A Moment Of Clarity
Perceptions are everything; reality is nothing. The former is fluid; the latter is fixed.
Today, we know 2 things we didn’t know yesterday. The first is that Public Sector Unions are toast [thank you people of Wisconsin]. It was an impressive victory [about 8 points] for Scott Walker, the incumbent Republican Governor, and a total rebuke of spend, spend, and spend some more [of your money] union thugs.
Take away union vote rigging in libtard nation Madison, and decaying corrupt Milwaukee, and the margin of victory probably really was on the order of double digits.
A world away some hours later we get the Vampire Squid Alumni, Mario the Great, holding his usual ECB presser after the ECB formally met to discuss monetary policy for the Eurozone. Like Greenspan, and all true great economists, he said nothing better than just about anybody normal.
“Spin it all you want Mario, you have no clue what to do to get Europe out of its mess.”
Which brings me to gold: it’s now $100 off the lows on the heroin hopes of QE3 on June 20 from our buddy Weimar Ben. Anybody but me ever hear of the adage buy the rumor sell the fact?
From a trading standpoint, who isn’t already long gold looking for a pop up if we get the anticipated
money printing easing? The Fed’s street mouth piece, J. Hilsenrath over at the WSJ
[Wall Street Journal] confirmed it yesterday. This guy leaks more info from the
Fed than “Deep Throat” ever did on Nixon back in the 70’s. So, when it comes,
who’s gonna be there to buy it from you at a higher price?
And what if we don’t get it? Pleeeeeeze, don’t write me with what happened to your “protective” sell stop.
And what if that election in Dairyland is the start of something bigger come fall? With Chalky Soetero gone and a true Republican House and Senate, can and would the Amerikan economy be unleashed for growth and maybe a balanced budget? I dunno, we’ll see.
What I do know is this: gold is not a one-way street. Jumping back in the vegas hot tub time machine once again, I take you back to this exact moment on the calendar 32 years ago. Gold has come off its historic highs in January of $850 / oz.; pessimism is high, Carter looks like a shoe-in for re-election, and then gold bugs are talking about price levels for gold that make people’s eyes glaze over, and budget deficits are huge and growing.
Then, an interesting thing happened; Reagan was elected and set off the 80’s boom and gold went into a 20+ year bear market that saw prices back at the $250 / oz. level.
Funny thing about history; it tends to repeat itself.
Have a good day everyone.