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THE VERDICT IS NOW IN!

December 30, 2005

No more guessing. The Dow ended up the year in the RED. The Nasdaq and S&P500 were barely in the green. And my earlier comment on the inverted yield curve flat-lined as we ended the year, after having spread further apart earlier.

Who Wants Cheaper Auto Insurance?

Most are no longer watching the money supply, and particularly M-3; however, it is exploding as Greenspan pumps the economy for all he’s worth in his last few weeks as Fed head. We’re literally floating in an ocean of liquidity, which is why HUI and other gold stocks have risen dramatically in ‘05.

In the last thirty days gold has gone up $21.80 (just one month!). For the year, gold jumped from $437 to $517+ (and that’s after a December correction). Gold is up 18% for the year while the Dow was down: not good market mechanics.

I see no way that 2006 can be a good year for the economy; however, I’ll hold off on specifics to Saturday or Sunday as I look into my crystal ball for several ‘06 predictions. Hasta luego! Party hardy, but do so sanely as you send out the old year.

Written by Ernie · Filed Under Daily Commentary 

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