Nov 08 2007
Yukon Cornelius!
“Silver and gold, silver and gold
Everyone wishes for silver and gold
How do you measure its worth?
Just by the pleasure it gives here on earth!”– Yukon Cornelius from “Rudolph the Red Nosed Reindeer”
Ah memories…Good old Yukon Cornelius from the classic, “Rudolph.” He certainly was a man who understood the value of real money. You’d also think he was reading current headlines.
Today we learn that GM posted a $39 Billion quarterly loss. Does this surprise us? Is George Bush going to win an eloquence contest? We’ve been warning about it for years. What else could an objective person expect from an industry, which for the better part of this decade has been accelerating purchases, which would normally take place in the future — via excessively low interest rates. Well — the future is now! You eat your seed corn – you’re going to go hungry down the road – maybe for a while. We smell lower interest rates – and an increased money supply (more inflation).
We also learn that several of the biggest and well known Wall Street banks and brokerage firms may be in MAJOR financial trouble. These firms — who took sub-prime mortgages — sliced, diced, and packaged large amounts of them into bonds, which they sold – and large amounts, which, they kept — are getting shellacked as mortgage defaults accelerate dramatically. While major losses are being announced – no one really knows how much a significant portion of this underlying sub-prime debt is really worth. Losses are estimated to end up in the hundreds of BILLIONS. We smell a major bailout – and an increased money supply (more inflation).
If that isn’t enough – today the Chinese announced they are getting ready to diversify out of the Dollar due to it’s continued plummet in value (hint, hint — due to inflation). Can’t blame them the Chinese – we think the Dollar – like all paper money — is going significantly lower against all things. It will be interesting to see what they buy. We think we have a pretty good idea.
Yes, that Giselle Bundchen is not just another pretty face. The supermodel is no longer accepting payment in Dollars. The Dollar is losing its status as the world’s reserve currency. However, since the rest of the world is also significantly inflating their currencies – we think Giselle will soon be heeding the sage advice of Yukon Cornelius. She’ll then be getting paid in real money.
