the pot is simmering

Here is the latest on Gold which has spiked over $1000 per ounce - which should now form a base of support at the $1000 level.

Gold* (GOLDC : NYMEX : US$1013.50)
Net Change: -6.70, % Change: -0.66%
"We wants it, we needs it. Must have the precious." - Gollum (The Lord of
the Rings: The Two Towers). Advocating precious metals and speaking about
the gloom facing the U.S. dollar is nothing new for Eric Sprott, but this
time he has highlighted some eye-opening numbers (to say the least) that
would give even the most optimistic U.S. media bull the chills. Sprott
starts out by noting that over the last six months there has been a
substantial increase in anti-U.S. dollar rhetoric from China, Japan,
Russia, France, Brazil, and even the United Nations. Reading between the
lines, Sprott states that it appears as though the U.S. dollar hegemony has
finally broken, and what happens next will have major consequences for the
global economy. To fully understand the debt predicament currently faced by
the United States, Sprott says it's best to look at the numbers. U.S.
Government revenues for the 12 months ended August 31, 2009 were ~ US$2.2
trillion from all sources. According to the U.S. Department of the
Treasury, the current outstanding debt as of August 31, 2009 is ~ US$11.8
trillion. To this (Sprott says) we must add the unfunded promises that the
U.S. Government has made to its citizens. The National Center for Policy
Analysis (NCPA) estimates that the unfunded portion of the U.S. Social
Security program totalled US$17.5 trillion as of June 2009. The NCPA also
estimates that the aggregate unfunded promises for Medicare total a
whopping US$89.3 trillion. Sarcastically, Sprott states that you probably
don't need a calculator to realize that the U.S. can never cover the debt
costs on US$118 trillion. Even if the U.S. Government were to spend 100% of
their tax revenues on debt payments, the absolute maximum they could
rationally borrow today couldn't exceed US$64.2 trillion (US$2.157 trillion
divided by 3.36% (current weighted annual interest rate)). The numbers just
don't add up. Sprott highlights that the Chinese Government, which is by
far the largest foreign investor in U.S. Government debt, is fully aware of
the current situation. Recently, China has even gone so far as to promote
the purchase of gold and silver to its citizens. Silver bullion is now
being advertised on Chinese television as a prudent investment for the
general public. Chinese banks have even planned to sell gold and silver
bullion bars in four different sizes. This represents a fundamental change
in Chinese policy where the distribution of gold and silver was once
strictly controlled. In summary, Sprott believes the most likely outcome
will be a U.S. dollar crisis. It is for this reason that he has positioned
his hedge funds and mutual funds so heavily in precious metals. At the end
of the day, when the world finally realizes what the U.S. has done to the
world reserve currency, international investors will shift into an asset
that no government can print. In Sprott's opinion the U.S. dollar's status
as a 'port' in the financial storm has officially come to an end.

Currently mortgage rates are holding steady - 5 year is around 3.99% and the variable rates are at Prime+.20 (2.45%)
many people are taking the variable rate in the hopes of riding the wave until the prime rate increases - after all the prime has to increase by 1.5% in order to reach 4% (roughly the current 5 year rate)
I would not suggest this strategy for those who are highly leveraged ..ie 90% loan to value on their homes - keep your eyes open - rates will move up next year ...the million dollar question is when..and by how much

greygoose out...enjoy the remaining dog days of summer - ....

as the beatles say...were on our way home

Well we are on our way back from Myrtle Beach South Carolina and the PGA Superstore World amatuer golf tournament. this is a four day event similar to the US Open where you compete against people from all over the world in your own category range...or so it should be (there appear to be a few sandbaggers in the mix)
In any event it is a great time - for fun and comeraderie. Joanne and I have participated in 14 of the 26 years of the tournament - this year she finished 9th in her division and i finished 12th. All in all a very satisfying showing.
While we were away interest rates have softened again to 3.99% for 5 year money - it cant stay low forever - it may be time to consider locking for the 5 years and as Mickey blue eyes says.... forget about it.