I'm Back -- Did I Miss Anything?
It's not just jobs -- retail sales collapsed in November, and other indicators are negative across the board. In case you haven't guessed, I am a reluctant supporter of the bail-out. I think letting a US car company go bankrupt in the current economic environment is like pouring gasoline on a fire. I didn't think Congress would be this stupid. After all, they don't raise a peep when Citibank got $300 billion. But some in Congress are apparently more interested in pursuing long-held ideological dreams -- like breaking unions -- than they care about this nation's well-being and health.
So is there hope? Well, if GM and Chrysler can hang on until the next Congress, sure. The final vote was 52 to 35 (12 didn't vote). Four Democrats did not vote, and Senate Majority Leader Harry Reid voted with Republicans (as a procedural matter). With 10 Republicans defecting, seven of whom will be around in 2009, new legislation will easily pass in January upon the arrival of at least seven new Democratic votes, unless Reid allows a filibuster. Reid is a total wimp, so car makers shouldn't hang their hopes on him suddenly growing a spine.
Meanwhile, everyone should read this Joseph Stiglitz piece. He's a Nobel-prize winning economist, and he identifies five key mistakes—under Reagan, Clinton, and Bush II — that laid the groundwork for financial apocalypse.
So what does this mean for gold? Gold is keying on the US dollar which has run into major problems over the past week.
The dollar has some final support at 83.75. If that fails, we could see the US dollar fall to 81. And that would be bullish for gold. Let's see how things develop today.
Now, how about my trip? I'll be telling my Red-Hot Global Small-Caps subscribers about it pretty soon, and I expect I'll make it my MoneyandMarkets piece for next week.