Newsroom
The Goldbugg Report – November 24, 2009
November 24, 2009
Please be advised that Worldwide Precious Metals will be closed November 26th and November 27th recognition of the US Thanksgiving.
For all trades please call 1-866-623-2002 x102
Happy Thanksgiving.
Worldwide Precious Metals
GOLD
-Super-rich seen buying gold, selling hedge funds. The investment preferences of the world’s wealthiest families have shifted significantly in favour of gold and other commodities and away from hedge funds in the wake of the financial crisis, according to a survey of family offices and advisers of the super-rich.
Two-thirds of the 100 respondents to a survey by the Family Office Channel, a new website, said that super-rich families are now more likely to invest in gold and other commodities. They are also more interested in bond investments and in holding higher amounts of cash as part of an “instinctive retreat to ultra-safe asset classes.”
By contrast, two-thirds of respondents said the wealthiest families are less likely to invest in hedge funds and structured products investments offering capital protection with one in three reporting “greatly reduced” interest in these holdings.
Private equity and commercial property are also much less popular asset classes, while attitudes to residential property investment remain largely unchanged. Read more here-
-Hinde’s Hedge Fund Advances 44% After Dumping Equities for Gold. Hinde Capital Ltd.’s hedge fund gained 44 percent this year after selling its holdings in the biggest mining companies to buy gold.
The Hinde Gold Fund made the switch in October 2008, having previously held equal weightings in equities and gold, according to Ben Davies, co-founder of the fund. He declined to say which stocks the fund had sold.
Gold is heading for a ninth annual gain, the best run since at least 1948. The metal rose 29 percent this year, and traded at a record yesterday, as a weakening dollar spurred investors to seek a store of value. Some also bought gold to guard against inflation. U.S. consumer prices will expand this quarter after three contractions, a Bloomberg survey of 63 economists showed.
“Gold is as undervalued as in 2001 and 2002,” Davies said by phone from London. “We’re in an early stage of inflation.” The switch from equities to bullion limited the fund’s loss to 18 percent last year, Davies said. Gold will comprise at least 75 percent of the fund this year, with holdings in smaller miners accounting for a further 15 percent, he said. Read more here-
http://www.bloomberg.com/apps/news?pid=20603037&sid;=a6S6FWbcFMZM
-Gold Investors Should Switch From Equities To Bullion Barings. Read more here-http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=6545c72b-7ea7-44d9-96eb-a0cba4c7b48e
-Is $6,300 fair value for gold? The last parabolic spike in gold took off when central banks joined the fray in the 1970s, hoarding bullion with the same enthusiasm as gold bugs.
Dylan Grice from Société Générale says it smells much the same today. Read more here-http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100002059/is-6300-fair-value-for-gold/
-Jim Rickards: If gold is money again, it goes to between $4,000 and $11,000. Jim Rickards, director of market intelligence for McLean, Virginia-based consulting firm Omnis, was allowed onto CNBC again today to make gold-friendly comments. You may recall his blunt statement on CNBC back in September: “When you own gold, you’re fighting every central bank in the world”
Today Rickards remarked that the United States and China are devaluing their currencies against each other in a game of chicken, that gold should easily reach $2,000 per ounce next year just as a matter of supply and demand, and that if gold should start being considered money again, it would have to rise to between $4,000 and $11,000 to support the big increase in the world’s money supply. Read and watch more here-http://www.gata.org/node/8051
-Gold at $5,000 an ounce? Don’t disgard it. Gold remains in focus and its price can still explode higher, writes Martin Hutchinson. When money is easy and demand moves much faster than supply, prices can explode. In 18 months from July 1978, gold went from $185 per ounce to $850. That’s $2,400 in today’s dollars. And interest rates then were much higher than now. A similar price rise from here would bring gold to more than $5,000 per ounce. Read more here-http://www.telegraph.co.uk/finance/breakingviewscom/6587195/Gold-at-5000-an-ounce-Dont-disgard-it.html
-Gold Could Hit $1,400 This Year: CEO. The gold rally is far from over and the price of the precious metal could hit $1,400 per troy ounce by the end of the year and keep rising from there, James Turk, chairman and founder of GoldMoney, told CNBC.
“In this current run I think you’re going to see 1,200 to 1,400 (dollars per troy ounce) by the end of this year, and next year I think it’s going to continue,” Turk said. Investors are moving out of paper gold and into physical gold due to increased risk aversion and that’s what’s been driving the price higher over recent months, Turk said.
“If we look back to 1983 when the Dow broke out above a thousand over the next few years the Dow Jones Industrials tripled in price. I think the same thing is possible for gold,” Turk said. Gold has been one of the best performing asset classes this decade and is only in the second stage of its bull market, he said. “We have a long way to go before we get the speculative parabolic stage,” he added. Watch video here-http://www.cnbc.com/id/34010551?__source=RSS*tag*∥=RSS
-Housing savant Paulson now looks to gold. Paulson & Co. to buy shares of gold-related investments in 2010. Paulson to invest $250 million. Billionaire John Paulson, who earned his hedge fund billions when he bet against the housing bubble, is waging a new noteworthy bet. Paulson is investing as much as $250 million in a new gold fund next year. Read more here-
http://money.cnn.com/2009/11/18/news/companies/John_Paulson_gold_fund/index.htm
-Gold to Outperform U.S. Stocks on Stimulus, Marc Faber Says. Gold, which climbed to a record today, will outperform U.S. stocks as investors turn to the bullion on further government stimulus spending, said Marc Faber, publisher of the Gloom, Boom & Doom report.
The support level for the commodity will now be at $1,000, which was the precious metal’s resistance level previously, Faber said in a Bloomberg Television interview in Singapore today.
“What will continue to happen is that the S&P; 500 and the Dow Jones will go down relative to gold,” Faber said. “I think gold will go up more” from its support level.
The outlook for gold sparked a debate between economist Nouriel Roubini and Jim Rogers earlier this month. Rogers, the investor who predicted the start of the commodities rally in 1999, said Roubini is wrong about the threat of bubbles in gold and emerging-market stocks. Roubini, who predicted the global economic crisis, said a forecast by the investor that gold will double to at least $2,000 an ounce is “utter nonsense.”
“Will it go $2,000, $200,000 or $2 trillion? I don’t know,” Faber said. “But if you have money printing in the world, then the price will over time rise. It will go up more for things that you just can’t increase the supply, and the supply of precious metals is very limited.”
Gold is set for a ninth annual gain as central banks, pension funds and individual buyers seek to protect themselves from potential currency debasement and inflation. Policy makers worldwide have set interest rates near zero and spent $2 trillion to pull the world economy out of the worst recession since World War II.
“With the crisis, people are realizing gold is a good asset to have,” Pierre Gay, chief executive officer at Newedge Financial Asia-Pacific, said in a Bloomberg Television interview today. “For me, the potential for gold is pretty high.” Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=aSoEpFEjNz3o
-Faber Says `Sky Will Be The Limit’ for Rising Gold Price. Watch video here-http://www.bloomberg.com/avp/avp.htm?N=av&T;=Faber%20Says%20%60Sky%20Will%20Be%20The%20Limit%27%20for%20Rising%20Gold%20Price&clipSRC;=mms://media2.bloomberg.com/cache/vuZkPHEkdyfM.asf
-Jim Rogers: There Is No Gold Bubble! Read more here-http://www.businessinsider.com/jim-rogers-there-is-no-gold-bubble-2009-11
-Jim Rogers: Buy Gold Not Gold Stocks. Read more here-http://www.thestreet.com/story/10627203/1/jim-rogers-buy-gold-not-gold-stocks.html?puc=_tscrss
-U.K. Royal Mint Quadruples Production of Gold Coins. The U.K.’s Royal Mint, established in the 13th century, more than quadrupled production of gold coins in the third quarter after demand for the metal increased as investors sought to hedge against a weakening dollar.
Output rose to 32,735.8 ounces from 7,500.2 ounces a year before, according to data obtained by Bloomberg News under a Freedom of Information Act request. Production in the first nine months more than tripled to 100,391.3 ounces, the data show.
Gold is set for a ninth annual gain as countries have cut interest rates to near zero percent and spent $2 trillion to pull the global economy out of the worst recession since World War II. The metal reached a record in London yesterday and has gained about 29 percent this year, while the dollar has dropped 7.3 percent against a basket of six currencies.
“There’s still a total lack of confidence in the financial system,” David Russell, a director at Dublin-based brokerage and bullion dealer GoldCore Ltd., said in an interview. “Investors are seeing the benefits of diversifying into gold. Smaller investors are clued into the fact that inflation possibilities are a worry for the future.”
Sales of American Eagle gold coins by the U.S. Mint more than doubled in the first nine months to 954,000 ounces, its Web site showed. Harrods Ltd., the London department store, began selling gold bars and coins for the first time in October. Read more here-http://www.bloomberg.com/apps/news?pid=20603037&sid;=ajSyUvek1EtE
-U.S. Mint resumes selling certain gold coins amid strong demand. Read more here-http://www.gata.org/node/8043
-The lifting of Vietnam’s ban on gold imports could have some remarkable effects on the market. Shifting sands in the gold investment market means that European countries are now in the vanguard when it comes to investment bar purchases; with local gold prices doubling since April 2006, will Vietnam now come back to the fore? Read more here-
http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=92778&sn;=Detail
-Buy Gold as Insurance. Frank Holmes, CEO of U.S. Global Investors, says investors should have 10% of their portfolio in gold for insurance purposes. He also reveals what other precious metals he’s buying. Watch video here-http://www.thestreet.com/video/10625847/buy-gold-as-insurance.html?puc=_tscrss&s;=1#49993600001
-Chartists sense golden opportunity for bullion. With record-high gold moving further into uncharted territory, analysts who study past chart patterns to predict future behavior are getting acclimatized and see any correction as an opportunity to lengthen exposure.
Even as chart signals show signs of strain they say the market’s long-term uptrend is intact, in line with the dollar’s downward trajectory, with prices targeting $1,200 an ounce by the end of 2009 and an eventual target of $1,500 by mid-2010. Read more here-http://www.reuters.com/article/ousivMolt/idUSTRE5AH2S520091118
-Clive Maund gold market update. Read more here-http://news.goldseek.com/CliveMaund/1258318980.php
-Ultimate store of value is gold. Read more here-http://www.321gold.com/editorials/saxena/saxena111309.html
-South African gold on final deathwatch as top grade scientist finds residual gold is more than 90% less than claimed. Research shows that production rates should fall permanently below 100 tonnes a year within the coming decade. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=93062&sn;=Detail
-Peak Gold: Yearly Gold Production Is Now On A Permanent Downwards Slope. Read more here-http://www.businessinsider.com/understanding-the-dynamics-of-peak-gold-production-2009-11
-Gene Arensberg: Big gold and silver shorts starting to retreat. Read more here-http://www.gata.org/node/8041
-BlackRock says central banks will be net buyers of gold. Read more here-http://www.gata.org/node/8030
-Russia’s state repository Gokhran will sell 30 tonnes of gold to the central bank in 2009 instead of offering it to the market, Russia’s finance minister said on Wednesday, adding that the operation will not be repeated in 2010.
Alexei Kudrin also told reporters that Gokhran will use the funds raised from the operation to buy 31 billion roubles ($1.08 billion)worth of diamonds from state miner Alrosa and may purchase the same amount again in 2010.
The government had planned to sell 20-50 tonnes of gold to help plug a budget deficit in the first major sale since the fall of the Soviet Union. Thirty tonnes would represent 0.5 to 1.25 percent of global consumption of the metal, which soared in price to a record high this month, but the open sale was later cancelled after information about it leaked. Read more here-
-Mauritius buys 2 tons of gold from IMF. Read more here-http://www.gata.org/node/8038
-John Embry Nov-Dec commentary. Read more here-http://www.sprott.com/Docs/InvestorsDigest/2009/11_27_2009%20Financial%20front_the%20four%20horsemen%20are%20riding.pdf
-Eric Sprott: Gold Momentum’s Picking Up Dramatically. Read more here-http://news.goldseek.com/GoldSeek/1258300800.php
-Kevin Kerr: Gold is the New Reserve Currency. Watch video here-http://watch.bnn.ca/clip236272#clip236272
-Jim Sinclair’s gold interview at King World News. Listen here-http://www.gata.org/node/8023
-When it comes to gold, history itself wears a tin-foil hat. Read more here-http://www.gata.org/node/8029
-Chart of the week: How The Old Gold Bugs Lost Control Of Gold. Latest data from the World Gold Council shows just how much the gold market has changed in just under two years.
Essentially, the more traditional sources of demand for gold, ie. jewelry, industry, gold bar hoarders, and coins have been falling.
Meanwhile, gold demand from new retail investment products has skyrocketed from just 7% of total gold demand in 2007 to a whopping 27% most recently. That’s almost a 4x increase in their share of demand in under two years. Given that market prices are generally driven by incremental changes in supply and demand, clearly the new retail style gold players are now driving the market.
The true gold bugs of yesteryear are no longer in charge. Though they’re probably not complaining given that retail demand is making them rich. Just realize that retail demand can be a fickle friend. Read more here-http://www.businessinsider.com/chart-of-the-day-retail-investments-share-of-total-gold-demand-2009-11
SILVER
Gold to silver ratio at 80 to 1 with gold at $1,400 the silver price would be $17.50
Gold to silver ratio at 70 to 1 with gold at $1,400 the silver price would be $20.00
Gold to silver ratio at 60 to 1 with gold at $1,400 the silver price would be $23.33
Gold to silver ratio at 50 to 1 with gold at $1,400 the silver price would be $28.00
Gold to silver ratio at 40 to 1 with gold at $1,400 the silver price would be $35.00
Gold to silver ratio at 30 to 1 with gold at $1,400 the silver price would be $46.67
Gold to silver ratio at 20 to 1 with gold at $1,400 the silver price would be $70.00
Gold to silver ratio at 15 to 1 with gold at $1,400 the silver price would be $93.33
-Clive Maund silver market update. Read more here-http://news.silverseek.com/CliveMaund/1258302432.php
-Poor man’s gold may be an investor’s treasure. Silver’s a severely undervalued ‘investment opportunity of a lifetime’. Silver’s not so much a poor man’s gold anymore and investors may soon realize that the white metal’s the real treasure. True, at $18 per ounce, silver is cheap trading around 60 times less than gold’s record price of more than $1,100. But year to date, it’s climbed 52% in value compared with gold’s rise of around 25%, according to data from FactSet Research.
Silver is a precious metal, after all, one that has historically outperformed gold in a bull market and doubles as an industrial metal and supplies of it are depleting at a much more rapid pace. “Silver is unique in terms of being both a monetary and an industrial metal,” the Bullion Services Team at GoldCore said in a recent report, pointing out that it’s severely undervalued. “Silver remains the investment opportunity of a lifetime.”
Gold’s prices have climbed nearly 11% in the last two months. In that same time span, silver’s up by only 3.1%. And “investors looking for returns continue to wager on higher gold prices, whether it be on concerns over equity or currency markets or to make quick short-term profits,” according to CPM Group’s latest Precious Metals Advisory. But investors would be better served to turn their eye toward silver.
“Silver is highly correlated to the safe haven of gold and is, in effect, a leveraged sister of the precious yellow metal,” according to GoldCore, an international bullion dealer. “Thus, informed investors use gold more for wealth preservation purposes and silver in order to make a return.” That’s particularly important to keep in mind as investors change the way they perceive the paper-asset markets.
As stocks, currencies, bonds and other paper assets have begun to disappoint investors, investor attitudes have been shifting, said Mark Leibovit, chief market strategist for VRTrader.com. “What begins as a trickle ends as a tidal wave when the panic peaks [and] when public revulsion at the U.S. dollar begins, the tidal wave will become a tsunami,” he said.
Under that scenario, “silver, far more volatile than gold, will benefit most,” he said.
“Silver’s allure as an investment is evermore appealing as a hedge against fading fiat currencies that are getting inflated into oblivion,” said Scott Wright, an analyst at financial-services company Zeal LLC. This is “measurable via skyrocketing investment demand” for physical bullion and exchange-traded funds, he said, pointing out that the iShares Silver Trust has already increased its holdings by 29% in 2009. From the start of this year through the end of October, total silver holdings in exchange-traded funds were up 36.3%, according to data from CPM Group.
The sale of silver coins and minted bars also offers a good gauge of demand. Over at The Perth Mint, total silver ounces sold as coins and minted bars is five times higher in the 2008-2009 year compared with 2005-2006, according to data from the Mint, which is owned by the Government of Western Australia. During the same period, gold ounces sold as coins and minted bars have more than doubled. U.S. Silver Eagle coin sales were up 72.6% in October from a month ago up 106.2% from October 2008, CPM Group data showed.
“Although fabrication demand is important, it is investment demand that tends to have a more dynamic effect on silver prices,” said Chintan Parikh, a commodity analyst at CPM Group in New York. “This is because of the larger dollar volumes of money that can be involved with investment demand, the speed and intensity with which investment demand trends can rise, fall and reverse course, and the ultimately total discretion that investors have over whether they wish to be involved in silver at all,” he said.
But while some agree that benefits for silver’s precious metal characteristics have outweighed the pluses from its industrial uses, that industrial label may soon turn out to be of lesser hardship. “The industrial uses for silver are numerous and generate substantial additional demand for silver outside its precious metal usage,” said Patrick Kerr, managing director at Amerifutures Commodities & Options.
True, silver’s suffering from a falloff in demand from the photography world as consumers turn to the digital age, but industries are finding other uses for the versatile metal, including medical applications, and actually consuming supplies as they use them. “Silver is consumed and gone forever in most applications,” said Julian Phillips, an editor at SilverForecaster.com. On the other hand, “huge efforts are made to recover gold, so essentially it is not consumed.” Gold’s much higher value prompts great efforts to recycle it.
In fact, “all the gold mined in the world ever is still with us, but a huge amount of silver has been used in photography, mirrors and other industrial uses in the last 200 years,” according to the GoldCore report. “The low price of silver makes recovery and recycling uneconomic.” So “industrial demand has been outstripping mining supply for most of the last 20 years, driving above-ground supply to historically low levels” and silver production has been flat in recent years, while demand has been increasing, the report said.
As a result, refined silver stocks are near an all-time low, with stocks dropping from around 2.2 billion ounces in 1990 to around 300 million ounces today, it said. “At one time, silver was more expensive than gold, but that was in the days of Egypt’s Pharaohs,” said Phillips. And while no one wants to say that will ever happen again, most analysts expect that silver prices will soon react to gold’s recent gains.
Prices for silver could spike to $20 between now and December, according to CPM Group. GoldCore expects to see prices at well over the nominal high of $50 an ounce and, eventually, surpass the inflation-adjusted high of some $130 per ounce in the coming years. “Ultimately, silver tends to exhibit its largest spurts in the latter stages of a major gold up legs,” said Zeal’s Wright. “Once speculators and investors start to get excited about this metal, it can really fly and fast.” Read more here-
http://www.marketwatch.com/story/story/print?guid=ECE2C8D2-FC88-4221-BD01-9BFB72ED253A
-Silver Prices to Hit New Highs in 2010. Silver may yet outshine gold in 2010 as spot prices for the white metal respond to the prospect of a surge in industrial demand. With a little additional help from investment demand, silver may even rally into the $25 range. So says Chintan Parikh, a commodity analyst at the CPM Group a leading New York-based commodities research, consulting, asset management and investment banking organization.
“Prices may spike as high as $25,” he says. At the very least, it should breach its most recent high, which was set at $20.79 in the spring of 2008, he adds. Parikh says much of this impetus for higher prices is being driven by the fact that traditional industrial end users of silver, such as the ever-burgeoning global electronics industry, have in recent weeks begunto replenish severely depleted inventories.
In fact, silver inventories became so run-down during the financial crisis that it may take up to six months to fully rebuild them to normal levels. Parikh also notes that demand from the industrial sector tends to be quite price inelastic, meaning that buyers have few options other to pay prevailing prices.
Another key driver for 2010 will be the advent of new market places for silver, including pent-up demand for silver-zinc batteries in ‘smart’ automobiles and an array of portable electronic devices, Parikh says.
In fact, the widespread adoption of silver-zinc batteries is going to be “one of the major drivers behind a rise in prices because it may absorb a lot of silver,” he adds. Though this important new application for silver might not necessarily become a major factor in demand for silver as early as next year, it promises to become a very sizeable marketplace, he suggests. And especially for automobiles.
Notably, China is forecast to become a huge adopter of electric cars to curtail its rising dependence on foreign oil and to reduce its air pollution. In fact, electric cars and hybrid plug-ins will account for more than half the auto market in China by 2020, according to Dr. Wolfgang Bernhart, an auto industry expert with the international think tank, Roland Berger.
Furthermore, silver-zinc batteries are destined to generate major market share as they are said to be much safer, more environmentally-friendly and far more energy-efficient than lithium-ion batteries (which currently dominate the markets for smart cars and portable electronics).
Also, the ever-expanding industrial sector for silver now includes LCD/plasma television screens, solar panels, water purification and even medical and superconductivity applications. It is also finding a critical new use in biocides (which use silver in chemical agents to kill dangerous bacteria, including superbugs).
GFMS, a renowned London precious-metals consulting firm, concurs that overall fabrication demand (which also includes the photography, jewelry silverware sectors) is expected to rebound to “normal levels” in 2010. And the emergence of key new markets for silver is sure to help power this recovery, according to Neil Meader, research director at GFMS.
“It is becoming an increasingly industrial metal and novel new uses will also likely assist the recovery in silver’s demand,” he says. However, the restocking of inventories for more of silver’s traditional uses will likely be the most powerful demand driver in the near-term, Meader suggests. It may even help propel silver prices into new territory to the extent that “a peak (in prices) could occur late this year or early next year.”
The revitalization of industrial demand is an inevitable consequence of silver’s growing importance as a high tech metal. In fact, this has grown year on year since 2001 to the onset of the financial crisis. And it only dipped a meager 1.4% to 447 million ounces in 2008.
This long-term growth trend is set against a backdrop of a multi-year rally in silver prices during this time frame, with gold’s poorer cousin refusing to be upstaged. It actually tripled in value to average US $15 in 2008 (in spite of its short-lived collapse to around $9). And it is continuing to trend higher this year now that supply/demand dynamics are beginning to reflect a return to a normal economy. All of this clearly demonstrates the price inelasticity of industrial demand.
Ironically, investment demand is also mostly shrugging off higher prices. Not only is there strong physical demand for silver bullion coins and bars, but the recent emergence of silver exchange-traded funds like theiShares Silver Trust is also creating strong additional demand.
Parikh notes that silver offers a safe haven in times of economic upheaval, while it also has the potential for significant investment returns. “Silver is a unique metal that wins whether the economy is going well or is in bad shape,” he says. “In the latter, the investor buys it as a hedge against the downturn in the economy and the markets. And if the economy improves, then the industrial demand increases.” Read more here-http://www.321gold.com/editorials/davis/davis111609.html or http://news.silverseek.com/SilverSeek/1258382340.php
-Butler sees increasing shortage of silver, risk of exchange closing. Listen here-http://www.gata.org/node/8025
-Silver is it about to explode? Read more here-http://news.silverseek.com/SilverSeek/1258468717.php
-Is silver’s salvation upon us? Advances in technology, increasing focus on reducing human interaction with bacteria, and tracking goods and people are all good news for silver and the price of the industrial metal, which has lagged for so long, says Jessica Cross, CEO of VM Group.
Long regarded as the poor cousin of gold, the metal, which is mainly used in industrial applications as well as to make jewellery, has bright prospects, with off take in a spectrum of new products put at just below 350 million ounces by 2020, Cross argued in a presentation at the LBMA Conference earlier this month.
The silver price is currently trading around $18.50/oz, a level that it traded around in the first half of 2008 when it broke up to just shy of $21. These two spikes were unparalleled, certainly since 1985, with the metal touching slightly north of $8.50 just once since then.
Looking at the history of the silver market, Cross said about two thirds of the mined metal is a by product of other minerals like copper, gold and lead, making it difficult to determine a price at which silver production would fall in a natural supply and demand scenario. Being a by-product, the metal will come onto the market almost regardless what the price is for it.
One of the major users of silver, the photographic film sector, is being particularly hard hit as consumers turn to digital cameras. A graph of silver demand by the sector shows a steady decline since a peak above 200 million ounces in the early 1990s to well below 150 million ounces in 2009.
Another anchor on silver prices, which tend to take direction from the waxing and waning gold price, is that a lot of silver used in a range of applications like photographic film, electronics and batteries tends to be recycled, bringing back about 400 million ounces a year of the metal to the market.
But the days of huge recycling could be drawing to an end, Cross said, pointing to a host of technological advances needing silver, including wound care, food hygiene and water, wood preservatives, textiles, solar panels and radio frequency identification tags.
“These new end uses for silver are set to pick up the demand slack left by the shrinking photographic industry,” she said. “But, unlike photographic film, these end uses do not generate vast amounts of recycled metal. In general the metal is going to be taken off the market for good.”
Silver’s time has come, she said. “The change is coming about as a result of silver’s unique properties as a biocide as well as is superior conductivity,” she said. “The interesting thing is that many of the world’s worries and woes today are playing right into the hands of silver and this metal appears to be in the right place at the right time in a number of applications.”
Radio frequency identification tags, used in identity documents, passports and stock controls, are growing in use. China, for example is spending $6bn to install these devices in identity documents for all its citizens and in transport tickets, she said.
London-based metals consultancy VM Group estimates use of these tags will grow to more than 30 billion by 2020 from around seven billion now. Each tag contains about 10 milligrams of silver on average, absorbing nine million ounces of silver from the 2.3 million ounces currently.
Solar panels and mirrors could absorb another 50 million ounces by 2020 compared to 18 million ounces now. Wood preservative coatings could account for up to 100 million ounces a year as chromate copper arsenic, the existing wood preservative is phased out.
There were no estimates of the amount of silver that could be used in plasters and bandages, which use silver for its anti-bacterial properties. These properties also feed into the clothing and textile sector where body odours and bacteria are eliminated.
Silver is also used in water purification devices and to store food. It could take up around 95 million oz by 2020. “Superimpose this good news on the tonnages of silver that have gone into the ETFs (silver-backed exchange-traded funds) and you have an underlying strength within this market to justify its current price strength,” Cross said.
The gold:silver ratio is expected to narrow. At current prices you can buy 64.4 ounces of silver for the price of a single ounce of gold. “The current market conditions indicate that gold has become overpriced and silver has become underpriced, suggesting there will be a shift in assets from gold to silver,” said Jeffrey Lewis, who edits Silver-coin-investor.com.
“Since 1970, the ratio of the number of ounces of silver you could buy with one ounce of gold has run as high as 80:1 and as low as 20:1, with a mean of 54:1. Today’s ratio is moderately higher than 54:1; in fact, the ratio is nearing 62:1, suggesting that there will be a correction in either the price of gold, or silver will advance to make up the deficit,” he said. Read more here-http://www.miningmx.com/news/gold_and_silver/is-silver-salvation-upon-us.htm
-Revenues from Silver Inks and Pastes to Reach $3.6 Billion in 2016. Read more here-http://www.azonano.com/news.asp?newsID=14691
PLATINUM-PALLADIUM
-Platinum deficit forecast for 2010. The introduction of a platinum-backed exchange-traded fund (ETF) in the United States could add 200,000 oz of fresh demand to the market, which will be in a small surplus of 140,000 oz this year, Johnson Matthey said on Tuesday. “Overall, the platinum market should tighten in 2010 and could move into a modest deficit as the world economy improves,” Johnson Matthey said in its 2009 interim platinum review.
This should support the platinum price, but many of the gains made in the price in the year to end-September have been fuelled by a weak US dollar and a strong gold price as well as investor interest in the metal rather than fundamental reasons. Platinum could trade as high as $1,550/oz in the next six months if the gold price remains strong. If the dollar strengthens and investors sell out of gold, platinum could fall as low as $1,280 in the same period.
The review showed the platinum demand for this year sliding 4.4% to 5.92 million oz, with the auto sector taking a third less metal to make autocatalysts than it did the year before.
This was offset by an astonishing 80% uptick in demand for platinum in jewellery, rising a million ounces to 2.45 million oz, just shy of the 2.48 million oz the autocatalysts makers wanted this year.
The surprise figure is the expected 900,000oz of additional demand expected from China, lifting offtake to a record 1.75 million oz this year on the back of restocking by jewellers and consumer demand triggered by relatively low metal prices.
“Although we expect industry restocking to slow in the second half of 2009, consumer purchasing should still maintain demand at close to record levels,” Johnson Matthey said in its report. Read more here-http://www.miningmx.com/news/platinum_group_metals/Platinum-deficit-forecast-for-2010.htm
-Johnson Matthey bullish on platinum, palladium, sees deficits. Read more here-http://www.miningweekly.com/article/platinum-palladium-outlook-bullish-deficits-on-way-johnson-matthey-2009-11-17
CHART OF THE WEEK-QUOTES-QUICK HITS
-Chart of the week: An Inflation Warning Sign. In a speech on Monday, Federal Reserve chairman Ben Bernanke said he did not see inflationary threats on the horizon. Perhaps that is because he’s looking in the wrong place. The prices of crude goods, those in the earliest stages of production, have been inflating for most of the year.
The willingness to pay more for crude goods probably indicates that businesses are predicting selling finished goods at higher prices. In other words, this is a strong indicator of inflationary expectations. Read more here-http://www.businessinsider.com/chart-of-the-day-producer-price-index-crude-goods-2009-11
-Chart of the day: Will Holiday Spending Recover This Year? Holiday sales will be the great test of our recovery. Wall Street analysts and industry insiders are predicting a mild uptick in sales over last year’s historic loss. The forecast from the International Council of Shopping Centers is for 1% growth and $242 billion, which seems rather conservative.
But what if ICSC is too optimistic? The forecasted number is lower than the peaks of 2006 and 2007 but slightly higher than the $239 billion spent during the holidays in 2005. We’re skeptical about the proposition that Americans will spend slightly more this year than they did in 2005. That year unemployment was half of what it is now and median home prices had gone up 13.4%. Are we really ready to spend like we did back then? Read more here-http://www.businessinsider.com/chart-of-the-day-traditional-holiday-spending-2009-11
-”Don’t let the fear of the time it will take to accomplish something stand in the way of your doing it. The time will pass anyway; we might just as well put that passing time to the best possible use.” Earl Nightingale: Was a motivational author and speaker
-”The hardest thing in investing is to ride a bull market all the way to the end.” Richard Russell-Read more here-http://www.financialpost.com/story.html?id=2228952
-Gold at $1,200/oz before year end remains a possibility but talk of a gold ‘rush’ and gold ‘frenzy’ is exaggerated. Gold is up less than 5 times in 10 years (5X $250/oz = $1,250/oz) whereas in the 1970s gold rose by more than 25 fold from $35/oz in 1971 to over $850/oz in January 1980. A gold rush is likely coming as there is no fever like gold fever, but we are a long way from there yet especially as most of the public in the investment world is actually selling their gold rather than buying it. Goldcore
-There are several ways you can look at to determine where gold should be selling at. We believe the easiest way is to clock official and real inflation since 1980. Official inflation would put gold at $2,400 and real inflation at $6,700, or to quote John Williams $7.150. This is all scientific and the numbers are real. The question that follows is how much gold does central banks have left of their 31,000 tons 15 years ago?
We believe it is less than 5,000 tons. We also believe there is a derivative covered short of between 50,000 to 100,000 tons. There is no way of actually knowing, because governments and other players refuse to tell us what their positions are. They say we do not have a need to know or it is a state secret.
That means there is no free market. We are told that total economic reserves of gold to be mined are 50,000 tons. That, of course, means any shorts beyond that cannot be covered. That means higher prices. Yes, we do have peak gold and lots of uncoverable shorts. That means gold has a long way to go to the upside along with silver. Bob Chapman-Read more here-
http://news.goldseek.com/InternationalForecaster/1258562162.php or http://news.goldseek.com/InternationalForecaster/1258308120.php
-U.S. Treasury Confident Congress Will Increase Debt Ceiling. The Obama administration is confident Congress will raise the country’s debt limit by year end to avert a showdown similar to the one that shuttered parts of the government in 1995, administration officials said.
The White House wants an increase of at least $1 trillion to $1.5 trillion, according to a person familiar with the deliberations between lawmakers and the administration. Record budget deficits are pushing the national debt closer to the $12.1 trillion statutory limit.
The administration’s request, higher than a proposed increase already passed in the House of Representatives, would get the government through the November 2010 midterm congressional elections without needing another increase. Earlier this month, Treasury officials acknowledged they’ll need more borrowing room by year-end to avoid market disruptions. Read more here-http://www.bloomberg.com/apps/news?pid=20601074&sid;=aWXDnpFProiY
-Trade Deficit in U.S. Increases by Most Since 1999. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aN1mKmvVAZp4
-California Deficit May Reach $21 Bln, Analyst Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=appTQwkQVpZ4
-Nine U.S. States Face California-Type Budget Crisis, Pew Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=anG43t4P6kho
-U.S. cities face growing budget gaps in the next two years because they’ll lag behind an economic recovery lifting the national and state governments, a study says. Property-tax collections, the largest city revenue source, haven’t bottomed, the National League of Cities report said, because assessments don’t yet reflect lower values, putting budgets under pressure “for the next several years.”
The S&P; Case-Shiller Index of home prices in the 20 largest metropolitan areas in August was about 29 percent below its July 2006 peak. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aP7nqKfbt7QE&pos;=9
-U.S. Initial Jobless Claims Unchanged at 505,000. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aE5S0GOy9vXo
-Click the following image to see the progression of unemployment in the US. View image here-http://cohort11.americanobserver.net/latoyaegwuekwe/multimediafinal.html
-The worst is yet to come: Unemployed Americans should hunker down for more job losses. Read more here-http://www.nydailynews.com/opinions/2009/11/15/2009-11-15_the_worst_is_yet_to_come_unemployed_americans_should_hunker_down_for_more_job_lo.html#ixzz0X8Jd1Z7e
-‘Road Trip’ Shows U.S. Stimulus Falls Short, ING Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aUS_VbBG90.0
-Shipper CMA CGM Sees Demand Recovering in Europe, Not in U.S. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=a5p8AwCL8Z_0
-6 double dip warning signs. The recovery from the Great Recession has likely started. But many economists are worried about falling into another downturn. Here’s what has them concerned. Read more here-http://money.cnn.com/galleries/2009/news/0911/gallery.double_dip_warning_signs/index.html
-Bernanke Signals ‘Extended’ Period May Become Longer. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=axtsFVRyRBOE&pos;=3 or
http://www.bloomberg.com/apps/news?pid=20601068&sid;=a1LQpeoa7_Qg
-Fed May Not Increase Rates Until 2012, Bullard Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a6b235jJZM_g&pos;=3
-Pimco’s Gross Says Risk of Bubbles Rises on Low Rates. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aiUtCw0GRZy4
-The reason there is a wave of mortgage refinancings coming in the housing market for one, and not only that, but in the commercial space, there are 2.7 trillion of debt coming due through 2011 and another 1.5 trillion of leveraged loans (see page 24 of Thursday’s FT). In other words, the default rate is going to rise even further and the Fed tightening policy would only aggravate that situation. In other words, the Fed is simply immobile for at least the next two years. David Rosenberg-Gluskin/Sheff
-Dominique Strauss-Kahn expects basket of currencies to eventually displace dollar. Read more here-http://www.theglobeandmail.com/report-on-business/crash-and-recovery/imf-head-eyes-currency-change/article1366060/ or http://www.gata.org/node/8016
-Meredith Whitney, the analyst who has no “buy” recommendations on U.S. banks, said valuations on lender stocks are too high and what “scares” her most is the government stepping away from buying mortgage-backed securities.
“The banks are still grossly overvalued,” Whitney said today in an interview on Bloomberg Radio. “People are expecting something great to happen in 2010 and I think they are going to be severely disappointed.” Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=acyezZUH_MYo&pos;=5 Watch video here-http://www.cnbc.com/id/33972133
-So far, Q3 S&P; 500 operating EPS is coming in at $15.27 still down around 2% YoY from a year ago and well below the $21.11 consensus expectation at the start of the year. Still no evidence of a turnaround in sales deflating 10.7% YoY for what will be the fourth decline in a row. Cost cutting and productivity gains remain the dominant theme, hence operating margins are holding at a high level of 7.23% (versus the 15-year average of 6.60%). David Rosenberg-Gluskin-Sheff
-When looking for where the buying power for U.S. equities has been coming from, there have been three primary sources.
1. Hedge funds who have had their margin lines re-established this year.
2. Equity portfolio managers taking cash ratios back down to late -2007 levels.
3. And short covering, which seems to be ongoing as short funds try and reverse at least part of the average 31.5% loss suffered this year. So what we just saw a 3.24% plunge in short interest on the Big Board through the last half of October goes a long way towards explaining this latest move in the major averages to new post-crisis highs. David Rosenberg-Gluskin/Sheff
-When champagne sales are going down and prices being cut, even in the midst of a 60%+ rally in the stock market, you know that we are into a secular theme of thrift even among the well-heeled among us. Have a look at Champagne Sales are Going Flat on page B1 of the Saturday NYT. And believe me, it’s not just the high-end that is hurting still according to the NPD Group, restaurant sales in the U.S.A. are down 3.0% since the summer, the steepest decline in decades (see What’s Eating McDonald’s on page 32 of BusinessWeek). David Rosenberg-Gluskin/Sheff
-U.S. consumer shopping habits have changed on a semi-permanent basis. Yes, the government can step in time and again to distort human nature and try to reverse the rising trend in the personal savings rate, but left to their own devices, households are in a thrifty state. This came through loud and clear in the latest Deloitte survey, which showed that more than 25% of the 10,878 consumers polled say they have permanently altered their shopping patterns in view of the asset and credit collapse this cycle.
And what did Wal-Mart Treasurer Charles Holley have to say yesterday in the aftermath of its earnings report? (Wal-Mart’s sales were a puny +2.4% YoY off a depressed YoY basis, profits were underpinned by improved productivity and inventory management.) Here its (can you handle the truth?): “The shopper has reset how he is spending money and that has affected retail in demand”.
Moreover, getting frugal also means getting small and in this new era, a most amazing thing is happening. Not only are consumers downsizing their auto purchases, but the size of the homes that are now being built is shrinking see the front page of today’s Wall Street Journal for evidence (Builders Downsize The Dream Home). Pure and simple the days of impressing our friends with the winding staircase are gone. David Rosenberg-Gluskin/Sheff
-New food price crisis a matter of time-UN. A new food price crisis is only a matter of time, the U.N. food envoy said on Tuesday, criticising world leaders for not tackling what he saw as the key factors behind price spikes in 2008 speculation and biofuels.
The U.N. Special Rapporteur Olivier De Schutter also said a U.N. food summit in Rome failed to address the domination of global food markets by large agri-business corporations.
“Maybe it will be April 2010, maybe April 2011, but we will have a new food price crisis because the direct causes of the 2008 spike are still there,” De Schutter said in an interview.
“There are indications already, because oil prices are going up and they are very closely linked to agricultural commodities prices. As soon as a big producer will be in difficulty speculation will set in,” he told Reuters. Read more here-http://www.reuters.com/article/swissMktRpt/idUSLH70163320091117
-Lions Ex-Stadium, Once Super Bowl Host, Sells for $7.25 a Seat. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=adFUGa0HXuZo
-Nicolas Cage: Movie star, foreclosure victim. Hollywood actor’s financial troubles continue as he loses two New Orleans homes worth $6.8 million in foreclosure auction. Read more here-http://money.cnn.com/2009/11/13/real_estate/Nicolas_Cage/index.htm
-Want to live in JR’s home? Dallas Larry Hagman selling off his $11million green mansion. Read more here-http://www.dailymail.co.uk/tvshowbiz/article-1229362/Want-live-JRs-home-Dallas-Larry-Hagman-selling-11million-green-mansion.html#ixzz0XKy3aB3m
-Will Ferrell tops list of Hollywood’s most overpaid stars as Ewan McGregor comes a close second. Read more here-http://www.dailymail.co.uk/tvshowbiz/article-1229339/Will-Ferrell-tops-list-Hollywoods-overpaid-stars–Scots-star-Ewan-McGregor-close-second.html#ixzz0XKyPlYQ3
-Breast Implants Cost 120 New York Flights for Finnair Flyers. First it was free flights, hotel rooms and magazine subscriptions. Now, Finnair Oyj, Finland’s biggest airline, has a new idea for attracting frequent flyers: free plastic surgery in exchange for air miles. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aV3NQ0TzSNsw
-Record 49.1 Million Americans Faced Hunger in 2008, USDA Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aU7.USapeRRs
-Ed Stein political cartoons drawn from gold-related issues. Read more here-http://www.gata.org/node/8026
-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/HistoricalPriceTrackingsystem.html
-Watch BTV interview of Harold Seigel on colored diamonds and his website http://www.rarecoloreddiamonds.com/. Watch video here-http://www.rarecoloreddiamonds.com/watchnow.html
-Jewels of historical significance garnered strong prices at Sotheby’s Magnificent Jewels sale, held in Geneva on November 17. The Roxburghe Rubies suite brought in $5,719,290 against a presale estimate of $618,000 to $1,097,000, with the necklace selling for $4,299,974 and the earrings going for $1,469,335. Overall, the Magnificent Jewels sale generated $36,682,714 (CHF 37,011,375), with 79 percent sold by lot.
David Bennett, Sotheby’s chairman of jewelry for Europe and Middle East, said: “The Roxburghe Rubies, a magnificent suite, comprised of a ruby and diamond rivière necklace and earrings, the property of Mary, Duchess of Roxburghe, attracted extraordinary presale attention at exhibitions around the world, both for the quality of the rubies and the significant historical provenance, and sold for $5.7 million (CHF 5,821,000), five times the high estimate and a world-record price for a ruby suite.
“A remarkable array of colored diamonds was led by the price of $3.1 million (CHF 3,162,500) for a very impressive fancy vivid yellow diamond and included two new world-record prices per carat for green and intense blue diamonds,” Bennett added. Chatila bought the fancy vivid yellow diamond, a 74.80-carat, cut-cornered, rectangular, modified brilliant-cut stone that was mounted in gold, for $3,134,417, which fell within the presale estimate range.
Sotheby’s called its 2.52-carat, vivid green diamond the largest of its kind to appear at auction and it sold there for $3,078,914, which was slightly below the corresponding presales estimate. Another rare find was a fancy intense blue, brilliant-cut, 3.17-carat diamond ring, which sold to Chatila for $2,523,500, within its presale estimate. A fancy pink, cushion-shaped, 6.63-carat diamond fetched $1,413,833, which was also within the presale estimate range. Read more here-http://www.diamonds.net/news/NewsItem.aspx?ArticleID=28667 or
http://www.bloomberg.com/apps/news?pid=20601088&sid;=a5S9.x.HjoTE or http://www.bloomberg.com/apps/news?pid=20601088&sid;=aP9wcC1Cjk.0
-Sotheby’s Auction Results for the Magnificent Jewels sale in Geneva. View here-http://www.sothebys.com/app/live/lot/LotResultsListPrint.jsp?sale_number=GE0905&action;=A&show;_lot_name=Y or http://www.sothebys.com/app/live/lot/LotResultsDetailList.jsp?event_id=29134&sale;_number=GE0905&show;_lot_name=Y
-Christie’s Geneva Sale Totals $32M. Christie’s Jewels: The Geneva Sale was 82 percent sold by lot and totaled $32,281,500 earlier today. Jean-Marc Lunel, head of the sale, said, “With $70 million of jewelry changing hands in two days at the Geneva auctions, the star lot of the week at Christie’s was an exceptional D flawless diamond of 62.30 carats purchased by Aleks Paul of Essex Global Trading for $8,051,000.
This shows the clear resurgence of the jewelry market and we look forward to exciting sales in Hong Kong, New York and London in early December.” Paul won the top three lots at the sale, starting with that 62.30-carat diamond, which was a type IIa pear, for $129,230 per carat. The second lot was comprised of a 3.30-carat, rectangular-cut, fancy intense blue and a 3.90-carat, E, VS2 diamond ring by Wolfers, which sold for $2,675,000.
Paul offered the top bid for a fancy vivid, fancy intense and fancy blue diamond clasp: $2,675,000. The top three lots sold well above their presale estimates. Other sale highlights included a 24.92-carat, pear-shaped, light blue, VVS2 diamond ring, mounted by Cartier, Type IIb, that sold for $1,555,000. A 13.91-carat, oval-shaped D, VVS2 diamond ring fetched $1,203,000. Selling slightly above its presale estimate was a 7.03-carat, oval-shaped Burmese ruby and diamond ring designed by Graff, which sold for $1,131,000.
The final lot that sold for more than $1 million was a 65.20-carat, cushion-shaped, fancy intense yellow, VS2 diamond pendant that sold for $1,035,000, within its presale estimate range. Christie’s noted that a 19.13-carat, briolette-cut, fancy grayish-yellowish green chameleon diamond-pendant necklace set a record price at auction for a chameleon at $987,000. Read more here-http://www.diamonds.net/news/NewsItem.aspx?ArticleID=28668
-Rio Tinto Drops 5 Customers from Distribution System. Rio Tinto Diamonds has restructured its marketing distribution system and cut five select diamantaires from its program as the company projects further declines in its production capacity. “We have cut our long term customer base from 25 to 20 companies due to the fact that our production has fallen and will continue to change in the near future,” said Patrick Coppens, marketing manager at Rio Tinto at the Antwerp Diamond Symposium Monday.
Rio Tinto, which has full ownership of the Argyle mine in Australia, a 60 percent stake in Diavik mine in Canada, and a 78 percent share of the Murowa mine in Zimbabwe, cut production during 2009 in response to the financial downturn. The company’s diamond output during the first nine months of 2009 fell 31 percent to 9.575 million carats. Even as it ramps up production again, output is expected to remain inconsistent as it transforms Argyle and Diavik from open pit to underground operations.
Coppens explained that the company is moving to a tender system, or “mechanism that is driven by market dynamics” for a minor portion of production, while the remaining major portion will be provided to ensure long term supply to its customers. He did not name the five customers that have been dropped from the select diamantaire program. Read more here-
http://www.diamonds.net/news/NewsItem.aspx?ArticleID=28630
-Hyperinflation Worries? Buy My Jewelry, Richemont’s Rupert Says. South African billionaire Johann Rupert suggested investors stock up on bespoke Cartier necklaces or Van Cleef & Arpels rings if they’re concerned that economic stimulus programs and government debt will fuel inflation.
“If we enter hyperinflation, you’re going to be so glad that you bought that stuff two months or six months ago,” Rupert told investors on a call today that followed results from Cie. Financiere Richemont SA, which is controlled by his family. “If inflation picks up, you’re going to see people running into your stores, buying high jewelry.” Read more here-
http://www.bloomberg.com/apps/news?pid=20601093&sid;=aXNQ5AJkxDWg
SOCIETE GENERALE TELLS CLIENTS HOW TO PREPARE FOR GLOBAL COLLAPSE-2012 MELTDOWN?
-Société Générale has advised clients to be ready for a possible “global economic collapse” over the next two years, mapping a strategy of defensive investments to avoid wealth destruction. In a report entitled “Worst-case debt scenario”, the bank’s asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders, creating a fresh set of problems.
Overall debt is still far too high in almost all rich economies as a share of GDP (350pc in the US), whether public or private. It must be reduced by the hard slog of “deleveraging”, for years. As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse,” said the 68-page report, headed by asset chief Daniel Fermon.
It is an exploration of the dangers, not a forecast. Under the French bank’s “Bear Case” scenario (the gloomiest of three possible outcomes), the dollar would slide further and global equities would retest the March lows. Property prices would tumble again. Oil would fall back to $50 in 2010. Governments have already shot their fiscal bolts.
Even without fresh spending, public debt would explode within two years to 105pc of GDP in the UK, 125pc in the US and the eurozone, and 270pc in Japan. Worldwide state debt would reach $45 trillion, up two-and-a-half times in a decade. Read more here-http://www.telegraph.co.uk/finance/economics/6599281/Societe-Generale-tells-clients-how-to-prepare-for-global-collapse.html
-Wall Street’s 2012 meltdown sweepstakes. Don’t say we didn’t warn you this time a new crash is dead ahead. Paul Farrell-Read more here-
http://www.marketwatch.com/story/story/print?guid=DA7661EF-56D3-4363-9408-2210BB2BA5B0
U.S. BANK FAILURES HIT 123
-Bank failure toll reaches 123. Regulators close two Florida banks and on in California, costing the FDIC $986.4 million. Two Florida banks and one in California failed Friday night, bring the 2009 national tally to 123. Regulators closed Century Bank, Federal Savings Bank in Sarasota, Fla., Orion Bank in Naples, Fla., and Pacific Coast National Bank in San Clemente, Calif. Read more here-http://money.cnn.com/2009/11/13/news/economy/bank_failure/index.htm
REAL ESTATE
-U.S. housing crisis hits new level. A record one in seven mortgages are in foreclosure or delinquent; even those with safe credit ratings are losing homes. The Mortgage Bankers Association said Thursday a record one in seven U.S. mortgages, or four million homeowners, were in foreclosure or at least one payment late in the third quarter.
The housing market accounts for about 20 per cent of the U.S. economy, and a stabilization in plummeting property values is seen as a key pillar of an economic recovery. Americans with solid credit ratings comprised 33 per cent of the quarter’s foreclosures. The highest jobless rate in 26 years made it impossible for many homeowners to make their payments in the quarter. Read more here-http://www.theglobeandmail.com/report-on-business/us-housing-crisis-hits-new-level/article1370396/
-Mortgage delinquencies hit another record in 3Q. The pace at which people fell behind on their mortgages slowed during the summer for the third consecutive quarter, but the overall delinquency rate hit another record, a new report shows. For the three months ended Sept. 30, 6.25 percent of U.S. mortgage loans were 60 or more days past due, according to credit reporting agency TransUnion. That’s up 58 percent from 3.96 percent a year ago.
Being two months behind is considered a first step toward foreclosure, because it’s so hard to catch up with payments at that point. The rate was up 7.6 percent from the second quarter. That’s a much smaller jump than the 11.3 percent rise in the second quarter from the first, and the 14 percent leap seen in the quarter before that.
While the slowing growth rate is a positive sign, the increase shows there’s still a lot of problematic mortgages out there, said F.J. Guarrera, vice president of TransUnion’s financial services division. The company doesn’t expect the figure to start declining until the middle of 2010.
Two things must get better before mortgage delinquency rates start reversing themselves, he said: home values and unemployment. “Until we see improvement in both of those areas, it’s possible that it will take longer for delinquency to improve,” Guarrera said. The statistics, which are culled from TransUnion’s database of 27 million consumer records, show that mortgage delinquencies remain highest in the four states where the crisis has hit the worst.
- In Nevada, the rate reached 14.5 percent, up from 7.7 percent a year ago.
- In Florida, the rate was 13.3 percent, up from 7.8 percent last year.
- In Arizona, the rate hit 10.4 percent, up from 5.5 percent in 2008.
- In California, the rate jumped to 10.2 percent, from 5.8 percent last year. Read more here-http://apnews.myway.com/article/20091117/D9C18RSG4.html
-U.S. Office Vacancies May Approach 20% Next Year. Office landlords in the U.S. will confront vacancy rates approaching 20 percent next year as employers hold off hiring, commercial property brokers Jones Lang LaSalle Inc. and Grubb & Ellis Co. said today. Jones Lang, the world’s second-biggest publicly traded commercial property firm, predicted vacancies will rise to 19.5 percent late next year, while Grubb & Ellis estimated a peak of 18.7 percent.
“The road to economic recovery throughout 2010 will remain turbulent,” Chicago-based Jones Lang said in a report. “While 2010 will be the year a global commercial real estate recovery begins, robust, broad-based growth is not expected until 2011.”
Demand for offices, retail space and apartments dropped during the recession as rising unemployment cut the space needed to house workers and prompted consumers to reduce spending. The delinquency rate for all types of commercial real estate loans held by banks may top 10 percent by the second quarter of 2010, Jones Lang said.
Offices will be the last type of commercial property to recover, said Robert Bach, chief economist for Santa Ana, California-based Grubb & Ellis. Next year “won’t feel like a classic recovery, but it will certainly feel better than 2009,” Bach said in a conference call.
Higher U.S. office vacancies will reduce rents 5 percent to 7 percent in 2010, according to Jones Lang. Leasing may reach bottom in the fourth quarter of 2009. Read more here-
http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=a8SYz0MnZLbo
-FDIC Sells Most Real Estate Since 1994 on U.S. Banking Debacle. The Federal Deposit Insurance Corp. has already sold the most real estate this year since 1994 as the regulator takes over properties held by failed lenders.
The FDIC raised $727 million from building and land sales in the first nine months of 2009 compared with $1.16 billion in the whole of 1994, according to FDIC data. The Washington-based agency sold 1,706 properties, according to its Web site, the highest number since 2,045 in 1996.
The failure of 148 lenders since 2007 is giving homebuyers and real-estate investors the chance to purchase office buildings, undeveloped land for houses and even gas stations from the FDIC. The agency may also have hundreds of millions of dollars in loans for sale from shuttered banks.
“It seems that they’re a little understaffed and they’re very busy trying to fold a bank a weekend or five banks a weekend,” Barry Sternlicht, the chairman and chief executive officer of Starwood Property Trust Inc., said on a conference call yesterday.
The FDIC real-estate sales are helping companies including CB Richard Ellis Group Inc. and closely held Prescient Inc., which are brokering transactions, and J.P. King Auction Co., which has held FDIC auctions in Detroit and Atlanta.
More than 900 properties sold through Sept. 30 were in Georgia, by far the most of any state, according to FDIC data. Georgia also led in bank failures since 2007, with 27 lenders collapsing. Minnesota was second with 114 properties sold and California third with 112, according to FDIC data. Read more here-
http://www.bloomberg.com/apps/news?pid=20601110&sid;=aIcNcx3Hm80o
-Deutsche Bank Drowning in Vegas on Costliest Bank-Owned Casino. Deutsche Bank AG’s Cosmopolitan Resort & Casino complex in Las Vegas, already the most expensive debacle in the city for a single lender, is now two years behind schedule, $2 billion over budget and under water — literally.
Deutsche Bank, the resort’s owner since it foreclosed on developer Ian Bruce Eichner last year, requires 24-hour pumps and containment walls after workers hit an aquifer below the Nevada desert floor. It’s another challenge for a project whose delays and redesigns have sparked lawsuits from condominium buyers and sales agents amid record declines in Las Vegas’s gambling revenue, home prices and hotel-room bookings. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=apdCk2i8v.tI&pos;=12
© 2012, Worldwide Precious Metals Canada Ltd.
www.wwpmc.com
The Goldbugg Report – November 24, 2009
Posted by Worldwide Precious Metals on Tuesday, November 24, 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.