Another Tough day for gold and silver…. Silver broke very key support levels, the hopes of a summer rally are getting smaller and smaller, at least for the time being. The only markets that ended up in the green today were the hooved animals. The Stock Market Rip Rawred into the close for no apparent reason. In my opionon, it makes for another good chance to get short selected names that are headed much lower. Crude keeps falling and the government keeps pissing me off. I think healthcare and student loans are the next big bubbles. 

Initial jobless claims came in 1K higher than analysts’ consensus at 386K, 6K lower than last week. The U.S. quarterly GDP came in on target and the same as the previous quarter at 1.9%.

S&P 500 futures fell 13 points to 1312.50, NASDAQ futures fell 38 points to 2519.75 and Dow Jones Industrial Average futures fell 129 points to 12424.00.

Gold futures fell $24.10 to 1554.30 and WTI crude futures fell $1.66 to $78.55.

Corn continued to rallyfor the 5th day in a row after the driest season in 24 years. So far corn is up 17% this month. This morning December corn futures were trading at $6.420.

Family Dollar Stores, Inc.’s (FDO) earnings jumped 12% after an increase in sales. Although they posted great earnings, the guidance for the rest of the year caused their shares to trade 3.37% lower at $66.80.

AOL gained 53 cents (1.94%) after agreeing buy back $400 million of its shares between $27 and $30. AOL shares have a 52-week trading range of $10.06 to $28.36.

Deutsche Bank (DB) fell 5.49% after being the target of an investigation on interest rate-rigging.

David Cornes holds a degree in economics from the University of Montana.

Yesterday, the global financial services firm that provides retail, corporate and investment banking services was fined $451.4 million after disclosing fake LIBOR and Euro interbank rates. It was reported that Barclays provided false rates in order to lessen fears about that bank’s health. As a consequence, Barclays will also cut bonuses of three lieutenants and the CEO.

Barclays is the United Kingdom’s second largest bank by assets had total cash of $1.55 trillion, a book value per share of $28.39, debt to equity ratio of 16.01 and the long term debt to equity ratio of 0.45.

For the options traders out there, BCS has a weekly volatility of 2.98% and a monthly volatility of 3.06%. The 14 day average true range was 0.44 with a beta of 2.65.

David Cornes holds a degree in economics from the University of Montana.

1.Raise payroll taxes
2. Increase the retirement age
3. Cut benefits

The most likely scenario is a combination of all three. Then what? That is what brings me to a fourth option that is very worrisome to me:

Confiscation.

This sounds like a crazy idea which is what I thought when I first heard it talked about but the more I think about it the more I begin to think that it could happen someday.

Just think about what happens to our deficits when interest rates rise to 6% – 8% which is where they were just a few years ago. Remember, the government is funding a majority of our trillions in debt with short term paper. This is highly susceptible to a crisis should interest rates move sharply creating a huge increase in borrowing costs. The massive amounts of debt the government has taken on will only escalate. As the years pass by, the Social Security numbers get grim.

Imagine a scenario 10-15 years down the road where we are in a financial crisis due to a heavy debt load and out of control deficits. People are angry that options 1-3 above have already been taken and there is talk of cutting benefits even further. It’s not hard to imagine a socialistic government in place that feels that it would be best to help its citizens during their retirement years by better managing their IRA’s and 401k’s by seizing those assets to help shore up Social Security for the good of mankind.

While those who have worked and saved so hard for all those years would regard this as theft, a large majority of people who don’t save for retirement, who wouldn’t be losing anything, and would think this is a good idea in order to guarantee their retirement and financial security. I’ve seen statistics that something like 70% of Americans do not even have a $1000 emergency fund. If you have no job, no savings, and little prospects, it would be very easy to vote for a support a system that would confiscate 401k’s for the betterment of society.

There are people in Congress who want to “encourage” plans to convert people’s 401k’s to annuity streams when they retire, it makes me wonder if this is just the first step to get people used to the idea.

While I don’t think there is a high likelihood this will happen anytime soon, it does make you think about what could happen and it doesn’t really seem that far-fetched.