The Gold Economy

March 26, 2010 – Everyone should be taking note that the yield on the 10-year Treasury note this week climbed to a 9-month high.  The T-note is sending a loud and clear message: interest rates are headed higher.

The same message was given this week by Bill Gross, manager of the world’s biggest bond fund, as reported by Bloomberg.  In his view, “bonds have seen their best days” and also importantly, “real interest rates are moving higher.”  He also warned that “sovereign credits are vulnerable at some point down the road”.  

If by “vulnerable” he means default, I wholeheartedly

March 22, 2010 – Only a few decades ago, the United States was the world’s largest creditor nation.  American capital spanned the globe financing all types of investments in virtually every country.  But that dominance began to erode in the 1960s because growth in consumption in the United States was starting to outpace new production.  Wealth built up over generations was being consumed.

To compensate for the resulting decline in living standards, the nation turned to debt, rather than hard work and savings.  This trend continued through the next decade.  A focus on consumption and a seemingly unstoppable reliance on