Bet Against the Majority. Buy Gold.

I was laid out on the couch, which I remember distinctly because my wife was yelling, “If you’re going lay down on the couch instead of doing something around the house to help me out, at least take your damned shoes off!” and I was using the remote to idly flip through the channels on TV, hoping to catch something in the vein of happy mindlessness, maybe something in the Gilligan’s Island-Bewitched genre, so that I did not have to keep track of a complicated plot and/or a bewildering cast of multi-faceted characters.

The Ins and Outs of Chinese Gold Reserves

Here we go again. Markets have caught a chill after signs of inflation fever in China. And that’s not even the half of it. Let’s dive in…

Consumer price inflation in China hit a 16-month high in February – a 2.7% year-over-year increase. China’s National Bureau of Statistics was quick to put out a statement reassuring everyone that “price rises this year will be moderate and controllable,” but that’s not enough to calm traders looking for excuses to feel jittery.

Investing in Gold During a Fed-Induced Bounce

Stocks up, gold down.

Once again yesterday, investors demonstrated their preference for paper over the shiny yellow metal. The Dow Jones Industrial Average notched a slight 3-point gain, while gold tumbled about $17 an ounce.

This divergence between stocks and gold is not enormous, but it is telling. Most investors believe the credit crisis is a mere memory, and that an economic recovery is underway.

US Credit Rating: Who Will be the First to Downgrade?

During World War II, there was a saying, that, “loose lips, sink ships”… I think Greek Prime Minister, George Papandreou, should have taken those words to heart yesterday… You see, the currencies, led by the beleaguered euro (EUR), were rallying, and the single unit was nearing 1.37, when Papandreou made a statement that sunk the rally’s ship… He said, “Greece’s debt problems could soon spread to the rest of Europe and mean a weaker euro”

When is the Best Time for You to Look at Junior Miners?

After a relatively quick run up in the value of gold, when’s a good time to consider taking another look?  Recently, the Wall Street Journal examined the junior miners, and the good opportunities there may be for investors interested in wisely timing stock purchases of early-stage firms.

From Wall Street Journal:

What’s More Important: Price Per Ounce or Ounces Owned?

In a recent conversation with a fellow gold analyst, he was emphatic that the price one pays for physical gold should be ignored. “What’s far more important,” he insisted, “is how many ounces I own in relation to the total value of my assets.”

Building a core position in gold bullion is a smart goal, to be sure, and a strategy Casey Research has been advising for years. However, ignoring the price you pay for gold could be seen as foolhardy; sure, it’s insurance, but isn’t price part of the consideration when you shop for insurance?

Sovereign Debt Worries Lighting a Fire Under Gold

It’s almost never a good idea to follow a crowd, but it’s certainly wise to be aware of where it’s headed. In today’s case, a Bloomberg survey has shown that some 73 percent of surveyed traders believe that sovereign debt problems in Europe may serve to boost the price of gold. More below…

Borrow and Spend Economics to Pay for Borrowing and Spending

Okay, I will admit that we had a little accidental gunfire around here recently, but nobody was hurt, and all that really happened is that I wasted a lot of very expensive ammunition and scared the hell out of a lot of people, including myself, a commotion which instantly activated my Amazing Mogambo Reflexes (AMR), making me drop the delicious Hostess Cupcake that I was noisily eating and take cover on the floor, falling, as I did, on top of the aforesaid cupcake, smashing it all over myself, and all over the floor, which made it taste terrible after that.

Investing in Gold: Protection from Runaway Inflation

Since the feds can’t grow their way out of debt…they’ll have to try to inflate their way out.

Trouble is, first…central bankers don’t have that good a grasp of inflation. They can control the amount of money in the monetary base at the Fed. But they don’t really control what happens to it next. For a long time, prices don’t necessarily react…because, in a depression, the velocity of money slows down to a crawl. The banks don’t lend; the money doesn’t get around…and it doesn’t feed into consumer prices. Then, all of a sudden, people realize that there dollars are losing value…suddenly, they are eager to send them on their way. Velocity increases – fast. It is as if they had put cash in a particle accelerator. Instead of 6% inflation, the CPI goes to 12%…or 25%…or 100%.

Shorting the Euro: A Good Bet if Not for the DOJ

Every crisis comes with political baggage. This morning, the US Justice Department is said to be “requesting” that certain hedge funds reveal their bets against the euro.

Under pressure from their EU counterparts, say rumors making their way around the Internet, the Department of Justice is tracking down fund managers who attended a particular dinner in February hosted by Monness, Crespi, Hardt & Co., a NYC brokerage firm. The managers there supposedly discussed taking short positions in the euro and in US banks while going long the Canadian dollar…all fantastic trading ideas, if you ask us.

Government Spending Induces Counterfeit “Expansion”

There’s good news and bad news…and a lot of news in between.

Consumers spent a little more than was expected of them. And manufacturing did a little better than expected too.

On the other hand, the federal government’s tax receipts plunged in the month of February…and bank lending is still contracting. Last week it shrank $33 billion – the 7th week in a row it has contracted.

Gold and Silver Supply: Get Some While You Can

Adrian Douglas of MarketForceAnalysis.com took a look at a summary of the goings-on at the Comex, and says, “the data reveals a very shocking trend. That is that the registered (dealer) inventory is being drawn down at a phenomenal rate. In silver the inventory has dropped by 24% in 6 months while in gold it has dropped an eye-popping 41% in 6 months!”