Rasmussen Reports reports that its Discover(R) Small Business Watch survey for July has been completed and is generally worse than June:
Small business confidence fell for the second month in July as a higher percentage of small business owners rated the current economy as poor and see it only getting worse, according to the Discover Small Business Watch. The index dropped to 83 in July from 86.1 in June. It has been below 83 only once since the beginning of 2010.. .
What I found most striking in the report was:
Record Number of Small Business Owners Taking Home Less Pay
•73 percent of small business owners surveyed also report current economic conditions have caused them to take home less money in July, up from 69 percent in July 2009 and 55 percent in February 2008, when the Watch first posed this question.
In order to finance foreign war(s), expand social spending, and fight for re-election, is the government tempted to print money, or shall I call it "money"?
In that vein, the decade-long trend toward historical norms of the Dow or S&P 500/gold ratio has had a significant rebalancing with the simultaneous moves in opposite directions of stocks vs. gold. Of course there are no guarantees that past is prologue, but when a major asset class goes into new high territory after a prolonged bear market/consolidation, there is strong support (buying interest) if the price falls toward to to the prior trading range, but there is generally limited selling interest if the price moves to the all-time high.
Both gold and Treasuries continue in their long-term bull market channels. Of the two, the Treasury bull is much older and with 2-year Treasuries and below at record low yields despite positive price inflation data (see the Rasmussen/Discover survey linked to above, for example), I believe that the Treasury market is more likely closer to the end of its bull than gold.
Meanwhile, economic activity will bounce around, but such factors as foreign military action, increased government involvement in the economy, and demographics continue to act as depressants to the level of productive activity.
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