Hear that sucking sound? That's the sound of Asia, specifically the Chinese, sucking all of the gold and silver that the reality tv watching American zombies are selling into cash for gold companies and now an operation being set up in Sears/Kmart by an affiliated Chinese company. And by many accounts, including this one from Clusterstock.com: LINK, the Chinese people can't exchange their fiat currency for gold and silver fast enough. I find it fascinating that both Europe and Asia, two civilizations with several centuries more history and experience with the precious metals than America, are buying the stuff hand over fist, while the consumption-happy Americans are all too willing to unload their last vestiges of real money in exchange for fraudulent pieces of paper that allow them to go buy faux-luxury goods and appliances at Sears and Kmart.
The dollar. I know I've been early on this call, but I now believe the dollar has finally rolled over:
A recent poll reported on Bloomberg showed 97% of all money managers were STILL bearish on the euro and bullish on the dollar. How come no one is talking about the short euro/long dollar trade being too crowded? Given that the big banks have been buying all the euros being sold by funds, and selling dollars to all the buyers, the higher probability bet here is to get long the euro and short the dollar. I can't recall since the internet stock bubble when fund manager/public sentiment was this massively skewed in one direction.
And finally, we all know that Goldman Sachs has taken it upon itself to fund the bailout of Obama's favorite ghetto-home-mortgaging bank, ShoreBank, in Chicago. But is this really a bailout with good intent by Goldman or does the firm look at it as an investment with a huge payoff? Obama apparently has close ties with this bank. Let's say that the Government originally were to settle its SEC lawsuit against GS for $1.5 billion. But now Obama steps in and works out a $1 billion settlement. Goldman effectively "earns" $500 million in exchange for the roughly $50 million that it is thought to be ponying up to save the failed bank. A 10x payout. Helluva deal there. My only question, and it's strictly rhetorical, would Goldman have saved this bank if McCain were in the White House instead of Obama?