Jubilee Prosperity

We do not, as shorting for higher rates and lower prices requires covering interest due.

For some reason, unpaid monopoly media still appear in collective denial about deficit economic realites, particularly on a Federal level, where 2009 April 15 tax revenues falling -35% were met by increased borrowing, hidden fees and tax hike proposals in Carbon, Energy and Healthcare reforms that have not yet passed.

We suspect the perception of little or no Government risk may change in 2010, with woe to the $66 of bond fund buyers for every $1 of equity fund buyers in 2009. A tax on both their houses.

There are $8.396 Trillion dollars in banks and money market funds and $12.145 Trillion dollars in Treasury Securities.

If these increasingly risky assets try to convert into the relatively scarce $1.7 actual Federal cash Reserves and physical cash dollars, the dollar rally Big4 called some time ago may continue much further higher longer.

Indeed, the recent Fed decision to pay interest on Fed Bank reserves took even more money out of circulation and credit.

http://in.reuters.com/article/marketsNewsUS/idINN3119683420091231

There are currently so many commodity, gold, platinum and silver bulls with headlines to match, that we pay special attention to Big4 shorts on these publicly popular markets.

We observed the USA. Although it outlawed and inflated the price of domestic gold in 1934, was on an international gold standard until 1971. That is so unlike now. What was true about precious metals during the last Great Depression and deflation is most certainly not true now. Why should we expect gold to hold up with deflation now that it is just another asset rising and falling with liquidity?

Windfall profits, dividends and appreciation on Dome and Homestake Mining in the Thirties were largely due to government price supports on gold with falling wage levels from the Great Depression.

We have no effective government gold guarantees now because government is in fact upside down, spending more than it takes in.

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This entry was posted on Sunday, January 3rd, 2010 at 6:10 pm and is filed under Prosperity. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.