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Posts Tagged ‘Dow Jones’

Here are some of my thoughts on the successful Brexit vote, shared on the Facebook page for Exposing Faux Capitalism:

  • Corporate mass media hypocrisy: When democratic referendums are in favour of being part of some bigger political union, they want to move on after saying how great the outcome was, yet, in the rare case that voters go against that, like with Brexit, the democratic majority is minimized for the sake of divide and conquer, pitting older against younger, and accusing what would only represent a small minority, of racist motives.
  • Leftist Brexit inconsistency, which I’ve noticed even with local mass media: Saying how bad the Brexit outcome is, yet ignoring the EU’s well-known democratic deficit.
  • Someone on a group I follow was so concerned yesterday about the pound dropping around 10% overnight to a 30-year low. Let’s put this in perspective. The Dow Jones fluctuated around 5% several days during the 2008 financial crisis, especially when the House initially voted down the bankster bailout bill, yet the bleeding stopped by March 2010 and the Dow is now historically high. Iceland’s currency dropped by 80% in just 4 months, but the good news was they didn’t have to pay for any of the bad loans that their private banks made. Britain had no business being in the EU in the first place, and their membership isn’t essential.
  • Good that Brexit has put an end for the UK to the silly EU passport policy where someone coming from Eastern Europe, for instance, had an easier time getting into the UK than someone from a Commonwealth country who is fluent in English.

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Gerald Celente of the Trends Research Institute, the man who, according to the Washington Times, accurately predicted “the 1987 stock market crash, the collapse of the Soviet Union in 1991, the 1997 Asian currency crash, and the 2007 subprime mortgage scandal,” was on the Alex Jones Show on May 7, 2010, and said at 1:55:46:

I’m not allowed, by law, to provide financial advice. That’s why I always make it clear — this is what I would do. What I’ve done and I’ve said it over and over again, it’s very simple for me. I buy gold — 80%. The rest of my money, I have hedged. I’m in dollars and I’m in Canadian dollars. One goes up, the other goes down. All I want is wealth preservation. Gold is my wildcard. The other ones, all I want to do is stay in.

For some historical background on gold, it reached an all-time closing high by January 21, 1980, of $850 USD an ounce, not reached again until 28 years later, on January 2, 2008. Its all-time high was reached on December 2, 2009, at $1212.50 USD an ounce. From $255.95 on April 2, 2001, that represents a 474% gain in just under 9 years — a more than 50% annualized return on investment.

Timing is key — From January 21, 1980 to January 1,  2008, your return on investment on gold was negative, while it was 1495% with the Dow Jones Industrial Average. From April 2, 2001 to December 2, 2009, gold’s ROI was 474%, while the DJIA’s was only 6.9%.

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On Tuesday, December 1, 2009, LewRockwell.com featured an article with the headline, “Famine or Gold Standard: Charles Goyette on the choice before us.” The article itself is entitled, “Parallel Universes,” and is a fictional account.

But wait. The U.S. was on a gold standard from 1929-1932. Did that prevent the Great Depression? No, it did not. It didn’t prevent the 20%+ unemployment, the 88% drop in the Dow Jones, nor the 5000+ bank/S&L failures during that period.

The Federal Reserve was to blame, you say? Yes, but only in part. The Federal Reserve existed while the U.S. was on a gold standard. Those two variables are conflated, and therefore, one can’t say with certainty that one was to blame and the other wasn’t, or that one factor was more to blame than the other, unless you measure the effect of each, independently of the other.

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According to CharlieRose.com, the global financial crisis ended on March 10, 2009.

Prior to the week of November 22-28, 2009, the site had the “Financial Crisis” collection on its front page, with the last episode in the series on March 10, 2009.

Quite an interesting coincidence that the last episode from that collection was on the exact day that the Dow Jones Industrial Average reached its lowest level since the full crisis hit in September, 2008, at 6547.01.

What’s happened since then?

THEN: The official unemployment rate stood at 8.1%.
NOW: 10.2%.

THEN: The U.S. dollar was worth 84 on the USDX.
NOW: 75, a 10.7% decline.

THEN: Gold traded at a New York Mercantile Exchange closing price of $896.10 USD.
NOW: Gold traded at an all-time high of $1195.80 USD on Friday, November 27, an increase of 33%.

THEN: The federal budget deficit for 2008 was $438 billion.
NOW: $1.4 trillion.

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I saw a ridiculous headline on Yahoo Finance this morning from the Associated Press, linking cause and effect of the swine flu to the less than 1% decline in the Dow Jones at the time, from Friday’s closing price.

No, it couldn’t have been due to any profit taking after a run-up of the Dow for the past seven weeks. It had to be fears of swine flu! Despite the closing price varying by 1% or more on other days during that period.

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