US Action News

Oil rose to a 29-month high while gold increased to within a $1 of a record as fighting in Libya intensified. Greek default risk climbed after Moody’s Investors Service cut the nation’s credit rating.

Printing money and huge deficits are propping up growth but one day the burden of these deficits will have to be paid either through inflation or higher interest on the debt which will be paid by your children. ‘The economy has become a drug addict and by injecting more drugs you’re not going to solve the problem. You have to put it into rehab.’

Nigel Farage, a Member of the European Parliament and leader of the UK Independence Party says the whole idea of the Eurozone was a failure from the very beginning. In Brussels, Eurozone finance ministers are meeting to discuss whether to boost the EU bailout fund which was only set up last year. Belgium’s Finance Minister wants the pot doubled to 1.5 TRILLION Euro. Some believe China is buying European bonds as a gold play.

Social unrest will become visible in America in 2011. There will be demonstrations in many major cities. Some will turn violent. Economics will be at the heart of the anger.

GCC states should boost their foreign reserve holdings of gold to help shield their billions of dollars of assets from turbulence in global currency markets, say economists at the Dubai International Financial Centre Authority (DIFCA).

The Republican Party, with the help of the Tea Party, swept the House of Representatives with a massive pickup of at least 60 seats. The Federal Reserve made another historic announcement with its $600-billion “Quantitative Easing” program (QE2). The October non-farm payroll number came in at a positive 151,000, and the unemployment number remained elevated at 9.6 percent for the month. All of this transpired in the course of one week. So, what’s next? Hold on to your seats.

Friday, 6 Nov 2009 – The dollar will get “utterly destroyed” and become “virtually worthless”, said Damon Vickers, chief investment officer of Nine Points Capital Partners. Due to the huge wage disparities between the United States and emerging markets like China, Vickers said that may resolve itself in some type of a global currency crisis.

Now the Federal Reserve is considering a price target that would generate higher inflation. In recent communiqués and speeches, the Fed has let it be known that it wants to target an inflation rate of 2%.

The sobering truth, however, is that history provides very few examples where dramatically rising gold prices do not point to unnerving instability or disaster.

Economic issues on currencies, weakening dollar, Phillips curve and inflation. Regulations are destroying jobs.