When you're in the funhouse, you have to continually remind yourself that nothing is real. The hall of mirrors is not the place to run full speed - even if it looks like your path is clear.

Jason's video analyzes the move of U.S. bonds over the past few years and also shows where I think prices are headed in the long and the short term.

While Bernanke didn't explicitly tell investors to buy dividend stocks, the message is clear: investors who want to earn a decent income need to turn to alternative income investments.

Federal Reserve Chairman Ben Bernanke has once again managed to penalize responsible savers.

Income stocks have never looked better than after yesterday’s Fed bombshell.

On a seesaw day for the financial markets, here are three stocks that made big jumps.

The combination of the quick start and afternoon pullback resulted in a doji candle.

Today, I'd like to provide some useful perspective as I take another look at what I had to say about silver exactly one year ago.

It used to be that money in the bank would pay an annual interest rate of three to five percent. However, that's not the case today (and hasn't been for some time now).

It's almost as if the EU and the U.S. Congress are in a contest to see which group can do the most damage to the global economy.

After Congressional Republicans sent Fed Chief Bernanke a letter that politely demanded the Fed cease on desist on all stimulus activities, I half expected Bernanke to drop a liquidity bomb on the market yesterday.

Today I'd like to show you a chart which should explain everything you need to know about inflation, commodities and why prices for just about everything are rising today and are likely to rise still further tomorrow.

To QE or to not QE? That is the question.

Whether 'tis nobler in the markets to suffer

The slings and arrows of outrageous inflation,

Or to take arms against a sea of deficits,

And through austerity, end them.

Recently, I sat in on a meeting with the top researchers, analysts and investment gurus here at Wyatt Investment Research. In one room sat many decades of investment experience, two MBAs in Finance, and each person with a specific skill-set that's unmatched anywhere outside of a multi-billion dollar i-bank or fund.

Today is Fed day. Bernanke will have spoken by the time you read this, so I will not go into any detail about my own expectations. Suffice to say I don't expect the Fed to announce any new stimulus.

The U.S. economy expanded at a 1% rate in the second quarter. This is revised lower from 1.3%. Investors expected this, so it's not a market moving number.

Growth actually improved from the first quarter, and that's one reason I think the Fed stands down today. We should expect growth to pick up a bit more for the end of the year.

The market declined mildly on Friday. Volume was jacked since Friday was option expiration day. But the price movement wasn't terribly exciting, or even all that frightening.

The selling was steady and persistent, but it didn't look convincing. While stocks declined, very few hit new lows. And the lack of new lows indicates that the indices are forming support zones.

The market action over the past few weeks has been extremely volatile. And it seems like support zones are regained and lost in hours. But SPX is stable around 1115. And hopefully that means it is forming a long term base from which to launch higher.

Many well-meaning people believe that the State is out to help them. That, if all else fails, the United States Federal Government will swoop in and give them a personal bailout.

So what's backstopping the American way of life? Is it the Government?

We live under the strongest political system the world has ever seen. It's the world's largest employer. It has legions of bureaucrats counting beans, measuring widgets and regulating the unregulatable.

It has the largest military force, backed by the most advanced and deadly war machines to ever exist.

Today I'd like to take full advantage of the power you give me. You might not realize it, but you are one of many. Tens of thousands of people read the words I write every day.

And while it's easy to forget while I sit here alone behind a keyboard, my 3 month old son cooing in the next room while my wife makes coffee - I have your attention for a few minutes each day - and that attention means something.

There's nothing about having the attention of thousands of people that I take lightly, which is why you should know that I do not accuse Ben Bernanke lightly.

The market recovered in a major way. Volume soared as the bulls emerged and took the indices 4% to 5% higher, literally in an instant.

Most indices hit session lows in the early afternoon, and were poised to close lower for yet another time. But in the last hour, the major U.S. indices burst higher to the tune of 7% to close positive.

The big gains from the indices on Tuesday erased most of the loss that occurred on Monday, which was attributable to the credit rating fiasco. Over the past few sessions I cautioned against going short.

As I explained, the market could head lower, but that downside was minimal. And once buyers stepped in a sharp and quick counter-trend rally would ensue. Yesterday morning I was looking for that rally to commence, which is exactly what happened.

Will stocks go up from here, or will they continue their fall?

That's the question right now, and many mainstream news agencies correctly point out that the answer largely hinges on what the Federal Reserve Chairman Ben Bernanke says later today with regard to monetary policy.

Imagine: the world's largest and most powerful economy ALL tied to the words and deeds of an academic in Washington DC.

How did we get here?

The market stabilized yesterday as a long term support zone was tested. The bulls protected 1250, but the countertrend move higher did not look enthusiastic. This was despite the fact that volume raced higher again on Wednesday and total volume is way above average this week.

The high volume could turn out to be a good thing if the bulls can protect 1250 over the next week or so. But if the bulls lose that support, those additional buyers from earlier in the week will quickly look to cut their losses. And by cutting those losses, there will be another stint of selling that would push the market lower, perhaps by another 10%.

We got a decent reversal off the lows yesterday. But it wasn't enough to get investors bullish for today.

It's clear that the stock market is not happy about the debt deal and the potential for spending cuts. On the other hand, without tax hikes to raise more revenue, spending cuts have to happen, as the current rate of spending is not sustainable. Spending cuts are probably a good idea even if more revenue can be raised.

One reason we are in this mess is because government stimulus intended to boost the economy has been largely ineffective...

I know I've spent the last two days resisting the temptation to discuss the debt ceiling.

But I can resist no longer.

Monday night, President Obama went on TV and said something that made me very angry...

We're all Americans - right? Regardless of how our nation's sovereign debt issue plays out, we still share common values that made this country great, and so shall again allow us to climb from the rubble, and rebuild it again and again.

I'd like to believe this assertion - but unfortunately I've come to realize that this country is divided into two opposed camps, one of which is in direct opposition to the statement above. And these two schools of thought cut across racial, political, religious and socio-economic lines.

Right now the folks in charge in Washington DC overwhelmingly fall into the first camp. While they may sing the national anthem just like you and me, they're only going through the motions. They don't believe it. They don't believe in individual responsibility, liberty, honesty or hard work.

Back in November, I made some predictions about the then upcoming second round of Quantitative Easing, aka QE2.

In short, I predicted that QE2 would disappoint the market. As a consequence, I thought that most asset classes would trend lower as the dollar strengthened.

I hoped that such an action would occur, because I believed, and still believe, that the commodity market still has plenty of upside, but that such a disappointment would create a stellar buying opportunity to load up on my favorite commodities.

I was wrong, of course. Bernanke’s announcement of $600 billion only encouraged the markets higher.

Everything’s more expensive now – which is exactly the type of market movement that’s highly unlikely if not completely impossible under normal circumstances. Normally, if widget X goes up in price, commodity Y and wage Z will fall. Normally, prices don’t all rise at once…

Oil prices jumped yesterday after the latest OPEC meeting in Vienna fell apart with no agreement about production increases.

I don't think it's any coincidence that Saudi Arabia's desire for increased production was not endorsed by Iran or Venezuela. Neither country is exactly America-friendly.

Paper money system default appears at first glance to be an unhappy accident of progressive governments biting off more debt than they can chew.

And while there’s certainly plenty of blame to go around for progressives, conservatives, RINOs, DINOs and moderates alike – if you take notice of who benefits from the devaluation of paper currencies, you arrive at a different conclusion.

You’d think that progressive candidates would spend money in an effort to end poverty. That would get them elected for life by the formerly impoverished.

Similarly, you’d expect the end-goal for hawkish conservative legislators would be world peace. Nothing would be a bigger victory for the world’s greatest military.

But despite decades of entitlement programs at home and billions of dollars spent annually on intermittently bombing and paying our enemies into submission abroad – we still have more poor people in this country than we know what to do with, and our list of enemies only grows longer every year, not shorter.

So if these programs have failed, then who or what is the real beneficiary of inflationary policy-cum-deficit spending?

The market was down again yesterday. And that marked the fifth straight day of declines for the indices. Volume was average as the bears dismantled the bulls.  Moreover, the market was actually up

Any first year economics student will be able to slowly and cogently explain the theory of maximum employment, or even give you a run-down on modern monetary theory.

Certainly, most hobbyist economists will be able to fumble their way through an explanation of Keynesian stimulus theory.

But where their book learning and theories and financial models break apart is during a crisis.

Why?

Because: you can’t model a currency crisis. You can’t say when one will occur. You can’t say how bad it will be once it starts.

A currency crisis occurs outside the realm of even the best mathematically correct theories. Such a crisis results from a massive, widespread loss of faith in a given currency. It doesn’t happen in textbooks or in charts, models or in Paul Krugman’s daily hack-job column.

It happens in the minds of men.

When I saw the headline that “Greek Aid Package to be decided by June” my first thought was “Great! That’s tomorrow…”

 

But of course, first impressions can be deceiving, as can misleading headlines.

 

The deadline for a(nother) Greek bailout is the end of June, which means we get to hear about for another month. I’m sure you’re very bit as excited about that as I am.

The market actually closed lower again yesterday. At this rate, the market may even close down for the week, which is an uncommon event. Volume also picked up yesterday, which given the weak close,

The market actually closed lower again yesterday. Although neither volume nor the percent of decline was substantial, SPX has struggled mightily against 1377 resistance. Additionally, which I also

The market climbed higher at the open yesterday, but indices could not hold that gain by the end of the day. Monday's session was actually more bearish than it looked as small caps and energy stocks

The market activity was rather mundane on Thursday, but the indices did build on the gain from earlier in the week. Most indices now trade at the highs of this month and above the February highs,

That’s why I’m forced, against my will to write about the dollar. Like it or not, the Federal Reserve Note (FRN) is still the world’s reserve currency. So if we don’t understand what’s going on with the FRNs, then we’ll be handicapped in our ability to surmise what’s going on with commodities.

So when the Federal Reserve Chairman speaks, we must listen.

I picked a few choice quotes from Ben Bernanke’s press conference yesterday. The most notable one:

“The United States has a very serious, long term fiscal problem.”

The emphasis on “fiscal” is mine. That admission might seem like a huge one, but for Bernanke, it came off like he was talking about ancient history or some foreign country.

That’s because he’s hanging his hat on the fallacy that fiscal deficits have nothing to do with the Federal Reserve’s monetary plans.

The market blasted higher yesterday and confirmed the break out past 1335 from earlier in the week. Yesterday’s move came after Ben Bernanke once again announced low interest rates for an extended

The market blasted higher yesterday and took out 1335 resistance. Volume levels were also high for most of the session, which is a great change of pace from Monday when volume was incredibly low.

The market action was mild yesterday. The indices were negative for most of the day, but in the final hour most managed to either close with a small gain or back to even. Volume was pitifully low as

Oil is the biggest single cost input into many businesses, goods, commodities and products. We know it, but it bears repeating.

So, if you’re looking for a reason for commodity prices to rise in price, you probably don’t have to look any further than the single biggest input.

Right now, oil prices are scratching around the $110 a barrel range – a price unthinkably high even three and a half years ago. Laughably high. Ridiculous. Who could afford gasoline over $4 a gallon?

The Financial Times recently published an astonishing story that just isn’t getting enough attention. I like to think of the FT as the newspaper The Wall Street Journal would like to be if it wasn’t trying so hard to impress everyone with fancy Weekend sections and glossy magazine forays.

If you want to look distinguished, you might read the WSJ in public. But if you want to be informed, you’ll also read the FT in private.

The market continued its sideways move yesterday and banged-up against 1335 resistance for most of the session. Over the past five sessions the market has been stuck in a small range and trading on

The market continued its sideways move yesterday and banged-up against 1335 resistance for most of the session. Over the past four sessions the market has been stuck in a four point range and trading

If you’re Ben Bernanke, you add Federal Reserve Notes (FRNs) into the mix. And the poorer the country’s engine runs, the more FRN additive you need to mix in.

The logic being, that if a small amount of FRNs help stimulate the engine to run a little bit better, a large amount of FRNs will stimulate the engine to run much better.

And just as with leaded gasoline, the consequences of this additive can be worse than the supposed upsides.

The sad thing is, this method of juicing an economy, I thought, was pretty soundly disproved around the same time that the United States began cutting back on lead additive gasoline.

Didn’t we learn the lessons of fiscal and monetary recklessness in the mid to late 1970s?

For 60 years it worked nearly flawlessly. You work hard, you save any excess earnings, invest prudently, you pay your taxes, and you pay into Social Security. Then when you retire, you have a nice pillow-cushion of savings, investment income and social security checks to fall back on.

But that’s clearly not the case anymore. The social contract is broken – and it wasn't broken by the average retiree. The average retiree held up their end of the bargain. But now, every single penny sitting in savings accounts, 401(k) plans, mutual funds, and being held in what remains of the Social Security coffers is a huge liability for the Federal Government.

Why? For a Federal Government that demands never-ending bureaucratic AND economic growth, money that just sits in a savings account or in a retirement fund could be better spent on war-machines and/or frittered away on stuff from China, Japan or Indonesia.

Right now, we have crystal clear proof on the topic of the wages of reserve currency devaluation. We know, because we’re seeing those wages everyday.

Reserve currency devaluation results in higher commodity prices.

I don’t even think that Ben Bernanke himself would dispute the above statement privately.

Over the course of Bernanke’s tenure, we’ve heard some fancy banker speak. We’ve heard about increasing liquidity and backstopping the financial system and easing quantitatively.

But today, everything that you would expect to happen when a currency is devalued is happening – and more.

Before I get to the “and more” portion, we don’t have to look very far or hard at all to find the wages of currency devaluation.

My favorite counter-indicator just signaled that some of the world’s best resource companies could soon be on sale.

I call it the Geithner-tron or maybe the Timmy-matrix.

And it essentially goes something like this: whenever Tim Geithner says something with a real sense of purpose or resolution, I know that the opposite is true.

The last time my Timbo-whatzit signaled signal went off me was on October 18, 2010. That’s when he dropped this doozy:

“U.S. Treasury Secretary Timothy Geithner vowed on Monday that the United States would not devalue the dollar for export advantage, saying no country could weaken its currency to gain economic health.”

To recap, that was just two weeks before Ben Bernanke unveiled QE2, the Federal Reserve’s $600 billion Treasury purchasing program – a move that can only be described as bearish for the dollar.