PRICE VOLATILITY & MORE SPENDING

by Michael Pennington 

Precious Metals Price VolatilityWe have often discussed how volatile the price of gold and silver is in the market place. This is due to the gold cartel working feverishly at times to lower or cap the prices. This is done in an effort to disguise from the American people what is actually occurring to their financial futures. You cannot allow these downward moves to affect your rationale for purchasing metals in the first place. Have the courage of your convictions and know that the fundamentals haven’t changed. As long as the fundamentals are the same, over time we know that the dollar will continue it’s decline and gold and silver will therefore continue their rise. No jawboning or market intervention will change these facts over the long term. Use these dips to buy more of your position. Remember Gold and Silver are a currency, a hard asset. U.S. dollars, stocks and bonds are paper, backed by a corrupt system manipulating markets to mask their misdeeds and benefit their friends.  Expect this volatility as normal and use it to your advantage. Do not sweat the day-to-day changes. Gold is headed for $1,100 and Silver is going to $22 before year end.Inflation is Attacking Your Portfolio
The dollar has been slowly collapsing over the past five years, losing one-half of its purchasing power compared to the euro. Crude oil has gone up by a factor of five, while gold has tripled. The demand for the dollar is declining. Hardly a day goes by without some central bank or major institution announcing that they have diversified out of the dollar into other currencies.SPEND, SPEND, SPEND IS GOOD, GOOD FOR GOLD AND SILVEROne can hardly keep up with all the new spending bills coming out of the federal and state governments these days. The Fannie and Freddie bailouts, according to Treasury Secretary Paulson, could end up costing the taxpayers in excess of $1 trillion dollars. This year alone it could increase our budget deficit by $800 billion. The FED has also predicted 150 US Banks will be declared insolvent this year. Not to worry, everyone is protected by the FDIC, correct? The problem is that the FDIC only has $1.5 billion in total assets, which is truly a drop in the bucket. One large financial like a Wachovia or Washington Mutual would exceed their total assets by tenfold. Obviously, not everyone will be protected. A good rule is that, if you see smoke in the hole, there’s a fire someplace nearby. Don’t find yourself at the end of a line somewhere because you trusted your bank.Congress is also considering a second “stimulus” check for all Americans. This is nothing more than dropping money out of helicopters as Fed Chairman, Ben Bernanke, promised he would do if necessary. The estimated cost is $500 billion.Congress has already passed a homeowner foreclosure bailout law. This new law will produce government spending of $200 billion dollars to help out homeowners who bought houses they couldn’t afford from mortgage companies at interest rates they couldn’t afford. Once again, if you were a responsible person who purchased a home you could afford with a fixed mortgage you stand to pay in higher taxes for the others who will be bailed out.We even have in the state of Washington now a bill pending that will provide those in need with “gas stamps”.  Similar to food stamps this program will issue $500 per year in stamps redeemable for gas.I could go on but the list seems almost limitless. Suffice it to say, the big spend socialists are burying this country in a sea of debt. For what purpose? The answer to this question seems very obvious. 

This entry was posted on July 24, 2008 at 3:32 pm and is filed under Uncategorized. 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.

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