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  Jim Kingsland

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  7/12/12

  I didn’t get my free Slurpee on 7/11 day. I hope you did. Today 7/12/12 is the day that Marty Mcfly went Back to the Future!

   

  A $2000 Gold Forecast

  This headline caught my eye on CNBC.com: Gold to Hit $2,000 by Year-End on More Fed Easing: Merrill

  The story boils down to Merrill’s expectation that the hamstrung Federal Reserve will have no choice but to initiate a future round of quantitative easing that would cause gold to rally. Presently gold is trading in the $1560 range. (Full story here: http://soc.li/CHF6EgH)

  The folks at Merrill have been reading our mail; the world is coming ‘round to the notion that in spite of the full court dispatch of all of all of the king’s horses and all the king’s men, humpty financial system still cannot be put back together again. In other words, even some of the paper pushers are waking up to the need for hard assets in ones portfolio of financial holdings. Merrill sees the writing on the wall. More QE will mean further dollar dilution which means it will take more dollars to buy gold. It is as simple and complex as that. Most still don’t get it.

  A Brief Word on the Fed Minutes

  Gold and stocks remain glum since the Fed yesterday gave no indication through the minutes of its recent meeting that it plans to immediately initiate another round of asset purchases.

  Tidbits

  Unemployment claims drop to 350k during 4^th of July week. It figures this would happen during a distorting holiday week.

  France today sold 4.11 billion euros of 3-month bills at a negative yield of -0.006%, or another example of paying to keep money safe (supposedly) . That’s going to come to a USA near you.

  South Korea’s central bank last night unexpectedly cut its policy rate by 25 bp to 3.00%. This has a greater impact on domestic matters, but with their industrial output slowing even the mega exporters like South Korea see the need to ease. This won’t stop until virtually everyone gets to zero. 3%? How 2002ish. Lol.

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