The Golden Truth: The Tech-Heavy Nasdaq Is Up 13.2% Since July 9th?

Friday, July 31, 2009

The Tech-Heavy Nasdaq Is Up 13.2% Since July 9th?

I preface this commentary by saying that the Nasdaq has a higher beta than the SPX or the Dow. That is, the Nasdaq will tend to make bigger percentage moves up and down for every 1% move in the SPX or the Dow. Having said that, it seems that lately the action in the whole stock market, up and down, is being led by the action in the Nasdaq. If you look at the employment data in the article I link, it would suggest that it's time to take any gains clawed back in your portfolio since the March '09 bottom and thank the Fed for that gift. The fundamantals will soon take that gift away and turn it into bigger losses:

As per the chart in the linked post at clusterstock.com, unemployment in the Silicon Valley has spiked up to 12%, which is above the statewide jobless number in California and quite a bit above the jobless number for the country as a whole (I'm using the Government-produced/manipulated number for purposes of comparison - I'm not endorsing the Govt number as being even remotely close to accurate - real unemployment is much higher).

It would seem to me that the big rally in the Nasdaq is not supported in any way by fundamental factors, other than maybe all of the money being injected in the system by the Fed. Here's the link:

http://www.businessinsider.com/henry-blodget-silicon-valley-unemployment-skyrockets-to-12-2009-7

It would also seem to me that anyone with money invested in technology or Nasdaq stocks should think about selling.

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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.