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They'll print money until we run out of trees."
Jimmy Rogers
Gold was hit hard, then rallied, then hit into the end of day again, pretty much in the manner which I had expected it would be.
So what next? I think the metals will continue to be capped and under pressure, since the deficit deal, as bad as it might be, provides a rallying point based on fear of discovery for the paper mongers.
As shown in the Gold/US Debt chart over the weekend, the longer term trend is obvious and understandable. The denials of those who do not wish to see it will become increasingly bizarre as the fundamental trend progresses and the world monetary system evolves.
Change is occurring. And it does not matter whether you accept it or not. It is unfolding even as we speak.
A big swing in the stock markets today, as they opened much higher, and then plummeted on the ISM report, and more jitters about the deficit faux deal.
NonFarm Payrolls at the end of the week. See the comments intraday below.
As a reminder, in addition to the Debt Ceiling Fandango, the real economy continues to chug along.
The market was shocked a bit by the miss in the ISM number this morning.
There are a few more important numbers being reported this week that have the potential to influence the markets, especially the Non-Farm Payrolls.
The July Non-Farm Payrolls report is interesting because like January it is one of the few monthly reports in which the raw actual number is revised significantly higher using a seasonality factor. This provides a fair amount of leeway in reporting the headline number, which itself is likely to be revised a month or two later.
As a reminder, isolated numbers, rather than the running trend, tend to be an integral part of the Wall Street/Washington magic lantern of perception modification.
I always like to look at the forecast from Briefing.com in addition to the consensus of economist forecasts. They run hot and cold like all individuals including myself, but it is good input nonetheless.
Let's see, when might we expect the price of gold in dollars to stop going higher?
Chart from sharelynx, and a h/t to my brother Steve.
It would be interesting to see this correlated to Debt/GDP or Broad Money Supply/GDP, but this gets the point across.
This is your country on oxycontin. Get used to it. h/t Ilene.
