Blog

September 20, 2010 – There is too much money being printed.  No rocket science is needed to reach that conclusion. The markets are giving us a clear message. For example, gold is trading at a record high, while silver has reached a 30-year high.  Those new high prices are happening for a reason.  The preciousRead more

Inflation is coming back. In fact, it never really left, although there was a brief moment after the Lehman Brothers collapse when it appeared that the dollar would slip into a deflationary collapse. But after peering over the precipice, Bernanke and his central bank cohorts around the world did not like what they saw. So pump they did, and the dollar and other national currencies have been losing purchasing power ever since. But the loss of purchasing power is about to gain momentum.

September 13, 2010 – I am pleased to present the following article written by Mark Lundeen. He explains why the Barron’s mining stock average has outperformed the Dow Jones Industrials since 1920. The analysis excludes dividends on both averages, which in itself could be an interesting study. Nevertheless, his conclusions are thought provoking and worthRead more

July 11, 2010 – The Fear Index has risen to a 16-year high.  As of June 30th, the Fear Index is 2.35%, based on M3 data made available by shadowstats.com.  Here is the formula and calculation for June 30th:   The following chart illustrates the Fear Index at the end of each month since DecemberRead more

July 10, 2010 – I need to correct an article I wrote last month stating that banks are lending again.  Total bank loans have indeed grown as I reported, but not because banks made new loans.  Instead, the increase was a result of pure accounting. On April 1, 2010, the accounting rules for banks changed.  CreditRead more

June 17, 2010 – Banks are lending again.  After many months of sitting on their hands while trying to repair their over-leveraged balance sheets, banks are making new loans.  They also continue to buy US government paper, though those purchases tapered off over the past month. Earlier this year I noted how banks were usingRead more

Hyperinflation results when a country’s central bank turns government debt into more currency than is demanded in economic activity. It is unfortunately impossible to measure precisely the demand for currency. Nevertheless, the rate at which the government is borrowing can be used as a general guideline to determine if too much currency is being created.

June 14, 2010 – The stock market is often acclaimed for its forecasting ability.  Stock prices peak long before the downturn in economic activity that generally results in a recession and a prolonged decline in the stock market.  Then after this lull in the economy, the bear market low in stock prices leads by severalRead more

June 3, 2010 – Icelanders voted in a referendum to address their debt problem.  Germans have a problem too, but they are voting with their pocketbook.  They are dumping the euro and buying physical gold, the demand for which is soaring in Germany. The problem Germans face is a broken promise.  Despite all the rhetoricRead more

The dollar is approaching hyperinflation