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The Goldbugg Report – June 23, 2009

June 23, 2009

WORLD FINANCIAL REPORT ON RADIO JUNE 19 2009 SHOW

“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.” Money and Wealth in the New Millennium, by Norm Franz 

 -John Embry Expects $1,500 Gold and Early Stage Hyperinflation by Year End.

-David Morgan silver commentary, is silver money?

GOLD

-John Embry Expects $1,500 Gold and Early Stage Hyperinflation by Year End.

TGR: If you project gold going to $1,500 by the end of the year, are you projecting that the inflationary period will begin before the end of this year too?

JE: Not in a dramatic way. It will be in the early stages. This obviously presupposes that the dollar will fall in that environment, but yes, as the dollar falls, you’ll start to see more inflationary implications in my opinion. There will still be a lot of people out of work and it will start affecting those who are working. I think that will have a rather negative impact on the overall U.S. economy as well.

TGR: What are the implications of all of this on investments, be they in gold or whatever else?

JE: Personally, I have a significant proportion of my own wealth in gold and gold shares. I like most hard assets. What I wouldn’t own are financial assets, such as bonds or bank deposits and certainly not banks and financial institutions. If what I foresee comes to pass, there will be rewards for being in hard assets. That will protect you.

TGR: What would you advise investors who are just coming into the gold market?

JE: I was responding to a questionnaire recently about how to construct a gold portfolio in today’s market. If you’re being relatively conservative, you would always have a solid core in bullion. I don’t mean ETFs. I mean real bullion or a vehicle where you can audit the fact that the gold is there and not just trust someone saying that it is.

TGR: How much would you put in that core holding?

JE: Physical gold would be 20% to 25% of my portfolio. Read more here-http://news.goldseek.com/GoldSeek/1244827800.php

-Gold sold like chocolate from German vending machines. Shoppers in Germany will soon be able to buy gold as easily as bars of chocolate after a firm announced plans to install vending machines selling the precious metal across the country. Read more here-http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5554972/Gold-sold-like-chocolate-from-German-vending-machines.html or http://www.nytimes.com/2009/06/18/business/global/18gold.html

-Bargain-Hunting for Gold: Seasonal Price Trends Look Favourably on Summer Purchases. Read more here-http://news.goldseek.com/GoldSeek/1211224662.php

-Russia wants gold incorporated in SDRs. Read more here-http://www.gata.org/node/7501

-New gold reserve discovery remains well below the industry’s ongoing needs. In a recently released study, Canada’s Metals Economics group shows that the major gold miners are not replacing resources through new exploration, but rather through acquisition, expansion and upgrading of existing or already known operations. Read more here-

http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=84977&sn;=Detail

-Mike Zielinski: U.S. Mint ends gold, silver coin rationing. Read more here-http://www.gata.org/node/7503

SILVER-PLATINUM-PALLADIUM

Gold to silver ratio at 80 to 1 with gold at $2,300 the silver price would be $28.75

Gold to silver ratio at 70 to 1 with gold at $2,300 the silver price would be $32.86
Gold to silver ratio at 60 to 1 with gold at $2,300 the silver price would be $38.33

Gold to silver ratio at 50 to 1 with gold at $2,300 the silver price would be $46.00
Gold to silver ratio at 15 to 1 with gold at $2,300 the silver price would be $153.33

-Ted Butler silver commentary. Read more here-http://news.silverseek.com/TedButler/1245173905.php

-David Morgan silver commentary, is silver money? Read more here-http://news.silverseek.com/SilverInvestor/1244782032.php

“The major monetary metal in history is silver, not gold.” Noble Laureate Milton Friedman in an interview with James U. Blanchard III for the 20^th Anniversary New Orleans Investment Conference, November 7, 1993.  

“To 250 million persons in 51 countries the word for money is the same as the word for silver and silver literally means money.” Silver Profits in the 80’s, by Jerome F. Smith and Barbara Kelly Smith, copyright © 1982, ERC Publishing Company, page 43. 

“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.” Money and Wealth in the New Millennium, by Norm Franz, copyright © 2001, Whitestonepress, page 154. 

-The price of silver will rise further in 2009 following a sharp rally in May, fueled by a combination of rising investor interest, recovering industrial demand and flat industry output, the chief executive of Coeur d’Alene Mines Corp said on Monday.

“Silver is now being looked at as a separate asset class and as a safe haven, and some sense that the economy may be bottoming,” CEO Dennis Wheeler of the Idaho-based silver producer told Reuters in an interview. “Silver is demonstrating its advantage both for investors and as a leading industrial metal,” Wheeler said. “Silver has a stronger base because of its industrial demand feature. So, I am not surprised that we have seen this price performance for silver compared to gold,” Wheeler said.

Wheeler forecasts silver to rise to a range between $16 and $18 an ounce for the rest of 2009, with a degree of price volatility. “This is an uncertain world that we are living in. Who knows what may trigger more investment into silver and gold as inflation hedges or secured asset buys,” Wheeler said. “You will undoubtedly see some price swings from time to time.”

Wheeler expected that both silver and gold to be supported by similar factors such as declining supply, very few new discoveries and shrinking reserves. “Nothing on the horizon is going to change that (flat supply), so we are going to have silver deficits over the long term by a considerable margin,” he said.

The worst economic crisis since the Great Depression has forced many silver mines to shut due to falling demand and lower metal prices. Silver output is expected to drop further because of the loss as a by-product from base metal mines. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=84191&sn;=Detail

-Roland Watson silver market update. Read more here-http://news.silverseek.com/SilverSeek/1245094693.php

-Gene Arensberg: Unshakeable confidence in gold, silver. Read more here-http://www.gata.org/node/7497

-London and Zurich silver ETFs grow by 3 million ounces in May. Europe’s silver ETFs showed sharp growth in May as investors moved into the most volatile of the precious metals. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=84228&sn;=Detail

-Platinum and palladium the ‘other’ precious metals. Read more here-http://www.moneyweek.com/investments/precious-metals-and-gems/platinum-and-palladium-the-other-precious-metals-14770.aspx

-Why platinum and palladium prices have risen despite GM bankruptcy. It may seem strange that platinum and palladium prices have been on the rise given the turmoil in the U.S. Auto industry and the GM bankruptcy. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=84960&sn;=Detail

DEFINITIONS-QUOTES-QUICK HITS

-Readers of The Economist magazine will be familiar with the Big Mac Index, its clever chart showing the price of a McDonald’s Big Mac in various countries, as a crude way of measuring the purchasing power of various currencies. Gregor Macdonald has taken the idea in a different direction, looking at how many Big Macs you could buy for a barrel of oil, at average prices throughout the year.

Says Gregor: “Two aspects of this chart surprised me. First, even as oil began to take off in 2004 there was still a trailing stability in its relationship to the Big Mac. A barrel of oil could still be purchased for less than 15 Big Macs throughout much of 2004.

The second insight I gleaned from this chart is that despite the advance in the price of the Big Mac since 2001, and equally despite the spectacular price crash of oil from the highs of 2008, a barrel of oil still costs nearly 20 Big Macs. In some sense, therefore, we can think of Oil as having moved from a previous pricing era of 10 Big Macs, to a new era of 20 Big Macs.” View chart here-http://www.businessinsider.com/chart-of-the-day-big-macs-to-oil-2009-6

-“Why don’t somebody print the truth about our present economic condition? We spent years of wild buying on credit, everything under the sun, whether we needed it or not, and now we are having to pay for it, howling like a pet coon. This would be a great world to dance in if we didn’t have to pay the fiddler.” Will Rogers

-There ain’t no rules around here! We’re trying to accomplish something. Thomas Edison

-Find out what any people will quietly submit to, and you have found out the exact measure of injustice and wrong which will be imposed upon them and these will continue, until they are resisted with either words, or blows or both. Frederick Douglass-Bio here-http://en.wikipedia.org/wiki/Frederick_Douglass

-A senior figure at the Sovereign Society claimed June 16th that Gold Prices could increase by as much as 50 percent in the next two years. Eric Roseman, investment director at the firm, has explained in an open letter on SovereignSociety.com that “one of the worst bouts of inflation America has ever seen” is on its way.

With investors traditionally Buying Gold as a hedge against inflation and demand far outweighing supply Mr. Roseman believes that a sustained rise for the yellow metal makes “perfect sense.” He wrote: “Right now, gold is poised to fly past $1,000 per ounce. Over the next 12 to 24 months, I wouldn’t be surprised to see it surge by 50 percent or more.” Read more here-

http://goldnews.bullionvault.com/Goldbug/gold_price/gold_prices_to_rise_by_50_percent_in_next_two_years_19221866

-Investors view precious metals as a safe haven amid turbulent markets and a hedge against inflation. “The most important driver for gold is the expectation that the trillions of dollars in bailouts that are being created in Washington will lead to a much lower U.S. dollar, which means a much higher gold price,” said John Ing, president of Toronto investment dealer Maison Placements. “Less gold is coming to market, while demand is growing. That can only mean one thing. The price of gold will go higher.” Read more here-

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=84877&sn;=Detail

-The last two years have taught so many the virtues of gold and the gold price has reinforced these. Prudence and perspicacity demand that competent investors hold at least a good portion of their wealth in gold and silver. In a worst case environment gold and silver have proved many times that they rise considerably with a real appreciation. Fundamentally, it is now time for gold and silver to take an important place in the world of real value as paper values are sincerely questioned.

We are of the belief that gold will continue on its upward path until there is substantial and convincing evidence that we have a monetary system that can withstand the potential systemic failures on the horizon now. Julian D. W. Phillips-Read more here-http://news.goldseek.com/GoldForecaster/1244828343.php

-“We consider this our only stretch target, as we are raising our year-end gold target to $1,200/oz. Thousand-dollar gold has provided mighty resistance but, considering that it is the only commodity or asset class to still be in a long-term uptrend since 2001, we believe it will ultimately push through this level on the fifth or sixth try. This is the ‘golden age’ for gold, with financial turmoil (bankruptcies and near-bankruptcies at major financial institutions) acting as the catalyst.” Desjardins Securities-Read more here-

http://www.globeinvestor.com/servlet/story/RTGAM.20090616.wdesjardins0616/GIStory/

-My belief is that the green shoots will be killed off by inflation and/or higher interest rates. The fact is that interest rates must increase dramatically, which will either put us in the same situation as the summer of 2007 thru the spring of 2009, or the inflation tactic will be sought to lower the value of debt.

The former scenario will lead to a deflationary recession/depression which will be favourable to cash and the dollar. The latter scenario which the Fed and Administration have shown conclusively to favour will send gold above $1,500 an ounce and oil to $200 per barrel just for starters. It will also mean the end of the US dollar as the world’s reserve currency. In either case, the resulting economic shock will be severe and the difference it will make to your investment strategy is impossible to overstate. Michael Pento-Read more here-

http://www.321gold.com/editorials/pento/pento061609.html

-Nothing will unnerve the paper gold and silver shorts more quickly and do more to undercut their confidence, than to strip them of the real metal and force them to come up with more hard gold and silver bullion to make good on deliveries. “Stand and Deliver or Go Home” should be the rallying cry of the gold and silver longs to the paper gold and silver shorts. Dan Norcini, jsmineset.com

-“Gold has reasons to rally,” said Stephen Platt, an Archer Financial Services commodity analyst in Chicago. “The dollar is pretty risky to be in and Chinese demand for gold seems to be better than expected.” Platt backed his assessment with a prediction that gold will probably trade at “$990 in a couple of weeks.” Casey Daily Resource

-“The dollar is likely to provide much of gold’s short-term direction,” wrote James Moore, of TheBullionDesk.com. “We expect the current theme of dip buying to continue.” And many dips there are likely to be, considering that we are entering the summer season, traditionally a period of the doldrums for gold. Casey Daily Resource

-The USDollar will suffer the brunt of USTreasury rescues, either by brute force futures contracts, or coordinated central bank interventions. Numerous factors read bearish on the billboard for the beleaguered USDollar: huge USGovt debt issuance, weak USEconomy, rising specter of price inflation, questionable bank leadership, foreign revolt in the form of reserves diversification, and calls for a new & improved global reserve currency to de-throne the USDollar. The chart for the DX index could not be more vulnerable.

The next targets are 77 and then 72. Watch for a 20-wk moving average crossover below the more stable 50-wk moving average, a powerful technical signal to sell the US$ down hard! It is coming like night follows day. The current bounce is dead on arrival, obstructed by the 81 level resistance from December, and the falling moving averages overhead. As the credit derivative issue, complete with fresh publicized losses, raises its ugly head, the USDollar will be the bigger loser.

The US banks are extremely vulnerable to additional credit derivative losses. Insolvency could quickly turn into a skein of bank failures. The mysterious rise in the crude oil price confirms great risk and weakness built into the USDollar. The Powerz can blame the speculators, but the true risk is with the USDollar. Crude oil confirms the US$ weakness. Jim Willie-Read more here-http://www.321gold.com/editorials/willie/willie061209.html

-Now that the Fed is halfway through its money printing binge, it may soon have to decide whether to up the ante, by ramping-up its Treasury debt purchases to as much as $1-trillion. But of course, the big risk with massive QE overdoses is that the gambit could end-up crushing the value of the US-dollar and intensify inflation fears that are festering in the bond market, pushing yields higher. In other words, massive money printing could send crude oil prices to $100 per barrel. Gary Dorsch-Read more here-

http://www.321gold.com/editorials/sirchartsalot/dorsch061109.html

-The next major move in the stock market will be down. We are seeing the last vestiges of a rally similar to what we saw in 1931. The rally we expected at 6600 up to 8500 will end as soon as all the financial institutions that need to sell what stock is necessary to bolster their balance sheets. Our guess is the rally has been aided in a big way by short covering and the participation of the US government.

Those who believe the SEC has stopped naked short selling are sadly mistaken. Markets weaken during the summer as volume dries up during the vacation season. In addition, second quarter earnings will be very disappointing, especially in the financial segment. Unemployment continues to worsen and capacity utilization is at its lowest level in years.

Banks continue to cut credit lines and not lend nearly as much as they did before. Citigroup’s earnings should turn down again. They won’t have another $2.7 billion gain or another $400 million mark-to-market fictitious gain. Absent those gains they would have lost $2.8 billion. Bob Chapman-Read more here-

http://news.goldseek.com/InternationalForecaster/1245260833.php

-China sells US bonds to ’show concern’. A decision by China to reduce its US Treasury holdings suggests concern about the US attitude towards its economic woes, Chinese economists were quoted as saying in state media Wednesday. The remarks, coming after US data showed a modest decline in Chinese investments in US government bonds, were in contrast to an earlier statement in Beijing which had said the recent sell-off was a routine transaction.

“China is implying to the US, more or less, that it should adopt a more pragmatic and responsible attitude to maintain the stability of the dollar,” He Maochun, a political scientist at Tsinghua University, told the Global Times. According to US Treasury data issued Monday, Beijing owned 763.5 billion dollars in US securities in April, down from 767.9 billion dollars in March.

It was the first month since June 2008 that Beijing failed to purchase more US T-bills. Zhang Bin, a researcher at the Chinese Academy of Social Sciences, said China’s move showed a more cautious attitude. “It is unclear whether the reduction will continue because the amount is so small. But the cut signals caution of governments or institutions toward US Treasury bonds,” Zhang told Xinhua news agency. Read more here-http://www.breitbart.com/article.php?id=CNG.6cc88b76aff9be3f90f62526a3107ec9.31&show;_article=1

-IMF official says U.S. dollar reserve status to stay. Read more here-http://www.reuters.com/article/topNews/idUSTRE55E3R920090615

-Russia has full confidence in the dollar and there are no immediate plans to switch to a new reserve currency, Finance Minister Alexei Kudrin said. “It’s too early to speak of an alternative” to the dollar, Kudrin said in Lecce, Italy, in a television interview today after meeting with finance chiefs from the Group of Eight nations. The fundamentals of the dollar are still in “good shape.” Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=abKnXn3puSjY

-Medvedev Reiterates Russian Aim to Create Supranational Currency. President Dmitry Medvedev reiterated Russia’s intention to push for the creation of a global reserve currency to replace the U.S. dollar.

“The strengthening of the international currency system” requires first creating regional reserve currencies and then a “supranational currency,” Medvedev told leaders of the member states of the Shanghai Cooperation Organization in Yekaterinburg, Russia, today. “Reinforcing the international currency system should not be done through reinforcing only the dollar,” Medvedev said. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=auA59hCyoDV4

-Suitcase With $134 Billion Puts Dollar on Edge. It’s a plot better suited for a John Le Carre novel. Two Japanese men are detained in Italy after allegedly attempting to take $134 billion worth of U.S. bonds over the border into Switzerland. Details are maddeningly sketchy, so naturally the global rumor mill is kicking into high gear.

Are these would-be smugglers agents of Kim Jong Il stashing North Korea’s cash in a Swiss vault? Bagmen for Nigerian Internet scammers? Was the money meant for terrorists looking to buy nuclear warheads? Is Japan dumping its dollars secretly? Are the bonds real or counterfeit?

The implications of the securities being legitimate would be bigger than investors may realize. At a minimum, it would suggest that the U.S. risks losing control over its monetary supply on a massive scale. Read more here-http://www.bloomberg.com/apps/news?pid=20601039&sid;=a62_boqkurbI

-20 Things You Didn’t Know About Money. Read more here-http://www.dollarcollapse.com/iNP/view.asp?ID=97

-Credit card defaults keep climbing. Default rates in May continue to rise as borrowers struggle with the weak job market. Read more here-

http://money.cnn.com/2009/06/16/news/companies/credit_card_losses/index.htm?postversion=2009061615

-Huge job cuts for U.K. public sector. As many as 350,000 public sector jobs could be lost over the next five years, the Chartered Institute of Personnel and Development (CIPD) is warning. Read more here-http://news.bbc.co.uk/2/hi/business/8102121.stm

-UK jobless total at 12-year high. Read more here-http://news.bbc.co.uk/2/hi/business/8104546.stm

-UK public sector borrowing was the highest on record in May, the Office for National Statistics said. Public sector net borrowing was £19.9bn in May, and has already reached £30bn in the first two months of the financial year.

This is double the level of one year ago, and even higher than the £19bn borrowed in March. The total outstanding government debt has risen to £774.8bn, £150bn more than one year ago, equal to 54.7% of UK GDP. In April’s budget, the Chancellor, Alistair Darling, forecast that borrowing this year would reach £175bn. Read more here-

http://news.bbc.co.uk/2/hi/business/8106607.stm

-U.S. poised for weak recovery UCLA forecast. Read more here-http://www.reuters.com/article/governmentFilingsNews/idUSN124751620090616

-Posen Says U.S. Economy ‘Bouncing Back,’ Sees W-Shaped Recovery. The U.S. economy is “bouncing back” but still faces a “bumpy ride” out of the recession, said Adam Posen, who will become a Bank of England policy maker in September.

Posen told a conference in Dublin today that he expects a “W-shaped” recovery by the U.S. economy, meaning he sees a “double dip” in which the recovery temporarily reverses before resuming. U.S. economic growth is expected to be “solidly positive” from the second half of this year, he added.

Posen said he’s “trying to resuscitate the good name of W” in describing the economic recovery. Some recent data indicate the U.S., the world’s largest economy, may be over the worst of the slump. Housing starts jumped more than forecast last month and confidence among U.S. consumers rose for a fourth straight month in June. Still, mounting unemployment and tight credit mean the recovery will be slow. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=agqS2gLC4lvw

-U.S. likely to lose AAA rating: Prechter. Technical analyst Robert Prechter on Monday said he sees the United States losing its top AAA credit rating by the end of 2010, as he stuck by a deeply bearish outlook on the U.S. economy and stock market.

Prechter, known for predicting the 1987 stock market crash, joins a growing coterie of market heavyweights in forecasting the United States will lose its top credit rating as the government issues trillions of dollars in debt to fund efforts to bail out the economy.

Despite the government and Federal Reserve’s massive rescues for financial companies and securities markets, Prechter expects credit markets to clam up again as they did in the first phase of the global financial crisis and for the U.S. economy to sink into a depression. Read more here-

http://www.reuters.com/article/InvestmentOutlook09/idUSTRE55E6BM20090615

-Roubini sees weeds amid green shoots. The U.S. economy will not recover until the end of this year, and even then growth will remain meek and vulnerable to higher interest rates and commodity prices, economist Nouriel Roubini said on Tuesday.

Roubini, who rose to prominence for predicting the global credit crisis, tore down the “green shoots” theory that a rebound is imminent, saying there was a significant risk of a “double-dip” recession where the economy expands slightly only to begin contracting again. “In addition to green shoots there are also yellow weeds,” he told the Reuters Investment Outlook Summit in New York.

He pointed to the growing divergence between business sentiment surveys, which have been improving in recent months, and industrial production, which is down sharply and receded another 1.1 percent in May.

Roubini, the head of economics research firm RGE Global Monitor, said the U.S. jobless rate, already at a 26-year high of 9.4 percent, would reach 11 percent before it begins to ease. He added that he saw few engines for growth given that U.S. consumers are tapped out

As a result, Federal Reserve policy-makers, whom Roubini says completely missed the magnitude of the crisis at its inception, face an unenviable set of policy choices. He said weak growth would allow the U.S. central bank to leave interest rates near the current rock-bottom levels for the foreseeable future. Eventually, however, trillions of dollars of unprecedented emergency measures to heal the financial system will need to be mopped back up to prevent an upsurge in inflation.

Rampant inflation could lead to negative economic cycles like the ones that plagued much of the industrialized world in the 1970s. “That’s the challenge the Fed is facing,” Roubini said. Read more here-http://www.reuters.com/article/InvestmentOutlook09/idUSTRE55F4ET20090616

-IMF chief warns it too soon to roll back stimulus. The head of the IMF warned on Monday it was too soon to discuss rolling back stimulus spending, saying the world economy had yet to weather the worst of a recession that has hammered industrial output and claimed a record number of European jobs.

“We first have to exit the crisis before we can implement an exit strategy, and we haven’t exited the crisis yet,” International Monetary Fund chief Dominique Strauss-Kahn said during a visit to Kazakhstan. Read more here-http://www.reuters.com/article/wtUSInvestingNews/idUSTRE55E0BJ20090615

-Bank Rescue Costs EU States $5.3 Trillion, More Than German GDP. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=aI.TvvSBYXBM

-King Says U.K. Banks May Need More Capital to Finance Recovery. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aZNaIn.9PBJo

-U.K. Bank of England pours cold water on economic recovery. Read more here-http://business.timesonline.co.uk/tol/business/economics/article6519170.ece

-More auto industry bankruptcies loom. Auto parts manufacturer trade group predicts widespread bankruptcies after the government rejects request for $8 billion to $10 billion in additional help. Read more here-http://money.cnn.com/2009/06/16/news/companies/suppliers_plea_rejected/index.htm

-Nearly 30 Airlines Have Vanished in the Last 18 Months. Read more here-http://www.nytimes.com/2009/06/15/business/global/15ravsqueeze.html

-Oilman says his ‘Pickens plan’ will be good for Canada. Read more here-http://www.globeinvestor.com/servlet/story/GAM.20090618.RPICKENS18ART1938/GIStory/

-T.Boone Pickens: $300 oil. Watch video here-http://money.cnn.com/video/fortune/2009/06/16/fortune.bg.061609.tboone.cnnmoney/index.html

-Poll: Half of Israelis back bombing if needed to stop Iran nukes. Read more here-http://www.cnn.com/2009/WORLD/meast/06/14/israel.iran.poll/index.html

-Iran 101: Understanding the unrest. Read more here-http://www.cnn.com/2009/WORLD/meast/06/18/iran.101.explainer.qa/index.html

-Warning: Counterfeit dollars from N. Korea. Treasury Department says the country could use financial deception to get around sanctions. Read more here-

http://money.cnn.com/2009/06/18/news/international/Treasury_warning_North_Korea/index.htm

-North Korea may fire a long-range ballistic missile toward Hawaii in early July, a Japanese news report said Thursday, as Russia and China urged the regime to return to international disarmament talks on its rogue nuclear program.

The missile, believed to be a Taepodong-2 with a range of up to 4,000 miles (6,500 kilometers), would be launched from North Korea’s Dongchang-ni site on the northwestern coast, said the Yomiuri daily, Japan’s top-selling newspaper. It cited an analysis by the Japanese Defense Ministry and intelligence gathered by U.S. reconnaissance satellites. The missile launch could come between July 4 and 8, the paper said. Read more here-http://apnews.myway.com/article/20090618/D98T1AR00.html

-U.S. may be within N. Korea missile range in 3 years, official warns. The West Coast may be vulnerable to an attack, the vice chairman of the Joint Chiefs of Staff says. However, North Korea is unlikely to be able to develop a nuclear warhead by then. Read more here-http://www.latimes.com/news/nationworld/world/la-fg-north-korea-missiles17-2009jun17,0,6692726,print.story

-Defense Secretary Robert Gates said he has ordered the U.S. military to take defensive measures should North Korea attempt to fire a ballistic missile toward Hawaii, even as officials express scepticism of the possibility. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aJd3FMsNStZ0

WWW.RARECOLOREDDIAMONDS.COM

-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

-Watch BTV interview of Harold Seigel on colored diamonds and his website http://www.rarecoloreddiamonds.com/. Watch video here-http://www.rarecoloreddiamonds.com/articles/index.html and http://www.youtube.com/watch?v=BWYMJnEz-n4

-Christie’s New York sale amounts to $11,367,875. The top lot was a 6.29-carat, pear-shaped internally flawless blue diamond. The Christie’s New York Jewels auction generated sales worth $11,367,875. Reports say, that the sale was 91 percent sold by lot and 86 percent sold by value. An anonymous bidder bought the top lot a 6.29-carat, pear-shaped internally flawless, fancy intense blue diamond, for $3,554,500.

The piece was carrying a presale estimate of $3.3 million to $5.5 million. A 46.72-carat, modified rectangular-cut, SI1, fancy yellow diamond featured amongst the top 10 lots, and sold for $602,500, within its presale estimate of $500,000 to $700,000.

Another amongst the top 10 lots was a 10.01-carat, pear-shaped F diamond, which topped the Christie’s presale estimate of $200,000 to $300,000. It was bought by a private buyer from the U.S. for $458,500. The sale took place on June 11, 2009, and indicated that the markets are looking up. Read more here-http://diamondworld.net/contentview.aspx?item=3899

or http://www.israelidiamond.co.il/english/News.aspx?boneId=918&objid;=5209 or http://www.diamonds.net/news/NewsItem.aspx?ArticleID=26691

-Colored diamonds sold at the Christie’s New York sale. View here-http://www.christies.com/LotFinder/searchresults.aspx?intSaleID=22124#action=refine&intSaleID;=22124&sid;=248e604a-530c-4494-a4b0-c59066523f29&selectedids;=55215

-Are Larger Stones Making a Comeback? Christie’s Auction Says Yes. Christie’s London Sale Wednesday, June 10, made several sellers very happy. A highlight of the sale was an Art Deco pendent containing a circular-cut fancy yellow, SI1 diamond weighing 44.14 carats, estimated at $327,000-$408,750. The piece reached an impressive price of $865,324 or $19,600 per carat. Read more here-http://www.idexonline.com/portal_FullNews.asp?id=32479

HYPERINFLATION WATCH

-Exploding Money Supply, But No Inflation Just Yet. In theory, the massive creation of money will lead to inflation. Indeed, everyone’s fretting about all the Fed’s printing. But according to traditional inflation metrics, it’s not here yet. Today’s chart shows how severely the money supply and inflation are going in fiercely opposite directions. Now, looking at inflation in terms of commodity prices, you get a different story. Read more here-http://www.businessinsider.com/chart-of-the-day-money-supply-vs-inflation-2009-6

-36 South Investment Managers Ltd., whose Black Swan Fund gained 234 percent in 2008, is raising money for a new hedge fund, betting that government efforts to pump money into economies could result in hyperinflation.

The Excelsior Fund targets returns that will be five times the average annual rate of inflation of the Group of Five economies France, Germany, Japan, the U.K. and the U.S. should the rate exceed 5 percent, Jerry Haworth, co-founder of the firm, said yesterday. Raising $100 million for the fund would be a “good” amount, he said.

“There is a sharply increased risk of greater than 5 percent inflation starting from now,” Haworth said in a telephone interview from London. “We are in the lag period between when the seeds of inflation are sown and when their off spring, that is higher prices, are evident for all to see.”

U.S. President Barack Obama is selling record amounts of debt to try to end the steepest U.S. recession in 50 years, while Japanese Prime Minister Taro Aso has unveiled three stimulus packages worth 25 trillion yen ($261 billion) since taking office in September. Governments around the world selling record amounts of debt may devalue currencies against assets and spark inflation. Most investors are underestimating the risk of inflation, Haworth said. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid;=aku06Rgam3n0

CHART OF THE DAY-RECESSION

-While the stock market has rallied nicely since bottoming on March 9th, the economy continues to struggle. For some perspective on the current economic recession, today’s chart illustrates the duration of all US recessions since 1900. As today’s chart illustrates, the five longest recessions all began prior to 1930. The length of the current recession (now in its 18th month) is above average and the longest recession since the Great Depression. Read more here-http://www.chartoftheday.com/20090612.htm?T

Source: Chartoftheday.com

U.S. RECOVERY OVERLY OPTIMISTIC

-This chart from innocentbystander.net clearly shows Team Obama’s projections in the American Recovery and Reinvestment Plan are overly optimistic. May’s 9.4% unemployment rate, a 25-year high, far exceeded expectations. But don’t worry, your tax dollars are hard at work.

About 1.6 million jobs were shed since the stimulus bill was passed in February, while the roughly $44 billion borrowed and spent from the recovery act has “saved or created 150,000 jobs,” claims the White House.

REAL ESTATE-FORECLOSURES

-Millionaire Homes’ May Lose Value Until 2012. Prices for the most expensive U.S. homes may not reach bottom for another few years, according to JPMorgan Chase & Co. analysts.

“Currently, we have national home prices bottoming in 2011,” they said. “However, prices for more expensive homes may not bottom out until 2012, and ultimately result in peak-to- trough declines in excess of 60 percent (compared to 40 percent nationally).”

“California is probably worse than other states, but higher-priced homes in general are going to be a problem,” Sim said in a telephone interview today. The state’s median sales price for existing single-family homes fell 37 percent in April from a year earlier, to $256,700, according to California’s Association of Realtors. Nationwide, the price fell 15 percent to $169,800, according to the National Association of Realtors. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=aXQ2MXGoSysw

-New York Home Prices Forecast to Drop 40%. Read more here-http://www.time.com/time/printout/0,8816,1905085,00.html

-Is the housing bust about to take Manhattan? Read more here-http://www.reuters.com/article/newsOne/idUSTRE55D1ON20090614

-California’s Unending Housing Problem. We keep hearing that the economic problems won’t go away until the housing crisis is over. And if you believe this chart, put together by Mark Hanson of the Field Check Group, that won’t be for a long time.

Here’s the problem: Foreclosures are still occurring more than twice as often as sales. In other words, the inventory just keeps piling up, month after month. And with the Option ARM resets still on the horizon, the mess is only getting worse. Bring out the bulldozers. Read more here-

http://www.businessinsider.com/chart-of-the-day-california-house-sales-vs-california-foreclosures-2009-6

-US cities may have to be bulldozed in order to survive. Dozens of US cities may have entire neighbourhoods bulldozed as part of drastic “shrink to survive” proposals being considered by the Obama administration to tackle economic decline. Read more here-http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5516536/US-cities-may-have-to-be-bulldozed-in-order-to-survive.html

-Spain April Home Sales -48%; Highlight Deep Recession. Read more here-http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=bb833661-225e-4eb1-a083-0c69bc82f58a

-New wave of foreclosures hits US. Read more here-http://news.bbc.co.uk/2/hi/business/8102408.stm

-Property tycoon loses his £21m home in Britain’s biggest ever repossession. Read more here-http://www.dailymail.co.uk/news/article-1193116/Property-tycoon-21m-home-taken-Britains-biggest-repossession.html

© 2010, Worldwide Precious Metals.
www.wwpmc.com

The Goldbugg Report – June 23, 2009
Posted by Worldwide Precious Metals on Tuesday, June 23, 2009

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