Stronger Dollar, Metals Rising?

One guy on Fox Business says this is mainly because of Greece. Is that really the big shock here? That Greece can't repay its debt? How is jumping into the dollar a safe haven? Isn't that like jumping from the frying pan into the fire? Hello...

Well at least PMs are holding pretty good through this so far.

I guess the Greece Prime Minister is willing to form a new government now.

They could always reform their government and then return to their ancient name of Hellas. Wouldn't that throw the banksters into a tizzy.

Speaking of all these national debt problems... I find it interesting that so many people tell us that government debt is vastly different from personal debt. In some technical terms, it probably is, but the very same rules of Econ 101 still apply, whether to a nation or to an individual. Spending more than you have is still a BAD idea! In many cases, borrowing money for something today is doing nothing more than stealing prosperity from our descendants and spending it. This is a shameful idea and it should never be done except in those very rare cases of national emergency. Funding World War II was just such a case. Today, though, we seem to do it as a matter of convenience... for us, that is. Our kids and grand kids get to pay the bill for it.

On to $1600!

IIRC it was closer to 1565.

One would hope that to be the case but we all know that the vast majority cannot see that watching the fiat currencies is like watching two trains headed for each other on the same track. The result is inevitable... and obvious to anyone who is paying attention. Unfortunately, all too many people are wasting their lives away, watching idiotic shows on TV instead of learning about the state of the world around them. Then, when these trains finally do collide and a massive mess occurs, they are shocked... stunned, even... that it has happened. They are, of course, totally unprepared for the times that result.

Fortunately for the rest of us, these mental midgets do not frequent this web site. OTOH, maybe they should. They could learn some things here that would do them a world of good. There is no end of kindly folks here who would love to teach them a thing or two.

. Hawk. There is a wild card in this deck, though, and that is the big bad unknown financial event. There are a number of these lined up and awaiting their cue to come on stage and play their part. We have HUGE debt problems, both in Europe and in the US, that seem to be competing for our attention and the impact they can have on the world's financial systems and on PMs. If Greece were to finally bite the bullet and default, there would be a huge, albeit temporary, panic in the Euro zone. There would also be considerable spill-over into the US markets. Even then, we would have the other PIIGS countries and their problems exacerbating the situation, perhaps considerably.

Then, of course, we have the US debt crisis and a congress / president unwilling to negotiate a successful compromise that would create the process needed to resolve this issue over time. No telling what will happen if the US goes into technical default. There is no doubt in my mind that the tax money coming in is sufficient to pay for the things that we REALLY need. The main problem of this is that government would finally have to go on a very strict diet and prioritize where they should spend the tax money, rather than just throw billions at every problem that comes along. While that may be easier and more popular with those who benefit from it, it is also a terrible and unsustainable monetary policy.

The thought that keeps nagging at the back of my mind is not, "How can we solve these debt and spending problems?", or, How can we solve them in the best possible way?". No, we seem to be past that time. The question now before us is, "Can these problems be solved at all?". At this stage, I am not convinced that they can be solved. At least not by the current government.

All of which should be extremely bullish for all of the PMs but perhaps most for gold and then for silver.

I think that you are right about that, Hock. I see really big problems in the same way as I would facing the problem of a large meteor coming towards the Earth. The farther away it is when we take action against it, the smaller the force can be and still deflect it from hitting us. The longer we wait, however, the more force is needed and the smaller the deflection is that results from our action. Clearly, doing a little ASAP is at least as good as, if not better than, waiting until the last minute and then going all out.

Like you, I believe that there are solutions that can be used to solve our huge debt and spending problems over time. We really do not need to solve it quickly but we do need to establish a process whereby it will become solved over time. Whether or not this can be done in a politically acceptable way is something that no one knows. I hope that this would be the case but am afraid that it isn't.

While we are currently facing some huge financial problems, this could also be seen as an opportunity to make some good long-range changes that would lead to a sustainable financial future for us, our families, and for future generations of Americans. Hopefully, enough people who are involved in creating the solutions that we need will also see the opportunity here and take advantage of them.