“Life is a tale told by an idiot --
full of sound and fury, signifying nothing“
William Shakespeare
There are a lot of people saying a lot of things about a lot of stuff and the bottom line is that nobody knows anything. Well, almost anything. Here’s what we do know:
The Scott Brown election completely upset the political apple cart. It prevented Democrats from unilaterally selecting America’s health care policies, virtually derailing – or at least making uncertain - any major legislation for 2010 at least until after the November election.
Ironically, this gives business more predictability about the next six months than they had in all of 2009, but insufficient predictability for them to take strong action until after the November election. Business needs to plan for the future. Therefore, business likes predictability. If business cannot predict how draconian health care policies or other regulations, restrictions, taxes, or intrusions not yet enacted will impact them, business will pull in its horns and cut back its expenses. In fact, they started doing this right after Obama’s election in 2008, largely out of fear that he would usher in massive changes to our economic structure, a fear that was well warranted.
Grandstanding and accusations will fly from all political quarters, but likely will do little more than raise the ire of the American public which I believe will take it out on Congress in the mid-term elections.
I could go on in this vein for quite some time, but the point is that despite the current weakness of other currencies against the dollar, the dollar itself is far from healthy, especially with the new debt ceiling of $14.3 Trillion, the expanded bailout of Freddie Mac and Fannie Mae to $6.4 trillion, and the oncoming blizzard of unfunded social and pension liabilities on all levels of government. Massive money creation has already occurred but has not yet shown up as price inflation because of the recession. We are gradually approaching the time when that will change, and price inflation will be unavoidable and potentially drastic.
While gold retreated from its high for a while, all the way down to near $1050, do not expect it to stay there. As the political battles shape up and the economic forces regroup, the main trend will probably be something along the line of “back to basics". Those basics indicate that gold and coins will continue their bull market for years into the future. Your biggest question is to determine how you will use that knowledge to protect and strengthen your financial position.
I’m making that my theme in the next Rare Coin Report Newsletter which will be done something this week and sent (by snail mail) to those who subscribe. It will also be available on line in the next couple of weeks at my website www.CNPCoins.com.