Yesterday we saw some interesting things in the stock market. Brother Ben (Bernake) has been getting the dog and pony show to jump through hoops but the poor little poodles and Shetlands can only keep pace for so long. With Ben’s interest rate cuts he successfully pumped 400+ points into the stock market … but then it dropped 290+ points, just like a Boeing 747 with no engines running. The people buying stocks are making a last desperate grab at free monies.
And because of that silver and gold paid a price yesterday. And to be honest they were in need of a break. This little break brings a false security with seeing gold back below the $1K mart. What it should be doing instead is draw more people in to the last “cheap” metals investment for a while to come. Here’s the score card … silver corrected itself to $18.17 (a 16% drop from 20.68 but way above the 11.50 it started this run from) and gold lost almost $60 to close around $945. I think they will both take a break from their rapid climbing for a week … perhaps 10 days at the most. Then look for sharper climbs as more “banking scandals” start to emerge and Ben’s interest rate cuts fail to stimulate the growth he’s looking for.
In other news ….
The US is still paying way too much for oil. It’s our own fault really. We have become gas guzzlers. Myself included with the purchase of a Honda Pilot in 2004. It gets 19mpg around town if we are lucky and at the top end 23mpg on the highway. My 94 GrandAm GT gets 22mpg around town and 27mpg on the highway … and it has 130K miles on it and still runs well. When are we going to realize the monster trucks/suvs/hummers/minivans are killing us? I had been thinking for a while of buying a new Honda Element for myself once I got my debt paid down. But to be honest, I’m looking at the Honda Fit or perhaps the Ford Focus … I need point A to point B transportation. Get me to work, get me home. I’ve thought about the new Smart cars too … but they are a bit pricey for the size. The Honda Fit is close in fuel economy and cheaper in price.
To make matters worse we (the US) is competing against China for buying oil. And they are seeing the pricing issues we are seeing. Why? Because they can buy from places like Iraq or Africa. Places we are not allowed to do business with because of some PC crap. I’m not saying the PC crap is crap, just that it’s crap. How crappy is it? Warren Buffet was chastised (not by the government but by the press and or PC people) for investing in a Chinese oil refinery because they bought oil from those to places. If I had tons of money to invest I’d follow whatever Buffet does. But I take the pocket change I have and buy my favorites .. silver then gold.