Filtering out the distortions.

There are several trends in force and one must understand and filter out the self serving distortions introduced for political gains. I will enlarge on this later.

The factor that is driving finances today is the financial implosion of Europe and the United States. But, if you look at some numbers, you might miss it. For example, look at the first graph (10 year Treasury yields). The yield is 1.7%. Even if you believe the government's figure of 3% inflation per year, buying a 10 Year Treasury yields you a 2.3% loss per year. Yet, people buy it. How come? Because institutions are dumping European equities and parking the yield in Treasuries and US Dollars.

The second graph is the US Dollar Index. We see that the value of the US Dollar is increasing while the FED prints more of it. It has risen for the same reason that Treasury yields dropped: European assets are being liquidated, people are withdrawing Euros and changing them into US Dollars.

How about gold and the miners?

Gold is holding its own. It is said by the pundits to be "volatile." When the US Dollar Index increases, gold drops then recovers when the Dollar Index stops rising.

Rick Rule has an interesting forecast for the miners. He thinks that ownership will change from institutions to high end customers AND large gold producers. We have already seen an uptick in miners and explorers. The rise in gold miners forecasts an expectation of rise in gold prices. Not as soon as I calculated, but it is around the corner.

That brings us to consider the self-serving lies peddled by the Media for the benefit of the Democrat Party. Remember the commercials made by Michael J Fox on behalf of Senatorial candidate McCaskell? Fox alleged that Bush banning embryonic stem cell research would stop his expected cure for Parkinson's disease. Of course, Bush did not ban that research, he merely stopped funding it by the government. Well, Mr Fox now admits that after Bush the Democrats lifted the ban. Was Fox cured? NO!!! But, McCaskill was elected based on a lie.

Another Big Lie that is circulating is shown in the next slide. Who is responsible for increasing spending and the debt? George Bush, thunders the Democrat machine and its megaphone. The last slide is from a propaganda piece put together by Pelosi. How is the Big Lie achieved? Simple. The first year of the Obama increases of one Trillion dollars are counted as Bush spending. From then on the new budget is counted as a baseline. Obama even complains that Republicans stand in the way of recovery by refusing to increase the budget, even though they agreed to raise the debt ceiling.

What about the gold price and the financial crisis? The financial crisis is heading for the US, make no mistake about it. Gold prices will go up, it is just a matter of time.