Other than a quick book review, I’ve been negligent in my posting duties lately. Consider this one an effort to get current on what’s happening.
-From our original note on August 8th, when the price of gold was $1,312, the yellow metal has gone up 8.2%, in the face of declining markets everywhere else. And it seems that the momentum is back with the bulls. Not that we ever had any doubts, right?
-Syria appears to be a fiasco in the making. Stratfor offers a decent explanation when they write that Obama has to respond, since chemical weapons represented his “red line” when it comes to U.S. intervention. So, if he does nothing, it encourages bad behavior from folks all over the world. But, let’s be honest, the rebels are just as brutal as Bashir al-Assad’s crew and are aligned with Al Qaeda. Why would we want them to win? And why does the U.S. have to be the global enforcer? It never turns out well. So, looking for more, the conspiracy theorist in me thinks it’s about economics. The budget deficit is smaller this year than expected, and military spending is the easiest way to goose the fiscal side and engender GDP.
-The stock market looks extremely vulnerable, with the head (of a proposed head-and-shoulders) coming together very nicely. In fact, it looks to be happening even faster than I thought. I am waiting on any short plays until the right shoulder is mature.
-As for bonds, between the war talk and a weak stock market, we should expect some useful information to be revealed on where we are in the transition from a secular bull to a secular bear – or put differently, where we are on the road to a funding crisis.
I think that hits on a lot of it.
