The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

Obama Kabuki Wrecking Your 401(k)

Posted on | July 27, 2011 | 4 Comments

Let’s see: Dow Jones Industrial Average dropped another 91 points Tuesday, down to 12,501.30, having lost 223 points in the past three sessions. If stocks are down, then bonds are up, right? Nope:

Treasuries fell [Tuesday], eroding a gain from [Monday], as President Barack Obama threatened to veto House Speaker John Boehner’s plan to raise the U.S. debt ceiling and reduce spending by $3 trillion.
The U.S. may have its top-level credit rating cut as politicians struggle to reach an agreement on how to increase the federal borrowing limit, a step needed to keep paying its debts, according to BlackRock Inc. and Loomis Sayles & Co. The Treasury is scheduled to sell $35 billion of five-year debt today, the second of three note auctions this week.

Hmmmm. Stocks down and bonds down. So . . .

Gold futures rose for the third straight session as the prolonged U.S. debt stalemate boosts demand for the precious metal as a haven. . . .
Gold futures for December delivery rose $4.90, or 0.3 percent, to settle at $1,619.30 an ounce at 1:48 p.m. on the Comex in New York. Earlier, the price fluctuated between gains and losses. The August contract reached a record $1,624.30 yesterday.

You should have listened to Glenn Beck!

UPDATE: And gold goes even higher:

Gold forged a record high above $1,625 per ounce (in London) on Wednesday, as investors parked their cash in the precious metal in the face of heightened concerns over a potential US default.
The price of gold struck $1,625.70 an ounce at about 0600 GMT on the London Bullion Market, beating the previous record of $1,624.07 that was hit on Monday.
“The threat of default by the world largest economy has led gold to a fresh peak above $1,625 this morning,” said FastMarkets analyst James Moore.

(Hat-tip: Don Surber.)

PREVIOUSLY:


Category: Barack Obama, Budget, Economics

Comments

4 Responses to “Obama Kabuki Wrecking Your 401(k)”

  1. HighPlainsJackal
    July 27th, 2011 @ 11:56 am

    At least I’ve got +30 years for it to recover.  But if I was <5 away from retirement I'd be pretty ticked about the stage show.

  2. Dan Gillen
    July 27th, 2011 @ 12:57 pm

    I’ve stopped paying attention to the stock market.  it’s completely disconnected from economic reality thanks to the Fed and quantitative easing.  

  3. Obama tosses away 222 years of good credit « Don Surber
    July 27th, 2011 @ 9:18 am

    […] UPDATE: From Robert Stacy McCain: “Obama Kabuki Wrecking Your 401(k).” […]

  4. Liz
    July 27th, 2011 @ 4:18 pm

    I think I’m lucky in that I’m in my early twenties. I have cast iron evidence that I’ll never retire, because the public pensions aren’t there and the private ones will be seized. Social Security will not exist, inasmuch as it ever did.

    Yeah, it sucks, and I worry about my health later on and whether someone else will hire me when I’m 70, but it has its upsides. I will never, ever trust that the government will take care of me and find myself at 60 realising that all my plans have gone to hell.