GDP Takes Right Hook in the Mouth

Yesterday as noted on here, the excitement of the GDP was at best questionable. Today, those questions blew up on investors as consumer spending fell and the stock market followed suit. The fact is/was the GDP news was based almost entirely on government spending. There is no business growth, see unemployment and there is no increased consumer spending as evident of today's announcement.

People grow tired of bad news, but here on this site, I am dedicated to offering the truth, something many places has decided against in favor of a political agenda. Remove the agenda or ignorant the bliss from this story and the fact is there is no story. An economy cannot sustain any form of growth with the government as the main player.

GDP Going Up?

The buzz today was the announcement of an increased GDP for the 3rd quarter. Sounds great doesn't it, but hold on. The components of the GDP include business spending, consumer spending and of course government spending. It is to believe under any spinning of the numbers that business and consumer spending drove the increase, it must be government spending.

Government spending has proven to be nothing more than a caffeine jolt, causing a quick rush, but resulting in a hard fall when the buzz wears off. It should surprise nobody when/if the GDP takes a fall very soon. In fact, most economists are predicting a decline in the very near future. The question is how hard will this fall be and will it create another round of caffeine injections are an actual cure? We shall see.

See a Chart on GDP Components>>>

Gold Prices Rebounding in Early Trading

Even with the solid economic numbers coming, such as the GDP up over 3 percent, gold is up in early trading; $11.30. Silver as normal is following gold's lead up .43. It appears gold and silver investors remain bullish on the precious metals, rebounding nicely after a few down days. The downward move of gold left some pondering if gold would slip back under $1000.

See Quotes>>>>

Goldman Sachs Economist: Reccession is Over

Goldman Sachs Abby Cohen talks about the positives in the economy. Many oppose this view point, but I want to offer this to the readers. It is interesting however, that she admit the stimulus package is a quick, short lived boost. After that her reasoning for long time growth seems questionable, but of course this is a non-exact science.

Watch Video>>>

FOX Business News Live

Check out FOX Business News Live. It is best to watch as many different sources as possible. Investors should never lock onto just one source, although some are clearly better than others such as Casey and Jim Rogers over any of the cable channels.

FOX Business News.

BTW: P&G comes in .97 a share, missing expectations by 2 cents, at .99

Commodities Futures

Here's a look at the commodities future chart..Looks promising for the most part.
See Chart>>>>

Oh Honey, Pick Me up Some Gold...

This is an interesting story. Harrod's in London is now selling gold...Oh yeah, along with a new shirt I will take a 5 ounce bar of gold please...
Read Story>>>>

Gold on Correction

Gold is showing some signs of a correction. If it goes below $1000 it might be time to buy. Gold Quote for 10/29/09

Also, take a look at this video. Euro Pacific Capital Peter Schiff explains why gold is going up and the proper way to look at inflation. Mr. Schiff's notes that inflation starts with the printing of cash and that is certainly underway. Also, watch the video, which was taped in September and note the talk of gold reaching and staying at $1000 something it has done; a major concern of those debating Mr. Schiff's position.

Commodity Review

Review of today's commodity markets watch the video;

Barney Frank Driving Down the Dollar

It is comments such as the one made by Barney Frank on the following video that is helping to drive investment money out of the United States; not to mention the dollar down.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Obamanomcis a Dude...

Is Obamanomics already dead? Check out the video below...

Stocks Taking a Big Hit

Stocks are taking a big hit today, falling below 10,000. The news isn't much better on the gold side as the spot price is down over $15 at $1040.40. It seems to be an overall bad day for investors, with no place to hide. But, as the old saying goes, easy come easy go? Yeah right.

Top Ten Signs the US Economy is in Trouble

Here are my top signs the US economy remains in trouble. These are in no particular order, just the way I wrote them.

1. White House economist Christina Romer noted the stimulus provided a jolt, but the unemployment and slowed growth is likely to return. Not a surprise and second fall, like coming down from a Mt. Dew high is likely to be worse than the original fall.

2. Unemployment continues to go up. Numbers for September showed 531,000 more people are receiving unemployment benefits. Not good, but even worse are states such as Michigan were unemployment is at 15%.

3. The State of California is as close to complete collapse as a state economy can get. Riddled by sky rocketing unemployment in the farming sector, caused by government regulation, and out of control spending, California is a disaster. Add it to Michigan and it is hard to imagine a recovering economy with two major states in economic disarray.

Suggested Email Newsletter

I would advise signing up to Doug Casey's newsletter. In these times, guys such as Casey are invaluable.

Big Brother Slashing Pay

The Federal government is coming and those companies which took TARP money will be paying the price. Word is out that the Feds plan on slashing the pay of top executives by nearly 90%.

On the surface this seems great, taxpayer money, so why should those who screwed things up reap the benefits. Beyond the surface, it is the growth of the Federal government and proverbial "Jeannie out of the bottle syndrome". Once they have done this for one company there is nothing stopping them from expanding into other areas. Don't fool yourself on this one, once the public factor is used all companies are open game and it will be under the veil of protecting the consumer/taxpayer. One more nail in the coffin of capitalism.

READ THE STORY

Gold Showing Some Early Weakness

Gold is showing some early weakness, but has come off an early low. Both gold and silver continue to show strength, even when it appears the correction is about to start.
GET QUOTES

Gold and Silver Links

I have compiled some gold and silver links. Each site offers something. I have purchased from a few, but cannot recommend any of them.

APMEX
Austin Rare Coins
Kitco
eBay gold and silver
US Mint
Royal Canadian Mint
Royal British Mint

Real Estate Market Takes a Hit

The excitement of a recovery in the real estate market hit a big bump Tuesday afternoon. After showing signs of life, housing starts data flat lined, dumping cold water on the excitement of a real estate recovery.

The other big shoe many are waiting for is the bomb of commercial real estate. Many people fear with so many offices sitting empty, investors will not be able to cover loans. This will create another round of foreclosures and send shock waves through the real estate industry. If this is true, any recovery will be wiped out.

READ STORY CONCERNING HOUSING STARTS>>>>

David Einhorn Warning of More Bad News

Hedge fund manager David Einshorn, who foresaw the Lehman Brothers' collapse is betting against the United States. Einshorn is not pleased with the direction of the nation's economic plan.
READ STORY

What if China is being Misread?

I found an article on Newsweek, offering a differing viewpoint on many of the common perceptions of China. It is an interesting read and certainly, when dealing with a country like China, all thoughts, evidence and viewpoints should be considered. It remains a mysterious place and we have a lot to learn...READ ARTICLE---

Fannie and Freddie Are Worthless

It appears the spiral downward continues for Fannie Mae and Freddie Mac. When the bank crisis hit in 2008, there were many voices yelling that the main player was Fannie and Freddie. However, driven purely by political reasons, those voices were drown out. The reason is simple,exposure of the truth would have destroyed the public approval of the bailout plan.

The process was as follows.

Politicians pushed for mortgage loans to the "underprivileged" guaranteeing a large segment of the population would vote in a specific manner. To accomplish the goal mortgage approval had to eased and this is where the large banks entered the picture. Fannie and Freddie, established as mortgage companies were used as quasi purchasing agents for the government. The banks approved the loans, sold them to Fannie and/or Freddie, for a profit and continued rolling in the mortgages and sending out the cash. As the process grow wildly out of control and the bad mortgages piled up faster then they could be sold, the bubble started to burst. When the real estate market sank and oil prices sky rocketed the banks were in trouble. The banks were left holding loans nobody could pay and they were stuck. Thus, the bubble burst. Enter the crisis talk, the bailout plan, the scare tactics and rush to fix the problem.

The end result is the American taxpayer is paying for two things; 1. Politicians buying votes 2. Large banks abusing a system and taking advantage.

Housing Market Looking at Double Dip Hit

I am not trying to put up bad news all the time. However, it seems to me and others that some in the media are looking through rose colored glasses. Things are not good, which for many of you that is a big duh. The link is to a story focusing on some very dangerous problems. Each one has the power to send the economy back into a spiral and must be addressed by any investor.

Housing Set for Double Dip

Arindam Nag Talks Investment Banks

Arindam Nag talks about investment banks and clearly he is sounding caution as the proper play, noting that companies simply do not have the cash for the market and we must wait to see if this changes. BTW: The banks mentioned are TARP babies.

Bank of America Taking a Beating

Bank of America has reported big losses in the third quarter. Led by the inability or refusal of debtors to pay off debt, Bank of American continues to suffer. Recovery under way?

Gold Down, Dollar Up

The dollar may have overshot it's downside and appears to forming a rally. This has resulted in a slowing the of the gold rally. However, this is one day trading and one day makes not a trend. Keep an eye on the gold price as it may dip below $1000 offering a buying opportunity.

Dollar Just Keeps Falling

The US Dollar continues to fall and it appears that tide will continue. This is just one of many indicators that contradicts the cries ending the recession. The others being employment. Unemployment is predicted to remain 8-10%, making any recovery a joke. Secondly, the debt is now projected to equal the GDP (Gross Domestic Product). In Lehman terms, the US is broke and all it's production is going towards paying a debt, not good.

Stock Market Pushing Towards 10,000 but is Another Bubble Builiding

The market is moving upward and there have been positive signs. Retails sales, minus cars were up in September. JP Morgan reported high profits as did Intel. The question remains, with so many negative indicators is another bubble building?

Investors seem ready to jump back in the market, which is certainly a positive, but any prudent investor must ask one simple question; Are these real improvements in the market or just the expected caffeine rush from the government influx of cash? The game of investing grows cloudier with each passing day. Whistle blowers in the accounting world have been decrying the tactics used by publicly traded companies. Showing profits and a solid company on the surface, ignoring the cracks in the foundation. Now with the government and politicians firmly tied to the success of a financial institutions, pressure for profits has never been greater.

I am no expert, but I would caution all investors to stay safe at this point and watch the market carefully. Learn from the recent financial debacle and take a moment to at listen to this sounding the warning sirens.

Unemployment Rate to Remain High

In a report released by National Association for Business Economics, economists believe employment recovery will be slow and the unemployment rate high. They agree that most jobs will not return for three years, stalling out any real recovery.

This report from the NABE would appear to contradict recent claims of a recovery already underway. Simply put, growth means jobs and if there are no jobs can there really be growth? A more reasonable conclusion is the economy may no longer be spiraling downward, but it has yet to begin the upward climb. This is the real problem.

The perception of the general public will remain negative as the unemployment rate is the most reliant indicator for the average person. If this number remains high, the fear of them being next will remain, forcing the consumer to curb spending, tighten investing and stall the economy.

Gold Closes on Record High in London

Gold closed at $1064 per troy ounce in London. Once again the driving force behind the precious metal's surge was the falling dollar. The American greenback dropped against the euro, driving investors towards gold.

There really seems nothing steaming the tide of the falling US dollar. As the United States pushes toward larger deficit the push out of the dollar will likely continue. The key factor in this commodity bull market and falling dollar is the presence of Asia. Never before has there be an economic power challenging the United States like China. Because of China, the historical indicators of the past are nearly null and void as their economic growth has been stunning.

New Bladeless Fan

Alright this really has nothing to do with gold or investing, but Dyson is introducing the new bladeless fan. The article explains how it works and the inventors claim it is more efficient and safer than the traditional fan. It is a new twist on an old device that has changed little since it was introduced to the world.

People, we just have to love the free market and the human mind!

Jim Rogers: Gold Could Hit $2000

Jim Rogers discussing gold four days ago. The most honest and perhaps one of a handful of the smartest guys going.

Steve Wynn on FOX Sunday.

Steve Wynn wipes out Michigan Gov. Granholm. As a free market lover, this man could not be more correct.

Gold and Silver Up Early

Gold and silver are up slightly in the early trading in New York.

Gold Milestones

This is a great article from Reuters . It shows the run of gold over the last few decades, showing how quickly things can turn up and down. Something of note however, is the influence of China as a new economic power. Even during the Soviet era, their economic influence was nowhere near what the Chinese have accomplished. Their presence is changing everything, including the continued decline of the dollar.

Jimmy Rogers with Larry Kudlow

Video with Jimmy Rogers on with Larry Kudlow...

Ayn Rand: Never Been More Correct.

Ayn Rand is undergoing a rebirth in the eyes of the media. However, as someone who believes in Rand, her presence has never really gone away, it just has been shoved aside. Her words have never been more correct than they are today. My hope is that more people will understand this and demand those in power undergo a change in course.

Secondly, although Rand defended the business world, she would have and did disapprove of those businesses such as the banking system and those taking TARP money, using the government as a tool of controlling the market. She found no difference between them and those who seek to control individuals through government.

China In the Movies

A quick clip about the Chinese movie industry...An interesting twist offered by the reporter at the end of the segment.

Gold Falls on Bernanke's Words

Gold is seeing a slight drop on the words from Fed Chair Bernard Bernanke's noting they might be ready to tighten dollar production. The other reason for the drop may also be simple profit taking. As gold soared along the entire week, it is natural to think some investors will start taking profits. Silver is also off its' high, but remains above $17. There is little reason to believe that the drop will change the course of the two precious metals, just a one day profit taking session.

Dateline: England

There is a report coming out of England declaring that the welfare state has destroyed the work ethic in England. The study was conducted as England attempts to clean up their version of disability. It went on to note that as generations have passed, the concept of receiving and/or cheating the welfare system in England has become prominent. The younger generations are now inclined to sit back and let others support them.

Is this any surprise? It shouldn't be. As many of you know I am a believer in the teachers of Ayn Rand (well most of them with a few exceptions). She stated clearly in her novel Atlas Shrugged what happens to a society when it becomes reliant on government hand outs. Oh yeah for those that have never read it, she began writing the novel in the 1930's.

Hey England could have saved a lot of money and just sat down and read the novel.

Gold and Silver Minor Gains

Gold and silver continue to go up, minor but the record highs for gold has taken and silver is trying to stay above 17. Everyone is waiting for the correction, but as the price goes up the bottom does to on any correction. For American investors, they need to step back and look at this country as an outsider; what they are seeing is not good.

Hyperinflation

I have serious doubts about hyperinflation, but listening to those that believe it is coming have been given some crediability with the housing disaster. The following video was produced by Inflation US. I know little about this organization, but it is the people who are seen in the video who I do know, such as Ben Bernanke. Ron Paul and many others. It is worth watching and taking into consideration what has already happened and what might be yet coming.

China Economic Growth in Energy

The Chinese just keep growing in all segments. The question of what type of the economy they are, gadget, small goods are a real world player is now clear. Anyone who denies this is fooling themselves.

Silver Riding on Gold

There is growing talk that silver will follow the coattails of gold. As the price of gold goes up, investor will look for another, cheaper option and that option could be silver. Take a look at this article to read more about silver prices.

I know personally I am a fan of silver and think investing in it offers the common investor a way into precious metals.

US Dollar Continues to be in Trouble

An interesting look into the US Dollar and how it works. There are some interesting things going on and it explains the actions of the Chinese and Russians.

Gold on a Run

The rampant reports of the dollar being phased out as the oil currency sent gold on an expected run today. The precious metal finished the day at $1042 per ounce. It's partner silver was right behind, going over $17 per ounce. The run came after a report that the Chinese along with other nations are working a deal that will phase the dollar out as the currency of choice for oil trade. Making things even more interesting was the fact gold was added to rumored equation.

This would of course explain the Chinese move to buy up gold and prompt their citizens to do the same. China is making a major push to become the world's number one economic power and they are succeeding. It is time for the United States to work closely with the Chinese as the two become more reliant on each others' economic stability. Interestingly enough, as these powers race in the economic world and create economic allies, the ideal of a more stable, peaceful world draws a bit closer. Nothing promotes peace more than economies which are reliant on each other.

Arabs Looking to Dump Dollar

Folks this is a stunning turn of events. According to this report the American Dollar will no longer be used to purchase oil. This is perhaps the biggest blow to the Dollar in generations. It is clear signal we have or are losing our stance as the world economic power. On the flip side, gold is going to run for the roof my friends, IMO.

Gold and Silver: Bear v. Bull

There still seems to be some mixed feelings as to if the gold/silver market is bullish or bearish. Indicators are mixed, leaving many scratching their heads. Here's what we do know. Gold has stayed at are near $1,000 this entire month, silver continues in the $16-17. The dollar shows little signs of life and is taking another beating against the Euro and other foreign currencies. However, on the flip side, how long before investors decide it is time to sell and take profits. This could create a self induced correction that history shows, can be sharp.

From reading and listening most believe if gold and silver continues to hold steady, then it is time to jump in and buy as that signals a sign the prices are going to remain. This really seems to the direction as so many signals (including the demands in India and China) indicate a bull market with an extended life. The best move right now might be sell, take some profits and wait. If the correction comes jump back in hard, if it does not slowly re-invest a little at a time. Remember hogs get slaughtered.

Gold and Silver Prices

Prices for both gold and silver seem to going a bit sideways today. Gold is up $2, while silver is up .09. Not much movement for either at this point in time. There is indications that the world's largest gold market India, is seeing an increase in demand. This is good news for gold investors, but could only be a temporary spike.

The dollar continues to struggle and former Fed Chair Alan Greenspan noted he believes unemployment could be going to 10%. Not a bold prediction considering it is currently over 10%. However, both could have long term meaning for the price of the gold and silver.

Have a good morning and I will be back later today.

Somoan Tsunami

Somoan Tsunami footage. If you are a praying person say a couple, if not wish for the best. The Somoan people are a hardy, self reliant group, they will recover.

Is There an Economic Recovery?

The question continues to be debated; Is there an economic recovery underway? The answer has two prevailing views. The first is no, there are little to no signs of a recovery, the national debt continues to rise, the dollar continues to plummet and there appears to be little growth in any economic segment. The opposing view is yes, there is a recovery. Job losses have stalled out, the real estate market is recovering and DOW Jones is hovering around the 10,000 mark. However, even this group of individuals agree that the recovery may be a jobless one. The unemployment reportis gloomy as once again first time claims have gone up.

So what is a jobless recovery? Basically for those that held onto their jobs, they look safe. Those that were cut, well good luck finding work that doesn't include the words welcome or do you want fries. For the latter group it will be very difficult to convince them a recovery is happening, for the former, forgive them if they hold onto a negative outlook. After all many of them are still facing wage freezes, unpaid leave and a stagnant future.

Honestly, for this individual it seems ridiculous for anyone to proclaim an economic recovery without job growth. If a large portion of society is unproductive the economy will remain at best in neutral, which is not a recovery.