U.S. Jobless Claims Unexpectedly Climb to Five-Month High
CIGA Eric
Who are the official "EXPECT-ORS" that are always shocked by a bad economic report clearly indicating the report is an aberration of some sort? Good reports are usually expected indicating that is the the norm..This is as form MOPE.
Jim
"Unexpected" suggests a lack of understanding of ebb and flow within larger secular patterns/cycles. Do not assume mass ignorance of the secular trends, though. As Jim suggests, perception management is a powerful short-term tool. If you cannot win a battle, you don’t rush to fight it. You talk it to death.
Eric
Average Weekly Initial Claims State Unemployment (AWIC) And YOY Change: ![clip_image002[1]](http://jsmineset.com/wp-content/uploads/2010/08/clip_image00212.jpg "clip_image002[1]")
Source: bloomberg.com
Gold Shares and Newmont Mining
CIGA Eric
Hi Eric: Am I crazy or is NEM tracing out this huge reverse head and shoulders pattern over the past 4 years.I know you’ve been saying gold stocks could move up 4X in the next few years as this chart portends a possible move up to at least 90ish.Does this analysis look correct to you? Once again in advance thanks for all your help!
Daniel
Technically speaking, head and shoulders are not continuation rather trend-reversal patterns. Newmont Mining (NEM) bottomed in 2000 and its trend reversed in early 2002. Notice how the trend energy made a new high in March 2010. This foreshadowed new highs for this secular bull in July 2010.
The breakout in the gold shares index from the massive, 30-year consolidation will certainly benefit most gold stocks. This includes Newmont Mining.
Newmont Mining: 
Was the State Aid Bill a Bailout?
CIGA Eric
More than 30 governors — Republicans and Democrats alike — supported the state aid bill, granting $26.1 billion in fiscal relief to local governments facing yawning budget gaps and signed into law yesterday. Yet only four Republicans — Sens. Susan Collins and Olympia Snowe of Maine, and Reps. Anh “Joseph” Cao (La.) and Mike Castle (Del.) — ended up voting for the deficit-neutral bill.
Was the State aid bill another bailout? Simply follow the money for the answer.
When States run out of money, they must issue debt or reduce spending. As credit ratings decline, debt issuance becomes less an option for States. The best option tends to be reduction in spending, usually in the form of massive layoffs and cutbacks in social programs. These cutbacks, however, curtail economic growth in a consumption driven economy, which in turn, translates into lower revenues for the State and Federal government.
A vicious cycle, described as "The Formula" by Jim, is born. The long-term cycle or formula is illustrated below.
US Federal Budget (Surplus or Deficit As A % of GDP, 12 Month Moving Average) and Gold London P.M. Fixed: 
The infusion of money (stimulus) from the Federal level is intended to break this cycle. Unfortunately, the Federal government must issue debt to provide money to the State and local governments. This is nothing more than a shift in debt burden from State to the Federal sector. Moreover, money transfers without investment will do little to increase economic growth in the future. In other words, once the stimulus has been consumed, more will be required.
Source: washingtonindependent.com
Source: maciverinstitute.com
Source: online.wsj.com
Source: nj.com
