Economy Turns Corner, Gold Heads Higher

Make a left turn around one corner and you head in another direction.Make two left turns and you start going backwards.Make four and you go in a circle.Keep turning and you get dizzy and fall over.

Today I hear that because a handful of retailers reported increased sales that this is an early sign the economy has turned a corner.I'm just trying to figure out which turn we're on.The economy has turned so many corners lately, I'm on the verge of tipping over.

I mean really.Just days ago it was reported that the census and other government agencies created 80,000 jobs last month.And in spite of the fact that unemployment remained at 9.7%, stimulus was working and the economy was showing signs of recovery.Today, jobless claims unexpectedly rose again.That's two turns in about a week and once again we are headed back to whence we came.Rising unemployment.

Now retails sales are on the rise - well maybe.If I'm not mistaken, same store sales are reported year over year.So, what I think I am hearing is that after last year, one of the worst years in history for our economy, a handful of retailers are showing signs that their business is better this year than it was last year.I'm aghast!

Now, do you think printing a couple trillion dollars and pumping it into the economy had anything to do with that?Did you know $2 trillion equals about $6600 dollars per man woman and child in this country.Some say with all the Fed gymnastics $10 trillion was created and used to bail out the world.But, for purposes of this illustration, let's settle on $2 trillion.Personally, I didn't get a dime, but with all the new money floating around is it any wonder blue jean sales were up 6% over last year - the year everyone was broke?

Here we go turning another corner.Stocks are up a little today but not much.I'm sure stock buyers are hanging on for another left turn.I just love how all these economists, interpret data.Every time a number comes out for any indicator, they are intent on explaining why the number isn't really the number.

When the CPI comes out they exclude energy because oil is up.Durable goods comes out and they exclude autos, because car sales are down.Unemployment numbers come out and they blame the weather.Earnings come out, they're up and that's good, right?Wrong! They're up because the company cut jobs and that's bad.

So, what happens when stimulus runs out?The same thing that happens when you put your forehead on a baseball bat and run around it 50 times.You tip over and so does the economy.

The sad thing is, the smart money, I mean really big money knows this.I mean really big like George Soros big and central bank big, like China big.The U.S. is headed for hyperinflation and that's why gold has been the only real consistent winning investment over the last 10 years.They know more money has to be printed in order to keep the economy turning corners.That's inflation and gold is a beneficiary of that environment.And now you know the same secrets as big money.And by the time everyone knows the secret gold demand will outstrip supply by so much that anyone who already has gold will be called big money too.

So, from now on when you hear the economy is turning a corner, know that somewhere out there gold demand just ticked up along with gold coin prices.And the next time you hear gold is heading higher, the only exclusion will be one more undiversified retirement account.