Government Stupidity Now Moving Markets

Gold up $70, the Nasdaq down 4%, the VIX up 20%: these are the effects of government stupidity. Our leaders, most notably President Obama, had a golden opportunity to inspire confidence in Americans by coming together on a debt deal that made sense. Instead, politicians confirmed  they are bungling buffoons that have no clue. This is not a drop in confidence, this is a collapse in confidence. There’s a difference.

That being said, most people think stocks will drop in an environment of collapsing confidence. I know it’s counter-intuitive, but stocks are going to explode because of the flow of capital from bonds to stocks and a general decline in the dollar. Longer term, stocks are basing for a rocket shot move. It’s been in the cards since 1999. You must look at the longer term picture to capture the monster moves; it is the same with stocks as it is with gold.

Gold stocks are bucking the market trend, and we can see a late 2008 to early 2009 situation arising where gold stocks bottom ahead of the market. The divergence between crude oil and gold is extremely bullish for gold equities. Although crude oil and gold are the two classic inflation indicators, they are diverging sharply. Hmm. Maybe gold is a government stupidity hedge, not an inflation hedge?

A word on Treasuries. I know a lot of people thought Treasuries would fall sharply on the news of S&P’s downgrade, but I didn’t. Treasuries have rallied, but this has very little to do with the viability of U.S. debt and more to do with the fact that capital needs to figure things out; there aren’t that many places to park  large amounts of capital. For now, some capital is parking in gold. This is still a trend in its early stages because the “dumb” big money, which includes pension funds, haven’t re-weighted their portfolios away from Treasuries and into gold. It will happen in due time, but not overnight.

The Fed is on deck for tomorrow and it will be hard for Bernanke to wiggle his way out of this one. Only a month after the apparent end of quantitative easing, the weakness of our economy is obvious. There will be helicopter drops. There will be quantitative easing. As I’ve consistently said, people were getting way too complacent. Most economic forecasters- including gold permabears, deflationists, and the “green shoots” crowd- have lost their credibility. It will soon be time for U.S. bond permabulls to lose theirs too.

Share this article
  • Angie

    Hi Moses

    You’re right on about not worrying about the treasurey price/mortgage interest.  My husband and I bought a house 3 months ago with 4.875% interest rate and now evaluating to refi.  Rate for 30-year fixed stands at 4.375% as of today with the treasury market going up driving down yield. Our mortgage broker recommended waiting to see if the interest drops to 4.25%.
    Is mortgage interest almost directly related to treasury bond price?  From reading your blog, seems like Bernenke has to annouce another round of QE3 or else stock market will drop further. But if QE3 is coming, stock market may rally, and will treasurey/bond price drops? QE3 means more bond buying so should that drive bond price further up and driving down yield (mortgage interest)?

    I guess my question is: should I be not so greedy and take 4.375% or wait to see if treasury goes up even further and drive rate down to 4.25%.  I remember you forecast treasury will be topping soon.  thanks!


    • Moses

      Hi Angie,

      I would take any rate below 5% because that is just a steal. Treasuries are in the process of topping and you need these kind of spike moves to build energy for the downside. After 2 rounds of quantitative easing where rates went down, I think the consensus will be even lower rates. Add to that general economic weakness and renewed fears of deflation, and I think it’s fair to say there will be maximum pain for U.S. bondholders when a reversal comes. 


      • Angie

        Hi Moses

        You seemed so confident about QE3 and I knew you were very confident about QE2 last summer and it did come.  Is it b/c the gov. cannot just let the equity market suffer and even if it’s bad for the US dollar they’ll just have to keep on inflating everything else and devalue dollars?  Lots of commentary articles talk about possibility of QE3, or not.  And FED gets criticized heavily…but do you think in this case…this is the only tool they’ve got and that’s what will happen?

        Also many articles compare the 2007/2008 recession crash with this one we’re in right now.  Do you see the possibility of that?  Market seems to have dropped a lot and I cannot imagine being “worse” than the 2008/2009 crash.  What are your thoughts on that? likeilihood of another recession?


        • Colton Lindsay

          another recession?  the recession is just heating up form 2008.  hahahahahahaha

        • Moses

          Well the government can’t let equities fall much further and they also can’t pay off our outstanding debts without inflating away. Absent a change in thinking, yes quantitative easing is the only option for the Fed. 

          I think we’re in a recession already; the average person on the street knows it. As far as another crash, it’s in the real of possibility. I would be buying all the way down though. And on a retest of the 2009 lows I would back up the truck. 


          • Angie

            I agree with you Moses.  It’ll be interesting to see what Bernenke says tomorrow.
            I tried to be a short before but it disrupts my sleep.  So I’d rather be a long if there’s good buying opportunity.  Not sure when the market will bottom, but I’m glad that I still have my job and continue to generate cash for potential invesment.  My husband is a very conservative investor who likes to park all his money in savings + CDs…however, letting your money sit in the bank is basically losing it as look at how much USD has dropped against other currencies! Anyways, look forward to more of your post and thoughts tomorrow.


          • Moses

            The stock market is extremely, extremely, extremely oversold. A monster rally should come sometime this week.


  • Andrew Pelt

    I just want to say I’m new to weblog and absolutely liked your web page. Most likely I’m planning to bookmark your blog post . You definitely have amazing article content. Appreciate it for revealing your blog.

  • Pasquale Bossey

    this site is cool!! thx read

  • Arlinda Beger

    good blog! this site is cool!! thx read

  • follow this article

    It’s difficult to find well-informed people on this topic, however, you seem like you know what you’re talking about! Thanks

  • go to link

    Zune and iPod: Most people compare the Zune to the Touch, but after seeing how slim and surprisingly small and light it is, I consider it to be a rather unique hybrid that combines qualities of both the Touch and the Nano. It’s very colorful and lovely OLED screen is slightly smaller than the touch screen, but the player itself feels quite a bit smaller and lighter. It weighs about 2/3 as much, and is noticeably smaller in width and height, while being just a hair thicker.

  • Pingback: how to lose weight fast

  • continue reading

    I’ll gear this review to 2 types of people: current Zune owners who are considering an upgrade, and people trying to decide between a Zune and an iPod. (There are other players worth considering out there, like the Sony Walkman X, but I hope this gives you enough info to make an informed decision of the Zune vs players other than the iPod line as well.)

  • Pingback: Healthy Weight Loss

  • penny stock

    How to uninstall firefox using command prompt or from registry?

  • Arlinda Beger

    this site is cool!! thx read

  • penny stock egghead review

    I am 13 and write the scripts for the school’s plays, write stories and film mini documentaries. I want to become a creative writer for WWE (writing the storylines). I know I will have to work for other TV productions before joining the WWE corporate. How can I improve my creative writing skills so that I can be successful in my career?.

  • penny stock egghead review

    If you like reading a blog, what kind of interesting things that make you like that blog? Give me your favorite blog links too..

  • from this source

    A fascinating discussion is worth comment. I do think that you ought to write more about this subject, it might not be a taboo subject but usually people do not talk about these subjects. To the next! Best wishes!!

  • Arlinda Beger

    this site is coooooooooooooooooooooool!!!!!!!!!!!!!!!!! thx read

  • nearest locksmith

    634622 79414I think one of your ads caused my internet browser to resize, you might want to put that on your blacklist. 185420

  • Auto approve list

    As soon as I found this website I went on reddit to share some of the love with them. “A sect or party is an elegant incognito devised to save a man from the vexation of thinking.” by Ralph Waldo Emerson.

  • amateur porn

    I’ll instantly grasp a person’s rss after i are not able to to discover a person’s e-mail ongoing web page link or maybe e-newsletter support. Are there any kind of? Please allow for me recognise making sure that I could truthfully join. Cheers.

  • Waxing Zürich

    Can you be a lot more specific? I’m incredibly interested in that what you are saying

  • Sugaring Zurich

    Hi everybody! I received a good friend who produced this at home and it operates! But she’s truly not making use of any strip, she just pull off the sugar paste…do u assume this receipt will get the job done also without a strip??

  • LED Lamp

    Wow,this is the post I’m searching for,it solves my doubts,thank you for sharing.

  • Sugaring Zuerich

    Sehr geehrter Dr. Steinmann,
    Ich bin 14 und leide an sehr starker Behaarung!
    Wenn die Eltern einverstanden sind, kann man sich die Haare trotzdem weg lasern lassen?

  • Cletus Regino

    I like this post, enjoyed this one thankyou for posting .

  • Timmy Toni

    extremely good post, i truly love this web site, carry on it

  • home std test

    Retroplanet has an on-line ordering facility for retro vacation cards. The second card should be placed on leading of the first card, forming a cross. The tarot cards are one of the oldest forms of divination known.

  • Google

    We came across a cool web site that you simply could delight in. Take a appear when you want.

  • http://garciniacambogia.SUNCITY1000.COM garcinia cambogia weight loss

    your posts are always the best. would you like to guest blog on my website ?

  • Pingback: how to make music

  • zabawki dla chłopców

     Matter. Higher than . Best quality information on recommendations greatest. From the pocket of the cheapest form of investment measures and the consequences of no hands ? Are not services that are not related to the value of the owned insurance companies . Revenue could not do the work without the nerve to take all the governments and the proposal to extend them fully up to bank deposits , additional services , proc . These word necessity. Clash , presidents , and a variable interest rate , eg Get the lowest commissions in which rules are inside each completely banish hours. Pay off all

  • full content

    Hands down, Apple’s app store wins by a mile. It’s a huge selection of all sorts of apps vs a rather sad selection of a handful for Zune. Microsoft has plans, especially in the realm of games, but I’m not sure I’d want to bet on the future if this aspect is important to you. The iPod is a much better choice in that case.

  • at home std test

    I do three shuffles and three twists each working day to make sure a random card. This can be a fortunate 7 days for giving and getting adore. You both need to unwind, and I recommend obtaining pampered.

  • kliknij i zobacz

    I’m typically to blogging and i really abide by your gratify. The article has really peaks my interest. I’m free to bookmark your web place and hold examination for brand pristine in mint condition information.

  • Dewitt Theesfeld

    great submit, very informative. I wonder why the opposite experts of this sector do not realize this. You should proceed your writing. I am confident, you have a huge readers’ base already!

  • Pingback: commercials funny

  • Odtrucia Alkoholowe Warszawa

    Polecamy najlepsze Odtrucia Alkoholowe Warszawa. Najlepsze odtrucia poalkoholowe w Warszawie tylko u nas.

  • Vince Ybarro

    You’ll be able to definitely see your enthusiasm within the paintings you write. The sector hopes for far more passionate writers like you who are not afraid to mention how they believe. At all times follow your heart.

  • Major Pazan

    I am truly grateful to the owner of this web site who has shared this impressive piece of writing at at this place.|

  • spółka z o.o. na sprzedaż

    Its similar to you read my mind! You appear to know a lot on the subject of this, like you wrote the book in it before impressive. I imagine that you could perform with a few pics to drive the message residential home a bit, except additional than that, this is excellent blog. An first-rate read. I will without doubt ensue back.

  • Chi Casilles

    I got what you intend, thanks for putting up.Woh I am delighted to find this website through google. “It is a very hard undertaking to seek to please everybody.” by Publilius Syrus.

  • Pingback: iherb coupon code

  • LED Lamp Shop

    Ok so I am thinking about removing my site from Tumbler and get it to a WordPress blog. I believe this is a wordpress website right? If it is, may I ask where you got the theme? Thanks a bunch!

  • Pingback: painful fails

  • Pingback: iherb coupon

  • Pingback: iherb coupon code

  • where can i buy ray ban sunglasses

    Tiffany Jewellery on the market.Then you definately can potentially find up wards 1 there’s a chance you’re ready to help to find. Tiffany involves motivated various to put to your direct because of these Necklaces building motifs through famous doing? Tiffany silver rings a fantastic outstanding business organisation.Jewelry empowered merely by Tiffany hopes to repeat a attractiveness in addition deluxe during the honest Tiffany stuff,find more in

  • Click To Find Out More

    discounted tiffany jewelleryprotects an array of earrings on your wedding event; marriage charms, jewellery, jewelry and so on. Bridesmaid costume outfit jewelry is without a doubt crafts within a selection of items and even colors collaboration; gold plated and / or gold plated by using diamonds and also gravel,,within color mix which will contributing a cheerful great beauty for you.

  • how to grow taller

    You can certainly see your expertise within the work you write.
    The sector hopes for even more passionate writers
    such as you who aren’t afraid to mention how they believe.
    Always follow your heart.

  • live lesbian sex

    This can be absolutely a amazing short article. Thanks a ton for bothering to summarize all this out for people. It truly is an excellent enable!

  • trendyol

    That wasnt what i am searching but anyway it was good to ready. I am goin to share it on social media.

  • http://http// LED Bulb

    Thank you for making this website so easy to find info. good stuff. Saving this one for later.

  • subway surfers hack ifunbox unlimited coins and keys

    Its like you learn my mind! You seem to understand a lot about this,
    such as you wrote the ebook in it or something.
    I think that you simply can do with a few p.c. to pressure the message house a bit, however other than that, this is excellent blog.
    A fantastic read. I’ll certainly be back.

  • keratozolax remedy

    Keratosis Pilaris (KP) is a anatomical pores and skin ailment in which has an effect on 40% from the the planet’s human population. KP presents itself like a bunch connected with small red bumps which have been most commonly located on the upper portion of this biceps and triceps, thighs, glutes along with much less generally around the deal with, that could be incorrectly recognized pertaining to pimples. Whilst there isn’t any heal with regard to KP, you can find approaches to treat it. We will show you precisely how.

  • LED Bulb Shop

    I have to say that for the past few of hours i have been hooked by the impressive articles on this blog. Keep up the wonderful work.

  • free skype credits generator software

    Hi it’s me, I am also visiting this web page on a regular basis, this site is in fact fastidious
    and the people are in fact sharing nice thoughts.

  • big tit cams

    Sometimes, blogging can be a bit tiresome specially should you have to have to update more subjects.”:’:’

  • girl webcam

    Sometimes your website is loading slowly, improved uncover a improved host..:~-.

  • Try These Guys

    tiffany pendantsaddresses an array of diamond jewelry on your wedding party; bridesmaid necklaces, anklet bracelets, engagement rings and so forth. Nuptial costume jewellery is crafting within the wide array of fabrics together with coloring pairing; gold bullion coated or even sterling silver plated by means of treasures in addition to gallstones,,inside shade mixture which will attaching a cheerful great beauty back.

  • where can you buy garcinia cambogia extract

    When I originally commented I clicked the -Notify me when new comments are added- checkbox and already if a comment is added I get 4 emails using the exact very same comment. Possibly there exists by any means you will be able to eliminate me from that service? Thanks!

  • Pingback: Roofing Contractors Colorado Springs

  • Royce Curleyhair

    Spot on with this write-up, I genuinely assume this internet site wants way far more consideration. I’ll probably be once far more to read far far more, thanks for that info.

  • 24 hour locksmith fulham

    What i do not realize is actually how you are not really much more well-liked than you might be now. You’re very intelligent. You realize thus considerably relating to this subject, produced me personally consider it from so many varied angles. Its like men and women aren’t fascinated unless it’s one thing to do with Lady gaga! Your own stuffs excellent. Always maintain it up!

  • jakikantor

    Good write-up, I am regular visitor of one’s blog, maintain up the excellent operate, and It’s going to be a regular visitor for a long time.

  • business networking online portal

    My compliments, advantageous create-up and an superb web site. Also your post has inspired me to commence writing on issues comparable to what you are carrying out. We are producing a premium on the internet portal a specially-produced net web site that brings particulars collectively from diverse sources in an uniform way. The Connectdirector Online Portal – marketing networks & match creating group portal is expert networking on the Connectdirector “all in a single” premium online portal providing enterprise networking & social networking, contacts, matching, online content material, (world wide web) advertising & (enterprise assistance) solutions. An special multi-language net portal notion with a worldwide exposure and a neighborhood focus on each and every wealthy greater higher high quality on the internet content material and dynamic database generated listings for matching person interest, business interests and social interests and desires. We at Connectdirector marketing networks and neighborhood portal are an match making authority in guiding and lowering barriers by direct linking enterprise and social interests and specifications interests on the principles of joint result, integrity, compliance and excellence. Summarized Connectdirector is Networking, Contacts, Matching, Content material, Advertising & Solutions.If you did not pay a pay a visit to to our net web site nevertheless and/or you are not a member, then please sign up as we really want to know your thoughts so we can improve our on-line portal. On our internet website you can commence straightforward to grow your network contacts!

  • Bluray Case

    Hmm i hope you dont get offended with this question, but how much does a site like yours earn?

  • ralph lauren outlet

    tiffany cheap jewelry could very well be good described as Expensive jewelry made from reasonably priced precious metals and even counterfeit and also semiprecious brick. Additionally, it generally known as trend jewelry, waste necklaces and it designed was designed as a more cost effective and cost-effective meant for repurchasing in order to healthy its own and then completely new suit trend.they’re largely fabricated from low-priced ,,gemstone which includes rhinestones and also on combination, silver precious metal fantastic coated metal

  • Pingback: iherb coupon

  • biura

    Wow, superb blog layout! How long have you been blogging for? you compose blogging look straightforward. The largely glare of your site is superb, agree to unaccompanied the content!

  • Kasy fiskalne Warszawa

    Mazowieckie Centrum Fiskalne poleca najlepsze kasy fiskalne Warszawa. Dobra kasa fiskalna Warszawa w Mazowieckim Centrum Fiskalnym.

  • Stefan Elbaum

    I have to express my admiration for your kind-heartedness supporting all those that require help with this one situation. Your special commitment to passing the message all-around became astonishingly beneficial and has continually encouraged others much like me to realize their pursuits. Your new insightful recommendations implies much a person like me and even further to my colleagues. Thanks a lot; from everyone of us.

  • Pingback: que es la ansiedad

  • read in this article

    En lezzetli bir birinden güzel kaliteli resimli yemek tarifleri web sitesi.

  • Seguidores

    you possess an incredible weblog right here! would you prefer to make some invite posts in my weblog?

  • Pingback: sprei murah

  • ray ban sunglasses sale

    Shade performs a major function in a very prom dress over the distinctive night time. It needs to accompany the skin coloration. For that complementary photograph, you are able to showcase your own figure by means of weight losing colors for instance homemade wine, serious dreary, woodlands green, night time pink, wine red, cacao, and the impartial hues associated with rappel, black, bleak, silver precious metal, platinum, as well as taupe. Prom dresses usually are professional celebration clothes, lengthy and also delicately gorgeous. ball gown prom dresses may be based on the theme on the occasion and also they will try to be classic soccer ball attire. There isn’t a typical method to establish this “best prom dress”. Oahu is the one that could make you are feeling lovely and carry the proper image-sweet, simple, captivating or just breathtaking. The most used prom dresses will be satin, sequined, old-fashioned clothing, the limited black costume, a irregular hem costume, the actual hanky sprained ankle treatment as well as traditional Cinderella tennis ball costume.

  • Numbers Zeno

    Also I believe that mesothelioma cancer is a unusual form of most cancers that is normally found in individuals previously exposed to asbestos. Cancerous tissues form within the mesothelium, which is a protecting lining which covers many of the body’s internal organs. These cells ordinarily form while in the lining on the lungs, belly, or the sac that really encircles the heart. Thanks for discussing your ideas.

  • gold for ira

    Would love to constantly get updated wonderful weblog ! .

  • Forrest Kisselburg

    You my mate truly are a genious! I absolutely adore this great site and especially your blog topic.

  • San Francisco CA Homes For Sale By Owner

    In my opinion, pick up study coupled with consult effective.

  • where to buy acai berry singapore

    Finicky post, finicky web page, I give rise to bookmarked your blog, it really is acceptable responsibility this. Say thanks.

  • hostgator indirim

    Is it possible to share it on my blog if i do show source ?

  • kawy do ekspresu

    Wow! Thank you! I permanently wanted to write on my website something like that. Can I implement a part of your post to my blog?

  • best cartier replica watches
  • hunt in poland

    great points altogether, you simply received a brand new reader. What may you suggest in regards to your publish that you simply made a few days in the past? Any certain?

  • Pingback: Crete Carrier Corporation

  • Pingback: World ventures compensation plan