The Sunshine Report

Veritas Financial Partners
Information about finance, the economy and business. Entertaining and informative. Seeking Alpha Certified Mark Sunshine Chairman & CEO

Category Archive: BLS

  1. Gold Bugs Beware Of Fed Extermination

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    Today I heard it again on the car radio — an adver­tise­ment claim­ing that since gold has topped $1,500 an ounce it’s a “must buy” for every respon­si­ble saver.

    If only it were true that I could pro­tect my fam­ily from eco­nomic Armaged­don by buy­ing gold.

    Unfor­tu­nately, the hard facts are that increas­ingly since 2000 gold has been the oppo­site of an infla­tion hedge. Even worse, when inter­est rates rise in response to infla­tion, gold will fall in value, and maybe by a lot.

    The his­tor­i­cal rela­tion­ship of gold to infla­tion, i.e., that it is a hedge, is no longer true. Gold has been “finan­cial­ized” by Wall Street and its price is being dri­ven by insti­tu­tional spec­u­la­tors that buy it by bor­row­ing money at near 0% inter­est. As long as inter­est rates remain low, the cost of bet­ting on gold is very low and money flows into the gold market.

    As gold prices soar indi­vid­ual investors need to beware. One day inter­est rates will start to rise and gold prices will plum­met. Inno­cent vic­tims that buy gold because of a mass mar­ket sales pitch will be sorry.

    My strong advice to read­ers is don’t be a gold bug. It’s only a mat­ter of time before the Fed exter­mi­nates you. [read full story]

    Posted in: BLS, commodities, CPI, economy, Federal Reserve, Finance, Gold, Inflation, Investments, monetary policy, Public Policy

  2. CPI Indicates" rel="bookmark">Money Supply and Economic Data Weekly Watch – Deflation Is Worse Than CPI Indicates

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    Last week’s eco­nomic data is under­es­ti­mat­ing defla­tion. On Wednes­day the Bureau of Labor Sta­tis­tics (“BLS”) announced that the con­sumer price index (“CPI”) declined by 1.0% in Octo­ber which was the biggest sin­gle one month reported decline since before World War II. Broad based defla­tion exac­er­bates the already severe credit cri­sis and increases cash hoard­ing by […] [read full story]

    Posted in: BANKS, BLS, Business Environment, CPI, Credit Crisis, Deflation, Economic Statistics, economy, Federal Funds Rate, Federal Reserve, Finance, Fiscal Policy, GDP, Inflation, Liquidity Trap, M2, monetary policy, Money Supply