2011 July 25 | timiacono.com

Obama Hosts Last-Ditch Debt Talks … Again

Maybe it’s just me, but it seems like every time I’ve summoned a Google News search on “debt ceiling” over about the last week, it’s always produced a result titled “Obama hosts last-ditch debt talks”, the latest entry being in the form of a video as shown below.

In a related survey from Rasmussen, most voters don’t think much about how either side is handling the debt ceiling debate, some 58 percent of respondents saying they disapprove of the way Obama and Democrats are handling the soon-to-be crisis and 53 percent not liking how Republicans are serving the nation.

Since the poll was taken late last week, those numbers are probably much higher now.

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It’s not clear what conclusion should be drawn from the raft of favorable gold articles recently, the latest being the New York Times story In a Gold Lovefest, Shades of 1980 that, despite what you might think from the title, is wildly bullish about the metal.

This follows a troika of stories from last week at the Wall Street Journal and Reuters that similarly fawned over the metal’s recent rise:

Asian investors stricken by gold fever on record price – Reuters
Gold Push Unlikely to Be Scrapped – WSJ($) (alternate link)
Why Gold Won’t Soon Crash – WSJ($) (alternate link)

In my view, we’re still nowhere near the top for the gold price and, while exiting long-term gold positions isn’t something that I’ve yet considered seriously, articles like the ones above appearing in Money Magazine would compel me to rethink that promptly.

Of course, all the recent interest in gold has really been driven by changing views about the increasingly shaky paper money that the world has been using in recent decades and, in the latest in a long series of articles about gold and money, Judy Shelton offers what is clearly the best paragraph about the two in recent memory in this story at The Weekly Standard:

Under a gold standard, money regains its primary purpose as a vital tool of free markets instead of serving as a corrupted instrument of government policy. Genuine economic growth​—​as opposed to the money illusion of artificial wealth reflected in bloated equities or housing prices​—​is no longer sacrificed to monetary policy encumbered by the fiscal failures of government.

Clearly, a gold standard is no panacea, but paper money does look more and more like a “corrupted instrument of government policy” each and every day…

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Phrase of the Day: “Debt Talks Stall”

In compiling the links post a short time ago, I couldn’t help but notice a phrase that kept popping up over and over in the headlines for reasons that should be obvious to anyone who’s turned on their computer, picked up a newspaper, or watched any TV news show over the last couple days. Here’s what it looks like for a simple Google search:

A more timely collection of links (but a far smaller number) appears for a search of Google News, in case anyone needs to get caught up to date on the lack of progress over the weekend. I wonder what the phrase of the day will be next Monday.

Monday Morning Links

Debt-fight doomsayers – New York Post
In a Gold Lovefest, Shades of 1980 – NY Times
Stocks set to drop after debt talks falter – CNN/Money
Greece rating cut by Moody’s amid default warning – BBC
How a Default Could Devastate the Country – Fiscal Times
Default Now, or Suffer a More Expensive Crisis Later – Paul, Bloomberg
UBS: August 2nd Isn’t The Real Debt Ceiling Deadline – Business Insider
Activist Ratings Agencies and Their Poor Predictions – Rortybomb
One in five American men don’t work: Where’s the outrage? – Fortune
Gold Standard or Bust – Weekly Standard
What a Business – aucontrarian

MARKETS/INVESTING
Oil falls to near $99 as US debt talks stall – AP
Gold hits new high as U.S. debt talks stall – Reuters
What the world’s best commodity investor is buying now – StockHouse
Gold price forecasts rise as jitters intensify: Reuters poll – Reuters
What you can learn from the “Great Silver Fall” of May 2011 – Commodity Online
Today In Silver Misinformation: David Morgan Swap/Lease Edition – Kid Dynamite
What are record gold prices telling us now? – Mineweb
Simple Arithmetic – Hussman Funds
Bubble Trouble – Barron’s ($)

ECONOMY/WORLD/HOUSING/BANKING
Who’s Afraid of Deflation? – Mises
Adults take teen jobs, leaving youth unemployed – Boulder Weekly
Food Costs Rising as Coke, Chipotle Pass on Commodity Increases – Bloomberg
Social Security payments would fall with new inflation gauge – USA Today
UK household squeeze at its worst for two years – Telegraph
Singapore’s June inflation up 5.2% on-year – Channel News Asia
Asia may worry more of U.S. downgrade than default – MarketWatch
Irish People Adopt the Skeptical View – WSJ
No refuge from the mortgage crisis – LA Times
62% Say Troubled Homeowners Should Buy Cheaper Houses – Rasmussen
Effects of the Fed’s large-scale asset purchases – EconBrowser

 
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