"Common Sense"

Guh-nomes

I read somewhere that in Harold Wilson's 1956 attack on Swiss bankers' alleged foreign currency manipulations, he pronounced "gnomes" with a hard G, perhaps for oratorical emphasis. Now Jim Willie thinks these shy creatures can be seen popping their heads above ground level again:

The Swiss want power to return to central Europe. Recall that the owners of the US Federal Reserve are reported to reside in both Switzerland and London, in more control of US monetary policy (if not political leaders) than people realize.

He thinks the Swiss franc is set for a rise.

Speaking of which, I speculated some while ago that Warren Buffett's currency speculation may have been in the "swissy", perhaps as a hedge against possible forex movements while negotiating a bid for the Zurich financial group. Not that I'd put any money on either of those horses, of course.

So much of European history is connected with mining: Martin Luther and Protestantism generally - maybe because digging out wealth with your own hands gave you a certain independence from government, and a taste for even more freedom. Perhaps that's the underlying theme of gold: intrinsic value that can't be stolen by rulers.

Update

... though according to this story, it can be seized by force, as we see in today's Federal raid on the Liberty Dollar. Watch out for more of this story and the call for a legal class action to follow. Governments have no sense of humour about unofficial challenges to their currency.

... but the news is no use

Ghassan Abdallah echoes what I've been thinking for some time, namely, that financial news (a) comes too late to help you make decisions, and (b) like the market charts, can be interpreted in either a bullish or a bearish way.

His advice is to get a sense of the underlying trend. I agree, though I'm unhappy about what I'm sensing.

"It's good news week"

... as the ironic (though barely intelligible) Hedghoppers Anonymous song went.

For while Japan and China are selling down their holding of US securities, the UK is gobbling up even more, according to Matt's graphs at Discursive Monologue. Maybe we want to be second in Uncle Sam's hierarchy of foreign creditors, instead of third.

And US employment is holding up, according to the official October figures - but not if you use a different measure, says Chris Puplava.

Synthetic alarm?

Gold's fallen nearly $50 dollars off its 7 November high, just as everything else seems to be taking on a crimson hue.

Is it central bank intervention in the bullion market, or gold forgetting it's a currency and trying to be a commodity, or a temporary slackening in demand because of investment houses having to pony up some cash to cover other positions?

"Danger! Danger!" to quote Robby the Robot from Lost In Space - and next episode, the meteor shower will hit the ground harmlessly.

Which banks are weakest?

Matt at Discursive Monologue compares the banks' mysterious black-box "level 3 assets" with the value of shareholder equity, to give an idea of the scale of the risk the investor in financial stocks may be taking.

Turkeys should note that Thanksgiving is on November 22 this year.

Mutts of the Dow

Greg Silberman suggests buying cheap, small-cap US stocks. Shades of Sir John Templeton's founding investment at the start of WWII?