Friday Charts: The Gold-Bug Crisis

That means the long-winded analysis is out. (Hallelujah!) And some carefully selected charts are in. (Amen!)

So without further ado, check out these snapshots on the scariest development in the gold market… one correlation we can’t afford to ignore… and an appalling example of why the government can’t possibly be trusted with our money.

Gold Bugs Beware
It’s official. The next chair of the Federal Reserve is going to be Janet Yellen. So come January, Ben Bernanke is officially out of a job.

You know what else is out, too? Evidence of a near-perfect correlation between growth in the Fed’s balance sheet and gold prices.

Talk about a crisis for gold bugs! Guess they’ll justify clinging tight by swearing up and down (again) that a nasty bout of hyperinflation is imminent. Because, of course, selling is never an option…

Stocks and Earnings: Still in Lockstep
Speaking of correlations, here’s one that certainly hasn’t broken down: stocks and earnings.

As Dan Greenhaus, Chief Global Strategist at BTIG, says, the chart above shows “quite convincingly” that stocks aren’t in bubble territory thanks to too much government intervention.

Instead, they’re moving in lockstep with trailing 12-month earnings. (As they should.)

Rest assured, the strong correlation holds true on the micro level, too. Here’s the proof…

Remember how I told you to avoid Ruby Tuesday, Inc. (RT) like the plague this week? Well, I hope you listened.


The company reported terrible earnings after the bell on Wednesday. Lo and behold, its stock price followed suit, dropping 18% at the open yesterday.

I’m not sure who feels worse – shareholders or the analyst at B. Riley & Co. who initiated coverage with a “Buy” rating and a $10 price target Wednesday morning. (Talk about a bad day at work.)

Throw the Bums Out
Anyone who tells you the government does it better than the private sector is either lying or just plain stupid.

The latest proof? The flagship technology piece of the Affordable Care Act – the healthcare exchanges.

Forget being plagued by bugs and buckling under heavy traffic even after “major code renovations” were made in the first week, as Digital Trends puts it. The most appalling failure is the cost to build the monstrosity that is Healthcare.gov.

According to government records, taxpayers (i.e. – you and me) forked over a whopping $634.3 million (and counting). It was originally supposed to cost only $93.7 million.

Clearly, politicians have never met a budget they can’t bust.

To put those figures into perspective, consider this… Entire internet-based businesses that are now generating billions in actual sales cost way less to get up and running.

Facebook (FB) and Twitter (Proposed Ticker: TWTR) each only needed about $350 million in their first three years of operation. And it only took a few million for them to create websites that actually work. (Maybe the President should have put Mark Zuckerberg in charge of the healthcare exchanges.)

I find it hard to believe that politicians can’t find any money to cut from spending. How about handing over a little control to the private sector? Just a thought.

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