During the 1991 recession (if you can call it that) Bill Clinton made a campaign issue of “It’s the economy stupid.” It’s true, it is all about the economy. But it’s also a little more fundamental than that. It’s something that people have known intuitively for centuries. In a good economy, there was always “plenty of money” and in hard times it was “money is scarce”. Things haven’t changed, except that now those responsible for money creation are intentionally clouding the picture with all kinds of economic jawboning (dutifully reported daily by the media) to create a paranoia of both hyperinflation and deflation.
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To My Clients:
Our accounts are up 20.41 % Year-To-Date.
The Dow Jones Average is up 10.66 % Year-To-Date.
Although the stock and bond markets have been quite buoyant over the last several months, it is still quite premature to declare the longest postwar recession, over. There are still considerable risks to the economy. The massive fiscal stimulus together with the central bank’s printing of money is beginning to unnerve central banks around the world that hold huge portfolios of dollars. Consequently, the dollar, which is the world’s reserve currency for trading commodities such as oil, is in decline. This means that it will become more difficult for the government to borrow massive amounts of money from foreign sources, and imports, such as oil, will rise in price. Interest rates will also rise as necessary to attract the needed capital. Likewise, gold has been rising in price and is reaching all time highs. Read more…
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