January 1, 2016 News Blinders

Listened to one, top of the hour newscast and turned the radio off... it was more than I could take.

Why, you ask?  Because they were reporting disinformation as fact.

# 1 Hypocrisy  Stock market falling because of China economy faltering.   FACT - the whole worlds economy is faltering because they have to pay so much more for American goods & services.  Their cost has jumped 20% in the last year.  That my friend is a lot of inflation!  The dollar has increased in value by that much against the average currency around the globe. Not saying a strong dollar is bad... it is just that there are things that happen that sometimes hurts in unexpected ways to the average person not understanding economics on a global scale.  Oh, it sounds good... and puts the blame on someone else, but hardly the real reason for the fall... not saying the dollar increase is all the reason... I believe there are more reasons we don't know about but will become evident later. 

# 2 Hypocricy  Leftist want to control gun violence... by making it harder for the average citizen to obtain guns, and California wants to make all education centers GUN FREE.  FACT - It isn't about saving lives or stopping violence.  It is about finding out who has guns and what they have. A registry.  No, they just want to make sure you are safe enough to purchase.  Think about this.  If I remember right, all the guns used in the major mass killings in the last 2 - 5 years were guns purchased legally.  So how is one more process going to stop anything?  Sooner or later they will know what you have and then they will come for them.  That is just the way it works. It is about doing something that sounds good right now.

#3 Hypocricy  California wants to ban chewing tobacco in the major stadiums.  For what reason?  I didn't wait around for the reason... I can't imagine what it would be.  Health?  Don't think so... FACT - this is the crowd that wants to legalize marijuana, but wants to limit you usage of chew & cigarettes. It isn't really about what is good for anyone, it is about doing something that sounds good. These are the people who said 10 years ago we would be a waste land and burning up by now.  

Gold & Silver Prices

So... a new post after years of being quiet... but I can't let this go without warning some of you who are really aware of things going on around you. If you have heard the adds espousing gold and silver as the hedge to the collapsing dollar...  saying when the stock market starts falling... everything will go into chaos.

An econ 101 lesson.  Investors put their money where it brings the best return.  So lets look at this from that logic and see what we come up with about this whole issue.

Currently the FED is holding off on raising interest because the economy is not rolling at a fast enough rate to sustain an expanding economy.  When I look at the numbers coming in, it reminds me of an old John Deere spitting and sputtering.  It acts like it wants to go, but fails and crashes every once in a while. Sometimes catching it's breath and actually giving numbers that show improvement,  makes one wonder if those numbers are real because the next thing you know, it is failing again.

What happens if the FED raises interest rates?  The doomsayers would have you believe they have to eventually and the markets will crash at that time. If they are going to actually pay interest on money, people will take their money out of the risk markets and put it in less risky investments paying interest. Stock market investors will be sellers looking to take their money and run... yes that will cause it to come crashing down.

Think about this... in the world market, the dollar is the safest currency and if they are actually paying a reasonable interest rate, world money will come running... creating a demand for dollars.  What you say?  Creating a demand... won't that make the dollar go up?  Of course it will.  The Dollar will appreciate over other currencies.

How do these two things effect metal and commodity prices?  Commodities are priced in dollars, meaning if the metal price is not in demand, stable prices, they will start depreciating because the dollar buys more of them because it is appreciating.  If commodities are depreciating, money will run from them instead of to them, and the supply demand will shift to greater supply than demand and depreciation will accelerate.

I am not on the computer that has my photo editing program on it, or I would post some monthly charts showing how dollar value effects metal prices over many years.  I will add those as soon as I get to that machine.

This is not investment advise nor should it be construed as such.  It is a warning only to look at what is happening from all angles.  If something is happening that you don't understand, it may be because there are other things you have not considered influencing the market.  Do not listen to adds on the radio or TV for investment advice.  If something is in demand and going to appreciate in value... do you think they would be wanting to sell it?  NO! Something is happening they are not telling you about and they don't want it on inventory.