Sunday, March 13, 2005


It Just Doesn't Add Up!

A review of the top economic stories of the week:

Those 262,000 Jobs

In Kudlow's Money Politic$, Kudlow says:

Today’s 262,000 payroll jobs increase is yet another data point arguing that the economy may actually be speeding up in the first-half of 2005.
Rob Kirby in SEND IN THE CLOWNS says...we actually lost 24,000 jobs

January Trade Deficit
Jan. Trade Deficit reported $58.3B vs. consensus $56.8B. January's trade deficit was the second largest on record and could have been much bigger but for a little jiggleing with the average price for oil that we import. Seems the government came up with a price of $35.35 per barrel almost as low as July of 2004 of $33.28 per barrel. Now take a look at this weekly chart of Light Crude and tell me how "they" arrived at $35.35. I suspect next months trade deficit will be a record.

John Embry! on Gold Price Manipulation

In the '68-'71 time, period, Embry says, western central-banks dumped 100 Million ounces of Gold to keep the price at $35 per ounce. When they failed, the price jumped 20-fold. The low in 2001 was $250 per ounce, 20-fold is a long way up there. So far the western central-banks have dumped 500 million ounces to manage the price over the last 10-12 years. But, this time eastern central-banks are buying!

Larry Kudlow argues there is no inflation. He believes the government figures of 2% or so despite the CRB going to 25 Year highs. One of his clues about inflation is revealed in this The American Spectator interview in March of 2001:

TAS: You are still largely a gold guy?

Kudlow: Yes. It provides important information about inflation.

TAS: But is gold really relevant, with all of these currencies trading against each other? We have wonderful barometers. Why still gold?

Kudlow: It has not failed me. When gold is low, inflation is low. In 1999 and 2000 when Greenspan was wrongly obsessing over inflation, I just kept saying wake me when gold hits $300. Sure, the gold bugs are gone, the investors. But I don't want gold to be a hot investment. The minute it is, I know the rest of the story is going to fall apart.
To believe the government's statistics is crazy, then to prognostocate based on those nutty numbers is crazier, and to base any personal financial decisions on some "expert's" prognostications is insane.

Mover Mike

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