When will mainstream financial media stop drinking the Kool-aid?
Bullion.Directory precious metals analysis 14 January, 2015
By Christopher Lemieux
Senior Analyst at Bullion.Directory; Senior FX and Commodities Analyst at FX Analytics
It is not looking good. The S&P 500 futures look to open lower by 26 points on data that continues to disappoint. Despite what virtually every analyst believes, lower gas prices are not indicative to more consumer spending and retail sales contract 1 percent.
In early December, when the crude fallout spread, the feel-good story was that lower gas prices would drive consumer spending. Everyone on CNBC sure thought so because it would hopefully continue this falsehood that there is a broad economic recovery in the US (let alone the developed world).
Heck, the Fed thought so. But then they think a lot of things on the vague fringes of reality.
Also in early December, I stuck my neck out and went against consensus.
In “Lower Crude Prices ≠ More Consumer Spending” I showed that consumer spending is not pushed higher by either lower gas or crude prices.
I tried to level with those thinking it would with just logic. The consumer is hurting. Wages are going nowhere, and when one has to now work two, three jobs in this glorious recovery, money not spent on gas is going to repay debt or into a savings account.
A CBS poll, released a week or so later, supported my “craziness.”
Those astute to reality will have seen this coming. Since the Fed took away the everclear-punch bowl, equities are nearly level. Those who were patient and bought gold are now seeing solid gains.
Even gold bears like Tom Gordon, who’s “gold to 800” clips were a daily installment on CNBC, are starting to see gold’s potential.
The fundamentals have not changed, people just open their eyes a little more when the equity markets stop going parabolic.
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