where Financial Un certainty Reigns!

Scott Brown’s election on Tuesday, to be the new U. S. Senator from Massachusetts, was the shot heard round the nation by all but the progressives and President Obama.  It is utterly amazing to me (although it shouldn’t amaze me because I understand these zealots) that they are willing to totally trash the United States in order to get the foundation for their socialist utopia.  With the possibility that the health care takeover might be stopped, President  Obama immediately shifted gears and launched an attack against the banking industry.  Why the need to keep uncertainty and fear at such a high level?

It is pretty obvious that the progressives are following Saul Alinsky’s playbook page by page. Rule number 13 from Alinsky’s  Rules for Radical’s states:  “Pick the target, freeze it, personalize it and polarize it.” It is really becoming tedious to try to read between the lines of the progressive media as they spin everything in their blatant attempt to keep the American public from seeing this administration’s true agenda.

By demonizing the financial industry,  all eyes are focused on a supposed new threat to the common man while the back door bargaining that is the reconciliation process continues in secret.  Don’t count out health care just yet!  While the public is tilting at the windmills of the “evil” corporations, the government is continuing to swallow up more and more of the freedoms that made this country great.

Bloomberg reported these comments from Joseph Stiglitz this week:

“Volcker was vindicated yesterday when Obama proposed limiting trading activities of financial institutions to prevent another crisis, adopting recommendations of the 82 year old former federal reserve chairman.  Obama called it the “Volcker Rule”.

“This represents somewhat of a shift from the positions of those in the administration in favor of deregulation,’ said Joseph Stiglitz, s Nobel Laureate and frequent critic of the administration.  “Volcker has been pushing for this for a year, and it was one of my biggest disappointments that his idea wasn’t picked up by decision-makers until now.”

Former Fed Chairman Volcker is the anti inflation “god” who throttled the nation’s last bout with inflation by hiking the lending rates to 20%.  Will this same policy return as we see inflation from the “stimulus package” and the progressives profligate spending binge enter the inflation pipeline?  Some where down the line it will have to unless the dollar is completely thrown to the wolves.

The Bloomberg quote regarding Volcker sounds ok on the first read, but they neglected to mention that the President said that he would decide which banks were “too big to fail” and cut them down to size.  Once again the Community Organizer In Chief’s solution to a “problem” is more government control.  The markets realized this and sold off big time after the latest proclamation from King Obama.  Uncertainty reigns once again and it is by design.  This President wants chaos and turmoil so that he can “fundamentally change America” as he promised on the campaign trail, which by the way, is the only one of his campaign promises that he is keeping!

The way to end the  recession/depression is quite clear.  Get government out of the way and unleash capitalism through tax cuts for business which will stimulate small business and create jobs. That is ostensibly what the progressives want with their words, but is not what you get with their actions.  they talk the talk, but they are not willing to walk the walk.

This Bloomberg report lays out the basics.

If you were to follow the President’s reasoning out to it’s logical conclusion, then it would behoove the American people to limit the size of government before it fails and takes the country down with it.  It is apparent that Tuesday’s election results are the first step on the road to that end.  The American people don’t want this President or this government taking any more control of the country and on top of that they want what has happened this past year to be rolled back!

The Community Organizer In Chief can’t have it both ways.  You can’t completely blame the banks for regulations imposed on them by Chris Dodd and Barney Frank.  The government played a role in the housing bubble and it should be taken to task for it as well.

In another assault on business and the banking industry, President Obama has proposed special taxes on the bail out banks, whether they have paid back their TARP loans or not, with two notable exceptions.  You guessed it, Fannie Mae and Freddie Mac are exempted because the U.S. Government effectively owns them. This next article from Bloomberg points out one investor’s objections to the plan.

Buffett Says He Can’t See Rationale for Bank Levy

How's That Hope And Change Working Out For YA?

By Andrew Frye, Betty Liu and Jamie McGee

Jan. 20 (Bloomberg) — Warren Buffett opposes President Barack proposed levy on financial institutions because firms including Goldman Sachs Group Inc. and Wells Fargo & Co. already repaid bailout funds.

“I don’t see any reason why they should be paying a special tax,” said Buffett, the chairman and chief executive officer of Berkshire Hathaway Inc.  in an interview on Bloomberg Television today. Supporters of the plan to tax the banks “are trying to punish people,” he said. “I don’t see the rationale for it.”

Obama announced a plan last week to impose a fee on as many as 50 financial companies to recover losses from the federal government’s Troubled Asset Relief Program. The levy would apply to firms with more than $50 billion in assets, including Wells Fargo and Goldman Sachs, two companies that Berkshire has investments in. It would exclude Fannie Mae and Freddie Mac, the government-sponsored mortgage lenders taken over by the U.S.

“Look at the damage Fannie and Freddie caused, and they were run by the Congress,” said Buffett. “Should they have a special tax on congressmen because they let this thing happen to Freddie and Fannie? I don’t think so.”

Wells Fargo, Goldman Sachs and other beneficiaries of the bailout such as Bank of America Corp. and JPMorgan Chase & Co. repaid the money they got from the government. Fannie Mae and Freddie Mac owe about $110 billion, according to Bloomberg data.

Unnecessary Rescue

“Most of the banks didn’t need to be saved,” Buffett said. “Including Wells Fargo.”

Before the U.S. Congress approved the bailout in 2008, Buffett, 79, said he was making a $5 billion investment in Goldman Sachs because he expected the government to rescue financial companies.

“If I didn’t think the government was going to act, I would not be doing anything this week,” he said on cable network CNBC the day after announcing the Goldman Sachs investment in September 2008. “I might be trying to undo things this week. I am, to some extent, betting on the fact that the government will do the rational thing here and act promptly.”

It is quite clear the Mr. Buffett is aware that government intervention in the banking industry had a lot to do with the relaxed lending policies that led to the housing bubble and its subsequent collapse.  You can read the entire article at Bloomberg.com at your leisure.

Uncertainty Puts Markets Under Pressure

The markets are telling you exactly what they think of this latest attempt at government intervention in the capitalist system.  They don’t like it and they are voting with their dollars as they exit the general equities markets!

DOW Craters After Obama's Latest Anti-Business Proclamtion!

You can clearly see the effects of the administrations attacks on the financial industry in each mornings opening after the latest proclamation. As long as these tactics remain the same, investors will run to the dollar and out of stocks.

Finacial Uncertainty Sends The Lemmings Into The Dollar

If the general equities continue to be driven down by the administration, the government reaps the benefit of the influx of dollars into the U.S. Treasuries, just as foreign governments are exiting them.  So what’s your call?  Will the government keep hammering the equities in order to sell its debt?  I think so!  They have painted themselves in a box with “quantitative easing”, so they are committed to and the dollar be damned!

Gold is Going Along For The Ride!

Gold’s relationship with the dollar remains intact and if the general equities really swoon, we will likely see gold swept down with them for a time, just as it did during the initial market drop at the beginning of the financial crisis.  I am looking for $1,o70 level to hold before the next leg up begins.  There is the chance that the $1,000 level will be tested, but right now I don’t think that it will come into play.  Either way, these are great buying opportunities for both gold and gold stocks.

Gold firms, with U.S. dollar under pressure

Jan Harvey

LONDON — Reuters Published on Friday, Jan. 22, 2010 6:42AM EST

Gold GC-FT firmed in Europe on Friday as the U.S. dollar fell broadly, retreating from six-month highs versus the euro, after U.S. President Barack Obama proposed tough new rules to limit financial risk-taking by banks.

Gold and other commodities initially slid on the news, amid fears the proposed new restrictions could limit investment flows into commodities. However, the dollar’s slip eventually helped prices to recover.

Spot gold was bid at $1,096.25 an ounce at 1039 GMT, against $1,094.20 late in New York on Thursday. In that session it tumbled to a three-week low of $1,088.30 an ounce.

“The dollar has been the driving force (for gold),” said Peter Fertig, a consultant with Quantitative Commodity Research.

He said while gold and other commodities had overreacted to the Obama news: “Uncertainty about U.S. financial system regulation is a factor which might be in the market for some time, until there are concrete details.”

President Obama’s announcement on Thursday of new proposals to limit risk-taking by Wall Street banks knocked stocks and commodities, including gold, that session.

But the precious metal made up some lost ground on Friday as the dollar retreated, with investors pausing to assess what the White House plan meant for the dollar and U.S. assets.

Relax and be patient. Use this pullback to accumulate both physical gold and silver and gold and silver stocks. Things are going to get extremely volatile as financial uncertainty reigns.

Till next time, good luck and good trading!

Also Noteworthy:

• Is Gold Putting In a Bottom?
• Putin Leads World Financial Revolution!
• Putin On Capitalism and the Financial Crisis
• Deepening Financial Crisis
• Gold and Uncertainty?