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The GoldBugg Report - Gold up over $15

January 22, 2008

Gold up over $15, Silver up 40 cents as US Fed places emergency 75 basis point Rate cut. The Dow Jones opens down by more than 400 points.

Headlines and Quotes

• Recession fears slam stocks. Wall Street skids on fears of a slowdown in the U.S. and abroad. Emergency interest-rate cut fails to soothe wary investors. January 22 2008, 9:55 AM
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• Weak retail sales fuel recession fears
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• "Gold will again in the near future cross $887.50 and $900 on its way to $1050 and then $1650." - Jim Sinclair
• Gold prices could hit 1,000 dollars an ounce in 2008 after this week's record-breaking run that was fuelled by fierce investment demand, precious metals consultancy GFMS said Thursday. "Investor appetite for gold at the moment seems undimmed and this should push gold higher over the year," GFMS chairman Philip Klapwijk said as the independent research group published its annual Gold Survey. "Predicting the top is never easy but we always thought the 900-dollar barrier could easily fall quite soon and then we have to start viewing 1,000 dollars as a clear possibility for later this year."
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• "I think that if the Financial Times is declaring that gold should once again take its rightful place as the currency it always has been, the price of gold is headed much higher" - Bill Fleckenstein
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• Gold may smash the $1,000 barrier as soon as this summer should the dollar continue its slide and the woes of the US economy deepen - Goldman Sachs
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• Gold prices will test a record $1,000 an ounce this year, boosted by growing investment interest, safe-haven demand and strong market fundamentals, a Citigroup metals analyst said. "We believe gold has entered a new investment-driven phase, in a much more hospitable macro setting."
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• Gold & Silver Market Update - Clive Maund
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• Ron Paul: Gold Market Rigged for Decades. Presidential hopeful Ron Paul talks monetary policy and accuses central banks of manipulating the price of bullion for the past 10 to 20 years.
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• "How about silver, often called 'the poor man's gold'? Silver used to be a monetary metal, and maybe some day it will be again. I've recommended silver before, and now I'm going to recommend silver again. Back in 1980, gold sold for 850 and silver sold for 50. Then, one ounce of gold would buy 17 ounces of silver. Today with gold near 900, one ounce of gold will buy a whopping 55 ounces of silver. It seems to me that silver, in terms of gold, is 'too cheap'." I think silver is cheap and a good buy here in this area. My position on the metal can be expressed in three words, I like silver." Richard Russell
• Wall Street's five biggest firms are paying a record $39 billion in bonuses, even though three of them suffered the worst quarterly losses in their history Christine Harper.
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• Iran sees no need to boost oil output. Iran believes there is enough oil in global markets and sees no need to increase production, the oil minister of OPEC's second-largest producer was quoted as saying on Wednesday. "Currently oil prices in global markets have dropped by $5 to $6 and our belief is that there is enough oil in global markets and there is no need to increase production," Oil Minister Gholamhossein Nozari was quoted as saying on the state broadcaster's Web site.
  The White House earlier said U.S. President George W. Bush, wrapping up a Middle East trip on Wednesday, hopes his talks in Saudi Arabia will help encourage OPEC to raise production and dampen oil prices. Iran, embroiled in a dispute over its nuclear ambitions with the West, has frequently said oil markets were not short of crude supply. Traders have cited the nuclear row as a factor supporting oil price rises and helping them to record levels. Oil hit a lifetime high over $100 a barrel this year.
  Source: Reuters
• Citigroup Inc. posted the biggest loss in the U.S. bank's 196-year history as surging defaults on home loans forced it to write down the value of subprime-mortgage investments by $18 billion. The fourth-quarter net loss of $9.83 billion, or $1.99 a share, compared with a profit of $5.1 billion, or $1.03, a year earlier, the largest U.S. bank said today in a statement.
  New York-based Citigroup also reduced its dividend by 41 percent, cut 4,200 jobs and obtained $14.5 billion from outside investors to shore up depleted capital.
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• Citigroup sees $15 billion writedown at Merrill. Citigroup expects a $15 billion fourth-quarter write-down at Merrill Lynch & Co Inc (MER.N) and said CDO/subprime exposures will decline by 50 percent to 70 percent in aggregate. Though the write-downs will be large, it will now be behind the firm and enable the management to focus on leveraging the franchise's inherent earnings power, Citi analyst Prashant Bhatia said in a note to clients.
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• Citigroup, Merrill Lynch Get $21 Billion From Outside Investors.
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• Ambac Financial Group Inc. ousted its chief executive officer, slashed the dividend 67 percent and will raise more than $1 billion to preserve its AAA credit rating after announcing the biggest-ever writedowns by a bond insurer.
  Ambac, the second-largest insurer of municipal and structured finance debt, fell the most ever on the New York Stock Exchange, extending a 76 percent decline from the past 12 months. Ambac will report a loss after reducing the value of securities it guarantees by $3.5 billion, according to a statement today.
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• American Express Co., the third- largest U.S. credit-card network, will take a fourth-quarter charge of $275 million to cover rising customer defaults and forecast earnings this quarter below analysts' estimates.
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• Inflation Rate Is Worst in 17 Years. Higher Costs for Energy and Food Push Inflation Rate Up by Largest Amount in 17 Years. Higher costs for energy and food last year pushed inflation up by the largest amount in 17 years, even though prices generally remained tame outside of those two areas. Meanwhile, industrial output was flat in December, more evidence of a significant slowdown in the economy.
  Consumer prices rose by 4.1 percent for all of 2007, up sharply from a 2.5 percent increase in 2006, the Labor Department said Wednesday. Consumers felt the pain when they filled up their gas tanks or shopped for groceries. Prices for both energy and food shot up by the largest amount since 1990.
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• Federal Reserve chief Ben Bernanke has said that the outlook for the US economy in 2008 has worsened. His comments in Washington come after leading investment banks warned that the US was heading for a recession. However, Mr. Bernanke said the central bank was willing to act in a decisive and timely manner to ensure the economy remained on an even keel. Analysts said this was a strong sign that the Fed would cut interest rates again when it meets later this month.
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• U.S. Treasury Secretary Henry Paulson said the U.S. economy slowed ``rather materially'' at the end of last year, and any stimulus package should be put into effect swiftly. ``We are looking at things that could be done quickly,'' Paulson said yesterday. ``Time is of the essence.''
  Paulson's comments, in an interview on Bloomberg Television's ``Political Capital with Al Hunt,'' were the clearest signs yet that the administration is likely to propose a package of tax cuts and other fiscal measures to spur growth in President George W. Bush's State of the Union address on Jan. 28.
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• U.S. Housing Starts Drop to Lowest Level Since 1991.
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• Cleveland is suing 21 of the nation's largest banks and financial institutions, accusing them of knowingly plunging the city into a financial crisis by flooding the local housing market with subprime mortgage loans to people who could never repay. The city is seeking "at least" hundreds of millions of dollars in damages, Cleveland's law director, Robert J. Triozzi, said Friday.
  The list of defendants includes some of the most prominent firms on Wall Street, like Citigroup, Bank of America, Wells Fargo, Merrill Lynch and Countrywide Financial.
  Mayor Frank G. Jackson said in an interview on Friday that the companies would be "held accountable for what they've done." "We're going after them to get the resources we need to rebuild our city," Mr. Jackson said.
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With the US Dollar devaluing, continued trouble in the Middle East, the sub-prime meltdown and the volatile stock market, investors are flooding into hard assets. There has never been a better time to own Precious Metals, for profit and protection.

To add Precious Metals to your portfolio, call 1-866-623-2002.

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The GoldBugg Report - Gold up over $15
Posted by Worldwide Precious Metals on Tuesday, January 22, 2008