In
Ben We Trust?
Ruben T. Varela
Oct 2, 2007
In his recent testimony to
Congress, Fed Chief Ben Bernanke actually had the nerve to say
that inflation is running at 2%. What planet is he living
on?
Are you getting the idea that
it is the job of the Federal Reserve Chairman to LIE to the American
people about his desire and obligation to fight inflation when
in reality - all the Fed does is create inflation? This
former Princeton professor gets a big fat F from me for his answer
to this moral-hazard question recently posed by Ron Paul [R-Tex].
Watch the
video.
Hasn't He Left The Building Yet?
I was sick of Greenspam 5 years
ago - now he's trotting around the country hawking his book on
how he sold us out? He's "The Thing That Wouldn't Leave"
I much prefer the lasting memory of Congressman Bernie Sander's
loving and well deserved "farewell" to Greenspam just
before Mr. Bubbles retired to writing and giving $50,000 speeches.
Tears to my eyes, really. Here
it is if you haven't seen it:
"But I can't pay the rent, I
can't pay the rent!"
Too much cheap credit from
Greenspan for too long, corrupt rating agencies, and zero-interest
money from Japan caused a huge bubble in credit instruments backed
by toxic, subprime borrowers shackled with falling housing prices.
Let's see, you bought no-money-down/interest only, your mortgage
has now doubled and you are sitting on negative equity. Are you
going to go without eating to pay the mortgage or walk away?
Ben "Helicopter" Bernanke
to the Rescue! ... uh, NOT!
So what's a Helicopter pilot
to do? Well, Ben the "genius" lowers short term interest
rates and injects even more liquidity into the system by the
hundreds of billions! Unfortunately, the problem is that
the Fed does not control long term interest rates - investors
do! Make that especially foreign investors, many of whom
were duped into buying what they thought was AAA credit which
is now virtually worthless. In the meantime, these foreign investors
are losing billions holding dollar reserves as the $USD falls
to record lows. Let's just say they are going to probably demand
much higher interest rates from US for the corresponding higher
risk if they are going to continue to finance our profligate
spending.
Is it any surprise that the
$USD is getting creamed, and along with it our savings, purchasing
power, and standard of living? I just love being happy in my
little hamster wheel while the bankers and politicians feed us
false statistics, destroy our way of life and get rich financing
war and waste. Thank you, Sir - can I have another?
Precious Metals
Gold
is powering higher in response to the tanking $USD, rising energy
costs, and global political uncertainty. Gold's daily chart is
definitely "overbought", but that doesn't mean it couldn't
go higher in the short term. It's not like there is a huge supply
of goldbugs still hanging around with the supply they paid $850
for in 1980! Essentially, the top was set at $730 in May 06.
Gold has been scorching higher since breaking out of resistance
in the 680-690 range.
Silver
should catch up with Gold and the Euro, and challenge its
May 06 high of $15.20. Of course, that doesn't mean it will happen
in a straight line. As of last week [09-21-07], Silver broke
out of its 8-month downtrend and printed a Major Weekly BUY Signal.
This is the setup for the 9-12 month "set wave" we
are looking to ride:
Silver's indicators on the
Daily Chart are also "overbought", as Silver approaches
previous horizontal resistance - a good place to take some profits
if you are leveraged.
Precious Metals Shares
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Ruben T. Varela
email: rvarela@socal.rr.com
Ruben Varela is an independent trader. Ruben attended
California State University - Long Beach, majoring in Economics
and Information Systems. After a successful 15-year career in
commercial and investment real estate, Ruben's trading success
led him to retire from real estate in January 2006 in order to
trade full time. Ruben is presently in the process of launching
a website [www.thegoldenbull.net, not live yet] focusing on trading
the Precious Metals sector. Look for the website launch and additional
insight from Ruben in the coming weeks. In the interim,
please feel free to contact Ruben at: rvarela@socal.rr.com.
321gold Ltd
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