Will Higher Rates Sink Gold and Silver?

Check out this Bloomberg article below. The headline speaks for itself. If you have ever read the work of Jim Sinclair, then you already know better :)

Gold, Silver Fall as Higher Interest Rates May Pare Demand
By Choy Leng Yeong

June 12 (Bloomberg) -- Gold fell, resuming its decline to a 12-week low in New York, on concern higher global interest rates will reduce demand for the precious metal as an alternative investment. Silver also dropped.

Gold tumbled 3.9 percent last week, the biggest weekly decline in three months, after the European Central Bank and the Reserve Bank of New Zealand raised rates. Holding gold becomes less attractive when rates rise because the metal has no fixed returns. U.S. Treasury yields rose today after China said prices increased at the fastest pace in two years, renewing speculation rising global inflation will prompt central banks to raise rates. (Read the rest of this article HERE)

A look at this year in charts

This year has come to an end. What does next year have in store? Let's take a look.

Silver and gold ended the year on a down note.

The Dollar and Bonds ended the year on an upward note.

Inflation is heating up.

The United States continues to print too much money and spend it on useless wars.

The Republicans and Democrats continue to keep a lock on power and corruption as the U.S. citizens are too stupid to figure out that they have been duped for years now. There are no Republicans or Democrats (except for Ron Paul who is a Real Republican). There are only Demopublicans. As long as the two party system remains in place expect more spending, war, entitlements, corruption and a decline in the standard of living of Americans.

A big thank you to Downsize DC and Ron Paul. These are two worthy organizations that are actually trying to do something about our absurd political and economical condition. Please visit them and support them and you can make a difference too.

A happy New Year to all.

Chart Review Below:

Optimism Rules

Alot of people I talk to lately are highly optimistic about the state of the U.S. Economy. This does not make them an optimist or me a pessimist. I am highly optimistic about the oportunities presenting themselves in precious metals, base metals and the global economy.

With all of the U.S. Economic optimism, it makes me wonder about the following headline from Reuters:

"NEW YORK, Nov 15 (Reuters) - The yield spread between 10-year and two-year Treasury notes briefly widened to 20 basis points on Wednesday, marking the deepest inversion since December 2000. (Read entire article here)