In Search of the Perfect Investment

There are  four ways Washington solves its deficit:

1.  Reduce spending

2.  Increase taxes

3.  Print money and let rampant inflation take care of the problem.

4. Change the system radically. For example, introduce Australia 9% retirement fund. 9% of your salary must go into your retirement fund. Bingo, no need for social security. We could do some smaller changes, like raise retirement to 70. Bring in a means test for social security. It’s insane that I’m receiving nearly $24,000 a year. Medicare is sad. Ever since I went on Medicare, every doctor I visit does tests, tests  and more tests — or tries to. Until I stop them. But how many older people can resist the pressure from their doctors for these “critical” tests. I went recently to have my ears cleaned of wax. He wanted to “check out” my sinuses. Apparently they’re connected to be ears. Upshot: my old pre-Medicare bill of $80 suddenly became, post-Medicare $450. There’s nothing wrong with my sinuses that a new, attractive nose wouldn’t fix.

Washington won’t tell us it’s opted for option 3.  It sure looks that way.  So it fudges its “official” figures for inflation, which it says doesn’t exist. Washington is 8-square miles surrounded by reality.

Will gold continue to rise? Probably. Should everyone own some gold? Yes. I like SGOL.

This piece came across the tape this morning:

MARKETWATCH VIEW: Gold’s Climb May Be Sending A Message 03/03 07:53 AM

Gold reaches a record high. Is it telling us something?

Gold closed $1437.70 on Wednesday, using the CME April contract as the measure, up $28.40 so far this week and breaking through significant technical barriers.

Over the weekend, Australia’s The Privateer had growled: “Just as it has since early November 2010, the area between $1,400 and $1,425 is proving a firm ‘ceiling’ for gold.”
The Gartman Letter was more direct on Tuesday: “Someone … or something … has kept a virtual lid on the gold market at or near $1,414-$1,416 for the past many months and has certainly been at work for the past two weeks making certain that gold does not push upward through that level.”

Consequently the new, adjusted gold chart looks very exciting. Pring Research put out an early Weekly Infomovie Report on Wednesday morning, saying of the ( for practical purposes identical to gold) SPDR Gold Trust ETF (GLD) chart: “The break-out is likely to be a valid one. That’s important because these consolidation formations are typically followed by price moves far in excess of that suggested by their size.”

The Aden Forecast’s Wednesday evening Weekly Update has swung entirely positive: “Now that gold is hitting new highs, it’s still to be seen if this is really the start of an A rise or an extended C rise. In either case, it’s very bullish.”
(Last week the Aden Forecast was still entertaining the possibility that gold remained in the undesirable “D” decline phase.)

Can gold go further? MarketVane’s Bullish Consensus appears to say yes. On Wednesday, gold rose to a 2011 high of 80% but the previous night a LeMetropoleCafe correspondent pointed out that, prior to the 2008 crash, tops generally involved several days in the 90s. Mark Hulbert’s HGNSI appeared to support this optimism. (–but after Wednesday’s action, HGNSI jumped very dramatically, to 71.9% vs. a record high of 89.58%, which will certainly disturb contrarians.)

What is going on? Obviously, the Middle East and the oil squeeze have to be considered. But two (hopefully) longer-term factors also command attention.

News of a recent stunning acceleration in Chinese imports is spreading. This week UBS published a report saying China imported 200 metric tonnes of gold in the first two months of this year, which suggests an astonishing and bullish restructuring of the physical market.

Possibly more important are signs of a dramatic slump in confidence in U.S. economic management. Symptomatic of this is the normally somewhat-deferential Gartman Letter.
Discussing Fed Chairman Bernanke’s Tuesday Congressional testimony, Dennis Gartman complained of “what we consider to have been one of the worst performances by an American central banker before a congressional delegation that we can remember … but then again we’ve only a memory going back to the days of William McChesney Martin, so our pool from which to draw is limited.”

“The Fed Chairman seemed all too willing to write off the current global price increases of food and energy as simply the result of exogenous market circumstances. … We have heretofore been overt and very consistent defenders of the Fed and of Dr. Bernanke … but the Fed chairman’s denigration of the problems attendant to rising food and energy yesterday caught us off guard, as it apparently caught everyone else off guard also. It was within a few minutes of his discussion that gold prices soared. They should have. They responded properly and they responded well.”

It’s not just Middle Eastern turmoil that is alarmingly reminiscent of the late 1970s!

(Peter Brimelow is author of “The Wall Street Gurus: How You Can Profit From Investment Newsletters.” He writes for MarketWatch. He can be reached at 415- 439-6400 or by email at AskNewswires@dowjones.com.)

Nice chart. This ETF includes all major Swiss companies.

Steve appeared. It was wonderful.This is him announcing the iPad2 at yesterday’s press conference.

He’s thin, but alive. His creative genius has produced the world’s most valuable tech company.

The iPad2 is faster, thinner, lighter and has two cameras — one forward facing, one backward facing. You can do video conferences with anyone who owns an iPad2 or an iPhone4. Apple calls those video conferences Facetime. They’re magical for grandparents, and even those of us who would like to become grandparents.

Will the iPad2 sell, despite 15 million iPad ones already sold? Items:

+ My sister owns a travel agency. She is the world’s least technical person. Yesterday she said she was buying an iPad2 to make presentations to her clients. The iPad was more convenient than her laptop — the one her brother sold her. (Yuch. You never win with the family.)

+ Computerworld magazine reports this morning, “iPad owners rush to dump old tablets for new models.“

Yes, Apple’s stock will continue to rise. Long live Steve. Thank you for appearing yesterday. I cried when I saw you.

God bless the Internet. Here’s a kitchen faucet. It’s called MOEN KLeo.

It costs $551.55 on MOEN’s web site, but only $208 on Home Depot’s web site. Go figure.

You can also buy faucets on Amazon — what can’t you buy on Amazon? What’s great about Amazon is that it runs instructions on how to install things. Check out this one on faucets. Click here.

Racist plumbing. Blame it on the Jews. I bought son Michael an apartment in New York. Then he moved away. I became a landlord. My first tenant was a pleasure, except his wife committed suicide by jumping in front of a New York  subway train and he moved out. Then I acquired a Jewish lady attorney tenant  from the West Coast and I  became her chief maintenance engineer. My first job was to fix her computer. I did. She was amazed.

“Jewish men can’t fix anything,” she said.

I asked, “Why not?”

She said her ex-husband once installed a motorized disposal in their kitchen. The first time she turned it on, it sprayed her with garbage. He had installed it backwards.

I wish I had been a fly one the wall. She was lucky he hadn’t installed her toilet.

Program your cell phone, please. Last night the Missus and I were in a taxi to an expensive dinner — $23. Our cheapness is not the point. We found a cell phone in the back of the cab. We wanted to return it. It had no information on whom  it belonged to.  I had to call a bunch of the numbers before someone recognized the owner.

The industry standard is ICE — In Case of Emergency. Please program your phone with an ICE number — your wife, your children, whatever. If you’ve lost your phone or you’re dieing by the side of the roadway, it helps us good Samaritans find you.

Grave dancer  Sam Zell was on CNBC this morning.Yesterday they had Warren Buffett. Today Zell. Occasionally they get stunners. Zell is a stunner. Zellisms:

+ How much more commercial real estate do we need? Maybe none.

+ People got into trouble with commercial real estate because they borrowed too much.

+ Brazil is the best opportunity out there. (Harry’s hint: Buy EWA.) Brazil reminds Zell of America in the fifties.

+ America gives PhDs, but not green cards.

+ Inflation is already here, despite Washington’s numbers. Inflation will escalate.

+ The banks have not recognized their real estate losses.

+ Low interest rates are messing things up.

The presumption of Invincibility. My friend Joe Daley loves tennis and golf. For several weeks he did both aggressively, morning, noon and night.  On Friday he’s checking into hospital for back surgery.

Joe, we’re no longer spring chickens. Moderation is a word that belongs in some of our vocabularies.

Good old Yankee (Red Neck?) ingenuity.

The story of the Indian who married the Jew.

An American Indian comes back to the Reservation to visit with his parents after spending some time in New York. He tells his father that he’s fallen in love with a nice Jewish girl.

His father is mortified and says, “You’re betraying your heritage and you’ll break your mother’s heart that you’re not marrying a precious Indian girl….and you know how Jews are, they’ll feel the same way and you’ll be ostracized in both camps!”

The Indian son reassures his father, “Don’t worry. The Jewish family has already accepted the situation because they’ve gone ahead and given their daughter an Indian name.”

“Really?” asks the father. “What name?”

The son answers proudly, “Sitting Shiva.”

Harry Newton who prays for the day he can throw everything out the mailman brought that day.  It hasn’t happened, yet. But yesterday I threw  out all the catalogs and magazines I hadn’t ordered.