Newsroom

The GoldBugg Report - August 26, 2008

August 26, 2008

-"Geopolitical risk is higher now than at any time since the end of the Cold War and looks set to remain heightened in the coming months. This will be a contributory factor in markedly higher gold prices in the coming months and years." Mark O'Byrne

-It is worth remembering that gold's price of 12 months ago was $650 and we are still up 28% since the start of the credit crisis ($650 to $834). A mean feat considering the extent of declines in other markets. Mark O'Byrne

-"Gold and silver are nearing the end of the savage correction they have endured. With silver the 'long shadow' of gold falling further on the decline we would expect it to outperform gold going forward, particularly as we see investment demand in that metal appearing ahead of that demand in gold." Julian Phillips

-Gold May Rally Through 2010 as Demand Gains, Citigroup Says. Gold may rebound from a slump and rally through 2010 as fabrication demand rises and on expectation the dollar will resume its decline against the euro, Citigroup Inc. said.

GOLD

-U.S. Suspends Sales of American Eagle Gold Coins, Treasury Says. The U.S. Mint suspended sales of its ``American Eagle'' gold coins after soaring commodity prices led collectors and investors to deplete supplies, a Treasury official said. Treasury spokeswoman Jennifer Zuccarelli confirmed the government notified dealers of the suspension last week. It is the first time in two decades that the Mint halted sales of the coins, which are made of 22-carat gold from domestic mines. The coins also contain small amounts of alloy for hardening.

Gold prices soared over the past year, with the most active gold futures reaching a record $1,033.90 an ounce on March 17 as the price of crude oil increased and the dollar weakened against the euro and other currencies. Commodity prices have since retreated. American Eagle coins, introduced in 1986, are also available in silver and platinum. The suspension was reported in today's editions of The Wall Street Journal. Bloomberg

-U.S. mint suspends gold coin sales; futures price is a fiction. Read more here-http://www.gata.org/node/6489

-American Eagle gold coins sold out after spree. Read more here-http://www.gata.org/node/6505

-The Eagle Has Been Grounded. Mint Halts Gold-Coin Sales After Supply Depleted Amid Price Drop. Read more here-http://www.gata.org/node/6504

-Another gold conspiracy unveiled! A dig at GATA from a U.S. gold coin dealer over assumptions it has made, and publicized, regarding the U.S. Mint's recent suspension of 1 ounce Gold Eagle sales. All credit to GATA though in that it has linked to this article on its own website too. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=60275&sn=Detail

-Why Precious Metals Retreated. Silver and gold lease rates were in negative territory the last few weeks as the central banks are selling cheap silver and gold to stabilize the financial markets, notes Jurg Kiener, CEO of Swiss Asia Capital. He tells CNBC's Martin Soong & Sri Jegarajah more. Read more here-

http://www.cnbc.com/id/15840232?video=826763189&play=1&__source=RSS*tag*&par=RSS

-Franklin Sanders: Paper prices no longer rule the precious metals markets. Twenty-eight years of brokering silver and gold have not prepared me for what I met this morning.

One of my wholesalers said he was not selling anything, only buying, until further notice. Another refused to give any prices until he adjusted his spreads.

Another was spreading one-ounce gold coins, normally at $7-$8, at $25. Another said he was making no sales for immediate delivery or deferred payment, only sales for 30 days' delivery paid at once. Read more here-http://www.gata.org/node/6492

-The gold rush is still on. Yes, the precious metal has pulled back with other commodities. But the underlying trends still suggest it will climb to $1,000 and beyond. Read more here-

http://articles.moneycentral.msn.com/Investing/CompanyFocus/TheGoldRushIsStillOn.aspx?page=all

-Gold "Bubble" Burst? Much of the financial media is once again heralding the bursting of the "gold bubble" or "precious metals bubble" and many seem to think that this is the end of the bull markets in gold and silver. It is interesting that it is the same commentators who never predicted a bull market in gold, barely acknowledged a bull market was in existence and yet they are again gleefully banging the "precious metals bubble is burst" drum.

The extent of the bearishness amongst many commentators and institutions is a classic contrarian indicator and is exactly what happens in bull markets which climb a 'wall of worry'. Bull markets do not normally end with the majority calling the top correctly rather they end when the majority (including the media) have been conditioned to expect ever higher prices and have given up attempting to call a top.

Only when the prevailing mass psychology is all bullish do bull markets end. As by then there are few buyers left to prop up prices and there is often a final exhaustion rally prior to the end of a bull market. We are a long way from that now with much of the media continuing to completely ignore gold most of the time and only some specialist financial media covering it on a regular basis.

There is blood in the street in the futures market and worry and fear is at levels not seen so far in this bull market and this should see prices bottoming in the coming days. Also it is worth recalling the huge sell off in 1974. Gold had surged from its fixed Gold Standard price of $35 per ounce to over $200 in 1974 prior to a brutal sell off that saw prices fall in half to nearly $100.

At the time, many called a market top and they were proved very wrong when prices subsequently rose 8 fold in the next 6 years. The fact that an asset class can be considered in a bubble when it has only recently surpassed its all time record nominal high of 28 years ago is astonishing and will be seen as so in the coming years when gold likely reaches its inflation adjusted high of some $2,400 per ounce. Don't believe the gold and silver "bubble" burst hype! Mark O'Byrne

-Unprecedented Investment Demand Leads to Supply Issues in Physical Bullion Market. The massive disconnect between the physical market and the paper futures market continues. There is now an unprecedented situation where large wholesalers and retailers of physical bullion in the US and internationally are having difficulty keeping up with investment demand.

Some are completely out of stock of some of the most popular bullion products such as gold Krugerrands (1 ozt) and gold American Eagles (1 ozt) and silver American Eagles (1 ozt) and silver bars (1 ozt, 10 ozt and 100 ozt).

There are similar issues internationally and The Times of India reports: "There is a shortage of the yellow metal in the bullion banks and traders." There are now also significant delays in delivering bullion (usual deliveries of 5 to 10 days are now taking some dealers 4 to 8 weeks to make). Gold Investments is a bullion broker and due to relationships with many of the major wholesalers in the US and EU has not been affected by these supply and delivery issues and can currently offer all bullion products in quantity for delivery internationally within 10 working days.

Large government mints and refiners are having difficulty meeting the demand and some are rationing supply to large dealers. Large wholesalers, retailers and institutions such as the Perth Mint are experiencing huge demand and even as spot prices have been falling sharply, there are little or no sellers and buyers are continuing to vastly outnumber sellers. Another indication of the sharp tightness in the bullion market is seen in the fact that premiums are rising very significantly on nearly all bullion coins and bars. Wholesale prices for some bullion coins have risen 2% to 3% in a matter of weeks.

This huge demand is not being reflected in the futures market where the speculative hot money of large hedge funds and institutions with short term horizons is leading to materially lower prices. Leveraged margin players who were long have had their heads handed to them on a plate as the shorts are pushing prices as low as possible in order to maximize profits. Clearly, this situation is not sustainable as ultimately the laws of supply and demand of the physical metal will dictate prices and not the speculative and manipulative antics of black box, momentum following traders.

Large, smart money is accumulating physical bullion away from the more risky leveraged casino that is the futures market. Thus, this latest of vicious sell offs is set to be another sharp correction in the gold bull market designed to as usual flush out the weak hands. The bounce when it comes will likely be just as dramatic as the shorts attempt to cover en masse. Should some large players decide to stand for delivery of near term futures contracts when they expire, then we could see some real fireworks and gold will be above $1,000/oz in very short order. Mark O'Byrne

-Why Buy Gold? Read more here-http://news.goldseek.com/ZihlmannInvest/1219244400.php

The chart above clearly shows one thing: long-term trends often last many years. The bear market that started in 1988 ended in 1993. The up-swing that followed lasted three years from 1993 until 1996 and culminated in what may be called a false break-out. Then another bear-market unfolded taking the gold price down to $250 over a period of almost four years.

Then the spike in the gold price (1999) came as a consequence of the central banks' announcement that they would be limiting their gold-sales. The 1999 bottom was tested again at the beginning of 2001. At that time, when few believed that any money should be put into precious metals, the present bull market started; a bull market we deem has still a long way to go in spite of the present correction.

In 2006, the gold price reached a fresh recovery high of $720.1 after a steep rise of roughly 80%. The correction that followed took it down to $560 or 22% before the gold price started to climb again. As per closing price of Friday August 15, gold has fallen 21% from its high reached in January 2008. This correction resembles the one we had gone through in 2006. The long-term trend is intact and we expect the gold price to reach a new high not later than 2009.

-Heavy demand for India gold amid dwindling stocks. India's gold prices were higher on Monday as foreign markets rebounded, but heavy demand from investors and retailers left sellers with little stocks to offer, dealers said. "I am saying 'no' to customers. I'm telling them to inquire the next day," said Jitendra Kantilal, partner at Jugraj Kantilal & Co, a large bullion trader in Mumbai's Zaveri Bazaar. Read more here-http://in.reuters.com/article/businessNews/idINIndia-35059020080818?rpc=401

SILVER

-Try to see gold and silver as just another currency. Gold and silver are likely to act more and more like a currency rather than metals with other uses from hereon. There will also be an increased decoupling from the euro and pound sterling which will go there own way against the dollar without influencing precious metal prices.

The painful mid-summer correction in precious metals appears to be over, and those who bought junior explorer shares at the depth of this panic have already been rewarded with large gains. However, there is still plenty of money to be made by buying the juniors as they remain at depressed prices relative to the metals.

Investors around the world are increasingly attracted to cash. That is logical in a world where shares look overvalued in a recessionary environment for profits, bonds are giving negative returns after inflation and real estate is still highly overvalued.

It is not logical, however, to buy US dollars. The systemic crisis in the US financial system has several more down legs to come. We know that typical financial crises last for about three years and we are only one year into this event.

The dollar may be on the rebound now, and possibly for this autumn but this rally will not last. Buying US stocks can only be a short term strategy and one doomed to failure, with a major bear market still to come.

That is why gold and silver remains the best investment opportunity, and the sell-off of mid-August gives a prime buying opportunity. The buyers of US stocks today are setting themselves up for big losses in the coming crash as the US economy is destined for even greater weakness in 2009 and profit expectations are still way too optimistic.

In an environment this bearish you can really only choose cash or precious metals for safety and treat the latter as currencies. Personally I prefer a currency outside the control of the US which is prone to devaluation and inflation. Gold and incredibly undervalued silver will rise to this challenge. The euro and pound also look losers. Peter J. Cooper-Story here-http://news.goldseek.com/GoldSeek/1218723600.php

-A Fabrication Bottleneck or Something More. The Internet is abuzz with reports that precious metal dealers have stopped selling coins and small bars because they have run out of inventory.

For example, Franklin Sanders reports on goldprice.org that his inability to purchase product from his suppliers is something that he has never seen before in his "twenty-eight years of brokering silver and gold." On Friday afternoon, Kitco posted the following notice: "Due to market volatility and higher demand in the entire industry, we are anticipating delays in supply of all bullion products."

The rush out of fiat currency and into precious metals on this latest drop in prices is not just a North American phenomenon. The Times of India reports: "There is a shortage of the yellow metal in the bullion banks and traders."

The bottom line is that it is difficult, if not impossible, to buy coins and small bars. Mints and refiners are back-ordered. Dealer shelves are bare. But the question is, why? Is it just a fabrication bottleneck, or is something else happening?

When I see or hear that store "shelves are bare", my first reaction is that government price controls have been imposed. Price controls always create shortages. But there are no price controls on the precious metals at least not yet anyway. So absent price controls, the answer to dealer shortages is simply that the price of gold and silver is just too cheap. James Turk-Read more here-http://goldmoney.com/en/commentary.php

-Unfortunately, many folks are panicking or depressed about silver, gold and other commodities. I think that we need to remind ourselves about the legendary Jesse Livermore when he said to be "right and sit tight." Silver, gold, oil and other commodities are on a long, zig-zag upward march that can't be stopped by any firm or government agency.

The commodities super-bull market is alive and well because the fundamentals are too powerful to suppress. Don't get fooled or spooked by the irrational and ill-conceived short-term gyrations. Stick with the fundamentals and stay focused on the long-term. I know that I am. Paul Mladjenovic-Read more here-http://www.safehaven.com/article-10998.htm

-Now is not the time to panic. Whatever you do, don't be scared into selling! Invest whatever you can in gold and silver now. Sometimes I feel like a broken record when I issue buy recommendations and say that this is the lowest price you will ever again be able to buy silver, but I think it is true.

Silver has been making higher lows since 2003 and every missed buying opportunity means that you will end up buying at a higher price down the road. Timothy Silvers-Read more here-http://www.silverbrothers.com/081708.html

-Silver Shortage? What, Me Worry? David Bond-Read more here-http://news.silverseek.com/SilverSeek/1218779880.php

-Jason Hommel: Silver has run out now! Read more here-http://www.gata.org/node/6502

-Ted Butler silver commentary. Read more here-http://news.silverseek.com/TedButler/1219089988.php

-David Morgan silver commentary-http://news.silverseek.com/SilverInvestor/1218807383.php

-Eric Sprott's Barron's interview on the markets, energy, gold and silver. Read more here-http://webreprints.djreprints.com/2012610711858.pdf

-Silver Is Key To Reducing Pneumonia Associated With Breathing Tubes. Read more here-http://www.sciencedaily.com/releases/2008/08/080819170435.htm

PLATINUM-PALLADIUM

-Platinum price to reach new highs over next quarters CPM Group expert. The CPM Group's commodity expert Jeffrey Christian tells Mineweb why platinum is still an attractive investment and reveals some of his price projections.

Platinum is still a relatively attractive investment in the market as the price is set to increase to $2,200 in the first half of next year and to remain at high levels of around $2000- $1,900/ounce through the end of 2009 and 2010, says the CPM Group's commodities expert Jeffrey Christian.

Christian told Mineweb in an interview that the downward movement in the platinum price over the last few weeks was technically driven as new resources funds and hedge funds were simply selling because the platinum price had started to decline.

He said there were no macro economic reasons for the technical sellers' actions, nor were they acting on price fundamentals. The sellers of platinum were following a "gut feeling" and price charts that prompted them to sell when the price declined and to buy when the price increased.

Vehicle manufacturers also played a role in recent platinum price movements as they bought PGMs to add to metal inventories in the first quarter when the South African power crisis erupted, but either sold or lived off their inventories in the second quarter as they fought for survival.

However, Christian said he has seen new buying in the market over the last two weeks by investors driven by platinum's long-term fundamentals. He believes the platinum market is currently tighter compared to nine months ago as the South African power crisis in the fist quarter of the year saw producers and refineries selling off inventories.

Lower prices also dampen selling in the physical market, while the auto industry's use of platinum has probably decreased by 2% and not by 10% as commonly believed. And while South African producers are pushing as much concentrate as possible through their smelters to make up for losses, this would only cause a short-term surge in supply. Read more here-http://www.mineweb.co.za/mineweb/view/mineweb/en/page35?oid=60097&sn=Detail

-Platinum, Palladium Will Rise in Next Three Months, UBS Says. Platinum, palladium and silver will advance in the next three months, UBS AG said. UBS expects platinum to trade at $1,550 an ounce in one month and $1,700 in three months, the bank said today in an e-mailed report. Palladium will trade at $300 an ounce in one month and $350 in three months. Silver will trade at $14.70 an ounce in a month and $16.40 in three months. Bloomberg

DEFINITIONS-QUOTES-QUICK HITS

-Short Covering. Purchasing securities in order to close an open short position. This is done by buying the same type and number of securities that were sold short. Most often, traders cover their shorts whenever they speculate that the securities will rise. In order to make a profit, a short seller must cover the shorts by purchasing the security below the original selling price. Investopedia.com-Read more here-http://www.investopedia.com/terms/s/shortcovering.asp

-SEC May Propose New Short-Sale Rules Within `Weeks,' Cox Says. U.S. Securities and Exchange Commission Chairman Christopher Cox said his agency will propose new rules aimed at curtailing manipulative short sales of stocks in the "next few weeks." Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a754hMpneMR8&refer=home

-If Michael Phelps were to melt down the eight gold medals he won at the Beijing Olympics Games and sell the gold, he could probably make about $1,225. Read more here-

http://www.marketwatch.com/news/story/olympic-medals-more-valuable-metal/story.aspx?guid={6D995B86-A2F3-489A-A89E-0EE7EFCAB03A}&dist=TNMostRead

-For some additional perspective, it's well to remember that a year ago, gold was trading at $670/oz. "The events of a few days, or even a few months, do not necessarily undo what is so far an event that has been going on for seven years," said George Milling-Stanley, a director at the World Gold Council. "A bull market can stand a correction of 30% in the price from time to time and still remain intact." Casey Daily Resource

-Star fund manager sticks to $1600 gold troy ounce prediction despite slump. Despite gold falling to below $800 for the first time in nine months on Friday and hitting his fund's performance, AAA-rated star US equity manager François Mouté is standing by his prediction of the gold price reaching $1600 per troy ounce in the next year.

Mouté thinks this recovery in the dollar will prove short-lived. 'The recovering dollar has been another factor putting pressure on gold,' he says. 'But the dollar is not going much further up. So I think the problem caused by the dollar is essentially complete.' The basis for his bullishness on gold is a negative real interest rate environment. He points to the US headline CPI figure of 5.6% combined with the far lower levels of interest rates for fed funds and US treasury bills (2% and 1.8% respectively).

'We have negative real interest rates like we have not seen since the seventies, so I think fundamentally there is a strong background for gold in particular, but also commodities in general. I am patiently waiting for the price to return.' Silver exposure is also a significant feature of Mouté's portfolio. The silver price has also fallen, leaving it extremely undervalued according to the veteran Frenchman. 'Silver at $12.50 is like having gold at $600. Silver is very depressed at the moment,' he says. Read more here-

http://www.citywire.co.uk/selector/-/news/fund-manager-interviews/content.aspx?ID=311838

"Longer term, we would not be surprised to see gold double,'' the bank's analysts John Hill and Graham Wark wrote in a report. "We would be aggressive buyers at current levels expecting gold to work higher through 2009/10.'' Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid=aVmAo0qxUH.U

-While gold is suffering during this time of a rallying U.S. dollar, nevertheless, Citigroup advised, "We would be aggressive buyers at current levels." While Citigroup finds that gold "has been punished amid a broad-based correction in commodities," the analysts assert that the floor in the U.S. dollar "is likely a short-term blip for gold, as it underscores the frailty of fiat currency globally."

"We see gold as attractive, heading into a period of seasonally strong physical out-take, which tends to tighten the market and allow any negative macro catalysts to be rapidly transmitted to prices. Gold will likely shine over time. Long-term drivers remain intact; falling mine production especially in S. Africa, competitive currency devaluations, wealth creation on India/China, and petrodollar flows." Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=60092&sn=Detail

-Gold fundamentals remain very strong with geopolitical risk, deepening worries about the financial sector, poor economic data, soaring inflation and stagflation internationally leading to very significant physical demand internationally.

Retail demand is huge in the U.S. with retailers, wholesalers, refiners and government mints having difficulty keeping up with physical demand for coins and bars. In India too the demand is massive with gold inventories cleared out, shortages and soaring premiums.

Available bars of gold in India have all but disappeared, due to a 'perfect storm' that has restored gold's lustre and forced physical premiums skyward ahead of the peak season for jewellery demand. A senior figure at a bullion bank in London said "pretty well everyone is sold out of stock there. We have seen premiums as high as $2.50 an ounce which is unheard of in India. Most refiners are now booked solid through September."

Reuters reports strong physical demand throughout Asia and in India this week: "Premiums for gold bars shot to their highest level this year as consumers returned to the physical market in droves, encouraged by a sharp drop in bullion prices ahead of key religious festivals in Asia." Mark O'Byrne

-Another indication of the strength of precious metals investment demand is seen in the lack of selling or redemptions in the precious metal ETFs. Gold, silver, platinum and palladium prices have fallen some 20%, 36%, 39% and 51% respectively. However ETF gold holdings had only fallen 4.1% to 1000.1 tonnes as of last Friday. ETF holding's of silver, platinum and palladium are down 1.3%, 41.4% and 5.3% respectively.

This clearly shows that ETFs are being bought by long term holders who are concerned about macroeconomic and systemic risk. Speculators remain in the futures market with all the leverage and risk involved but smart money investors are remaining passively in the precious metals (particularly in gold and silver) in anticipation of higher prices as the global economic crisis deepens. Mark O'Byrne

-Peter Spina, of Goldforecaster.com, who is nearly always clearheaded about these things, wrote: "The short-covering rally in the dollar is a prime driver for the pullback in gold prices and that was aided by free market intervention by Central Banks.

All this has done is provided additional time before the serious nature of the financial crises has to be once again confronted. The ingredients are in place for a significantly higher gold price and this short-term anomaly only means that gold can still be accumulated sub $1,000 an ounce. The rapid rate at which dollars are being created (according to shadow stats the no longer published M3 is expanding at double digit rates) remains the primary driving force in the gold market, this cheap monetary policy will continue to debase the value, integrity and confidence in the faith-backed Dollar.

Competitive paper money devaluations will enhance gold's luster going forward as hundreds of billions of fictitiously created paper currency is used to continue these monstrous bailouts with government deficits rapidly growing." Casey Daily Resource

-Farmers' Almanac says cold winter ahead. Read more here-http://news.mainetoday.com/updates/031815.html

RARE COLORED DIAMONDS

-Auctioneers of luxury commodities such as art, wine and diamonds say investors are exploring alternative markets as stocks decline, economies stall and banks sack workers. Financial shares have led the MSCI World Index to a 17 percent slump this year as losses and writedowns top $500 billion. Art investment funds buy and sell a pool of works for a set fee and a share of any profit made. "Demand for the rarest things is still very strong,'' said Owen in a telephone interview. "The middle market is more difficult.'' Read more here-

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aEFEhsFWo_m8

-A rough diamond story. Rough diamond prices continue to rise, and listed diamond stocks continue going down, and down. The Diamond Trading Company (DTC), the marketing arm of De Beers, the world's biggest miner and marketer of rough diamonds by value, announced further price increases this week, for a 16% cumulative increase since the start of the year. But just as rough diamond prices have continued to rise, so investors have continued selling down listed diamonds stocks. Read more here-

http://www.mineweb.co.za/mineweb/view/mineweb/en/page37?oid=60323&sn=Detail

-African Diamond Industry Faces Diminished Reserves. "We can no longer guarantee big stones because mines are giving more of small stones." "We need to move over 100 tonnes for every little carat diamond. With increased cost of fuel and electricity mining is a very capital intensive business." Read more here-http://www.newera.com.na/archives.php?id=22296

OIL-GAS-GASOLINE

-Why oil won't fall below $100. With a surge in the price of global commodities, it's costing more to produce a barrel of oil than ever before. Read more here-

http://money.cnn.com/2008/08/21/news/economy/oil_price_floor/index.htm?postversion=2008082115

-As Oil Giants Lose Influence, Supply Drops. Oil production has begun falling at all of the major Western oil companies, and they are finding it harder than ever to find new prospects even though they are awash in profits and eager to expand.

Part of the reason is political. From the Caspian Sea to South America, Western oil companies are being squeezed out of resource-rich provinces. They are being forced to renegotiate contracts on less-favorable terms and are fighting losing battles with assertive state-owned oil companies.

And much of their production is in mature regions that are declining, like the North Sea. The reality, experts say, is that the oil giants that once dominated the global market have lost much of their influence and with it, their ability to increase supplies. Read more here-http://www.nytimes.com/2008/08/19/business/19oil.html?_r=2&adxnnl=1&oref=slogin&partner=rssnyt&emc=rss&pagewanted=print&adxnnlx=1219337595-6Ww+xwC1r6Dgn4DAnYjRqA

-Natural-Gas Discount to Crude Is `Too Large.' Natural gas is poised to outperform crude oil after prices for the heating and power-plant fuel dropped almost 40 percent since the end of June. The ratio of crude to gas futures prices on the New York Mercantile Exchange rose Aug. 14 to the highest level since September 2006. It also shows how historically, gas outperforms crude after the ratio climbs to more than 10 or 12 to 1.

The ratio of oil to gas prices, which has averaged 8.04 since 2000, reached 14.14 last week. "It's too large of a price disparity,'' said Tom Orr, director of research at Weeden & Co. in Greenwich, Connecticut. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid=aa_VeMmtncY0

-Gasoline running short in Alberta, B.C. Between 80 and 90 gas stations in British Columbia and Alberta have run out of fuel as Petro-Canada continues to grapple with an equipment breakdown at its Edmonton refinery. About a dozen stations were out of gasoline last week. Read more here-

http://www.globeinvestor.com/servlet/story/RTGAM.20080821.wgasshortage0821/GIStory/

COMMODITIES

-Commodities Rally, Heading for Biggest Weekly Jump Since 1975. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=adS1jGB9mmq8&refer=home

-Do the math: Commodities are oversold. We believe this correction, while painful, is healthy and constructive for natural resource markets over the long term. Commodity supplies remain extremely tight and as global population and emerging economies continue to grow, these trends will be supportive of commodity prices.

The risk to this scenario would be major policy changes by the world's most populous countries that would slow infrastructure spending, which we continue to view as unlikely. Frank Holmes is CEO and chief investment officer at U.S. Global Investors-Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=60332&sn=Detail

-Don't Write off Gold and Commodities Bull Run. Read more here-http://news.goldseek.com/GoldSeek/1218812400.php

INFLATION-STAGFLATION

-Canada Inflation Accelerates to Fastest Since 2003. Canada's annual inflation rate rose to the highest since 2003 in July because of a surge in gasoline prices for the country's drivers.

Consumer prices rose 3.4 percent from July 2007, Statistics Canada said today in Ottawa, in line with economists' median forecast in a Bloomberg survey.

Prices rose 0.3 percent from June, less than economists' 0.4 percent forecast. With most of July's gain tied to energy prices, which have dropped in the past month, the report may not affect the Bank of Canada's ability to cut interest rates to kick start growth. Policy makers signaled in mid-July that borrowing costs would stay put for the foreseeable future, citing slow growth and projecting inflation to peak at 4.3 percent next year, more than double their target.

"We see this report as a sign the Bank of Canada has room to cut rates,'' Karen Cordes, an economist at Scotia Capital Inc. in Toronto, said by telephone, adding cuts may come later this year. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid=aJQYJ_BbNk3w&refer=canada

-Canadian Wholesale Sales Rise at Fastest in 16 Months. Canadian wholesale sales rose at the fastest pace in 16 months as the automotive industry rebounded. Sales advanced 2 percent to C$45.2 billion ($42.4 billion), Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg said sales would gain 0.7 percent, the median of 16 estimates. The agency revised May's gain to 1.5 percent from the initially reported 1.6 percent. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid=aQyXuJeonIkM&refer=canada

-U.S. Producer Prices Surge More Than Forecast in July. Prices paid to U.S. producers rose twice as much as economists had forecast in July, reflecting the jump in energy and commodity costs that has since started to wane.

The 1.2 percent increase in the producer price index followed a 1.8 percent increase the prior month, the Labor Department said today in Washington. Costs were up the most in 27 years from a year before. So-called core prices that exclude fuel and food rose 0.7 percent after a 0.2 percent gain in June. Read more here-

http://www.bloomberg.com/apps/news?pid=20601068&sid=aArLqb.zZlKM&refer=home

-Bracing for Inflation. Despite the recent softening of oil prices, the U.S. could be looking at double-digit inflation as early as 2009. Read more here-

http://www.businessweek.com/bwdaily/dnflash/content/aug2008/db20080815_021990.htm?chan=top+news_top+news+index_news+%2B+analysis

-U.S. food prices seen rising most since 1990. Read more here-http://www.gata.org/node/6503

-Meat, Dairy May Push Food Inflation to 28-Year High. Rising prices for meat, dairy products, cooking oil and fresh produce may accelerate U.S. food inflation this year at the fastest pace since 1980, the government said in a report.

Food-price gains may be as much as 6 percent this year, up from last month's top estimate of 5.5 percent, U.S. Department of Agriculture said in the report to be released Aug. 25. Gains may reach 14 percent for fats and oils, 9 percent for dairy products, 5.5 percent for fish and seafood, 6 percent for fresh fruits and vegetables and 3.5 percent for beef, the USDA said.

The last time food jumped as much was in 1980, when the U.S. was mired in a recession. Price gains are accelerating as producers spend more on energy and livestock feed, USDA economist Ephraim Leibtag said. Gasoline jumped to a record $4.114 a gallon at the pump on July 15, and corn used to raise cattle, hogs and poultry was the highest ever on June 27.

"The main story has stayed the same'' as last month, when the USDA predicted food inflation may reach the highest rate since 1989, Leibtag said today in an e-mail. The Bureau of Labor Statistics, which supplies the historical data that USDA uses in its forecasts, showed in an Aug. 14 report that food costs jumped 0.9 percent in July after a 0.8 percent increase in June, while energy rose 4 percent after a 6.6 percent gain the previous month. Food prices account for almost one-fifth of the consumer price index. Read more here-

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aZrPJ8RP.Jpw

-Hershey's is raising prices on all their products. By a lot! The cost of your chocolate Kisses and other such items will be 10% higher in the near future. "Commodity costs have been volatile over the last several years and continue to remain at levels that are well above historical averages," said David J. West, president and chief executive of Hershey's. "Market prices for ingredients such as cocoa, corn sweeteners, sugar and peanuts are up 20% to 45% since the beginning of the year." Perezhilton.com

-Higher Costs Are Taking a Toll on Business. Prices for goods purchased by American businesses surged more than expected in July and have jumped by nearly 10 percent over the last year the sharpest increase since 1981. Read more here-http://www.nytimes.com/2008/08/20/business/economy/20econ.html?_r=1&oref=slogin&partner=rssyahoo&emc=rss&pagewanted=print

-U.S. Economy: Housing, Price Reports Raise Stagflation Danger. U.S. builders broke ground on the fewest new homes in 17 years and producer prices climbed the most since 1981, providing no sign of an economic recovery or easing inflation. Housing starts fell 11 percent in July to an annual rate of 965,000, the Commerce Department said today in Washington. The Labor Department reported the producer price index jumped 9.8 percent from a year before.

"There's no doubt we're in a period of stagflation now,'' said Peter Kretzmer, a senior economist at Bank of America Corp. in New York who formerly worked at both the Federal Reserve Bank of New York and the Fed Board in Washington. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aBbE5iz5ywC8&refer=home

CREDIT-FINANCIAL CRISIS

-Credit crunch may take out large US bank warns former IMF chief. The deepening toll from the global financial crisis could trigger the failure of a large US bank within months, a respected former chief economist of the International Monetary Fund claimed today, fuelling another battering for banking shares.

Professor Kenneth Rogoff, a leading academic economist, said there was yet worse news to come from the worldwide credit crunch and financial turmoil, particularly in the United States, and that a high-profile casualty among American banks was highly likely.

"The US is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say the worst is to come," Prof Rogoff said at a conference in Singapore. In an ominous warning, he added: "We're not just going to see mid-sized banks go under in the next few months, we're going to see a whopper, we're going to see a big one, one of the big investment banks or big banks," he said. Read more here-http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4563171.ece or

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

-Nobel Laureates Say Credit Crunch Hurting Growth. Nobel Prize-winning economists Myron Scholes and Daniel McFadden predicted the yearlong credit squeeze will inflict more pain on the world economy and financial markets.

The crisis is "not over and I'm not exactly sure when it's going to end,'' Scholes said today at a conference in Lindau, Germany, featuring 14 Nobel laureates in economics. McFadden said in an interview "that as the crisis continues you will see a lot of business failures.'' Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aTtYLhidMBuI&refer=home

-Bank borrowing from ECB is out of control. The European Central Bank has issued the clearest warning to date that it cannot serve as a perpetual crutch for lenders caught off-guard by the severity of the credit crunch. Not Wellink, the Dutch central bank chief and a major figure on the ECB council, said that banks were becoming addicted to the liquidity window in Frankfurt and were putting the authorities in an invidious position.

"There is a limit how long you can do this. There is a point where you take over the market," he told Het Finacieele Dagblad, the Dutch financial daily. "If we see banks becoming very dependent on central banks, then we must push them to tap other sources of funding," he said. Read more here-http://www.gata.org/node/6506

-Dollar Surge Will Not Stop America From Feeling Effects of Global Crunch. Read more here-http://www.gata.org/node/6495

-The next credit crunch. Our easy access to plastic is about to dry up and with it our ability to fake living the good life. We made it through the bursting of the Internet bubble and now the bursting of the real estate bubble. Next we may be approaching the end of the most worrisome bubble of all: the standard-of-living bubble.

That conclusion comes from the latest data on credit card debt. It's growing fast, but the problem is bigger than that and to understand what it means, we have to take a few steps back. Read more here-http://money.cnn.com/2008/08/18/news/economy/Colvin_next_credit_crunch.fortune/index.htm

-Goldman sees more pain for banks, brokers. Analysts cut profit estimates and warn of more write-downs, asset sales. Read more here-

http://www.marketwatch.com/News/Story/Story.aspx?guid={9C094170-BC50-4FFF-A5A7-9E603A93F3F4

-Sharp contraction in money supply points to Wall Street crunch. The US money supply has experienced the sharpest contraction in modern history, heightening the risk of a Wall Street crunch and a severe economic slowdown in coming months.

Data compiled by Lombard Street Research shows that the M3 "broad money" aggregates fell by almost $50 billion (L26.8 billion) in July, the biggest one-month fall since modern records began in 1959.

"Monthly data for July show that the broad money growth has almost collapsed," said Gabriel Stein, the group's leading monetary economist. On a three-month basis, the M3 growth rate has fallen from almost 19 percent earlier this year to just 2.1 percent (annualized) for the period from May to July. This is below the rate of inflation, implying a shrinkage in real terms.

The growth in bank loans has turned negative to a halt since March. "It's obviously worrying. People either can't borrow, or don't want to borrow even if they can," said Mr. Stein. Read more here-http://www.gata.org/node/6498

-Pimco's El-Erian Says Raising Bank Capital Is Harder. Mohamed El-Erian, co-chief executive officer of Pacific Investment Management Co., said it has become harder for financial firms to raise capital because investors such as sovereign wealth funds have gotten ``smarter.''

"We are in the process of a major adjustment of the banking system which is made harder because you don't have the capital to lubricate it,'' El-Erian said in an interview from Newport Beach, California, on Bloomberg Radio. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=alU0HWTj3r4Q&refer=home

-Lehman May Report $4 Billion Writedown, JPMorgan Says. Lehman Brothers Holdings Inc. may write down about $4 billion in credit-related investments and other assets when it reports fiscal third-quarter earnings, JPMorgan Chase & Co. analysts said. "The credit environment continues to be difficult,'' New York-based analysts led by Kenneth Worthington wrote in a report yesterday. "It will be another difficult quarter for Lehman.''

Lehman may mark down some of its $61 billion of mortgage and other asset-backed securities after benchmark residential and commercial mortgage-related indexes declined by as much as 20 percent, the analysts wrote. The company may have already been selling some commercial mortgage assets, they added. Read more here-

http://www.bloomberg.com/apps/news?pid=20601087&sid=aaZw_5o4U1Y4&refer=home

-Merrill, Wachovia in Danger of Failing: Strategist. Read and watch video here-http://www.cnbc.com/id/26262925

-Morgan Stanley Says Financial Crisis Will Last: Report. Read more here-http://www.cnbc.com/id/26252398

FREDDIE-FANNIE

-Fannie, Freddie Fall as Barron's Says Bailout Likely. Fannie Mae and Freddie Mac fell to almost 18-year lows in New York trading on concern the government will be forced to bail out the mortgage-finance companies, wiping out common stockholders.

Both Fannie and Freddie slid as much as 12 percent after Barron's said government officials anticipate the companies will fail to raise the equity capital they need, prompting the U.S. Treasury to step in. Fannie is down 82 percent this year. Freddie has fallen 85 percent. Read more here-

http://www.bloomberg.com/apps/news?pid=20601087&sid=amCEpnB6I_Hw&refer=home

-Investors expecting wipeout for Fannie and Freddie. Read more here-http://www.gata.org/node/6501

-Fed's Lacker Clashes With Paulson on Fannie, Freddie. Richmond Federal Reserve Bank President Jeffrey Lacker called for ``demonstrably'' privatizing Fannie Mae and Freddie Mac, becoming the first Fed official to publicly clash with the Bush administration's strategy of keeping them as federally backed firms.

"I would prefer to see them credibly and demonstrably privatized,'' Lacker said today in an interview with Bloomberg Television. He agreed with former Fed Chairman Alan Greenspan's view that the two largest U.S. mortgage finance firms ought to be nationalized, then split up and sold off.

Treasury Secretary Henry Paulson by contrast has tried to keep Fannie Mae and Freddie Mac in their current form as government-sponsored companies owned by shareholders. Lacker's remarks come as a slide in the firms' stocks and increase in their borrowing costs spur speculation the Treasury will intervene. Read more here-

http://www.bloomberg.com/apps/news?pid=20601087&sid=aHbJk11JLWtk&refer=home

-Bernanke Tries to Define What Institutions Fed Could Let Fail. Ben S. Bernanke is still trying to define which financial institutions it's safe to let fail. The longer it takes him to decide, the tougher the decision becomes.

In the year since credit markets seized up, the 54-year old Federal Reserve chairman has repeatedly expanded the central bank's protective role, turning its balance sheet into a parking lot for Wall Street's hard-to-finance bonds and offering loans through its discount window to investment banks and mortgage firms Fannie Mae and Freddie Mac.

The lack of clearly defined limits may put the Fed's independence at risk as Congress discovers that its $900 billion portfolio can be used for emergency bailouts that might otherwise require politically sensitive appropriations and taxes. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a0v71H6gketc&refer=home

U.S. DOLLAR

-The Strong Dollar Illusion from Peter Schiff. Read more here-http://www.321gold.com/editorials/schiff/schiff081808.html

-The Dollar: Short-Term Rebalancing Of Expectations, Long Term Risk. Read more here-http://www.321gold.com/editorials/brusuelas/brusuelas081508.html

U.S.-U.K. RECESSION

-U.S. Economy: Leading Index Signals Deeper Slowdown. The U.S. slowdown will deepen in the second half of the year as housing continues to slump and unemployment rises, according to a measure designed to predict the economy's direction.

The Conference Board's index of leading indicators fell 0.7 percent in July, more than triple the drop forecast by economists surveyed by Bloomberg News. Separate reports showed the number of Americans collecting unemployment insurance remained near a five- year high last week and manufacturing in the Philadelphia region shrank for a ninth straight month. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a37O.tbVC1c8&refer=home

-U.S. Economy Facing `Rough Patch,' Fisher Tells Morning News. The U.S. economy will face a ``rough patch'' before improving, and central bankers are partly to blame for ``letting things get too far,'' with easy credit, Dallas Federal Reserve Bank President Richard Fisher told the Dallas Morning News. "I blame the regulators, including the Federal Reserve, for letting things get too far,'' said Fisher, who spoke to the newspaper in a question-and-answer session last week, in an article published today.

"The credit markets are rough right now,'' he said. ``So I expect us to have a rough patch here before we pull our socks up.'' Fisher also told the newspaper that inflationary forces in China will likely increase after the Olympics, and that the impact might be felt in the U.S. Fisher is the only voting member of the interest rate- setting Federal Open Market Committee to dissent five times this year in favor of tighter policy than his colleagues. Bloomberg

-Mrs. Fields to file for bankruptcy. The cookie company reveals its finances are crumbling, in a filing with the Securities and Exchange Commission. Read more here-

http://money.cnn.com/2008/08/15/news/companies/mrsfields_bankrupt.ap/index.htm

-UK 'Recession And Unemployment.' Some 300,000 people will lose their jobs over the next two to three years and unemployment levels may top two million, Britain's business leaders say. The British Chambers of Commerce (BCC) also forecasts the UK economy will enter recession within the coming year.

In its latest quarterly economic forecast, the BCC said Britain was heading into a "technical" recession of two or more quarters of declining output over the next six or nine months. Read more here-http://uk.biz.yahoo.com/18082008/140/uk-recession-unemployment.html

-Apocalyptic times for Britain's economy. Read more here-http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/08/20/dl2004.xml

-Goldman Sachs Says Half of the World Economy Faces Recession. Goldman Sachs Group Inc. said countries that account for half of the world's economy face a recession a year after the credit crisis began.

The U.S., Japan, the 15-nation euro area and the U.K. are ``either in recession or face significant recession risks in the months ahead,'' Goldman's London-based international economist Binit Patel said in a report to clients today.

A year since the U.S. housing slump sparked about $500 billion in credit market losses for banks globally, the world's largest economies are all stumbling as rising borrowing costs combine with record commodity prices to sap growth. The U.S. is close to a recession and France, Germany and Japan all contracted in the second quarter. Read more here-

http://www.bloomberg.com/apps/news?pid=20601087&sid=atnK8SXk1G.8&refer=home

JIM ROGERS

-Jim Rogers Predicts Bigger Financial Shocks Loom, Fueling a Malaise That May Last for Years. The U.S. financial crisis has cut so deep and the government has taken on so much debt in misguided attempts to bail out such companies as Fannie Mae and Freddie Mac that even larger financial shocks are still to come, global investing guru Jim Rogers said in an exclusive interview with Money Morning.

Indeed, the U.S. financial debacle is now so ingrained and a so-called "Super Crash" so likely that most Americans alive today won't be around by the time the last of this credit-market mess is finally cleared away if it ever is, Rogers said. The end of this crisis "is a long way away," Rogers said. "In fact, it may not be in our lifetimes." Read more here-

http://jutiagroup.com/2008/08/19/exclusive-interview-jim-rogers-predicts-bigger-financial-shocks-loom-fueling-a-malaise-that-may-last-for-years/

-Jim Rogers Says Commodities Will Rebound After Drop. Jim Rogers, who in April 2006 correctly predicted oil would reach $100 a barrel and gold $1,000 an ounce, said a tumble in commodities from records represented a temporary reverse in a long-term rally. "I don't see that it's the end of the bull market,'' the chairman of Rogers Holdings, said in an interview in Bangkok before speaking at an investor conference later today.

"Until either a lot of supply comes on stream or the economy collapses, the bull market will continue,'' he said. Soybeans, copper, platinum and crude oil have dropped from all-time highs after a rally in the dollar curbed demand for raw materials as a hedge against inflation and concerns increased that economic growth will slow.

Sixteen of the 19 commodities in the Reuters/Jefferies CRB Index fell this month, after the index plunged 10 percent in July, the biggest such drop in 28 years. "I am contemplating whether it's time to get involved in base metals again,'' Rogers, 65, said today. "I haven't bought any for awhile.'' Read more here-

http://www.bloomberg.com/apps/news?pid=20601012&sid=abseyMStTAb4&refer=commodities

DR. DOOM

-On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession.

He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac. The audience seemed skeptical, even dismissive.

As Roubini stepped down from the lectern after his talk, the moderator of the event quipped, "I think perhaps we will need a stiff drink after that." People laughed and not without reason. At the time, unemployment and inflation remained low, and the economy, while weak, was still growing, despite rising oil prices and a softening housing market. And then there was the espouser of doom himself: Roubini was known to be a perpetual pessimist, what economists call a "permabear."

When the economist Anirvan Banerji delivered his response to Roubini's talk, he noted that Roubini's predictions did not make use of mathematical models and dismissed his hunches as those of a career naysayer. But Roubini was soon vindicated. In the year that followed, subprime lenders began entering bankruptcy, hedge funds began going under and the stock market plunged.

There was declining employment, a deteriorating dollar, ever-increasing evidence of a huge housing bust and a growing air of panic in financial markets as the credit crisis deepened. By late summer, the Federal Reserve was rushing to the rescue, making the first of many unorthodox interventions in the economy, including cutting the lending rate by 50 basis points and buying up tens of billions of dollars in mortgage-backed securities.

When Roubini returned to the I.M.F. last September, he delivered a second talk, predicting a growing crisis of solvency that would infect every sector of the financial system. This time, no one laughed. "He sounded like a madman in 2006," recalls the I.M.F. economist Prakash Loungani, who invited Roubini on both occasions. "He was a prophet when he returned in 2007." Read more here-http://www.nytimes.com/2008/08/17/magazine/17pessimist-t.html?_r=2&oref=slogin&ref=business&pagewanted=print

REAL ESTATE

-U.K. House Prices Fall Most Since at Least 2002, Rightmove Says. U.K. house prices posted the biggest annual decline in August since at least 2002 as reduced mortgage lending deepened the property slump in London, Rightmove Plc said.

The average asking price for a home fell 4.8 percent from a year earlier to 229,816 pounds ($426,929), Britain's most-used property Web site said in a statement today. On the month, home values fell 2.3 percent, the most since December, led by London.

"The lack of mortgage finance is central to the problem,'' Miles Shipside, commercial director of Rightmove, said in the statement. ``London, in particular, appears to be having its own special summer sale, with over 21,000 pounds off in a month.'' Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aPPMVVpeaGto&refer=home

-Demand for U.K. Rental Homes Gains at Fastest Pace in a Decade. Demand for rental homes in the U.K. climbed in the second quarter at the fastest pace in at least a decade as a slump in property prices deterred homebuyers, a report by the Royal Institution of Chartered Surveyors showed.

During the quarter, 37 percent more real-estate brokers reported an increase in new rental contracts than those that said there was a drop, the London-based industry group said. RICS members also reported the largest increase in mandates to rent out properties since the survey was first carried out 10 years ago. Read more here-

http://www.bloomberg.com/apps/news?pid=20601213&sid=aPC4BFM1PjgQ&refer=home

-'Bloated inventory': RealtyTrac counts 750,000 foreclosed houses for sale in L.A. Read more here-http://latimesblogs.latimes.com/laland/2008/08/bloated-invento.html

-U.S. Builders' confidence holds at record low. A survey of homebuilders' assessment of the housing market shows the industry's sentiment tied the all-time low level set in July. Read more here-http://money.cnn.com/2008/08/18/news/economy/builders_confidence/index.htm

FORECLOSURES-MORTGAGES

-Foreclosures up, defaults down. ForeclosureRadar.com estimates that California homes are foreclosing at a rate of 1,300 per business day. And the drop in defaults is not very promising. Read more here-http://www.latimes.com/business/la-fi-realblog17-2008aug17,0,2442032.story

-S.F. Foreclosures smack home prices down 29.3%. Cut-rate foreclosed homes being unloaded by banks wreaked havoc on the Bay Area's median price in July, sending it down nearly 30 percent to a level not seen in more than four years. Read more here-http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/08/19/MNPK12DR3G.DTL

-The next wave of mortgage defaults. More borrowers with good credit are defaulting on their home loans, and that's going to make it even harder for the staggering housing market to recover. Read more here-http://money.cnn.com/2008/08/12/real_estate/prime_defaults_price_drops/index.htm

-U.S. MBA's Mortgage Applications Index Fell 1.5%. Mortgage applications in the U.S. declined last week to the lowest level since December 2000, further evidence that the housing market has yet to reach bottom, as fewer homeowners sought to refinance their loans. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aw_z0K.3pF6g&refer=home

A FILM ABOUT U.S. DEBT IOU U.S.A

-Another inconvenient truth. Fiscal Armageddon, coming to a cinema near you. David Walker, who until recently ran the Government Accountability Office, has made it his mission to get the nation to acknowledge and treat this "fiscal cancer". His efforts form the core of a new documentary, "I.O.U.S.A.", out on August 21st.

The message is simple enough: America's financial condition is a lot worse than advertised, and dumping it on future generations would be not only economically reckless but also immoral. Read more here-http://www.economist.com/finance/displaystory.cfm?story_id=11921663

-Movie website here-http://www.iousathemovie.com/ Watch movie trailer here-http://www.youtube.com/watch?v=HBo2xQIWHiM

-Buffett spotlights nation's debt crisis. Billionaire investor teams up with Wall Street luminaries to focus attention on America's ballooning budget deficit. Read more here-

http://money.cnn.com/2008/08/21/news/economy/buffett_town_hall.ap/index.htm

GEOPOLITICAL NEWS

-US refuses to sell planes to Israel, fearing strike on Iran. Read more here-http://www.jpost.com/servlet/Satellite?cid=1219218601145&pagename=JPost%2FJPArticle%2FShowFull

-Iranian claims of jet range dismissed. Iran's claim of having increased the range of its fighter jets, allowing them to fly as far as Israel and back without refueling, did not signify any new operational abilities, an arms expert said on Sunday. Read more here-http://www.jpost.com/servlet/Satellite?cid=1218710384313&pagename=JPost%2FJPArticle%2FShowFull

-Iran sparks US concern with satellite rocket launch. Iran said it had sent a rocket carrying a dummy satellite into space on Sunday, triggering fresh concern in Washington that the technology could be diverted to ballistic missiles. The launch is likely to further exacerbate tensions with the West over its nuclear drive, which Iran's arch-foe Washington and its allies claim is a cover for atomic weapons ambitions.

"The Safir (Ambassador) rocket was successfully launched. All its systems are Iranian-made," Reza Taghipour, head of Iran's space agency, told state television, adding that a "test satellite was put into orbit." "We have paved the way for placing a satellite in space in future," state television said, showing images of the pre-dawn rocket launch which was attended by President Mahmoud Ahmadinejad. Read more here-http://www.breitbart.com/print.php?id=080817202726.v33hy5pa&show_article=1

-Iran Pushes Ahead on Nuclear Power Plants With Search for Sites. Iran took a step toward building more nuclear power plants, selecting six Iranian companies to find sites for the projects. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid=acZLquhZoQvE

-Fear of new Mid East 'Cold War' as Syria strengthens military alliance with Russia. Read more here-http://www.timesonline.co.uk/tol/news/world/middle_east/article4573599.ece

-Russia warns of response to US missile shield. Russia says its response to the further development of a U.S. missile shield in Poland will go beyond diplomacy. Russia's Foreign Ministry issued a statement saying the U.S. missile shield plans are clearly aimed at weakening Russia.

The U.S. says the missile defence system is aimed at protecting the U.S. and Europe from future attacks from states like Iran. The United States and Poland signed a deal Wednesday to place a U.S. missile defence base just 115 miles from Russia's westernmost fringe. Read more here-http://www.breitbart.com/print.php?id=D92M5GM81&show_article=1

The GoldBugg Report - August 26, 2008
Posted by Worldwide Precious Metals on Tuesday, August 26, 2008

Information Request

Use our Information Request Form and one of our helpful customer service representatives will contact you promptly.

Request Info

Chat Online

Talk live right now with one of our Precious Metals Experts.

WWPMC Newsletter

Subscribe to our newsletter to receive timely information on precious metals by email.