Write downs in the gold field.

Bllomberg news is bursting with joy and sarcasm as big gold miners are writing down assets. They talk as if gold in the ground is worthless and gold mining is about to cease. Actually, gold and silver are groping for a bottom before they take off.

The world is straining with financial problems.

1. The buck has less bang than it used to. But, the FED is scared to reduce QE, because if the wealth factor is reduced, the economy will take a big hit. Interest rates are beginning to rise as inflation is near 9%. Look at the price of beef! Three fifty for a pound for hamburger (mince, for you in England).

2. Chinese numbers are like a Holloween custume. Fifty percent of Chinese debts are rolled over every 3 months and 75% is rolled over every 3-6 months.Credit has exploded from 9T to 23T and housing prices are clearly in bubble stage. China has a high rate of inflation and a credit shortage to top it all off. One Yuan printed now produces .15 whereas it used to produce .85.

3. If China is in a bad spot, Japan is even worse off. Japanese population is imploding and there is no prospect that the young will be able to pay for the cost of the Japanese social democracy. Higher interest rates, a collapsing bond market and a collapsing Yen point to increasing strain. Japanes problems have sunk below the point of redemption.

Don't let rising interest rates fool you.

We are starting at ridiculusly low rates. Larry puts it this way:

1. These are not normal times, so do not expect normal reactions
2. The Dollar will soar and so will commodities along with interest rates.