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The World Financial Report – November 29th, 2011

November 29, 2011

GOLD

-”Gold bears the confidence of the world’s millions, who value it far above the promises of politicians, far above the unbacked paper issued by governments as money substitutes. It has been that way through all recorded history. There is no reason to believe it will lose the confidence of people in the future.” Oakley R. Bramble

-Richard Russell: The Gold Skyrocketing Phase Still Lies Ahead. Day after day, everyone asks whether gold has topped out. Nobody ever asks whether the market has topped out. Think about it, we’re in a low inflation, low investor fear environment, a dollar that appears to have bottomed and is now firming, and still gold holds above 1700 an ounce.

This is a remarkable performance aided by heavy buying in China, India, and Asian nations. But what happens when we hit the inevitable inflation; when investors fears are on the rise? To conclude, gold is holding well in an environment that is not bullish for gold, but in due time, the environment will turn highly bullish for the yellow metal. Do not time your gold purchases. Simply continue to accumulate gold. The skyrocketing phase lies ahead, maybe one to three years. Read more here-http://tinyurl.com/85s22pq

-”My advice: We are moving closer and closer to what I call “survival period” the period where the magic of compounding turns into what will be the poison of compounding. This isn’t a time for timing. This is a time for action. Reduce your exposure to bonds and all items that provide fixed interest rates.

Similarly, reduce your exposure to stocks except the gold miners. Look to expand your positions in inflation-protected assets, especially gold.” “Those who are holding stocks in the hopes of the usual rebound are going to be terribly disappointed in the years ahead. This bear market is going to be unlike anything we’ve ever seen before.

In the end my survival vehicle will be gold. I say again, timing is hopeless. Gold will have purchasing power and true wealth as almost everything else is destroyed by this unprecedented bear market. The US Government is now so loaded with ever-growing debt that it has become a mathematical freak.

We return to different times, when rising interest rates will eat up the US government. With $55 trillion in assorted debts, the US is in no shape to deal with rising interest rates. We are in a state of reverse compounding, leading to inevitable bankruptcy on a massive scale.” Richard Russell

-Bud Conrad: Is Gold Still the Answer for Investors? Read more here-http://tinyurl.com/cn8rmjh

-Jeff Clark: Don’t Sweat the Correction in Gold. I’ve told more than one concerned investor that when the gold price falls, they should “come back in three months” and see if they’re still worried. The idea is that the daily and monthly gyrations are nothing to fret over, that the price will recover and, in time, fetch new highs. That advice has worked every time gold underwent any significant correction (except in late 2008, when one had to take a longer view than three months). Here’s proof. Read more here-http://tinyurl.com/buorcz6

-The Aden Sisters: Gold is Still Good. The gold price has actually been telling us for the past few years that the world is a scary place, even more than it was during the 2008 meltdown. The fact that gold has hardly declined in a normal downward correction (down only 16% so far) since then, after reaching record highs, reinforces that the world is tense and uncertain. Plus, with gold in other currency terms also rising to record highs, it further reinforces this (see Chart 2).

But you may remember that during the financial meltdown in 2008, all assets fell, including gold, and only the dollar and bonds held up. This is something that could happen again. We might see an accident or a meltdown at any time, which would tie in with the much awaited full downward correction in gold. Most telling during the 2008 crisis, however, was that gold fell much less than the other markets, and it ended the year on an up note. It fell almost 30% during the year but ended up about 5%.

Last time we showed you the current bull market in gold compared to other bubbles of the past. Gold is hardly near those explosive high levels, and the next chart provides yet another good example of this. Chart 3 shows the gold price above, along with its leading indicator, below, since 1968. Note the sharp steady rise in gold since 2001. It’s been an amazing rise, up 660%.

But the type of volatility gold had in the 1970s has yet to be seen. The indicator (lower chart) helps to identify volatility, as well as high and low areas in the major trend. Note the clear difference between the volatility in the 1970s and the movements since 2001. So looking at the big picture this indicator is saying that gold is near a normal high area within a major uptrend, but it has yet to experience any type of explosive action. This is likely still to come once this current period of weakness is over. Read more here-http://tinyurl.com/d8×6xdo

-Gold will shine at $3000 in 2-3 yrs: Superfund Financial. The crisis which the world is in right now is a global crises and not one emanating just from the Eurozone, says Johann Santer the COO of Superfund Financial India. From the commodity space, he is extremely bullish on gold and advices his investors to remain invested in the yellow metal. He expects gold to touch USD 3,000 per ounce in the next couple of years. Read more here-http://tinyurl.com/crzrvdx

-Jim Rickards: Gold Pullback Meaningless, It’s Headed Higher. When asked about Paul Brodsky’s thoughts on gold and his $10,000 price target, Rickards responded, “I agree completely with Paul on that. Again, I don’t want to put a stake in the ground around $10,000. My method has been to come up with a range, depending on different variables, but you end up in the same place.”

Here’s the point, whether you end up with $5,000, $7,000, Paul is saying $10,000 and that’s a perfectly respectable estimate, I could (even) see it (gold) at higher levels, $15,000 or $20,000. In other words, the price level that I have given, that is in chapter eleven of the book, is based on today’s data.

Now if you change the data, if you print even more money than we’ve printed so far, you’ll get even higher prices. But the point is Paul’s estimate is right in the middle of the range that I’ve come up with, a perfectly good estimate.

We all like our investments to go up, but if you buy gold at $1,700 and it goes to $1,500, buy more because it’s on its way to $2,000, $3,000, $4,000 and higher. The fundamental story (for gold) is completely intact, in fact it’s getting stronger. Read more here-http://tinyurl.com/d5goyhk

-Jim Rickards: Who Will Bail Out the Fed & How High for Gold? Read more here-http://tinyurl.com/6swulet

-John Embry: Get Ready for Extreme Money Creation Globally. Read more here-http://tinyurl.com/brd8enx

-John Embry: Tremendous Manipulation of Both Gold & Silver. When asked about Paul Brodsky’s view that gold is trading at an 80% discount to its real value and so reactions are irrelevant, Embry remarked, “I couldn’t agree more. I won’t make a price prediction because what you are predicting is how far currencies are going to fall in value.

They could fall to nothing and so the price of gold could be infinite. The real issue here is to be long because the trend is up. It’s been up for eleven years and it’s going to be up for a lot longer and the appreciation is going to accelerate. It’s really interesting if you watch what’s been going on for the last few years because they have controlled the rise. They can’t stop the rise, but they can control the speed of it.

The last couple of years gold has been up around 26% and guess what? They are holding it here right now and if the year ended tomorrow we would be up about the same percentage. I mean nothing that isn’t manipulated works like that.” Read more here-http://tinyurl.com/d3zx7xn

-Stephen Leeb: Expect QE3, QE4 and 40% to 50% Inflation. Read more here-http://tinyurl.com/csxhod2

-Clive Maund: Gold Market Update. Read more here-http://tinyurl.com/7covos2

-Rick Rule: Gold and the Financial Crisis. Read more here-http://tinyurl.com/6w9xa8v

-Daniel R. Amerman: Gold/Housing Ratio Falls To Historic Low. Read more here-http://tinyurl.com/cy68o85

-Tom McClellan: Why Gold Has 1-3 More Years Left Of Beating The Market. Read more here-http://tinyurl.com/8xzvszp

-Frank Holmes: The Gold Triple Play Volatility, Currencies and Europe. Read more here-http://tinyurl.com/cks9eol

-Murray Pollitt: Gold Contango. Read more here-http://www.gata.org/node/10697

-In Nervous Market, Gold Gains Respectability. “Gold is a money that governments don’t print,” said Charles Stevenson. Read more here-http://tinyurl.com/c2pqkvc

-James Turk: The Myths and Reality of Gold Confiscation. Read more here-http://tinyurl.com/7qn8ha5

-Cash for gold in the eurozone bailout. Read more here-http://www.gata.org/node/10696

-Mystery surrounds jump in central bank gold purchases. According to Reuter’ calculations, the owner of 130 of the 150 tonnes of gold bought by central banks in Q3, remains a mystery. Read more here-http://tinyurl.com/dxysdct

-Despite rising inflation, Iran advises against buying dollars or gold. Read more here-http://www.gata.org/node/10690

-Gold in India’s coffers makes government richer. The findings of a working paper by India’s central bank advise the Indian government to buy more gold to bolster the government’s kitty. Read more here-http://tinyurl.com/brlmrtn

-India gets its first gold and diamond studded jewels ATM. Not content with bullion alone, a new ATM in Mumbai also spits out diamond jewellery too. Read more here-http://tinyurl.com/d4jr5bh

-Twice in a week, Financial Times pays grudging respect to gold. Read more here-http://www.gata.org/node/10691

-Indifference, volatility cited in weekly metals review at King World News. Listen here-http://www.gata.org/node/10688

-Ford library confirms Fed letter tying Germany to gold price suppression. Read more here-http://www.gata.org/node/10686

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SILVER

Gold to silver ratio at 50 to 1 with gold at $2,000 the silver price would be $40.00

Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00

Gold to silver ratio at 30 to 1 with gold at $2,000 the silver price would be $66.67

Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00

Gold to silver ratio at 15 to 1 with gold at $2,000 the silver price would be $133.33

Gold to silver ratio at 50 to 1 with gold at $2,500 the silver price would be $50.00

Gold to silver ratio at 40 to 1 with gold at $2,500 the silver price would be $62.50

Gold to silver ratio at 30 to 1 with gold at $2,500 the silver price would be $83.33

Gold to silver ratio at 20 to 1 with gold at $2,500 the silver price would be $125.00

Gold to silver ratio at 15 to 1 with gold at $2,500 the silver price would be $166.67

-”It [has occurred] to me that it is financial terrorism that best describes the behavior of the manipulators in the silver market. When a world commodity, like silver, declines 30% in a matter of days [twice this year], or when it declines 7% in a day [Thursday] for no good economic reason, it is natural to wonder why that occurred. When the only plausible explanation is that the sell-offs occurred as a deliberate attempt to scare innocent holders out of the market through fear and intimidation [of further loss], is that not financial terrorism?”

“As I’ve indicated previously, the key to these sudden and sharp silver sell-offs is in the sequence of events. In every single instance, it is never a case of investors suddenly deciding to sell and that collective selling action which precipitates the price decline. Rather, it is always the case of the price first being suddenly rigged lower [at the quietest of trading times] and investors then reacting to those lower prices and selling after the price has come down.

Also, in every single instance, those who initiated the suddenly lower prices [the COMEX commercials], then reap the whirlwind of their financial terrorism by buying all the positions they were able to intimidate into being sold. Scare folks into selling so that the financial terrorists can then buy from those that had been terrorized.” “This is a crooked, rotten racket that has been going on for decades in silver.

The only difference is that it is not al Qaeda or some militant terrorist group at work, but a consortium of leading banks and firms financially terrorizing that segment of the public that has chosen to invest in silver. Instead of being organized by bin Laden, the silver terrorists are organized and protected by the CME Group.” Ted Butler via Ed Steer Casey Research-Read more here-http://tinyurl.com/792vyqk

-John Embry: Silver Update. “The fundamentals are fantastic. It’s a very small market relative to all the other markets and there is a massive paper short who has been manipulating the market violently for years, and we all know who that is.

I mean we shouldn’t be surprised that in these difficult times these guys are throwing everything at it but the kitchen sink. It’s just creating an unbelievable opportunity and when silver is trading at 5 and 10 times these levels in a few years, this will just be a bad memory.” Read more here-http://tinyurl.com/brd8enx

-Clive Maund: Silver Update. Read more here-http://tinyurl.com/ccxruql

-Louis James: Silver: Investment Demand Is Just Part of the Picture. Read more here-http://tinyurl.com/77m5r2q

-Coeur d’Alene’s CEO, Mitchell Krebs, expects the prices of silver and gold to continue rising on healthy demand even as economic uncertainty persists. Read more here-http://tinyurl.com/7qosqmr

-Hubert Moolman: Why Silver For A Monetary Collapse? Part 1. Read more here-http://tinyurl.com/6olc3zc

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CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: Gold Update. Today’s chart provides some long-term perspective in regards to the gold market. As today’s chart illustrates, the massive bull market in gold that began in early 2001 is alive and well. In fact, as today’s chart illustrates, the pace of the gold bull market has only increased over time.

Since peaking in early September 2011, however, gold has retreated. Each pullback has brought gold back down to support (green line) of its accelerated uptrend. Over the past two weeks, gold has declined once again and has crossed below the $1700 per ounce level and is once again testing support. Read more here-http://tinyurl.com/ce5xfku


Source: chartoftheday.com

-”You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.” Steve Jobs

-Global Collapse a Done Deal, says Jim Rogers. Rogers message to investors is If you think 2008 was bad, 2012 will be worse. “We’re certainly going to have more crises coming out of Europe and America; the world is in trouble.” He said everyone has spent beyond their means, public and private, “and it’s all coming home to roost.” “Last time, America quadrupled its debt. The system is much more extended now, and America cannot quadruple its debt again.” “Greece cannot double its debt again. The next time around is going to be much worse.” Read more here-http://tinyurl.com/7yu5vvn

-Eric Sprott: This Financial Crisis Will Be a lot Worse Than 2008. “I think it’s going to be a lot worse because it took a certain amount of money to bail out Lehman and all of the counterparties to Lehman. But when you have governments and sovereigns and major banks that have these issues, I just can’t imagine there is enough money to bail it out.

Of course day by day people are losing confidence in these various currencies. So I don’t think it can be solved. I don’t think there is enough money to bail it out and of course if they try we are going to end up with some kind of hyperinflation or (massive) depreciation of currencies. It’s not going to work, I just don’t think there is a solution to the problem.” Read more here-http://tinyurl.com/7ghsu5p

-PIMCO’s Chief Executive Officer Mohamed A. El-Erian said U.S. economic conditions are “terrifying” as the nation struggles to recover from recession. The odds of the U.S. returning to recession are as high as 50 percent, El-Erian said during an interview. U.S. economic growth was worse than expected and congressional policy makers are gridlocked over what to do about the economy and the deficit, which risk exacerbating an already weak recovery.

We have less economic momentum than we thought we had and we have no policy momentum.” “What’s most terrifying,” he said, “we are having this discussion about the risk of recession at a time when unemployment is already too high, at a time when a quarter of homeowners are underwater on their mortgages, at a time then the fiscal deficit is at 9 percent and at a time when interest rates are at zero.” Read more here-http://tinyurl.com/c4ry5vg

-Euro Zone Needs ‘Momentous Deal’: Credit Suisse. Euro leaders must reach “a momentous deal” toward fiscal and political union by mid- January to save the 17-nation bloc, Credit Suisse said in a note to investors. They also predicted the European Central Bank will move “more aggressively” to lower its benchmark 1.25 percent rate and provide banks with longer term funds. “In short, the fate of the euro is about to be decided,” according to the note, which was published this week. Read more here-http://tinyurl.com/bmkacto

-IMF Revamps Credit Lines for Nations Facing Shocks on Europe Debt Turmoil. The International Monetary Fund revamped its credit line program to encourage countries facing outside shocks to turn to the fund with few conditions attached, as European leaders fail to end their debt turmoil. Read more here-http://tinyurl.com/cdzj7rw

-Ben Davies: We are Seeing 2008 Style Crash Signals. “There is no doubt that we are hitting monetary and fiscal constraints. The balance sheet of the Fed is 50 times levered relative to 2007 when it was 25 times levered. That means that effectively 2% down on that portfolio and you wipe out all of the equity. Effectively, without printing more money, they (the Fed) would be insolvent.” Read more here-http://tinyurl.com/bp7yr6j

-China vice premier sees chronic global recession. A long-term global recession is certain to happen and China must focus on domestic problems, Chinese Vice Premier Wang Qishan has said. “The one thing that we can be certain of, among all the uncertainties, is that the global economic recession caused by the international financial crisis will be chronic,” Wang said.

Wang’s comments were the most bearish forecast ever by a top Chinese decision-maker about the world economy, and Beijing’s worry about a worsening global environment could translate into an impetus for pro-growth policies at home. Read more here-http://tinyurl.com/bqmgh5v

-A Few FOMC Members Said Outlook May Warrant More Easing. Some Federal Reserve policy makers said the central bank should consider easing policy further, according to minutes of their Nov. 1-2 meeting. Read more here-http://tinyurl.com/csb64q9

-Dollar Pre-Eminence Grows as Foreign Banks Double Deposits at New York Fed. Foreign bank deposits at the Federal Reserve have more than doubled to $715 billion from $350 billion since the end of 2010 amid Europe’s debt turmoil, buttressing the dollar’s status as the world’s reserve currency. Forty-seven non-U.S. banks held balances of more than $1 billion at the New York Fed as of Sept. 30, up from 22 at the end of 2010. Read more here-http://tinyurl.com/7rfywxe

-Treasury Notes Sell at Record Low Yield. Treasuries gained as the U.S. sold $29 billion in seven-year notes at a record low auction yield amid concern of contagion from the European debt crisis, pushing investors into the safety of government debt. Read more here-http://tinyurl.com/c3je8nh

-Consumer Spending Slows as Holidays Begin. Consumer spending in the U.S. rose less than forecast in October as Americans used the biggest gain in incomes in seven months to rebuild savings, indicating the biggest part of the economy may contribute less to the recovery. Read more here-http://tinyurl.com/dyglqe5

-’Company Policy: We are not hiring until Obama is gone.’ Read more here-http://tinyurl.com/79ou5ot

-Payrolls Gained in 39 U.S. States in October, Led by Illinois, California. Read more here-http://tinyurl.com/6mlg2q3

-As New Graduates Return to Nest, Economy Also Feels the Pain. Read more here-http://tinyurl.com/76ygvs7

-MF Global Missing Money May Exceed $1.2 Billion, Double Previous Estimate. Read more here-http://tinyurl.com/buq8ev8

-James Turk: MF Global Disaster to Create Another Lehman Crisis. Read more here-http://tinyurl.com/89o2cds

-Barclays CEO Pay ‘Corrosive’ for U.K. Economy, Study Says. The soaring earnings of top bankers including the chief executive officer of Barclays Plc are having a “corrosive” effect on the U.K. economy, the High Pay Commission said. Read more here-http://tinyurl.com/coby8lj

-Oil Abundance in Canada Provokes Anxiety Over Fossil Fuel Lust. Read more here-http://tinyurl.com/d88653l

-Vindicated Seismologist Says Japan Still Underestimates Threat to Reactors. Dismissed as a “nobody” by Japan’s nuclear industry, seismologist Katsuhiko Ishibashi spent two decades watching his predictions of disaster come true: First in the 1995 Kobe earthquake and then at Fukushima. He says the government still doesn’t get it. Read more here-http://tinyurl.com/7jdfp89

-U.S. Targets Iran Oil, Bank in Bid to Halt Nuclear Program. The U.S. expanded measures aimed at thwarting Iran’s nuclear program, targeting its central bank and oil industry with actions intended to cut the regime off from international financial transactions. Read more here-http://tinyurl.com/cc4j7ph

-Russia Prepares to ‘Destroy’ U.S. Shield, Medvedev Says. Russian President Dmitry Medvedev ordered the military to prepare to “destroy” the command capability of the planned U.S. missile-defense system in Europe. Read more here-http://tinyurl.com/8xsc736

-Foreign hackers targeted U.S. water plant in apparent malicious cyber attack, expert says. Read more here-http://tinyurl.com/8458nks

-Steve Jobs’ Heirs Have Reason to Sell Apple and Disney. Read more here-http://tinyurl.com/bqu3ps5

-Apple Shifts to Sharp for 2012 TVs: Jefferies. Read more here-http://tinyurl.com/btop77p

-EBay Targets Shoppers Who Want to Buy Products Shown on TV. Read more here-http://tinyurl.com/7dt6hwo

-Passengers Pay 6% More for Thanksgiving Trips as Jets Fly Full. Passengers are paying an average of 6 percent more this year for round-trip flights during the U.S. Thanksgiving holiday as airlines reduce their available seats to maintain pricing power. Read more here-http://tinyurl.com/csle8hs

-New Zealand Exodus is Biggest in a Decade. More migrants left New Zealand than arrived for the seventh month in the past eight, extending the biggest exodus in a decade, after residents were uprooted by an earthquake in the South Island city of Christchurch. Read more here-http://tinyurl.com/87jnzc9

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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://tinyurl.com/6l4thaf

-Watch BTV interview’s of Harold Seigel on colored diamonds. Watch video here-http://tinyurl.com/62gx3du and http://tinyurl.com/6dqhwx8

-Rarecoloreddiamonds.com Featured Diamond of the Week. This week’s Diamond is a very large 2.13ct pear shape fancy pink. Very few large pinks exist today. Pear shapes are very popular for resale. I highly recommend this diamond as an excellent investment. Harold Seigel-See video of the Diamond here-http://tinyurl.com/6g37q2r

-”I think prices of large quality diamonds will get stronger and stronger because there is a limited amount of them.” Laurence Graff

-”If 10 per cent of China’s 1.3 billion population bought diamonds, there would be none left in the world,” Laurence Graff said. He added that the lack of supply concerned him, given that no new diamond mine had been discovered for 10 years. As such, he believes diamond prices will continue to go up.

While the Chinese community tends to prize gold, Graff believes mainlanders will take up the Western custom of buying diamonds for wedding or engagement rings. “A diamond is a family treasure, as it can be passed on to children and grandchildren. Diamonds would be the last thing you would throw away.” Read more here-http://tinyurl.com/cg8ks84 Watch video here-http://tinyurl.com/d8v7pqz

-Pink Diamonds Find New Best Friend: China’s Rich. Wealthy Chinese are moving their investments from stocks and bonds to one of the world’s rarest gemstones: pink diamonds. Watch more here-http://tinyurl.com/6whyfpx

-Dubai diversifies with push into diamonds. The United Arab Emirates, the world’s fourth-largest oil exporter and home to gold trading hub Dubai, is rapidly becoming a force in trade of another highly valuable commodity: diamonds. Read more here-http://tinyurl.com/dx7u8y5

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SOVEREIGN DEBT

-Portugal’s Credit Rating Cut to Junk by Fitch. Portugal’s credit rating was cut to below investment grade by Fitch Ratings due to the country’s rising debt level and weakening economy. Read more here-http://tinyurl.com/bvsehz9

-Japan ‘May Be’ Close to a Downgrade: S&P. Standard & Poor’s said Japanese Prime Minister Yoshihiko Noda’s administration hasn’t made progress in tackling the public debt burden, an indication it may be preparing to lower the nation’s sovereign grade. Read more here-http://tinyurl.com/85paoh7

-France’s AAA Status in Tatters as Yields Surge. Investors aren’t waiting for Standard & Poor’s or Moody’s Investors Service to strip France, Europe’s second-biggest economy, of its top credit rating. The extra yield demanded to lend to AAA rated France for 10 years was 158 basis points more than the German rate. Read more here-http://tinyurl.com/7w93d3t

-Merkel Rejects Euro Bonds Again After Auction. German Chancellor Angela Merkel again ruled out joint euro-area borrowing and an expanded role for the European Central Bank in fighting the debt crisis. Read more here-http://tinyurl.com/dymb8y8

-German Auction ‘Disaster‘ Stirs Crisis Contagion Concern. Germany failed to get bids for 35 percent of the 10-year bonds offered for sale today, propelling borrowing costs in Europe higher and the euro lower on concern the region’s debt crisis is driving away investors.

“This auction is nothing short of a disaster for Germany,” said Mark Grant, a managing director at Southwest Securities Inc. in Fort Lauderdale, Florida. “If the strongest nation in Europe has this kind of difficulty raising capital, one shudders concerning the upcoming auctions in other European nations.”

Turmoil that began more than two years ago in Greece and snared Ireland, Portugal, Italy and Spain has closed in on France and now risks engulfing Germany, the region’s biggest economy. Political leaders are struggling to find a fix for the crisis, with German Chancellor Angela Merkel rejecting proposals for common currency-area bonds, while the European Central Bank resists calls to boost sovereign-debt purchases. Read more here-http://tinyurl.com/ckvvpre

-Michael Pento: Failed German Auction Will Force ECB to Print. Read more here-http://tinyurl.com/cprdpyp

-BOE’s Miles Sees Risk a Country May Exit Euro Area as Debt Crisis Persists. Bank of England policy maker David Miles said there’s a risk a country may leave the 17-nation euro area and that the threat from the region’s crisis has increased uncertainty about the outlook for the U.K. economy. Read more here-http://tinyurl.com/766lj7u

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U.S. DEBT-DEFICIT

-China media says US sitting on debt ‘bomb.’ China’s state media Tuesday blasted the United States over its “ticking debt bomb” and urged American lawmakers to be more responsible after they failed to agree on deficit-cutting measures.

China is the world’s largest foreign holder of US Treasuries with a portfolio of around $1.15 trillion, prompting Beijing’s keen interest in the state of the US economy. “Washington’s political elites are obligated to muster the courage to defuse the ticking debt bomb and start to show the world they have the wisdom and determination not to further jeopardise the fragile global economic recovery,” Xinhua news agency said in a commentary. Read more here-http://tinyurl.com/8ablcv3

-U.S. Supercommittee Fails to Reach Agreement as Across-the-Board Cuts Loom. A special debt-reduction committee in the U.S. Congress failed to reach agreement, extending partisan gridlock into the 2012 election year and setting the stage for $1.2 trillion in automatic spending cuts. Read more here-http://tinyurl.com/7oep63h

-U.S. Rating Affirmed by S&P, Moody’s as Supercommittee Fails. Standard & Poor’s and Moody’s Investors Service said they won’t lower ratings on the U.S. after the congressional committee charged with finding $1.5 trillion of deficit cuts failed to reach an agreement. S&P, which stripped the U.S. of its top AAA grade on Aug. 5, said that the supercommittee’s inability to reach agreement didn’t merit another downgrade because the inaction will trigger $1.2 trillion in automatic spending cuts.

The deliberations were “not decisive,” Moody’s spokesman Eduardo Barker said after the panel issued a statement. Fitch Ratings reiterated that the talks failure would likely lead to a revision of the U.S. rating outlook to negative. Read more here-http://tinyurl.com/d2d6ts5

-Ron Paul: Balance by returning to 2004; Lenzner: Top 0.1 percent gets half of all cap gains. Read more here-http://www.gata.org/node/10693

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BANKING

-Regulators close 2 banks in Iowa, Louisiana. Regulators on Friday closed a bank in Iowa and another in Louisiana, bringing the nationwide tally of bank failures up to 90 for the year. Read more here-http://tinyurl.com/bnkbota

-The FDIC’s confidential list of “problem” banks fell for a second straight quarter, declining to 844 from 865 three months earlier, the agency said. There were 26 bank failures in the three-month period that ended Sept. 30, bringing the year’s total to 74, compared with 127 a year earlier. Read more here-http://tinyurl.com/cvugcgb

-Fed Requires Top Banks to Submit Capital Plans. The Federal Reserve told the 31 largest U.S. banks to test their loan portfolios and trading books against a deep recession and a European market shock to ensure they have enough capital to withstand losses. The most severe test scenarios outlined by the Fed today include an unemployment rate of as much as 13 percent, an 8 percent drop in gross domestic product and a 21 percent plunge in home prices. Read more here-http://tinyurl.com/74uelpr

-’Unsellable’ Real Estate Assets Threaten Survival of Smaller Spanish Banks. Spanish banks, under pressure to cut property-backed debt, hold about 30 billion euros ($41 billion) of real estate that’s “unsellable,” according to a risk adviser to Banco Santander SA and five other lenders.

I’m really worried about the small and medium-sized banks whose business is 100 percent in Spain and based on real- estate growth,” Pablo Cantos, managing partner of Madrid-based MaC Group, said in an interview. “I foresee Spain will be left with just four large banks.” Read more here-http://tinyurl.com/c3put4p

-Chinese Banks ‘Built on Quicksand’: Chanos. Chinese banks are “extremely fragile” because the lenders don’t have enough capital to offset bad loans, said Jim Chanos, president and founder of the $6 billion hedge fund Kynikos Associates Ltd.

Chinese lenders are saddled with non-performing loans accumulated in the late 1990s and early 2000s, Chanos, the short seller who predicted the collapse of Enron Corp. in 2001, said in an interview. The banks are failing to recognize the losses on the bad loans and have carried out a lending binge since 2008, said Chanos.

The Chinese banking system is built on quicksand and that’s the one thing a lot of people don’t realize,” said Chanos, who is shorting the shares of Agricultural Bank of China. “Everybody seems to think it is a free and clear open checkbook. It’s not. The banking system in China is extremely fragile.” Read more here-http://tinyurl.com/caf7ln8

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REAL ESTATE

-Sales of Existing U.S. Homes Unexpectedly Rise. Sales of previously owned homes in the U.S. unexpectedly rose in October, a sign falling prices may be attracting buyers. Purchases increased 1.4 percent to a 4.97 million annual rate, the National Association of Realtors said today in Washington. Read more here-http://tinyurl.com/cyfaqp7

-Births at 11-Year Low May Prolong Five-Year Housing Slump. Read more here-http://tinyurl.com/7lcegqw

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The World Financial Report – November 29th, 2011
Posted by Worldwide Precious Metals on Tuesday, November 29, 2011


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