Newsroom

The Goldbugg Report – April 6, 2010

April 6, 2010

POST CFTC HEARING

-Peter Brimelow: Gold price suppression suspicion now mainstream, http://www.marketwatch.com/story/radical-gold-bugs-vs-wall-street-2010-04-05

- Silver couldn’t be more bullish, Ted Butler tells King World News, http://www.kingworldnews.com/kingworldnews/Broadcast_Gold+/Entries/2010/4/2_Ted_Butler_on_the_Metals_Market.html

- Tim Iacono: Gold, silver, the CFTC, and conspiracy theories, http://news.goldseek.com/GoldSeek/1270188480.php

- James Turk: Silver looks ready to soar, http://www.fgmr.com/silver-looks-ready-to-soar.html

- James Turk: A new dynamic in the gold market, http://www.fgmr.com/new-dynamic-in-the-gold-market.html

- CFTC: Obey Your Plaque!

-John Rubino: The coming precious metals short squeeze, http://dollarcollapse.com/articles/the-coming-precious-metals-short-squeeze/

- Max Keiser covers silver market rigging on Russia Today network, http://rt.com/About_Us/Programmes/Keiser_Report/2010-04-01/558424.html

- Germany gets a full account of the CFTC hearing sensation, http://www.goldseitenblog.com/peter_boehringer/index.php/2010/04/03/zensur-der-goldsilber-manipulation-im-ma

GOLD

-China Gold Demand May Double Within Decade, WGC Says. Gold consumption in China may double within the next 10 years, boosting prices as supplies fail to keep pace with booming demand from investors and the jewelry industry, the World Gold Council said. “China has an insatiable appetite for gold, which looks likely to continue in an environment where domestic mine supply lags behind demand,” the council said in a report today.

China’s economy grew 10.7 percent in the fourth quarter from a year earlier, the fastest pace in two years, after a 4 trillion yuan ($586 billion) stimulus package spurred record lending and consumption. The world’s biggest gold producer has increased reserves by 76 percent to 1,054 metric tons since 2003 and has the fifth-biggest holdings by country, Hu Xiaolian, deputy governor of the People’s Bank of China, said in April.

“An uptick in China purchases could bring an impetus back to the gold market,” said Hwang Il Doo, Seoul-based senior trader with KEB Futures Co, by phone today. “Given China’s currency reserves and rising wealth, the impact from their buying on prices will be powerful, although it may take time.”

Bullion prices have gained 21 percent in the past year as the global recession spurred demand for haven assets and the dollar weakened 5 percent against six major currencies. “On the investment side, we see exponential growth,” Albert Cheng, the council’s managing director for the Far East, said in an interview in Beijing.

Chinese demand from investors and the jewelry industry, which account for 80 percent of purchases in the country, reached 423 tons in 2009, while domestic mine supply was 314 tons, according to the group’s data. The output shortfall will create a “snowball effect” as the country’s production fails to keep pace with the annual leap in consumption, the report said. China’s gold output rose 8 percent a year from 2006 to 2009, it said.

Higher mine development costs, potential supply disruptions, tougher safety regulations and depleting ore bodies could put a much higher floor under the gold price, according to the council. “Near-term inflationary expectations and rising income levels are likely to support the investment case for gold as an asset class, especially given that Chinese consumers are high savers and are looking to gold to protect their wealth,” the council’s report said. “Jewelry and investment growth are expected to be the chief drivers of demand.”

If gold jewelry buying in China reaches the same per capita rate as India, Hong Kong or Saudi Arabia, the nation’s annual demand could increase by at least 100 tons to as much as 4,000 tons, the Council said. “Historically, in the past five years, about 20 percent of gold was bought for investment, about 60 percent was bought for jewelry” and the rest for industrial use, Cheng said. “Last year there was a change. Jewelry has come down to about 50 percent and investment has grown to about 30 percent,” he said.

Policy makers in China “encourage some alternative investments, but they don’t want people to go crazy about property or the stock market,” said Wallace Ng, executive director of commodity derivatives with Fortis Nederland NV in Hong Kong. “So they might encourage them to buy other assets such as gold.”

The world’s central banks also hold gold as a component in their portfolio of reserves, but they don’t buy gold as a “trading mechanism,” Cheng said. In the past 15 years, central banks in the western world have generally sold gold and “rebalanced their portfolios,” he said.

Since last year, the world’s central banks have switched from selling to buying, Cheng said. Russia, India, China, Sri Lanka and Mauritius have all added to their reserves. “That is a big change,” he said. Gold accounts for 1.6 percent of The People’s Bank of China’s $2.4 trillion total reserves, according to the council’s report.

If the bank raised its gold holdings to the peak of 2.2 percent reached in the fourth quarter of 2002, the “incremental demand would amount to a further 400 tons at the current gold price,” the report said. Still, China’s central bank hasn’t stated whether it will add to its gold holdings, Cheng said. Read more here-

http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aH_vhx7LNgro and http://www.telegraph.co.uk/finance/personalfinance/investing/gold/7534497/Chinas-demand-for-gold-will-double.html

-Gold Buying From Arabia Will Likely Outpace China. Read more here-http://news.goldseek.com/PeterCooper/1269955566.php

-McEwen Says Debt Levels, Money Printing to Boost Gold. Watch video here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aks3otvEZRWE

-John Embry March commentary: Gold bullion price, new all time high dead ahead. Read more here-http://www.sprott.com/Docs/InvestorsDigest/2010/MPLID_032610_pg087Emb.pdf

-Why You Should Own Gold. Read more here-http://www.forbes.com/2010/03/24/gold-mining-personal-finance-investing-inflation-metals_print.html

-Gene Arensberg: Got Gold Report-Big Gold Shorts Covering Again. Read more here-http://news.goldseek.com/GoldSeek/1269960098.php

-Gold Imports by India Jump Before 1 Million Weddings. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=am2H6PYM1A7U

-IMF Is Now Rejecting Prospective Buyers For Its Gold Stash. Read more here-http://www.zerohedge.com/article/imf-now-rejecting-prospective-buyers-its-gold-stash

-IMF rejects investment house bids for gold. Read more here-http://www.gata.org/node/8471

-Janet Tavakoli: How to corner the gold market. Read more here-http://www.gata.org/node/8486

-Sprott cites Murphy, Butler in interview with King World News. Listen here-http://www.gata.org/node/8475

-CFTC posts video of hearing on metals futures trading. Watch video here-http://www.gata.org/node/8470

-Dispute over curbs on metal futures. Read more here-http://www.gata.org/node/8472

-Zero Hedge follows admission to CFTC that London gold market is unbacked paper. Read more here-http://www.gata.org/node/8479

-GATA’s Murphy, Douglas, and Powell interviewed by King World News. Listen here-http://www.gata.org/node/8489

-Jason Hommel: CFTC hearing poised to act. Read more here-http://www.gata.org/node/8485

-Toby Connor: Manipulation, fact or fantasy? Read more here-http://www.gata.org/node/8488

-GATA’s evidence of silver and gold manipulation at CFTC hearing. Testimony from GATA’s Bill Murphy to the CFTC hearing in Washington could be embarrassing for some major investment banks. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page72068?oid=101525&sn;=Detail&pid;=1

-CFTC whistleblower Maguire, GATA’s Douglas interviewed by King World News. Read more here-http://www.gata.org/node/8483

-CFTC whistleblower injured in London hit-and-run. Read more here-http://www.gata.org/node/8477

-New York Post notes attack on CFTC whistleblower. Read more here-http://www.gata.org/node/8482

SILVER

Gold to silver ratio at 80 to 1 with gold at $1,600 the silver price would be $20.00

Gold to silver ratio at 70 to 1 with gold at $1,600 the silver price would be $22.86

Gold to silver ratio at 60 to 1 with gold at $1,600 the silver price would be $26.67

Gold to silver ratio at 50 to 1 with gold at $1,600 the silver price would be $32.00

Gold to silver ratio at 40 to 1 with gold at $1,600 the silver price would be $40.00

Gold to silver ratio at 30 to 1 with gold at $1,600 the silver price would be $53.33

Gold to silver ratio at 20 to 1 with gold at $1,600 the silver price would be $80.00

Gold to silver ratio at 15 to 1 with gold at $1,600 the silver price would be $106.67

-CFTC staff, chairman met Butler on day before hearing. Listen here-http://www.gata.org/node/8473

-A London trader walks the CFTC through a silver manipulation in advance. Read more here-http://www.gata.org/node/8466

-Why Silver Will Keep Shining. Silver a star performer over the past several weeks, still has plenty of room to shine. Analysts say demand for silver should remain strong as a result of both investment interest and increased use in electronics and other products as the economy recovers. Read more here-http://online.barrons.com/article/SB126843798928661257.html

-Waiting for silver’s big break. Patience and bravery are key to reaping the metal’s rewards. Read more here-http://www.marketwatch.com/story/story/print?guid=904816AE-6A1E-4E5A-8A06-0392BAF9C4CF

-Adrian Ash: The Case for Silver. Read more here-http://news.silverseek.com/SilverSeek/1269469187.php

-When you factor in inflation and devaluation of the U.S. dollar, $850 gold in 1980 is $2,500 an ounce in today’s dollars. In other words, gold might be at 50% at $1,200, which is the highest of highs. Could there be a run to $2,500?

Your personal answer to that question will depend upon how confident you are in Fed Chairman Ben Bernanke, President Obama, and Wall Street. If you have faith in our leaders of commerce, don’t buy gold. If you do not have faith in them, maybe you should buy gold or silver.

If the dead cat bounce dies and the Dow drops to 5,000 in 2010, as I predict, then the price of gold and silver may die with the dead cat of the Dow, as investors cling to cash. The next question you need to answer is, “If the Dow dies and the price of gold and silver drop, what should you invest in at the bottom…stocks, gold and silver, or cash?”

I know what I will do. I will buy more gold and silver. Why? The answer is because I trust gold and silver more than Central bankers, the Oval Office, and Wall Street. Gold and silver have been real money for thousands of years. Robert Kiyosaki-Read more here-http://finance.yahoo.com/expert/article/richricher/221388

-In 1980 the historic ‘70s gold bull market finally topped out at $850. After adjusting for inflation, to merely equal what it did in 1980, gold would have to go (only) to $2,300, and silver topped out at $50 in 1980. After adjusting for inflation since then, to merely make a new high, silver would have to go over $125 and gold to $2,300!

Silver is the poor man’s gold. Think of gold as large denomination money, and silver as small bills. A one-ounce gold coin is now worth more than $1000, but you can buy a roll of pre-1965, ninety percent silver dimes for under $60 a roll. Partly because it is so much cheaper, the potential buying pool is much larger, and industrial use is so much greater, silver will be more profitable than gold by at least one hundred percent!

Silver is by far the more important industrial metal. There are more than two thousand silver industrial applications, and Uncle Sam has zero stockpiles of silver. It can be polished to be more reflective than any other metal, which is why it is used as backing for glass to make mirrors. It has thousands of essential uses in industry. It is an essential component for the manufacture of all audio and videotape, and all film. But above all, it is routinely accepted as money, especially in India, China, and the Middle East.

And remember, silver went from under $2 to $50 in the last bull market, when the consensus was that there was many times more silver than gold above the ground. Now the ratio is reversed. There is five times more gold above ground than silver. Howard Ruff-Read more here-http://www.kitco.com/ind/Ruff/ruff_mar052010.html

-Silver may break previous high of $50 within 3 years, and at current levels it looks totally undervalued, Lakeshore Trading precious metals analyst David Levenstein said on Thursday.

“For this reason, I suggest every single investor should own some silver,” said Levenstein. Read more here-http://www.busrep.co.za/index.php?fArticleId=5378328&fSectionId;=615&fSetId;=662

-Is it Time for Silver to Outshine? Read more here-http://sovereignsociety.com/2010/03/05/%E2%80%9Cgold-should-get-ready-to-take-a-back-seat%E2%80%A6%E2%80%9D/

-There is a lot made of the silver-gold ratio. Silver probably will reach what I call the classic, or the monetary ratio, which is 16:1. It could even get down to the natural ratio, which at this time is about 10:1, but I don’t see it getting to any better ratio than that. Of course, this implies that silver is undervalued relative to gold.

We have a 10-year bull market behind us and in my view we have several more years to go. What happens is at the end of these great bull markets is you get into the euphoric or manic stage and this happens in almost all markets. You’ve seen it in the technology sector, when people were buying dot-com stocks that had no business plan and no equity, just an idea.

I think we’ll see the biggest run up of all time in gold and silver, especially the equities, a euphoric state of panic buying driven by fear and greed. I’ll probably face a lynch mob me when I say “sell,” because no one will want to trade physical metal for paper currency and I don’t blame them. Anticipating this, I’ve already planned some techniques to use to preserve our physical metal and still allow us to sell to a strong market, but those are days ahead.

When the panic hits, gold probably will go up to $2,000 and beyond the average person will wake up thinking, “Oh, I’ve got to get gold equities; I listened to my friends and I thought they were idiots and now I see the light.” Many will turn to silver because it’ll still affordable relative to gold.

Significant money will move in to the metals. And because silver is cheaper than gold, a lot of it will go silver, which will cause the ratio to spike relative to gold. You’ll see the ratio drop from 60:1 to 50:1 to 40:1 to 35:1 to 20:1, maybe to 16:1 or 10:1 because there’ll be more money, relatively speaking, moving into silver than in the past. And since silver is such a small market, any small increase in buying power will send the price far higher. David Morgan-Read more here-http://news.silverseek.com/SilverInvestor/1267220221.php

CHARTS OF THE WEEK-QUOTES-QUICK HITS

-Check out the chart below, which shows the government’s projection of debt held by the public in relation to GDP. And keep in mind that this is not what’s called the “National Debt,” which includes intragovernmental debt but just what can be considered “net debt,” or debt held by the public. Read more here-http://www.caseyresearch.com/displayCdd.php?id=381

-State Debt Woes Grow Too Big to Camouflage. California, New York and other states are showing many of the same signs of debt overload that recently took Greece to the brink budgets that will not balance, accounting that masks debt, the use of derivatives to plug holes, and armies of retired public workers who are counting on benefits that are proving harder and harder to pay. Read more here-http://www.nytimes.com/2010/03/30/business/economy/30states.html?pagewanted=print

-“A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences.” Proverbs 22:3

-”Don’t be afraid to give up the good to go for the great.” John D. Rockefeller-Bio here-http://en.wikipedia.org/wiki/John_D._Rockefeller

-”The greater danger for most of us lies not in setting our aim too high and falling short, but in setting our aim too low and achieving our mark.” Michelangelo-Bio here-

http://en.wikipedia.org/wiki/Michelangelo

-Greece will be put to the test in April when €15 billion of bonds have to be rolled over (through the end of May). David Rosenberg-Gluskin/Sheff

-The eurozone debt problems have not gone away and Greek sovereign bonds suffered a sharp sell-off yesterday as investor concerns over the country’s financial health flared up again. The US is not immune to the debt crisis as California, New York, Illinois and other US states are showing many of the same signs of debt overload that has taken Greece close to bankruptcy. Goldcore.com

-Even though our debt reached its saturation point more than 40 years ago, it is certain that government will continue these failed policies for years to come. If they weren’t productive then and the government was still willing to continue, why would the government now stop, even when spending is not only bankrupting the economy, but providing negative returns?

In moving forward, the government will do what is has been doing since the beginning of time: spending and inflating. Gold and silver will continue its historical trend as well, providing a fail-safe against the plague of debt. Dr. Jeffrey Lewis-Read more here-http://news.goldseek.com/GoldSeek/1269583620.php

-Sentiment is so negative on the U.S. Treasury market it’s not even funny. Everyone seems to focus strictly on supply without realizing that the only way to predict a price is by forecasting both supply and demand. On its own, supply looks worrisome given the Administration’s bent on running huge fiscal deficits (and it just unveiled a new set of initiatives to reverse the foreclosure crisis). David Rosenberg-Gluskin/Sheff

-The big bad secret is that if banks and other financial companies reported their true financial positions they’d be out of business insolvent. The Fed and the SEC are certainly well aware of these problems, but the game goes on. The fraud is intentional and conscience.

They know there are two sets of books, that MBS on their books are virtually worthless, they just bought $1.1 trillion worth of the toxic waste and they are well aware that the shadow inventory on their books is at best worth $0.30 on the dollar. In fact, everyone within the beltway knows it, just like seven years ago they all knew Fannie Mae and Freddie Mac were broke.

As you can see, there is no law; it is only what these people want it to be. Faithfully all regulators and our elected representatives look the other way. They allow corruption to flourish. One thing that can be guaranteed is that if you report any of these frauds nothing is liable to happen. Today that is the American way crime pays. Bob Chapman-

http://news.goldseek.com/InternationalForecaster/1269792000.php and http://news.goldseek.com/InternationalForecaster/1270047600.php

-What we have to constantly remind ourselves is that we are still in a secular bear market, that the S&P; 500, through all the numerous peaks and valleys, is still in the hole to the tune of 25% over the past decade. David Rosenberg-Gluskin/Sheff

-The market is now overvalued by over 25% but is also extremely overbought having gone 24 sessions without a decline of 1% or more, and 89% of the stocks in the S&P; 500 are now trading above their 50-day moving averages (see page M3 of Barron’s). The Dow has advanced in 17 of the past 21 days.

I mean, even if you are bullish on the outlook, one would have to admit that such a parabolic move is vulnerable to at least a modest pullback or more. I know what a broken record sounds like and this has been a confounding and confusing market for both the bears and many (though not all) of the bulls. David Rosenberg-Gluskin/Sheff

-From our lens, the rally of the last 12 months smacks of the 1930 snapback, and if memory serves us correctly, the S&P; 500 went on to hit new lows in subsequent years and the next secular bull market did not start until 1954.

I am sure that all the bullish pundits and ‘tape watchers’ were ridiculing the cautious folks back then just go and have a look at the Diary of Benjamin Roth and you will see how much giddiness there was over the bear market rally and that the worst was over back then.

Meanwhile, the lows were still more than a year away to everyone’s surprise except those who kept their eyes on the forest, not the trees. Deleveraging cycles take years to play out, even with massive doses of government intervention. David Rosenberg-Gluskin/Sheff

-If you believe analysts’ estimates on stocks, the market’s trading at 14 times this year’s earnings. If you believe more of a top-down sort of a view, it’s about 20 to 23 times earnings. It’s kind of like in the tech bubble when everybody believed the operating earnings, not the reported earnings.

They figured, well, reported included writeoffs. But don’t worry about them they’re not about the future. People are looking more at operating earnings right now and saying the market’s cheap. If you look on a reported basis, it doesn’t look like it is. It’s trading at 20 to 25 times earnings and that’s pretty high. Tom Forester-Read more here-http://money.cnn.com/2010/03/30/pf/funds/forester_funds.fortune/index.htm

-Federal Reserve Bank of Chicago President Charles Evans said the U.S. jobless rate may remain higher than 9 percent at the end of this year, underscoring the potential need to keep interest rates low into 2011. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=azwOSDUoq1Z0

-Treasuries Find Greenspan’s Canary Fainting in Mine. Former Federal Reserve Chairman Alan Greenspan’s warning that rising yields on government debt will drive up American borrowing costs is resonating with the world’s biggest bond traders, who say this month’s losses in the market for U.S. Treasuries are just the beginning.

Higher yields are the “canary in the mine,” Greenspan said in a March 26 interview on Bloomberg Television’s “Political Capital With Al Hunt.” The increases reflect concern over “this huge overhang of federal debt which we have never seen before,” he said. The budget deficit, which hit $1.4 trillion in fiscal 2009, will drive Treasury sales to a record $2.43 trillion this year, a February survey of 10 dealers showed. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=apJKoFUkPD.c

-Last week’s bond auctions did not go well. It seems that Japan and China did not show much interest. The lack of bids was no better underscored than in the 7-year Treasury note auction where the median yield was 3.29% versus 3.05% a month earlier.

April is a cruel month for the U.S. Treasury market, with 10-year yields rising in each of the past 4 Aprils and in 6 of the past 7, and by an average of 25 basis points. (As Alan Greenspan said on Bloomberg News last week, higher yields are “the canary in the mine”.) David Rosenberg-Gluskin/Sheff

-Sell-off in US Treasuries raises sovereign debt fears. Investors are braced for a further sell-off in US Treasuries after dramatic moves last week raised fears that the surfeit of US government debt is starting to saturate bond markets. Read more here-http://www.telegraph.co.uk/finance/economics/7533014/Sell-off-in-US-Treasuries-raises-sovereign-debt-fears.html

-ADP Says U.S. Companies Unexpectedly Cut Payrolls. Companies in the U.S. unexpectedly cut payrolls in March, according to data from a private report based on payrolls. The 23,000 decline was the smallest in two years and followed a revised 24,000 drop the prior month, data from ADP Employer Services showed today.

Over the previous six months, ADP’s initial figures have overstated the Labor Department’s first estimate of private payroll losses by as little as 2,000 in February to as much as 151,000 in November. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=arbMRzsCxhzo

-U.S. Decline, Sloth Look a Lot Like End of Rome: Mark Fisher. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=apWu9PvexGoE

-Irish Banks Need $43 Billion on ‘Appalling’ Lending. Ireland’s banks need $43 billion in new capital after “appalling” lending decisions left the country’s financial system on the brink of collapse.

The fund-raising requirement was announced after the National Asset Management Agency said it will apply an average discount of 47 percent on the first block of loans it is buying from lenders as part of a plan to revive the financial system. The central bank set new capital buffers for Allied Irish Banks Plc and Bank of Ireland Plc and gave them 30 days to say how they will raise the funds.

“Our worst fears have been surpassed,” Finance Minister Brian Lenihan said in the parliament in Dublin yesterday. “Irish banking made appalling lending decisions that will cost the taxpayer dearly for years to come.”

Dublin-based Allied Irish needs to raise 7.4 billion euros to meet the capital targets, while cross-town rival Bank of Ireland will need 2.66 billion euros. Anglo Irish Bank Corp., nationalized last year, may need as much 18.3 billion euros. Customer-owned lenders Irish Nationwide and EBS will need 2.6 billion euros and 875 million euros, respectively. Read more here-

http://www.bloomberg.com/apps/news?pid=20601010&sid;=aRbf5whFOhvg

-Afghanistan’s weak central government is characterized by patronage, corruption and impunity that has hindered economic development and contributed to increased poverty, a United Nations report said. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a3z91p9EfPRs

-CIA: Iran capable of producing nukes. Iran is poised to begin producing nuclear weapons after its uranium program expansion in 2009, even though it has had problems with thousands of its centrifuges, according to a newly released CIA report. Read more here-http://www.washingtontimes.com/news/2010/mar/30/cia-iran-has-capability-to-produce-nuke-weapons/print/

-Iran Nuclear Scientist Defects to U.S. In CIA ‘Intelligence Coup’. Shahram Amiri Disappeared Last June in Saudi Arabia, Reportedly Now Resettled in the United States. Read more here-http://abcnews.go.com/print?id=10231729

-There’s a multi-million-dollar battle brewing between superheroes. Just a month after a Batman comic knocked Superman from his perch as the highest-selling comic book ever, Clark Kent’s alias is back for revenge. A high-quality copy of Action Comics #1, which marks Superman’s 1938 debut, sold for $1.5 million on Monday. Read more here- http://money.cnn.com/2010/03/30/news/economy/Superman_comic_book/index.htm

-Toronto Drivers Face Longer Commutes Than in L.A., Star Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=apKv3d3eTcTE

-New York Yankees are best paid team in global sport. Read more here-http://in.reuters.com/article/sportsNews/idINIndia-47300520100329

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/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 and http://www.b-tv.com/features/watch-now.html?id=326

-Christie’s is hosting its Hong Kong Sale of exquisite jewels, in which it will feature ‘The Sensational Six’, selection of six superlative gems that are a treasure for the serious gem collector. The sale is slated for June 1, 2010.

A superb 5.01 carat Fancy Vivid Blue VS2 heart-shaped diamond ring. It has a pure, straight blue hue. It shows no trace of a secondary colour, making it exceedingly rare, both commercially and naturally. Such rich depth of colour, combined with perfectly balanced tone and saturation, has secured the Gemological Institute of America’s coveted ‘Fancy Vivid’ colour grading.

A stunning pair of 2.48 carat and 2.03 carat Fancy Deep Blue heart-shaped and 10.12 carat D VS2 and 9.61 carat E VS1 pear-shaped diamond ear pendants. This pair of heart-shaped 2.48 and 2.03 carat diamonds, of the bluest blue, is exceedingly rare. Each blue heart suspends a dazzling white pear-shaped diamond of the highest quality. Read more here-

http://diamondworld.net/contentview.aspx?item=4813

-How diamonds are regaining their sparkle. They’ve been seen as a symbol of enduring love since the 16th Century and long been described as a girl’s best friend. But it is only recently that investors have taken a shine to diamonds. Now people are not only buying the world’s most precious stones to wear, but are also investing, just as they would do with stocks and shares.

While the clarity of diamonds has always been treasured, the multi-billion dollar industry has historically been one of the world’s most opaque, which has been seen as off-putting to potential investors. Paris-based jeweller Alexandre Murat says diamonds are a “paradox”.

“There is emotional implication from the customer as they are bought for happy occasions such as weddings, births and birthdays,” he says. Yet recently, Murat, CEO of Adamence, has had clients clamouring to invest in diamonds. “We have had some clients saying they would like to buy five or ten diamonds. They have explained that because of the financial downturn, they would prefer to invest in diamonds,” he told RFI.

Peter Temple, author of the Handbook of Alternative Assets, says that in a financial downturn people look to invest in assets that they can see, as they lose trust in stocks and bonds. He says this is why gold prices keep breaking records, and diamond prices are set to rise.

Temple says there are various similarities between gold and diamonds. “There’s the scarcity aspect, and both are priced in dollars. And they’re both portable,” he says. “Gold in particular is seen as a store of value, something that will protect your cash at times of high inflation. With diamonds, there is an extreme shortage of supply of high quality stones.”

He says that while gold has already benefitted from this recession, diamonds have some catching up to do. This is because diamond dealers typically rely on loans and credit, which were hard to obtain last year, so diamonds didn’t benefit as quickly as other alternative commodities such as gold, art or wine. He predicts that diamond prices may rise up to 15 per cent this year. Read more here-http://www.english.rfi.fr/print/18140?print=now

REAL ESTATE

-Home price dip extends to 4th month. The market seems to have pulled the rug out from under housing industry hopes for a sustained early recovery. After a five-month run-up in home prices starting last spring, prices have now fallen for four consecutive months, according to the S&P;/Case-Shiller Home Price Index of 20 cities, a gauge of market values, released Tuesday.

In January, prices were down 0.4%, compared with December and have fallen 0.7% from a year earlier. “The rebound in housing prices seen last fall is fading,” said David Blitzer, chairman of the Index Committee at Standard & Poor’s. “Fewer cities experienced month-to-month gains in January.” Read more here-

http://money.cnn.com/2010/03/30/real_estate/January_Case_Shiller/index.htm and http://www.bloomberg.com/apps/news?pid=20601068&sid;=aqYAKQFntJbc

-Half of Commercial Mortgages to Be Underwater: Warren. By the end of 2010, about half of all commercial real estate mortgages will be underwater, said Elizabeth Warren, chairperson of the TARP Congressional Oversight Panel, in a wide-ranging interview on Monday.

They are mostly concentrated in the mid-sized banks,” Warren told CNBC. “We now have 2,988 banks mostly midsized, that have these dangerous concentrations in commercial real estate lending.”

As a result, the economy will face another “very serious problem” that will have to be resolved over the next three years, she said, adding that things are unlikely to return to normalcy in 2010. Read and watch more here-http://www.cnbc.com/id/36085517

-Downtown Manhattan, where demand for office space began to surge three years after the 9/11 terrorist attacks, is about to lose its spot as the best performing U.S. market. Vacancies may exceed 14 percent of the area’s 87 million square feet by late 2011, empty space that’s equivalent to four Empire State Buildings and the highest rate since 1997, according to property broker Cushman & Wakefield Inc.

That doesn’t include the 4.4 million square feet of offices in two towers now under construction at the World Trade Center site. Those are scheduled for completion in 2013. “The amount of space that’s potentially going to come to the market will increase availabilities and put pressure on pricing,” said Kenneth McCarthy, Cushman’s head of New York- area research. “It will be quite awhile before it can be absorbed.” Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a3NKXZe6aJPE

-For some perspective into the all-important US real estate market, today’s chart illustrates the US median price of a single-family home over the past 40 years. Not only did housing prices increase at a rapid rate from 1991 to 2005, the rate at which housing prices increased.

That brings us to today’s chart which illustrates how housing prices have dropped 35% from the 2005 peak. In fact, a home buyer who bought the median priced single-family home at the 1979 peak has actually seen that home lose value (4.3% loss).

Not an impressive performance considering that over three decades have passed. It is worth noting that the median priced home has moved back to the top of a trading range that existed from the late 1970s into the mid-1990s. Read more here-http://www.chartoftheday.com/20100326.htm?T

Source: www.chartoftheday.com

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

The Goldbugg Report – April 6, 2010
Posted by Worldwide Precious Metals on Tuesday, April 6, 2010

Subscribe to
receive timely
information on
precious metals.

• Home
• About Us
• Info Request
• Open An Account
• Bullion
• Newsroom
• Testimonials
• Contact Us
• Client Login
• Sitemap