Monday March 11, 2013
The amazing parallels with 1973 continue. During the 1972 eleciton Nixon and Kissinger claimed to have a
secret plan for ending the long Viet Nam war. It ended all right but not as planned. It was a short two years and three months from the 1973 inauguration to the Fall of Saigon.
By1975 the Democrat controlled Congress wanted nothing to do with Viet Nam and refused to fund any more operations. It was the end.
Fast forward 40 years and on newspaper front pages, Afghanistan's Karzai accuses the Taliban of killing Afghans to support the US staying in his country. This was of course denied but the damage is done. When the exodus time in 2014 rolls around this will be remembered. There will not be any Republicans or Democrats wanting to stay any longer. At that point Karzai's Afghanistan will be all alone.
Since I penned the above yesterday, Karzai now accuses the CIA of kidnapping Afghans, the wheels are coming off this story faster than we can report it.
On Wall Street there is a saying that a couple of generations need to pass between crashes. In this way there are not many around to warn of the danger remembering what happened. It seems the same is true for foreign adventurism.
Jeff Gundlach likes silver, thanks for a reader bringing this to our attention. The detail time line is hard to see but half way through he spotlights the rising tide of 90day + delinquent student loans. We have repeatedly warned this would be part of the economic problem.
Northwestern Law trims enrollment by 10%. There are twice as many law school grads as job opennings. Pair this with Gundlach's graph of delinquent student debt.
As the new net creditor for the world, could China demand a new Bretton Woods agreement?
Another problem is looming unfunded public debt, now the SEC charges Illinois Pension Fund with fraud but lets them off the hook for any wrongdoing. No doubt the IL politicians believe the Federal Government will bail out the pension fund, we shall see.
GDX to SPX An Inverse Relationship
As we said in our e mail yesterday this is one of those rare times on Wall Street. Stocks are in what could go wrong Mary Poppins valuations while no one wants gold miners. GDX is at the same disparity of March 2009. No doubt this is contrived by Central Bankers to make us think their plan, printing money, is working.
Consider the inverse relation of stocks and miners, then think about the world wide money printing regardless of its impact on recovery thus far. The number of individuals on food stamps in the US neared 48 million yesterday.
The Canadian and Australian Dollars continue edging up, let the US Dollar roll over and we should see oil and metals off to the races.
Another A & M Professor and I are presenting a paper at the FBD Conference in Alburquerque this week. We leave Wednesday afternoon and return Friday evening. So don't expect much in terms of updates till the weekend. It does appear the commodity rally is getting underway
Thanks for reading TMP.
Take a Spin in This $524,000 Rolls Royce
CNBC video.....
Posted by: Danwrixon | March 16, 2013 at 01:21 PM