Tuesday, June 2, 2009


CURRENCY COMMENT: The following currencies have had extensive rallies and have either met or exceeded the projections for the current wave up: british pound, canadian, eurocurrency and swiss. They all built good bases some time ago and, obviously, broke out of them to produce their current moves. It is only the yen that is still consolidating at a lower level. Strange or not?

They all have an inverse relationship with the dollar. It is the timing of the turns that may vary. Based on last year's action when the dollar bottomed, the eurocurrency and british topped almost to the day. Both the swiss and canadian had topped much earlier. The yen much later. If history repeats itself, possibly the canadian and swiss will top again before this sell-off in the dollar is over. The british and eurocurrency top more in line with the actual bottom in the dollar. (more)

How To Get Rich In The Stock Market Over The Next Decade

Easy: buy and hold a basket of Gold mining stocks or buy a Gold stock mutual fund or ETF (like GDX). There's only one catch, and it's a minor one: you should wait until the price comes down from current lofty levels.

Gold stocks are a good countercyclical asset to own, meaning they tend to do well when general stocks are doing lousy. Well, most of us already know that general stocks are doing lousy (other than the past two months). This can be seen in the table below, using Homestake Mining (now part of Barrick Gold Corporation, ticker ABX) as a proxy for the Gold mining sector: (more)

A Novice Guide To Precious Metals Part II: The Miners

Jeff Nielson
May 30, 2009
In "Part I" of this series, I provided a basic overview of what separates gold and silver from all other commodities, why gold and silver are so attractive today, and dispelled the popular myth that "bullion-ETF's" are the same as owning real, "physical" bullion. In Part II, I will explain why the potential profits from investing in gold and silver miners always exceeds the potential return from bullion, alone.

The obvious starting-point when it comes to a discussion of gold and silver miners is to discuss the basic proposition of "leverage", as it applies to a commodity-producer. Let's make the hypothetical example really simple: a gold miner who can produce an ounce of gold for $500 (its "cash costs"), with the price of gold at $1000/oz. As everyone can see, this miner earns $500 profit on each ounce of gold produced. (more)

California in "Financial Ruin"

California is in dire straits. Hoping to find opportunity amidst the angst, Schwarzenegger declares 'day of reckoning'.

Declaring that "California's day of reckoning is here," Gov. Arnold Schwarzenegger said today the state should turn its dire budget straits into an opportunity to make government more efficient.

Speaking to a relatively unusual joint session of the Legislature and other constitutional officers, Schwarzenegger acknowledged the billions of dollars in spending cuts he has proposed to close a $24.3 billion hole in the budget will be devastating to millions of Californians. (more)

Dollar Declines as Nations Mull Reserve Currency Alternatives

June 2 (Bloomberg) -- The dollar weakened beyond $1.43 against the euro for the first time in 2009 on bets record U.S. borrowing will undermine the greenback, prompting nations to consider alternatives to the world’s main reserve currency.

The euro gained for a fourth day versus the dollar as the Russian government said emerging-market leaders may discuss the idea of a supranational currency. The pound rose to the highest level since October and the Canadian dollar traded near an eight-month high on speculation signs of a recovery in U.S. and U.K. housing will spur higher-yield demand. (more)

American Socialism to Hit You Right in the Wallet

Howard Ruff in the RUFF TIMES

Norman Thomas was a leading American socialist, pacifist and six-time presidential candidate for the Socialist Party of America. He is reported to have said this in a 1944 speech:

“The American people will never knowingly adopt socialism. But, under the name of ‘liberalism,’ they will adopt every fragment of the socialist program until one day America will be a socialist nation without knowing how it happened.

“I no longer need to run as a Presidential candidate for the Socialist Party. The Democrat Party has adopted our platform.”

I loved the quote but couldn’t attest to its accuracy until I got this letter from Roger Clites, a faithful subscriber to The Ruff Times, who is a professor of economics at a mid-west Christian college:

Dear Howard,

I heard Norman Thomas speak shortly before he died in 1968. After the speech five or six of us stayed around to talk with him. One guy tried to taunt him by asking, "Mr. Thomas, why did you stop running for president so soon?"

Thomas responded, "The Democrats have put into place plank after plank of the socialist platform and soon the Republicans will compete with them in an attempt to gain support from voters who don't understand what they are doing." He added that America would become a socialist nation and not know how it happened.

What you wrote in the Ruff Times was essentially the same thing. Now you've got it confirmed from an eye (ear?) witness. – Roger

Thanks to Roger for clarifying that rather amazing admission.



FIRST: Norman Thomas was absolutely right. One example? The government is now the proud owner of General Motors. In fact, GM now stands for Government Motors. Just kidding about that, but not about America’s new socialism. Our politicians ARE trying to cram socialism down our throats. I predict it won’t stick here…but there will be serious economic turmoil in the years to come as we find our way back to a nation of sound principles. Coming economic turmoil should mean one thing to you: Get prepared! In all the ways you and your family need to prepare.

SECOND , you now have a good headstart. The consequences of socialism and the horrendous debt we find ourselves in will start becoming obvious later this year and in 2010.

How Low Can the Dollar Go?

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