Well, the news coming out of Washington took on a surreal moment this week when I heard Nancy Pelosi say, “I’ll cut you a trillion if you raise a trillion”. It sounded like a poker game but with the stakes much much higher than anyone can imagine. And this from the people that make the laws that you and I have to live by.
Also, this last month, gold prices reached an all-time high of $2082 on August 6th. The talking heads ran with it and said the rise in gold prices indicated the dollar was crashing and inflation cannot be far behind. (Remember, if it bleeds, it leads.)
Point of reference:
1. Gold’s last all-time high was $1,850 on 8/11/2011 and the S&P 500 closed at 1,173. Last Friday, the S&P 500 closed at 3351.28.
2. In January 1980, the S&P 500 was 111 and gold was at around $800/oz. At 3351, it’s up 30 times vs. gold’s 2.5 times.
I have said many times, “Gold is for jewelry”. In the meantime, the US equity markets were all positive for the week with the DOW leading the charge at +2.9%. Total number of jobs created were more that expected and the unemployment rate was lower than expected. What else is new.
All of that said, the attached article gives a real good look at the US debt structure with a projection that we could reach $30 trillion by the end of the year. So, in closing, I personally think there are much better ways to get the US economy back up to some semblance of normalcy. Printing money is not one of them.
Since I don’t make predictions, I’m not sure how and where this is all headed but I continue to focus on equities for the long haul As always, should you have any questions or wish to talk and/or meet with me, please don’t hesitate to email, or call.
PS: This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.