“Mandated Econ in the Schools” Mascot, 2010
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With some sense seeming to come into the market, the dollar is doing it’s flight to safety thing and breaking up over $81.00 mark with “gusto.” But somehow, investors aren’t seeing Prime, Grade-A American Securities of the longer variety as such the flight to safety instrument they used to be. [[TLT]] is case in point.
What’s going on, ovah heah?
Here’s my take, for what it’s worth. The markets still see the dollar, as the most liquid reserve currency, and the short part of the curve, as the safest port in a storm. Therefore, any kind of international unrest is going to drive dollar strength, no matter how undeserved.
In the past, this also led to good things for our longer duration U.S. bonds as well. That was before, however, the rest of the world started wising up to our gargantuan debt situation, made even more limpid this weekend with the addition of a seemingly suicidal third massive bureaucratic entitlement program.
As a result, with the markets needing a pullback (for whatever excuse they’ve decided on today, I believe it’s Greek Somali Pirates off the shorts of Delaware*), investors are soaking up zero-return dollars and dumping longer bonds. This is one reason we recommend you keep a large trunk’s worth of [[TBT]] on hand, for just such exigencies.
Another important point — thanks to this surprise breakdown in the longer US Bonds, it seems the 10-year swap spread just went negative for the first time in history. This may seem mind boggling, but it indicates that the market is more happy with owning higher grade corporate securities than it is the 10-year U.S. Treasury Bond.
God bless Barack’s America, right?
For equity investors, however, this can actually be foretelling greater gains, believe it or not. The article I’ve linked above indicates private equity will heat up as a result (because of the non-existent debt spreads), but I contend more liquid equities will as well, as investors seek safe yield that’s going to fight incipient inflation.
Keep an eye on physical gold and silver here folks, this may be the last time you see it this cheap (and gold may get as much as $50-70 cheaper) in a long while. As soon as this dollar peaking is done, we should be heading back down with a vengeance.
I’m looking at the usual suspects in the PM markets on pullbacks — Allied Nevada Gold Corp. [[ANV]] , Eldorado Gold Corporation (USA) [[EGO]] , IAMGOLD Corporation (USA) [[IAG]] , Silver Wheaton Corp. (USA) [[SLW]] , [[EXK]] and [[SVM]] for a start — but also keeping an eye on my LED babies, Cree, Inc. [[CREE]] and Veeco Instruments Inc. [[VECO]] .
Veeco is an exciting company with it’s hand in many sweet honey pots. I shall develop more on it in future postings. For now, I will be adding slowly on dips. Keep an eye on Monsanto Company [[MON]] as well. Ags will be heroes again soon.
All the best, Jake.
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Comments »
(That’s right folks, not one whit of logical reply or argument yet. Pure “attack the person.” Demonstrative, no? –ed.)
(LOL. Certainly makes the response easier doesn’t it? One wonders if the troll even realizes he’s making it difficult to ascertain whether he’s really even got an argument yet? There’s no mention of support for socialized medicine, yet, fwiw. — ed.)
(That’s right, save for that little unbolded bit above, we’re still doing about .050 out of 1.000 on the “repliable argument” scale. Don’t act surprised, this is actually a decent ratio for most internet trolls. — ed.)
And that’s pretty much all there is folks. Amazing, no?
First, I’d like to thank Alvari, whom I’ve affectionately dubbed “Lungsac” due to an early misreading of his name, for giving me such a great example of exactly what’s behind most trollish arguments — ironically, ” a lot of expelled hot air.”
As a sop, and a “thank you,” I will now address the very few addressable arguments he provided in contradiction…
First, his argument that medical personel will not exit the industry upon imposition of price capitation. Note, he doesn’t really have an argument against that statement, only a weak attack on the polling source I provided:
Note, it’s hard for him to even get a partially data-based statement out without referring reflexively to presumably evil “right wingers,” or worse, the Left’s most hated bogeyman, “Fox News.”
I have no knowledge of this being “used by right wingers,” for the record. I simply took the first article on the subject I found on Google. The internet is replete with examples of doctor’s being at their breaking point. I guess Google is become an arm of the nefarious Murdoch Empire, I don’t know.
That’s probably why he couldn’t supply anything that says doctors will be seeking to pick up more Medicare patients and other government payors as a result of this wonderful legislation. Meanwhile, I can find many more articles on the displeasure of the provider community. No doubt, it’s all a “right wing conspiracy” brought to you by Fox News!
Second, let’s take the World Health Organization (“WHO”) left wing talking point put forth by M. Le Troll, which claims the US is the “37th ranked healthcare service in the world.” First, a reasonable person might ask, “What is the WHO?” Not many will be surprised to find this fraying crutch of the left is the largely anti-American United Nations’ health advocacy group with a strong predisposition to socialized medicine “for all my friends.”
“Quelle suprise,” no? Now, is anyone surprised to find that the WHO’s criteria for a decent health care system mandates a socialized medicine diktat? I quote CATO’s evisceration of this leftist fallacy:
In closing, I welcome sensible argument, even from the hard left. But if all the trolls can bring is envious ad hominem, I have no interest in responding.
Be forewarned, proponents of government health care– your assumptions and your emotional arguments will be challenged at every juncture. Gird your loins for further demolition.
Best to you all, even the misguided Leninists.
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Update: Can you imagine Barack Obama had been delivering speeches like this as Congresscritter? Here’s a follow up… did he deliver any?
[youtube:http://www.youtube.com/watch?v=lwk1aHU-pms 450 300]______________