Newsroom
The GoldBugg Report – March 31 , 2009
March 31, 2009
WORLD FINANCIAL REPORT ON RADIO MARCH 27 2009 SHOW
Worldwide Precious Metals will be at the Calgary Resource & Clean Energy Investment Conference
April 4&5, 2009.
Conference is free if you pre-register now at:http://www.cambridgehouse.ca/ch_calgary2009.html#exhibitors
Call Worldwide Precious Metals for more details, 1-866-623-2002.
-A continued global economic tsunami and the increasingly urgent scramble for an investment lifeline will combine to power gold prices
-Bill Murphy of GATA interviewed by Bloomberg TV. Watch the Clip
-Silver and Gold New Rally Underway.
GOLD
-A continued global economic tsunami and the increasingly urgent scramble for an investment lifeline will combine to power gold prices ominously higher and into uncharted territory later this year. This is the consensus of opinion among the CEO’s of a dozen emerging to mid-tier gold mining companies who were recently interviewed by BNW Business Newswire. Gold will be trading in the $1,100 to $1,500 range by year’s end, they all agreed. Read more here-http://www.kitco.com/ind/Davis/printerfriendly/mar202009.html or http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=80626&sn;=Detail
-Gold appears to be enjoying a rehabilitation of its historical might and role as a financial asset, as investors look toward safe haven assets in these volatile times, says a new CPM gold report. A report by the CPM precious metals and commodities research group in New York City asserts “gold is entering a new era,” thanks to “a major rehabilitation of gold as a financial asset around the world” as investors look for safe havens in volatile times.
“Not since the Great Depression and World War II has sentiment about the state of financial and economic conditions been so pessimistic,” CPM noted in its newly released Gold Yearbook 2009. “The market consensus appears to be that the gold price will remain strong, at least through the first four months of 2009. All of the factors that have been driving investors to buy gold continue to be in place,” CPM analysts said.
As the value of paper assets has been greatly diminished, CPM asserts that the “value of gold has been greatly advanced.” The report projects that investors “will buy significantly more gold in 2009″ adding a record 52.3 million ounces to their holdings this year. “In this environment, with gold prices relatively tight, such levels would be expected to propel gold prices to a new record high, surpassing their record $1033.90 in March 2008,” CPM analysts advised.
“Further demand for gold should be expected, and further price appreciation most likely will follow as well,” they predicted. The analysts suggest that “the tremendous increase in investor could buying and the consequent rise in prices since 2001 instead may represent the beginning of a major restoration of gold as a financial asset in the world, with a concomitant upward revaluation in the price of gold.” Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=80858&sn;=Detail or http://www.resourceinvestor.com/pebble.asp?relid=49258
-New Gold Upleg from Adam Hamilton. Read more here-http://news.goldseek.com/Zealllc/1237565903.php
-Young Japanese retail investors are turning to gold purchasing plans at an unprecedented rate as they seek to protect their finances amid a deepening recession, an official at the nation’s largest bullion retailer said.
“We’ve never seen anything like this,” said Noriyuki Abe, an executive at the precious metals division of Tanaka Kikinzoku Kogyo K.K. The company has signed up more than 4,000 customers a month for its gold accumulation plan since October. Previously “the tally wouldn’t exceed 1,000″ he said in an interview. Read more here-
-Bank crisis spawns new kind of gold rush. 2009 recession and banking crisis has set off a rush to invest in gold and other precious metals at unprecedented levels.
http://www.theglobeandmail.com/servlet/story/RTGAM.20090319.wrgold20/BNStory/energy/?page=rss&id;=RTGAM.20090319.wrgold20 or http://www.gata.org/node/7282
-Gold market will remain robust as economic and financial risks remain paramount Citigroup. Although investments in other commodities have collapsed, Citigroup says surging investment demand is keeping the gold market robust. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=80498&sn;=Detail
-Gold to stay near $1,000 for years. Steve Shepherd, a J. P. Morgan analyst, has joined the growing consensus that expects gold prices to remain strong for years to come. Read more here-http://www.financialpost.com/personal-finance/story.html?id=1424300
-CIBC stands pat on $950 gold this year, $1050 in 2010. CIBC World Markets says Kinross takes top honors in adding total ounces per share last year, while Agnico-Eagle did the best at finding gold ounces. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=80494&sn;=Detail
-Barclays lifts 2009 gold forecast to $940/oz. Barclays Capital has lifted its gold price forecast for 2009 to $940 an ounce. Read more here-
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=80597&sn;=Detail
-Clive Maund gold market update. Read more here-http://news.goldseek.com/CliveMaund/1237822969.php
-Beware base metals optimism stick to gold and silver for wealth protection. Base metals may still be vulnerable as global industry remains well below its peaks so gold and perhaps silver probably remain the best bets for wealth preservation for the moment. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=80788&sn;=Detail
-Central banks sit on their bullion reserves. Falling gold sales and loans provide price support; IMF has 400 tons to unload. Read more here-http://www.marketwatch.com/news/story/Central-banks-sell-less-gold/story.aspx?guid={0573231B-37D7-4328-A126-76FED1FC90B2}&print;=true&dist;=printMidSection
-Gold’s Seasonality has changed! Read more here-http://news.goldseek.com/GoldForecaster/1238008454.php
-Got gold? You’re right on the money. Read more here-http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/got-gold-youre-right-on-the-money.aspx
-Why the gold price is not yet soaring. Read more here-http://news.goldseek.com/GoldSeek/1238002413.php
-Why we should bring back the Gold Standard. Read more here-http://www.moneyweek.com/investments/bring-back-the-gold-standard-14680.aspx
-Making gold nanoparticles hollow holds promise for cancer therapy. A new metal nanostructure developed by researchers has shown good results in cancer therapy and could be used for chemical, biomedical and other applications. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=80729&sn;=Detail or http://www.newswise.com/articles/view/550293/?sc=rsla
-Bill Murphy of GATA interviewed by Bloomberg TV. Watch video here-http://www.youtube.com/watch?v=j0kM9BJSZwI or http://www.youtube.com/watch?v=bjxZtFJY-jk
-More documentation of central bank gold rigging buried. Read more here-http://www.gata.org/node/7295
-The Next Gold Rush: Your Living Room. Read more here-http://www.cbsnews.com/stories/2009/03/24/eveningnews/main4890550.shtml?source=RSSattr=U.S._4890550 or http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=80789&sn;=Detail
-The New California Gold Rush Modern-day gold diggers party like it’s 1849. Read more here-http://www.nbclosangeles.com/news/local/NEW-CALIFORNIA-GOLD-RUSH.html
SILVER
Gold to silver ratio at 80 to 1 with gold at $1,500 the silver price would be $18.75
Gold to silver ratio at 70 to 1 with gold at $1,500 the silver price would be $21.43
Gold to silver ratio at 60 to 1 with gold at $1,500 the silver price would be $25.00
Gold to silver ratio at 50 to 1 with gold at $1,500 the silver price would be $30.00
Gold to silver ratio at 15 to 1 with gold at $1,500 the silver price would be $100.00
-Ted Butler silver commentary. Read more here-http://news.silverseek.com/TedButler/1237839396.php
-Clive Maund silver market update. Read more here-http://news.silverseek.com/CliveMaund/1237823048.php
-Silver and Gold New Rally Underway. Hopefully you have a solid foundation of gold and silver in your portfolio. If you don’t, it would have been great to buy at the low prices last week but that opportunity disappeared quickly. The next targets for gold are $1075 and silver in the $15 to $16 range on this rally. Timothy Silvers-Read more here-
http://news.silverseek.com/SilverSeek/1238077767.php
-Dow 3800 and silver better than gold? Bob Chapman interviewed here-http://news.silverseek.com/SilverSeek/1237579361.php
-Twenty-nine years ago this week, an attempt by Nelson Bunker Hunt and his brothers to buy up the silver market collapsed and took with it a large part of Hunt’s estate. Hunt, who was once considered the world’s richest private individual, was left with lawsuits, bankruptcy and tax problems in the aftermath of what has become known as ‘Silver Thursday.’ Read more here-http://www.cnbc.com/id/29826600 or http://www.chron.com/disp/story.mpl/chronicle/6330933.html
DEFINITIONS-QUOTES-QUICK HITS
-The term “toxic asset” is a nontechnical term used to describe certain financial assets when their value has fallen significantly and when there is no longer a functioning market for these assets, so that they cannot be reasonably sold. This term became common during the financial crisis that began in August 2007. Toxic assets played a major role in that crisis. When the market for such assets ceases to function, it is described as “frozen”.
Markets for some toxic assets froze in 2007, and the problem grew significantly worse in the second half of 2008. Several factors contributed to the freezing of toxic asset markets. The value of the assets were very sensitive to economic conditions, and increased uncertainty in these conditions made it difficult to estimate the value of the assets. Banks and other, major financial-institutions were unwilling to sell the assets at significantly reduced prices, since lower prices would force them to significantly reduce their stated assets, making them appear insolvent. Read more here-http://en.wikipedia.org/wiki/Toxic_asset
-So What’s A Toxic Asset? A Closer Look at The Financial Black Holes That Are Clogging Up The Nation’s Credit Flow. Read more here-
http://www.cbsnews.com/stories/2009/03/23/earlyshow/main4884103.shtml
-Confidence grows at the rate a coconut tree grows. It falls at the rate a coconut falls. Montek Ahluwalia-Bio here-http://en.wikipedia.org/wiki/Montek_Singh_Ahluwalia
-Giving money and power to government is like giving whiskey and car keys to teenage boys.” P.J. O’Rourke-Bio here-http://en.wikipedia.org/wiki/P._J._O%27Rourke
-I understand these are dark days for the newspaper business, but I hate it when people say that newspapers are obsolete. That’s totally untrue. I know from firsthand experience. I recently got a puppy, and you can’t housebreak a puppy on the Internet. Joe Biden U.S. Vice President
-”The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.” Thomas Jefferson-Bio here-
http://en.wikipedia.org/wiki/Thomas_Jefferson
-A recession should be a time of strengthening and regrouping for an economy. But as long as the government insists on maintaining the status quo by propping up failed institutions, we will continue to dig a bigger hole for ourselves. Ron Paul U.S. Congressman-Read more here-http://news.goldseek.com/RonPaul/1237834215.php
-The Fed said it will start monetizing Treasuries today notes with maturities from 2/16 to 2/19. Ya think China will sell some? We’d hit the bid if we held what China holds. Bill King, the King Report, March 25, 2009
-US markets are not only back in inflation mode, they are in virulent inflation mode. Bill King, the King Report, March 24, 2009
-Jim Dines expects gold to reach $3,000 to $5,000 an ounce. Marketwatch.com
-Investing legend Richard Russell has become supremely bullish. Last Friday he said: “I’ve written in the past that if you want to make ‘BIG’ money in the market, you have to take an over-sized position and be dead right on the trend.
The last time I did that was in late 1958. I did extremely well on that fateful ride, and I never again had the nerve to take that large a position until now. “I started building my gold position in 1999. My gold position now is comparable to my market position back in 1958 maybe 30% of my total worth. Why have I done this again?
“(1) I believe gold is in a major or primary bull market. I believe the gold bull market is currently in its second phase. This is the phase where sophisticated and seasoned investors and the funds enter the market.
“(2) If there is only one bull market in progress, it will attract broad new coverage and attention just as Thursday’s $70 rise in gold did.
“(3) I believe the bear market in stocks will continue erratically and the deflationary trends will persist. Bernanke will stop at nothing (including massive printing of dollars) in his effort to halt deflation.” Casey Daily Resource-Read more here-http://www.321gold.com/editorials/russell/russell032309.html
-International quantitative easing, zero percent interest rates and competitive currency devaluations will likely see all fiat currencies fall against the finite currency that is gold and we have likely only seen the early stages of this in recent months. Gold.ie-Read more here-http://news.goldseek.com/GoldSeek/1237983873.php or
http://news.goldseek.com/GoldSeek/1237552898.php
-Once inflation eventually kicks in, in reaction to all of this massive government spending, gold is going to soar, but this is going to take time. It’s not going to happen from one day to the next, but that’s the underlying foundation pushing gold’s bull market higher, and it’s not going away any time soon. So stay with your gold. It’s your best, and probably only solid bet looking out to the years ahead. Aden Sisters-Read more here-http://www.kitco.com/ind/Aden/aden_mar232009.html
-James Turk wonders: “How bad is it out there that the Fed would take this big gamble to risk hyper inflating the dollar to try saving insolvent banks? What does Bernanke see that he would expand the Federal Reserve’s balance sheet by another $1.2 trillion? What is he not telling us?” Read more here-http://www.marketwatch.com/news/story/bugs-triumphant-about-gold-terrified/story.aspx?guid={39440865-467F-4035-9154-5C30BB1B7EE6}&dist;=TNMostRead&print;=true&dist;=printMidSection
-’Gold was not only the currency of last resort, it was also the piggy bank of last resort, the ultimate source of liquidity.’ Brien Lundin-Read more here-http://www.marketwatch.com/news/story/can-gold-safe-haven-hero-again/story.aspx?guid={79839211-EDF0-4BE7-B47B-C241EC51356E}&dist;=TNMostRead&print;=true&dist;=printMidSection
-”When you look at the gold market, there is a huge dynamic in place, which is an increasing loathing of currencies,” said Nick Moore, an analyst at RBS Global Banking & Markets. “The only true currency, which is gold, is the beneficiary of that.” “If central banks around the world are keen to avoid deflation, then by definition they must have inflation, and that plays straight into gold’s hands,” he added. Casey Daily Resource
-”Investors would be wise to buy some gold, whether or not gold goes up, down, or remains unchanged next week,” Tom Hartmann, a commodity analyst at AltaVista Worldwide Trading LLC in Mission Viejo, California, said on March 19. “The larger picture here is greater than a one-week time frame. Inflation is certain to come.” Bloomberg
-”The dollar is still under some pressure,” said Stephen Platt, a commodity analyst at Archer Financial Services Inc. in Chicago. “There’s growing concern that the U.S. monetary base is expanding. That’s helping foster renewed buying interest in gold.” Bloomberg
-”The big picture is that they’re putting more liquidity into the system and that will eventually weaken the dollar and help gold,” said Frank McGhee, head dealer at Integrated Brokerage Services LLC in Chicago. Bloomberg
-A 10-20% portion of any financially viable family’s net worth should reside in physical gold. Tuck it away and forget about it (but not where you tuck it!) until it is needed to provide for you and yours or to pass on to your children and grandchildren. Michael Mickey Fulp-Read more here-http://www.kitco.com/ind/fulp/printerfriendly/mar242009.html
-Bob Moriarty interviewed by the gold report. TGR: Even Jim Cramer (Mad Money) says that now is a good time to buy gold.
BM: Cramer recommends everything. One day he’s saying, “Buy this,” and the next day he’s saying, “Sell this.” It has nothing to do with anything. He’s a trend follower, not a trend leader. The very best book on investing ever, Extraordinary Proper Delusions & the Madness of Crowds, was written around 1860, and it gives you about 30 stories of the insanity of mob behavior.
I saw it in real estate two or three years ago; literally everybody I knew was talking about how to make money in real estate. When that happens with gold, when you go to a cocktail party and everybody is talking about gold, you want to get out completely. Read more here-http://www.theaureport.com/pub/na/2387?utm_source=streamsend&utm;_medium=email&utm;_content=3379752
-There is a growing consensus that if China no longer wants to buy our bonds, we can simply print the money and buy them ourselves. This naïve view fails to consider the consequences implicit in such a change. When the Treasury sells bonds to China, no new dollars are printed. Instead, China prints yuan which it then uses to buy treasurers. This effectively allows America to export its inflation to China.
However, now that we will be printing the money ourselves, the full inflationary impact will fall directly on us. With such a policy in place, America has now become a banana republic. It won’t be too long before our living standards reflect our new status. Got Gold? Peter Schiff-Read more here-http://news.goldseek.com/EuroCapital/1237572152.php
-Economy: Worst in 26 years. The nation’s gross domestic product declined by 6.3% in the fourth quarter the biggest drop since 1982. Read more here-
http://www.bloomberg.com/apps/news?pid=20601068&sid;=aemO.zzB7LlE&refer;=home or http://money.cnn.com/2009/03/26/news/economy/gdp/index.htm?postversion=2009032609
-U.S. Jobless Rolls Increase to Record 5.56 Million. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aT1Ab3iuML6c&refer;=home
-Michigan jobless rate hits 12%. State’s unemployment rate rises about half a percentage point a smaller increase than last month, but still the highest since 1984. Read more here-
http://money.cnn.com/2009/03/25/news/economy/michigan_unemployment/index.htm?postversion=2009032517
-U.S. stocks will fall and the government will nationalize more banks as the economy contracts through the end of 2009, said Nouriel Roubini, the New York University professor who predicted last year’s economic crisis.
“The stock market is a bit ahead of the real macroeconomic and financial news,” Roubini, a professor at NYU’s Stern School of Business and the chairman of consulting firm Roubini Global Economics, said in an interview with Bloomberg Television in London today. “We’ll have some major banks going belly up that will need to be taken over.” Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=aUzSQ01UhV6s&refer;=home
-Nobel laureate economist Paul Krugman said the U.S. will eventually have to “seize” big banks as the economic and financial crisis deepens. “In the end, we’ll come to it,” Krugman said in an interview with Bloomberg Television today, referring to nationalizing banks. “You guarantee the liabilities of everybody but seize the big ones.” He also said the U.S. economy won’t stabilize until “late in the year.” Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ardgK6NSMTUk&refer;=home
-Counting on dividends? Not so fast. Poor economy puts dividend payments on track to decline by 22.6% this year, the most since 1938, S&P; analyst says. Read more here-
http://money.cnn.com/2009/03/20/markets/dividend_caution/index.htm
-Bear market rallies can be violent and exciting. Read more here-http://www.marketwatch.com/news/story/bear-market-rally-new-bull/story.aspx?guid={F4539F5D-2B3F-4EE5-B000-C84C617B4058}&dist;=TNMostRead&print;=true&dist;=printMidSection
-Airline Industry Loss Estimate Jumps to $4.7 Billion. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aZZidTwjfF6w
-March auto sales faring no better. Car sales are down about 40% so far this month, according to J.D. Power and Associates. Read more here-
http://money.cnn.com/2009/03/26/autos/jd_power_march_sales/index.htm
-U.S. regulator probing “rampant Ponzimonium.” Read more here-http://www.reuters.com/article/wtMostRead/idUSTRE52J48B20090320
-Canadian Fund Manager Ran $60 Million Ponzi Scheme, OSC Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=aPWE2bmvzufI&refer;=canada
-Millennium Bank in Caribbean Is Ponzi Scam, SEC Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a95is8wWQv5s
-What does 1 Trillion look like? View here-http://www.pagetutor.com/trillion/index.html
-PBS TV show on U.S. debt, ten trillion and counting. Watch show here-http://www.pbs.org/wgbh/pages/frontline/tentrillion/
-Americans are in a collective state of financial depression as many admit they could only cover their bills for two months at most if they found themselves suddenly jobless, a nightmare more and more worry may come true. Read more here-http://www.marketwatch.com/news/story/Fears-grow-more-consumers-just/story.aspx?guid={504D22FD-CC66-4FC1-BF8D-2F199C2AD042}&print;=true&dist;=printMidSection or http://www.foxbusiness.com/story/markets/industries/fears-grow-consumers-just-paycheck-ruin/
-Top hedge fund managers still raking in the money. Despite market turmoil, top 25 earners took home $11.6 billion in 2008, according to ranking by Alpha magazine. Read more here-
http://money.cnn.com/2009/03/25/markets/hedge_alpha/index.htm or http://www.theglobeandmail.com/servlet/story/RTGAM.20090325.WBstreetwise20090325072435/WBStory/WBstreetwise/
-North Korean Threat to End Talks Is ‘Provocative’, U.S. Says. The U.S. State Department rejected North Korea’s threat that it will pull out of talks on its nuclear program if there is any attempt in the United Nations to criticize a planned rocket launch. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aE9RBuX0CdyU&refer;=home
-Mr. Iran envisions ‘major’ war in coming months. Read more here-http://www.presstv.ir/detail.aspx?id=88605§ionid;=351020104
-Is this the end of America? U.S. law-making is riddled with slapdash, incompetence and gamesmanship. Read more here-
-Paradise goes bankrupt. Island paradise the Seychelles has the dubious honor of being perhaps the most indebted country in the world. Read more here-
http://money.cnn.com/2009/03/25/magazines/fortune/seychelles_bankrupt.fortune/index.htm
-The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G. Read more here-http://www.nytimes.com/2009/03/25/opinion/25desantis.html?_r=1
-Space storm alert: 90 seconds from catastrophe. Read more here-http://www.newscientist.com/article/mg20127001.300-space-storm-alert-90-seconds-from-catastrophe.html?full=true
-The Rare Colored Diamonds Historical Value Tracker system is the perfect tool for investors to view the potential future value of a rare colored diamond based on the current market trend of a particular type of diamond. Track the potential future value of colored diamonds here-http://www.rarecoloreddiamonds.com/HistoricalValueTracker.html
-Magnificent Jewels New York December 9th 2008. Read more here-http://www.sothebys.com/app/live/dept/Article.jsp?article_id=1260
419, Oval Fancy Vivid Yellow Internally Flawless Diamond Ring, 36.99cts, Sotheby’s $2,658,500
431, Rectangular Brilliant-Cut Fancy Pink Diamond Ring, 9.11cts, Sotheby’s $962,500
423, Emerald-Cut Fancy Vivid Yellow Diamond Ring, 10.05cts, Sotheby’s $536,500
399, Pair of Fancy Intense and Vivid Yellow Diamond Pendant-Earclips $422,500
-Magnificent Jewels Geneva November 19, 2008. Read more here-http://www.sothebys.com/app/live/dept/Article.jsp?article_id=1220
408, Fancy Pink diamond ring weighing 8.02 carats, Sotheby’s $1,321,107
273, Rectangular-cut Fancy Intense Yellow Diamond ring 63.22cts, Christie’s $1,284,414
-Magnificent Jewels Geneva May 15, 2008. Read more here-http://www.sothebys.com/app/live/dept/Article.jsp?article_id=1320
453, Fancy Vivid Blue pear-shaped diamond ring $4,955,097
437, Fancy Vivid Purplish Pink diamond ring $2,554,242
427, Fancy Light Pink diamond ring $1,593,901
430, Fancy Intense Yellow diamond ring, Van Cleef & Arpels $1,113,730
308, A Fancy Intense Yellow cushion modified brilliant-cut $1,049,707
-Christie’s upcoming jewellery sale is on April 22, 2009 in New York. Among the colored diamonds to be sold will be a fancy grayish yellowish green “chameleon” briolette-cut, 19.13-carat diamond pendant necklace with a pre-sales estimate of $800,000 to $1.2 million. The chameleon is the largest briolette-cut chameleon diamond in the world to be offered at auction, according to Christie’s. A marquise cut, fancy vivid yellow, 8.06-carat diamond will be another highlight among the colored diamonds. Read more here-
http://www.diamonds.net/news/NewsItem.aspx?ArticleID=25730 or http://www.idexonline.com/portal_FullNews.asp?id=32117
COMMODITIES
-Michael Aronstein, the strategist who predicted last year’s commodities collapse, is putting 20 percent of the money he manages into raw materials in a bet that prices have bottomed.
Aronstein started buying metals, agriculture and energy futures this month for the $115 million fund he helps manage at Oscar Gruss & Son Inc. in New York. The worst commodity rout in at least five decades forced producers to idle rigs and mines at the same time China and the U.S. spend $1.4 trillion on roads, bridges, schools and hospitals, reviving demand, he said.
“People have gotten way too negative about the global economy,” Aronstein, 55, said in an interview. “The markets did not react in a normal recessionary tract. It was like we went through the outbreak of a war or some enormous natural disaster that just closed down the global capital markets.” Aronstein, a graduate of Yale University who makes knives and tools as a blacksmith in his spare time, isn’t alone.
Merrill Lynch Global Wealth Management says commodities will benefit as the economy improves. Theresa Gusman, who manages $215 billion for Deutsche Bank AG’s DB Advisors unit, is telling clients to buy raw materials from copper to oil because of “dramatic” cuts in supplies. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=at9BPB7aQdPY&refer;=home
U.S. PLAN TO BUY TOXIC ASSETS-WILL IT WORK?-EXPANDED POWERS TO SEIZE NON BANKS-NEW REGS
-The Obama administration unveiled its plan to remove toxic assets from the books of the nation’s banks, betting that it can revive the U.S. financial system without resorting to outright nationalization.
The plan is aimed at financing as much as $1 trillion in purchases of illiquid real-estate assets, using $75 billion to $100 billion of the Treasury’s remaining bank-rescue funds. The Public-Private Investment Program will also rely on Federal Reserve financing and Federal Deposit Insurance Corp. debt guarantees, the Treasury said in a statement in Washington.
Barely two months after President Barack Obama took office, he and Treasury Secretary Timothy Geithner are staking much of the new administration’s economic credibility on the theory that removing the devalued loans and securities from banks’ balance sheets will help them start lending again and resuscitate the economy. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=ajiVjxYZ.AjM&refer;=home
-Geithner rescue package ‘robbery of the American people’. The US government plan to free beleaguered banks of up to $1 trillion (£690bn) of toxic assets will expose American taxpayers to too much risk, leading economist Joseph Stiglitz has cautioned. Read more here-http://www.telegraph.co.uk/finance/financetopics/recession/5045421/Geithner-rescue-package-robbery-of-the-American-people.html
-IMF says clean up banks to tackle dire world crisis. Read more here-http://www.reuters.com/article/bondsNews/idUSLN31921620090323
-Nobel-prize winning economist Paul Krugman said in remarks published on Monday that the latest U.S. Treasury bailout program is nearly certain to fail, triggering a sense of personal despair. U.S. Treasury Secretary Timothy Geithner on Monday unveiled a plan aimed at persuading private investors to help rid banks up to $1 trillion in toxic assets that that are seen as a roadblock to economic recovery.
“This is more than disappointing,” Krugman wrote in The New York Times. “”In fact it fills me with a sense of despair.” “The Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt,” the Princeton University economist said, citing weekend reports outlining the plan.
“This isn’t really about letting markets work. It’s just an indirect, disguised way to subsidize purchases of bad assets,” he added. Krugman called it a recycled idea of former Treasury Secretary Henry Paulson, who later abandoned the “cash for trash” proposal. “But the real problem with this plan is that it won’t work,” he says, adding that bad loans may be undervalued because there is too much fear in the current climate. Read more here-http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52M4SS20090323
-One Small Problem With Geithner’s Plan: It Will Bankrupt The Banks. Read more here-http://www.businessinsider.com/henry-blodget-one-small-problem-with-geithners-plan-it-will-bankrupt-the-banks-2009-3
-U.S. Seeks Expanded Power to Seize non bank firms. Read more here-http://www.washingtonpost.com/wp-dyn/content/article/2009/03/23/AR2009032302830_pf.html or http://www.reuters.com/article/ousiv/idUSTRE52O44820090325
-Geithner Calls for ‘New Rules of the Game’ in Finance. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aY.q5sTdMTHA&refer;=home
MASSIVE U.S. DEFICITS FOR THE NEXT 10 YEARS-NOBODY LEFT TO LEND TO U.S.?
-$1 trillion deficits seen for next 10 years. President Barack Obama’s budget would produce $9.3 trillion in deficits over the next decade, more than four times the deficits of Republican George W. Bush’s presidency, congressional auditors said Friday.
The new Congressional Budget Office figures offered a far more dire outlook for Obama’s budget than the new administration predicted just last month a deficit $2.3 trillion worse. It’s a prospect even the president’s own budget director called unsustainable. Read more here-http://news.yahoo.com/s/ap/20090320/ap_on_go_pr_wh/obama_budget or http://www.reuters.com/article/bondsNews/idUSN2049806720090320
-Deficit estimate: Up to $1.85 trillion. Lawmakers’ budget agency evaluates the revenue and spending effects of the president’s budget proposals. Read more here-
http://money.cnn.com/2009/03/20/news/economy/cbo_obama_budget_deficit/index.htm or http://www.iht.com/articles/ap/2009/03/20/business/Obama-Budget.php
-The United States wouldn’t even be eligible to enter the European Union if it wanted to because of its debt levels, Sen. Judd Gregg (R-N.H.) claimed Thursday. “We won’t even be able to get into the EU if we wanted to,” Gregg said this morning on MSNBC, “because our government is so large and so huge.”
The European Union’s Stability and Growth Pact (SGP) adopted in 1997 requires a budget deficit to be less than three percent, and requires a national debt beneath 60 percent of Gross Domestic Product (GDP). “We’ve been lectured by France on the fact that we’re not fiscally responsible right now,” Gregg, the would-be commerce secretary, noted with incredulity. Read more here-http://briefingroom.thehill.com/2009/03/26/gregg-us-couldnt-even-join-eu-due-to-debt-levels/
-Soon there may be nobody left to lend to America. Read more here-http://business.timesonline.co.uk/tol/business/columnists/article5950258.ece?openComment=true
CALIFORNIA DEBT AND UNEMPLOYMENT NUMBERS KEEP GROWING
-California Returns with $6.5 Billion Deal, Biggest Since 2004. California sold the biggest U.S. tax-exempt bond issue in almost five years to jump-start capital spending after tight credit and a record budget impasse kept the state out of the municipal market since June.
California boosted its sale 64 percent to $6.54 billion yesterday, following a state advertising push that stretched to New York City for the first time and helped drive about $3.2 billion in purchases by individual investors. The “huge demand” allowed the state to offer bonds to mutual funds and other institutions a day earlier than planned, said Tom Dresslar, spokesman for State Treasurer Bill Lockyer. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=asRKFvW8CL0E
-California economy worsens, unemployment at 10.5 pct. California’s unemployment rate rose to 10.5 percent in February it’s highest in nearly 26 years, as most industries in the most populous U.S. state slashed payrolls. The increase underscores how the U.S. financial crisis and slump in consumer spending it prompted is battering California’s economy, the world’s eighth largest and compounding troubles brought on by its prolonged housing downturn.
At 10.5 percent, California’s unemployment rate is at its highest level since April 1983 and has increased for 11 consecutive months, economist Steve Levy of the Center for the Continuing Study of the California Economy said on Friday after officials reported on the state’s labor market. Read more here-
U.K. DEBT AND DEFICIT CRISIS
-UK will have the worst deficit in Western world, warns IMF. Britain is now tumbling towards the biggest budget deficit in the Western world, the International Monetary Fund has warned.
Next year the Treasury will have to borrow a record 11pc of gross domestic product as it fights the crisis equating to more than £150bn and far more than has ever been borrowed before in British history, according to a devastating new assessment by the Fund.
The assessment coincided with the publication of official figures showing a further deterioration in the public finances during February as the recession ate further into tax revenues. The IMF also confirmed, as had been leaked earlier this week that it now expects the world economy to shrink this year for the first time since the Second World War. It also expects the UK to endure a more severe and longer-lasting contraction than almost any other major economy. Read more here-http://www.telegraph.co.uk/finance/financetopics/recession/5018214/UK-will-have-the-worst-deficit-in-Western-world-warns-IMF.html
-Mervyn King warns Gordon Brown to stop spending. The Governor of the Bank of England laid bare tensions between Gordon Brown and the Treasury yesterday by warning that Britain could not afford a second economic stimulus in the Budget.
Mervyn King threw caution to the wind as he sided with Alistair Darling and the CBI against Downing Street in raising strong doubts over any prospect of another round of “significant fiscal expansion” next month. Read more here-http://www.timesonline.co.uk/tol/news/politics/article5971296.ece
-The Bank of England and No.10 at war: We can’t afford Budget spending spree, Governor tells Brown. Brown to borrow £351billion in the next two years, that’s more than Britain’s total debt from 1691 to the 1997 election. Read more here-http://www.dailymail.co.uk/news/article-1164440/Brown-borrow-351billion-years-thats-Britains-total-debt-1691-1997-election.html
-The devalued Prime Minister of a devalued Government U.K. Daniel Hannan, MEP for South East England, gives a speech during Gordon Brown´s visit to the European Parliament on 24th March, 2009. Watch video here-http://news.goldseek.com/GoldSeek/1237993698.php
U.K. TREASURY AUCTION FAILS TO SELL BONDS
-City alarm as Treasury fails to sell Government gilts. Britain’s ability to borrow tens of billions of pounds to fight the economic crisis has been called into question after the Treasury failed to sell Government gilts for the first time in more than a decade. Read more here-http://www.telegraph.co.uk/finance/financetopics/recession/5051738/City-alarm-as-Treasury-fails-to-sell-Government-gilts.html
-The U.K. failed to find enough buyers for 1.75 billion pounds ($2.55 billion) of bonds for the first time in almost seven years as debt investors repudiated Prime Minister Gordon Brown’s plan to stem the worst economic crisis in three decades.
Gilts slumped after the London-based Debt Management Office, which manages bond auctions on behalf of the Treasury, said investors bid for 1.63 billion pounds of the 40-year securities. The last time the U.K. government was unable to attract enough investors was in 2002 when it tried to sell 30- year inflation-protected bonds. The yield on the 4.25 percent gilt due 2049 rose one basis point to 4.6 percent today. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=ab62rFruCiiM
-U.K. Gets Increased Demand for Inflation Bond after Failed Sale. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a745DTateo0U
20 FAILED U.S. BANKS AND COUNTING
-3 banks fail, 20 so far this year. The FDIC estimates that the cost of the three failures will run in excess of $200 million. One bank was not able to find a buyer, two others were. Read more here-http://money.cnn.com/2009/03/20/news/companies/bank_failure/index.htm
-Feds shut banks in Georgia, Colorado, Kansas. Regulators close banks in Georgia, Colorado, Kansas; 20 bank failures so far this year. Read more here-
http://finance.yahoo.com/news/Feds-shut-bank-in-Georgia-18-apf-14706705.html
-U.S. seizes 2 big credit unions. U.S. takes over two credit unions after tests find vulnerability. U.S. Central Federal Credit Union and WesCorp have combined assets of $57 billion. Read more here-http://money.cnn.com/2009/03/20/news/companies/credit_unions/index.htm
CURRENCY WARS
-UN panel touts new global currency reserve system. Read more here-http://www.breitbart.com/article.php?id=CNG.18e9e5692442aa61d7510553b5ffc14e.8b1&show;_article=1
-China ‘Super Currency’ Call Shows Dollar Concern, G-20 Ambition. China’s call for a new international reserve currency may signal its concern at the dollar’s weakness and ambitions for a leadership role at next week’s Group of 20 summit, economists said. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ae6ezzIMK6cs&refer;=home
or http://www.reuters.com/article/marketsNews/idINPEK18455820090323?rpc=44 or http://www.telegraph.co.uk/finance/breakingviewscom/5042739/Paper-gold-nice-idea-shame-about-the-politics.html
-China’s leaders may press at the Group of 20 summit for specific steps to protect its more than $1 trillion of dollar assets as U.S. fiscal policies risk sparking a “currency war,” a senior Chinese researcher said. The dollar weakened after the Federal Reserve said March 18 it would buy as much as $300 billion of Treasuries and the U.S. this week outlined plans to buy as much as $1 trillion of illiquid bank assets.
U.S. purchases of Treasuries are “irresponsible” because they may weaken the dollar, Li Xiangyang, of the government- backed Chinese Academy of Social Sciences, told a forum in Beijing today. “Chinese leaders are likely to articulate their concern to their U.S. counterparts strongly and ask for specific measures.”
President Barack Obama is relying on China to continue its purchases of Treasuries as the government seeks to fund a $787 billion stimulus package and a deficit this year forecast to reach $1.5 trillion. China’s President Hu Jintao is due to meet with his U.S. counterpart at the G-20 summit in London next week.
“China is a hostage,” said Andy Xie, an independent Shanghai-based analyst who was formerly Morgan Stanley’s chief Asia economist. “China is America’s bank and America basically says there’s nothing you can do to me. If I go down you don’t get paid.” Treasuries have handed investors a loss of 1.6 percent in yuan terms this year, according to Merrill Lynch & Co.’s U.S. Treasury Master index. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=a6VAJqVQF2FM
-China hints at reduction in dollar holdings. Read more here-http://www.gata.org/node/7296
-China keeps faith with U.S. Treasuries: central banker. Read more here-http://www.reuters.com/article/gc04/idUSTRE52M12C20090323
-Falling greenback fuels BRIC dollar reserve rethink. Read more here-http://www.reuters.com/article/reutersEdge/idUSTRE52M5UZ20090323
-Treasury Secretary Timothy Geithner sent the dollar tumbling with comments about China’s ideas for overhauling the global monetary system, only to drive it back up by affirming that it should remain the world’s reserve currency. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aVevdIrBPtUE&refer;=home
-Obama dismisses idea of single global currency. Read more here-http://www.reuters.com/article/newsOne/idUSN2434732920090325
RECOVERY IN 2010?
-2009 will be hard, recovery in 2010 report. The economy will continue to sputter for the rest of this year, but see some relief next year, according to the UCLA Anderson report. Read more here-http://money.cnn.com/2009/03/25/news/economy/ucla_forecast/index.htm
-Feldstein: Recession to run into ‘10. Prominent Harvard professor Martin Feldstein says nation will probably need another large stimulus package. Read more here-
http://money.cnn.com/2009/03/24/news/economy/us_recession_feldstein.reut/index.htm
REAL ESTATE-FORECLOSURES-MORTGAGES-EVICTION
-California Home Prices Decline 41% on Foreclosures. California home prices dropped 41 percent last month from a year earlier, more than double the U.S. decline, as surging foreclosures drove down values, the state Association of Realtors said today.
The median price for an existing, single-family detached home in California sank to $247,590 in February from $418,260 a year earlier, the Los Angeles-based group said in a statement. The U.S. median price fell 16 percent during the same period, the second-biggest drop on record, according to the National Association of Realtors.
Home prices have been falling since their 2006 peak, pushed down by rising foreclosures blamed for the U.S. credit crisis. California, the most populous state, has one of the highest rates of foreclosure, according to RealtyTrac Inc., an Irvine, California-based seller of real estate data. Lenders usually sell foreclosed properties at a discount, dragging down the median price, so it doesn’t necessarily reflect the value of most homes, the California Association of Realtors report said.
“The median, for all its imperfections, tells a really interesting tale right now,” Andrew LePage, an analyst at research firm MDA DataQuick, said in an interview. “It tells you what is and what is not selling. What’s selling right now is foreclosures.”
Foreclosures accounted for 58 percent of existing California home sales in February, compared with 33 percent a year earlier, according to San Diego-based MDA DataQuick. Inland California, where prices are lower than coastal areas, accounted for half the state’s mortgage defaults in the last three months of 2008, MDA DataQuick said. Read more here-
http://www.bloomberg.com/apps/news?pid=20601110&sid;=aUnHHxyqfsyA
-Purchases of new homes in the U.S. unexpectedly rose in February from a record low as plummeting prices and cheaper mortgage rates lured some buyers. Sales increased 4.7 percent to an annual pace of 337,000 after a 322,000 rate in January, the Commerce Department said today in Washington. The median sales price fell 18 percent, and unsold homes at the current sales pace were the fewest since June 2002. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aAZ4tL_FZ32w&refer;=home
-U.S. Sales of previously owned homes unexpectedly climbed in February as record foreclosures brought bargain hunters into the market to take advantage of lower prices. Purchases increased 5.1 percent to an annual rate of 4.72 million from 4.49 million in January, the National Association of Realtors said today in Washington. The median price slumped 15.5 percent from a year ago, the second-biggest drop on record, and distressed properties accounted for 45 percent of all sales. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=aNyqmWIhEdZA&refer;=home
-U.K. house prices face an “utterly unprecedented” decline of 40 percent in nominal terms, as interest rate cuts fail to slow the momentum of decline, according to analysts at Sanford C. Bernstein in London. “A 40 percent nominal house price fall is utterly unprecedented in the U.K.,” analysts led by Bruno Paulson wrote in an e-mailed note to investors today. Prices have already declined 20 percent, it said. Read more here-http://www.bloomberg.com/apps/news?pid=20601102&sid;=avdOXgz7yQNM&refer;=uk
-London has been pushed off its top spot by Monaco as the most expensive place to buy residential property, with the capital and the home counties suffering some of the biggest price falls in the world.
Monaco is now the world’s most expensive residential market, where prime property is being sold for €50,000 (£47,000, $68,000) per square metre (up 2.1 per cent in 2008), followed now by London, at €28,000 per square metre, and then Manhattan, at €16,500 per square metre (down 4.1 per cent). London also saw one of the biggest falls in value of any part of the world, down 17 per cent, beaten only by the 25 per cent falls in prices in Hong Kong. Read more here-http://www.ft.com/cms/s/0/0714c9fc-174a-11de-9a72-0000779fd2ac.html
-Soros Predicts U.S. Commercial Real Estate Values Will Fall 30%. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a2pBt4Vo5uHk&refer;=home
-Commercial Real Estate: The Banks’ Next Big Problem. Read more here-http://www.time.com/time/business/article/0,8599,1886767,00.html
-U.S. banks, battered by record losses from the worst housing slump since the Great Depression, now must weather increasing loan delinquencies from owners of skyscrapers and shopping malls. The country’s 10 biggest banks have $327.6 billion in commercial mortgages, which face a wave of defaults as office vacancies grow and retailers and casinos go bankrupt. A projected tripling in the default rate would result in losses of about 7 percent of total unpaid balances, according to estimates from analysts at research firm Reis Inc.
Commercial property prices are down almost 20 percent in the past year, and with the global recession worsening, there’s “significant stress” in the market, said William Schwartz, a credit analyst at DBRS Inc. in New York. Moody’s Investors Service is reviewing the financial strength ratings of 23 regional lenders, as “these losses are likely to meaningfully weaken the capital position of many banks in 2009,” said Managing Director Robert Young in New York.
Bank of Hawaii Corp., City National Corp., Comerica Inc. and Sovereign Bancorp Inc. were among the companies put on Moody’s list of lenders with a “negative outlook” on March 12, partly because of their “risk concentrations” in the commercial market. Wells Fargo & Co. and Bank of America Corp. account for about half of commercial mortgages owned by the 10 largest banks, company reports show. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=aR72TKlxCQ7A&refer;=exclusive
-Global recession stalls skyscraper construction. Read more here-http://www.reuters.com/article/bondsNews/idUSN1729195720090323
-The U.S. 30-year fixed mortgage rate fell to 4.85 percent, the lowest on record, on a government plan to increase purchases of mortgage-backed bonds and buy as much as $300 billion of Treasuries.
The average rate is the lowest in the Freddie Mac weekly survey dating to 1971, the McLean, Virginia-based mortgage buyer said today in a statement. The rate fell from 4.98 percent a week earlier, Freddie Mac said. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=arq_Xb9SN7_s&refer;=home
-Tenant evicted even though she pays rent on time. Brown and her family are being evicted not because of anything they did, but because her landlord defaulted on the mortgage and the house fell into foreclosure. The house was recently sold at auction.
The bad news came just seven months after Brown had moved in. A real estate broker came to the door and handed her an eviction notice, telling her she had 30 days to vacate. “I was hysterical, I was like, what do you mean?” Read more here-http://www.cnn.com/2009/US/03/23/landlord.foreclosure/index.html
© 2012, Worldwide Precious Metals Canada Ltd.
www.wwpmc.com
The GoldBugg Report – March 31 , 2009
Posted by Worldwide Precious Metals on Tuesday, March 31, 2009
Subscribe to
receive timely
information on
precious metals.
a
Fill Prices may vary based on actual time orders are placed and confirmed. All orders are Final and Subject to Terms and Conditions of the Customer's Account Agreement with Precious Metals International, Ltd. All Fabricated Products for Home Delivery are quoted, basis specific product, quantity and delivery destination at Time Orders are placed and confirmed. Retail Dealer Prices may vary.