Why Gold Is Destined To Rise Significantly In The Next Few Months
Why Gold Is Destined To Rise Significantly In The Next Few Months
by Chris Apicella
With all the failures in US economic policy, it is regretful that we must report that more, much worse problems are coming ahead which will result in not just the inevitable slide in the value of the dollar, but also continued and significant decline of the US economy as whole, and the failure of the current, ill-conceived government policy to stop the continued heamoraging of jobs and value from the US economy. The economy is destined to stay stuck in this rut until a new set of industry supportive policies takes hold in Washington.
This is not a failure of the US industry, The US economy has been and still is the most productive economy per-capita on earth, but what we are now experiencing is a failure of government policy, unseen since perhaps the wage and price controls set into place by Nixon(a), or even the stateist government policies that led to the great depression(b).
This report will outline the major pressure points, largely ignored, or spun as positives by the mainstream media in order to protect their ally, Barak Obama, and how there is a perfect storm rising now, that will cause great woe in America, and around the world; Leading to a rush on gold supplies, and thus tighter supplies will cause extremely large price increases in gold and other hard assets that have traditionally been used as safe harbors during turbulent times.
1. Unemployment: A major problem that will cause a downward cycle leading to a continued bad economic outlook. Unemployment is now at a 26 year high; Reported at 9.4 percent for May 2009, the highest since July 1983, up from 8.9 percent in April(c), Amazingly, this huge problem is being reported/spun as good news by the media, citing a slower “rate of loss”, and attributing the rise to some re-entering the job market(d). Which seems incredible being that the unemployment is racing to highs not seen in almost 3 decades.
Why are the media sirens reporting these numbers as a positive? It is being spun as a positive by the media in order to boost stock prices. The stock market is the most visible indicator of the economy. Due to the major media “investment” in Obama(e,f), they need to make him look successful. Stock markets are easy to manipulate because they rely so much on current events. By spinning the economic news, the media hopes to continue the current bull market despite the impending storm, likely resulting in making a bad situation worse(f).
Obama’s major failure in the economy can no longer be blamed on Bush. The Obama recession has already resulted in 2.2 million lost jobs since he became president.(c) The continued lack of media honesty regarding Obama’s record will cause further major failures in the economy as a whole and perhaps be a major reason that the US goes into a depression.
2. Stock market: All the negatives being spun as positives will eventually cause the market to go significantly lower. In addition, the Obama administration’s attack on private business will backfire as more jobs and wealth is lost as a result. The rate at which this administration is taking over private industry is breath-taking, and would make a dedicated Marxist like Venezuela’s Hugo Chavez blush(g). Thus far we have seen the government take control of the financial industry accompanied by an attack on executive pay(h), and controlling strings tied to bail-outs.(i) Currently the administration is working on a take-over of a large section of the auto industry<j.k). GM, once the greatest company on earth, has been reduced to a government make-work program for big union labor allies.
Despite congress specifically voting down a bailout, the administration went ahead with the takeover / bailout.(l) Amazingly in a blatant effort to justify this questionable government takeover of major private industry, Senator Hoyer claimed that congress “specifically authorized” Obama to bail-out auto companies – even though congress specifically declined to pass the auto bailout bill.(m)
Already skeptical consumers may stage a boycott of GM products, causing major losses to the government due to the enormous “investment” of public funds they have already made to prop up GM and other auto makers. A recent poll suggests that 17% of American Support GM Boycott and 53% describe government takeover of GM as a “Bad Idea”.(n)
Additionally, there is already a large number of the populace that does not trust GM due to the poor workmanship of their products in the 70’s and 80’s, and would not ever consider buying them anyway. This is the primary reason for their failures today, along with their long term uncompetitive nature due to the large overhead in operational costs caused by expensive union contracts.
The Auto and Financial industries have long been allies to Republicans, the administration essentially fired the GM CEO, along with 50% of their work force via closed dealerships. Next it seems that they have set their sights on the radio industry(o), coal,(p) oil, pharmaceutical(q) – all industries that historically supported the GOP. These “reforms” / takeovers all seem very politically motivated, with the unstated goal of cutting off major funding from industries that donated heavily to the GOP. This politically motivated attack on industry will cause major negative unforeseen consequences in the economy.(k)
Aside from the spin on unemployment reporting, another example of the media covering-up for Obama is the recent report by the AP that state jobs are a “shield” to recession(r). This false stateist view underlies the total lack the understanding of this mindset to the fact that it is private enterprise taxes which sustain big-government spending and jobs.(u)
3. State tax revenue is falling sharply (s,t,u.v)- which will cause cuts in state jobs. Thus punching big wholes into the recessionary shield. Many states in just the last month reported tremendous shortfall in tax receipts. Obviously, this is due to the lack of private industry jobs, as private industry is the largest contributor the health of the economy. Revenue shortfalls will necessarily lead to cuts in spending and jobs across the country.(u) In a largely unreported statement by fed chairman Bernanke. On June 4th 2009(w), he demanded that Congress and the Obama administration map out a program of austerity measures to bring down record budget deficits. This is obviously needed for the country to turn around, and austerity may eventually be a necessity.
4. Inflationary pressure will increase as the government continues monetization of the debt(x) (translated as printing of huge amounts of money) will cause a significant diminishing of the dollar’s value. Additionally because of a general failure of the government policy to control spending and show fiscal restraint, that have lead to unsustainable debt levels. More and More money will be going to servicing debt resulting in higher taxes and less funding and financing available for private industry, causing higher interest rates.
5. Oil prices will rise sharply in coming months despite the “rosy” picture painted by the media and “expert” forecasters.(y) this is due in part to energy industry anticipation of impending controls and caps to be placed upon them. Additionally as previously mentioned, inflation will the weaken dollar, and because most of the oil consumed in the US is imported, prices will rise. The ill-conceived carbon cap and trade tax will also increase consumer energy costs significantly. As seen in the 1980’s energy crisis, energy cost increases lead to higher costs in all industry that rely on transportation, leading to a general increase in prices across the board – read “higher inflation”.
6. Continuing trouble in the mortgage market – Default has hit a 28 year high. Homeowners need to be employed in order to make mortgage payments. The mortgage market traditionally closely tracks the employment market. Recently the rate of default was reported as 28 year high as 616,000 homeowners were hit with foreclosure actions in the first 3 months of 2009. (aa)
7. China will invest heavily in gold as a safe harbor versus the falling dollar. recent actions of China have caused a spike in commodity prices. China is buying up raw materials at a feverish pace, motivated by fear of a falling dollar. These actions come in light of quotes from China’s Premier Wen Jiabao, (bb) where he expressed concern over how much his nation holds in U.S. currency, saying he is “definitely a little worried” over where the greenback could head. This moves portend the fact that the Greenback is no longer the favored global “safe” investment, and major producing countries that have substantial reserves are looking to gold as a fallback in the vacuum caused the failing dollar and the depressed US economy.(cc)
These facts are not well reported, and are largely political, due to the highly politicized nature of the current US Government. You can take them for what they are worth or ignore them at your peril.. I have included an extensive list of references for those who wish to fact check, something the media today is reluctant to do.
References
a) Nixon Imposes Wage and Price Controls
http://www.econreview.com/events/wageprice1971b.htm
b) Causes of the Great Depression
http://en.wikipedia.org/wiki/Causes_of_the_Great_Depression
c) 2.19 Million Jobs Lost Under Obama
http://atr.org/point-million-jobs-lost-under-obama-a3342
d) U.S. unemployment rate hits 9.4% in May, highest since 1983
http://www.latimes.com/business/la-fi-unemployment6-2009jun06,1,5502911.story
e) U.S. job losses slow in May, fueling recovery hopes
The pace of U.S. job losses slowed sharply last month, the strongest sign to date that the recession is diminishing, even as the unemployment rate hit its highest in nearly 26 years. The Labor Department said on Friday that U.S. employers cut 345,000 jobs in May, the fewest since September and far less than economists had forecast. They cut 504,000 jobs in April.
http://www.reuters.com/article/smallBusinessNews/idUSTRE55376U20090605
f) Treasuries Tumble as Jobs Report Renews Fed Rate Speculation
http://www.bloomberg.com/apps/news?pid=20601087&sid=a0_Adl2NKAso
g) Newsweek’s Evan Thomas: Obama Is ‘Sort of God’
http://newsbusters.org/blogs/kyle-drennen/2009/06/05/newsweek-s-evan-thomas-obama-sort-god
f) Halperin Decries ‘Disgusting’ Pro-Obama Media Bias in Election Coverage
http://blogs.abcnews.com/politicalpunch/2008/11/halperin-decrie.html
g) Hugo Chavez Mocks Obama: “Obama has just nationalized General Motors. Comrade Obama! Fidel, careful or we are going to end up to his right!” (Video)
http://conservativexpress.blogspot.com/2009/06/hugo-chavez-mocks-obama-obama-has-just.html
h) White House Set to Appoint a Pay Czar
http://online.wsj.com/article/SB124416737421887739.html
i) Bailout strings tie up banks
Some to return money because of restrictions
http://www3.signonsandiego.com/stories/2009/mar/11/1n11bailout234354-bailout-strings-tie-banks/?uniontrib
j) GM To Be Removed From Dow
http://online.wsj.com/article/SB124433060825091715.html
k) GM bankruptcy filing will have far-reaching effects, VADA leader says Monday — The VADA president also denied that there was any conspiracy with the closures being related to dealers’ political ties and campaign contributions to Republicans,
http://www.newsvirginian.com/wnv/news/local/article/gm_bankruptcy_filing_will_have_far-reaching_effects_vada_leader_says_monday/40930/
l) Auto Bailout Rejected After Senate Vote
http://www.worldcarfans.com/9081212.010/auto-bailout-rejected-after-senate-vote
m) Hoyer Claims Congress ‘Specifically Authorized’ Obama to Bail Out Auto Companies-Even Though Congress Specifically Declined to Pass Auto Bailout Bill
http://www.cnsnews.com/public/content/article.aspx?RsrcID=49097
n) Rasmussen Poll: 17% of American Support GM Boycott
53% describe Govt takeover as a “Bad Idea”
http://blog.dealerdex.com/rasmussen-poll-17-of-american-support-gm-boycott/
o) How Far Should the Government Control Radio?
http://www.historians.org/Projects/GIRoundtable/Radio/Radio_TOC.htm
p) Obama Called Out for Comments About Bankrupting Coal Fired Power Plants
http://www.wsaz.com/political/headlines/33726759.html
q) The End of Medical Miracles?
Scientific discoveries are neither inevitable nor predictable.
http://online.wsj.com/article/SB124389153780873939.html?mod=googlenews_wsj
r) AP: Government jobs serve as recession shield
http://www.google.com/hostednews/ap/article/ALeqM5gRAm8uwpQmCD7hE_OMrPsrzy-GdQD98LV3NG0
s) State tax collections down 14% in May
http://boston.bizjournals.com/boston/stories/2009/06/01/daily57.html
t) State to county: Sales tax receipts ‘gloomy’
http://www.newsargus.com/news/archives/2009/06/04/state_to_county_sales_tax_receipts_gloomy/
u) State tax receipts drop, may lead to budget shuffling
http://www.radioiowa.com/gestalt/go.cfm?objectid=1148ED1E-5056-B82A-373D0039971B3B33
v)State tax receipts fall again against both an earlier estimate and receipts a year ago
http://blogs.thenewstribune.com/business/2009/02/10/state_tax_receipts_fall_again_against_bo
w) US Fed Chairman demands plan to cut social programs
Bernanke demanded that Congress and the Obama administration map out a program of austerity measures to bring down record budget deficits.
http://www.globalresearch.ca/index.php?context=va&aid=13873
x) Monetizing the Debt: The Grandest of Larcenies
http://goldriches.com/goldblog/66/monetizing-debt-the-grandest-of-larcenies/
y) Oil spikes above $70 for first time this year
Crude prices have doubled in four months on signs economy is turning
http://www.msnbc.msn.com/id/12400801/
z) Gas prices and oil futures rise sharply
California leads the U.S. as regular climbs to an average of $2.756 a gallon, according to the Energy Department.
http://www.latimes.com/business/la-fi-gas2-2009jun02,0,6481013.story
aa) Troubled mortgages hit record high – More than 616,000 homeowners were hit with foreclosure actions in the first 3 months of the year, the Mortgage Bankers Association reports.
http://money.cnn.com/2009/05/27/real_estate/MBA_mortgage_delinquencies/index.htm?section=money_news_economy
bb) China And Commodities: A Discussion
China is buying up raw materials at a feverish pace, motivated by fear of a falling dollar. What does this mean for the U.S.?
http://www.forbes.com/2009/06/04/china-commodities-dollar-intelligent-investing-debt.html
cc) Depressed America No Longer The Safe Harbor It Was For Investment
http://bobchapman.blogspot.com/2009/05/depressed-america-no-longer-safe-harbor.html
Tags: Barak Obama, Economic Outlook, Gold Supplies, Government Policy, Great Depression, Mainstream Media, Nixon, Perfect Storm, Price Increases, Safe Harbors, Turbulent Times, Unemployment, Woe
