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The GoldBugg Report – April 8

April 8, 2008

Gold and silver are the most under-owned asset class at this stage of their bull market. It is surprising to us that for 8 years most investors have missed the sector almost completely. The major funds of the world don’t own these shares, but they are about too.

The global asset market is worth about $140 trillion and if just 1% moved into these assets the result would be earth shattering. This next second phase of the gold/silver bull market will take gold to $3,000 an ounce and silver over $100.00. Then we still have to deal with phase 3 and perhaps a phase 4 the blow-off phases. A replay that will be similar to the Nasdaq in March of 2000.

This is the opportunity of a lifetime. You will never have an opportunity like this again. You are less than 1% of the investing public and your ranks will only grow to 5% during the remainder of this saga. You should consider yourself fortunate to have discovered the future by listening and thinking unconventionally outside of the box. Bob Chapman

James Turk, who expects gold to end 2008 between $1,100 and $1,200 per ounce, says he also sees a spike to as high as $1,500 during the next few months on inflation worries and investor concerns about the health of the global banking system. Reuters

“I’d expect gold to rally back up to the high 900’s or low 1,000’s within the next month or two,” said Zachary Oxman, of Wisdom Financial. Why? “Fundamentally, the market is in the same place we were before the $90 sell-off in gold,” Oxman said, “and with the economy in a recession, as evidenced by the poor data, I’d look for the flight to move back to gold.” Kitco Daily Resource

CIBC World Markets economist and strategist Jeff Rubin said gold’s recent retreat from record high levels above $1,000 an ounce will prove temporary given a continuing weak greenback, inflationary jitters and further anticipated U.S. Federal Reserve rate cuts. Read more at-http://www.reportonbusiness.com/servlet/story/RTGAM.20080402.wrubinoil0402/BNStory/SpecialEvents2/home

There is no avoiding the collapse of the dollar and later the collapse of all currencies versus gold it is inevitable. It is obvious the elitists have chosen first to abandon the dollar. Its save Wall Street and the heck with everything else. The Fed has told us they will create money and credit until they cannot anymore. It can’t get any clearer than that.

They lie about inflation and ignore it hoping it will go away, but of course it won’t and they know that. They are without shame and conscience. Over the next few years someone will turn the light on all paper assets as they fall in value and investors seek alternatives. Bob Chapman

Continuing pullbacks in all the precious metals are almost certainly short term healthy corrections as the supply demand fundamentals remain extremely favourable (particularly to silver and gold) and pullbacks should be used as buying opportunities in order to protect against the coming recessions in the UK and U.S. which are not priced into the market as some more sanguine commentators would have us believe. Gold.ie

We pointed out that after all these corrections there were short sighted analysts who claimed the end of the bull market and the ‘bubble’ had burst. They will be proved wrong again. Commodities follow long term cycles which are normally of some 15 to 20 years. This would see gold peaking in price sometime between 2015 and 2020 which seems likely given the extremely favourable macroeconomic and geopolitical fundamentals and the very tight supply demand situation.

Interestingly, respected currency and gold expert, Jim Sinclair has issued a challenge to the gold bears. “Gold will trade at $1650 before the second week of January 2011. I am offering a $1,000,000 USD wager with a financially qualified party that this will occur. Any party on Bloomberg, CNBC or CNN stating an opposite opinion on the price of gold should be informed of this challenge. Please communicate to any vocal bearish gold expert that I challenge them to put their money on their views.”

With U.S. interest rates set to fall further and pressure the dollar and with the U.S. in the early stages of what could prove to be a serious recession it is unwise to say that the gold ‘bubble’ has burst. Besides it is very difficult to have a ‘bubble’ when an asset class has not even reached its inflation adjusted high from 28 years ago. Gold.ie

A recession has clearly arrived in the U.S. (and will likely soon reach the UK) the question is how deep the recession becomes and whether a recession leads to a 1990s style Japanese deflationary recession, a 1930s style deflationary crash and depression or a 1920s style German hyperinflation or most likely a severe 1970s style stagflation with a combination of sharply falling asset prices and economic growth with competitive currency devaluations and severe inflation in the price of essential goods such as food and energy. Gold.ie

GOLD

5 reasons gold is headed to $1,500. Gold’s much-heralded climb above $1,000 an ounce was pretty short-lived. Gold’s long-term ascent won’t be. With gold now trading closer to $900, this is a great time to load up on more exposure to bullion, which is only taking a breather before heading to $1,500 an ounce and higher. That’s the view of two gold gurus who have been correctly calling bullish advances in the yellow metal for years, most recently predicting the move to $1,000 an ounce.

That was in November, when it seemed like an audacious forecast. With their forecast proved correct if briefly they’re not backing off. “There is lot more upside for gold,” says Thomas Winmill, who manages the Midas Fund, one of the top-performing precious metals funds, with a three-year average annual return of 41.6%. Winmill thinks gold could see $1,500 in 12 to 18 months.

Frank Holmes, who manages the second-best-performing gold fund this year, U.S. Global Investors Gold and Precious Metals Fund, sees bullion going to $1,500 to $2,000 an ounce in the next leg up. He’s not offering a time frame for that target. Like Winmill, Holmes is worth listening to because his precious metals fund is also consistently one of the top performers. His Gold and Precious Metals Fund is up 40.1% a year over the past three years. Their funds do 6 to 7 percentage points a year better than the average for their peers.

Here’s a look at why they think gold will see $1,500 within a year or so. A move in gold to $1,500 suggests silver would sell for $30 an ounce.

Reason No. 1: The dollar’s value is declining. “Gold is attractive as a safe haven when the dollar is declining,” says Holmes. But why will the greenback continue to weaken? Above all, the Federal Reserve has been slashing interest rates dramatically, and it may reduce them even more. This makes investors move money to other countries especially emerging-market economies that have higher interest rates and higher growth rates. As investors move away from U.S. assets, they sell the dollar and push it down. And they buy other currencies, pushing them up against the dollar.

Investors are also losing confidence in the U.S. economy and U.S.-based investments because of the growing federal deficit, the subprime mess and concerns about the Fed’s new role in bailing out investment banks exposed to too much subprime debt.

Reason No. 2: More inflation on the way. To see where inflation is headed, just take a peek upstream in the production process, says Winmill. Prices on intermediate goods or stuff that is midway through production advanced 8.8% during the 12 months through the end of February. Prices on early-stage “crude” goods were up 24%, according to producer price index data released by the Bureau of Labor Statistics (BLS). “I see those price increases coming into the economy,” says Winmill. “That is inflation in the pipeline.” Prices on finished goods gained 6.4% in the same time frame.

Consumers, of course, are already aware that prices for food and gasoline have gone up. But as inflation persists, they’ll hit a pivotal point in their thinking, when they switch to expecting prices to continue climbing. “That will trigger a psychology of investing in gold as a place to hang on in an inflationary environment,” believes Winmill.

Reason No. 3: Investors will seek greater safety. Inflation is already so high that investors are losing money in traditional “safe” investments like U.S. government bonds. Consumer prices are advancing by about 4% a year, according to the BLS, while two-year U.S. Treasury bonds are yielding around 1.6%. So investors who now buy two-year government bonds will be losing 2.4% of their money per year. If the Fed lowers rates even more and inflation advances, the negative returns on government bonds will only widen.

“Historically this has been very good for any kind of hard asset, and particularly gold,” says Winmill. “In a negative interest rate environment you don’t want to hold bonds because you lose purchasing power.” Winmill sees plenty of room for a shift in the flow of investing dollars toward gold, because only a minuscule amount of money in managed accounts is dedicated to investments in commodities.

Meanwhile, people continue to lose lots of money on investments like real estate and debt instruments backed by subprime mortgages which will keep scaring them into buying perceived safe assets like gold. “There is massive deflation in real estate and financial assets, and gold has traditionally done well when there are concerns about deflation,” says Holmes.

Reason No. 4: Oil is getting pricier. Holmes points out that that over the past five years, gold and oil prices have moved in sync 90% of the time. The reason: When oil-producing countries take in more money because oil prices go up, they diversify by investing in gold. Typically, this creates a 10-to-1 relationship between the price of an ounce of gold and a barrel of oil. Thus $1,000 gold makes sense when a barrel of oil is $100. But that ratio can jump to 15 to 1 when geopolitical turmoil drives other investors to the safety of gold, says Holmes.

He thinks oil could trade as high as $125-$130 a barrel this year because of a basic imbalance between demand from emerging economies and short supply due to a lull in exploration investments during the 1990s, when oil prices were much lower. “If oil were to run to $125 a barrel because of a geopolitical event, gold would easily go to $1,500 an ounce,” says Holmes.

Reason No. 5: Gold should follow other commodities. Since so many other metals, including copper and oil, have smashed their inflation-adjusted price records, why shouldn’t gold follow, asks Holmes. If it does break through its inflation-adjusted high,
set in 1980, it would trade north of $2,000 an ounce. Full story at-http://articles.moneycentral.msn.com/Investing/CompanyFocus/5ReasonsGoldIsHeadedTo1500Dollars.aspx?page=all

An example of gold’s historic role as a safe haven asset is seen in the following data. The industry performance of Physical Gold Versus the S&P; 500 during eleven stock market declines of 15% or more in the Post-War period (since 1946).

Some exposure to gold should be included in all diversified portfolios. In the same way that every major Central Bank in the world continues to maintain huge reserves of gold bullion in order to help prevent systemic or monetary crisis, so too should private investors and institutions invest, save and own gold.

A good rule of thumb would be a minimum allocation of around 10% to gold and related gold-investments. The wise old Wall Street saying “Put ten percent of your money in gold and hope it doesn’t work” is particularly applicable in today’s fast changing and increasingly uncertain macroeconomic, financial and geopolitical world. Gold.ie

German Finance Ministry denies wanting to sell gold. Read more at-http://www.reuters.com/article/businessNews/idUSL2911176020080329

European central banks may reduce gold reserve sales as prices for the precious metal remain robust and the U.S. dollar weakens, a senior executive at the world’s biggest gold producer said Tuesday. “There is the potential for central bank gold sales to fall,” Jamie Sokalsky, Barrick Gold Corp. (ABX) chief financial officer, said at an investor conference in London.

Sokalsky noted that central banks did not sell their full allotment of gold in 2007.

“I think that is an indicator of some changed thinking,” he said. European central banks sold around 475 metric tons of gold in the 12 months to Sept. 26, less than the 500 tons allowed under a central bank gold agreement covering 16 European central banks, according to the World Gold Council.

Sokalsky said banks are beginning to “think twice about selling those reserves as easily as they did in the 1990s” when prices were lower. Reduced central bank sales would keep more gold off the market. Sokalsky and Barrick Chairman Peter Munk noted the central bank action as one of several factors that will support gold prices this year. Neither executive would forecast gold prices but Munk said there is a “greater likelihood for gold prices to go up than go down.” Dow Jones

SILVER

With further confirmation of extreme tightness and shortages in the retail silver bullion markets (particularly in smaller format 1 ounce and 10 ounce bars and coins) silver looks set to reach its nominal 1980 high of $50 per ounce at least in the coming months.

Oil has gone from $10 a barrel in 1999 to $110 this month and thus increased 11 fold. Silver was at $5.00 in 2001 and will likely far surpass even oil’s 11 fold increase in the coming years. Silver remains the investment opportunity of a lifetime and will protect investors from falling stock and property markets and the coming sharp slowdown in western economies.

The fundamental reasons for our very bullish outlook on silver is due to continuing and increasing global macroeconomic and geopolitical risks; silver’s historic role as money and a store of value; the declining and very small supply of silver; significant industrial demand and most importantly significant and massively increasing investment demand.

The silver market remains a tiny finite market (all of the above ground refined silver in the world is only worth at today’s prices roughly a miniscule $8.5 billion-500 million ounces X $17) and if even a fraction of the world’s increasingly skittish investment capital flows into the silver market prices will rise to multiples of the current price.

Gold Investments continue to believe that silver should surpass $25 in 2008, its non inflation adjusted high of $48.70 per ounce before 2012 and its inflation adjusted high (as many other commodities including oil already done) of some $130 per ounce in the next 5 to 8 years. These are conservative estimates. Gold.ie

Significance of Silver as an Investment. today most silver investors are not really investors in the traditional sense, they are people with knowledge of history and understanding. They know many important facts that most investors never will learn. Read full story at- http://news.silverseek.com/SilverInvestor/1206634357.php

• You cannot borrow yourself rich – it might work short term but not forever.
• Real savings must be in something of intrinsic value since all paper currencies eventually fail. This is a fact pure and simple, yet people believe that some power beyond them will be able to make it different this time.
• Watering the milk (printing more “money” than goods or services) never works.
• Spending beyond your means leads to bankruptcy whether individual, city, state, or even Government.
• Printing your way out of this problem creates an even bigger problem, creating more credit that cannot be paid back will not solve the problem (study the Weimer Republic and their hyperinflation).
• Eventually people will use their financial “survival” instinct and get rid of dollars by buying anything with lasting value, silver and gold top that list.
• As more and more people catch on and move to protect themselves the paper price of both gold and silver move up to levels that most people at this point would find hard to believe. David Morgan

Silver Versus Gold, with Silver Updates. Read more at-http://www.kitco.com/ind/Lee/printerfriendly/mar282008.html

Howard Ruff on silver. The bull market in the metals has been distorted by futures buying and selling. But it will return to fundamentals, and, sooner or later, the actual buyers of the metal will be the dominant force in continuing to drive the bull market.

I’ve consistently advised you to look at declines like this as opportunities to buy more that we thought we would never see again. So my advice is still the same. Buy, buy, buy physical gold and silver. You won’t see many chances to buy it this cheaply again. Read more at-http://www.kitco.com/ind/Ruff/ruff_mar312008.html

Men Arrested for Stealing Silver from Kodak. Read more at-http://www.13wham.com/news/local/story.aspx?content_id=88141c2a-ce99-480f-a346-139f70c487b0

Another Look at the Bull Market in Commodities. At the end of each month, one of the first charts I turn to is the Commodity Research Bureau Index. Rather than looking at the “Current Index”, which is a relatively new index created a couple of years ago, I use the “Continuing Index” to provide a fairly consistent long-term picture of commodity prices. Here’s the monthly chart of the CRB Continuing Index from 1957 through March 2008.

The above chart is important. There have been dozens of reports the past couple of weeks that the bull market in commodities has ended. Those reports conflict with the message of the above chart. One can only reasonably conclude from any objective view of this chart that the bull market in commodities in still going strong.

The CRB Index did drop -8.7% in March, but that is after gaining 5.7% in January and a further 12.4% in February. What’s more, the CRB Index had risen in eight of the previous ten months ending February 2008. So after a run like that, a correction can be expected. But even after dropping in March, the CRB Index is still up 8.5% for the first three months of this year, which by any measure is a spectacular result.

No one will argue that commodities have come a long way since I first presented the above chart in my alert on November 11, 2003. But it would be incorrect I believe to say that the commodity bull market ends here. There is no evidence to make that case. The demand for commodities remains strong, while the supply of many commodities appears constrained. Also, commodity prices continue to rise because national currencies are losing purchasing power from inflation and other monetary debasement that result from government and central bank mismanagement.

If I am correct in assuming that the bull market in commodities still has a long way to go, then it also follows that the bull market in gold and silver are also far from over. That point of view is consistent with the following charts, both of which I have presented many times and should therefore be very familiar to the readers of these alerts.

Gold is up 9.7% year to date, and 38.2% for the past twelve months. Silver is up 16.7% year to date, and 29.0% for the past twelve months. By any measure, these are spectacular results, and they place gold and silver among the best performing asset classes. Meanwhile, the US Dollar Index has dropped -6.4% year to date and -13.4% over the past year, making it one of the worst performing asset classes.

There has not been any meaningful or fundamental change to take the dollar off its present path, which leads to the fiat currency graveyard. In the absence of that action, one can only assume that over time the dollar is going lower, and gold and silver are going higher. Therefore, continue to accumulate gold and silver, while minimizing your holdings of dollars, and for that matter, any national currency. The dollar is not alone; the purchasing power of all currencies is falling relative to gold and silver. James Turk

PLATINUM-PALLADIUM

-Palladium Market May Have Supply Deficit, Societe Generale Says. Palladium production will fall 65,000 ounces short of demand next year, the first deficit in at least five years, partly because jewelers and automakers will switch from more expensive platinum, Societe Generale SA said. That compares with a surplus of 810,000 ounces this year and 691,000 last year, Societe Generale analysts including London- based Stephen Briggs wrote in a report e-mailed March 28.

Palladium’s price forecast for this year was raised by a third to $465 an ounce, up from $350 forecast in January when it estimated a palladium surplus of 135,000 ounces for 2009. Price forecasts for gold, platinum and silver were also raised. Gold will average $1,025 an ounce this year, up from $800 forecast in January, and silver $19.20 an ounce from $13.75. Platinum will average $2,100 an ounce, up from $1,450 an ounce.

“Platinum demand is expected to come under pressure in the jewelry market, partly as a result of a fresh marketing program for palladium” led by the world’s biggest palladium miner, Russia’s OAO GMK Norilsk Nickel, the Societe Generale analysts wrote. Palladium may also benefit as automakers switch from platinum for use in diesel-fueled cars, the report said. Palladium has climbed 21 percent this year, lagging a 33 percent jump in the price of platinum.

Both metals can be substituted in applications including jewelry and auto catalysts to reduce vehicle emissions. Motor companies will increase palladium use by 4.1 percent next year while lowering their platinum consumption by 3.9 percent, according to the report. Growth in jewelry consumption will be 6.3 percent for platinum and 5 percent for palladium. Bloomberg

OIL-COMMODITIES

-Clinton, Obama take on Big Oil. Read full story at-http://www.cnn.com/2008/POLITICS/04/01/dems.oil/?iref=mpstoryview

• Story Highlights
• Sens. Barack Obama and Hillary Clinton pitch energy ideas to Pennsylvania voters
• Clinton: Bush is “too busy” with the Saudis to care about American truck drivers
• Clinton calls for oil companies to contribute to $50 billion alternative energy fund
• Obama wants a $150 billion investment over 10 years in clean energy

-Don’t let tar sand oil slip away. Read more at-http://www.freep.com/apps/pbcs.dll/article?AID=/20080331/OPINION02/803310307/1070

-Renewed Oil Exploration Coming Up Short. Read more at-http://www.321energy.com/editorials/casey/casey032808.html?print=on

-The Mega Commodity Move: Why it’s Happening. Mary Anne Aden and Pamela Aden-Read more at-http://news.goldseek.com/AdenResearch/1206889200.php

IMF CUTS GLOBAL FORECAST ON WORST CRISIS SINCE 1930S

-The International Monetary Fund cut its forecast for global growth this year and said there’s a 25 percent chance of a world recession, citing the worst financial crisis in the U.S. since the Great Depression. The world economy will expand 3.7 percent in 2008, the slowest pace since 2002, according to a document obtained by Bloomberg News at a meeting of Southeast Asian deputy finance ministers and central bankers in Da Nang, Vietnam. In January the fund projected growth of 4.1 percent.

The reduction is the third by the Washington-based lender since last July, when it predicted the world economy would cope with the U.S. credit squeeze and grow 5.2 percent this year. Central banks will need to conduct policy “as flexibly” as the circumstances warrant, the statement said, adding that the European Central Bank has room to lower borrowing costs.

“The financial shock that originated in the U.S. subprime mortgage market in August 2007 has spread quickly, and in unanticipated ways, to inflict extensive damage on markets and institutions at the core of the financial system,” the statement said. “The global expansion is losing momentum in the face of what has become the largest financial crisis in the United States since the Great Depression.” Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aM9zsAt8cFbs&refer;=home

U.S. RECESSION

-CBS Poll: Views on Economy At All-Time Low. Read more at-http://www.cbsnews.com/stories/2008/04/03/opinion/polls/main3992628.shtml

-Bernanke Says U.S. Economy May Slip Into a Recession. Federal Reserve Chairman Ben S. Bernanke acknowledged for the first time that a U.S. recession is possible as homebuilding weakens, unemployment increases and consumer spending slumps. “It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly,” Bernanke said in testimony to Congress’s Joint Economic Committee today.

He also told lawmakers the Fed’s agreement to provide an emergency loan to Bear Stearns Cos. followed a March 13 warning by the company it “would have to file for Chapter 11 bankruptcy the next day.” Bernanke, making his first extensive public comments since the Fed’s decisions two weeks ago to back the takeover of Bear Stearns and lower interest rates by 0.75 percentage point, is trying to fend off criticism of the rescue while aiming to prevent a deeper economic contraction.

While the Fed expects the economy to return to its long-term growth pace in 2009, “in light of the recent turbulence in financial markets, the uncertainty attending this forecast is quite high and the risks remain to the downside,” he said. “This is a much more pessimistic assessment of the economy than what the Fed had three months ago or six months ago,” said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, who previously worked as a senior economist in Congress. “Certainly, the Fed and the capital markets have been surprised the economy has slowed so quickly.” Read more at-http://www.bloomberg.com/apps/news?
pid=20601087&sid;=amnGP1IORPRY&refer;=home

-Individual bankruptcy filings up 27%. American Bankruptcy Institute says first-quarter filings rose as households creak under heavy debt load. Read more at-

http://money.cnn.com/2008/04/02/news/economy/bankruptcy/index.htm?postversion=2008040212

-Late Payments on Consumer Loans Highest Since 1992, ABA Says. Consumers fell behind on car, credit-card and home-equity loans at the highest level in 15 years during the fourth quarter, another sign the U.S. economy is slowing, according to an American Bankers Association survey. Payments at least 30 days past due increased across all eight categories of loans tracked, the Washington-based group said today in a statement.

Late loans climbed 21 basis points to 2.65 percent of all accounts in a consumer-loan index created by the group. “The rise in consumer credit delinquencies is consistent with a rapidly slowing economy,” ABA chief economist James Chessen said in the statement. “Stress in the housing market still dominates the story, but it’s a broader tale.” Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aLveCTaPPrBI&refer;=home

-U.S. Initial Jobless Claims Rose 38,000 to 407,000. Read more at-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aj_pHDjAoGxs&refer;=home

-The underemployment rate is rising. Don’t be fooled by the relatively low 4.8% unemployment rate. Other measures, such as the number of people only working part-time, are a sign of recession. Read more at-http://money.cnn.com/2008/04/02/news/economy/jobs_outlook/index.htm?postversion=2008040208

U.K. RECESSION

-BOE’s King Might Be Sleepwalking Into Recession. Read more at-http://www.bloomberg.com/apps/news?pid=20601039&sid;=aD237XXZ.Hok&refer;=home

BANKS FACE BIGGEST CRISIS IN 30 YEARS

-Banks Face Biggest Crisis in 30 Years, Report Shows. Read more at-

http://www.bloomberg.com/apps/news?pid=20601103&sid;=atzA1IMO53LU&refer;=us

-Banks write down billions. Deutsche Bank, UBS, Lehman Bros. and Thornburg announce writedowns to boost liquidity amid credit crisis.

http://money.cnn.com/2008/04/01/news/companies/banks_liquidity.ap/index.htm?postversion=2008040111

-Banking industry to lose 200,000 jobs. Financial research firm says cuts will appear over 12 to 18 months as subprime crisis hits other areas of the banking industry. Read more at-

http://money.cnn.com/2008/04/01/news/companies/banking_jobs.ap/index.htm?postversion=2008040107

-US credit crunch hits education as banks abandon student loans. Read more at-http://business.timesonline.co.uk/tol/business/economics/article3649021.ece

BRACE FOR $1 TRILLION WRITEDOWN

-Brace for $1 Trillion Writedown of ‘Yertle the Turtle’ Debt. Be it ever so devalued, $1 trillion is a lot of dough. Read more at-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aHCnscodO1s0 or http://www.usatoday.com/money/books/reviews/2008-03-30-trillion-dollar-meltdown_N.htm?csp=34

WORLD WIDE FINANCIAL CRISIS

-Paulson Backs Regulatory Overhaul, Broader Fed Role. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aJmElwyOABbI&refer;=home

-Analyst slams Paulson plan. Richard Bove says the Treasury’s regulation blueprint offers no help for current economic turmoil and is a ‘great disappointment.’ Read more at-

http://money.cnn.com/2008/04/01/news/economy/bove_paulson.ap/index.htm

-UBS Says Ospel Resigns After Writedowns Lead to Loss. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a5gVkKVdPk2o&refer;=home

-In its advertising, UBS tells clients “it’s you and us,” but on Friday it told investors “you’re on your own.” Read more at-http://www.forbes.com/2008/03/28/ubs-auction-rates-markets-equity-cx_vr_0328markets32_print.html

-Deutsche Bank AG, Germany’s biggest bank, will write down 2.5 billion euros ($3.9 billion) of loans and asset-backed securities and said markets are deteriorating. Read more at-

http://www.bloomberg.com/apps/news?pid=20601087&sid;=aDMJxmhhc3Ug&refer;=home

-Muni Losses May Put Taxpayers on Hook for $7 Billion. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ay5nn_yu4ibs&refer;=home

-Traders in London’s financial district have seen their salaries and bonus payments drop as much as 40 percent amid a worldwide tightening of credit, according to recruitment company Napier Scott Executive Search Ltd. Read full story at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aCxqPE5zJxIk&refer;=home

U.S. DOLLAR

-Dollar Posts Biggest Quarterly Loss Against Euro Since 2004. Read more at-http://www.bloomberg.com/apps/news?pid=20601083&sid;=aLiDIL6DRSiI&refer;=currency

-Will Uncle Sam let the dollar collapse? Read more at-http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid;=A1YourView&xml;=/money/2008/03/30/ccliam130.xml

-Weak dollar not at odds with policy ex-US official. Read more at-http://in.reuters.com/article/asiaCompanyAndMarkets/idINHKG3018120080331

-The U.S. Dollar & Gravity’s Pull. Read more at-http://www.resourceinvestor.com/pebble.asp?relid=41633

-The Dollar and the Credit Crunch. Read more at-http://online.wsj.com/article/SB120692677175575901.html?mod=rss_opinion_main

-Chinese exporters shun flagging dollar. Read more at-

http://www.ft.com/cms/s/0/aac6859e-fc35-11dc-9229-000077b07658.html?nclick_check=1

-S Korea pension fund shuns US debt. Read full story at-http://www.ft.com/cms/s/0/6dcf5f86-fb67-11dc-8c3e-000077b07658.html

-Arabs’ Dollar Doldrums Fail to Shake Central Bankers. Read more at-

http://www.bloomberg.com/apps/news?pid=20601109&sid;=azFsZgo_uH1I&refer;=home

INTEREST RATES-INFLATION

-Weber, Stark Say ECB Will Raise Rates If Necessary. Read more at-http://www.bloomberg.com/apps/news?pid=20601085&sid;=aRkF5svGgTf0&refer;=europe

-Europe Inflation Accelerates to 3.5%, Sentiment Drops. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aR2xZcBWBfdA&refer;=worldwide

STOCK MARKETS

-Bear market rallies only delay day of reckoning. Read more at-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/31/ccview131.xml

-”Don’t Be Cruel” Stocks Show Short Covering Deceives. Read more at-http://www.bloomberg.com/apps/news?pid=20601213&sid;=arjgRb0Whxcw&refer;=home

-China Stocks Have Worst Quarterly Drop; Vanke, Baoshan Decline. China stocks fell, with the benchmark index completing the biggest quarterly decline on record, as speculation waned that the government will step in to bolster the nation’s shares. Read more at-http://www.bloomberg.com/apps/news?pid=20601089&sid;=axdVFdD5FaZ4&refer;=china

-Australia Stocks Have Worst Quarter in 20 Years as Rates Rise. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=agATsOWwDpOU&refer;=home

-Soros Sees Additional Market Declines After Temporary Reprieve. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ajkPSW_domB4&refer;=home

-Australian Regulator Investigates Collapse of Opes. Read more at-

http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aMu9zMJw.JNQ or http://www.theaustralian.news.com.au/story/0,25197,23457511-601,00.html

MORE BEAR STEARNS FALLOUT

-Fed Aided Bear Stearns as Firm Faced Chapter 11, Bernanke Says. Read more at-

http://www.bloomberg.com/apps/news?pid=20601087&sid;=a7coicThgaEE&refer;=home

-Bear May Have Survived If Fed Acted Sooner, CEO Says. Bear Stearns Cos. Chief Executive Officer Alan Schwartz said the fifth-largest U.S. securities firm may have survived if the Federal Reserve acted sooner to lend money directly to investment banks. “It is highly, highly unlikely in my personal opinion that we would be in the situation we find ourselves in today” had the Fed provided financing earlier, Schwartz told members of the Senate Banking Committee today.

The Fed agreed to provide emergency funding to New York- based Bear Stearns on March 14 after a run on the company put it on the verge of bankruptcy. JPMorgan Chase & Co. has agreed to buy Bear Stearns for $10 a share, a fraction of its value earlier last month. Following Bear Stearns’s near collapse, The Fed opened up borrowing to securities firms for the first time since the Great Depression. The move, aimed at preventing a meltdown in financial markets, should be made permanent, Schwartz said. Bloomberg

REAL ESTATE

-Manhattan Condo, Co-op Sales Decline Most in 18 Years. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aBVi.IJW8Aq4&refer;=home or

http://www.bloomberg.com/apps/news?pid=20601109&sid;=ablSPpNgcHsY&refer;=home

-Condo Meltdown-Developer halts project, faces millions in liens. Read more at-http://www.dailybusinessreview.com/news.html?news_id=47884

-Credit crunch: British house values fall £7,000 since October. Read more at-http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article3642753.ece

-The US housing slump has arrived at the Hamptons, summer playground of the Manhattan elite. Read more at-http://us.ft.com/ftgateway/superpage.ft?news_id=fto033120082201006468

-Vacation Home Sales and Prices Tumble as Buyers Wait. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aWbAifuHe.DM&refer;=home

-Some homes worth less than their copper pipes. Read more at-http://www.reuters.com/article/newsOne/idUSN2527885420080401?sp=true

-Too Many Dogs and Not Enough Bones. Read more at-http://thehousingbubbleblog.com/?p=4340

-The Unwinding Of This Housing Boom. Read more at-http://thehousingbubbleblog.com/?p=4336

-It’s A Market-Driven Issue In California. Read more at-http://thehousingbubbleblog.com/?p=4342

FORECLOSURES-MORTGAGES

-Paulson Says Treasury `Flexible’ on Housing Measures. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aO9bYYGJu3Ww&refer;=home

-Angry Homeowners Wreak Havoc on Foreclosure Properties. Watch video here-

http://blogs.wsj.com/developments/2008/03/28/angry-homeowners-wreak-havoc-on-foreclosure-properties/?mod=WSJBlog

-59% of Los Angles Houses for Sale Are Foreclosures. Very few are in the newspapers because realtors are afraid of effect on market. Read more at-

http://patrick.net/housing/contrib/foreclosures_percent.html

-West Palm Beach to open foreclosure help center. The South Florida city is planning to start a mortgage assistance office aimed at helping desperate homeowners. Read more at-

http://money.cnn.com/2008/03/31/real_estate/West_Palm.ap/index.htm

-As owners default, lenders move in. Bank ownership of foreclosed homes doubles, and it’s changing the face of U.S. neighborhoods. Read more at-

http://www.chicagotribune.com/business/chi-foreclosure_monmar31,0,1221355.story

-Careers vanish after subprime ‘free fall’. Kent and Mysti Cope were well-paid executives at subprime lenders who never thought the industry could disappear overnight. Now they’re just trying to get by. Read more at-http://money.cnn.com/2008/03/31/news/economy/copes/index.htm

-Chase mortgage memo pushes ‘Cheats & Tricks’. The bank says it never backed the strategies, which detail how to get an iffy loan approved. Read more at-

http://www.oregonlive.com/printer/printer.ssf?/base/business/120658650589950.xml&coll;=7&thispage;=1

-New mortgage applications fall 29%. Mortgage Bankers Association’s survey reveals that application volume declined in latest week as rates for fixed-rate loans increased. Read more at-http://money.cnn.com/2008/04/02/real_estate/mortgage_applications.ap/index.htm?postversion=2008040207

-Foreclosure Machine Thrives on Woes. Read more at-http://www.nytimes.com/2008/03/30/business/30mills.html?_r=2&ei;=5089&en;=29c59115ede63768&ex;=1364616000&oref;=slogin&partner;=rssyahoo&emc;=rss&pagewanted;=print

GEOPOLITICAL

-Prime Minister Gordon Brown shelved a plan to withdraw more British soldiers from Iraq after violence flared in Basra, where the U.K. has responsibility for security. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ay7iO5nD2ZLA&refer;=home

-The U.S. moved closer to building a missile-defense system in eastern Europe, concluding an accord to base a radar station in the Czech Republic and winning NATO’s endorsement for the project. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aXDWYo_K.kLI&refer;=home

-Iran Incites Cold War With U.S. in Lebanon Stalemate. Read more at-http://www.bloomberg.com/apps/news?p
id=20601087&sid;=a6MDE1AyS3.U&refer;=home

IMF still needs OK from Congress; says it won’t add to official sales – http://www.gata.org/node/6210

© 2012, Worldwide Precious Metals Canada Ltd.
www.wwpmc.com

The GoldBugg Report – April 8
Posted by Worldwide Precious Metals on Tuesday, April 8, 2008

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