We begin this morning by forecasting a major rally in markets today, a soaring price of gold, which will likely, I think, bust through $1,800 later in the week, or something next, and a drop in the US dollar versus other world currencies.
And I know this how?
Let’s go back a few weeks to the latest call from my friend who hangs out with the PTB and his hint that went like this: “Remember, the taxing power sets the value of a currency.” In other words, if the dollar is strong, it is because world money gurus believe that the dollar will be able to bring in more tax revenue (proportionately) than competing currencies.
When there is more taxing going on, the dollar strengthens which means it takes fewer dollars to “buy the Dow” or an ounce of gold. Thus, prices appear to come down. Conversely. if the underlying taxing ability of the dollar weakens, then the value of the dollar drops, so it takes more of them in order to “buy the Dow” or to buy that ounce of gold. So, it appears prices go up.
Sometimes economic reality is hard to discern, particularly when the republicorps spend an inordinate amount of time blaming the democorps for inflation and that gets into people’s heads. Clever, these both-sides-of-mouth types in pollyticks (sic).
Seriously, this is how the people who comprise ThePowersThatBe really work. For them, it is all a game, and in this case, the faction of PTB that has been buying up gold and silver while the markets have languished sideways have some easy money ahead if Romney wins.
The reason? Romney is their best bet to decrease planned tax increases which, perhaps counter intuitively, would have been deflationary since the purchasing power of dollars rises when taxes go up. But, the purchasing power under Romney may be expected to drop a good bit, because he would likely continue tax cuts if he can.
Moreover, prospects of more democrats (higher taxes) in congress would tend to increase the value of the dollar (relative to say, the Euro) and that would make it seem like prices are being held in check.
So – for the astute observer – there’s no need to watch the debates. You only need is to read one or two headlines and look at the price of gold to see who won. The market, later on today, will rally modestly but really be saying the same thing: Romney won the first debate.
Still, if you want to wallow in the complexities of partisanship and buying into this whole blood pressure-raising stuff called pollyticks, have fun. But the reality is that Romney would cut taxes and maybe do something about socialism’s flip side to “forced-production” – which is what? “Forced-consumption” of things like, oh, corporate marked-up healthcare.
It all sounds really good to the Romneyites – on the front end, but there’s hell to pay (inflation, soaring prices) on the back end. So while there are plenty of good stories on how the debate went, like the NationalJournal‘s “Incumbent Debate Curse: Barack Obama Falls to Mitt Romney”, you don’t need to spend the time.
If gold goes up, and drags the market along with it, Romney won. If gold goes down, Obama’s making headway. It’s really that simple. Value is relativistic but it’s easy to be sucked in to prices go up when money’s value’s going down. That’s not a popular view on the web, but it’s what we roll with around here. Da uglee trute, bro.
Terrorism: The Modern McCarthyism Catch-All
A story in the UK’s Telepgraph headlined “Al-Qaueda blamed for Europe-wide forest fires” brings to mind an interesting thought. Is it possible that forest fires were set by “terrorists?” I suppose, but is lightning or reckless campers equally likely? At least.
But this is what make terrorism the new McCarthyism. The stroke of genius McCarthy missed in hunting for “Reds!”? Not enough hiring but now with something like a million people directly employed (not counting military) in the terror industry, anything can be labeled terrorism and it’ll not only sell but it will self-perpetuate.
Not that AQ isn’t a real threat – there were four embassy attacks in September, but forest fires? The was no AQ in the wings back in 2000 yet we managed to burn 6.5 million acres…about twice the 10-year average.
Next thing you know, Smokey Bear will be wearing a berqa and be sent to Euro as part of a terrorism task force. Loverly.
Reminds me of the joke about the guy wearing a watermelon on his head. A friend asks “Why are you wearing a watermelon on your head? “Keeps elephants away!” was the answer.
So his friend says “Why there aren’t any elephants within a thousand miles!”
“You see how well it works?” (rimshot)
Elaine’s first question of the morning? “Turkey still shooting at Syria?” Yep…the shelling is going hot and heavy again today, which will keep tensions high and only a matter of time, even though the timeline for real war in that part of the world has been pushed back to next year.
Some reports are describing the shelling as cutting a “10-km buffer swtrike inside Syria” which means they will roll out the heavy stuff to recapture their own border…ugly in the wings.
Got an Archduke handy?
Speaking of things counter-intuitive: We’re hearing rumbles that the US declining to back Israel firmly may actually increase odds that Israel will have to resort to nukes when the red line comes along. Especially since high end US conventional ordinance is not being shared.
Press release this morning from Challenger, Gray, and Christmas:
“CHICAGO, October 4, 2012 – Downsizing activity remained relatively flat in September as US-based employers announced plans to cut 33,816 jobs from their payrolls during the month. That was up 4.9 percent from a 20-month low of 32,239 job cuts in August, according to the latest report released Thursday by global outplacement firm Challenger, Gray & Christmas, Inc.
Last month’s total was 71 percent lower than a year ago, when planned job cuts unexpectedly surged to a 29-month high of 115,730. It was, in fact, the lowest September total since 1997 when only 20,698 were announced. “
Weekly job check from the feds:
“In the week ending September 29, the advance figure for seasonally adjusted initial claims was 367,000, an increase of 4,000 from the previous week’s revised figure of 363,000. The 4-week moving average was 375,000, unchanged from the previous week’s revised average. The advance seasonally adjusted insured unemployment rate was 2.6 percent for the week ending September 22, unchanged from the prior week’s unrevised rate.
The advance number for seasonally adjusted insured unemployment during the week ending September 22 was 3,281,000, unchanged from the preceding week’s revised level. The 4-week moving average was 3,285,250, a decrease of 12,750 from the preceding week’s revised average of 3,298,000. “
Market is still going to rally at the open based on the Romney romp.
But the REAL News is….
One I know you have been just sitting on the edge of your chair waiting to be answered…and sure enough, here’s the headline from the Washington post’s TV columnist: “Was Nicki Minaj-Mariah Carey fight faked for ‘Idol’ publicity?“
Naw….tell me it ain’t so… in America for crying out loud? Why, who’da thought?
More after this…