By Greg Hunter’s USAWatchdog.com
It looks like the end of power for tyrant Muammar Gaddafi. He’s been in power 40 years, but what will take his place? Remember when stories broke out a few months ago about Libyan rebel al-Qaeda links? It is a fact that was reported in one of many publications such as The Telegraph back in March. The story headline read “Libyan rebel commander admits his fighters have al-Qaeda links.” The story went on to say, “Abdel-Hakim al-Hasidi, the Libyan rebel leader, has said jihadists who fought against allied troops in Iraq are on the front lines of the battle against Muammar Gaddafi’s regime. . . . Earlier this month, al-Qaeda issued a call for supporters to back the Libyan rebellion, which it said would lead to the imposition of “the stage of Islam” in the country.” (Click here to read the complete Telegraph story.) Did NATO’s 20,000 bombing missions help al-Qaeda win? It sure looks like it. The questions are why, and who got more than $6 billion in Libyan gold reserves? I frankly do not have the answers, but what is coming to power next in Libya could make Gaddafi look like a boy scout.
Meanwhile, the rest of the world is breathing a sigh of relief and the markets are reflecting that, at least for a while. Sure, Libya will be pumping oil at full speed again, and that should hold oil prices down. I do not expect oil prices to stay suppressed with all the money printing going on to try to keep the world economy from falling off a cliff. Friday, Bill Gross of PIMCO told Reuters, “Economic growth is slowing down.” Gross went on to say that his company is predicting “0% growth,” or close to it by fourth quarter. Sorry Mr. Gross, according to shadowstats.com, the economy is already hitting negative growth. At the beginning of this month I reported, “The recent year over year 1.6% growth reported by the Bureau of Labor Statistics in the Gross Domestic Product (GDP) is a statistical crock, according to economist John Williams of Shadowstats.com. In his most recent report, Williams said, ‘The SGS Alternate-GDP estimate for second-quarter 2011 is an approximate annual contraction of 2.8% versus the official estimate of a 1.6% gain. Such is more negative than the alternate 2.6% annual contraction (2.2% official gain) in the first-quarter.’ Double-dip here we come.” (Click here to read the original post.)
On the other side of the Atlantic, Europe remains in deep financial trouble. Monty Guild of Guild Investment wrote Friday on JSMineset.com, “Several European countries recently banned short-selling of financial stocks. The U.S. did the same thing in the summer of calamitous 2008. Financial stocks collapsed even further shortly afterward. Expect to see a poorly re-engineered rerun with new actors but the same plot and the same ugly final act. In the original, American taxpayers paid for the profligacy of bankers and politicians. Now European taxpayers will foot the bill.” (Click here to read Mr. Guild’s complete excellent report.) Monty Guild says that the EU will have to spend close to $2 trillion to get control of the sovereign debt problem.
Money printing and instability are the reasons gold is hitting one all-time high after another. The yellow metal hit another one today. I expect to see some sort of correction in the weeks ahead because the price has spiked so dramatically, but the long term trend is up. The dire debt problems the western world faces will not be solved anytime soon. Therefore, I predict the “good news” in Libya will not have a lasting effect on the markets.