Wall Street pundits keep talking about a major shift in asset allocation, but naturally they never even mention the gold market. Posted by James Randolph on March 28, 2011
When the neighborhood goes bad, move to the gold market.
March 28, 2011 – Wall Street pundits keep talking about a major shift in asset allocation, but naturally they never even mention the gold market. With the bond market flat and Treasuries “screaming to be shorted … stocks are the best house in a bad neighborhood,” says Leon Cooperman, chairman of Omega Advisers, in the Wall Street Journal.
But that wouldn’t suit the Fed’s grand design. The theory goes that forcing "investors to move into riskier investments, such as stocks … could eventually feed through into the broader economy,” says the Journal. That’s just what the individual investor needs right now – more risk.
It’s all symptomatic of the “broader erosion of the U.S. middle class.” Today the Commerce Department is “expected to show personal incomes, before tax and unadjusted for inflation, rising about 5% in February from a year earlier … Yet a closer look shows a troubling decline in wage-based income over the years and offers less reason for cheer.”
Income in the form of paychecks has dropped from 75% of total income in 1970 to only 64% last year and about 40% of all consumer spending comes from the top 20% of households. To put that in other terms, the percentage of total spending by those who have to work for a living has dropped 24% since 1970.
The whole economy is moving steadily towards servicing the wealthy at the expense of the working class. The average citizen is footing the bill for a recession that for them is far from over. Their wages are stagnant and QE fueled inflation in food and fuel has already eaten most of the increase in their income from tax cuts.
When a neighborhood goes bad it’s best to get out while you can. And the best place to move to is the gold market.
Senior Staff Writer – Certified Gold Exchange