Jesse's Cafe' Americain

I'll say it again, Jesse's Cafe Americain while not always the easiest site to digest, continues to be among the most informative and usefull sites anywhere on the net.

After a week of nonsense within the halls of Congress, The Whitehouse and especially on your TV, here's Jesse with one timely chart that explains it all.

Buy Gold!!!!!

Both the quote, and the Peter Nicholson cartoon below were found at one of my very favorite sites, Jesse's Cafe' Americain.

If you are tired of being cannon fodder for the banks and a corrupt government, and are sincerely interested in knowing just what the hell is really happening in the world around you.

Not to mention what is being done to you specifically, Jesse has some answers.

It is not often an easy read, and you will be lost the first 7 or 10 times you pull up to this fine blog, as Jesse is a trader and like all traders, his world is monitored and then explained using all manner of charts, acronyms and shorthand phrases that you as a non trader won't readily understand.

What you need to grasp here, is that among those things that Jesse does for a living, is to trade his own account.

That is to say, he places his own money at risk either for or against some specific proposition, commodity, stock ... whatever.

The power here resides in the phrase "his own money".

You can trust me on this one when I tell you that when it's your own money, your thinking gets way sharper.

Way Sharper.

It is my sincere hope that you will spend three minutes or so a day with Jesse in the hope that you may avoid some or all of the ass kicking heading in our general direction.

This thing is far from over.

And please try to keep in mind what has happened over the past ten years.

I am utterly amazed that the US has just passed through one of the greatest financial scandals and frauds in history, and within two or three years is willing to act as though nothing had happened, that it was just some random act of God, and that everything is back to a 'new normal' again. 

Few prosecutions and shallow reforms. 

Remarkable.

Jesse's Cafe Americain is of of my very favorite sites.

To begin with, his biases align perfectly with my own, which of course causes me to think he's really, really smart.

I also thoroughly enjoy the poster art with which he decorates this fine site.

Obviously ..... recommended.

Anyway, the chart below links to a pretty simple discussion titled "Triffin's Dilema Reserve Currencies and Gold" by Walker Todd which begins as follows:

Nearly 50 years ago, Yale University economist Robert Triffin identified the inevitable future deterioration of the dollar in his book, Gold and the Dollar Crisis: The Future of Convertibility (1960). Essentially, Triffin argued, under the Bretton Woods system in which the U.S. dollar was the world’s principal reserve currency (instead of gold, for example), the United States had to incur large trade deficits in order to provide the rest of the world with the liquidity required for functioning of the global trading system. 

Unfortunately, Triffin wrote, U.S. trade deficits eventually would undermine the foreign exchange value of the dollar because foreign accounts would hold an increasing quantity of dollars. Restating Triffin's argument in contemporary terms, as the proportion of dollar claims held abroad versus U.S. gross domestic product (GDP) increases, the foreign exchange value of the dollar must decline if dollar interest rates do not increase at about the same rate as the foreign dollar claims.

The article was originally posted at the American Institute for Economic Research.

Jesse's provided a link at the top of his post to the entire Walker Todd piece.

Got all that?

Jesse has most of it with a cool chart.

AIG has all of it without the chart.

It's all good and not too tough to get your mind around.

Next.

I skulk through Jesse's Cafe' Americain once or twice a week.

Sometimes his analysis is a little deeper than I am tall.

But I keep coming back probably, mostly because I almost always agree with him when I can figure out just what the hell he's talking about.

Among the most time honored chart patterns identified by technical analysts of stock and commodity pricing is the "cup and handle" pattern.

This Gold daily chart offers about as good an example of the "cup and handle" pattern as any you are likely to see.