A lot of Smart People, a lot of Dumb Ideas

This is a mid-morning comment as I don’t see the need for short-term trading comments at the moment. With the breaking of the 1050 support on gold and 1070 support in the S&P in the past week or so we appear to be set for a move into the low 900’s in those two markets over the next month or two.

 As to the title today, Bernanke is leading the parade talking about exit strategy and politicians are pushing deficit reduction, both ideas a sure fire prescription for the opening shot at a real depression.  The economy was rescued and the Cramer lovers overshot the financial markets.  Now they talk like we have a recovery on our hands.  Give me a break. 

We have a open window of fresh air, but the car is still going to the bottom if we don’t have real recovery in employment.  I said it a year ago, I say it now, the renewable energy direction is the only thing we need now, and we need trillions of investment, not low billions.  We need to produce the equipment here, not buy it from China and we need to get people back to work.  If this deosen’t happen we may putter around for a couple of years but sooner or later it will become clear that inflation is not our enemy, deflation is and the 2001 lows in gold will look like a coming home party.