Gold Update 2-25-09

February 25, 2009 Physical Gold, Politics No Comments

Today’s piece is going to be a little different. I am working on an in depth look at “Putin Capitalism” that will post later this afternoon, so this will be an abbreviated look at the action in the markets and gold. It is important that we focus on the big picture when we look at gold, but I must admit that I can’t resist taking a shot at the day to day moves in the markets. We are living in an age of predatory legislators and their daily machinations affect all aspects of the markets. The more we look at the daily moves in the markets and more importantly, what causes them, the easier it is to spot patterns that will help us with our investments in the future.

The markets reacted to Fed Chairman Bernanke’s statement that the banks would not have to be nationalized in the usual knee jerk fashion. They showed “irrational exuberance” as the DOW rose 236 points. It seemed not to matter that these statements change depending on how the Fed reads the temperature of the financial community on any given minute. There is an old adage that applies 100% to what is taking place today. “How can you tell if a politician is lying? If his lips are moving.” In no way do I mean to imply that the Fed Chairman is lying, because he is not a politician and he does not work for the government. He has an entirely different agenda which has nothing to do with that of the Federal Government, or for that matter, with what is good for the people of the United States.

This Financial Crisis is Giving Me A Migraine!

Today, the markets, or as I like to say, the active share holders of the United States, are once again demonstrating their confidence, or lack there of, in the President’s plan to fix the economy. Once again, President Obama is continuing to bat 1000. The DOW is down 125 at 7,225, the NAS is down 26 at 1,415, the dollar is up .92 (1.19%) at 87.70 and gold has latched on to it’s good buddy, the dollar, and is up $8.40 at $971.10. If nothing else, President Obama is consistent. Every time he speaks the markets go down. Why is this happening? It’s happening because the people who are invested in the markets know that increased debt will not solve the current financial problem. It’s that simple!

Here is how the Economist Magazine commented on the Obama rescue:

“The fiscal stimulus plan has some obvious flaws. Too much of the boost to demand is back loaded to 2010 and beyond. The compromise bill is larded with spending determined more by Democrat lawmakers pet projects than by the efficiency with which the economy will be boosted. And it contains Buy American clauses that, even in their watered-down version, send the wrong signal to trading partners..Fiscal stimulus, indispensable as it is, cannot create a lasting economic recovery in a country with a broken financial system.

This “stimulus package” has nothing that deals with stimulus in it. It is a left wing wish list that is 95% pork that is designed to drag the United States into European socialism. How can you rescue the economy by attacking corporate executives for flying private jets and getting bonuses when that is exactly what the predatory legislators are doing. Divide and conquer is their strategy and it is appears to be succeeding. Unfortunately by the time they finish with their plan, the United States will be unrecognizable to anyone over 30.

Gold and gold stocks are more important now than ever. This correction will be short, so take advantage of it and buy gold in any of it’s forms.

Till next time, good luck and good trading!