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The GoldBugg Report - April 29, 2008

April 29, 2008

RUFF SAYS FINANCIAL WORLD COULD COLLAPSE

-Veteran gold bug Howard Ruff's Ruff Times is having a relatively rough time this year, but that's nothing compared to what he sees ahead for the U.S. economy. Ruff is one of a number of veteran gold bugs who have been boosted by the apparent post-2000 return of the conditions that first brought them to fame in the late 1970s. He frankly says that his new book, "How to Prosper During the Coming Bad Years in the 21st Century," is simply an updated version of his 1978 best-seller, "How to Prosper During the Coming Bad Years" because "it's déjà vu all over again."

Ruff says that he has recently decided that this time around the U.S will experience hyperinflation ("400 percent inflation or more") rather than "a rush of brains to the head, like Paul Volcker and Ronald Reagan did in 1980" and a halt to monetary expansion, "ending inflation and the gold and silver bull market, for at least a few years." He writes: "I spent the '70s fending off the media label of "Prophet of Doom," arguing that I expected much less than doom.

It turned out to be so. "With my new book in circulation, I'll face the same accusations, and this time they are right. The financial world we know and love is facing genuine doom. You could lose the value of all your assets in the stock market. You could find yourself unable to buy essential commodities, when you want them, and gold and silver will be valued, not in the tens or hundreds of dollars per ounce, but in the thousands!"

Reason: like many of my emailers, Ruff appears convinced by, and in his latest issue quotes very extensively from, John Williams' Shadow Government Statistics, which argues Washington has been systematically underreporting inflation and monetary growth. Ruff writes: "Ruff Times subscribers who accept John's scenario have no downside! At the worst they will make tons of money in gold and silver, then we will eventually put out a sell order and the world will return to relatively normal.

If I and John Williams are right, it will literally save your current lifestyle, and perhaps even your lives." Not surprisingly, Ruff's current "investment menu" is almost exclusively into precious metals and energy. Read more at-http://www.marketwatch.com/news/story/ruff-sees-more-rough-times/story.aspx?guid=%7b0354D5FB-2AE2-48CB-A7F0-4B06FBE5EE61%7d&dist=msr_5&print=true&dist=printTop

GOLD

-"Inflation adjusted, going back to 1980 prices, gold today should be over $2,300 an ounce, so making the statement that gold could go to $2,000 is not irrational," Frank Holmes, CEO of U.S. Global Investors told CNBC. Watch video here-http://www.cnbc.com/id/15840232?video=715663149

-Mitsui Mining and Smelting Co Ltd said on Wednesday it has developed a new catalyst for diesel engine cars that replaces the use of platinum with silver, a less conventional but much cheaper metal. "Silver will totally replace platinum in this new autocatalyst that we've developed," a company spokesman said. By substituting platinum with silver, the cost of precious metals in the production of autocatalysts, which clean car exhaust fumes, would be cut by more than 90 percent, the company said. Read more at-http://www.reuters.com/articlePrint?articleId=UST26231020080423

-Newly rich Chinese consumers take a shine to gold. Read more at-http://www.chinapost.com.tw/print/152951.htm

-For the first time, the Bank of Russia purchased gold for its international reserves from gold producers, a source in banking circles told Interfax. Previously the central bank had always purchased gold on the interbank market. GATA.org

-Gold broke down from its range bound channel yesterday and quickly fell to support at $895-$900 as anticipated. Should gold fall below $900 we could again retest the support of the early April lows of $880. We expect strong support at these levels but there is a possibility that should gold close below $880 we could retest previous resistance at the 1980 nominal high of $850 per ounce.

Gold should be supported by the economic data in the U.S. this week which is again expected to be weak. The deeply distressed housing sector will again come under the spotlight with the release of new home sales data. Durable goods orders and the weekly jobless numbers also feature and weak numbers could put the dollar under pressure and put a floor under gold.

The dollar's strong rally (from record highs just above 1.60 to the euro to below 1.575) has led to nervous selling by traders and speculators in the gold futures markets with short term horizons. Gold.ie

-Physical Buyers in Asia and Internationally to Lead to Higher Gold Prices in Coming Months and Years. Physical buyers in Asia with longer term aims have emerged as buyers at these levels and Reuters reports strong physical buying throughout Asia. Main consumer India, was abuzz with activity during the wedding season and ahead of a religious festival, dealers said on Thursday" as were other parts of Asia; the bullion trading cities of Hong Kong and Singapore noted steady buying from jewellers in Indonesia, Thailand and Vietnam.

Ultimately, supply and demand in the physical market will dictate the price of gold but the paper futures traders can create and exacerbate sell offs in the short term prior to the fundamental primary bull market reasserting itself. It is worth remembering that the population of the world in 1980 was some 3.5 billion and today it is some 6 billion. Much of that growth in population has been in Asia and now there is a huge growth in the wealth of these societies.

Meanwhile the supply of gold and gold production may have peaked in 2001 and has fallen since despite the rising prices. Thus, increasing demand in Asia and safe haven demand in the western world is being met with a falling supply of gold. Production in South Africa continues to fall with gold output in January falling 16.5% year on year. South Africa's gold production has plummeted by some 75% since 1970 (from over 1,000 tonnes in 1970 to only 272 tonnes in 2007). Giving further credence to the theory that the world has reached the peak in gold production.

Investors should continue to focus on these ‘big picture' fundamentals rather than the noise of hour to hour and day to day price movements. Physical supply and demand and not speculative short term movements should remain paramount in investors' minds. Investors who focus on these fundamentals will be handsomely rewarded. Gold.ie

-Chinese Gold Demand Increasing Significantly. Figures from the World Gold Council showed sales of gold jewellery in China hit a record high of 302.2 tonnes in 2007, up 34 percent on the previous year. China has now overtaken the United States to become the world's second largest buyer of gold jewellery after India. But behind the remarkable growth lies a deep Chinese traditional appreciation of the precious metal as a hedge against social and economic risks.

"I'm more confident in gold we've been buying it for so many years in the past anyway," said 78-year-old Wu Peifen, who was selecting a wedding gift for her grandson at Beijing's Wangfujing Department Store. High inflation and a 41-percent slump in the domestic stock market this year have added further momentum to China's drive to buy gold.

Importantly, Chinese consumers are not deterred by rising prices, experts said. Rather, they increasingly view gold as not only a means to protect wealth but also as an efficient part of their investment portfolio. "In fact, higher gold prices helped to stimulate investment purchases of the metal as consumers were attracted by the strong returns generated by the metal," the World Gold Council said in a recent report about the China market. It said investment demand for gold at the retail level amounted to 23.9 tonnes in 2007, a rise of 60 percent compared with 2006. Gold.ie

-How much gold do Vietnamese keep under their pillows? Read more at-http://www.gata.org/node/6238

-Bill Murphy: The 'strong dollar' policy was gold price suppression. GATA has been working for nine years to expose the manipulation of the gold market by a very cunning Gold Cartel, but one who is now on the ropes. Nonetheless, over a short period of time, they can make life very miserable for our gold/silver camp, as they did a few weeks ago with their orchestrated raid on both markets.

Yet, what is so stunning, is that after all these years, the gold and investment world still doesn't get it, or "won't go there." The fact is the now heralded President's Working Group on Financial Markets met on a Monday in March and then gold was bombed for more than $100 an ounce. Read full speech at-http://www.gata.org/node/6251

-Wistar Holt: GATA gives vital confidence to precious metals investors. Read more at-http://www.gata.org/node/6252

-Edwin Vieira Jr.: Silver and gold guarantee freedom. Read more at-http://www.gata.org/node/6244

-Chris Powell: There are no markets anymore, just interventions. Read more at-http://www.gata.org/node/6241

-What does a recession mean for the gold price. Read full story at-http://premium.thebulliondesk.com/content/reports/tbd/temp/GoldRecession.pdf

-Gold producer hedge book is at its lowest since 1992. Major gold miners have continued to reduce their hedge positions during 2007 with the total book now at its lowest for 16 years. Read more at-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=51465&sn=Detail

-Regardless of extreme volatility, gold is headed to $1650 and the US dollar to .5200. Jim Sinclair

-A while back, we alerted readers of a gambling nature that Jim Sinclair of jsmineset.com was willing to wager a million bucks that gold will trade at $1650 on or before the close of the COMEX open outcry session at the end of the 2nd week of January 2011. Now it appears that Sinclair has found a taker.

He announced that it "appears an agreement will be concluded shortly between myself and a Canadian hedge fund as counsel for both parties." Sinclair has not as yet named the other bettor, but he promises to release all details once the deal is finalized. For our part, we're inclined to believe that Jim will make himself a cool million. Kitco Daily Resource

SILVER

-Like gold, silver is in better position than it was at its May 2006 peak. Silver has major support at $15. It was an important peak and it took silver four tries to best it. Also the 200-day moving average is at $15.17 and rising. I should also note that the corrections that followed silver's big moves in 2004 and 2006, corrected more than 62% of the advance. The 62% retracement of silver's recent move is $15 exactly. So silver is going to hold up much better than it did following the previous two spikes. Any dip below $16.50 and silver is a great buy.

Looking ahead, $25 is the next magnet for silver. $25 was the peak prior to the spike to $50. Also, if you look at a very long term chart of silver you will notice an obvious cup and handle originating from $15 in 1983 down to $4 in the early 1990s and 2000s and back up to $15 in 2006-2007. The recent breakout gives us a target of $26 (15-4 = 11. 11 +15 = 26). Okay, so it isn't $25 but you get the point. $25/$26 is the next target. Jordan Roy-Byrne-Read full story at-http://news.goldseek.com/GoldSeek/1208969406.php

-Gold and silver trading figures at high volumes. Volume data for trading in gold and silver on the London markets in March showed an interesting trend in that volumes were particularly high indicating greater institutional activity. Read more at-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=51517&sn=Detail

-Popular demand for silver is on the rise strongly in the U.S. How can we tell? An interesting divergence has been developing where the paper silver market in New York is not really reflecting popular demand for the white metal on the street. Why would the paper silver market not reflect the popular silver demand? Well, the COMEX paper silver market is related to, but different from the popular physical silver market.

The paper silver market deals almost exclusively with very large, average 1,000-ounce so-called "good delivery bars" and each futures contract covers the delivery of five such bars at a date in the future. The popular silver bullion market, which is every coin and bullion shop everywhere, covers a whole host of other products for silver investors large and small, including small one-ounce rounds (such as U.S. silver eagles and Canadian silver maples), one, ten and 100-ounce silver bars, and investment bags of 90% silver U.S. coins in $500 and $1,000 face value lots.

A bona fide scarcity of silver inventory for just about all popular small-sized fabricated silver products is evident because even dealers are willing to pay higher than normal premiums in order to get the metal when silver is trading near current cash market prices. When dealers are paying higher premiums they are only doing so because they have immediate need for it, because they have customers willing to pay even more, if they can get it.

When customers are willing to pay much higher than normal premiums, it means that current inventories of silver are insufficient to meet the demand at the prevailing spot price, which is largely influenced by the paper silver markets. Tight supplies in the popular silver markets and positive money flow into silver exchange traded funds suggest that demand for the second most popular precious metal in strongly on the rise in the U.S. Read more at-http://www.resourceinvestor.com/pebble.asp?relid=42084

-The purpose of this article is to help you decide for yourself if silver is still the great investment opportunity I believe it to be. I see some major fundamental differences between silver in 1980 and today. I think it is those differences which should make you want to buy and hold silver more than ever before. In no particular order of importance, let's consider those differences. Read more at-http://news.silverseek.com/TedButler/1208878782.php

I have been a staunch advocate of silver for years as it languished below $5 an ounce. The price has gone up almost four times and yet the bullish factors haven't changed very much. It strikes me as odd that the broad array of facts and comparisons still suggest that silver is extremely undervalued and capable of a price jolt to the upside that will shock many. There may come a day when that can no longer be said, but that's not the case today. Please think carefully about the case I've made. I hope you also can see the enormous opportunity that has become clear to me. Ted Butler

-David Morgan interviewed by Theaureport.com

TGR: Typically there are three legs, to a bull market. Correct?

DM: Good question. There are really four different attitudes for the market and three cycles. I will try to explain them in general terms. Looking at the big picture, you've got pessimism, skepticism, optimism, and euphoria. Those are the four major attitudes toward the market. I divide them into three cycles: stealth, major participation, and the mania. In the stealth phase you go from the very bottom up to the end of the first leg. Until it's over, you don't know how high that is. During that time you can make a great deal of money, but no one is paying attention.

Then, just about the time that some of the public finally wakes up to the sector, it corrects, and you get a long consolidation. To describe this, I have kind of coined the expression, "The market will wear you out or it will scare you out." So, if you got into gold at $550 near the top of the stealth phase when it was starting to consolidate and it took several months before the next leg up began, it wore out a lot of people.

It was like it was going nowhere, back and forth, back and forth. People thought, "David Morgan and these guys don't know what the heck they're talking about, and I am getting back into tech stocks or whatever." They gave up, in other words!

Then, just about at the end of the consolidation period, or correction, it starts up on the next leg. That's where I think we are. I don't want to be too specific here, because until we look backwards, we won't know if this move up to $21 silver and $1000 gold is really part of the second leg or a part of the first leg. We really don't know yet. I believe it's probably a part of the second leg up.

It is definitely not the euphoria phase, since the general sentiment is skeptical. There are people who were watching silver at $17 who probably wanted to get in but were scared. They didn't get in, and watched it go to $21, and now it's back to $17, and they're saying, "I'm so glad I didn't get in." And if it goes down to $15, they will probably never get in this market.

A bull market gets its name for a reason. It will shake as many people off its back as possible all the way up. We're witnessing one of those shakeouts right now. Those who follow me closely and listen to my radio shows are well aware of that fact. If you're mentally prepared for it, it's not a big deal. Read full interview at-http://www.theaureport.com/pub/na/1301

-Silver could be low-cost substitute for platinum in autocatalysts. If Mitsui Mining & Smelting new technology is proven effective, silver, not palladium, may prove to be the most cost-effective substitute for platinum in autocatalysts. Tokyo-based Mitsui Mining & Smelting announced Wednesday that it has developed a new catalyst to clean exhaust gases from diesel engines using silver, rather than the much more pricey platinum.

In a news release, Mitsui claimed that the new catalyst, which has particle matter purification efficiency that currently equals that of platinum now used in autocatalysts, can reduce precious metal costs by 90 percent or more. A company spokesman told Reuters that Japan, Europe and the United States are all planning to impose tighter regulations on exhaust emissions for heavy equipment, such as that used in construction and farming, beginning in 2012. "We hope this catalyst will be used in these vehicles, and this is the market we are targeting." Platinum demand from automakers for catalytic converters is increasing due to strong sales of light-duty diesel vehicles in Europe.

Platinum and increasingly palladium are used in autocatalysts to reduce carbon monoxide and particulate emissions. Previously, silver has not been used in autocatalysts because of its poor heat resistance. But Mitsui Mining said it has succeeded in making silver withstand heat of up to 800 degree centigrade by adding metal composite oxide. The company said the catalyst is now undergoing performance evaluation tests. Mineweb.com

PLATINUM-PALLADIUM-BASE METALS

-Investec predicts platinum price north of $2400 by December. Investec talks about the inelasticity of platinum supply and demand. Investec Asset Management believes the platinum price will exceed $2,400/ounce by the end of this year as both supply and demand are inelastic. Portfolio manager Gail Daniel said South Africa's current power problems would severely constrain growth in the production of platinum as the country accounted for 80% of the world's platinum resources and Zimbabwe for much of the balance.

This implied that supply was very inelastic. Demand for the metal was also inelastic as the use of autocatalysts in motor vehicles was legislated in various parts of the world. Diesel vehicles could only be fitted with platinum autocatalysts, while palladium autocatalysts could be applied to petrol vehicles as well. Growing vehicle demand in China supported platinum demand, while the fact that many consumers bought platinum jewellery as an investment, implied that jewellery demand would not fall off with higher prices either.

Daniel forecast a 400,000 ounce deficit in the platinum market for this year, but said if Anglo Platinum, which still has not appointed a new CEO, could manage to increase its production it could affect the outcome. Investec believed that 25 years was a "quite normal" period for commodity cycles of which the latest cycle kicked off around 1996. The current cycle could still see higher growth in demand until 2020, but short term cycles could still occur within the long-term trend.

The company is of the view that a strong commodity price environment will sustain strong earnings if higher costs are managed. It said the market would award companies attaining exploration success as all the "easy finds" of resources had been made already. The successful companies will strongly outperform or be acquired. Mineweb.com-Read more at-http://www.marketwatch.com/news/story/platinum-may-hit-2400-ounce/story.aspx?guid=%7b8C01ECF1-EEC3-47D9-A718-42260C466C80%7d&dist=msr_2&print=true&dist=printTop

-Bullish outlook for precious and base metals and bulk mined commodities. Macquarie Capital Securities has forecast that the physical tightness of many commodities is expected to persist into the next decade, keeping prices well above normal for the long term. Read more at-http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=51514&sn=Detail

COMMODITIES

-Soros Says Commodity 'Bubble' Still in 'Growth Phase'. Billionaire George Soros said the boom in commodities is still in a ''growth phase'' after prices for oil, wheat and gold rose to records. ''You have a generalized commodity bubble due to commodities having become an asset class that institutions use to an increasing extent,'' Soros said today at an event sponsored by the Centre for European Policy Studies in Brussels. ''On top of that you have specific factors that create the relative shortage of oil and, now, also food.''

Soros's comments echo those of Jim Rogers, a fellow founder of the Quantum Hedge Fund in the 1970s. Rogers is best known for being a commodities bull since the late 1990s, before the market started to rally in 2001. His Rogers International Commodity Index has more than quadrupled since its start in 1998. Read more at-http://www.bloomberg.com/apps/news?pid=20601072&sid=aLSge4iZvG3g&refer=energy

-Speculation not behind surging commodities. Read more at-http://www.chinapost.com.tw/print/153269.htm

OIL-GASOLINE

-National average gasoline prices will top $1.40 a litre this summer and $2.25 by 2012, according to a forecast from CIBC World Markets which says tightening supplies will drive crude oil over US$150 a barrel by 2010 and to US$225 a barrel in four years. Read more at-http://canadianpress.google.com/article/ALeqM5jaHZm_hy5H473JftYcuGif6jA35A or http://www.marketwatch.com/news/story/gasoline-could-hit-7-oil/story.aspx?guid=%7B824E895C-F649-4526-89F1-50C198A8A0D5%7D&dist=hplatest

-Canadian gas prices approach all-time high. Read more at-http://www.cbc.ca/money/story/2008/04/22/gasprices.html

-Gasoline price seen heading to $1.40 a litre this spring and summer. Read more at-http://www.globeinvestor.com/servlet/story/GAM.20080419.RENERGY19/GIStory/

-Emerging Market Oil Use Exceeds U.S. as Prices Rise. Read more at-http://www.bloomberg.com/apps/news?pid=20601109&sid=a_YCEx7do3LQ&refer=home

-Report: Iran's president says oil prices too low. Report: Iran's president says oil at $115 a barrel is too low, calls for higher prices. Read more at- http://biz.yahoo.com/ap/080419/iran_oil.html?printer=1

-Are We Nearing The Peak Of Fossil Fuel Energy? Has Twilight In The Desert Begun? Watch slide show here-http://www.321energy.com/editorials/simmons/simmons042308/simmons042308.html

-Oil running out as prime energy source: world poll. Read more at-http://www.reuters.com/article/environmentNews/idUSN1835277320080420?feedType=RSS&feedName=environmentNews&rpc=22&sp=true

-Saudis put off longer-term oil capacity rise. Read more at-http://www.ft.com/cms/s/0/36b36e2a-0efe-11dd-9646-0000779fd2ac.html?nclick_check=1

-High oil prices here to stay, energy forum hears. Read more at-http://afp.google.com/article/ALeqM5gcoqYf3Q4NeQeZDsLDZjp-rj69dA

-Mexican oil production falls 7.8 percent in first quarter. Read more at-http://www.iht.com/articles/ap/2008/04/21/business/LA-FIN-Mexico-Oil-Production.php

-Nippon Yusen's Oil Tanker Hit by 'Rocket' Off Yemen. Read more at-http://www.bloomberg.com/apps/news?pid=20601101&sid=a8sd5blxNtGE&refer=japan

-Brazil's discoveries of what may be two of the world's three biggest oil finds in the past 30 years could help end the Western Hemisphere's reliance on Middle East crude, Strategic Forecasting Inc. said. Saudi Arabia's influence as the biggest oil exporter would wane if the fields are as big as advertised, and China and India would become dominant buyers of Persian Gulf oil, said Peter Zeihan, vice president of analysis at Strategic Forecasting in Austin, Texas. Zeihan's firm, which consults for companies and governments around the world, was described in a 2001 Barron's article as ''the shadow CIA.'' Read more at-http://www.bloomberg.com/apps/news?pid=20601109&sid=aBUoYKhu7PWk&refer=home

GLOBAL FOOD CRISIS

-IMF in Talks to Boost Funds to Nations Hit by High Food Prices. The International Monetary Fund is in talks to provide extra financing to 10 developing countries struggling to cope with the soaring cost of food, a spokesman for the Washington-based lender said. Read more at-http://www.bloomberg.com/apps/news?pid=20601110&sid=a219hKdi7V.s

-UN chief warns world must urgently increase food production. Read more at-http://www.breitbart.com/print.php?id=D905T9KG0&show_article=1

-Stephen King: Food protectionism could provoke a crisis on a par with 1970s oil shocks. Read more at-http://www.independent.co.uk/news/business/comment/stephen-king/stephen-king-food-protectionism-could-provoke-a-crisis-on-a-par-with-1970s-oil-shocks-812753.html?service=Print\

-World Bank Says Thai Curb on Rice Exports Would Deepen Crisis. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=aTqWEKplxUsE&refer=home

-Run on rice makes its way to U.S. Read more at-http://www.latimes.com/business/la-fi-rice24apr24,0,3320375.story

-Two major US retailers ration rice amid global food crisis. Read more at-http://www.breitbart.com/article.php?id=080424190924.hb977n7e&show_article=1

-Wal-Mart's Sam's Club limiting sales of rice. Read more at-http://www.reuters.com/article/marketsNews/idUSN2323679120080423

-Rice Shortage in Philippines May Mean More Trouble for Arroyo. Read more at-http://www.bloomberg.com/apps/news?pid=20601109&sid=aTA4EeJaGgZY&refer=home

-Americans hoard food as industry seeks regs. Read more at-http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20080423/BUSINESS/868303815/1001&template=printart

-Bay Area Shoppers Asked To Limit Rice Purchases. Read more at-http://www.nbc11.com/news/15953044/detail.html

-Load Up the Pantry. I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food. Read more at-http://online.wsj.com/article/SB120881517227532621.html

-A ''silent famine'' risks emerging in some Asian countries where food prices including rice are escalating beyond the reach of the poorest people, the World Food Program warned. ''There is food on the counters and on the shelves in stores but there is a certain population that cannot afford that food,'' Paul Risley, a spokesman for the United Nations agency, said today. ''There's a risk of a silent famine.'' Read more at-http://www.bloomberg.com/apps/news?pid=20601012&sid=axuenSYeMBJU&refer=commodities

-Japan's hunger becomes a dire warning for other nations. Read more at-http://business.theage.com.au/japans-hunger-becomes-a-dire-warning-for-other-nations/20080420-27ey.html

-Many parts of America, long considered the breadbasket of the world, are now confronting a once unthinkable phenomenon: food rationing. Read more at- http://nysun.com/news/food-rationing-confronts-breadbasket-world

-Food Crisis Shows How Bad Policies Can Be Deadly. Read more at-http://www.bloomberg.com/apps/news?pid=20601039&sid=arSRWU0yDL7M&refer=home

-Era of cheap food ends as prices surge. Read more at-http://business.timesonline.co.uk/tol/business/industry_sectors/consumer_goods/article3799327.ece

-Amid U.S farm boom, fears grow of a collapse. Read more at-http://www.iht.com/articles/2008/04/21/business/farmdebt.php?WT.mc_id=newsalert

INFLATION-STAGFLATION

-Hyperinflationary Depression, commentary by Howard Ruff. Read more at-http://www.kitco.com/ind/Ruff/ruff_apr212008.html

-Canadians face higher food prices. Read more at-http://www.reportonbusiness.com/servlet/story/RTGAM.20080424.wfood0424/BNStory/Business/home?cid=al_gam_mostview

-Stagflation is clearly a real threat as inflation appears to be accelerating and growth is clearly slowing. While gold has yet to respond to oil's recent surge and the dollar's record low against the euro, it would be prudent to focus on the medium and long term. We believe gold's historic correlation with the oil price will be reasserted in the coming days as gold plays catch up with oil. The historic ratio of gold to oil is 15 barrels of oil to 1 ounce of gold.

Thus, if the ratio is reasserted as we strongly believe it will then we should see gold trade at some 15 times a barrel of oil or at today's prices (15 X 115) some $1,725 per ounce. Importantly gold tends to vastly outperform oil towards the end of their respective bull markets as oil is more subject to demand destruction than gold. Unlike gold, oil is not a finite currency used as a safe haven asset and store of wealth.

The financial crisis is continuing to spread to the wider economy as the woes of Wall Street are now clearly being felt on Main Street. The slump in the U.S. housing market could cause prices to fall substantially more than they did in the Great Depression. Yale University economist Robert Shiller has said there's a good chance housing prices will fall further than the 30 percent drop in the historic depression of the 1930s. The U.S. in the 1930s was the largest creditor nation in the world, unlike today.

Home prices in the U.S. already have dropped 15 percent since their peak in 2006. It is worth remembering that house prices in Japan fell by nearly 90% between 1990 and 2006. This was a low painful decline and there was no banking and credit crisis as there is today. Also, Japan's largest trading partner, the U.S. was in a far sounder fiscal and financial position then it is today with the U.S. being the world's largest debtor nation and suffering from massive financial imbalances in the budget, trade and current account deficits. Gold.ie

-Inflation is here and it is likely to continue for some time. But investors must watch for signs of the political winds shifting. The question to keep in mind over the coming months is whether it is more politically feasible to have severe inflation or severe deflation. We still believe rampant inflation and U.S. Dollar debasement is the most likely outcome in the short term. But, if riots and upheaval continue to spread, all out deflation may be the only antidote. Todd Stein & Steven McIntyre-The Texas Hedge Report-Read more at-http://www.321gold.com/editorials/texashedge/texashedge042308.html

-Moms' new battle: The food price bulge. Beyond clipping coupons, families are embracing generic grocery brands, and making their own baby food and detergent. Read more at-http://money.cnn.com/2008/04/21/news/economy/moms_foodshopping/index.htm

INTEREST RATES

-Canada Cuts Rate by 50 Basis Points as Economy Slows. The Bank of Canada lowered its benchmark rate by half a point to revive an economy that's growing at its slowest pace in 16 years, and signaled more easing may be needed ''in the medium term.'' The rate on overnight loans between commercial banks dropped to 3 percent, the lowest since December 2005, as forecast by 28 of 32 economists in a Bloomberg survey.

The Canadian dollar fell as some investors bet that the statement signals borrowing costs will be lowered again in the next few months. Policy makers reduced their 2008 economic growth forecast to 1.4 percent, the lowest since 1992, from a January forecast of 1.8 percent, and said inflation will stay below their 2 percent target until 2010. ''Obviously the risks are the Bank of Canada will cut more going forward,'' said Karen Cordes, an economist at Scotia Capital Inc. in Toronto.

Cordes, who predicts a quarter point reduction at the next meeting, scheduled for June 10, said the central bank's statement ''leaves the door open for more than we were previously expecting.'' Canada sends about three-quarters of its exports to the U.S., and the economic crisis in that country has sapped demand for Canadian lumber and cars. Read more at-http://www.bloomberg.com/apps/news?pid=20601068&sid=aZU_v_TyfniM&refer=home

-Fed Officials May Be Nearing Rate Pause as Inflation Quickens. Federal Reserve policy makers, sensing both renewed inflation dangers and a possible economic boost from government rebate checks, may be nearing a pause in interest-rate cuts after the fastest reductions in two decades.

In remarks this week, Fed Governor Kevin Warsh, San Francisco Fed President Janet Yellen and three other district bank presidents voiced concerns about rising prices. Harvard University economist Martin Feldstein, who for almost 30 years has headed the group that decides the dates of recessions, called for an end to Fed rate cuts. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=adJIM71hYaxo&refer=home

-ECB's Noyer, Mersch Signal Higher Rates May Be Needed. European Central Bank council members Christian Noyer and Yves Mersch signaled the bank may have to raise interest rates to contain inflation. The ECB will ''move rates'' if needed to push inflation below 2 percent in 2009, Noyer, who heads France's central bank, told RTL radio today. Luxembourg central banker Mersch said the question of whether the ECB should raise rates is a valid one, the Financial Times Deutschland reported, citing an interview. Read more at-http://www.bloomberg.com/apps/news?pid=20601068&sid=a5ZCU1MpPm7I&refer=economy

U.S.-GLOBAL RECESSION

-The odds the country will fall into its first recession since 2001 are rising sharply. Thirty percent of economists now believe the economy will shrink in the first half of this year, up from 10 percent who thought this in January, according to a survey being released Monday by the National Association for Business Economics, known by its acronym NABE. Read more at-http://www.breitbart.com/print.php?id=D9068VH80&show_article=1

-Turmoil in credit and housing markets will be the most significant threat to growth this year, according to a survey of top financial company executives released Friday. These executives believe there is a high probability 88 per cent that the country will suffer a recession in the next 12 months.

The responses came from executives whose firms are members of the Financial Services Forum, which represents 20 of the largest financial companies in the country includingBank of America, JP Morgan Chase, Goldman Sachs, Merrill Lynch, Allstate Insurance and Fidelity Investments.

After credit market tumult and troubles in the housing market, the executives listed the next biggest threats to the economy now as the possibility the government will impose higher taxes or raise protectionist barriers to foreign competition. Read more at-http://www.globeinvestor.com/servlet/story/RTGAM.20080418.wuseconsurvey0418/GIStory/

-Wealth fund warns of worst slump for 30 years. The world economy will suffer its most serious recession since the oil crisis of the mid-1970s with little sign of success for policymakers' attempts to end the credit crunch, one of the globe's largest sovereign wealth funds predicted yesterday.

"We could be facing a recession which is longer, deeper and wider than any recession we have encountered in the last 30 years," said Tony Tan, deputy chairman of the Government of Singapore Investment Corporation (GIC). "The financial contagion has spread beyond US shores, increasing the likelihood of a global financial crisis and recession." Read more at-http://www.independent.co.uk/news/business/news/wealth-fund-warns-of-worst-slump-for-30-years-813403.html?service=Print

-Canada Says Credit Shortages to Persist Until 2010. The Bank of Canada predicted tightness in credit markets until 2010, and said the shortages will combine with a slump in exports to the U.S. to cause the slowest economic growth in 16 years. Read more at-http://www.bloomberg.com/apps/news?pid=20601082&sid=aP8W5guzLEQ8&refer=canada

-The market's worst is yet to come. Now that a few Wall Street folks have finally dared to utter the word 'recession' aloud, most of the rest are assuming this downturn is practically over. Expect the bulls to stumble. Read more at-http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/TheMarketsWorstIsYetToCome.aspx?page=all

-US regulator fears wave of bank failures. Read more at-http://us.ft.com/ftgateway/superpage.ft?news_id=fto042220081906290241

-UPS, FedEx Decline Points to Continuing Recession. Falling shipments at United Parcel Service Inc. and FedEx Corp., which together deliver 80 percent of packages in the U.S., show the economy is in a recession and unlikely to rebound this year. Read more at-http://www.bloomberg.com/apps/news?pid=20601109&sid=aFS4NPtPEFhw&refer=home

-Merrill Lynch & Co., the third- biggest U.S. securities firm, is raising $9.55 billion by selling bonds and preferred shares after writing down the value of $6.5 billion of assets. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=ag2dUOFaPjWQ&refer=home

-Bondholders Lucky to Get 10 Cents in Looming Defaults. The looming wave of bankruptcies is unlikely to be kind to bondholders. And they have only themselves to blame. Rather than receiving the historical average recovery of 42 cents on the dollar in a default, owners of a third of high- yield, high-risk bonds rated B+ or lower may get no more than 10 cents, according to New York-based Fitch Ratings. About 22 percent are likely to get 11 cents to 30 cents. Read more at-http://www.bloomberg.com/apps/news?pid=20601109&sid=ah5Lg9TW9B_M&refer=home

8 STEPS TO A TRILLION DOLLAR MELTDOWN

-How did the U.S. financial crisis happen? A review of the road to ruin reveals a course littered with more villains than heroes. No, it's not the Great Depression, but the United States is facing a nasty economy-wide retrenchment following the excesses of the 2000s, with no easy way to dance through it.

Think 1979 to 1982, when then U.S. Federal Reserve Chairman Paul Volcker exorcised consumer price inflation from the economy. The difference today is that the inflationary explosion has been absorbed by prices of assets houses, stocks and bonds, office buildings rather than by the prices of things you buy at the store. Here's how it happened.

1. The Fed spikes the punch bowl. In the wake of the dot-com bust and 9/11, the Fed lowers interest rates to 1 percent, the lowest since 1958. For more than 2½ years, long after the economy has resumed growing, the Fed funds rate remains lower than the rate of inflation. For banks, in effect, money is free.

2. Leverage soars. Financial sector debt, household debt, and home prices all double. Big banks shift their business models away from executing transactions for customers to "principal trading"-or gambling from their own accounts with borrowed money. In 2007, the principal-trading accounts at Citigroup, JPMorgan Chase, Goldman Sachs, and Merrill Lynch balloon to $1.3 trillion.

3. Consumers throw a toga party. Soaring home prices convert houses into ATMs. In the 2000s, consumers extract more than $4 trillion from their homes in net free cash (excluding financing costs and housing investment). From 2004 through 2006, such extractions exceed 7 percent of disposable personal income. Personal consumption surges from its traditional 66 to 67 percent of GDP to 72 percent by 2007, the highest rate on record.

4. A dollar tsunami. The United States' current-account deficits exceed $4.9 trillion from 2000 through 2007, almost all for oil or consumer goods. (The current account is the most complete measure of U.S. trade, as it encompasses goods, services, and capital and financial flows.) Economists, including one Ben S. Bernanke, argue that a "global savings glut" will force the world to absorb dollars for another 10 or 20 years. They're wrong.

5. Yields plummet. The cash flood sweeps across all risky assets. With so many people taking advantage of cheap loans, the most risky mortgage-backed securities carry only slightly higher interest rates than ultra-safe government bonds. The leverage, or level of borrowing, on private-equity company buyout deals jumps by 50 percent. Takeover funds load even more debt onto their portfolio companies to finance big cash dividends for themselves.

6. Hedge funds peddle crystal meth. Aggressive investors pour money into hedge funds generating artificially high returns by betting with borrowed money. To maximize yields, hedge funds also gravitate to the riskiest mortgages, like subprime, and to the riskiest bonds, which absorb losses on complex pools of lower-quality mortgages known as collateralized debt obligations or CDOs. The profits from selling bonds based on very risky underlying securities override bankers' traditional risk aversion. By 2006, high-risk lending becomes the norm in the home-mortgage industry.

7. A ratings antigravity machine. Pension funds cannot generally invest in very risky paper as a mainstream asset class. So, banks and investment banks, with the acquiescence of the ratings agencies, create "structured" bonds with an illusion of safety. Eighty million dollars of "senior" CDO bonds backed by a $100 million pool of subprime mortgages will not incur losses until the defaults in the pool exceed 20 percent. The ratings agencies confer triple-A ratings on such bonds; investors assume they are equivalent to default-proof U.S. Treasury bonds or blue-chip corporates. To their shock, investors around the world discover that as pool defaults start rising, their senior CDO bonds rapidly lose trading value long before they suffer actual defaults.

8. The Wile E. Coyote moment arrives. Suddenly last summer, all the pretenses start to come undone, and the market is caught frantically spinning its legs in vacant space. The federal government responds with more than $1 trillion in new mortgage lending and lending authorizations in multiple guises from Fannie Mae, Freddie Mac, the Federal Housing Finance Board, and the Federal Reserve. Home prices still drop relentlessly; signs of recession proliferate; risky assets plummet. What now? Read full story at-http://www.foreignpolicy.com/story/cms.php?story_id=4240&print=1

REAL ESTATE

-U.S. Existing Home Sales Fell in March; Prices Lower. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=a3CdecFaWGiw&refer=home

-New-Home Sales in the U.S. Plunge More Than Forecast. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=aDyYp9o4DMGI&refer=home

-Palm Beach mansion fetches $81.5 million. Read more at-http://www.palmbeachpost.com/localnews/content/local_news/epaper/2008/04/18/m1a_mansion_0418.html

-Let Britain's housing bubble burst. Read more at-http://us.ft.com/ftgateway/superpage.ft?news_id=fto041720081507199382

FORECLOSURE-MORTGAGES

-1 in 33 Homeowners Predicted To Be In Foreclosure. Read more at-http://www.pewcenteronthestates.org/uploadedFiles/PCS_DefaultingOnTheDream_Report_FINAL041508_01.pdf

-California home prices fall 26 percent amid foreclosures. Read more at-http://www.businessweek.com/ap/financialnews/D903SMT80.htm

-California's Home-Mortgage Defaults More Than Double. Read more at http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aAHn_aopwRWs

-Rate of home foreclosures expected to get worse. Read more at-http://www.usatoday.com/money/economy/housing/2008-04-15-foreclosure-filings-march_N.htm?loc=interstitialskip

-Renters can't escape housing foreclosure crisis. Read more at-http://www.usatoday.com/money/economy/housing/2008-04-21-rent-rising-eviction_N.htm

-Foreclosure bus' magical misery tour. Two Las Vegas realtors have found a way to profit amid the downtown: foreclosure tours. Read more at- http://money.cnn.com/2008/04/17/smbusiness/magical_misery_tour.fsb/index.htm

-The trillion-dollar mortgage time bomb. Risks are rising that Fannie Mae and Freddie Mac may need a government bailout that could cost far more than previous rescues. Read more at-http://money.cnn.com/2008/04/21/news/economy/fannie_freddie/?postversion=2008042103

© 2008, Worldwide Precious Metals.
www.wwpmc.com

The GoldBugg Report - April 29, 2008
Posted by Worldwide Precious Metals on Tuesday, April 29, 2008

The GoldBugg Report - Liars, Wall Street & Your Gold

April 22, 2008

Liars, Wall Street & Your Gold

Few seem to remember that Wall Street is not a non-profit community driven by altruism or any sense of service. They would gladly cheat you out of your entire life savings if their actions were legal, or at least not prosecuted. In the last two to three years, the lies, deception, misdirection, false reporting, corruption, and grand fraud will be the topic of historical accounts for decades. When returning on my flights from another successful Cambridge House gold conference, this in Calgary Alberta, many thoughts came to mind, jotted down while gazing at the natural beauty made up from cloud blankets with a sun guarding its lot. The sun and clouds care not at all about economic landscapes underneath, even if in turmoil. Whenever travels take me across national borders, nationalism, idealism, culture, and dreams come to mind. It seems pursuit of truth, clarity, and integrity has become negotiable, one and all in the United States. Its people are being stripped of so much. Perhaps this layout will be helpful. Routinely such matters are covered in the Hat Trick Letter reports. Gold & silver continue to do well to protect individuals and their wealth. Banks are no longer safe, an astonishing conclusion. Bonds are not safe, and neither are money market funds!!!
Read more at-http://www.financialsense.com/fsu/editorials/willie/2008/0416.html

All empires come to an end, and the American one is no exception. We've fought too many foreign wars, swept too many domestic problems under the rug, and paid for our greedy consumption with money borrowed from too many countries around the world. The end isn't just near, it's inevitable.
For these people I'm an advocate of financial education, but I also know that many of them aren't interested in becoming more financially astute. So instead, I recommend that they buy silver coins, as long as silver is under $25 an ounce. Today, silver is cheap and easy to acquire and manage, while real estate and businesses are both management-intensive; silver requires no management, expect for a safe storage place. Silver is consumed in many industries, and it's reported that the world has less than a 10-year supply of it left. That's why I believe silver is currently one of the best investment opportunities there is - even for people with limited financial training.

Even if the end is near, there's always a silver lining. Robert Kiyosaki

-James Moore, of TheBullionDesk.com writes, "Given the ongoing recessionary/inflationary fears and liquidity issues dogging the credit market, we remain bullish in the mid to longer-term and expect gold to reclaim $1,000 an ounce later in the year." Kitco Daily Resource

-The next intermediate term target for the silver price is $24.50 to $26.50, again towards the second half of 2008 or early 2009. Troy Schwensen CPA

-Rush for silver if you want to make moolah! You know this time around white metal may prove to be a better option for you to invest than in yellow metal. There are several reasons for that. Mainly, according to Jason Homel's Silverstockreport.com, silver has all the monetary properties of gold, and more.

It is interesting to know this. If you want know the enviable properties of silver, read on. The historic price ratio of silver to gold shows that about 10 ounces of silver would buy one ounce of gold, a 10:1 ratio. Recently, the ratio is about a 50:1 ratio (with silver at $20/oz., and gold at $1000/oz.) As the silver to gold ratio returns to historic values, from 50:1 to 10:1, you may make over 5 times more money investing in silver, than gold!

Silver prices may rise to exceed the 10:1 ratio, for the following reasons: More than all of the silver produced by the mines each year is consumed by industry, which leaves little to no room for substantial investment demand. A marginal increase in investment demand will drive prices sky high. Read more at-http://www.commodityonline.com/news/topstory/newsdetails.php?id=7291

Record-high crude nears $120 on supply concerns
Weekly U.S. crude stockpiles seen rising; gasoline hits new high at the pump
http://www.marketwatch.com/news/story/crude-hits-new-intraday-high/story.aspx?guid=%7B8B6DEB5D%2DD66F%2D4985%2D8DE3%2D3ED8E103A099%7D

-With oil and commodities surging, the dollar continuing to weaken and economic growth slowing gold's best friend stagflation is a real and growing threat to much of the global economy.

Oil has remained near record levels above $114 per barrel and this will mean that the worrying inflation statistics of recent weeks will soon get worse, making central banks' jobs even harder and continuing to make gold an important part of a properly diversified portfolio. Gold.ie

-Gold Standard. A monetary system in which a country's government allows its currency unit to be freely converted into fixed amounts of gold and vice versa. The exchange rate under the gold standard monetary system is determined by the economic difference for an ounce of gold between two currencies. The gold standard was mainly used from 1875 to 1914 and also during the interwar years.

The use of the gold standard would mark the first use of formalized exchange rates in history. However, the system was flawed because countries needed to hold large gold reserves in order to keep up with the volatile nature of supply and demand for currency.

After World War II, a modified version of the gold standard monetary system, the Bretton Woods monetary system, was created as its successor. This successor system was initially successful, but because it also depended heavily on gold reserves, it was abandoned in 1971 when U.S president Nixon "closed the gold window". Investopedia.com

-"It's puzzling why bankers have come up with these new ways to lose money when the old ways were working so well." Wells Fargo CEO John Stumpf

-"China is going to be the next great country. The 19th century was the century of the U.K. The 20th century was the century of the U.S. The 21st century is going to be the century of China." Jim Rogers

-Western economies are losing momentum due to rising average oil and food prices, falling house prices and turmoil in financial markets which will continue to underpin the gold market. In these circumstances it is absurd to suggest that gold is in a bubble despite being one of the few asset classes or commodities that is actually less than half its inflation adjusted high of 28 years ago ($2,300 per ounce).

Real diversification into non correlated assets is now more than ever essential. Risk aversion and capital preservation should remain prevalent in all investors' minds given the unprecedented challenges facing financial markets internationally. Gold.ie

-Financial crises do not happen in a vacuum and the current U.S. banking debacle is linked to imbalances in an economy that favoured spending at the expense of saving, Paul Volcker, the former Federal Reserve chairman, said on Wednesday.The U.S. economy is on the verge of recession as a persistent housing slump drags down the banking sector, pushing up unemployment. Volcker said a propensity to consume more than it produces is what got the United States into this sort of trouble. Read more at-http://www.iht.com/articles/reuters/2008/04/09/business/OUKBS-UK-USA-ECONOMY-VOLCKER.php

-Financial stocks, which have taken a pounding from the subprime mortgage meltdown, could take up to 25 years to recover to their pre-credit crisis levels, a senior hedge fund manager said last week. Speaking at the Reuters Hedge Fund & Private Equity Summit in London, Hugh Hendry, Chief Investment Officer of Eclectica Asset Management, said financial stocks were set to fall further after the credit crisis burst a 16 year bubble in their prices last year. Read more at-http://www.reuters.com/article/HedgeFundsandPrivateEquity08/idUSL0986422020080409?pageNumber=1

-Goldman Sachs and Wells Fargo warn 'delusional' investors on stocks. Wall Street faces the growing risk of an equities bloodbath in coming months as the credit crunch spreads to the wider economy and earnings crumble, according to a pair of grim reports issued by Goldman Sachs and Wells Fargo.

David Kostin, the chief US investment guru for Goldman Sachs, expects the S&P 500 index of Wall Street equities to plummet a further 15pc over the "near term" as companies scramble to lower their outlook for this year. "Although only a few firms have reported first quarter results, early signs are awful. We expect a swath of lowered profit guidance," he said in a research note published today, entitled 'Fasten Seatbelts'. Read more at-http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/04/14/bcngold114.xml

-Food Costs Rising Fastest in 17 Years. Read more at-http://biz.yahoo.com/ap/080414/inflation_squeeze.html?.v=4&printer=1

-The more Alan Greenspan whines about his tarnished legacy since leaving the helm of the Federal Reserve, the more his predecessor Paul Volcker looks to claim the title as the "greatest central banker who ever lived." That's what Greenspan was hailed as in 2005, when the economy was booming and inflation remained low. Economists lauded his significant contributions during his 18-year Fed tenure, which included making the central bank more communicative and weathering two recessions.

Those accolades largely overshadowed Volcker's achievements. He left the Fed in 1987 after an 8-year run of steering the economy through a tough battle against double-digit gains in inflation and a punishing economic decline. Volcker's legacy seems to be soaring now, while Greenspan's is sinking despite his intense effort to shift blame away from himself as the cause of today's punishing financial crisis. Read more at-http://www.msnbc.msn.com/id/24052851/

-Greenspan critics: One voice stands out. Read more at-http://www.globeinvestor.com/servlet/story/RTGAM.20080410.wreynolds0411/GIStory/

-Why China is the REAL master of the universe. Read more at-http://www.dailymail.co.uk/pages/live/articles/news/worldnews.html?in_article_id=559133&in_page_id=1811

-What Power Looks Like. They ride on Gulfstreams, set the global agenda, and manage the credit crunch in their spare time. They have more in common with each other than their countrymen. Meet the Superclass. Read more at-http://www.newsweek.com/id/130637/output/print

GOLD

-Peter Grandich, editor of the Grandich Letter, writes that gold "Appears to be building a base after a massive rally this past winter. While seasonal factors come into play in a couple of months, worldwide economic and political concerns should keep us from seeing any sharp corrections."

And considering how closely gold has been tracking the dollar, Grandich's medium-term currency prediction is notable: "So long as economic weakness persists, rallies should be just bear market corrections. Somewhere down the road, when the inflation genie is out of the bottle to all, then we could see a significant dollar rally as interest rates rise sharply. But that is more likely at the minimum, 12-24 months from now, if not longer." Kitco Daily Resource

-The bottom line is gold's bull market is universal and global, far transcending the myopic and quaint dollar-centric notions Wall Street is babbling about today. True, there was a time when the US dollar bear drove gold. But that became history when Stage Two dawned in mid-2005. Since then gold has risen powerfully all over the world, in all currencies, because soaring global investment demand is driving it higher.

And nothing begets more investment demand like sharp runs higher leading to record prices. Investors who would have scoffed at gold three years ago are starting to pay attention today. The higher it runs, the more they will want it. Nothing sparks greed in the human heart like gold, as history testifies abundantly. Today's early Stage Two uplegs are the vanguard of a coming massive shift into hard assets. Adam Hamilton CPA-Read more at-http://www.321gold.com/editorials/hamilton/hamilton041108.html

-Gold could rally strongly and post fresh highs later this year and into 2009. GFMS Gold Survey 2008-http://www.resourceinvestor.com/pebble.asp?relid=41816

-John Embry: Central banks face Custer's Last Stand with gold. Sprott Asset Management chief investment strategist John Embry writes in new commentary for Investor's Digest of Canada that the credit-creation mechanism of the central banks seems to have broken. But, Embry says, the central banks likely will wage Custer's Last Stand against gold at $1,000 per ounce. Embry expects a result for the central banks similar to what happened to General Custer along the Little Big Horn. You can find Embry's commentary, "Credit-Creation Mechanism Appears to be Broken," at the Sprott site here: http://www.sprott.com/pdf/investorsdigest/digest.pdf

-How much risk is gold discounting? Inflationary forces and counterparty risk are impacting the gold positively, but how much of this risk is being accounted for in the current price?

We have the perfect environment for gold prices, in dollar terms at least, to continue to rise; a bearish dollar outlook, rising inflation and more importantly, inflationary expectations, negative interest rates in parts of the global economy, and counterparty risk. The question is, is all the bad news in the price? Read more at-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=51297&sn=Detail

-The mettle of precious metals. Research suggests that experimenting with precious metals diversification is worth considering. With gold trading at approximately $1000 (£592) an ounce and the S&P Metals and Mining ETF trading near all-time highs, investment exposure to precious metals has certainly helped some investors weather the turmoil in equity markets.

It is reasonable to ask then whether precious metals tend to improve portfolio performance in general, on both an absolute and risk-adjusted basis. If so, what is the best way to include precious metals into your portfolio, and when is a good time to do it? Read more at-http://www.ftadviser.com/FinancialAdviser/AssetClass/Features/article/20080410/2ded5d12-009b-11dd-9a61-0015171400aa/The-mettle-of-precious-metals.jsp

-Chavez Muses about Buying IMF Gold. Chavez Says Venezuela Could Afford to Buy Some of IMF's Gold Reserves. Venezuelan President Hugo Chavez said Saturday that his government could afford to buy some of the International Monetary Fund's gold reserves as the Washington-based lender faces hard times. Chavez raised that idea with a chuckle as the IMF, the lender of last resort for countries in trouble, considers trimming costs by selling off some of its gold reserves.

"Look at how the U.S. empire must be in unimpeded decline, that the International Monetary Fund is selling its crown jewels," Chavez said during a speech at a military parade. "The International Monetary Fund is selling what gold it has left to be able to pay salaries," Chavez said. "We could give a loan to the Monetary Fund. We could buy some gold bars. I think they're selling gold cheap." Read more at-http://biz.yahoo.com/ap/080412/venezuela_us_finance_meetings.html?.v=1

-The I.M.F. Gold Sales Will Be Very Good for the Gold Price. Read more at-http://news.goldseek.com/GoldForecaster/1208198925.php

-South African gold output fell 28.2 percent year-on-year in February in volume terms, while total minerals production fell by 7.3 percent, official data showed on Thursday. Production of non-gold minerals declined by 3.2 percent, Statistics South Africa said. South Africa's mining sector has been hit by a power crisis, with utility Eskom [ESCJ.UL] cutting electricity supply to 90 percent at the end of January before upping that to 95 percent in March. Reuters

SILVER

-Over the past week silver again showed a significant increase in the Silver ETF Silver Trust up 151.35 tons to 5,730.30 tons. You might ask how does silver sell down from $21.00 to $16.60 with no negative money flow and physical silver very hard to get. The answer is your government is manipulating the price. You should approach all politicians and demand this be stopped. Bob Chapman

-Silver nanoparticles could improve the safety of the world's food supply, according to a research project at Iowa State University. Silver nanoparticles cannot currently be added directly to foods as little is known about their adverse effects on human health and their impact on ecological systems. However, the university's current research programme is examining how silver nanoparticules could work as an antimicrobial in foods, with the goal of developing food-related applications such as microbe-resistant fabrics or non-biofouling surfaces.

Silver nanoparticles are emerging as one of the fastest growing nanomaterials with wide applications. However, Brehm-Stecher, an Iowa State University assistant professor in food science and human nutrition, admitted that the science of silver nanoparticles on food is currently at a basic point. Brehm-Stecher hopes that his research could change this. Silver is thought to have anti-microbial properties, and according to Brehm-Stecher, research has found that impregnating other materials with silver nanoparticles is a practical way to exploit its germ-fighting properties. Major consumer goods manufacturers already produce goods that utilize the antibacterial properties of silver nanoparticles.

Current applications for silver nanoparticle-impregnated materials include household items, clothing (for example, socks to prevent foot infections for soldiers deployed in jungles), and laundry detergents. In the food industry, the technology has a variety of uses including detecting bacteria in packaging. Silver nanoparticles are already being used in food packaging to extend the shelf life of fruits by soaking up the plant-ripening hormone ethylene, Brehm-Stecher explained. Read more at-http://www.foodproductiondaily.com/news/printNewsBis.asp?id=84601

-The market for silver conductive inks will almost triple over the next eight years to reach $2.4 billion by 2015, industry analysts NanoMarkets predicts. In their report, "Silver Inks and Pastes for Printable Electronics: 2008-2015," NanoMarkets said businesses "are suddenly sitting up and taking notice of opportunities in the silver ink business, when they haven't paid made attention to this kind of material in years."

The report covers the future of both conventional inks and pastes and new nanosilver inks. Printed electronics are attracting attention as an opportunity for conductive silver inks, according to the study. "Since silver is the best conductor known to man (especially since its oxide is also conductive), silver conductive inks immediately assume a pre-eminence in the pursuit of PE."

The biggest opportunity in the demand for silver inks "will be found in the RFID space where revenues from silver inks for RFID antennas alone will exceed $880 million by 2015. Based on the current excitement surrounding alternative energy, NanoMarkets expect the use of silver inks for solar panel contacts to grow to almost $250 million by 2015." Read more at-http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=50689&sn=Detail

PLATINUM-PALLADIUM

-Platinum Supply Deficit to Remain in 2008. The VM Group reported on Tuesday that the platinum market will remain in a deficit of 360,800 ounces in 2008, although down from 412,400 ounces in 2007, as mine supply continues to fall thus offsetting any drop in demand foreseen in the automotive industry. Platinum prices will remain strong so long as supply remains tight.

"The platinum market has suffered a supply shock due to the [South African] power crisis and, as one would expect, the platinum price has moved higher," said Jessica Cross, CEO of VMG. Read more at-http://www.resourceinvestor.com/pebble.asp?relid=42005

-Swiss fund to increase platinum holdings with second PGM fund. Swiss fund manager BAC plans to lauch a second platinum fund focusing on platinum juniors and explorers in South Africa and Africa. It wants to increase current platinum holdings. Read more at-http://www.mineweb.net/mineweb/view/mineweb/en/page35?oid=50587&sn=Detail

-Power crisis sparks platinum struggle. The ‘supply shock' suffered by the platinum market as a result of South Africa's power crisis is likely to result in a deficit of 360 800 oz in 2008, down from 412 400 oz in 2007. This is according to Virtual Metals Research & Consulting's VM Group and Fortis Bank, which on Tuesday released the fourth issue of The White Book, a bi-annual analysis of global platinum group metals fundamentals.

Mine closures late in January and restricted power supply to mines will see South African platinum production decline again this year, making 2008 the second consecutive challenging year after 2007 was plagued by safety stoppages. South African mine supply is forecast to drop to 4.775 million ounces in 2008 from last year's estimated 4.909 million ounces. Read more at-http://business.iafrica.com/news/691482.htm

-Palladium Explodes at Basel Watch Fair: Major Brands Celebrate the Many Uses of Palladium. Read more at-http://ca.us.biz.yahoo.com/bw/080417/20080417006164.html?.v=1

COMMODITIES

-Jim Rogers fails to understand the bearish case on commodities. Nobody has brought on any new supply of anything in the past 25 or 30 years. The last gigantic oil field was discovered in the 1960s. The number of acres devoted to wheat farming has been declining for more than 30 years. Food inventories are the lowest they've been in 60 years... in 2018, or whenever this bubble finally starts to peak, if I'm lucky you will call me up and I'll say it's time to sell commodities. Barrons

-Prices soaring as biggest grain exporters halt foreign sales. Read more at-http://www.gata.org/node/6233

-China grain trade in deficit for Jan, Feb. Read more at-http://www.chinadaily.com.cn/china/2008-04/16/content_6619449.htm

-An Explanation for Soaring Commodity Prices. It is hard to remember now, but mineral and agricultural commodities were considered passé less than ten years ago. Anyone who talked about sectors where the product was as clunky and mundane as copper, corn, and crude petroleum, was considered behind the times. Read more at-http://www.resourceinvestor.com/pebble.asp?relid=41910

-"Chindia's" Demand for Base Metals to Remain Strong in 2008. Read more at-http://www.resourceinvestor.com/pebble.asp?relid=41876

-The new underground currency. The gang descended on the house on Penn Avenue like carrion, ripping open wall board and gutting it of copper. They severed the pipes connected to the gas furnace and water heater, then hit the kitchen sink. Piles of lath lay at the foot of the stairs, the wall torn open to expose the upstairs bathroom. By the time officer Richard Jackson knocked down the door, the gang was gone along with most of the home's copper. Read more at-http://www.msnbc.msn.com/id/24085629

-The commodities frenzy has led to a shortage of giant tires and boom times for a niche business. Read more at-http://www.businessweek.com/print/magazine/content/08_16/b4080046262873.htm

GLOBAL FOOD CRISIS

-UN Chief: Food Crisis Is Now Emergency. Read more at-http://ap.google.com/article/ALeqM5gZkSrMax7_TollHxvIGxFgLMjE_gD901PT181

-World Bank urges action on food prices. The president of the World Bank said governments need to deal with surging food prices in order to curb violence in developing countries. Read more at-http://money.cnn.com/2008/04/13/news/economy/bc.apfn.financemeetings.ap/index.htm

-Finance Ministers Emphasize Food Crisis Over Credit Crisis. Read more at-http://www.nytimes.com/2008/04/14/business/14finance.html?_r=4&oref=slogin&ref=business&pagewanted=print

-Price shock in global food. Riots over grain prices call for a rethink of global stability based on better farming. Read more at-http://www.csmonitor.com/2008/0407/p08s01-comv.html

-The White House on Monday authorized the release of 200 million dollars in emergency food aid to help alleviate a growing global food crisis, a spokeswoman said. Read more at-http://afp.google.com/article/ALeqM5hofN-LUekInWFpm7b0EVboSvbtEA

-Global food crisis, the fury of the poor. Read more at-http://www.spiegel.de/international/world/0,1518,druck-547198,00.html

-Global warming rage lets global hunger grow. Read more at-

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/14/ccview114.xml

-A Drought in Australia, a Global Shortage of Rice. Read more at-http://www.nytimes.com/2008/04/17/business/worldbusiness/17warm.html?_r=1&ref=business&oref=slogin

-Chile Thirsts for Rain as Goats Drop, Mines Face Power Cuts. The reservoir at the Laja dam south of Santiago gauges Chile's predicament: It has been less than half full since August.

Chile is in the grip of the most damaging drought in a century. The water shortage is reducing output at hydroelectric dams, pushing up energy prices and forcing the government to consider restricting power supplies to mines and factories. Subsistence farmers' crops and livestock are dying. Read more at-http://www.bloomberg.com/apps/news?pid=20601109&sid=ayzSmNhAJMug&refer=home

-EU defends biofuel goals amid food crises. Read more at-http://news.yahoo.com/s/afp/20080414/sc_afp/euunfarmpovertyenergypoliticsbiofuel_080414143918&printer=1;_ylt=AiyP9hFTsHQLbllBMqWT9HzQOrgF

-Fuel Choices, Food Crises and Finger-Pointing. Read more at-http://www.nytimes.com/2008/04/15/business/worldbusiness/15food.html?_r=1&ref=business&pagewanted=print&oref=slogin

OIL-GAS-GASOLINE

-Nigerian Oil Output Could Decline 30 Percent by 2015, FT Says. Nigeria, Africa's biggest oil producer, could lose 30 percent of its oil output by 2015 due to funding problems, the Financial Times reported, citing a government report. Read more at-http://www.bloomberg.com/apps/news?pid=20601116&sid=aQUWFNn9fzuM&refer=africa

-Iran Thumbs Nose At West Over Oil Demands. Iranian Oil Minister Gholam Hossein Nozari taunted America and Britain after the two countries appealed for OPEC to increase supply.

"Why should OPEC try to lower prices? ... Let America and Britain continue demanding," the controversial minister said to journalists outside a conference in Tehran on Wednesday.

-Peak Oil's Investment Implications. Watch slide show here-http://www.321energy.com/editorials/simmons/simmons041108/simmons041208.html#

-Oil surges as investors hunt an 'anti-dollar'. Oil prices have surged to almost $115 a barrel as China builds up stocks before the Olympics and hedge funds pour money into commodity futures as a way to exploit the collapse of the dollar. Read more at-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/17/cnoil117.xml

-Experienced commodity investor Tim Guinness expects the oil price will hit $150 a barrel in the next five to 10 years before a demand shock reverses the current trend of increasing prices. Read more at-http://www.citywire.co.uk/selector/-/news/fund-manager-interviews/content.aspx?ID=300587

-China Sees Record Crude Imports in March. Read more at-http://www.resourceinvestor.com/pebble.asp?relid=41919

-Global oil demand seen falling. International Energy Agency revises its overall 2008 forecast downward, says prices could still remain high due to supply concerns. Read more at-

http://money.cnn.com/2008/04/11/news/international/international_oil.ap/index.htm

-OPEC Pres: Oil Prices High Because Of Weak Dollar. Read more at-http://www.gata.org/node/6228

-LNG Supply to U.S. Could Come Under Pressure. Read more at-http://www.resourceinvestor.com/pebble.asp?relid=41892

-Saudi to leave some oil finds for future. Read more at-http://www.business24-7.ae/cs/article_show_mainh1_story.aspx?HeadlineID=5523

-Russian Oil Slump Stirs Supply Jitters. Read more at-http://www.cbc.ca/money/story/2008/04/15/oilrecord.html

-Diesel hits new record. Nationwide average price for a gallon of diesel fuel hits all-time high of $3.365 as regular unleaded falls slightly, AAA survey says. Read more at-

http://money.cnn.com/2008/04/14/news/economy/gas_prices/index.htm

-Thieves drill gas tanks to steal fuel. Read more at-http://www.patriotledger.com/news/cops_and_courts/x2103872274

-Confirming the Obvious, High Oil Prices Stoke Nationalization. Read more at-http://www.resourceinvestor.com/pebble.asp?relid=41963

INTEREST RATES

Bank of Canada lowers target for overnight rate to 3%
http://www.marketwatch.com/news/story/canadian-central-bank-cuts-key/story.aspx?guid=%7BCE493DB9%2DD187%2D45FD%2DBC4E%2D8E9FA4C54477%7D&siteid=bnb

-Fed Beige Book Says Economy 'Weakened' Since February. The Federal Reserve said economic growth has slowed in nine of its 12 districts since February, hurt by "anemic" real estate markets and a slowdown in consumer spending. "Economic conditions have weakened since the last report," the central bank said in its regional business survey, known as the Beige Book for the color of its cover. "Nine districts noted slowing in the pace of economic activity, while the remaining" three "described activity as mixed or steady."

The anecdotal reports are part of a package of analysis and data that will be used by Fed policy makers as they decide on interest rates at their meeting April 29-30. Today's release underscores a weakening economy, though with manufacturing benefiting from record exports. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=aYEr66G_zZmU&refer=home

-Fed Risks Higher Prices With Low Rates, Yellen Says. The Federal Reserve, while trying to revive credit markets and fuel economic growth, should ensure that reductions in the benchmark interest rate don't spur inflation, said San Francisco Fed President Janet Yellen.

The Fed "will have to be careful not to leave monetary accommodation in place longer than it is needed," Yellen said to reporters after a speech today in Alameda, California. Otherwise, policy makers may "put upward pressure on inflation" or create "a bubble" of speculation in the economy. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=aFHrXQHTO0f0&refer=home

INFLATION

-Zimbabwe's annual rate of inflation soared to an all-time high of almost 165,000 per cent in February, according to the latest government statistics obtained Wednesday. Read more at-http://www.globeinvestor.com/servlet/story/RTGAM.20080416.wzimbabweinflation0416/GIStory/

-U.K. Producer Prices Rise at Fastest Pace Since 1991. Read more at-http://www.bloomberg.com/apps/news?pid=20601068&sid=awym1zus7irM&refer=home

-U.S. March Producer Prices Rise More Than Forecast. Read more at-http://www.bloomberg.com/apps/news?pid=20601068&sid=aDNb.rLRAVr8&refer=home

-It's inflation, stupid! Rising oil and food prices fuel a much bigger jump than expected in producer prices. That's hurting the economy, and has to have the Fed worried. Read more at-http://money.cnn.com/2008/04/15/markets/thebuzz/index.htm

GLOBAL LIQUIDITY-FINANCIAL CRISIS

-Central Bankers Say Crisis Not Over, Urge Regulation. Federal Reserve and European Central Bank officials said the eight-month credit squeeze is still festering and urged financial firms to speed disclosure of losses and improve the way they value assets. "The market is still adjusting, the turmoil has not yet settled down," Fed Vice Chairman Donald Kohn told reporters in Washington today. "It's still a fragile situation out there."

Capital markets have seized up in the aftermath of $245 billion in asset writedowns and credit losses tied to the collapse of the U.S. subprime mortgage market. Finance ministers and central bankers from the Group of Seven nations yesterday endorsed a series of proposals from the Financial Stability Forum including a 100-day action plan to strengthen market regulation.

"This is one of the few instances where people who have both the power, but also more critically the jurisdictional responsibility in each country, gathered and agreed to take action," Bank of Italy Governor Mario Draghi, who chairs the Basel, Switzerland-based forum, told reporters.

The forum's proposals are the most sweeping call for tougher oversight of financial markets since the cost of credit jumped last August. The cost of borrowing in euros and dollars for three months was still at the highest since December in the past week. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=aXL58O.8xf1M&refer=home

-Subprime "train wreck" could continue to 2010. Read more at-http://www.canadianunderwriter.ca/issues/ISArticle.asp?id=82954&issue=04152008

-Britain could be hardest hit by financial crisis, says IMF. Read more at-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/10/ncredit110.xml

-The Bank of England said financial institutions bid for 50 billion pounds ($99 billion) in its weekly auction, three times the amount offered and the most since January, as the credit shortage worsened. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=aYloQpbi9EB4&refer=home

-Wachovia Corp., the fourth-largest U.S. bank, sold $7 billion of stock and cut the dividend after bad home loans in California triggered an unexpected first-quarter loss. Read more at-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aLRwcl5rOii8

-Bear Stearns assets shrink 20%. Assets under the investment bank's management stood at $36 billion in March from $45 billion late last year, due to clients' withdrawal of funds. Read more at-http://money.cnn.com/2008/04/11/news/companies/bear_stearns.ap/index.htm?postversion=2008041119

-Bear Stearns profit plummets 79 per cent. Read more at-http://www.globeinvestor.com/servlet/story/RTGAM.20080414.wbearstearns0414/GIStory/

-The global credit crunch is making itself felt on Canadian businesses, the Bank of Canada said Monday in in its quarterly business outlook survey. Read more at-http://www.cbc.ca/money/story/2008/04/14/boc.html

-JPMorgan Chase & Co., the third- biggest U.S. bank, said the credit-market crisis is almost over after it reported a 50 percent drop in first-quarter profit on $5.1 billion of writedowns and provisions. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=aPTfzdGrvj4c&refer=home

-JPMorgan Chase & Co. raised $6 billion of hybrid securities in the bank's biggest-ever sale, after reporting a 50 percent drop in first-quarter profit. JPMorgan, based in New York, is paying annual interest at 7.9 percent, or 4.19 percentage points more than U.S. Treasuries, for 10 years on the perpetual preferred shares, according to data compiled by Bloomberg. The securities are hybrid instruments that combine elements of equity and debt.

The third-biggest U.S. bank is shoring up capital reserves after profit declined to $2.37 billion and as a slowing economy hurts clients' ability to pay credit cards and consumer loans on time. JPMorgan agreed last month to buy Bear Stearns Cos. after lenders and clients fled on concern that the firm faced a cash shortage. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=aHnlTlWkF6no&refer=home

-Merrill Lynch & Co. posted its third straight quarterly loss and will cut about 3,000 jobs after at least $6.5 billion of writedowns and a 40 percent drop in investment-banking fees. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=amUesQD5SlN0&refer=home

-Sallie Mae the largest U.S. student loan company, on Thursday affirmed its 2008 profit forecast, but warned of a "train wreck" in the $85 billion education financing market without urgent government intervention. Read more at-http://news.yahoo.com/s/nm/20080417/bs_nm/studentloans_salliemae_outlook_dc_1

-Lehman Brothers Holdings Inc. bailed out five of its short-term debt funds, joining a growing list of securities firms and asset managers that have propped up investment vehicles crippled by frozen credit markets. Lehman took $1.8 billion of assets from the funds onto its books, the New York-based firm said in a Securities and Exchange Commission filing yesterday.

The company recorded a $300 million loss from the bailout in the first-quarter, according to a person familiar with the writedown. Read more at-http://www.bloomberg.com/apps/news?pid=20601103&sid=aFCymcBt2qY0&refer=us

-UBS Set to Cut 10% of Jobs at Investment Bank, CNBC Reports. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=aEGHGDiqzTKs&refer=home

-Mizuho's $4bn sub-prime hit Asia's biggest. Read more at-http://www.theaustralian.news.com.au/story/0,25197,23525279-20142,00.html

U.S. RECESSION

-Canada's CIBC World Markets Says U.S. Has Sunk Into Recession. The U.S. economy has probably sunk into recession and the Federal Reserve will likely cut its benchmark rate by another percentage point this year, CIBC World Markets Inc. predicted in its quarterly forecast. Canada, which sends about three-quarters of its exports to the U.S., will follow with 75 basis points in reductions by June, Toronto-based CIBC World Markets said in a quarterly report published today. Bloomberg

-U.S. Economy: Philadelphia Factory Index Unexpectedly Fell. Manufacturing in the Philadelphia region shrank by the most since 2001 and the number of Americans receiving jobless benefits jumped to a four-year high as the economic slowdown showed little sign of abating. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=alRaGPOP8E48&refer=home

-The number of workers on the unemployment benefit rolls hit the highest level in almost four years early this month and 372,000 more workers applied for aid last week, the government said on Thursday. Read more at-http://news.yahoo.com/s/nm/20080417/bs_nm/usa_economy_jobless_dc_2

-Sen. John McCain this morning said "greedy" Wall Street investors are partly to blame for what he said is probably an economic recession the nation is now suffering. "There has to be a modification of the greedy behaviour of some of these people," he said, using the word "greedy" repeatedly in remarks to the Associated Press annual meeting at the Washington Convention Center today. Read more at-http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20080414/NATION/195874612/1001&template=printart

-America's economy is in recession. Don't expect a quick recovery. It may not be official but it is increasingly obvious: America's economy has slipped into recession. The latest labour-market figures a jump in the unemployment rate to 5.1% and the loss of 98,000 private-sector jobs in March, the fourth consecutive month of decline point to a shrinking economy. So do surveys of manufacturing and services.

So does Ben Bernanke, chairman of the Federal Reserve. On April 2nd he told a congressional committee that output was unlikely to "grow much, if at all, over the first half of 2008 and could even contract slightly." Read more at-http://www.economist.com/world/na/displaystory.cfm?story_id=11016296

-U.S. Consumer Confidence Index Falls to 26-Year LowRead more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=aBlxa.ME3gi0&refer=home

-Fears of long recession rising. Growing number of economists worry that second-half recovery is out of reach and that recession will be longer and more painful than current forecasts. Read more at-http://money.cnn.com/2008/04/14/news/economy/how_bad/index.htm

-Congress wants to jolt economy again. Democrats outline proposals, including jobless benefits, to counter downturn. President Bush wants to give the first stimulus law a chance to work. Read more at-http://money.cnn.com/2008/04/15/news/economy/stimulus_options/index.htm?postversion=2008041508

-Sour economy casts pall over once sunny Florida. Read more at-http://www.reuters.com/article/ousiv/idUSN1131231020080415

-Working poor struggle to get by. Read more at-http://www.individual.com/story.php?story=80522037

-Can't Get Ahead, Hard To Keep Up. A New Poll Finds Americans Feeling a Lot More Squeezed. Read more at-http://www.washingtonpost.com/wp-dyn/content/article/2008/04/09/AR2008040901811_pf.html

-Retailing Chains Caught in a Wave of Bankruptcies. Read more at-http://www.nytimes.com/2008/04/15/business/15retail.html?_r=4&oref=slogin&ref=business&pagewanted=print&oref=slogin&oref=slogin&oref=slogin

-Retailers post sluggish sales in March. Read more at-http://news.yahoo.com/s/ap/20080410/ap_on_bi_ge/retail_sales_5&printer=1;_ylt=AjroCgCCN9lsNyIDuPPimShv24cA

-US credit rating under threat. The US government's need to provide financial backing to the state-sponsored mortgage financiers that dominate the US housing market could pose a risk to the country's triple-A credit rating, Standard & Poor's, the credit rating agency, said on Monday.

In the event of a deep and prolonged US recession, S&P said the potential costs of propping up government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac, which have implicit government backing, could cost the US government up to 10 per cent of GDP. The costs of supporting broker-dealers like Bear Stearns in a dire economic situation would be much lower, at below 3 per cent of GDP, S&P said. Ft.com

U.K. RECESSION

-The UK economy looks set for a serious economic correction Read full story at-http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/04/13/cccity113.xml

U.S. MID YEAR BUDGET DEFICIT AT ALL TIME HIGH

-Record federal deficit increases 20.5% from 2007, reflecting overall economic slowdown. The federal deficit through the first half of this budget year is at an all-time high, underscoring the pressure the budget is coming under as the overall economy slumps. The Treasury Department reported Thursday that the deficit through the first six months of the budget year totaled $311.4 billion, up 20.5% from the same period a year ago.

That was the largest deficit for the first half of a budget year on record, surpassing the old six-month mark of $302 billion set in 2006. Full-year estimate of $410 billion. The Bush administration, when it sent its budget proposal to Congress in February, estimated that the deficit for the whole year will total $410 billion, putting it very close to the all-time high in dollar terms of $413 billion.

However, private economists are forecasting a much bigger deficit, reflecting the country's current economic problems and a $168 billion stimulus package that Congress has passed in an effort to jump-start growth. Rebate checks will be mailed to 130 million households starting next month in an effort to boost consumer spending and make sure that any downturn is short-lived and mild.

The Treasury's monthly budget report showed that revenues for the first six months of the budget year, which began on Oct. 1, totaled $1.146 trillion, up 2.2% from last year. However, government spending was up by a much faster 5.7%, rising to $1.457 trillion. Both the spending and the revenues were records for the first six months of a budget year. The difference between revenues and spending left a deficit of $311.4 billion, compared to a deficit for the same period in the 2007 budget year of $258.4 billion. AP

U.S.-CANADIAN DOLLAR

-James Turk, The Dollar Hasn't Bounced. Read full story at-http://goldmoney.com/en/commentary-print.html or http://goldmoney.com/en/commentary.php

-Commodities to support economy and loonie, CIBC says. Strong commodity prices will keep the Canadian economy from sliding into recession and help to boost the loonie to $1.05 US by year-end, a new forecast from CIBC World Markets says. "The resilience of the resource markets, particularly, energy prices, heralds a new measure of economic independence for Canada," said chief economist Jeff Rubin, who paints a relatively optimistic picture of the country's economy over the next year or two.

"The resource sector still enjoys booming economic conditions, and will continue to do so over the next four quarters, irrespective of the pace or timing of a U.S. recovery," he said. CIBC forecasts that the energy sector will lead the TSX to a record high 16,200 in 2009 an 18 per cent increase over its current level with oil prices averaging $110 a barrel US. Canada's GDP will grow by 1.6 per cent this year and 3.0 per cent in 2009, the forecast says. Read more at-http://www.cbc.ca/money/story/2008/04/14/cibc.html or http://www.bloomberg.com/apps/news?pid=20601082&sid=aw1CKU48o7P0&refer=canada

STOCK MARKET

-Goldman Sachs Group Inc. strategists said the U.S. corporate earnings season got off to an "awful" start and shares will drop as companies slash forecasts for the rest of 2008. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=abVJmlzaDPMg&refer=home

-U.S. Treasury Panels Lay Out 'Best Practices' for Hedge Funds. Read more at-http://www.bloomberg.com/apps/news?pid=20601109&sid=azt5tTk..S.o&refer=home

-U.S. Treasury Secretary Henry Paulson urged the International Monetary Fund to adapt quickly to the growing complexities of the global financial system and improve its monitoring of currency markets. "The IMF must reform to retain its relevance and legitimacy," Paulson said in the text of a speech at the fund's semiannual meeting in Washington. "The fund must spring quickly and far to adapt to rapid technological change, the rise of dynamic emerging market economies and the increasing internationalization of financial markets." Read more at-http://www.bloomberg.com/apps/news?pid=20601068&sid=aCILKhuMHf8o&refer=home

REAL ESTATE

-'Cooling' the watchword in Canadian real estate. Read more at-http://www.cbc.ca/money/story/2008/04/17/realestate.html

-Canada March Existing Home Sales Rise 0.9 Percent, Realtors Say. Read more at-http://www.bloomberg.com/apps/news?pid=20601082&sid=a.6jI7CzPfcU&refer=canada

-JPMorgan's Dimon Says Real Estate Is 'Getting Worse'. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said he expects U.S. home prices to drop as much as 9 percent this year as even borrowers with the best credit have difficulty keeping up their mortgage payments. "Real estate is getting worse," Dimon said in a conference call today with investors after the bank, the third largest in the U.S., reported first-quarter earnings. "Home prices we still expect to go down." Read more at-+-http://www.bloomberg.com/apps/news?pid=20601087&sid=af8Rtek9ahlk&refer=home

-U.S. Housing Starts Slide to Lowest Level in 17 Years. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=a2WtOEVhSUQM&refer=home

-The collapse of the housing bubble in the United States is mutating into a global phenomenon, with real estate prices down from the Irish countryside and the Spanish coast to Baltic seaports and even in parts of India. This synchronized global slowdown, which has become increasingly stark in recent months, is hobbling economic growth worldwide, affecting not just homes, but also jobs.Read more at-http://www.iht.com/articles/2008/04/13/business/housing.php

-U.K. House prices decline at record levels. Read more at-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/15/nprices115.xml

-Britain's property boom turns to bust: prepare for a hard landing. Read more at-http://www.economist.com/world/britain/PrinterFriendly.cfm?story_id=11024646

-Vacant Homes in U.K. Prove Speculator Nightmare as Losses Mount. Read more at-http://www.bloomberg.com/apps/news?pid=20601109&sid=alavZ8rOJcfc&refer=home

-Existing home sales in North Texas were down 25 percent in March, compared to a year ago, according to prelinimary figures from the North Texas Real Estate Information System. Read more at-http://www.star-telegram.com/804/story/568136.html

-Another Sign of Desperation in Florida. Read more at-http://thehousingbubbleblog.com/?p=4388

-A Deal with the Housing Bubble Devil. Read more at-http://thehousingbubbleblog.com/?p=4384

-Buyers Haven't Gone Away, They're just waiting. Read more at-http://thehousingbubbleblog.com/?p=4380

-Buyers Pay What A Home Is Worth, But Not A Penny More. Read more at-http://thehousingbubbleblog.com/?p=4380

-We Need To Have This Correction, Bring It On. Read more at-http://thehousingbubbleblog.com/?p=4376

-The Value Of Housing Has Come Unhitched In California. Read more at-http://thehousingbubbleblog.com/?p=4381

-Taking Away the Comfort Zone in California. Read more at-http://thehousingbubbleblog.com/?p=4377

-The Great Experiment Is Over. Read more at-http://thehousingbubbleblog.com/?p=4382

FORECLOSURE-MORTGAGE

-U.S. Foreclosures Jump 57% as Homeowners Walk Away. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid=ahJfJhKyxAWI&refer=home

-1 in 7 worry they'll miss mortgage payments. Read more at-http://www.charlotte.com/business/story/581406.html

-Wachovia Tightens Standards for Home Loans Nationally. Read more at-http://www.bloomberg.com/apps/news?pid=20601213&sid=akNmRzeoi5iU&refer=home

-Fannie warns homeowners who walk away. Read more at-http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2008/04/13/RE34101D2M.DTL&type=printable

-You Thought You Had an Equity Line Read more at-http://www.nytimes.com/2008/04/13/business/13gret.html?ref=business&pagewanted=print

The GoldBugg Report - Liars, Wall Street & Your Gold
Posted by Worldwide Precious Metals on Tuesday, April 22, 2008

The GoldBugg Report - April 15th

April 15, 2008

"Precious Metals - The lows are getting higher and highs are getting higher. Buy the lows!"

-"We can't stress enough that you should stay invested in the major gold uptrend, which still has years to run. Don't get left behind or shaken out." "The biggest difference between the bull market today and the 1970s is demand (more buyers than supply). This is much more powerful. When the current bull market runs its course, it will be the greatest bull market in history." We see demand growing, a gold bull market that is seven years old reaching a record high, yet the public is not in the market yet and gold hasn't been mentioned much in the financial press.

This means gold fever still lies ahead. The almost 300% gold rise since 2001 is just the start. "We got a glimpse of gold fever in 1979 when the gold price soared from $300 to its $850 peak in 20 weeks. That was a 183% gain in about four months. The upcoming gold run will likely make that rise look like child's play. "With gold in a new era, many are asking, what is the likely forecast for the years ahead? If the up trending channel since 2001 stays intact, gold would be near $2200 by 2012.

Interestingly, this level in real terms is equivalent to the $850 peak in 1980. "Of course, gold could go much higher and it most likely will, but this is a reasonable target for now. The 65-week moving average has been in identifying the major trend since 2001. Gold has stayed consistently above this average since August, 2001 and as long as it stays above it, now at $780, the major trend will remain up and prices are headed higher. Aden Sisters

-Since 2001, gold has outperformed stocks, bonds, and just about every investment you can name. And it's done this with no yield, no cash flow, and no Wall Street gurus pushing it on their clients. Yet I would wager that less than 1 in 10,000 investors actually own the stuff. Only 10% of worldwide demand for gold is for investment purposes. This won't last for long.

Globally, entire gold markets that didn't exist in 1980 are now beginning to buy the precious metal. Vietnam started trading gold futures in June 2007. Already the exchange trades around $100 million in gold futures a day. China's Shanghai Futures Index started trading gold futures just a few months ago. The latter country has already surpassed the U.S. as the second largest consumer of gold behind India.

Gold is a great inflationary hedge. However, in light of the growing number of gold investors, it's going to be a great investment simply due to supply and demand as well. Sure, $2,000 gold may sound ridiculous. But $1,000 gold sounded ridiculous just three years ago. And we flirted with that level earlier this year.

I strongly suggest buying gold during this recent pullback if you haven't already done so. Bear in mind, I'm not a trader. I'm an investor. I look for investments of value. And to me, gold remains one of the last cheap asset classes relative to its historic levels. Graham Summers

March's wholesale-level inflation jumps hotter-than-expected 1.1%; core rate on mark
http://www.marketwatch.com/news/story/marchs-wholesale-level-inflation-jumps-hotter-than-expected/story.aspx?guid=%7B01377D4E%2D89A3%2D4D50%2D8DB7%2D1F2CD8D3AF44%7D&siteid=bnb

Gold Futures Rise as Record Energy Costs Spur Inflation Concern
http://www.bloomberg.com/apps/news?pid=20601012&sid=aEPYX79La6W4&refer=commodities

Gold futures edge higher, as crude oil hits record
http://www.marketwatch.com/news/story/gold-futures-edge-higher-crude/story.aspx?guid=%7B3E861554-43BE-427B-9109-3ED3A54153E9%7D&dist=msr_1

Foreclosures jump 57% in March
The housing bust continues to take its toll, with over 50,000 homes lost to foreclosure.
http://money.cnn.com/2008/04/15/real_estate/foreclosures_march/index.htm?postversion=2008041509

-Double Dip Recession. When the gross domestic product (GDP) growth slides back to negative after a quarter or two of brief positive growth. In other words, a recession followed by a short-lived recovery, followed by another recession.

The causes for a double-dip recession vary. However, they often include a slowdown in the demand for goods and services because of layoffs and spending cutbacks from the previous downturn. A double-dip (or even triple-dip) is a worst case scenario. Fear that the economy will move back into a deeper and longer recession makes recovery even more difficult. Investopedia.com

-Bear Market. A market condition in which the prices of securities are falling or are expected to fall. Although figures can vary, a downturn of 15-20% or more in multiple indexes (Dow or S&P 500) is considered an entry into a bear market.

When you see a bear what do you do? Tuck in your arms and play dead! Fighting back can be extremely dangerous because it is quite difficult for an investor to make stellar gains during a bear market unless he or she is a short seller. Investopedia.com

-"The gold standard makes the money's purchasing power independent of the changing, ambitions and doctrines of political parties and pressure groups. This is not a defect of the gold standard; it is its main excellence." Ludwig von Mises

-Of course, for all the talk about taxpayer bailouts, none of the U.S. senators bothered to mention that, for the moment, no tax increases are actually on the table. Instead, the bailouts are being financed by savers, pensioners, wage earners, investors and the elderly on fixed incomes, who all suffer staggering increases in their costs of living, as the Fed uses inflation to rob Main Street to pay off Wall Street. Peter Schiff -Read more at-http://news.goldseek.com/EuroCapital/1207325044.php

-Questions for the Fed. Read more at-http://online.wsj.com/article/SB120718721266185319.html?mod=opinion_main_commentaries

GOLD

-Gold prices could climb to US $1200 by early 2009. Gold prices could move sideways in the near term and may not make much of a move in the next two quarters, but they should turn upward after that, according to Martin Murenbeeld, chief economist at DundeeWealth Economics. "These projections may be considered somewhat bearish by some readers, but we assure them that the medium and long-term outlook remains quite bullish indeed," he told clients in a note. Read more at-
http://network.nationalpost.com/np/blogs/tradingdesk/archive/2008/04/07/gold-prices-could-climb-to-us-1200-by-early-2009.aspx

-Why gold is likely to keep moving higher over the long run. Read more at-http://www.usagold.com/amk/abcs-goldengutcheck.html

-Gold's Recent Correction is Only Blip in Long-term Fundamentals. Declining gold production worldwide along with strong demand from investors and the jewelry industry should continue to underpin gold prices and sustain a bullish outlook for gold, said a senior executive at Barrick Gold Corp. "Despite the recent correction in gold, nothing has fundamentally changed," said Alexander Davidson, executive vice president of exploration and corporate development, at a mining conference in Singapore.

Inflation risks, geopolitical tensions, negative real interest rates in the United States and fears of a recession there continue to draw investors to gold, Davidson said. Fundamentally, Davidson said the gold industry is struggling to bring on new mines, as there has been a scarcity of new discoveries, while development timelines have lengthened. Read more at-
http://www.diamonds.net/news/NewsItem.aspx?ArticleID=21235

-Got Gold Report-Gold, Silver 'Bubbles' Pricked? Rubbish. This offering of the Got Gold Report focuses on the notion that very large institutional interests are now rotating out of precious metals and into other assets once again. The idea that the gold and silver markets have been in a "bubble" and that an exodus of capital away from precious metals will now decimate metals prices.

We've seen that same argument become popular several times since the Great Gold Bull began in 2001-2002, haven't we? Didn't we hear it when gold first managed to eclipse the $425 level late in 2003? Remember those very same gold-bull-is-over calls when gold touched $730 in May of 2006? Then again at $750, at $800, at $900 and now this one with gold having just tested $1,000 for the first time.

Quite a few analysts, commentators and market watchers are, once again, of the opinion that a bubble of sorts has just been pricked in precious metals and it sometimes seems all of these metals-bearish experts somehow find their way onto televised financial media. To hear them tell it, actions by the FED and the U.S. congress have been the pin that just got stuck into the over-inflated balloon of precious metals and commodities.

Really? Experts "Schmecksperts" I