An article today titled ‘Geithner: US to address deficits after recovery’ says just that. I consider this type of ongoing rhetoric ‘off the charts’.

• First, general statements without specific reasoning behind them as to how something is going to be accomplished simply ought to be disregarded – irrespective of the topic such statements address; and,

• Second, does Geithner think that the Chinese (and for that matter all other thinking people in the world) don’t understand my first point?

The referenced article says “China has huge investments in the United States and has worried it could be undermined by U.S. budget deficits”. I have commented on China’s concerns about this in previous posts. From my perspective China would be foolish indeed not to be concerned – hence I anticipate a step-up in the numbers of strategic investments China will make in the near-term both inside and outside China. A problem I see China having with spending its U.S.$ on investments it considers strategic is that the amount of U.S.$ China holds is so large it will be very difficult for China to find ‘good homes’ for all of those $.

Click here for Research on Gold Stocks.

See Blog Legal Disclaimer

Possibly Related Posts:

• An Accident Waiting to Happen, or ‘Ever Closer To The Cliff’!
• After Spain, is Italy Next?
• Spain and Spanish Bank Dilemma!
• China Banking Camel In U.S. Tent?
• No Alternative To Austerity

Yesterday it was reported that U.S. New House sales increased by 11% in June over May (in units 384,000 versus 346,000), and at the same time the Libor Rate (the London Interbank Offered Rate) fell below 0.5%, the latter thought by some to be the ‘strongest signal yet that confidence has returned to the credit markets’ – see article discussing these things by clicking here.  That said, at the high of the ‘boom’ in post-2000 U.S. house sales – reached in July, 2005 – were 1.4 million in one month.  At the same time the average house price fetched in June decreased from May to $206,200, 11.2% less than the average house price in July 2005 ($229,500).  For me it follows, consistent with my ongoing commentary to pay attention to absolutes and not percentages, that while it is clear U.S. New Home Sales increased month/month in June there is no reason to jump to a conclusion that ‘all is well with the U.S. economic world’ and that near-term meaningful recovery is ensured any time soon.

Click here for Research on Gold Stocks.

See Blog Legal Disclaimer

Possibly Related Posts:

• An Accident Waiting to Happen, or ‘Ever Closer To The Cliff’!
• After Spain, is Italy Next?
• Spain and Spanish Bank Dilemma!
• China Banking Camel In U.S. Tent?
• No Alternative To Austerity

An article today titled ‘Report: BofA planning to cut 10 pct of branches’ says the Wall Street Journal reported on Tuesday that the Bank of America CEO said he is planning to shrink the bank’s 6,100 branch network by about 10%.  This would amount to closing about 600 branches, obviously with related job losses being an undisclosed multiple of that number.  This is not good news from a job loss point of view and hence, at least in my view, not positive in the context of U.S. economic recovery.

Click here to see Research on Gold Stocks.

See Blog Legal Disclaimer

Possibly Related Posts:

• An Accident Waiting to Happen, or ‘Ever Closer To The Cliff’!
• After Spain, is Italy Next?
• Spain and Spanish Bank Dilemma!
• China Banking Camel In U.S. Tent?
• No Alternative To Austerity

Last fall I wrote a Series of 11 Posts on this Blog collectively titled ‘Gold as an Investment’.  Readers can find those posts in the Blog archives.  I came to a number of conclusions summarized in those post, two of which are:

•    the world changed economically for the U.S. and the rest of the world in 1971 when Bretton Woods was abandoned and the U.S. $ became the world fiat ‘Reserve Currency’.  It was after that time that governments more strongly influenced (if not dictated) inflation rates and, importantly from my perspective, the U.S. began running consistent year/year net trade deficits that escalated throughout the post-1973 period – and have escalated and continue to escalate hugely after 1999; and,

•    that whereas most commentators focus on their view as to the likely increase/decrease in the gold price and see gold as an ‘inflation hedge’, I think the better focus is on gold in the context of its purchasing power in both inflationary and deflationary periods.

I think anyone with an interest in furthering their understanding of gold ought to read an article today titled ‘The day the Dollar died – and the day Gold was reborn’.  While the article does not reach the specific conclusions about gold that I have reached it does provide some history and ‘food for thought’.

Click here for Research on Gold Stocks.

See Blog Legal Disclaimer

Possibly Related Posts:

• Spain and Spanish Bank Dilemma!
• Sprott On Economic Fundamentals (and Gold)
• Gold, Interest Rates, Price Forecasts?
• Gold, Inflation, Other Factors!
• Gold – On The Way Down?