Saturday, March 07, 2009

Another great post from Don Luskin.

He appears frequently on Kudlow and Company, and is a financial type for Trend Macro. He suggests that the price of gold will go to and past 2000, making today's gold price of 1000 an ounce a bargain.

He recommends GOLD right now. A great deal to recommend gold. It is not denominated by dollars, and so is proof against the inflation we expect as the eventual response to economic slowing. When the government creates money from nothing, they get to spend it first. When the government creates 1 new dollar for every existing dollar, the value of existing dollars is now halved.

I expect the government will make gold illegal to own, just as FDR made it illegal to own gold. Too many people invest there, and thus become proof against the governments scheme to steal the value of their effort.

"Take a look at the chart, below. It shows the daily progress of the S&P 500 in terms of percentage change from the very top. The brown line is the change from the recent all-time highs on October 9, 2007. The blue line is the change from the all-time highs just before the Great Depression, September 6, 1929.
As of yesterday's close (Thursday, March 5), the S&P 500 has lost 56.4% from its all-time highs 513 days ago. At the same point in the bear market associated with the Great Depression, that is at the 513 day mark, the S&P 500 had only lost -- only! -- 49%. "

Good luck kids.

401 K

I can only hope that the people who voted for Obama had very big 401 K assets. I had little for him to steal by inflation, or to ruin by his economic policies, so as one who did not vote for Obama, poetic justice is thus less applicable to me. He could, by the twin policies of weakness and fecklessness, draw us into a war, so when he violates his pledged word by keeping us in Iraq to kill terrorists, and provide an alternative to violent Islam, that is for the good.