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"Luck is not chance, it’s toil; fortune’s expensive smile is earned.”

Friday, October 10, 2008

Friday in the House of Pain and Gold Chart

I didn't blog yesterday because I'm too busy working on A) issues and B) my new gold report, which is being published Tuesday. Along with my picks and analysis, I've been doing some interviews with some very smart people. Busy, busy!

And then there are these frakking markets. Yeah, we have hedges on -- it still sucks. My target for the Dow is 7,500. I think we could get there early next week. Martin and Mike (Larson) have a target that is a LOT lower.

Paul Krugman is saying that "If a new rescue plan is not announced this weekend, the world economy may experience its worst slump since the Great Depression."

The problem is Paul -- and may I call you Paul? -- you still don't get it. The Republicans rule the White House. That means they are running point on this crisis. But the Republicans HATE government. I mean, that's their brand, that's what they've run on since Reagan -- that "government is the problem, not the solution."

So now, Paul, you expect a party that hates government to get serious about governing? Ha-ha-ha!

Even CNBC's Larry Kudlow is sounding like a socialist now. And that is freaking me out.

And you want to know something really scary? Even the "smart" Democrats went along with Paulson's plan to buy toxic debt. The obvious thing to do was to recapitalize the banks while guaranteeing bank deposits and underwriting new interbank lending. We're just getting to recapitalizing the banks NOW ... and had to wait for dotty ol' Great Britain to show us the way. We. Cannot. Afford. To. Waste. Time.

I'm ready to get out the pitchforks.

Seriously, my target is Dow 7,500, though if you have short positions on, you may want to grab them sooner than that, because even dead cats bounce. Beyond that, you know it's likely that something will happen that will cause a 1,000-point rally. Beyond that, my crystal ball is cloudy. Maybe Martin and Mike are right. I hear a lot of smart people calling for an economic recovery late next year, which is far enough away that you know it's economist-speak for "I'm just pulling a time target out of my butt."

One thing that I'm a little more sure of -- gold is looking better all the time. Let me show you a chart of gold ...

This is a short-term (daily) chart, so take it for what's it worth. And in the current market environment, technical charts aren't working that well.

Oh, in other news, I had a new column on Wednesday: "7 Trillion Reasons to Own Gold."


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