Eternal Vigilance

My preivous post on natural gas bills being 20% higher than last years high prices, and the later post to add another 20% to that, has been outdated again in just 2 weeks.  Natural gas bills are set to be 71% higher than last year!  And since natural gas is a main source for electricity generation, electric bills are estimated to be 20% higher also.  For those 40% of homeowners who’s mortages are 95% or more financed, and the 25% of interest only’s, I hope you just got your masters degree, or a major promotion, or a second job.  I hope you didn’t run up the credit cards again after paying them off with the last refinance.  I hope it’s false that credit card companies are doubling their minumun payments this month.  I hope your job isn’t too far away.  I hope your kids are either too young or too old for college.  I hope your job is secure.  I hope you have been saving.  I hope nobody has a medical emergency.  I hope you don’t have to file bankruptcy after the October 15th deadline.  Cuz this is it, unless you were hoping for another 20% increase in home appreciation in the face of 11 interest rate hikes in 12 months.  I hope your profligacy doesn’t effect the rest of the America’s real estate.  I hope I am wrong about real estate, but common sense overpowers hope.

A perfect example of how mainstream media are either complete imbeciles, or they have an agenda set for what they don’t want you to know….

Everyday when I wake up, there is about a 98% chance the first thing I do is turn on CNBC for today’s business news.  There is also an 85% chance the CNBC will remain on my television set for the rest of the day.  There is a 50% chance I might go to the store, get some lunch, use the restroom, and a 50% chance I will be playing poker here, blogging here, or watching stocks.  Whats my point? 

Given how much I watch/listen to the talking heads on CNBC, not once in over 4 years have I heard a mainstream source wonder what higher gold means for inflation.  What I have heard numerous times is the talking point that “There is no inflation, so gold must be ready to crash again.”  Over four years, gold has been the best performing sector.  Physical gold has outperformed the DOW by 37%, NAS by over 50%.  Gold Funds have been known to be up over 100% in 3 of the last 4 years, and some grow over 100% every year.  What’s my point?

My point is, this morning, Conchita whatever her name is from CNBC, reports to us that gold is just underneath a new 17 year high, and they are watching for it to break through.  I had to do a double take at the TV.  Aside from any contrarian point of veiw, this is most definitely a first.  Only now, after Gasoline averages hit an all time high of over 3$ a gallon (yes that is adjusted for inflation), Real estate sectors have gone up almost as much as gold, tuition is in double digits increases every year, and I lost track of health care increases, but I can tell you my cost of living wage increase I get once a year has been forfeited to help pay for my health insurance.  What’s my point?

The writing is on the wall, and gold is going to expolde.  Only this time, people will be hearing about it.  It will be the buzz.  I suspect it will reach a peak about when gold is topping short term around $530, which I will also guess is when most people will be buying gold, which I will also guess gold will have a harsh correction as ALWAYS, and the new investors will get burned, swearing to never buy gold again.  What ever happened to buy low sell high?  May I provide an example?

Larry Kudlow, a man which in my opinion should do hard time for crimes against investment humanity, calling for gold to go down when it hit $330.  He said theres no inflation, gold is’nt going higher.  Then gold hit $350, and Kudlow even had a guest on who said if gold hit $360, our economy would be in serious trouble.  Then gold hit $378, and Kudlow calls for a top.  Gold hits $400, and Kudlow is bearish, then $414, $430.  Now gold at $430 is a new 14 year high, and guess what Kudlow does, genious that he is?  He announces “Allright, gold is the real deal!  I’m buying into gold, this is it”  Well then the next day, gold goes down 8$, and then 6$ the next day.  Kudlow loses his ass.  Everyone saw him lose on gold.  He swears off gold.  You really want your info from a horrendous investor like this?  Or maybe there is more to it?  Larry Kudlow is my sell signal, rather when he buys, its time for me to sell. 

-Eternal Vigilance