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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

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∈_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 believe it was Mark Twain who said, “Few things are more irritating than when someone who is wrong is also very effective in making his point.” What if these expert analysts are invited on the business TV programs not because they are good at what they do, but instead are very good at how they say it? (Or worse, because they are good looking.) Read full story at-http://www.resourceinvestor.com/pebble.asp?relid=41689

-Why people hold Gold to their hearts. From gold exchange-traded funds (ETFs) to gold stocks to buying physical gold, investors now have several different options when it comes to investing in the royal metal. But what exactly is the purpose of gold? And why should investors even bother investing in the gold market?

Indeed, these two questions have divided gold investors for the last several decades. One school of thought argues that gold is simply a barbaric relic that no longer holds the monitory qualities of the past. In a modern economic environment, where paper currency is the money of choice, gold’s only benefit is the fact that it is a material that is used in jewellery.

On the other end of the spectrum is a school of thought that asserts gold is an asset with various intrinsic qualities that make it unique and necessary for investors to hold in their portfolios. In this article, we will focus on the purpose of gold in the modern era, why it still belongs in investors’ portfolios and the different ways that a person can invest in the gold market.

The Importance of Gold In the Modern Economy-Given the fact that gold no longer backs the U.S. dollar (or other worldwide currencies for that matter) why is it still important today? The simple answer is that while gold is no longer in the forefront of everyday transactions, it is still important in the global economy.

To validate this point, one need only to look as far as the reserve balance sheets of central banks and other financial organizations, such as the International Monetary Fund. Presently, these organizations are responsible for holding approximately one-fifth of the world’s supply of above-ground gold. In addition, several central banks have focused their efforts on adding to their present gold reserves.

Gold Preserves Wealth-The reasons for gold’s importance in the modern economy centers on the fact that it has successfully preserved wealth throughout thousands of generations. The same, however, cannot be said about paper-denominated currencies. Read more at-http://www.commodityonline.com/news/topstory/newsdetails.php?id=7129

-The IMF is selling metal, currently valued at better than $US13 billion, and said it would also substantially cut costs, by $100 million over the next three years, as part of an efficiency drive. Managing Director Dominique Strauss-Kahn said the IMF had made “difficult but necessary choices” to close an income shortfall pegged at about $400 million by fiscal 2010, and to make the multilateral agency more efficient through a “new and sustainable income and expenditure framework.”

“If approved, gold sales would be conducted in a transparent manner with strong safeguards to ensure that they do not add to official sales and avoid any risk of market disruption,” the IMF said. Announcing this does not make it a done deal, of course. For one thing, Congress must approve any such action on the part of the IMF. And member countries also will have to enact legislation to expand the IMF’s investment authority. Kitco Daily Resource-Read more at-http://www.resourceinvestor.com/pebble.asp?relid=41767

-World Gold, Dubai Commodities Plan Gold Share Venture. Dubai Multi Commodities Centre, a tax-free business park in the United Arab Emirates, plans to start a venture with the World Gold Council to trade the first Islamic securities backed by gold bullion. Through a joint venture called Dubai Gold Investments, the partners plan to create Dubai Gold Shares and list them on the Dubai International Financial Exchange Ltd., they told reporters at a briefing in Dubai today.

Dubai Gold Shares will comply with Islamic Shariah law, WGC Chief Executive Officer James Burton said at the briefing. The shares will allow holders to gain from advances in the price of gold without having to insure, store and move the metal, he said.

The venture follows exchange-traded gold securities started by the WGC on nine other exchanges including bourses in London, New York, Singapore and Paris. Those securities held gold worth $24.2 billion at the end of March, according to notes distributed at the briefing.

Each Dubai Gold Share will represent 0.1 ounce of gold held in custody by the center and HSBC Holdings Plc, according to Burton. Scholars of Islamic law employed by Shariah Capital Inc. will ensure the securities comply with Islamic principles. Dubai started the commodities center in 2002 in a bid to develop its non-oil economy, providing a physical market for traders in gold, diamonds, energy and tea. Bloomberg

-Two sets of forces work on market prices. Internal factors, or market’s technical conditions, can in some periods dominate all others. The second set of forces are fundamental factors. The latter is that which is happening in the world that might influence the market. The much enjoyed rally from last summer’s lows to the joyous move above US$1,000 was driven by latter. Investors wanted to protect their purchasing power from collapse of purveyors of paper assets.

Internal factors seem now to be more important at the present time. In this week’s chart, the green line portrays the six month rate of change in monthly average $Gold price using right axis. As a measure of price momentum, it helps in assessing the technical nature of the market.

An observation approaching 40% appears to be an abnormal reading, or indicative of a seriously over bought condition.. Last time $Gold’s return approached that level, return on Gold turned down. That appears to again be happening. This writer’s view is that technical factors are dominant at this time, and imply $Gold price weakness rather than strength.

On the fundamental side, the red line is six month rate of change for U.S. money supply, M-2, annualized using left axis. Until recently, the two seemed to have some commonality. Creating U.S. dollars at a faster rate tended to cause return on $Gold to rise. That view seems reasonable. Now with the Federal Reserve abandoning restraint, U.S. money supply growth has exploded to the highest level in years.

Producing more dollars at a faster rate should cause the value of dollar to fall and $Gold to rise. However, the market correctly predicted the Fed’s actions and discounted them in advance. The technical factors and the discounting in advance of Fed actions seem to be dominating $Gold. Given these factors, this analyst would expect $Gold to stage short rallies followed by a continuation of a correction.

The first intermediate buy signal has already been given. Expect more to follow as it usually takes a number of oversold periods to create the end of a correction. Since we will never know till after the fact the final low for this correction, investors should commit part of their cash to Gold on each price decline that creates an over sold condition. You do want to own Gold for the final ride to more than US$1,500, but getting on the train at the right station can increase the pleasure derived from the ride. Ned W. Schmidt

-Gold Fields SA ops chief says winter could bring more power problems. Read more at-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=50466&sn;=Detail

-2007 gold production fell marginally and 2008 output to stabilize-GFMS. Read more at-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=50465&sn;=Detail

-Gold could rally strongly and post fresh highs later this year and into 2009. But in the longer term it is likely to fall quite rapidly to an equilibrium level around $600/oz, according to Philip Klapwijk, Chairman of the precious metals research consultancy GFMS, who launched the Gold Survey 2008 report at an impressive presentation in London. Read more at-
http://www.resourceinvestor.com/pebble.asp?relid=41816

SILVER

-The bullish case for gold, that has been made in this article, is even more powerful for silver. Whereas most of the gold that is used, eventually gets recycled, most of the silver that is used, ends up in landfill. Small amounts are used in every cell phone, computer, refrigerator, TV set, laptop, satellite, electrical switches, medical wound coverings, water filters etc. The 2.5 billion ounces that existed in US government stockpiles when I first became interested in silver in the early 1960’s are gone! Used up! Finished!

During the recent drop in silver a few weeks ago, the number of ounces in the SLV, silver ETF actually increased! A very bullish development! Silver seems to bottom towards the end of each quarter: March, June, September and December often carve out a bottom in silver. The drop in March came right on schedule. It was my pleasure to meet Mr. Nelson Bunker Hunt at a convention; just after the Comex board changed the rules on silver contracts, and finished his run at silver in early 1980.

I asked him about the gold to silver ratio. He told me that he felt that in time, the ratio would shrink to 10 ounces of silver for an ounce of gold. More than 25 years have passed since that conversation, and many more uses for silver have been discovered. Less and less silver is being found. Due to environmental concerns it is more difficult now to open a mine than at any time in history. (Congress is currently discussing mining legislation HR 2262).

It is my belief that the ratio between gold and silver will shrink in time, to 5 ounces of silver buying an ounce of gold. We are a long way from having to be concerned about an exit strategy from our gold and silver positions. For those of you who worry about tops, I’ll share my exit strategy with you. When 2 ounces of gold or 10 ounces of silver are equal in value to the daily quote for the Dow industrials, I’ll start making plans to sell most of my metals, and I’ll buy blue chip stocks or real estate with the proceeds. Today the ratio between gold and the Dow is 13.6 ounces of gold or 700 ounces of silver versus the Dow. That is a long way from my exit. Peter Degraaf-Read more at-http://www.321gold.com/editorials/degraaf/degraaf040908.html

-From the beginning, I have steadfastly maintained that a silver commitment should be made for the long term, after one has done sufficient investigation into the facts surrounding the commodity. Now, more than ever, I believe that to be the correct approach. Over the past few years, the price of silver has climbed impressively, enriching many and validating the bullish case. However, that doesn’t mean you should accept only what you want to hear or read.

You can’t profit on that which has already occurred. Profit accrues on what happens in the future and how you are positioned to take advantage. Even if you were fortunate enough to initially invest at much lower than current prices, you should be on guard for changing supply and demand circumstances that might dictate that the silver price is no longer undervalued. After all, the time to consider selling is when you feel the price becomes overvalued compared to the fundamentals.

A long-term holding is much like a long journey, a travel that will occupy a good portion of your life. Sometimes the journey will be successful and bring financial and intellectual rewards, other times not. Long-term investment journeys, like other life paths, can be adhered to or changed, depending on your readings of the mile markers and signposts along the way. Obviously, if you start getting signs that danger lies ahead, a change may be in order.

Likewise, confirmation that you are on the right path should encourage you to stay the long-term course. Ending a silver investment based upon the many periodic short-term price sell-offs has been generally a mistake, even though those sell-offs can be unnerving. So what signs, aside from price action, should you look at along the way, to reinforce you are on the correct long-term path? What and how seem pretty straight-forward to me.

You look at the facts and you rely on your common sense to observe and interpret those facts compared to your original motivation for buying silver. Do the facts, as you see them, confirm or undermine your original decision for buying silver? The first thing I see is a current retail investment tightness or shortage in silver for the first time in history. I also see that the US Mint has run out Silver Eagles, for the first time ever, amid record retail demand. I don’t know if this tightness or shortage will continue.

I just know it has occurred for the very first time in my, or anyone else’s, lifetime. I don’t know if this retail tightness will lead to a wholesale tightness, but my common sense suggest to me that it easily could. The next thing I see is that, also for the first time, there was no liquidation in the metal holdings of the silver ETF in the face of a fairly sharp sell-off. In fact, there has been a significant increase in those holdings very recently, which is also unprecedented.

This suggests to me that deep and strong hands of the wholesale variety are interested in buying and holding silver, in spite of temporary price weakness. Next, I see evidence that the retail shortage is unique to silver. I am aware of no reports of retail gold shortages. I also see no signs that the US Mint is having trouble keeping up with gold coin demand, or that gold coin sales are anywhere near a record high. If anything, Gold Eagle sales are very much closer to record lows, not highs. This is not a knock on gold.

It could be that things will change and gold retail sales will suddenly soar like silver sales, but this exercise is about observing facts and signposts. Further, I see many credible reports of the widespread melting of gold by the public in response to the higher prices and tough economic times. A recent prominent story in the NY Times enlightened me to jewelry parties (much like Tupperware parties) where women came together in a social setting, with a gold-buying representative present, to weigh and evaluate old gold jewelry to be melted and write a check out on the spot.

I am aware of and have read no such stories of unusual silver melting or silver parties. Take a moment and try to transport yourself back a few years ago, when silver was in the sub $5 price range (and gold around $300). If someone suggested that silver would be in the $17 to $20 price range at this time, most observers would have sworn that would bring silver for melting out of the woodwork, causing a glut of metal.

Few would have suggested a surge in gold melting at current prices. Even fewer would have predicted a surge in silver investment demand. Here we have a five-fold increase in the price of silver, and instead of a glut of household silver available for melt, we face an unprecedented tightness and record demand. My expectation was that there was less above ground silver than gold. Furthermore, there was less silver in the world every day, due to silver’s industrial consumption.

I always knew that silver offered more relative value than gold, no matter what the current price of each was. I thought there would be a shortage in silver, while it would be impossible for there to be a gold shortage. This has been a signature issue of mine from the very beginning. I hope and expect that gold continues to increase in price, but I don’t have to hope silver will outperform gold, as the facts demand that out-performance.

Gold investors are doing themselves a disservice by not over-weighting their metal exposure to silver. Make the switch now, based upon the clear evidence right in front of you. Don’t wait until silver’s price performance has made itself clear. It will be much more costly to switch later, after the majority see the real facts. If and when the time comes when it appears the silver journey is reaching its final destination, amid credible evidence of serious surplus and net selling and the resolution of the concentrated short position, prudence will dictate a reevaluation.

I know of no such current evidence. What is most important is how you reconcile what you see with your own silver journey. This is you and your family’s financial future at stake. It is your own journey. Do you see any signposts that undermine your original decision to buy silver for the long term? Even more to the point, ask yourself this question in light of what you see with your own eyes, do you have enough silver? Ted Butler

-Clive Maund, gold and silver market updates. Read more at-http://www.321gold.com/editorials/maund/maund040708.html

-Mint Short on Silver American Eagles. A shortage of 2008 American Eagle silver one-ounce coins is preventing buyers from purchasing during the current dip in silver prices.

The U.S. Mint suspended sales twice this year. The first time was Feb. 4 to March 3, and the second time was March 19 and continuing into early April. The Mint notes that from Dec. 27, 2006, to March 19, 2007, it sold 3,497,000 coins while in the same period this year, sales have been 6,549,500 pieces, which is 87 percent more. Numismatic News

PLATINUM-PALLADIUM

-Johnson Matthey involved in palladium catalysis research. Johnson Matthey has been involved in research to understand the role of carbon in palladium catalysis. Read more at-
http://www.platinum.matthey.com/media_room/1207648815.html

COMMODITIES-FOOD

-Letter Bullish On Long-term Resources Run. Commodities have been volatile, but a top letter says think long-term. Read more at- http://money.cnn.com/news/newsfeeds/articles/djhighlights/200804070037DOWJONESDJONLINE000012.htm

-China, the world’s biggest copper consumer, may increase imports of ore used to make the metal by 20 percent to a record this year, said Trafigura Beheer BV, the country’s top supplier. Read more at-
http://www.bloomberg.com/apps/news?pid=20601109&sid;=alWlh3m3fv50&refer;=home

-Chavez’s Threats, Commodities Boom Converge to Fuel Arms Race. South American nations, flush with cash from increased prices for oil, soy, copper and other commodity exports, are going on a military spending spree. In the wake of Venezuelan President Hugo Chavez’s arms purchases, which saw him order $1.3 billion in military aircraft and 100,000 assault rifles in 2005, nations across the region are bulking up. Read more at-http://www.bloomberg.com/apps/news?pid=20601109&sid;=a3J3JJ6v3wJQ&refer;=home

-Chavez Plans to Nationalize Venezuela Cement Industry. Venezuelan President Hugo Chavez said he will nationalize the country’s cement companies to boost supplies of construction materials, a pledge that threatens the operations of Cemex SAB of Mexico, the largest producer. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aAdDfAmeLQ78&refer;=home

-India to Face Coal Shortages, WCL Chief Says. Read more at-http://www.resourceinvestor.com/pebble.asp?relid=41749

-Food Shortages Cause Worldwide Price Spike. Read more at-http://www.realtruth.org/news/080408-002-international-print.html

-Egypt’s Rising Food Prices Swell Bread Lines, Deficit. Read more at http://www.bloomberg.com/apps/news?pid=20601109&sid;=amxCfY1PA_ek&refer;=home

-Grains Gone Wild. Read more at http://www.nytimes.com/2008/04/07/opinion/07krugman.html?_r=1&ei;=5087&em;=&en;=814beb53994fd272&ex;=1207800000&pagewanted;=print&oref;=slogin

-China’s Winter Wheat Less Healthy Than Normal by Early April. Read more at-http://www.resourceinvestor.com/pebble.asp?relid=41852

-Chinese Govt. Purchasing Corn to Buoy Domestic Market. Read more at- http://www.resourceinvestor.com/pebble.asp?relid=41746

-Rice Jumps to Record on Philippine Imports, Curbs on Exports. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ahRifIz3hjh0&refer;=home

-Rice Run Prompts Curbs to Rival Credit Market Seizure. Read more at-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=aRnBO9RP59Xw&refer;=home

OIL-GASOLINE

-IEA Chief Energy Economist Birol Says Oil Prices to Stay High. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aJRvT9j7xjt4&refer;=home

-Mexico unveils oil reform plans. Read more at-http://news.bbc.co.uk/2/hi/americas/7338211.stm

-Gas Prices Slip From Record, but Could Reach $4 a Gallon This Spring, the Government Said. Read more at-http://biz.yahoo.com/ap/080408/oil_prices.html?.v=10&printer;=1

-Are you prepared to pay $8 a gallon at the pump? Read more at-http://www.sltrib.com/portlet/article/html/fragments/print_article.jsp?articleId=8822746&siteId;=297

INFLATION-STAGFLATION

-Asian Inflation Begins to Sting U.S. Shoppers. Read more at-
http://www.nytimes.com/2008/04/08/business/worldbusiness/08inflate.html?_r=2&hp;=&oref;=slogin&pagewanted;=print

-A professional shopper looks for inflation. Labor Department researcher scours store aisles to help determine Consumer Price Index. Read more at-
http://money.cnn.com/2008/04/08/news/economy/inflation_shopper/index.htm?postversion=2008040815

-Middle-class discontent: Poll. -http://money.cnn.com/2008/04/09/news/economy/middle_class.ap/index.htm

-For Many, a Boom That Wasn’t. How has the United States economy gotten to this point? Read more at-http://www.nytimes.com/2008/04/09/business/09leonhardt.html?_r=2&oref;=slogin&ref;=business&pagewanted;=print

-How derivatives suppress commodities to conceal inflation. Read more at-http://www.financialsense.com/Market/kirby/2008/0407.html

-Zimbabwe unveils $50-million bank note to cope with rampant inflation. Authorities in Zimbabwe have issued a new mega bank note in an attempt to cope with the troubled African country’s runaway inflation. The size of the new note? Fifty million Zimbabwean dollars.

The new bill, issued Friday, marks the third time in three months that the central bank in Harare has issued a higher denomination note in response to the country’s 100,000 per cent annual inflation rate. In practical terms, the $50-million bill is worth just $1 US in trading on Zimbabwe’s widely used black market. That means it can buy just three loaves of bread. CBC.ca

-Stagflation is clearly emerging as a real and present danger to western economies and to the UK economy and the BoE (like the Federal Reserve) is caught between a rock and a hard place. The property markets and economy again need the life elixir of cheaper money but the inflation genie is out of the bottle and should sterling fall even further inflation will increase even more which would require sharp rate increases (possibly to double digit levels) in order to control the grave threat that is real and serious inflation. Gold.ie

INTEREST RATES

-Iceland Raises Benchmark Interest Rate to 15.5%. Read more at-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=atYTED7QcGbo

-Trichet Not Ready to Cut Rates Even as Risks Mount. Read more at-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=armg9RkeRAII&refer;=home

-Bank of England Lowers Rate to 5% on Recession Risk. The Bank of England cut the benchmark interest rate for the third time since December as higher credit costs and the worst housing slump in 16 years threatened to push the economy into a recession. Read more at-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aZ1ylSDeYV.s&refer;=home

U.S. DOLLAR-TRADE GAP

-Goodbye to the dollar? As the world’s financial leaders meet in Washington this month at the World Bank-International Monetary Fund annual meeting, perhaps they should be glad there is no clear alternative to the dollar as the global currency standard. If the euro were fully ready for prime time, we might well be seeing it’s dollar exchange rate jump to over 2.00, and not just to 1.65 or 1.70, as it seems poised to do anyway. Read more at-http://www.sundaytimes.lk/080406/International/international00010.html

-The German finance ministry is opposing using interventions to prop up the weak U.S. dollar, weekly magazine Der Spiegel reports Saturday, citing a finance ministry document prepared for Finance Minister Peer Steinbrueck. Read more at-http://www.tradingmarkets.com/.site/news/Stock%20News/1313760/

-Iran to OPEC: Stop Oil Sales in Dollars. Read more at-http://www.reuters.com/article/telecomm/idUSL0743596620080407?sp=true

-Interview with Jim Rogers: More Pain for the Greenback, and the Failure of the Federal Reserve. Read more at-http://www.321gold.com/editorials/fitz-gerald/fitz-gerald040808.html

-U.S. Economy: Trade Gap Unexpectedly Grew on Imports. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aDq_o7vTwgJM&refer;=home

IMF SAYS FINANCIAL-ECONOMIC LOSSES MAY REACH $945 BILLION

-IMF Says Financial, Economic Losses May Swell to $945 Billion. The International Monetary Fund said financial losses stemming from the U.S. mortgage crisis may approach $1 trillion, citing a “collective failure” to predict the breadth of the crisis. Falling U.S. house prices and rising delinquencies may lead to $565 billion in mortgage-market losses, the IMF said in its annual Global Financial Stability report, released today in Washington.

Total losses, including the securities tied to commercial real estate and loans to consumers and companies, may reach $945 billion, the fund said. The forecast signals the worst of the credit crunch may be yet to come, because banks and securities firms so far have posted $232 billion in asset writedowns and credit losses. Policy makers, concerned that lenders’ deteriorating balance sheets will hobble economic growth, are pushing companies to raise capital.

“The current turmoil is more than simply a liquidity event, reflecting deep-seated balance-sheet fragilities and weak capital bases, which means its effects are likely to be broader, deeper and more protracted,” the report said. The fund warned of the risk of “a serious funding and confidence crisis that threatens to continue for a significant period.” Today’s report comes days before finance ministers and central bank governors from the IMF’s 185 members gather in Washington for spring meetings of the fund and World Bank. Group of Seven policy makers meet April 11. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aBCSyLv7HQmU&refer;=home

WORLD LIQUIDITY-FINANCIAL CRISIS

-Fed auctions another $50 billion to banks. Read more at-http://money.cnn.com/2008/04/08/news/economy/Fed_auction.ap/index.htm?postversion=2008040811

-The International Monetary Fund urged U.S. policy makers to strengthen their response to the housing slump and called on the European Central Bank to lower interest rates as the global economy cools. The Washington-based lender estimated a 25 percent chance of a worldwide economic downturn in its semiannual World Economic Outlook, released today.

The fund lowered its global growth forecast to 3.7 percent this year from a 4.1 percent prediction in January. The fund anticipates a “mild recession” in the U.S., with expansions slowing in Europe and Japan. While central banks have acted “aggressively” to inject cash into the financial system, further efforts may be needed because of the danger of a “full- blown credit crunch,” the IMF said.

“The worst is not yet over,” said David Bloom, global head of currency strategy at HSBC Holdings Plc in London. “If the IMF predictions prove true, it demands an urgent policy response to galvanize the world economy.” Read more at-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aXJg7chaTKl4&refer;=home

-The Federal Reserve is considering contingency plans for expanding its lending power in the event its recent steps to unfreeze credit markets fail. Among the options: Having the Treasury borrow more money than it needs to fund the government and leave the proceeds on deposit at the Fed; issuing debt under the Fed’s name rather than the Treasury’s; and asking Congress for immediate authority for the Fed to pay interest on commercial-bank reserves instead of waiting until a previously enacted law permits it in 2011. Read more at-
http://online.wsj.com/article/SB120768896446099091.html?mod=hpp_us_whats_news

-Tight global credit markets will persist “for some time to come,” Bank of Canada Deputy Governor David Longworth said today. “We do not know just when or how this turmoil will ultimately be resolved,” Longworth, 56, said in a speech he’s giving today in Lake Louise, Alberta. He also repeated that the central bank will probably cut interest rates soon to boost flagging economic growth. The next rate decision is April 22. Read more at-http://www.bloomberg.com/apps/news?pid=20601082&sid;=au7X1UX.mPsE&refer;=canada

-Wall Street’s Latest Illusion-Turning Losses into Paper Profits. Read more at-http://online.barrons.com/article/SB120736147391891897.html?mod=yahoobarrons&ru;=yahoo

-Volcker Says Fed’s Bear Loan Stretches Legal Power. Former Federal Reserve Chairman Paul Volcker questioned the central bank’s decision to back a loan to an investment bank, saying the decision was at “the very edge” of its legal authority. “The Federal Reserve has judged it necessary to take actions that extend to the very edge of its lawful and implied powers, transcending in the process certain long-embedded central banking principles and practices,” Volcker said in a speech to the Economic Club of New York.

Fed Chairman Ben S. Bernanke last month agreed to take on $29 billon of Bear Stearns Cos.’s assets, paving the way for JPMorgan Chase & Co. to buy its Wall Street rival. Bernanke, who worked with Treasury Secretary Henry Paulson to broker the bailout, last week defended the move as necessary to prevent “severe” damage to financial markets. Volcker, the Fed chair from 1979 to 1987, had implicit criticism for U.S. regulators and market participants who allowed for “excesses of subprime mortgages” to spread into “the mother of all crises.”

The Fed’s Bear Stearns loan was unusual, he said. “What appears to be in substance a direct transfer of mortgage and mortgage-backed securities of questionable pedigree from an investment bank to the Federal Reserve seems to test the time-honored central bank mantra in time of crisis: lend freely at high rates against good collateral; test it to the point of no return,” he said.

Lawmakers, while praising the Fed and Treasury for averting a financial collapse, have also questioned the plan to subsidize Wall Street while the government resists using government funds to address homeowners in the worst housing crisis in 25 years. Volcker said the modern financial system has “failed the test” of the marketplace. When asked whether he predicts a “dollar crisis,” Volcker said, “you don’t have to predict it, you’re in it.” Bloomberg

-Sub-prime crisis hits German bank. Read more at-http://news.bbc.co.uk/2/hi/business/7328694.stm

-The Mortgage Bust Goes Global. Read more at-http://www.nytimes.com/2008/04/06/business/06ubs.html?_r=1&ref;=business&pagewanted;=print&oref;=slogin

-ANZ Increases Bad-Debt Provisions to A$975 Million. Australia & New Zealand Banking Group Ltd. increased bad-debt provisions by 71 percent, joining Commonwealth Bank of Australia in forecasting rising delinquencies this year amid financial market turmoil. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=awgxDvkCTOcM&refer;=home

-Washington Mutual Inc., the largest U.S. savings and loan, will receive $7 billion from a group led by David Bonderman’s TPG Inc. to replenish capital as it confronts more losses tied to subprime mortgages. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a7M_ER.SKD9E&refer;=home

-Japan says U.S. banks may need bailout. The Bank of Japan said on Tuesday Washington may have to use public funds to bail out U.S. banks hit by the credit crisis as Tokyo joined European calls for the Group of Seven states to work together calm financial markets. Read more at-
http://www.reportonbusiness.com/servlet/story/RTGAM.20080408.wg70408/BNStory/robNews/home

-Morgan Stanley’s Mack Sees Crisis Lasting `Couple of Quarters.’ Morgan Stanley Chief Executive Officer John Mack said the credit crisis is going to last “a couple of quarters” longer as it spreads to commercial real estate, subprime mortgages in Europe and U.S. midsized banks. “It’s going to be a difficult year for the Street,” Mack said to reporters before the company’s annual meeting today in Purchase, New York. Mack, 63, told shareholders the markets are facing the most difficult conditions he’s seen in 40 years. Bloomberg

-Canaccord Leads Plan to Buy C$138 Million in Debt. Canaccord Capital Inc., a Vancouver- based brokerage, will lead a bailout of its clients to help win their support for a proposal to restructure about C$32 billion ($31.4 billion) of frozen commercial paper in Canada. Canaccord and unidentified investors will buy back as much as C$138 million from 1,430 individuals holding up to C$1 million each in asset-backed paper, according to a statement today. Read more at-http://www.bloomberg.com/apps/news?pid=20601082&sid;=a9M_vWRPWwzk&refer;=canada

-Canadian Investors Push to Delay C$32 Billion Vote. Some Canadian companies saddled with commercial paper that hasn’t traded since August are pushing to delay a vote on a C$32 billion ($31.5 billion) restructuring plan because they need more time to study it. Read more at-http://www.bloomberg.com/apps/news?pid=20601082&sid;=a13OL3SUDkTA&refer;=canada

U.S.-GLOBAL RECESSION

-U.S. near recession amid global slump-IMF. International Monetary Fund shows U.S. sliding into recession and pulling down economic growth around the world. Read more at-
http://money.cnn.com/2008/04/09/news/international/world_economy.ap/index.htm

-Fed sees economy getting worse. Minutes from central bank’s last meeting show fear of ’severe and protracted downturn’; some members worry economy could shrink in first half of year. Read more at-http://money.cnn.com/2008/04/08/news/economy/fed_minutes/index.htm or http://www.bloomberg.com/apps/news?pid=20601087&sid;=adhv7YFQhdIQ&refer;=home

-The tip of the iceberg. Economies in crisis: Despite the sanguine assurances of the Federal Reserve, the US recessession will be neither short nor mild. The economists all assure us that the recession will be short and mild. Anyone who finds this reassuring should remember that almost none of these economists ever saw the recession coming.

The overwhelming consensus among economists just a few months ago was that the problems in the housing market would cause somewhat slower growth, but posed little risk of a recession. Read full story at-http://commentisfree.guardian.co.uk/dean_baker/2008/04/the_tip_of_the_iceberg_1.html

-Feldstein says U.S. sliding into recession. Martin Feldstein, who leads the group that is considered the arbiter of U.S. recessions, said Monday that he personally believes the economy has been sliding into a recession since December or January. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aIGfaau8QloM&refer;=home

-Citigroup, Wells Fargo May Fuel Recession by Curtailing Lending. Read more at-http://www.bloomberg.com/apps/news?pid=20601109&sid;=ay.wksrAwOGI&refer;=home

-The Great Depression: The sequel-Is it coming to a soup kitchen near you? Here’s how we’ll know if the current recession is turning into something much worse. Read more at-
http://www.salon.com/opinion/feature/2008/04/02/depression/index.html

-U.S. Loses 80,000 Jobs, Unemployment Rate Increases. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=alfGIs6CKH_o&refer;=home

-U.S. Economy: Employers Cut Most Workers Since 2003. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=azV.9Jrf9q5Y&refer;=home

-Moelis Says Wall Street’s Banks May Cut 35% of Jobs. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aEiGgw2lOnUk&refer;=home

-U.S. Consumer Borrowing Rose $5.2 Billion in February. Read more at-
http://www.bloomberg.com/apps/news?pid=20601068&sid;=aM_Af10opvlc&refer;=home

-Restaurants’ triple serving of recession. Not only do they have to cope with a drop in business, but fuel surcharges and soaring food costs as well. Read more at-
http://money.cnn.com/2008/04/09/news/economy/restaurants/index.htm?postversion=2008040912

-Bankruptcies Jump 30% in March, Led by Housing-Bust States. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aw8ifLmYMFlI&refer;=worldwide

-BOJ’s Shirakawa Says Japan Economy to Keep Slowing. Read more at-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aJGgigm1aqSE&refer;=home

-Australian Consumer Confidence Slumps to 15-Year Low. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a7YRi_hqWnwY&refer;=home

-Weak Economy Sours U.S. Public’s View of Future, New Poll Finds. Read more at-
http://www.nytimes.com/2008/04/03/us/03cnd-poll.html?ei=5065&en;=150c88cced5c5f4a&ex;=1207886400&partner;=MYWAY&pagewanted;=print

GREENSPAN SAYS U.S. IN RECESSION-WORST CREDIT CRISIS IN 50 YEARS-HOUSING MAY STABILIZE IN 2008

-Former Federal Reserve Chairman Alan Greenspan said on Tuesday the U.S. economy was in recession, and said it would be appropriate to tap public funds to resolve the mortgage-related crisis that has helped pull the economy under. In an interview with CNBC television in which he defended his chairmanship of the U.S. central bank against charges that his policy missteps had laid the groundwork for the current crisis, Greenspan said Fed decisions on his watch were rationally constructed based on evidence at the time.

“I have no regrets on any of the Federal Reserve policies that we initiated back then because I think they were very professionally done,” Greenspan said. Read more at-
http://news.yahoo.com/s/nm/20080408/bs_nm/usa_economy_greenspan_dc&printer;=1;_ylt=AqdOKYylPw1ZiZ2M1sjLP82b.HQA

-Greenspan Says Credit Crisis Is Worst in 50 Years. Former Federal Reserve Chairman Alan Greenspan said the current credit crisis is the worst in at least 50 years. “The current credit crisis is the most wrenching in the last half century and possibly more,” Greenspan told a conference in Tokyo today via satellite from Washington.

Greenspan’s remarks echo the assessments of economists including those at the International Monetary Fund, and may add to pressure on policy makers to strengthen their response to the credit crunch. Federal Reserve officials last week acknowledged that capital markets remain distressed even after the fastest interest-rate cuts in two decades. Greenspan, 82, said the extent of damage stemming from the collapse of the subprime-mortgage market won’t be known for months.

“Have we reached a point where prices are stable? We cannot know that for a couple of months,” he said. He added that prices may begin to stabilize by the start of 2009 as home inventories decline. Greenspan said inflation will be contained during the current slowdown before picking up as the world economy recovers momentum. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aclMlgBb3taQ&refer;=home

-Greenspan Says U.S. Home Prices May Stabilize in 2008. Former Federal Reserve Chairman Alan Greenspan said the drop in U.S. home prices will probably end “well before” early next year as the number of houses on the market diminishes, aiding an economic rebound. “It will not be until early 2009 that we will get close to having eliminated most of this” home inventory, Greenspan told a conference in Tokyo today sponsored by Deutsche Bank AG and co-hosted by Bloomberg LP.

“But it is very likely that home prices will stabilize well before that.” Greenspan added that the extent of damage stemming from the collapse of the subprime-mortgage market won’t be known for months. He described the credit crisis as the worst in 50 years, echoing the assessment of International Monetary Fund economists. “You won’t see asset markets recover until housing prices stabilize,” said Glenn Maguire, chief Asia-Pacific economist for Societe Generale SA in Hong Kong.

“If Greenspan is correct, you’ll see weakness in the economy through 2008.” Greenspan’s successor, Ben S. Bernanke, and other Fed officials have highlighted declining home prices as a major economic risk that may further hurt household wealth and consumer spending. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=afx4_3cUthg4&refer;=home

GEORGE SOROS CALLS FOR SEVERE RECESSION

-Soros predicts end of the road for cheap and easy borrowing. The City of London faces a severe recession and the UK economy is set to follow the US into a sharp downturn, according to a gloomy prognosis from the billionaire financier George Soros. Faced with over-valued houses, mountains of personal debt and a rise in unemployment, the UK is especially vulnerable to the effects of the credit crisis sweeping through financial markets, Mr. Soros said, and he warned not to expect a rebound at any point in the near future.

Indeed, the crisis is so serious that it will up-end 25 years of free-market thinking and bring to an end an era of cheaper and easier borrowing, he predicted. “It is not going to be like the 1930s we are not going to allow financial institutions to fail but this is a historic event like the Great Depression was.”

In the UK, as in the US and the rest of the developed world, “ever looser lending standards and more aggressive supply of mortgages” have contributed to a house price bubble but, said Mr. Soros, “I think we have come to the end of the road”. Read more at-http://www.independent.co.uk/news/business/news/soros-predicts-end-of-the-road-for-cheap-and-easy-borrowing-804978.html?service=Print

-Soros Lambastes Market Theory, Says It Created `Super-Bubble.’ For 20 years, George Soros has challenged the theory that markets, however choppy, always move toward equilibrium.

Now a meltdown has handed him rich evidence that the hypothesis isn’t just flawed, it’s dangerous. We are facing the worst financial crisis since the Great Depression, Soros writes in “The New Paradigm for Financial Markets,” a book rushed online this week.

The culprit, he says, is a misconception that markets can correct themselves, no matter how we short-circuit them with easy money, massive leverage and brain-bending synthetic instruments. “The belief that markets tend towards equilibrium is directly responsible for the current turmoil,” the billionaire philanthropist writes. “It encouraged the regulators to abandon their responsibility and rely on the market mechanism to correct its own excesses.”

His solutions, laid out here in uncluttered prose, range from abandoning some financial instruments to curbing lending to creating an exchange or clearing house for credit-default swaps. Soros also gives glimpses of the trading strategies he’s using to shield his wealth: He has bet against U.S. and European stocks, the dollar and 10-year Treasuries, preferring non-U.S. currencies and equities in China, India and the Gulf states. Read more at-http://www.bloomberg.com/apps/news?pid=20601088&sid;=aErAvCsDM8ZU&refer;=home

REAL ESTATE

-Across the Globe, Hints of More Perils in Housing. As a weakening housing market appears to be dragging the American economy into recession, the International Monetary Fund warned this week that home prices in other industrial countries were even more overvalued. Read more at-
http://www.nytimes.com/2008/04/05/business/05charts.html?_r=1&oref;=slogin&ref;=business&pagewanted;=print

-U.S. Economy: Pending Home Resales Fell in February. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a5d01wpv4svI&refer;=home

-A Foolish Investment in California. Read more at-http://thehousingbubbleblog.com/?p=4361

-U.K. House Prices Fall the Most Since 1992, HBOS Says. Read more at-http://www.bloomberg.com/apps/news?pid=20601068&sid;=ar4cEW7TvLSM&refer;=home

-UK House Prices Fall Sharply. The UK housing market has taken a sharp turn for the worst with HBOS reporting a 2.5% fall in house prices, the largest monthly fall in UK house prices since 1992. House prices were forecast to fall just 0.3%. With all lenders having withdrawn 100% mortgages, borrowers will be severely hampered from entering the property market which is likely to put further downward pressure on property prices. Gold.ie

FORECLOSURES-MORTGAGES

-Lenders Swamped By Foreclosures Let Homeowners Stay. Read more at-
http://www.bloomberg.com/apps/news?pid=20601109&sid;=aOluOO8Vy0gc&refer;=home

-Foreclosure crisis reaches into rural communities, too Read more at-http://www.usatoday.com/money/economy/housing/2008-04-05-rural-foreclosures_N.htm?csp=34

-The Bush administration is expanding a federal mortgage insurance program to allow as many as 100,000 borrowers at risk of foreclosure to keep their homes. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=atnyyy4TGxus&refer;=home

-The big risk in the foreclosure fix. FHA, a formerly obscure federal agency, is now at center of many plans to fix the housing market. But it may not be up to the task – and that could cost taxpayers a bundle. Read more at-http://money.cnn.com/2008/04/10/news/economy/fha/index.htm?postversion=2008041011

-The futile $100M foreclosure fix. A new bill would allocate millions for foreclosure counseling. But is that enough to help keep at risk borrowers in their homes? Read more at-http://money.cnn.com/2008/04/07/real_estate/new_counseling_funds/index.htm?postversion=2008040812

-Mortgage fraud reports up 42% in 2007. The U.S Treasury says there were 52,868 reports of fraud last year as banks are more suspicious of lies on loan applications. Read more at-
http://money.cnn.com/2008/04/03/real_estate/Mortgage_Fraud.ap/index.htm?postversion=2008040313

-International banks are scrambling to sell their holdings of Spanish mortgage debt at a steep discount, fearing that the country may be sliding into the worst economic downturn in its modern history. Read more at-http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid;=&xml;=/money/2008/04/04/cnspain104.xml

GEOPOLITICAL

-Al Qaeda attacks in Yemen latest to target oil. The Al Qaeda terrorist organization, building on earlier claims, has taken responsibility for a rocket attack on a residential complex in Yemen that houses executives and the headquarters of Safer E&P; Operations Co. “Al Qaeda has issued a statement claiming the attack,” said a Yemeni security official. Residents reported no injuries after three rockets struck near the residences of US employees of the Yemen-owned Safer E&P.; Read more at-
http://www.pennenergy.com/display_article/325095/7/PRARC/none/GenIn/1/Al-Qaeda-attacks-in-Yemen-latest-to-target-oil/

-Petraeus Says Iraq Too “Fragile’ for Removing Troops. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ai9WnIpMutt0&refer;=home

-President George W. Bush endorsed a plan to suspend further force reductions in Iraq beyond July, saying the U.S. and Iraq must consolidate the gains made in the last 15 months. Read full story at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aSVeuBe1G3IE&refer;=home

-Iran has begun installing 6,000 new centrifuges at its uranium enrichment plant in Natanz, state television quoted President Mahmoud Ahmadinejad as saying Tuesday. Iran already has about 3,000 centrifuges operating in Natanz, and the new announcement is seen as a show of defiance of international demands to halt a nuclear program the United States and its allies say is aimed at building nuclear weapons. “The president announced the start of the phase of installing 6,000 new centrifuges in Natanz,” state television reported. Read more at-
http://apnews.myway.com/article/20080408/D8VTKG8G0.html

The GoldBugg Report – April 15th
Posted by Worldwide Precious Metals on Tuesday, April 15, 2008

The GoldBugg Report – April 8

April 8, 2008

Gold and silver are the most under-owned asset class at this stage of their bull market. It is surprising to us that for 8 years most investors have missed the sector almost completely. The major funds of the world don’t own these shares, but they are about too.

The global asset market is worth about $140 trillion and if just 1% moved into these assets the result would be earth shattering. This next second phase of the gold/silver bull market will take gold to $3,000 an ounce and silver over $100.00. Then we still have to deal with phase 3 and perhaps a phase 4 the blow-off phases. A replay that will be similar to the Nasdaq in March of 2000.

This is the opportunity of a lifetime. You will never have an opportunity like this again. You are less than 1% of the investing public and your ranks will only grow to 5% during the remainder of this saga. You should consider yourself fortunate to have discovered the future by listening and thinking unconventionally outside of the box. Bob Chapman

James Turk, who expects gold to end 2008 between $1,100 and $1,200 per ounce, says he also sees a spike to as high as $1,500 during the next few months on inflation worries and investor concerns about the health of the global banking system. Reuters

“I’d expect gold to rally back up to the high 900’s or low 1,000’s within the next month or two,” said Zachary Oxman, of Wisdom Financial. Why? “Fundamentally, the market is in the same place we were before the $90 sell-off in gold,” Oxman said, “and with the economy in a recession, as evidenced by the poor data, I’d look for the flight to move back to gold.” Kitco Daily Resource

CIBC World Markets economist and strategist Jeff Rubin said gold’s recent retreat from record high levels above $1,000 an ounce will prove temporary given a continuing weak greenback, inflationary jitters and further anticipated U.S. Federal Reserve rate cuts. Read more at-http://www.reportonbusiness.com/servlet/story/RTGAM.20080402.wrubinoil0402/BNStory/SpecialEvents2/home

There is no avoiding the collapse of the dollar and later the collapse of all currencies versus gold it is inevitable. It is obvious the elitists have chosen first to abandon the dollar. Its save Wall Street and the heck with everything else. The Fed has told us they will create money and credit until they cannot anymore. It can’t get any clearer than that.

They lie about inflation and ignore it hoping it will go away, but of course it won’t and they know that. They are without shame and conscience. Over the next few years someone will turn the light on all paper assets as they fall in value and investors seek alternatives. Bob Chapman

Continuing pullbacks in all the precious metals are almost certainly short term healthy corrections as the supply demand fundamentals remain extremely favourable (particularly to silver and gold) and pullbacks should be used as buying opportunities in order to protect against the coming recessions in the UK and U.S. which are not priced into the market as some more sanguine commentators would have us believe. Gold.ie

We pointed out that after all these corrections there were short sighted analysts who claimed the end of the bull market and the ‘bubble’ had burst. They will be proved wrong again. Commodities follow long term cycles which are normally of some 15 to 20 years. This would see gold peaking in price sometime between 2015 and 2020 which seems likely given the extremely favourable macroeconomic and geopolitical fundamentals and the very tight supply demand situation.

Interestingly, respected currency and gold expert, Jim Sinclair has issued a challenge to the gold bears. “Gold will trade at $1650 before the second week of January 2011. I am offering a $1,000,000 USD wager with a financially qualified party that this will occur. Any party on Bloomberg, CNBC or CNN stating an opposite opinion on the price of gold should be informed of this challenge. Please communicate to any vocal bearish gold expert that I challenge them to put their money on their views.”

With U.S. interest rates set to fall further and pressure the dollar and with the U.S. in the early stages of what could prove to be a serious recession it is unwise to say that the gold ‘bubble’ has burst. Besides it is very difficult to have a ‘bubble’ when an asset class has not even reached its inflation adjusted high from 28 years ago. Gold.ie

A recession has clearly arrived in the U.S. (and will likely soon reach the UK) the question is how deep the recession becomes and whether a recession leads to a 1990s style Japanese deflationary recession, a 1930s style deflationary crash and depression or a 1920s style German hyperinflation or most likely a severe 1970s style stagflation with a combination of sharply falling asset prices and economic growth with competitive currency devaluations and severe inflation in the price of essential goods such as food and energy. Gold.ie

GOLD

5 reasons gold is headed to $1,500. Gold’s much-heralded climb above $1,000 an ounce was pretty short-lived. Gold’s long-term ascent won’t be. With gold now trading closer to $900, this is a great time to load up on more exposure to bullion, which is only taking a breather before heading to $1,500 an ounce and higher. That’s the view of two gold gurus who have been correctly calling bullish advances in the yellow metal for years, most recently predicting the move to $1,000 an ounce.

That was in November, when it seemed like an audacious forecast. With their forecast proved correct if briefly they’re not backing off. “There is lot more upside for gold,” says Thomas Winmill, who manages the Midas Fund, one of the top-performing precious metals funds, with a three-year average annual return of 41.6%. Winmill thinks gold could see $1,500 in 12 to 18 months.

Frank Holmes, who manages the second-best-performing gold fund this year, U.S. Global Investors Gold and Precious Metals Fund, sees bullion going to $1,500 to $2,000 an ounce in the next leg up. He’s not offering a time frame for that target. Like Winmill, Holmes is worth listening to because his precious metals fund is also consistently one of the top performers. His Gold and Precious Metals Fund is up 40.1% a year over the past three years. Their funds do 6 to 7 percentage points a year better than the average for their peers.

Here’s a look at why they think gold will see $1,500 within a year or so. A move in gold to $1,500 suggests silver would sell for $30 an ounce.

Reason No. 1: The dollar’s value is declining. “Gold is attractive as a safe haven when the dollar is declining,” says Holmes. But why will the greenback continue to weaken? Above all, the Federal Reserve has been slashing interest rates dramatically, and it may reduce them even more. This makes investors move money to other countries especially emerging-market economies that have higher interest rates and higher growth rates. As investors move away from U.S. assets, they sell the dollar and push it down. And they buy other currencies, pushing them up against the dollar.

Investors are also losing confidence in the U.S. economy and U.S.-based investments because of the growing federal deficit, the subprime mess and concerns about the Fed’s new role in bailing out investment banks exposed to too much subprime debt.

Reason No. 2: More inflation on the way. To see where inflation is headed, just take a peek upstream in the production process, says Winmill. Prices on intermediate goods or stuff that is midway through production advanced 8.8% during the 12 months through the end of February. Prices on early-stage “crude” goods were up 24%, according to producer price index data released by the Bureau of Labor Statistics (BLS). “I see those price increases coming into the economy,” says Winmill. “That is inflation in the pipeline.” Prices on finished goods gained 6.4% in the same time frame.

Consumers, of course, are already aware that prices for food and gasoline have gone up. But as inflation persists, they’ll hit a pivotal point in their thinking, when they switch to expecting prices to continue climbing. “That will trigger a psychology of investing in gold as a place to hang on in an inflationary environment,” believes Winmill.

Reason No. 3: Investors will seek greater safety. Inflation is already so high that investors are losing money in traditional “safe” investments like U.S. government bonds. Consumer prices are advancing by about 4% a year, according to the BLS, while two-year U.S. Treasury bonds are yielding around 1.6%. So investors who now buy two-year government bonds will be losing 2.4% of their money per year. If the Fed lowers rates even more and inflation advances, the negative returns on government bonds will only widen.

“Historically this has been very good for any kind of hard asset, and particularly gold,” says Winmill. “In a negative interest rate environment you don’t want to hold bonds because you lose purchasing power.” Winmill sees plenty of room for a shift in the flow of investing dollars toward gold, because only a minuscule amount of money in managed accounts is dedicated to investments in commodities.

Meanwhile, people continue to lose lots of money on investments like real estate and debt instruments backed by subprime mortgages which will keep scaring them into buying perceived safe assets like gold. “There is massive deflation in real estate and financial assets, and gold has traditionally done well when there are concerns about deflation,” says Holmes.

Reason No. 4: Oil is getting pricier. Holmes points out that that over the past five years, gold and oil prices have moved in sync 90% of the time. The reason: When oil-producing countries take in more money because oil prices go up, they diversify by investing in gold. Typically, this creates a 10-to-1 relationship between the price of an ounce of gold and a barrel of oil. Thus $1,000 gold makes sense when a barrel of oil is $100. But that ratio can jump to 15 to 1 when geopolitical turmoil drives other investors to the safety of gold, says Holmes.

He thinks oil could trade as high as $125-$130 a barrel this year because of a basic imbalance between demand from emerging economies and short supply due to a lull in exploration investments during the 1990s, when oil prices were much lower. “If oil were to run to $125 a barrel because of a geopolitical event, gold would easily go to $1,500 an ounce,” says Holmes.

Reason No. 5: Gold should follow other commodities. Since so many other metals, including copper and oil, have smashed their inflation-adjusted price records, why shouldn’t gold follow, asks Holmes. If it does break through its inflation-adjusted high,
set in 1980, it would trade north of $2,000 an ounce. Full story at-http://articles.moneycentral.msn.com/Investing/CompanyFocus/5ReasonsGoldIsHeadedTo1500Dollars.aspx?page=all

An example of gold’s historic role as a safe haven asset is seen in the following data. The industry performance of Physical Gold Versus the S&P; 500 during eleven stock market declines of 15% or more in the Post-War period (since 1946).

Some exposure to gold should be included in all diversified portfolios. In the same way that every major Central Bank in the world continues to maintain huge reserves of gold bullion in order to help prevent systemic or monetary crisis, so too should private investors and institutions invest, save and own gold.

A good rule of thumb would be a minimum allocation of around 10% to gold and related gold-investments. The wise old Wall Street saying “Put ten percent of your money in gold and hope it doesn’t work” is particularly applicable in today’s fast changing and increasingly uncertain macroeconomic, financial and geopolitical world. Gold.ie

German Finance Ministry denies wanting to sell gold. Read more at-http://www.reuters.com/article/businessNews/idUSL2911176020080329

European central banks may reduce gold reserve sales as prices for the precious metal remain robust and the U.S. dollar weakens, a senior executive at the world’s biggest gold producer said Tuesday. “There is the potential for central bank gold sales to fall,” Jamie Sokalsky, Barrick Gold Corp. (ABX) chief financial officer, said at an investor conference in London.

Sokalsky noted that central banks did not sell their full allotment of gold in 2007.

“I think that is an indicator of some changed thinking,” he said. European central banks sold around 475 metric tons of gold in the 12 months to Sept. 26, less than the 500 tons allowed under a central bank gold agreement covering 16 European central banks, according to the World Gold Council.

Sokalsky said banks are beginning to “think twice about selling those reserves as easily as they did in the 1990s” when prices were lower. Reduced central bank sales would keep more gold off the market. Sokalsky and Barrick Chairman Peter Munk noted the central bank action as one of several factors that will support gold prices this year. Neither executive would forecast gold prices but Munk said there is a “greater likelihood for gold prices to go up than go down.” Dow Jones

SILVER

With further confirmation of extreme tightness and shortages in the retail silver bullion markets (particularly in smaller format 1 ounce and 10 ounce bars and coins) silver looks set to reach its nominal 1980 high of $50 per ounce at least in the coming months.

Oil has gone from $10 a barrel in 1999 to $110 this month and thus increased 11 fold. Silver was at $5.00 in 2001 and will likely far surpass even oil’s 11 fold increase in the coming years. Silver remains the investment opportunity of a lifetime and will protect investors from falling stock and property markets and the coming sharp slowdown in western economies.

The fundamental reasons for our very bullish outlook on silver is due to continuing and increasing global macroeconomic and geopolitical risks; silver’s historic role as money and a store of value; the declining and very small supply of silver; significant industrial demand and most importantly significant and massively increasing investment demand.

The silver market remains a tiny finite market (all of the above ground refined silver in the world is only worth at today’s prices roughly a miniscule $8.5 billion-500 million ounces X $17) and if even a fraction of the world’s increasingly skittish investment capital flows into the silver market prices will rise to multiples of the current price.

Gold Investments continue to believe that silver should surpass $25 in 2008, its non inflation adjusted high of $48.70 per ounce before 2012 and its inflation adjusted high (as many other commodities including oil already done) of some $130 per ounce in the next 5 to 8 years. These are conservative estimates. Gold.ie

Significance of Silver as an Investment. today most silver investors are not really investors in the traditional sense, they are people with knowledge of history and understanding. They know many important facts that most investors never will learn. Read full story at- http://news.silverseek.com/SilverInvestor/1206634357.php

You cannot borrow yourself rich – it might work short term but not forever.
Real savings must be in something of intrinsic value since all paper currencies eventually fail. This is a fact pure and simple, yet people believe that some power beyond them will be able to make it different this time.
Watering the milk (printing more “money” than goods or services) never works.
Spending beyond your means leads to bankruptcy whether individual, city, state, or even Government.
Printing your way out of this problem creates an even bigger problem, creating more credit that cannot be paid back will not solve the problem (study the Weimer Republic and their hyperinflation).
Eventually people will use their financial “survival” instinct and get rid of dollars by buying anything with lasting value, silver and gold top that list.
As more and more people catch on and move to protect themselves the paper price of both gold and silver move up to levels that most people at this point would find hard to believe. David Morgan

Silver Versus Gold, with Silver Updates. Read more at-http://www.kitco.com/ind/Lee/printerfriendly/mar282008.html

Howard Ruff on silver. The bull market in the metals has been distorted by futures buying and selling. But it will return to fundamentals, and, sooner or later, the actual buyers of the metal will be the dominant force in continuing to drive the bull market.

I’ve consistently advised you to look at declines like this as opportunities to buy more that we thought we would never see again. So my advice is still the same. Buy, buy, buy physical gold and silver. You won’t see many chances to buy it this cheaply again. Read more at-http://www.kitco.com/ind/Ruff/ruff_mar312008.html

Men Arrested for Stealing Silver from Kodak. Read more at-http://www.13wham.com/news/local/story.aspx?content_id=88141c2a-ce99-480f-a346-139f70c487b0

Another Look at the Bull Market in Commodities. At the end of each month, one of the first charts I turn to is the Commodity Research Bureau Index. Rather than looking at the “Current Index”, which is a relatively new index created a couple of years ago, I use the “Continuing Index” to provide a fairly consistent long-term picture of commodity prices. Here’s the monthly chart of the CRB Continuing Index from 1957 through March 2008.

The above chart is important. There have been dozens of reports the past couple of weeks that the bull market in commodities has ended. Those reports conflict with the message of the above chart. One can only reasonably conclude from any objective view of this chart that the bull market in commodities in still going strong.

The CRB Index did drop -8.7% in March, but that is after gaining 5.7% in January and a further 12.4% in February. What’s more, the CRB Index had risen in eight of the previous ten months ending February 2008. So after a run like that, a correction can be expected. But even after dropping in March, the CRB Index is still up 8.5% for the first three months of this year, which by any measure is a spectacular result.

No one will argue that commodities have come a long way since I first presented the above chart in my alert on November 11, 2003. But it would be incorrect I believe to say that the commodity bull market ends here. There is no evidence to make that case. The demand for commodities remains strong, while the supply of many commodities appears constrained. Also, commodity prices continue to rise because national currencies are losing purchasing power from inflation and other monetary debasement that result from government and central bank mismanagement.

If I am correct in assuming that the bull market in commodities still has a long way to go, then it also follows that the bull market in gold and silver are also far from over. That point of view is consistent with the following charts, both of which I have presented many times and should therefore be very familiar to the readers of these alerts.

Gold is up 9.7% year to date, and 38.2% for the past twelve months. Silver is up 16.7% year to date, and 29.0% for the past twelve months. By any measure, these are spectacular results, and they place gold and silver among the best performing asset classes. Meanwhile, the US Dollar Index has dropped -6.4% year to date and -13.4% over the past year, making it one of the worst performing asset classes.

There has not been any meaningful or fundamental change to take the dollar off its present path, which leads to the fiat currency graveyard. In the absence of that action, one can only assume that over time the dollar is going lower, and gold and silver are going higher. Therefore, continue to accumulate gold and silver, while minimizing your holdings of dollars, and for that matter, any national currency. The dollar is not alone; the purchasing power of all currencies is falling relative to gold and silver. James Turk

PLATINUM-PALLADIUM

-Palladium Market May Have Supply Deficit, Societe Generale Says. Palladium production will fall 65,000 ounces short of demand next year, the first deficit in at least five years, partly because jewelers and automakers will switch from more expensive platinum, Societe Generale SA said. That compares with a surplus of 810,000 ounces this year and 691,000 last year, Societe Generale analysts including London- based Stephen Briggs wrote in a report e-mailed March 28.

Palladium’s price forecast for this year was raised by a third to $465 an ounce, up from $350 forecast in January when it estimated a palladium surplus of 135,000 ounces for 2009. Price forecasts for gold, platinum and silver were also raised. Gold will average $1,025 an ounce this year, up from $800 forecast in January, and silver $19.20 an ounce from $13.75. Platinum will average $2,100 an ounce, up from $1,450 an ounce.

“Platinum demand is expected to come under pressure in the jewelry market, partly as a result of a fresh marketing program for palladium” led by the world’s biggest palladium miner, Russia’s OAO GMK Norilsk Nickel, the Societe Generale analysts wrote. Palladium may also benefit as automakers switch from platinum for use in diesel-fueled cars, the report said. Palladium has climbed 21 percent this year, lagging a 33 percent jump in the price of platinum.

Both metals can be substituted in applications including jewelry and auto catalysts to reduce vehicle emissions. Motor companies will increase palladium use by 4.1 percent next year while lowering their platinum consumption by 3.9 percent, according to the report. Growth in jewelry consumption will be 6.3 percent for platinum and 5 percent for palladium. Bloomberg

OIL-COMMODITIES

-Clinton, Obama take on Big Oil. Read full story at-http://www.cnn.com/2008/POLITICS/04/01/dems.oil/?iref=mpstoryview

Story Highlights
Sens. Barack Obama and Hillary Clinton pitch energy ideas to Pennsylvania voters
Clinton: Bush is “too busy” with the Saudis to care about American truck drivers
Clinton calls for oil companies to contribute to $50 billion alternative energy fund
Obama wants a $150 billion investment over 10 years in clean energy

-Don’t let tar sand oil slip away. Read more at-http://www.freep.com/apps/pbcs.dll/article?AID=/20080331/OPINION02/803310307/1070

-Renewed Oil Exploration Coming Up Short. Read more at-http://www.321energy.com/editorials/casey/casey032808.html?print=on

-The Mega Commodity Move: Why it’s Happening. Mary Anne Aden and Pamela Aden-Read more at-http://news.goldseek.com/AdenResearch/1206889200.php

IMF CUTS GLOBAL FORECAST ON WORST CRISIS SINCE 1930S

-The International Monetary Fund cut its forecast for global growth this year and said there’s a 25 percent chance of a world recession, citing the worst financial crisis in the U.S. since the Great Depression. The world economy will expand 3.7 percent in 2008, the slowest pace since 2002, according to a document obtained by Bloomberg News at a meeting of Southeast Asian deputy finance ministers and central bankers in Da Nang, Vietnam. In January the fund projected growth of 4.1 percent.

The reduction is the third by the Washington-based lender since last July, when it predicted the world economy would cope with the U.S. credit squeeze and grow 5.2 percent this year. Central banks will need to conduct policy “as flexibly” as the circumstances warrant, the statement said, adding that the European Central Bank has room to lower borrowing costs.

“The financial shock that originated in the U.S. subprime mortgage market in August 2007 has spread quickly, and in unanticipated ways, to inflict extensive damage on markets and institutions at the core of the financial system,” the statement said. “The global expansion is losing momentum in the face of what has become the largest financial crisis in the United States since the Great Depression.” Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aM9zsAt8cFbs&refer;=home

U.S. RECESSION

-CBS Poll: Views on Economy At All-Time Low. Read more at-http://www.cbsnews.com/stories/2008/04/03/opinion/polls/main3992628.shtml

-Bernanke Says U.S. Economy May Slip Into a Recession. Federal Reserve Chairman Ben S. Bernanke acknowledged for the first time that a U.S. recession is possible as homebuilding weakens, unemployment increases and consumer spending slumps. “It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly,” Bernanke said in testimony to Congress’s Joint Economic Committee today.

He also told lawmakers the Fed’s agreement to provide an emergency loan to Bear Stearns Cos. followed a March 13 warning by the company it “would have to file for Chapter 11 bankruptcy the next day.” Bernanke, making his first extensive public comments since the Fed’s decisions two weeks ago to back the takeover of Bear Stearns and lower interest rates by 0.75 percentage point, is trying to fend off criticism of the rescue while aiming to prevent a deeper economic contraction.

While the Fed expects the economy to return to its long-term growth pace in 2009, “in light of the recent turbulence in financial markets, the uncertainty attending this forecast is quite high and the risks remain to the downside,” he said. “This is a much more pessimistic assessment of the economy than what the Fed had three months ago or six months ago,” said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, who previously worked as a senior economist in Congress. “Certainly, the Fed and the capital markets have been surprised the economy has slowed so quickly.” Read more at-http://www.bloomberg.com/apps/news?
pid=20601087&sid;=amnGP1IORPRY&refer;=home

-Individual bankruptcy filings up 27%. American Bankruptcy Institute says first-quarter filings rose as households creak under heavy debt load. Read more at-

http://money.cnn.com/2008/04/02/news/economy/bankruptcy/index.htm?postversion=2008040212

-Late Payments on Consumer Loans Highest Since 1992, ABA Says. Consumers fell behind on car, credit-card and home-equity loans at the highest level in 15 years during the fourth quarter, another sign the U.S. economy is slowing, according to an American Bankers Association survey. Payments at least 30 days past due increased across all eight categories of loans tracked, the Washington-based group said today in a statement.

Late loans climbed 21 basis points to 2.65 percent of all accounts in a consumer-loan index created by the group. “The rise in consumer credit delinquencies is consistent with a rapidly slowing economy,” ABA chief economist James Chessen said in the statement. “Stress in the housing market still dominates the story, but it’s a broader tale.” Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aLveCTaPPrBI&refer;=home

-U.S. Initial Jobless Claims Rose 38,000 to 407,000. Read more at-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aj_pHDjAoGxs&refer;=home

-The underemployment rate is rising. Don’t be fooled by the relatively low 4.8% unemployment rate. Other measures, such as the number of people only working part-time, are a sign of recession. Read more at-http://money.cnn.com/2008/04/02/news/economy/jobs_outlook/index.htm?postversion=2008040208

U.K. RECESSION

-BOE’s King Might Be Sleepwalking Into Recession. Read more at-http://www.bloomberg.com/apps/news?pid=20601039&sid;=aD237XXZ.Hok&refer;=home

BANKS FACE BIGGEST CRISIS IN 30 YEARS

-Banks Face Biggest Crisis in 30 Years, Report Shows. Read more at-

http://www.bloomberg.com/apps/news?pid=20601103&sid;=atzA1IMO53LU&refer;=us

-Banks write down billions. Deutsche Bank, UBS, Lehman Bros. and Thornburg announce writedowns to boost liquidity amid credit crisis.

http://money.cnn.com/2008/04/01/news/companies/banks_liquidity.ap/index.htm?postversion=2008040111

-Banking industry to lose 200,000 jobs. Financial research firm says cuts will appear over 12 to 18 months as subprime crisis hits other areas of the banking industry. Read more at-

http://money.cnn.com/2008/04/01/news/companies/banking_jobs.ap/index.htm?postversion=2008040107

-US credit crunch hits education as banks abandon student loans. Read more at-http://business.timesonline.co.uk/tol/business/economics/article3649021.ece

BRACE FOR $1 TRILLION WRITEDOWN

-Brace for $1 Trillion Writedown of ‘Yertle the Turtle’ Debt. Be it ever so devalued, $1 trillion is a lot of dough. Read more at-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aHCnscodO1s0 or http://www.usatoday.com/money/books/reviews/2008-03-30-trillion-dollar-meltdown_N.htm?csp=34

WORLD WIDE FINANCIAL CRISIS

-Paulson Backs Regulatory Overhaul, Broader Fed Role. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aJmElwyOABbI&refer;=home

-Analyst slams Paulson plan. Richard Bove says the Treasury’s regulation blueprint offers no help for current economic turmoil and is a ‘great disappointment.’ Read more at-

http://money.cnn.com/2008/04/01/news/economy/bove_paulson.ap/index.htm

-UBS Says Ospel Resigns After Writedowns Lead to Loss. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a5gVkKVdPk2o&refer;=home

-In its advertising, UBS tells clients “it’s you and us,” but on Friday it told investors “you’re on your own.” Read more at-http://www.forbes.com/2008/03/28/ubs-auction-rates-markets-equity-cx_vr_0328markets32_print.html

-Deutsche Bank AG, Germany’s biggest bank, will write down 2.5 billion euros ($3.9 billion) of loans and asset-backed securities and said markets are deteriorating. Read more at-

http://www.bloomberg.com/apps/news?pid=20601087&sid;=aDMJxmhhc3Ug&refer;=home

-Muni Losses May Put Taxpayers on Hook for $7 Billion. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ay5nn_yu4ibs&refer;=home

-Traders in London’s financial district have seen their salaries and bonus payments drop as much as 40 percent amid a worldwide tightening of credit, according to recruitment company Napier Scott Executive Search Ltd. Read full story at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aCxqPE5zJxIk&refer;=home

U.S. DOLLAR

-Dollar Posts Biggest Quarterly Loss Against Euro Since 2004. Read more at-http://www.bloomberg.com/apps/news?pid=20601083&sid;=aLiDIL6DRSiI&refer;=currency

-Will Uncle Sam let the dollar collapse? Read more at-http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid;=A1YourView&xml;=/money/2008/03/30/ccliam130.xml

-Weak dollar not at odds with policy ex-US official. Read more at-http://in.reuters.com/article/asiaCompanyAndMarkets/idINHKG3018120080331

-The U.S. Dollar & Gravity’s Pull. Read more at-http://www.resourceinvestor.com/pebble.asp?relid=41633

-The Dollar and the Credit Crunch. Read more at-http://online.wsj.com/article/SB120692677175575901.html?mod=rss_opinion_main

-Chinese exporters shun flagging dollar. Read more at-

http://www.ft.com/cms/s/0/aac6859e-fc35-11dc-9229-000077b07658.html?nclick_check=1

-S Korea pension fund shuns US debt. Read full story at-http://www.ft.com/cms/s/0/6dcf5f86-fb67-11dc-8c3e-000077b07658.html

-Arabs’ Dollar Doldrums Fail to Shake Central Bankers. Read more at-

http://www.bloomberg.com/apps/news?pid=20601109&sid;=azFsZgo_uH1I&refer;=home

INTEREST RATES-INFLATION

-Weber, Stark Say ECB Will Raise Rates If Necessary. Read more at-http://www.bloomberg.com/apps/news?pid=20601085&sid;=aRkF5svGgTf0&refer;=europe

-Europe Inflation Accelerates to 3.5%, Sentiment Drops. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aR2xZcBWBfdA&refer;=worldwide

STOCK MARKETS

-Bear market rallies only delay day of reckoning. Read more at-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/31/ccview131.xml

-”Don’t Be Cruel” Stocks Show Short Covering Deceives. Read more at-http://www.bloomberg.com/apps/news?pid=20601213&sid;=arjgRb0Whxcw&refer;=home

-China Stocks Have Worst Quarterly Drop; Vanke, Baoshan Decline. China stocks fell, with the benchmark index completing the biggest quarterly decline on record, as speculation waned that the government will step in to bolster the nation’s shares. Read more at-http://www.bloomberg.com/apps/news?pid=20601089&sid;=axdVFdD5FaZ4&refer;=china

-Australia Stocks Have Worst Quarter in 20 Years as Rates Rise. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=agATsOWwDpOU&refer;=home

-Soros Sees Additional Market Declines After Temporary Reprieve. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ajkPSW_domB4&refer;=home

-Australian Regulator Investigates Collapse of Opes. Read more at-

http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aMu9zMJw.JNQ or http://www.theaustralian.news.com.au/story/0,25197,23457511-601,00.html

MORE BEAR STEARNS FALLOUT

-Fed Aided Bear Stearns as Firm Faced Chapter 11, Bernanke Says. Read more at-

http://www.bloomberg.com/apps/news?pid=20601087&sid;=a7coicThgaEE&refer;=home

-Bear May Have Survived If Fed Acted Sooner, CEO Says. Bear Stearns Cos. Chief Executive Officer Alan Schwartz said the fifth-largest U.S. securities firm may have survived if the Federal Reserve acted sooner to lend money directly to investment banks. “It is highly, highly unlikely in my personal opinion that we would be in the situation we find ourselves in today” had the Fed provided financing earlier, Schwartz told members of the Senate Banking Committee today.

The Fed agreed to provide emergency funding to New York- based Bear Stearns on March 14 after a run on the company put it on the verge of bankruptcy. JPMorgan Chase & Co. has agreed to buy Bear Stearns for $10 a share, a fraction of its value earlier last month. Following Bear Stearns’s near collapse, The Fed opened up borrowing to securities firms for the first time since the Great Depression. The move, aimed at preventing a meltdown in financial markets, should be made permanent, Schwartz said. Bloomberg

REAL ESTATE

-Manhattan Condo, Co-op Sales Decline Most in 18 Years. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aBVi.IJW8Aq4&refer;=home or

http://www.bloomberg.com/apps/news?pid=20601109&sid;=ablSPpNgcHsY&refer;=home

-Condo Meltdown-Developer halts project, faces millions in liens. Read more at-http://www.dailybusinessreview.com/news.html?news_id=47884

-Credit crunch: British house values fall £7,000 since October. Read more at-http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article3642753.ece

-The US housing slump has arrived at the Hamptons, summer playground of the Manhattan elite. Read more at-http://us.ft.com/ftgateway/superpage.ft?news_id=fto033120082201006468

-Vacation Home Sales and Prices Tumble as Buyers Wait. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aWbAifuHe.DM&refer;=home

-Some homes worth less than their copper pipes. Read more at-http://www.reuters.com/article/newsOne/idUSN2527885420080401?sp=true

-Too Many Dogs and Not Enough Bones. Read more at-http://thehousingbubbleblog.com/?p=4340

-The Unwinding Of This Housing Boom. Read more at-http://thehousingbubbleblog.com/?p=4336

-It’s A Market-Driven Issue In California. Read more at-http://thehousingbubbleblog.com/?p=4342

FORECLOSURES-MORTGAGES

-Paulson Says Treasury `Flexible’ on Housing Measures. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aO9bYYGJu3Ww&refer;=home

-Angry Homeowners Wreak Havoc on Foreclosure Properties. Watch video here-

http://blogs.wsj.com/developments/2008/03/28/angry-homeowners-wreak-havoc-on-foreclosure-properties/?mod=WSJBlog

-59% of Los Angles Houses for Sale Are Foreclosures. Very few are in the newspapers because realtors are afraid of effect on market. Read more at-

http://patrick.net/housing/contrib/foreclosures_percent.html

-West Palm Beach to open foreclosure help center. The South Florida city is planning to start a mortgage assistance office aimed at helping desperate homeowners. Read more at-

http://money.cnn.com/2008/03/31/real_estate/West_Palm.ap/index.htm

-As owners default, lenders move in. Bank ownership of foreclosed homes doubles, and it’s changing the face of U.S. neighborhoods. Read more at-

http://www.chicagotribune.com/business/chi-foreclosure_monmar31,0,1221355.story

-Careers vanish after subprime ‘free fall’. Kent and Mysti Cope were well-paid executives at subprime lenders who never thought the industry could disappear overnight. Now they’re just trying to get by. Read more at-http://money.cnn.com/2008/03/31/news/economy/copes/index.htm

-Chase mortgage memo pushes ‘Cheats & Tricks’. The bank says it never backed the strategies, which detail how to get an iffy loan approved. Read more at-

http://www.oregonlive.com/printer/printer.ssf?/base/business/120658650589950.xml&coll;=7&thispage;=1

-New mortgage applications fall 29%. Mortgage Bankers Association’s survey reveals that application volume declined in latest week as rates for fixed-rate loans increased. Read more at-http://money.cnn.com/2008/04/02/real_estate/mortgage_applications.ap/index.htm?postversion=2008040207

-Foreclosure Machine Thrives on Woes. Read more at-http://www.nytimes.com/2008/03/30/business/30mills.html?_r=2&ei;=5089&en;=29c59115ede63768&ex;=1364616000&oref;=slogin&partner;=rssyahoo&emc;=rss&pagewanted;=print

GEOPOLITICAL

-Prime Minister Gordon Brown shelved a plan to withdraw more British soldiers from Iraq after violence flared in Basra, where the U.K. has responsibility for security. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ay7iO5nD2ZLA&refer;=home

-The U.S. moved closer to building a missile-defense system in eastern Europe, concluding an accord to base a radar station in the Czech Republic and winning NATO’s endorsement for the project. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aXDWYo_K.kLI&refer;=home

-Iran Incites Cold War With U.S. in Lebanon Stalemate. Read more at-http://www.bloomberg.com/apps/news?p
id=20601087&sid;=a6MDE1AyS3.U&refer;=home

IMF still needs OK from Congress; says it won’t add to official sales – http://www.gata.org/node/6210

The GoldBugg Report – April 8
Posted by Worldwide Precious Metals on Tuesday, April 8, 2008

The GoldBugg Report – April 1

April 1, 2008

-“The U.S. economy will get much worse in 2008, making gold the premier asset of choice, but not the best performing precious metal. That honor will go to silver, which I expect will clear $30 in 2008.” James Turk

We agree with Turk that silver will shine brighter in 2008 for a number of reasons. Here are some of the most important:

1. Supply and Demand. Silver, quite simply, has better supply and demand characteristics than gold. For 18 straight years now, we’ve consumed more silver above ground than we’ve been able to extract from below ground (compared to only 4-5 years for gold). And the rate at which industry finds new, unique uses for the white metal is staggering compared to gold.

2. Emerging Markets. Despite fears to the contrary, we anticipate that industrial demand for silver will continue to be robust should the United States slip into recession this year or next. That’s because the true driver toward higher commodity prices, in general, is the emerging markets of China, India, Russia and Eastern Europe. China’s expansion alone can be compared to the industrial explosions that took place in Japan in the 1960s and the United States at the turn of the last millennium.

3. Market Capitalization. The silver market is much less capitalized than the gold market. Less dollars trade daily on the silver exchange than do on the gold exchange. As a result, every dollar spent on silver will have a greater impact on the silver market than the dollars spent on gold will have on the gold market. To visualize this concept, consider the relative impact of a rock tossed into a pond versus the same rock being tossed into a puddle. Michael Checkan

On the brink of disaster
By Allan Sloan, senior editor at large
http://money.cnn.com/2008/03/28/news/economy/disaster_sloan.fortune/index2.htm

Central bank currency riggers buy dollars sold by central bank investment arms
http://www.gata.org/node/6189

Treasury’s Plan Would Give Fed Wide New Power
http://www.nytimes.com/2008/03/29/business/29regulate.html?_r=2&pagewanted;=2&hp;&oref;=slogin&oref;=slogin

-Hedge funds and other speculative institutional players with short term horizons likely exacerbated the recent sell off in the futures market as they continue to focus on short term profits rather than the long term fundamentals of the gold and precious metal markets. Mindless black box computer models with no concept of intrinsic value and which automatically sell on breaching certain support levels have definitely intensified the sell off.

Also the huge commercial shorts were suffering billions in losses after gold and silver’s recent surge in price and there can be little doubt that it was in their interest that there be a sharp sell off in order that they stop hemorrhaging on their short positions and in order to allow them to cover and buy back their short positions at far lower levels. This will likely be seen in the coming days.

This is a speculative futures driven sell off and physical buyers of gold and silver for diversification benefits have not been selling indeed many market timers with medium to long term outlooks are now coming into the marketplace and buying into the sharp sell off. It would be wise not to be seduced by short term movements in markets and continue to focus on the all important macroeconomic ‘big picture’ which remains poor and extremely uncertain. Gold.ie

-“Today’s prices for silver remind me of a beat up painting that someone buys at a garage sale or flea market for a nothing price, only to discover later that he holds a valuable masterpiece.” Israel Friedman

-The toxic mix of stagflation and a growing solvency and systemic crisis means that risk aversion should remain paramount for investors. Gold and silver should be a cornerstone of all portfolios in the current unprecedented macroeconomic climate. Cash is not a safe haven in an economic environment threatened by systemic risk and significant inflationary risk. Gold.ie

-Bank customer: “What’s the difference between a recession and a depression?” Bank manager: “In a recession, you lose your job. In a depression, I lose mine.” When the going gets tough, banks yelp for nanny-Read full story at-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/26/ccjeff126.xml

-Is there still time to get into the precious metals? Yes, but few will be willing to climb onto the bull’s back, because the mainstream will be calling gold and silver dead. The Ultimate Trade Simply, Buy low hold on through all the dips Sell High! David Morgan-Read more at-http://news.silverseek.com/SilverInvestor/1206081753.php

- I don’t believe we’ve seen the phase of frantic global gold-buying yet. That phase, I’m convinced, lies ahead. The gold bull market should wind up with some eye-opening fireworks. It should end up in a state of speculative fever. Or as my old-timer subscribers remember, "There’s no fever like gold fever." Believe me, we haven’t seen the gold-fever yet at least not during this bull market. Richard Russell

-“Gold is a great portfolio diversifier. An allocation to gold or gold shares should be a welcome addition for investors who believe that there are still considerable risks to their other more mainstream investments.” Joseph M. Foster, portfolio manager for the Van Eck International Investors Gold Fund

-“I believe the U.S. is heading into the worst recession in many years and one that could possibly spread throughout the globe. The magnitude of the housing meltdown and the unprecedented failure of the credit markets make it unavoidable. I believe these problems will be supportive of gold for the many years it will take to return the markets to some form of normalcy. It’s an environment in which gold will thrive.” Joseph M. Foster, portfolio manager for the Van Eck International Investors Gold Fund

-“I don’t think this gold bull market will end until there is a material change in the way governments manage the fiat monetary system. -Read full interview at-http://www.resourceinvestor.com/pebble.asp?relid=41378

-Despite the usual misguided and uninformed commentary there is no change in the long term fundamentals driving the gold market. Some of the superficial commentary is by those who came late and are recent converts to the precious metals markets. Many did not forecast or predict gold above $1,000 (nor did they predict oil over $100 or the dollar at $1.60 to the euro) and now they incorrectly assert that the ‘bubble’ is burst. This is a dangerous and deluded assertion especially as we are in the midst and likely the early stages of the worst financial crisis since the Wall Street Crash of 1929 and the Great Depression.

With the financial crisis set to continue, this is another short term healthy correction in gold’s bull market. While the severity of the sell off will have made newcomers to the market understandably nervous, it was not unexpected given the extent of gold’s surge in recent weeks. Indeed despite this latest sharp sell off gold remains up more than 14% so far this year unlike all major stock markets which remain down and some significantly.

Gold below $950 and silver below $18 are table thumping buys and investors and diversifiers should use this short term correction to increase allocations to gold and silver. Silver remains extremely undervalued (especially from an historical inflation adjusted point of view and the crucial supply demand point of view) and will likely outperform all other. Rumours of supply shortages are rampant on the internet and in the financial mainstream. While the rumours are exaggerated there is some truth to them.

Silver in a smaller bar format (1 oz and 10 oz bars) is extremely tight and some of the larger suppliers and wholesalers have sold out. Silver bags, silver 100 oz and 1000 oz bars and silver eagle coins and maple coins remain available for delivery from wholesalers. There certainly is tightness in the marketplace and should the supply issues being seen in smaller silver bars spread than silver could quickly soar to new record highs in the coming weeks and challenge the 1980 record high of $50.00 per ounce in the coming months. Gold.ie

-Unfortunately all the problems we have been warning about for years are upon us. That is the bad news. The good news is you all own gold and silver related assets and they will allow you to offset the losses that have been inflected on you by the collapse of our economy and our financial system. We assume as well, except for your mortgage and vehicles that you are out of debt. The times we are entering into will be worse than you have already imagined.

The game is on whether we like it or not. The Federal Reserve and the US Treasury are attempting to hold the financial system together. Thus far they have been unsuccessful. In fact, the problems are worse than they were eight months ago and they are getting further out of control. The dollar has been abandoned in order to save Wall Street and the bankers, who caused these problems in the first place.

The professionals on Wall Street finally realize that it’s the “Working Group on Financial Markets” that is providing the only support holding the stock market up. That is why so many are now switching into the gold, silver and commodities markets. They finally see the implosion and the inevitability of what they face. Bob Chapman

-10 of the Most Important Economic Events of the Last 10 Years. Read more at-http://www.chycho.com/?q=node/1638

GOLD

-Gold has potential to double: UBS. Gold may have eased back from last week’s record high of US$1,030.80 an ounce, but the yellow metal is well positioned for growth and could potentially double in price, Tony Lesiak, analyst at UBS, says in a note to investors.

Mr. Lesiak says gold appears relatively cheap compared to oil on a historical basis, holding the potential for gold to more than double to levels where it will regain its long term average relationship. However, he said the price of gold was hard to call at present and prices may not move much in the coming weeks.

“In the near-term, fundamental value will not mean very much: positioning and the need to raise liquidity will determine what happens to precious metals and indeed other asset classes,” Mr. Lesiak says. “This environment is one where gold should do well, although de-leveraging may prevent the metal from moving higher, it should certainly outperform other metals and has a genuine chance of trading much higher should the dollar weaken further and de-leveraging become overwhelmed by safe haven buying.” Nationalpost.com

-Gold’s support is now between $900 and $906 and below that strong support is at previous resistance at the 1980 record nominal high of $860. Resistance is at the recent new record nominal high of $1030.80 and $1000. Gold Investments continue to see gold reaching at least $1,200 per ounce in 2008. Gold.ie

-The evidence continues to mount that gold’s spectacular plunge in the past week was a mere correction in an ongoing bull market. Read full story at-http://www.marketwatch.com/news/story/contrarians-continue-bullish-gold/story.aspx?guid=%7B1987E425%2D4997%2D4A1D%2DBCB3%2D1A6D99E48255%7D

-BlackRock says gold record high may be challenged. Read more at-http://www.reuters.com/article/idUSNOA62770720080326

-10 Reasons Why Gold Has Farther to Run. Read more at-http://seekingalpha.com/article/69340-10-reasons-why-gold-has-farther-to-run

-The $95 price drop in gold a week ago is therefore nothing short of a gift. An unparalleled buying opportunity that will quickly be acted on, and one of a likely good number, as the volatility in the commodities, debt, and equities markets is going to stay high for the foreseeable future. Next stop: $2,000 gold. James West

-People’s Bank of China and Central Bank Reserve Diversification. The Chinese central bank is on record as saying that they are going to increase their allocation to gold. They are already diversifying their huge foreign-exchange reserves into what they have termed ’strategic’ resources and metals including gold bullion. Last April The Wall Street Journal reported that People’s Bank of China Vice Governor Xiang Junbo reiterated this intention. So this is no idle speculation rather it is real demand and potentially even greater real demand.

China, the U.S.’ largest creditor may not take kindly to western and U.S. criticism of China’s actions in Tibet and could at the very least sell some of their massive dollar holdings which would result in an even greater fall in the value of the dollar. Some Chinese economists are urging Beijing to quadruple its gold reserves to 2,500 tonnes from the current 600 tonnes (The U.S. Federal Reserve is believed to have 8,500 tonnes).

Tan Yaling, an economist at the Bank of China, backed the call for higher gold reserves to "help the government prevent risks and handle emergencies in case of future possible turbulence in the international political and economic situation". Interestingly, a mere 5% Chinese allocation to gold would be very small in the light of the fact that Greece has 80% of its reserves by value in gold, Portugal 79%, Italy 66%, Germany 63%, Netherlands 56% and France 56%.

Some of this gold may have already been leased onto the market. Thirty years ago China held 95% of its foreign reserves in gold. Today, China’s gold reserve only accounts for 1.3% of total reserves. A figure well below the average minimum 3%-5% adopted in many other countries. China with an estimated gold reserve of 600 tonnes has a fraction of that believed held in the U.S. with some 8,500 tonnes, the world’s largest holder.

This Chinese demand is not solely governmental and there is a significant increase in private demand for jewellery and investment. It is often forgotten that the Chinese gold market was only opened in 2002 and that was the first time in over 50 years (since 1949) that Chinese individuals could buy gold in jewellery or bullion format. With the huge increase in volatility in the Chinese stock market and fears of a crash, many of their huge and growing middle classes and nearly some 500,000 plus millionaires (in 2004 Merrill Lynch & Co estimated that there were more than 300,000 mainland Chinese with a net worth over $1 million, excluding property) will diversify partly into gold.

The global credit crisis will likely lead to many western central banks curtailing gold sales and indeed likely becoming buyers again under to create faith in paper fiat currencies. Meanwhile there is increasing demand from the Chinese central bank and also what are termed "tier 2" central banks: Russia, Argentina, South Africa and others. Gold.ie

-Doug Casey: “Gold is Going to the Moon.” Read more at-http://news.goldseek.com/DougCasey/1206546971.php

-Ron Paul urges gold standard, abolition of Fed on CNBC. Watch video here-http://news.goldseek.com/RonPaul/1206397102.php

SILVER

-Gold Investments continue to see silver reaching $25 per ounce in 2008 especially in the light of the incredibly and unprecedented supply demand imbalance in silver. All the above ground refined silver in the world is only worth at today’s prices roughly a miniscule $9 billion (500 million ounces X $18). Roughly what the Federal Reserve is printing on a daily basis in order to rescue the world’s financial system.

Any one of hundreds of billionaires, hedge funds or sovereign wealth funds could decide to take a significant position in silver or even corner the silver market as the Hunt brothers did in 1979-1980. Such an action which appears increasingly likely would result in a surge in the price of silver that would make that seen in the 1970s very tame in comparison. This would especially be the case if those cornering the silver market did not make the same mistake as the Hunt brothers. They failed to take delivery of their silver bullion and amassed a huge stake in the leveraged futures marketplace.

Outright ownership of physical bullion by buying ‘off exchange’ and taking delivery of all silver on expiration of futures would eliminate this risk. There is further confirmation of shortages of refined silver coin and bar products in the U.S. bullion marketplace. Not only are 1 ounce and 10 ounce silver bars not available in many wholesalers and large dealers but there are also issues with regard to silver eagles and silver maples with the mints being out of stock and with there being delays of some 3 to 4 weeks prior to delivery. Gold.ie

-I did my Silver Bullion Dealer survey, which I have not done for some time. I personally phone most of the major physical dealers in the U.S. and ask how the orders for silver bars, rounds, and bags are doing? What I found was that most dealers reported that February was the biggest month they have had for physical silver in a very long time, additionally it was almost all buying very few sellers. We even spoke to a few dealers that were having trouble filling large orders. I want to remain objective here. We do not find this to be the case all over the country. David Morgan

-A shortage of another kind presented itself: Physical silver the metal itself was reportedly becoming hard to find. By midweek, online precious-metal discussion groups were plastered with reports of neighborhood coin shops that had little or no supply of silver bullion.

Reports soon followed that regional and national bullion distributors themselves had run dry. Citing overwhelming demand, the American Precious Metals Exchange had frozen its online ordering platform, while other major bullion dealers are reporting no stock or delivery delays. An apparent disconnect has emerged between the spot price for silver and its physical availability within the marketplace.

Fundamentally speaking, this is a noteworthy development. As economist David Morgan points out in his book Get the Skinny on Silver Investing, the entire supply of above-ground silver bullion worldwide was estimated in 2006 at about 500 million ounces. Read full story at-http://www.fool.com/investing/general/2008/03/24/dont-miss-the-silver-lining.aspx

-March 19-Guess who is running low on Silver! Jason Hommel-Read more at-http://news.silverseek.com/GoldIsMoney/1205981676.php

-March 20-Silver Shortage: 19 dealers reported "Sold Out." You know me, I don’t send out two emails in one day, so this must be important. Since my email earlier tonight, where I reported that 5-6 major silver dealers (Amark, Tulving, 2 in Vancouver, my local dealer, NWT Mint) are "out of inventory", 13 more reports came in, saying that the dealers were out of silver inventory.

Some of these names are big names in the business, Scotia bank, the Perth Mint in Australia, CNI Numismatics in LA, APMEX says they have some items, but are looking to buy. If there are any coin dealers or bullion shops that have an inventory, in stock, of more than 100, 100 oz. bars, let me know, and I’ll give you FREE Advertising within 24 hours in my next newsletter. Jason Hommel-Read full story at-http://news.silverseek.com/GoldIsMoney/1205995646.php

-March 21 2008-Silver Shortage gets worse. Three more major silver dealers are reported to be out of silver today: The U.S. Mint, Kitco, and Monex. This, on top of the major dealers yesterday, Amark, Perth Mint, CNI Numismatics, and APMEX, all reported sold out. Further, nearly all of Canada is reported to be out of silver, from Vancouver to Toronto. Jason Hommel-Read more at-http://news.silverseek.com/GoldIsMoney/1206119500.php

-March 25-Update of Silver Shortages. Jason Hommel-Read full story here-http://news.silverseek.com/GoldIsMoney/1206460150.php

-Gold and Silver updates-Clive Maund-Read more at-http://www.321gold.com/editorials/maund/maund032408.html

-Got Gold Report COMEX Commercials Surprised by Gold, Silver Swoon? Read more at-http://www.resourceinvestor.com/pebble.asp?relid=41471

PLATINUM-PALLADIUM

-The investment case for platinum and palladium. Read full story at-http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=49681&sn;=Detail

COMMODITIES-NATURAL GAS

-An outbreak of sharp eyespot disease (SED), which affects cereals, is threatening 72.46 million mu (4.83 million hectares) of wheat in China’s major producing regions, according to local agricultural authorities. SED might erode the wheat output by 10% to 20%, while a more serious epidemic could cut output by as much as 50%, officials from the Henan Oil and Grain Product Quality Inspection Center told Interfax. "As it is still the early growth stage for wheat, the impact on output might be reduced, although wheat quality may be downgraded," an official from the center said. Read more at-http://www.resourceinvestor.com/pebble.asp?relid=41387

-Commodities Attracting `Enormous’ Investments, JPMorgan Says. Read more at-http://www.bloomberg.com/apps/news?pid=20601012&sid;=aHe6yOZiFFjo&refer;=commodities

-Commodities bust? Don’t count on it. Read more at-http://biz.yahoo.com/rb/080320/markets_commodities.html?printer=1

OIL-GASOLINE

- Iraq Pipeline Fire Curbs Supply to Export Terminal. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=amhqN5Hs9kc0&refer;=home

-Oil Sands Attracting Interest Due to High Crude Prices and Reserve Concerns. Read more at-http://www.resourceinvestor.com/pebble.asp?relid=41415

-Oil demand by China rose 6.2 percent in February, picking up the pace from a sluggish January as state-owned companies increased imports to ensure plentiful domestic supplies before the Olympics, according to data released Monday. Read more at-http://www.iht.com/articles/2008/03/24/business/chioil.php

-Record-High Gasoline Never a Better Buy, Say Citigroup, FBR. Read more at-http://www.irnnews.com/news.asp?action=print&article;=20902

-Top scientists warn against rush to biofuel. Read more at-http://www.guardian.co.uk/environment/2008/mar/25/biofuels.energy1/print

INFLATION

-Medvedev Says Inflation Is Price of Being World Power. Russian President-elect Dmitry Medvedev said inflation, which accelerated at the fastest pace in 31 months in February, is a result of the country’s success at developing an open global economy. “Inflation remains a rather serious issue for Russia,” Medvedev said in a transcript of an interview with the Financial Times posted on his Web site today. “This is the price that we are essentially paying for our presence in the club of world economic powers.” Read more at-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aWcDP5OySNOE&refer;=home

WORLDWIDE CREDIT CRISIS

-Democrat Barack Obama said the government must overhaul the rules governing banks and other financial institutions in the wake of a collapse in the subprime mortgage market that has shaken confidence in the U.S. economy. Read full story at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aXyotbCavFtc&refer;=home

-Fed auctions another $50 billion. The eighth sale of short-term loans designed to inject liquidity into the banking system brings the total to $260 billion since December. Read more at-
http://money.cnn.com/2008/03/25/news/bc.na.fin.us.fed.credit.ap/index.htm

-Big Wall Street investment companies are taking advantage of the Federal Reserve’s unprecedented offer to secure emergency loans, the central bank reported Thursday. Those firms averaged $32.9 billion in daily borrowing over the past week from the new lending facility, compared with $13.4 billion the previous week. The program, which began last Monday, is part of the Fed’s effort to aid the financial system. On Wednesday alone, lending reached $37 billion. Read more at-http://apnews.myway.com/article/20080327/D8VM0BPO1.html

-FDIC adds 140 workers to bank-failure division. Federal regulators will increase by 60% the number of workers who handle bank failures. Read full story at-
http://money.cnn.com/2008/03/25/news/economy/bc.na.fin.us.bankfailur.ap/index.htm

-Equity Loans as Next Round in Credit Crisis. Little by little, millions of Americans surrendered equity in their homes in recent years. Lulled by good times, they borrowed sometimes heavily against the roofs over their heads. Now the bill is coming due.

As the housing market spirals downward, home equity loans, which turn home sweet home into cash sweet cash, are becoming the next flash point in the mortgage crisis. Americans owe a staggering $1.1 trillion on home equity loans and banks are increasingly worried they may not get some of that money back. Read more at-http://www.nytimes.com/2008/03/27/business/27loan.html?ei=5065&en;=9f7a9c9b8785d2ff&ex;=1207281600&partner;=MYWAY&pagewanted;=print

-What Created This Monster? Like Noah building his ark as thunderheads gathered, Bill Gross has spent the last two years anticipating the flood that swamped Bear Stearns about 10 days ago. As manager of the world’s biggest bond fund and custodian of nearly a trillion dollars in assets, Mr. Gross amassed a cash hoard of $50 billion in case trading partners suddenly demanded payment from his firm, Pimco.

“Bear Stearns has made it obvious that things have gone too far,” says Mr. Gross, who plans to use some of his cash to bargain-shop. “The investment community has morphed into something beyond banks and something beyond regulation. We call it the shadow banking system.” Read more at-
http://www.nytimes.com/2008/03/23/business/23how.html?_r=2&oref;=slogin&ref;=business&pagewanted;=print&oref;=slogin

- The worry is that the shadow banking system with its $516 Trillion of exotic and untested derivatives or “Buffett’s financial weapons of mass destruction” may lead to what is being called a ‘Derivatives Chernobyl.’ Read full story at-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/23/ccfed123.xml

-Wall Street banks, brokerages and hedge funds may report $460 billion in credit losses from the collapse of the subprime mortgage market, or almost four times the amount already disclosed, according to Goldman Sachs Group Inc. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aIGeO4anyk.c&refer;=home

-Junk Bond Losses Top $35 Billion, JPMorgan Sees More. Read full story at-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=a1hPDYsWY9zQ&refer;=home

BEAR STEARNS FALLOUT

-JPMorgan Chase & Co. quadrupled its offer for Bear Stearns Cos. to $10 a share and struck a deal to buy 39.5 percent of the company without a shareholder vote, making it unlikely opponents can block the takeover. Read full story at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aa3pP2hIfFBs&refer;=home

-Taxpayers May Be Liable From Bear, Mortgage Rescue. Even as the Bush administration insists it won’t risk public funds in a bailout, American taxpayers may already be liable for billions of dollars stemming from Federal Reserve and Treasury efforts to quell a financial crisis. History suggests the Fed may not recover some of the almost $30 billion investment in illiquid mortgage securities it received from Bear Stearns Cos., said Joe Mason, a Drexel University professor who has written on banking crises.

Treasury’s push to have Fannie Mae and Freddie Mac buy more mortgage bonds reduces the capital the government-chartered companies hold in reserve at a time when foreclosures and defaults are surging. Regulators “are playing with fire,” said Allan Meltzer, a Fed historian and economics professor at Carnegie Mellon University in Pittsburgh. “With good luck, none of these liabilities will come due. We can’t expect that good luck, and we haven’t had it.”

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson were forced to respond after capital markets seized up and Bear Stearns faced a run by creditors. In an emergency action that jeopardizes the dividend it pays the Treasury, the Fed authorized a $29 billion loan against illiquid mortgage- and asset-backed securities from Bear Stearns that will be held in a Delaware corporation. JPMorgan Chase & Co. contributed $1 billion. Read more at-http://www.bloomberg.com/apps/news?pid=20601109&sid;=a4ZyPj4AHfmU&refer;=home

-JPMorgan Chase & Co., the third- largest U.S. bank, will pay brokers at Bear Stearns Cos. a maximum bonus of 100 percent of the annual revenue they generated to keep them from leaving as the two companies combine. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a9ykinzrvGvk&refer;=home

-Jim Cramer: "I Was Wrong Bear Stearns Was in Trouble." Read more at-http://www.mediabistro.com/tvnewser/cnn/cramer_i_was_wrong_bear_stearns_was_in_trouble_80531.asp

U.S. ECONOMY-HARD TIMES ARE HERE

-Wall Street Firms Cut 34,000 Jobs, Most Since 2001 Dot-Com Bust. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aTARUhP3w5xE&refer;=home

-How Deep Is Economic Abyss, Americans Ask As They Face Stream of Bad Financial News. Read more at-http://biz.yahoo.com/ap/080323/economy_on_the_edge.html?.v=10&printer;=1

-Slump Moves From Wall St. to Main St. Read more at-
http://www.nytimes.com/2008/03/21/business/21econ.html?_r=1&ei;=5089&en;=dbb413b1d88aa67b&ex;=1363838400&oref;=slogin&partner;=rssyahoo&emc;=rss&pagewanted;=print

-A new Great Depression? Dysfunctional capital markets, frantic central banks, stressed-out consumers, fear and uncertainty all are alarming echoes of the global economic cataclysm of the 1930s. Which raises the inevitable question: Could another Great Depression be lurking over the horizon? Read more at-http://www.latimes.com/business/la-fi-depression20mar20,1,832563.story

-U.S. consumer confidence fell more than forecast in March as Americans’ outlook on the economy dropped to the lowest level since Richard Nixon was in the White House. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=afZ8HSAxwbCE&refer;=home

-Some economists say the United States is not in a recession, but don’t tell that to the majority of American consumers Read more at-
http://money.cnn.com/2008/03/21/news/economy/CNN_poll_review/index.htm

-America is already in recession, say top economic global experts and that spells trouble for the UK. Read full story at-http://www.dailymail.co.uk/pages/live/articles/news/worldnews.html?in_article_id=541172∈_page_id=1811

-America’s Coming Garage Sale. Read full story at-http://www.time.com/time/printout/0,8816,1725094,00.html

-Rebate checks won’t get spent. Majority of Americans say they plan to put their tax rebate checks in the bank or use it to pay off debt, according to a recent poll. Read more at-
http://money.cnn.com/2008/03/24/news/economy/rebates_poll/index.htm

-1 IN 10 Ohioans, food stamps double since ‘01, but price of food means they don’t go as far now. Read more at-http://dispatch.com/live/content/local_news/stories/2008/03/22/foodstamps.ART_ART_03-22-08_A1_NN9NE83.html?sid=101

U.S.-U.K. PERSONAL DEBT PROBLEMS

-Desperate for cash, many in U.S. taking high-interest ‘payday’ loans. Read more at-
http://www.iht.com/articles/2008/03/24/business/loan.php

INTEREST RATES

-Tighter lending conditions have made the Bank of England more inclined to cut interest rates as the credit crunch enters a new and difficult phase, BoE Governor Mervyn King said on Wednesday. Read more at-http://www.reuters.com/article/companyNewsAndPR/idUSL2635165820080326

-Iceland’s central bank raised its key interest rate by a record 1.25 percentage points at an emergency meeting to halt a slump in the krona and a surge in inflation. Read more at-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aGebxAuBuKYA&refer;=home

-Bank of Israel Cuts Base Rate to Lowest Ever at 3.25%. Read more at-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=a387AJWNWR7s

U.S. STOCK MARKET VOLATILITY HIGHEST IN 70 YEARS-DON’T TRUST STOCK RALLY

-The U.S. stock market is the most volatile in 70 years, according to a Standard & Poor’s study of daily price swings in the S&P; 500. The benchmark for American equities has advanced or declined 1 percent or more on 28 days this year. That’s 52 percent of the trading sessions so far, which is the highest proportion since 1938, said Howard Silverblatt, S&P;’s senior index analyst. The S&P; 500 lost 12 percent in 2008 through yesterday following $195 billion in bank losses related to subprime mortgages.

“The enormous uncertainty of the market is translating into volatility,” New York-based Silverblatt said in an interview. “Everyone is reacting to the day-to-day events as opposed to the longer-term trends.” In 1938, the most volatile year since the index’s inception in 1928, the S&P; 500 rose or fell at least 1 percent during 57 percent of the trading days, according to Silverblatt’s analysis. The measure advanced 25 percent that year. Option prices, which increase when investors expect wider share-price swings, have risen this year.

The Chicago Board Options Exchange Volatility Index, the price gauge for contracts linked to the S&P; 500, has averaged 26.15. That’s 49 percent higher than the level in 2007. The so-called VIX closed at a five-year high of 32.24 on March 17. In 2002, when U.S. stocks hit bottom after collapsing in March 2000, 1 percent moves in the S&P; 500 occurred 50 percent of the time, Silverblatt said.

That fell to 12 percent in 2006 and 13 percent during the first half of last year. The figure increased to 39 percent during the second half of 2007. “The upcoming earnings season appears poised to add to the volatility,” Silverblatt wrote in a report. Profit “estimates are unusually wide, given how close to the quarter end we are.” The first quarter concludes in less than two weeks. Alcoa Inc. is scheduled to become the first member of the Dow Jones Industrial Average to report results for the period on April 7. Bloomberg

-Don’t trust the Wall St rally. Divining future profitability of the nation’s financial firms tells us stock market valuations are still too high. Read more at-
http://money.cnn.com/2008/03/24/news/companies/McLean_wallst.fortune/index.htm?postversion=2008032416

BERNANKE’S OWN HOME SHOWS HOUSING BOOM AND BUST

-The U.S. housing recession has arrived literally on the doorstep of Federal Reserve Chairman Ben S. Bernanke. Bernanke lives in Washington’s Capitol Hill area in a four- bedroom, 2,600-square-foot house he bought new in May 2004 for $839,000. Almost four years later, it may not be worth any more, according to real estate records and local agents. Bernanke’s timing wasn’t the best values in the area peaked a year later and he is hardly alone among Americans living in an investment that’s turned cold. Read more at-http://www.bloomberg.com/apps/news?pid=20601109&sid;=a_SQurUfHic0&refer;=home

REAL ESTATE

-New-Home Sales in U.S. Fall to Lowest in 13 Years. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=am3T3LRU3MhY&refer;=home

-U.S. Economy: Existing-Home Sales Rise, Prices Fall. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aHOMZAVSyBks&refer;=home

-S&P;/Case-Shiller Home Price Index Falls Record 10.7%. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a4kZQNXUFpW4&refer;=home

-California freefall: Home prices fell 26% in February. Read more at-http://latimesblogs.latimes.com/laland/2008/03/california-free.html

-Buy-to-let U.K. investors who fear they may be left homeless. Read more at-http://www.guardian.co.uk/money/2008/mar/22/buyingtolet.investmentfunds

FORECLOSURES-MORTGAGES

-California Leads U.S. in Defaults, Home-Price Decline. Read more at-http://www.bloomberg.com/apps/news?pid=20601109&sid;=a_IN0W3.lFV0&refer;=home

-Banks Fail to Lower Mortgage Rates as Bernanke Cuts. Read more at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a3Vhp40UwPFM&refer;=home

GEOPOLITICAL NEWS

-Four U.S. soldiers were killed in a bomb attack in Baghdad, taking the American death toll in the Iraq War to at least 4,000, according to the independent icasualties.org group that tallies fatalities in the conflict. Read full story at-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aN2hLgttrfKw&refer;=home

-Iran ‘behind Green Zone attack.’ Read more at-http://news.bbc.co.uk/2/hi/middle_east/7311565.stm

-Qaida No. 2 Urges Attacks on Israel, US. Read more at-http://www.breitbart.com/print.php?id=D8VJK20O0&show;_article=1

-Osama bin Laden urged Palestinians to use "iron and fire" to end an Israeli blockade of Gaza, in a recording after the Vatican rejected accusations by the al Qaeda chief of a "new crusade". Read more at-http://www.reuters.com/article/topNews/idUSL2086543620080320?feedType=RSS&feedName;=topNews&rpc;=22&sp;=true

-Osama bin Laden accused Pope Benedict XVI of helping in a "new Crusade" against Islam and warned of a "severe" reaction to European publications of cartoons of the Prophet Muhammad that insulted many Muslims. Read more at-http://apnews.myway.com/article/20080320/D8VHCSC81.html

-Russia’s foreign minister laid out a tough negotiating position on America’s missile defense plans Thursday ahead of a visit by President Bush, saying the best solution would be for the U.S. to scrap the idea altogether. Read more at-http://www.breitbart.com/article.php?id=D8VLUK4G0&show;_article=1

-With Iranian backing, Hezbollah guerrillas have dramatically increased their rocket range and can now threaten most of Israel, senior Israeli defense officials said. Read more at-http://apnews.myway.com/article/20080327/D8VLNEFO0.html

-U.S. Treasury Secretary Henry Paulson and the sovereign wealth funds of Abu Dhabi and Singapore agreed to adopt rules for greater disclosure and to ensure their investments are for economic, not “geopolitical,” purposes. Read more at-http://www.bloomberg.com/apps/news?pid=20601068&sid;=a2Bs51SaAkFE&refer;=home

The GoldBugg Report – April 1
Posted by Worldwide Precious Metals on Tuesday, April 1, 2008

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