"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Sunday, July 21, 2013


Gold FINALLY has taken out that pesky overhead resistance at $1300 during early Asian trade. Volume thus far is average but the fact is that the bulls were able to overcome the selling that has consistently shown up on recent approaches towards that key level.

If the market can stay above $1300 as it heads into European trading, but especially New York trading, then we should get some further short covering and actually begin to see some fresh money begin flowing back into the metal. That will be the big test for gold.

Lots of ifs and buts, but if the HUI can close that chart gap and push past 245 then we will have the both cylinders firing at the same time.

One thing I am also noticing is that the price of crude oil is remaining stubbornly high. While food prices are moving lower across the futures markets, the energy sector refuses to break down. If anything, it is escalating higher. It is difficult to see how crude prices could stay this strong given the anemic nature of the economy but other supply-side factors are at work in that market which are keeping a firm bid in it thus far.

A higher crude oil price can be ignored as an inflation factor if players see it as more of a short-term, news driven feature rather than more lasting set of changes in the fundamentals. If the thinking begins to shift and traders see the higher crude oil price as something that is going to stick around longer than initially expected, some might start anticipating a cost push factor from higher energy inputs.

If that becomes the case, we should see some impact on the bond market. As of now, bonds are up even in the face of the higher crude with the thinking being that it will act as more of drag/tax on the economy rather than heating up any inflation push.