April 15, 2013 has been a crazy day. I was originally going to write some thoughts about tax day. Then gold went into freefall and I was going to write on that. Then there were bombings at the Boston Marathon. So I will just touch on each topic briefly and expand in future posts if necessary. I will probably write more about the plunge in gold.
People tend not to take a step back with some perspective when a tragedy happens. The bombings at the Boston Marathon is certainly a newsworthy event and is a tragedy for those involved. But we have to wonder what kind of overreaction we will see (much like the school shooting in Connecticut). Americans forget that this is a country of 300 million people. There are about a hundred people who die every day on the roads in the U.S. alone. Yet we don't hear much about them. But then when a bombing happens, all panic breaks loose. Who knows what totalitarian step the government will take next? How many more billions or trillions will be wasted?
These bombings in Boston don't seem like a big professional job as we saw on September 11, 2001. It could be a lone nut or a couple of nuts. Maybe it was a Muslim terrorist. Maybe it was an American with a certain gripe.
I am actually surprised how little we have seen in the way of terror attacks in the last 10 years. The U.S. government has killed hundreds of thousands of people in Iraq, Afghanistan, Pakistan, other parts of the Middle East, and Africa. There have to be a lot of friends and family members who are really ticked off. It is actually shocking that we have not seen more blowback in the U.S.
As for tax day, I was just going to reinforce the point that we shouldn't concentrate on taxes so much. It is the total level of government spending where we should be concerned. It doesn't matter if the government spending is through taxation, borrowing, or monetary inflation. It hurts our standard of living, regardless of how the money is obtained.
As for the plunge in gold, I am quite baffled. It was down almost 10% in one day. And this was after a 5% drop on Friday. This was huge. Before all of this happened, I had read from a couple of chart guys that sometimes gold corrects before it enters into a new bull market. I don't know if this is what they had in mind. I am not a big chart guy for predicting the future, but it is interesting to see some of the historical trends.
Either we are going to see gold bounce back up or we are going to see a hardcore recession. If we see a deep recession while the Fed is pumping in $85 billion per month, then I am more scared than you can imagine. We are in for some very serious pain if that is the case. And then we have to worry how much more the Fed is going to pump in.
I am going to discuss gold some more in the coming days. I want to look at it in context with an overall portfolio of investments. I also want to discuss the possibilities of what happens next.
April 15, 2013 was a crazy day. Unfortunately, I think we are going to see some more crazy days ahead, particularly with the economy.