Market weakness persists, video blog where I talk Bear Market

The world is still here. Yes, there was weakness in Asian stock markets, but European markets have been on either side of UNchanged. the G7 is promising to keep the fiat beast alive and that has rallied gold to beyond $1700 an ounce. Bet your bottom dollar that the G7 printing presses will fail in the longer run. Thus, $2000 gold seems more likely by the end of the year especially if there is another debt downgrade of the US debt this November as some analysts are predicting.

Again, the US downgrade matters. It is not because it comes from corrupted S&P or anyone else with the exception of the good people at Weiss which rates the US at a realistic C- (S&P equivalent of BBB). if people are so bent out of shape with S&P, why aren’t they criticizing crony capitalist Warren Buffett controlled Moody’s for keeping the US at the laughable AAA? Actually Buffett is sounding more like a folksy buffoon with his pronouncement that we should AAAA. Hey, let’s go to AAAAA! This downgrade matters because it forces many into the realm of realization that we are not and have not been AAA for years. I could care less about the political knocks the report dishes out, or its math errors.

This downgrade is 10 years too late (at least) and should signal that the problems with the US finances are far bigger than any politician, really the overall political process, or any math technicality or math error. The long term math is so large that the so called errors of S&P are miniscule compared to the long term math. There is no way out of this predicament of already maxed out debt at 100% of GDP and future liabilities that are conservatively estimated to be another 8 times larger than the actual debt.

The imperfect FICO credit scoring system says something everyday about each and everyone’s credit. Even one blemish on your credit can hold up getting a mortgage. If you have excessive debt, forget about a mortgage. How would Unce Sam rate in a FICO system? Not too well. You wouldn’t need S&P or anyone to tell you that. S&P at least gives a token downgrade, though it should be larger and perhaps another downgrade will come in November. One can only hope for more honesty about where we are at as a society from a financial perspective — and we are not at a good point. Remember why we are no longer AAA when you are stuck in traffic because of outdated infrastructure. Remember we are no longer AAA when a Sr. center closes because the "money" is no longer there.

I have much more to say in the video blogcast as I feel we’re contending with a real bear market that is only getting started.

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http://www.youtube.com/watch?v=wRqnx_WGWwE