#245: Election News and Market Rally

FBI done with 650,000 email review. Huge rally in stocks. Hillary and Trump crisscrossing the battleground states. Gold crashes... Jamaican lottery scam kingpin busted... And more!

(From Monday, November 7th, 2016)

...And Gas Prices Continue to Climb

Gasoline prices continue to increase.

Many thought that the death of Osama Bin Laden, or Usama Bin Laden for the Fox News readers, would help to bring down oil prices down. Initially, this happened. But oil prices rebounded as the day went on.

The thought is that just because Osama is dead, it doesn't mean that terrorism is over. In addition, there are some other issues facing the economy.

First, oil prices are determined by supply and demand. Even though some of the economic numbers have come in a little murky lately, the GDP is not negative. The economy is sluggish at 1.8%, but it is positive growth. In addition, world economies are doing better as well.

Next, the Federal Reserve is keeping interest rates low and continuing with Quantitative Easing. This is putting pressure on the dollar. Oil is denominated in dollars. In addition, the annual deficit is $1.6 trillion, while the US debt is over $14 trillion dollars. This also puts pressure on the dollar. Again, oil is denominated in dollars.

There is talk about "oil speculators" driving the price of oil up. But there are over 80 million barrels of oil consumed a day. And these folks are really betting against the economic policies of Obama, Geithner, and Bernanke. It's been the right environment to make money in commodities. In addition to oil, just look at the price of gold, silver, cotton, sugar, etc.

Is there anything on the horizon that could bring down the price of oil and gasoline? Absent a recession?

$GLD Down 6% for Year

I have said that a 2011 theme will be investors fleeing $GLD and bonds and buying equities.

Gold is down 6% for the year.

Gold doesn't make or produce anything. You don't receive growth or dividends.

But it does make pretty jewelry.

I believe gold has been in a bubble.

If you read the CNBC article, you will see that the consensus opinion is that gold will average $1450 in 2011. We shall see.