Let's take a quick look at some of the recent headlines. 

BP is working to contain the damage from Deepwater Horizon oil spill.  Multiple issues involving federal government failures to regulate and implement. 

The Federal government refuses to enforce our immigration laws and eliminate illegal immigration on the Mexican border.  Arizona has to pass its own law to protect its citizens.

USG's financial stimulus program not materially impacting the US economy.  More and more government debt needed for marginal GDP growth.  This is a continuing long term trend and no surprise to knowledgeable people.  Double dip recession or long economic recovery ahead.

$13T of Federal Government debt and no way to pay it back.  Tens of trillions of dollars in US government obligations for unfunded entitlement programs and other obligations.  

Artificial values in housing market were initially created by Fannie Mae and Freddie Mac.  Now FHA is creating the next artificial housing market.   Housing has become another entitlement program that the government has screwed up from a policy perspective.  The USG refuses to let the housing market settle out from a value and financing perspective.  This will cause more problems then is solves in the end. 

Now Congress and Obama administration are trying to determine how to tax us more to pay for all of their programs.  They justify this with references to post WWII tax rates of decades ago.  We are living in a different world.

These are just a few of the examples of how Big Government Is Not the Answer.  The Tea Party people are getting the picture.   Will the US government cut entitlements significantly and cut the defense budget?  Or will they try to inflate the problem away by printing fiat money? 

I bet the Feds run the monetary printing press at full speed before the citizens call a halt to the madness of our leaders.  Defend yourself and your family.  See my article on The Case For Gold.

Have a great Memorial Day.

TPM

I just watched the 60 Minutes segment on the Deepwater Horizon disaster in the Gulf of Mexico.  60 Minutes interviewed a Transocean employee who provided critical information regarding the sequence of events that caused the disaster.  It is very clear that both BP and Transocean are guilty of violating established operational procedures in their quest to maximize the speed of their drilling operation.  BP and Transocean are also guilty of ignoring (at best) or willfully violating (at worst) their own safety procedures.  The Deepwater Horizon tragedy is a direct result of line management decisions on the rig.

Under the circumstances that appear to exist in this accident it is imperative that BP and Transocean be held completely accountable for all of the damages caused by the accident because both companies were operating their business in direct violation of proper procedures.  From my perspective, it doesn't matter how much the clean up costs or how many direct or in-direct damage claims must be paid.  These two companies must pay for all damages related to this event even if both companies go bankrupt in the process.  Their actions were intolerable and they must be held fully accountable for the damage created by their employees.

It is not clear if Halliburton did anything wrong during the events leading up to the accident so I have no comment regarding Halliburton.

BP has a horrible safety record.  It is obvious that the executive management team at BP doesn't care about safety as a top priority within the company.  I suggest the government take any and all actions that are possible against BP and its senior executives in an effort to force fundamental changes in management thinking at the company.  BP's business conduct is not acceptable.

TPM

This evening gold traded at an all time high of $1,232.50 an ounce during after hours trading. 

The US government led by the Obama administration and his Congressional Democratic collegues continue to spend more and more money and rack up huge new debts with no substantive fiscal discipline in sight.  Helicopter Ben Bernanke and his Federal Reserve buddies continue to crank out all the Federal Reserve notes they can in their quest to re-inflate the US economy.

The European Central Bank in cooperation with the International Monetary Fund, including the Federal Reserve of the US, is now printing Euros as fast as they can to keep Greece and potentially other nations from bankruptcy and destroying the Euro as a useful currency.  The US dollar is increasing in value relative to the Euro because the dollar is bad and the Euro is currently worse.  Gold has made a huge move higher in Euro terms.

The new highs in gold have gotten the attention of the talking heads on financial TV.  I have just watched a spirited discussion on gold on CNBC's Fast Money program.  Some people fully appreciate what is happening on a long term basis in the world financial markets and some don't.   I have just watched another promo for a discussion of gold on the Kudlow Report on CNBC, which will be coming up later this evening.  The financial world is finally beginning to wake up concerning the ramifications of all the money printing that is occurring.  Investors are looking to protect their assets and gold and other precious metals are one of the few places they can invest for long term asset protection.

Check out my article "The Case For Gold".  The gold move higher is far from over but it is likely to be very volatile as there are many players in the world financial markets that don't want gold to take its true place as the ultimate reserve currency and store of value.  Politicians and central bankers don't like fiscal discipline because it limits their power.

TPM