12/30/11 Baltimore, Maryland – And here we are at the end of the week…and the end of the year.
And we’re no surer of what is going on than we were at the beginning of it.
The Dow rose 135 points yesterday. But gold kept going down. It is looking more and more like gold intends to make its big correction now… It’s been down for 6 days in a row.
We’ve been waiting for it. We’ve been hoping for it. We’ve been counting on it.
Is it here yet?
We don’t know. Gold is edging down towards $1,500. But it is still solidly ahead for the year! What kind of bull market correction is that?
Who knows? Maybe 2012 will give us a better opportunity to buy more gold… We hope so…
In the meantime, the markets are fairly quiet. The politicians are keeping their mouths closed too.
Here at The Daily Reckoning Christmas headquarters we’re drinking eggnog, eating fruitcake and wondering what 2012 will bring. We’ve given up trying to actually look into the future. We don’t seem to have the knack for it.
Instead, we’re just trying to figure out what we OUGHT to believe in order to end the coming year in the best possible situation. That is, what belief is least likely to be fatal? Which is most likely to pay off?
Generally, you ought to believe that things will turn out worse than they actually will. Why? Because the danger is on the downside. And this is a dangerous market.
Europe could blow up at any time. Despite what you read in the papers, Europe’s debtor nations — and the banks that hold the debt — are just a few basis points from disaster. Traders and speculators are taking it easy over the holidays. We’ll see what happens when they get back to work in January.
China, too, is a danger zone. Trouble is, we don’t know exactly what the danger is. The economy is still growing at more than 5% per year. If the growth rate goes up…China will put a big strain on the world’s demand for oil and other commodities…which will make it harder for US and European families to make ends meet.
On the other hand, China is also showing signs of a slowdown…or even a blow-up. Shanghai property prices are said to be falling…fast. And the size of China’s bad debts may be greater than America’s subprime or European ‘olive country’ bonds.
Meanwhile, the US is sitting pretty. For now. Money is fleeing China and Europe for the perceived safety of the USA. Whatever else may happen, there’s one thing investors can count on. Ben Bernanke and his merry band of price fixers will print the money necessary to pay off bondholders.
But America is dangerous too. It has a doomed currency…an out-of-control military…and a dysfunctional Congress. Sooner or later, it will blow up too.
We don’t know which bomb will go off first. But at least we know to keep our heads down in 2012.
That’s all we have for this week,
Best wishes for the New Year…
Regards,
Bill Bonner,
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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Happy new year, Bill.
Happy New Year, but the danger of a HOT conflict in 2012 is very high.
Bill,
The US military isn’t out of control, the politicians who run it may be though.
I would have thought that gold would be edging toward $2000/ounce given the debt hanging out there.
My gut instinct on Spetember 12, 2001, the day after the WTC attack, was that Kabul should be nuked. No invasion, no posturing, no police action. To many it would have seemed like indiscriminate use of excessive force. But at the time, few other nations would have condemed us for it. And the immediate effect would have been to destroy local support in Afghanistan for the Taliban and their terrorist operatives. Mission accomplished in less than 3 hours. Instead, with a decade of dual wars in both Afghanistan and Iraq, –the later for no plausible reason– the extent of destruction and civilian casulties aren’t much different than if Kabul had been nuked on day one. The only real difference being that the US is now bankrupt and far from having any empathy from the rest of the world like we did on 9/11. Much of the rest of the world now senses we have it coming when the US economy implodes, and if they have any concerns at all about it, its only to the extent that it affects their own economy.
In any case, the generalist statement that the militairy is out of control is true. By extension, you can consider most domestic counter-terrorism as little more than the militairy take-over here at home. Out of control? Indeed. Anyone who doesn’t think so must be blind.
I hope people will read articles like this in 2012 to educate themselves more about the bankers and how to fight back.
Who own the Federal Reserve ? See “The Federal Reserve Cartel: The Eight Families” – by Dean Henderson
http://www.globalresearch.ca/index.php?context=va&aid=25080
Dean Henderson is a frequent contributor to Global Research – the Centre for Research on Globalization.
Or aticles like this :
Billions For The Bankers –
Debts For The People
The Real Story Of The Money Control Over America – By Sheldon Emry
http://www.rense.com/general61/bbil.shtm
Or that book Eustace Mullins wrote about the bankers, dont have the link, try google it.
Once we start gets name and surnames and addresses of the bankers who create these financial crises by reading links like those I posted above, they will no longer be able to hide behind their puppet politicians who take the fall for them.
But Bruce, who would have then made all that money from all the arms contracts ?
Hmmmm fruitcake. We didn’t even see it in the grocery stores this year.
The bankers plan to destroy the West is well underway – They create as much debt as they can for America and invest billions into the Far East and use their influence over the Far East to make it profitable for others to do the same with their money. The idea is to build up the East at the expense and destruction of the West. This is because these international bankers of London and New York have never considered themselves Western in the first place and they themselves originate from the East and hate the West. These Illuminati bankers of London and New York are the prophesied 2 horned, second beast of Revelations. (the First beast was the Catholic church whose wounded head is being healed by the second beast that now rules the world) They funded communism while sitting in New York pretending to the world that they oppose it and they funded Hitler while pretending to oppose it as well. If they cant get what they want from their corrupt politicians, they they create wars – EVEN WORLD WARS – to get what they want. What better way is their to rule the enemy than to weaken them by making them fight each other ? Once we are weakened sufficiently through economic means – then the East will invade !
Happy New Year 2012!
That said, inflation is a product of one of several effects. One is the rate at which money chases goods, a.k.a. the velocity of money. Right now, we are at a decade low. I personally agree with The InvestorsFriend that we are in a balance sheet recession/depression and are likely to stay there as per Japan since 1990.
All fine and good. But what happened to all the fruitcakes in 2011?
Care to opine on the price of platinum versus the price of gold. I’m really confused by what I perceive is an “up side down” relationship. Any insights?
Let them eat fruitcakes.
A very happy new year to you too. May gold go down to 1200 and silver to 20 so you (& I) can have another accumulation phase…
Buy fruitcake online.
I wanted to buy a fruitcake for granny this year. But couldn’t find one in the stores anywhere.
To heck with buying stuff online!