Blog

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

June 1, 2010 – Numerous records continue to be broken by gold, including some longstanding ones that go back to the January 1980 peak.  Gold closed the month of May at a new record high against every major world currency except the Japanese yen. Various charts of the gold price in terms of major currenciesRead more

May 22, 2010 – Silver is inching closer to its long-awaited upside breakout.  The huge accumulation pattern that silver has been building over the past three years is almost complete, as can be seen on the following chart. I noted in my last commentary that silver looks ready to soar and more to the point,Read more

The IMF does not own gold; it owns claims to gold

Greece’s debt troubles are well known. Less recognized is the worrying truth that Greece is just the tip of the iceberg.