I know all the jokes about being as busy as a set of jumper cables at a (take your choice) wedding. Funny, but they do come in handy. However, a set of jumper cables will not fix a worn out engine, worn out battery, or worn out car. They may get it started for a while, but not for long usually.
Yesterday, a half hour before opening, the Fed used its jumper cables, and the market responded by only going down 128 points. As I write this today, the Orientals thought this was great, and their stocks went up. The Europeans thought otherwise, and theirs went down. The jumper cables worked briefly, but the economy is sick and dangerously so. As I have been warning about for months and months and months, as have others. How long have I been writing about the real estate collapse? A year and a half or more? This time, it isn’t just the NASDAQ stuff which is going down, but a lot more, and the United States situation is not fixable with jumper cables.
Will the Fed cut again? I say probably. The Japs cut theirs to absolute zero, and it didn’t help much, and zero it stayed at for years. Will the Fed cut to 1%?. It is not impossible, but it will be a jumper cable trying to get something started which will not fix the problem. The problem is that the credit bubble has burst. Low interest money was thrust upon the Americans and Brits plus others as well. Everyone bought things they couldn’t afford and shouldn’t have bought. Houses, cars, TVs, vacations, and the whole gambit. Debts piled upon debts as though there was no tomorrow. Homes were used as credit cards, and the mortgages came on like melting snow in April. Everyone borrowed it seemed. Mortgage brokers and appraisers went nuts and lied to everyone and each other. Whoopee! We have reached the land of milk and honey. Except as I said, and lots of other said who deal in precious metals and who have a sense of Austrian Economics plus a sense of sheer logic said, it had to crash, and metals as well as all tangibles had to go up in currencies. It has happened.
Gold and silver may be down today, as more and more have to sell their tangibles to cover their margin calls on lost stock prices, but that’s just a buying opportunity. See why I have stayed away from stocks? See why I have been urging people to protect themselves with gold and silver? The demand for gold around the world is unbelievable, because hundreds of millions want out of their currencies, and want out before they collapse further. Silver is not universally regarded as ’safety’ even though it is, so the ratios have not gone down as they eventually will. One person, who I admire greatly, believes that the DOW might be close to 8500 by May 1st, and he may be correct, but I don’t care, since I don’t have any, and don’t want any till it goes below 8500. 6,000? Maybe.
So don’t fret about world and US economics. It had to happen. Be glad you have gold and silver! Will the dollar be replaced by the ’Amero?’ NO! There’s a lot of BS on the internet, and this is one of the biggest. The dollar may go down in value. Way down! It will, because all they can do it print it, but it will be around; constantly buying less and less, but it will be there. The euro will buy less and less too, as will the yen. All are being printed. It’s almost a race to see who can devalue theirs the most, so they can recover foreign trade. Sick, sick, sick. The Chinese have over-built, and now people will buy a lot less of their junk. They may be in trouble also. The buck is backed by nothing. The euro is backed by nothing. The yen is backed by nothing. Gold and silver are self backed and need no governments to give them value. They have it all by their little glittery, beautiful selves. You simply have to…protect yourself!
I am going to take a brief vacation beginning Sunday, so you will have to call my son David for a week or so beginning Monday. When he takes his kids to Florida after I come back, you’ll have to call me. His is the first number on the web site, and mine is second. While we are away, your checks may sit in the post office for a few days, but the trades of course are locked in.