Wednesday, April 20, 2011

Buy More Stocks Because the Dollar is Worthless

If anyone has any kind of notion that today's massive uptick in stocks had anything to do with the strength of the US economy, they'd better go back to economics 101 and check the chapter on currency devaluation.

Oh, there is no chapter on that? Well, allow me to explain how the dollar was absolutely savaged by - of all things - the Euro, and a host of other currencies including, but not limited to: the Aussie dollar, the Canadian looney, the Chinese Yuan and especially, the Swiss Franc.

On the dollar index (not a particularly great way to value US paper money, but sufficient for this discussion), the loss was 74 cents, or nearly one percent, meaning everything you buy that isn't produced in the United States - which is just about everything - costs 1% more today than it did yesterday. The corresponding rise in stocks only helps alleviate the pain for the richy-rich amongst us, but they usually find tax dodges or off-shore accounts for their hordes of cash anyhow.

The rest of you schmucks are just going to have to take it, see? You pay more so the Fed can print more billions, give them to the primary dealers and allow the government to continue overspending until eternity, which is a long, long, time. Next week, it will likely get worse, with gas heading for $5.00 a gallon nationally, and everything else going up accordingly, eventually, the average household will be able to buy food and fuel and little else, all the while watching those who own stocks make fortunes.

While the wizards of Wall Street frolic in the fields of greenbacks, you and I will be left holding the bag, containing manure, and be taxed into oblivion. Don't worry about Medicare and Social Security, most of us will die off before any benefits are actually paid out.

It's an ugly, severely evil set-up by the banks and our hands-out congress to create two distinct classes in the United States: the super, super rich and everyone else. You and I must learn how to raise our own crops and subsist off the land leased by our wealthy masters. Welcome to the golden age of feudalism!

I have nothing more to add except that if you haven't started some plants growing in your back yard and already own some silver or gold or both, you need to do so immediately, as time is running short and planting season is upon us. We are nearing the point of complete collapse of the middle class.

If your kids are planning to go to a big university and go into hock to the tune of $40, $50 or as much as $100,000 to get their degree, it might be time to sit them down and explain that their high school diploma will be sufficient, in their bleak future, to work as a mechanic, a gardener, or a chamber maid. Their dreams of becoming the next great biologist or astronaut will have to be put on indefinite hold.

Dow 12,453.54, +186.79 (1.52%)
NASDAQ 2,802.51, +57.54 (2.10%)
S&P 500 1,330.36, +17.74 (1.35%)
NYSE Composite 8,457.65, +125.62 (1.51%)

Advancing issues pounded decliners, 5245-1347. There were 133 new highs and 29 new lows. On the NYSE, 193 new highs and 16 new lows was the order of the day. Volume was relatively solid on the NASDAQ, where all the momentum stocks reside, but the usual miserable figures were posted on the NYSE. Almost all of the day's gains were made at the open, so the futures players made fortunes; the rest of the session was nothing more than churning.

NASDAQ Volume 2,112,464,250
NYSE Volume 4,657,346,000

Crude oil made a huge move of nearly 3%, gaining $3.17, to $111.45, making that $5.00 gallon of gas that the oil barons dream about that much closer to reality. Gold blasted through the $1500 mark again, but was taken down to $1,498.90, a gain of a mere $3.80. Silver continues to dazzle, gaining another 54 cents on the day, finishing in New York at $44.46.

While some argue that gold and silver are bubbles, if that is the case, then what is to be said of stocks, which have doubled off their March 2009 lows? Gold and silver are only a third to a fifth of the way to where they are eventually going. With every new dollar printed by the Chairman of the Fed, Ben Bernanke, an ounce of precious metals costs a little bit more, and that's about the only good news I can report today.

EDIT: Following the COMEX close in New York, gold bounced to $1502.10, and silver shot up to $45.22 an ounce at 5:18 pm EDT.

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