While CNBS et al struggle to explain the awful, miserable and pathetic GDP numbers, I certainly hope that none of this comes as any surprise to you.
And believe me, every stone was turned looking for inputs to get the number even to the paltry 1.3% they reported. Actual growth was certainly even less than that. No matter. As the U.S. economy staggers around like Michael Spinks, tax revenues continue to plummet and the imminent "need" for more QE becomes readily apparent.
As stated here ad nauseam (particularly back in May), DO NOT SELL YOUR PMs. They are your only insurance against the financial calamity that is now rolling over the horizon. Politicians and bankers may operate and function in a dream world where they can deny reality. In truth, however, they are subject to the same rules and laws of economics as you and I. Trust your instincts and do not be dissuaded. Prepare for the worst while hoping for the best. Be a leader and help enlighten others.
I've mentioned before a book by a man named Ben Sherwood. In researching "The Survivors Club", he spoke with people who had been able to survive all sorts of disasters, both natural and man made. He wanted to find if the "survivors" shared any common characteristics, experiences or traits. He found that, without exception, all of his survivors had two things in common:
1) Faith. Not a particular religious doctrine but a faith in a Creator who was present in their lives.
2) Preparation. All survivors had taken time to mentally prepare for any and all eventualities. They "knew where to find the exit doors", so to speak.
I mention all of this today not because I expect the world to end over the weekend...but...heretofore unimaginable, life-changing events are rapidly racing toward us and we must be ready. You've been blessed with time and foreknowledge. Use it wisely.
As you might expect, the PMs are rallying on the GDP number. As predicted last night, gold has finally broken through 1625 and is currently trading near 1632. A close today near this level will help to set up another explosive Sunday-into-Monday trade which will take gold up near its next target of 1650. Silver continues higher but at a slower pace. This is clearly due to all of the lousy margin hikes form back in May. Open interest is rising but is still below 120,000. This is keeping the rally contained and measured but it also leaves the rally with plenty of room to run. A close today above 40.50 sets silver up to trade through 41 next week and make a stab at my short-term goal of 42-42.50.
That's it for now. As usual, keep an eye on the headlines out of DC and stay nimble. If any significant dip develops, I, for one, will be jumping all over it. TF