Newsroom
New Office
July 31, 2008
Worldwide Precious Metals (Canada) Ltd. is pleased to announce, due to expansion requirements, we are relocating as of August 1st, 2008 to:
Suite 1488 - 777 Hornby Street
Vancouver, B.C. V6Z 1S4
Toll Free: 1-866-623-2002
Phone: 778-945-2002
Fax: 778-945-2003
Please note new area code.
We look forward to working with you in the future which, according to the leading analysts, is looking very bright for Precious Metals.
Robert Kiyosaki recently wrote "The Fed is flooding the market with nearly a trillion dollars of liquidity, which is why I believe gold under $1,200 an ounce and silver under $30 an ounce are bargains."
Jeff Rubin, chief economist at CIBC recently cut his TSX forecast stating "the waning economy coupled with high inflation in the United States will challenge "large swaths" of Canadian stocks"
The Globe and Mail just this week had an article on Peter Schiff's gloomy outlook of the US economy. Read the entire article here -
http://www.theglobeandmail.com/servlet/story/RTGAM.20080728.wheinzl0729/EmailBNStory/SpecialEvents2/
© 2009, Worldwide Precious Metals.
www.wwpmc.com
New Office
Posted by Worldwide Precious Metals on Thursday, July 31, 2008
The GoldBugg Report - July 29, 2008
July 29, 2008
-Gold Nearing Summer Lows Prior to Rallying Strongly into Autumn.
-Why gold and silver are table-thumping buys.
-"Gold and silver are headed much higher, and will now regroup for the final assault on $1,000 for gold and $21 for silver that will take us to new heights and more unexplored territory." Bob Chapman
GOLD
-Gold Nearing Summer Lows Prior to Rallying Strongly into Autumn. Gold seasonal patterns often result in lows in July or August prior to strong rallies into year end. Previous years may be instructive in this regard. Last summer, gold fell some 7% from $687 on July 16th to $641 on August 13th. The $641 reached on August 13th marked the seasonal low and subsequently gold rallied strongly in August, September, October and early November. It reached $845 less than 3 months later for a return of nearly 32%.
Gold subsequently had a shallow and brief correction in November and early December prior to rallying from mid December low of $787 to its highs in March of $1003 or a return of 27%. A similar performance can be seen in previous years in this current secular gold bull market as seen in the excellent charts which featured yesterday at the James Joyce Table in Lemetropolecafe.com. Read more and see charts here-http://news.goldseek.com/GoldSeek/1216905228.php
-Gold's safe haven attributes are coming into their own due to significant macroeconomic and systemic risk. While demand destruction may lead to falls in the demand for commodities, gold's finite currency credentials will lead to it continuing to outperform other assets in the coming months.
With conditions quite similar to those of the stagflation of the 1970s, this is particularly the case. Although it is difficult to see how oil, energy and food prices could be subject to significant demand destruction given the massive demographic, social and economic ramifications of the emergence of huge middle classes and western consumerism in Asia and the BRIC economies.
Also the increasingly accepted theory of ‘peak oil' should give pause for thought to those who have been and continue to always bang the drum that the commodities ‘bubble' is bursting (stock market permabulls are particularly prone to this deluded form of wishful thinking). This mantra has been sung for some years now and its proponents remain in denial about these huge social and economic changes in the global economy. Gold.ie
-Putting the Gold Price in Perspective. While the future is unknowable and unpredictable, the probability of gold falling to $500 in 2010 is "slim to none". The only way for gold to fall to that level would be for the purchasing power of the dollar to be significantly enhanced.
In other words, instead of inflating the dollar, the US government would need to embark on a new monetary policy aimed at deflating the dollar, the result of which would be to enhance the dollar's purchasing power, repeating the experience of the Great Depression. Monetary policy is aimed specifically at avoiding another deflationary Great Depression, so it is reasonable to expect that the dollar will continue to be inflated, meaning the price of gold will continue to rise. James Turk-Read more here-http://www.kitco.com/ind/Turk/turk_jul222008.html
-Gold's strength is the U.S. dollar's weakness. Authorities say they support a strong dollar but refuse to take the action required to strengthen it. John Embry commentary-Read more here-http://www.sprott.com/pdf/investorsdigest/digest.pdf
-How well (or poorly) has the stock market been performing? It all depends on how you measure. When measured in US dollars, the Dow currently trades 19.2% off its all-time record highs of October 2007. However, when measured with that other world currency (gold), the picture is more dismal. To help illustrate the point, today's chart presents the Dow divided by the price of one ounce of gold.
This results in what is referred to as the Dow / gold ratio or the cost of the Dow in ounces of gold. For example, it currently takes 12 ounces of gold to "buy the Dow." This is considerably less that the 44.8 ounces back in the year 1999. When priced in gold, the US stock market has been in a bear market for the entire 21st century. Chart of the day
-Oil is a commodity, gold is money decoupling will happen. With the global oil price suffering a significant correction in the past few days, gold too is showing signs of weakness, but the oil price and gold price should decouple as the one is a commodity and the other ‘money'. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=57077&sn=Detail
-Has Petrodollar Conversion into Gold Reached its Peak? Read more here-http://www.resourceinvestor.com/pebble.asp?relid=44538
-Gold's Performance as a Safe Haven Asset. 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). Gold.ie
-The rush for Gold: Sales of bars double. Investors opt for bullion rather than shares or property. Britons who still have any wealth to invest are turning their backs on the property portfolios, stocks and shares, and sports cars that have long constituted conventional investments, and pumping their savings into old-fashioned gold bullion and coins. Read more here-
http://www.independent.co.uk/news/uk/this-britain/the-rush-for-gold-sales-of-bars-double-872392.html
-Why the Mania Phase in Gold May Be Upon Us. There is other hot-off-the-press evidence that the golden pot is starting to boil.
It is possible the central banks of Russia and Argentina are buying gold. There is also unconfirmed talk that the central bank of China and other sovereign wealth funds may be buyers. Since these countries have trillions more cash than Western central banks have gold, it is easy to envision a scenario where central banks as a whole become net buyers, even if some countries continue selling.
Over 50 countries are now experiencing double-digit price rises. Ukraine is now at 29%, and in the Gulf states inflation is out of control. Russia is at 15%, and India is close behind at 11%. China is on the cusp, at 7%. Interest rates are still below inflation rates in much of the emerging world.
The supply/demand picture for gold is getting tighter every month... Older mines are playing out, rising costs threaten the marginal operations, and large new deposits are simply not being discovered. Yet demand in all categories is up - industrial, jewelry and investment. And the potential for investment dollars to flee to gold is tremendous; consider that the sum total of the world's paper financial assets (including equities, bonds and bank deposits) equals US$74.5 trillion. Yet the value of all physical gold held by private investors and central banks is just US$1.1 trillion. A mere 5% of that going into gold would be $3.725 trillion. What do you suppose that would do to the gold price?
The Gold Mania is here. In fact, our research shows this is the last summer you will be able to buy gold for 3 figures. Do you have enough? Perhaps the most transparent way to find the answer is to ask: will you feel like you bought enough gold when it's selling for $2,000 an ounce? Jeff Clark-Read more here-http://news.goldseek.com/GoldSeek/1216407036.php
-Reuters poll says average gold prices to be 30% higher this year and silver to track. A Reuters poll says that average gold prices could rise by over 30% in 2008 compared with 2007 as investors buy gold for its safe haven status. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=57610&sn=Detail
-Gold and silver ETFs top the pack. Amid a general ongoing slide in just about anything to do with commodity valuations, gold and silver exchange traded funds/commodities rise to the top of the pack. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=57387&sn=Detail
-ETF Securities gold ETC holdings rise 12 pct to record. Read more here-http://www.reuters.com/article/goldMktRpt/idUSL2112463520080721?rpc=401
-Biggest gold ETF loses 4.6 percent of gold holding in two days. The SPDR Gold Trust ETF which had been holding over 700 tonnes of gold has seen nearly 5 percent of the gold it holds on behalf of investors liquidated in two days in line with the sharp gold price falls this week. Read more here-
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=57631&sn=Detail
SILVER
-Why gold and silver are table-thumping buys. In addition to macroeconomic, systemic and geopolitical risk; geological constraints, terrorism, climate change and natural disasters such as Hurricane Katrina; there are other risks that mean that the old Wall Street advice to invest 10% of one's portfolio in gold bullion and hope it does not work is more important now than at any time in living memory. Given silver's even more favourable fundamentals, an allocation to silver would also be extremely prudent as it is likely to outperform even gold in the coming years. Mark O'Byrne-Read more here-http://www.moneyweek.com/file/50927/why-gold-and-silver-are-table-thumping-buys.html
-Panic on Wall Street Is Building-Gold and Silver's Role. David Morgan-Read more here-http://www.kitco.com/ind/morgan/printerfriendly/jul182008.html
-Benchmark Asset plans India's first silver ETF. Read more here-http://in.reuters.com/article/domesticNews/idINBOM5566820080722
-Local coin shop runs out of silver bullion coins. Yesterday I visited the local coin shop in my home town, Salisbury in England and while full of interesting medals and collectables something was missing this year. The coin counter had shrunken to a small selection in the corner. I asked the owner of The Castle Galleries, John Lodge what had happened and he explained that it was proving hard to buy sufficient supplies to keep up with demand.
Indeed he apologised for only having two silver bullion coins on display: a 1924 Silver Eagle and a 1780 Marie Theresa. So I bought both for $40 and emptied his shop! However, Mr. Lodge has been in business for a long time, and as a very small boy I used to go to a youth club he ran called the Happy Hour Club. He recalled that in the late 1970s people used to queue down the road to buy gold and silver coins, and nothing like that had happened yet.
Mr. Lodge felt it was remarkable just how long ago the last gold boom seemed. It certainly appeared unreasonable to me that I should pay $20 for an ounce of silver as a coin, exactly the same price as I would have paid in 1979. In that year I worked as a labourer for my father's building company and we sold one house for $36,000. Today it would be twenty times that amount. Nothing else I have bought on my short visit is close to the 1979 price.
In just the past year gas prices are up 27 per cent and the average supermarket basket by 21 per cent, according to the Daily Mail. So why should bullion coins be unchanged over 29 years? Mr. Lodge says it is extraordinary how long the bear market lasted and reminded me that the coins bottomed at $5 each. Yet you look at one ounce of silver and it looks like it ought to be worth $100 or more. But there is a shortage emerging, clearly and that ought to be driving prices higher if nothing else.
Mr. Lodge also thinks the industrial consumption of silver is forgotten, and that means the silver of 1979 has gone, unlike gold which piles up in vaults. Apparently bullion dealers report a doubling of sales in the UK over the past year with increasing interest among the public in buying silver and gold coins and bars of metal. But if inflation does what it did in the 1970s then the queues down the road to buy from Mr. Lodge will be there again. I just hope he finds some stock. Peter J. Cooper
PLATINUM-PALLADIUM
-Platinum outlook comfortably above $2000/ounce despite macro concerns. The Fortis/VM Group gives a platinum outlook that jostles with supply constraints and demand concerns.
The Fortis metals monthly says the outlook for platinum is comfortably above $2,000/ounce on new investment demand, higher capital costs stemming from power generators and a looming Cosatu strike in South Africa. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=57040&sn=Detail
-Higher diesel prices adverse for platinum demand. Although EU demand for diesel vehicles is unlikely to be affected dramatically by higher diesel prices, the diesel revolution is yet to start in the US. The diesel revolution in the European Union that drives demand for platinum and palladium is unlikely to reverse itself, but EU drivers will progressively divert from diesel vehicles if the diesel price remains significantly higher than the price of gasoline.
The Fortis/VM Group says in its latest metals report the ratio of sales between diesel and gasoline engine cars naturally has implications for the relative prices of the two metals. One of the great advantages platinum has enjoyed over the last decade compared with palladium is the trend away from gasoline-powered cars to those using diesel.
This trend has been most evident in Europe. The report said that until recently diesel engine vehicles could only use platinum-based catalysts, but the price gap between platinum and palladium has encouraged autocatalyst producers to use less platinum and increase the volume of palladium in autocatalysts. Read more here-
http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=57013&sn=Detail
-Precious metals poll puts average platinum price up 50% this year on last. Another Reuters poll, this time on platinum and palladium, shows big increase in anticipated platinum price this year compared with last and palladium up too. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=57624&sn=Detail
-Platinum used in new biofuel reaction 22nd July 2008. Scientists claim to have developed a new reaction that uses platinum in turning sawdust into biofuels. Read more here-
http://www.platinum.matthey.com/media_room/platinum_used_in_new_biofuel_reaction_18694869.html
DEFINITIONS-QUOTES-QUICK HITS
-Bailout. A situation in which a business, individual or government offers money to a failing business in order to prevent the consequences that arise from a business's downfall. Bailouts can take the form of loans, bonds, stocks or cash. They may or may not require reimbursement.
Bailouts have traditionally occurred in industries or businesses that may be perceived no longer being viable, or are just sustaining huge losses. Typically, these companies employ a large number of people, leading some people to believe that the economy would be unable sustain such a huge jump in unemployment if the business folded.
For example, Chrysler, a large U.S. automaker was in need of a bailout in the early 1980s. The U.S. government stepped in and offered roughly $1.2 billion to the failing company. Chrysler was able to pay the entire bailout back, and is currently a profitable firm. Investopedia.com
-"If the U.S. Fed, U.K. central bank, and other central banks continue to protect all of the institutions, all of the shareholders, and all the depositors, the crisis will actually be more prolonged and more difficult to come out of than if they let a lot of the smaller institutions go broke.
Thus far, it is obvious that the Fed and the U.S. and U.K. administrations want to make the government the lender of last resort and make it a world where mistakes are not punished. We go on record saying that this is a mistake the example of Japan comes to mind." Monty Guild and Tony Danaher
-"At present, the best the government can do for housing and the economy is to leave both alone, cease interference in the free market, restore sound money, and allow capitalism to work." Peter Schiff-Read more here-http://www.321gold.com/editorials/schiff/schiff071808.html
-I get such a kick out of how the price of gold can run up over $100 in 14 days and no one in the media makes a comment. We then have a $22 drop and they start playing the funeral music. Whenever the "financial experts" are trashing gold it makes me that much more committed. CIGA Buz-Comment on Jsmineset.com
-Nothing whatsoever has changed. Gold is headed to $1200 this year and $1650 on or before January 14th, 2011. The euro will trade above $1.60 on its way to $2 plus. Jim Sinclair-Jsmineset.com
-"Nothing beats a little cash in a bear market, of course, and the oldest form of cash is gold." James Grant
-Credit Suisse believes that a renewed test of $1,000 an ounce is "increasingly likely during the third quarter." Kitco Daily Resource
-Full Steam Ahead for Gold Train-The gold train has left the station and this year the price will reach at least $1,200 and next year $2,500, Thomas Bachheimer, CEO of Meridian Commodity Advisor, told CNBC. Watch video here-http://www.cnbc.com/id/15840232?video=796268335&play=1
-"Gold and silver are headed much higher, and will now regroup for the final assault on $1,000 for gold and $21 for silver that will take us to new heights and more unexplored territory." Bob Chapman
-In 1974 I concluded gold would rise to $900. That number represented the price gold would have to be at times the amount of gold published as held for the US Treasury to balance the value, at par, of US Treasury debt held internationally. This would be balancing the international balance sheet of the USA.
The trick is analyzing what the international debt of the US is both directly and implied. The number in 1974 was $900. I will not tell you the number today. It is absolutely scary. I will stay with $1650 as I know for a fact gold will trade there. Jim Sinclair
-Looking ahead, "In the near term, gold will be driven by risk-aversion fears," wrote John Reade of UBS. "If gold moves from being a minority-held asset class to a popular safe haven, then our short-term forecast of $1,000 in one month and $1,050 in three months will look very conservative." Kitco Daily Resource
-Gold was due a correction after its recent surge in price and remains up some 6% in the last month (from $882 to $935) unlike oil and the majority of stock markets (which are down by similar amounts). Gold's recent outperformance may have led to a bout of profit taking and further consolidation is likely prior to challenging the March highs of $1030 per ounce in the coming weeks. Gold.ie
-"While oil remains an important factor in influencing the gold market, we remain confident that there will be a gradual decoupling between oil and gold in the coming months." Gold will outperform oil, Mark O'Byrne, executive director at Gold and Silver Investments Ltd maintains, since oil is a commodity that is "far more subject to demand destruction in the face of a sharply deteriorating global economy than gold." Kitco Daily Resource
-Citigroup Mining and metals analyst John Hill said the mix of macro and supply/demand factors, along with the same forces that have pushed gold higher for the last five years, give him good reason to remain bullish on gold. He sees prices climbing through 2009 and 2010. "Longer term, we would not be surprised to see gold double or triple from current levels as the global policy prescriptions for the credit crunch remain powerfully and uniformly re-flationary," the analyst told clients. Gold.ie
-At no time more than now, investments in gold and silver will give investors a protection for their wealth as never before. We do not expect to see gold in three figures for much longer and thereafter it will be a simple piece of history. Silver below $20 will likewise be something of the past! Julian D. W. Phillips-Read more here-http://news.goldseek.com/GoldForecaster/1216732147.php
-"Unless the United States moves quickly to fundamentally change and restrain its fiscal behavior, its bankruptcy will become a foregone conclusion." Federal Reserve Bank of St. Louis report in July/August 2006.
The Federal Reserve Bank Report continues "Given the reluctance of our politicians to raise taxes, cut benefits, or even limit the growth in benefits, the most likely scenario is that the government will start printing money to pay its bills. This could arise in the context of the Federal Reserve "being forced" to buy Treasury bills and bonds to reduce interest rates.
Specifically, once the financial markets begin to understand the depth and extent of the country's financial insolvency, they will start worrying about inflation and about being paid back in watered-down dollars. This concern will lead them to start dumping their holdings of U.S. Treasuries.
In so doing, they'll drive up interest rates, which will lead the Fed to print money to buy up those bonds. The consequence will be more money creation exactly what the bond traders will have come to fear. This could lead to spiraling expectations of higher inflation, with the process eventuating in hyperinflation." Gold.ie
-Truth about Wall Street briefly escapes president's lips. President George W. Bush said Wall Street had "got drunk" and was experiencing a hangover at a recent closed-door fundraiser in Houston in which he also made light of the US housing crisis. In a video recording that emerged on Tuesday, Mr. Bush questioned how long Wall Street banks would remain sober and "not try to do all these fancy financial instruments." Read and watch video here-http://www.gata.org/node/6443
-Paulson braces public for months of tough times. Treasury secretary says problems in the banking system are a "manageable situation" but that it will take time to work through them. Read more here-http://money.cnn.com/2008/07/20/news/economy/paulson_economy.ap/index.htm
-Why No Outrage? Through history, outrageous financial behaviour has been met with outrage. But today Wall Street's damaging recklessness has been met with near-silence, from a too-tolerant populace, argues James Grant. Read more here-http://online.wsj.com/article_print/SB121642367125066615.html
-Ten most overpaid jobs in the U.S. Number 1-Mutual-fund managers. Everyone on Wall Street makes far too much for the backbreaking work of moving money around, but mutual fund managers are emerging as among the most reprehensible. This isn't kicking 'em when they're down, given the growing fund-industry scandal.
They've been long overpaid. Stock-fund managers can easily earn $500,000 to $1 million a year including bonuses even though only 3 in 10 beat the market in the last 10 years. Now we discover an untold number enriched themselves and favored clients with illegally timed trades of fund shares. That's a worse betrayal of trust than the corporate scandals of recent years, since they're supposed to be on the little person's side. Put aside what fund managers earn and consider their bosses.
Putnam's ex-CEO Lawrence J. Lasser's income rivals the bloated pay package that sparked New York Stock Exchange President Dick Grasso's ouster. Lasser's take: An estimated total of $163 million over the last five years. Read more here-http://www.marketwatch.com/news/story/10-most-overpaid-jobs-us/story.aspx?guid=954AA053-F953-43F3-BBC8-63D351A3BF2A&dist=SecMostRead&print=true&dist=printMidSection
RARE COLORED DIAMONDS
-Diamonds Attract Funds as Largest Gem Prices Surge 76% in Year. Diamonds, like art, are a commodity that is gaining attention as an alternative investment. Increases in the price of the rarest colorless and colored diamonds are attracting wealthy investors and structured funds as stock markets and real-estate values decline. The price of 5-carat gems with the potential to be sold at $1 million or more has risen 76.5 percent in the year to May 2008, according to Idexonline.com, the Web site of the International Diamond and Jewelry Exchange.
"There's a group of very savvy, tremendously wealthy people who have put a small portion of their fortunes aside to invest in diamonds,'' said Francois Graff, managing director of London- based Graff Diamonds International, in a telephone interview. ``They've made incredible returns.'' Five years ago, dealers were paying $70,000 per carat for colorless diamonds of 10 carats and more, said Graff. "Now we're paying over $200,000 per carat,'' he said. There are only about 200 highest-grade, D-flawless colorless diamonds of more than 5 carats discovered per year, according to Raymond Sancroft-Baker, Christie's International's European director of jewelry.
The annual yield of large-scale blue and pink stones is considerably smaller. "Diamonds are getting rarer. The earth just isn't giving them up,'' said Sancroft-Baker in a telephone interview. The commodity asset-management firm Diapason Commodities Management SA listed a specialist investment fund, Diamond Circle Capital Plc, on the London Stock Exchange on June 25. Full story here-http://www.bloomberg.com/apps/news?pid=20601093&sid=aKVjxYejpss0&refer=home
-Super-rich still pay dear for rare diamonds. The rapid rate of increase in wholesale prices of rare polished diamonds is unsustainable, but for now the growing number of super-rich are paying rising prices for top-tier diamond jewelry. Charles Wyndham, founder of PolishedPrices, a leading index of wholesale diamond prices, said on Friday prices of larger, rare, near-flawless gemstones had shot up by roughly 200 percent over the past 18 months. Read more here-http://www.reuters.com/article/newsOne/idUSL0416926920080705
-Demand for rarest diamonds outstrips supply. Read more here-http://www.reuters.com/article/reutersEdge/idUSL0646558820080606
-De Beers Sales Climb 10% on Higher Diamond Prices. While demand for high-end diamonds is "very, very strong,'' sales of smaller lower-quality gems in the U.S. market is likely to be "pretty flat'' in the second half, De Beers Chief Executive Officer Gareth Penny told reporters in a conference call this week. Read more here-
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aUiYKfM.uurk
COMMODITIES-FOOD
-U.S. food companies plan more hefty price increases. Kraft Foods, which has said it will push up its prices by 12-13 per cent this year, said some of its cheese categories could rise 25 per cent. Read more here-http://www.gata.org/node/6434
-Mideast Facing Choice Between Crops and Water. Global food shortages have placed the Middle East and North Africa in a quandary, as they are forced to choose between growing more crops to feed an expanding population or preserving their already scant supply of water. Read more here-
OIL-WIND-BIOFUEL-GAS
-Fundamentals led to $130 oil report. Federal task force finds that supply and demand for oil are largely responsible for the commodity's record rise. Read more here-
http://money.cnn.com/2008/07/22/news/economy/oil_speculation.ap/index.htm
-Faber Says Oil May Decline as Global Growth Weakens. Marc Faber, who told investors to bail out of U.S. stocks before 1987's so-called Black Monday crash, said oil prices may fall to $100 a barrel as demand slows in a global economy at the "tail end'' of its expansion. Read more here-
http://www.bloomberg.com/apps/news?pid=20601082&sid=ajVyQXiLi1Ks&refer=canada
-Pickens sees $300 oil unless U.S. cuts crude imports. Oil prices will hit $300 a barrel in 10 years if the United States fails to reduce its dependence on foreign imports, billionaire oil investor T. Boone Pickens told U.S. lawmakers on Tuesday. Read more here-http://www.reuters.com/article/businessNews/idUSN2228084120080722?feedType=RSS&feedName=businessNews&rpc=23&sp=true
-Pickens urges action on energy crisis. Oilman turned wind guru tells Congress that his plan would reduce the nation's dependency on foreign oil by 38%. Read more here-
http://money.cnn.com/2008/07/22/news/economy/senate_energy_security/index.htm?postversion=2008072212
-Wind power: A reality check. Plans are afoot to prod the nation into using much more renewable energy. Can it be done, and what's the cost? Read more here-
http://money.cnn.com/2008/07/22/news/economy/pickens_wind/index.htm?postversion=2008072214
-Arctic May Hold 90 Billion Barrels of Oil, U.S. Says. The Arctic may hold 90 billion barrels of oil, more than all the known reserves of Nigeria, Kazakhstan and Mexico combined, and enough to supply U.S. demand for 12 years, the U.S. Geological Survey said. Read more here-http://www.bloomberg.com/apps/news?pid=20601072&sid=aiyouP1_l.kg&refer=energy
-Arctic's oil could meet world demand for 3 years. Read more here-http://news.yahoo.com/s/nm/20080723/ts_nm/arctic_oil_dc
-Why the oil crunch may grow worse. The fear is that all the easy-to-reach crude has been found. These may be 'the good old days,' one expert says. Read more here-
http://www.latimes.com/business/la-fi-peakoil22-2008jul22,0,4040165.story
-Pemex Oil Production Falls 11% in June on Aging Field. Petroleos Mexicanos, the state-owned energy company, said oil output fell 11 percent in June from a year earlier as new wells failed to keep pace with a four-year decline in the aging Cantarell field, the nation's largest. Production dropped to 2.839 million barrels a day in June from 3.206 million a year earlier, the Mexico City-based company, known as Pemex, said today on its Web site.
At Cantarell, where a drop in pressure is making it more difficult and costly to extract oil, the company pumped 1.017 million barrels a day, down 35 percent from a year earlier and the fastest rate of decline in 12 years, Pemex said. The company is pumping 33 percent more from the Ku-Maloob-Zaap field to make up for the decline at Cantarell. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aLLrhZOGOD_M&refer=home
-N.H. will accept free oil from Chavez after all. Two years ago, New Hampshire refused to accept heating oil from Venezuelan President Hugo Chavez, the pro-Castro U.S. critic who once called President Bush "the devil." But with fuel prices rising, well, free oil is free oil. With the state's blessing, New Hampshire residents will be receiving some of the fuel this winter. New Hampshire becomes the last state in the Northeast to embrace the offer. Read more here-http://www.breitbart.com/print.php?id=D920E39G9&show_article=1
-Texas Governor Fights U.S. Ethanol Rule That Raises Food Costs. Rising U.S. gasoline prices and the growing world food crisis will clash this week when the Bush administration decides whether to relax rules requiring greater use of ethanol in auto fuels.
Texas Governor Rick Perry, backed by at least 26 senators and 51 representatives, is seeking to halve a requirement that the U.S. produce 9 billion gallons of ethanol this year. The Environmental Protection Agency must rule by July 24 on their request for a waiver of the rule, favored by oil and food retailers and opposed by farm groups and environmentalists. Read more here-http://www.bloomberg.com/apps/news?pid=20601072&sid=asKoGIcOXRjA&refer=energy
-U.S. schools eye four-day week to cut fuel costs. Read more here-http://www.reuters.com/article/lifestyleMolt/idUSN2439039120080724?feedType=RSS&feedName=lifestyleMolt&rpc=22&sp=true
U.S. FISCAL-PERSONAL DEBT
-Given a Shovel, Americans Dig Deeper Into Debt. The collection agencies call at least 20 times a day. For a little quiet, Diane McLeod stashes her phone in the dishwasher. But right up until she hit the wall financially, Ms. McLeod was a dream customer for lenders.
She juggled not one but two mortgages, both with interest rates that rose over time, and a car loan and high-cost credit card debt. Separated and living with her 20-year-old son, she worked two jobs so she could afford her small, two-bedroom ranch house in suburban Philadelphia, the Kia she drove to work, and the handbags and knickknacks she liked.
Then last year, back-to-back medical emergencies helped push her over the edge. She could no longer afford either her home payments or her credit card bills. Then she lost her job. Now her home is in foreclosure and her credit profile in ruins. Read more here-http://www.nytimes.com/2008/07/20/business/20debt.html?_r=1&oref=slogin
-The U.S. debt trap. A series about the surge in consumer debt and the lenders who made it possible. Read and watch more here-
http://www.nytimes.com/interactive/2008/07/20/business/20debt-trap.html
-America's Money: Debt crush. Americans deep in debt are struggling more than ever amid the credit crisis and economic downturn. See how people got in the hole and what they're doing to get out. Read more here-http://money.cnn.com/galleries/2008/news/0805/gallery.real_people_debt/
-The $53 trillion asteroid by Glenn Beck. Read full story here-http://www.cnn.com/2008/US/03/26/beck.deficit/index.html
Story Highlights
Medicare trust fund will become insolvent in the year 2019, report says
Paulson: "Rising costs will ... threaten America's future prosperity"
Expert: Unfunded debt is "an IOU of around $455,000 per American household"
Beck: Our financial deficit is only dwarfed by "deficit of trust" we have in our leaders
Let's say a giant asteroid was headed toward Earth right now and experts say it has a good chance of ending civilization as we know it. Let's also say that we've known about this asteroid for years but even as it gets closer and closer our leaders do nothing. "Don't worry," they tell us, "The next administration will figure something out."
With the future of our country at stake, would Americans really sit back and tolerate that kind of inaction? Of course not we'd be sharpening our pitchforks and demanding answers. Well there may not be a space asteroid heading toward us, but there is an economic one and the threat to our future is just as severe.
You might think that I'm talking about the recession (sorry: potential recession) or credit crisis, but I'm thinking bigger. Much, much bigger. Let me give you three numbers that will put this economic asteroid into perspective: $200 billion, $14.1 trillion, and $53 trillion.
$200 billion is the approximate total amount of write-downs announced so far as a result of the current credit crisis.
$14.1 trillion is the size of the entire U.S. economy
And $53 trillion is (drum roll please) the approximate size of this country's bill for the Social Security and Medicare promises we've made.
U.K. BUDGET DEFICIT BIGGEST SINCE 1946
-U.K. Budget Deficit Balloons to Widest Since 1946. The U.K. budget deficit ballooned to the widest since records started in 1946, putting pressure on Prime Minister Gordon Brown to ease decade-old borrowing rules. The shortfall rose to 24.4 billion pounds ($49 billion) in the three months through June, the Office for National Statistics said today. Last month, the deficit widened to 9.2 billion pounds, more than the median forecast of 7.4 billion pounds in a Bloomberg News survey of 17 economists.
Brown's rules are buckling as the economy edges towards its first recession since the early 1990s, forcing borrowing higher. The government, which has already cut taxes this year, may find it hard to meet its March forecast of a 43 billion-pound deficit this year as revenues wane. Government bond yields rose today. "The credibility of the policy framework is going to take a major knock,'' said Nick Kounis, chief European economist at Fortis Bank in Amsterdam and a former U.K. Treasury official.
"Whatever move is made to the goalposts now is reducing credibility, which is why you see sterling easing this morning.'' Chancellor of the Exchequer Alistair Darling may change Britain's rules for government spending later this year, a Treasury spokesman said this week. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid=abCtj2s5v_3Y&refer=home
FANNIE-FREDDIE-SALLIE
-Fannie Mae and Freddie Mac-End of illusions. In the end, the turtle at the bottom of the pile is the American taxpayer. But that suggests that, if Americans are losing money on their houses, pensions or bank accounts, the right answer is to tax them to pay for it. Perhaps it is no surprise that traders in the credit-default swaps market have recently made bets on the unthinkable: that America may default on its debt. Read more here-http://www.economist.com/finance/displaystory.cfm?story_id=11751139
-Fannie, Freddie Rescue Plan May Cost $1 Trillion, Bunning Says. A government rescue of Fannie Mae and Freddie Mac would require taxpayers to pay ``way'' more than the $25 billion estimated by the Congressional Budget Office, potentially as much as $1 trillion, Senator Jim Bunning said. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJ_PxvWbq4z0&refer=home
-Fannie, Freddie Rescue May Cost Taxpayers $25 Billion, CBO Says. Treasury Secretary Henry Paulson's rescue package for Fannie Mae and Freddie Mac will probably cost $25 billion, the Congressional Budget Office said. "There is a significant chance probably better than 50 percent that the proposed new Treasury authority would not be used before it expired at the end of December 2009,'' the nonpartisan agency, which provides economic and budget analysis for lawmakers, said in a report today. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=aAsOifUPPUNU&refer=home
-Fannie Mae Unsold $5 Billion Homes Bring Peril to Shareholders. Fannie Mae, the largest U.S. mortgage finance company, couldn't find a buyer who would pay $6,900 for the three-bedroom house at 1916 Prospect St. in Flint, Michigan. So broker Raymond Megie, who is handling the foreclosure sale, advised cutting the price to $5,000. Megie still couldn't sell it. "There's oversupply,'' he said. The home sold in 2005 for $110,000.
Fannie Mae acquired twice as many homes through foreclosure in the first quarter as it sold, regulatory filings show. Unsold properties may weigh on the company's stock, which lost almost half its value since June 5, said Moshe Orenbuch, managing director of equity research at Credit Suisse Group AG in New York. Late payments on the company's home loans, a harbinger of foreclosures, almost doubled in the past year.
Together, Fannie Mae and Freddie Mac, the two biggest U.S. mortgage finance companies, owned a record $6.9 billion of foreclosed homes on March 31, compared with $8.56 billion held by all 8,500 U.S. commercial banks and savings and loans. Foreclosed houses sell at an average discount of about 20 percent, according to economists Ethan Harris and Michelle Meyer at New York-based Lehman Brothers Holdings Inc.
At that rate, the two mortgage companies stand to lose $1.39 billion on the foreclosed houses they currently own. "Progress on this is probably one of, if not the single most important economic process right now,'' Orenbuch said. "With prices decreasing, it's better to get rid of houses quickly.'' Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid=aMz0dl3IdwjU&refer=home
-Sallie Mae Profit Falls as Buyers Shun Securities. SLM Corp., the largest U.S. student lender, said its second-quarter profit fell 72 percent as investors purchased fewer securities backed by its loans. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aK6_UYWyw0ow&refer=home
FDIC-INDYMAC BAILOUT
-FDIC Faces Mortgage Mess After Running Failed Bank. Federal officials heap much of the blame for the subprime mortgage mess on lenders, claiming they recklessly made too many high-cost home loans to borrowers who couldn't afford them. It turns out that the U.S. government itself was one of the lenders giving out high-interest, subprime mortgages, some of them predatory, according to government documents filed in federal court. Read more here-http://online.wsj.com/public/article/SB121641296022866029.html?mod=2_1569_leftbox
-FDIC Seeking Sale for IndyMac "As Soon as Possible," Bair Says. IndyMac Bancorp Inc., the third-largest bank to be taken over by U.S. regulators, will be sold "as soon as possible,'' Federal Deposit Insurance Corp. Chairwoman Sheila Bair said. Bair, whose agency began running the Pasadena, California- based lender last week, said today the FDIC will try to sell all of its assets to a single buyer.
She said the government may offer to share losses to entice buyers to pay a higher price for IndyMac's assets, which include mortgages. "Our target is three months,'' Bair said in an interview in San Francisco. "That may be a little ambitious, but we would really like to get this bank back into the private sector as soon as possible.'' IndyMac, which specialized in mortgages that didn't require borrowers to document income, racked up almost $900 million in losses as home prices tumbled and foreclosures climbed to a record.
California has the second-highest U.S. foreclosure rate after Nevada, according to RealtyTrac Inc., which sells information on repossessed properties. "One of the things we're looking at is perhaps marketing the assets with some kind of loss share so we don't create a real distressed asset price,'' Bair said. "That, perhaps, would take some of the uncertainty and risk out of the asset and give us a little better initial price for it.'' Bloomberg
WASHINGTON MUTUAL 3.3. BILLION LOSS
-WaMu Reports $3.3 Billion Loss as Housing Market Deteriorates. Washington Mutual Inc., the biggest U.S. savings and loan, said mortgage-related losses through 2011 will be at the high end of its forecast as the housing crisis reaches borrowers with stronger credit.
Rising delinquencies on option adjustable-rate mortgages will contribute to mortgage losses in the next two and a half years near the top of the $12 billion to $19 billion range predicted in April, the Seattle-based bank said yesterday. Washington Mutual increased provisions for loan losses 69 percent to $5.9 billion.
``Option-ARMs were particularly popular in many of the housing markets that are today experiencing some of the fastest rates of house-price declines,'' Chief Enterprise Risk Officer John McMurray said on the second-quarter conference call yesterday. ``In 2008, option-ARMs are the product type experiencing the fastest rate of delinquencies.''
What started as a subprime issue for Washington Mutual became a broader mortgage crisis as tumbling home prices in California left an increasing number of customers unable to make payments. Chief Executive Officer Kerry Killinger, 59, faces increased pressure after reporting a $3.3 billion second-quarter loss, cutting jobs, raising capital and presiding over an 86 percent drop in the stock in the past year. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=af3qEdZ71Mik
-WaMu wary of IndyMac cashier's checks. More strange doings tonight surrounding the failure and federal takeover of IndyMac: some rival banks are refusing to honor cashier's checks written by IndyMac even though those checks are backed by the federal government. John Bovenzi, the FDIC official now running IndyMac, tells the Los Angeles Times today he is "deeply troubled by reports that there are financial institutions that are refusing to honor or are placing excessive holds on IndyMac Federal checks."
On latimes.com tonight: "Sheryl MacPhee, 46, said she liquidated a certificate of deposit at IndyMac's San Marino branch Tuesday morning after a two-hour wait. She then took the cashier's check to a Washington Mutual branch in South Pasadena to deposit. "MacPhee said a WaMu manager told her that under a new corporate policy, the bank was not accepting IndyMac checks. If a customer insisted on depositing the check, it could be eight weeks or more before the full amount would be accessible, she said she was told." More: "WaMu spokeswoman Olivia Riley declined to discuss details of the bank's check policies.
'We have a check hold policy that takes into consideration a variety of factors,' she said. 'WaMu is accepting checks from IndyMac customers; however, depending on the specifics, funds will be subject to an extended hold period.' Wells Fargo said it too was placing extended holds on many IndyMac checks as a precaution. "Officials at the Office of Thrift Supervision, WaMu's chief regulator, are investigating the complaints about the checks, OTS spokesman William Ruberry said." LA Times or http://ktla.trb.com/news/ktla-mortgages,0,4731206,print.story
WACHOVIA 8.9 BILLION LOSS-CUTS DIVIDEND
-Wachovia Has Record $8.9 Billion Loss, Cuts Dividend. Wachovia Corp., the U.S. bank that hired Treasury Undersecretary Robert Steel as chief executive officer two weeks ago, reported a record quarterly loss of $8.9 billion, slashed the dividend and announced 6,350 job cuts. The stock slumped as much as 10 percent in New York trading.
The second-quarter loss of $4.20 a share compared with net income of $2.3 billion, or $1.23, a year earlier, the Charlotte, North Carolina-based company said today in a statement. The loss included a $6.1 billion charge tied to declining asset values. The writedown, job cuts and second dividend reduction in three months reflect Steel's response to the worst housing market since the Great Depression, which cost former CEO Kennedy Thompson his job after eight years. Wachovia has dropped more than 75 percent since it spent $24 billion two years ago to buy Golden West Financial Corp. just as home prices were peaking.
"Steel is clearly trying to get his arms around this,'' said Joseph Gordon, president of Gordon Asset Management in Durham, North Carolina, which owns Wachovia shares and manages more than $200 million. Even so, ``We aren't advising any clients to buy until they fess up and go full transparency on Golden West and their commercial lending problems.'' Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a3ioTFV38p78&refer=home
GLOBAL RECESSION
-IMF warns global economy "fragile." Read more here-http://uk.news.yahoo.com/rtrs/20080717/tts-uk-imf-global-outlook-d1d4700.html
-The global economy is at the point of maximum danger. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/21/ccview121.xml
-A recession has clearly arrived in the UK, U.S. and many other economies internationally - 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. Most likely is a severe 1970s style stagflation with a combination of sharply falling asset prices and economic growth with competitive currency devaluations and very severe inflation in the price of essential goods such as food and energy.
Today, due to our modern non Gold Standard monetary system deflationary recessions or depressions are highly unlikely. The U.S. experienced a deflationary Depression in the early 1930s as it was the world's largest creditor nation and it was on the Gold Standard meaning that every dollar was backed by gold. Therefore all assets and the price of goods fell in value vis-à-vis money and vis-à-vis gold, gold was money.
The last time the U.S. experienced a serious recession since the advent of the fiat paper currency system was in the 1970s and it was a period of stagflation. Since the ending of the Gold Standard and our modern experiment with paper currencies there have been few experiences of deflationary depressions Japan's ‘Lost Decade' being the one of the very few. Japan experienced deflation at it too was a massive creditor nation with large exports, huge national trade and credit account surpluses, huge savings rates (savings rate of 15pc versus a negative savings rate in the U.S. today) and thus a sound currency.
Thus prices of assets and goods fell in terms of their sound currency the Japanese yen. The U.S. is today the largest debtor nation that the world has ever seen with a massive and exponentially increasing national debt, massive trade deficits and significant and growing current account and budget deficits. Thus, it is highly unlikely that there will be deflation against this fundamentally flawed economy and currency.
This could only happen if Ben Bernanke and the Federal Reserve became determined to tackle inflation (a la Volcker in the late 1970s) and increased interest rates to well above 10%. This is highly unlikely given the extent of household and national debt in the U.S. Thus a period of stagflation and even hyperinflation seems increasingly likely and investors and savers should prepare themselves accordingly. Gold.ie
-Britain Is in No Shape to Cope With a Recession. There is no longer much dispute that the U.K. is heading for a recession later this year. The economic news gets gloomier by the day, and with prices still rising fast, there is little prospect of the Bank of England heading off the coming storm with reductions in interest rates.
Already the job losses are starting to mount. Homebuilders Redrow Plc and Bovis Homes Group Plc have announced they will cut 40 percent of their staff. Wolseley Plc, the world's biggest distributor of plumbing and heating equipment, has a hiring freeze in place after firing 400 employees in the U.K. during the second half of last year. Plenty more workers will lose their jobs before a recovery takes place.
The real problem isn't the economic decline, which is part of a normal business cycle. Britain is in no shape to face a recession. Consumers and government are up to their eyes in debt, the economy is becoming less competitive, and the country has placed itself in the wrong industries. The underlying weakness of the U.K. economy is about to be cruelly exposed.
"The U.K. is a classic case of financial over-stretch,'' says Stuart Thomson, who manages 23 billion pounds ($46 billion) in bonds at Resolution Investment Management Ltd. in Glasgow, Scotland. ``We have been living on the edge with very little for a rainy day. We expect to see the economy come crashing back down to Earth.''
In the past 50 years, according to UBS AG research, the U.K. has had only three recessions. In 1991, output declined 2.5 percent from the peak to the trough. In 1980, it dropped 6.1 percent. And in 1975, it slipped 3.3 percent. Read more here-http://www.bloomberg.com/apps/news?pid=20601039&sid=aywsH.3Yxklg&refer=home
-British economic 'horror movie' to continue: think-tank. Read more here-http://news.lycos.co.uk/uk/080720231517.i7j5iisd.xml.html
-Uncomfortable Answers to Questions on the U.S. Economy. Read more here-http://www.nytimes.com/2008/07/19/business/economy/19econ.html?_r=1&oref=slogin&partner=rssyahoo&emc=rss&pagewanted=print
-Gloomy Days Ahead for U.S. Retailers. If sales weaken further after the stimulus checks are spent, a wave of bankruptcies may be forthcoming. Read more here-
http://www.businessweek.com/bwdaily/dnflash/content/jul2008/db20080718_996200.htm?campaign_id=yhoo
-Economy hobbles Calif. Town. Read more here-http://www.usatoday.com/money/economy/2008-07-21-vallejo-city-bankruptcy_N.htm
-U.S. Commercial bankruptcies soar, reflecting widening economic woes. Read more here-http://www.mcclatchydc.com/227/story/44717.html
THEY TOLD US SO...
-A few who predicted this mess tell us what they see coming next. Full story here-http://nymag.com/news/intelligencer/48695/
-"We are now the largest debtor nation in the history of the world. We owe $13 trillion, and we get $1 trillion further into debt every fifteen months. That's the world giving up on America."
Jim Rogers, investor, who has predicted a stock-market fall and commodities boom
-"The house next to mine in Florida sold for $105,000 in 1998, $765,000 seven years later. My guess is that it may more properly be worth around $275,000. Getting from $765,000 to $275,000, if it happens, is going to involve a lot of pain." Andrew Tobias, investment guru, who has warned of a real-estate bubble since 2002
-"The American consumer is toast. We're talking a multiyear adjustment, at least two or three years, maybe more. Does that mean America is over? Does that mean we have a whole new world order? The jury's out on that." Stephen Roach, former chief economist at Morgan Stanley, who in 2004 warned of impending economic "Armageddon"
-"I think we are maybe 10 percent into this crisis. The economic distortions have been building for longer than we've seen in the history of the world. Never have we had such confidence falsely placed in a reserve currency." Ron Paul, former presidential candidate, who advocates a return to the gold standard
NOURIEL ROUBINI-THE COMING SYSTEMIC BUST OF THE U.S. BANKING SYSTEM
-Roubini: The Coming Systemic Bust of the U.S. Banking System. Read more here-http://www.rgemonitor.com/roubini-monitor/253053/the_coming_systemic_bust_of_the_us_banking_system_dead_stocks_rallying
-Roubini: Bear Market Only Half Over, But It's Not Armageddon. Watch video here-http://finance.yahoo.com/tech-ticker/article/41229/Roubini-Bear-Market-Only-Half-Over-But-It
-Roubini: More Than $1 Trillion Needed to Solve Housing Crisis. Watch video here-http://finance.yahoo.com/tech-ticker/article/41423/Roubini-Nationalize-Housing-or-Worsening-Slump-Leads-to-Massive-Bank-Failures?tickers=FNM,FRE,XLF,WM,WB,WFC,BAC
-'They're All Toast': Roubini Says Brokers, Even Goldman, Can't Stay Independent. Watch video here-http://finance.yahoo.com/tech-ticker/article/41330/%27They%27re-All-Toast%27-Roubini-Says-Brokers-Even-Goldman-Can%27t-Stay-Independent?tickers=GS,LEH,MS,MER,JPM,BAC,C
U.S. DOLLAR-FOREIGN CURRENCY
-Dollar Advances as Paulson Voices Support for U.S. Currency. The dollar rose the most against the euro in more than two weeks as Treasury Secretary Henry Paulson voiced support for the currency and the Federal Reserve Bank of Philadelphia president said interest rates should be raised. Read more here-
http://www.bloomberg.com/apps/news?pid=20601101&sid=afqDa4y_1yXE&refer=japan
-Don't Buy the Dollar Head Fake. This week, we were treated to strong statements by both Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke about the desirability of a "strong dollar", and the intention of policy makers to pursue strategies that will enhance its value.
To the relief of many, the dollar responded to the moral support and managed a mild rally. The move is inconsequential. The harsh realities have not changed in the slightest, and the dollar is set to continue its overall decline. Read more here-http://www.321gold.com/editorials/browne/browne071708.html
-Eleven years after the Asian financial meltdown, economists warn of another possible currency crisis. Read more here-
http://www.reportonbusiness.com/servlet/story/RTGAM.20080723.wrcurrency0723/BNStory/Business/home
INTEREST RATES
-Two Fed myths that need debunking. Bernanke & Co. do not set interest rates, and they're not about to run out of money for bailouts. Read more here-
http://money.cnn.com/2008/07/22/news/economy/sloan_fed.fortune/index.htm?postversion=2008072213
-Plosser Says Fed Should Raise Rates Sooner, Not Later. Federal Reserve Bank of Philadelphia Charles Plosser said the central bank should raise interest rates ``sooner rather than later'' to lower inflation and prevent price expectations from getting out of control. "We will need to reverse course the exact timing depends on how the economy evolves, but I anticipate the reversal will need to be started sooner rather than later,'' Plosser, who argued against cutting interest rates in two Fed decisions this year, said in a speech today in King of Prussia, Pennsylvania.
"It will likely need to begin before either the labor market or the financial markets have completely turned around.'' Plosser joins Minneapolis Fed President Gary Stern, who also votes on rate decisions this year, in making the case for raising borrowing costs, a move Fed Chairman Ben S. Bernanke avoided discussing in congressional testimony last week. Record oil prices and rising food costs this year have increased investor expectations for the Fed to raise the benchmark interest rate.
"Monetary policy cannot control changes in the relative price of a key commodity, like oil or food,'' Plosser said in prepared remarks to a breakfast hosted by the Philadelphia Business Journal. "But it can help ensure that a relative price increase doesn't turn into a rise in overall inflation.'' Stern, the longest-serving Fed policy maker, said in a July 18 interview that "we can't wait until we clearly observe the financial markets at normal, the economy growing robustly, and so on and so forth, before we reverse course.'' Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid=aXzLcq31PuJ8&refer=home
-Pimco's Paul McCulley Says Plosser Wrong on Rate Hikes. Watch video here-http://www.bloomberg.com/avp/avp.htm?N=av&T=Pimco%27s%20Paul%20McCulley%20Says%20Plosser%20Wrong%20on%20Rate%20Hikes&clipSRC=mms://media2.bloomberg.com/cache/vg95BaZ6AkMo.asf
-N.Z. Cuts Key Rate a Quarter Point as Economy Slows. New Zealand's central bank cut its benchmark interest rate by a quarter point to 8 percent, the first reduction in five years, saying slowing economic growth will curb inflation. The nation's currency fell.
"Economic activity is likely to remain weak over the remainder of 2008,'' Reserve Bank Governor Alan Bollard said in a statement in Wellington today. "The weaker economy is expected to reduce pressure on resources, making it more difficult for firms to pass on costs and for higher wage claims to be agreed.''
New Zealand's economy contracted in the first quarter, putting the nation on the brink of its first recession since 1998, as drought, a slumping housing market and rising credit costs stall spending. Bollard says inflation will return below the 3 percent limit of his target range within two years, which will allow him to cut borrowing costs further. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=aWE7OoUzjoVg&refer=home
INFLATION-STAGFLATION
-Alberta inflation jumps 4.4%. Costly fuel means many are driving less, but rising food prices worry analysts. Read more here-
-Canada Inflation Quickens to 3.1%, Fastest Since `05. Canada's inflation rate in June was the highest since September 2005 as energy costs surged, forcing companies such as Air Canada to raise prices. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid=aUVt8KS0rOBg&refer=canada
-Inflation May Offset U.S. Pay Increases in '09. Read more here-http://online.wsj.com/article/SB121678057371476163.html?mod=googlenews_wsj
-Australia's Quarterly Inflation Accelerates to 1.5%. Australian inflation accelerated in the second quarter to the fastest pace in two years, adding to pressure on the central bank to leave borrowing costs at a 12- year high. The consumer price index rose 1.5 percent from the first quarter, when it gained 1.3 percent, the Bureau of Statistics said in Sydney today.
The median estimate in a Bloomberg News survey of 22 economists was for 1.3 percent. Prices gained 4.5 percent from a year earlier, the most since 2001. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYLcjEFnbwj4&refer=home
-Inflation shows why Australian households are hurting. Read more here-http://www.smh.com.au/news/national/inflation-shows-why-households-are-hurting/2008/07/23/1216492541106.html
-German June Producer Prices Increase Most in 26 Years. German producer prices rose at the fastest pace in 26 years in June, adding to pressure on the European Central Bank to keep interest rates high even as economic growth slows.
Prices for goods from newsprint to plastics increased 6.7 percent from a year earlier, the most since March 1982, after rising an annual 6 percent in May, the Federal Statistics Office in Wiesbaden said today. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid=aYqXWIX2j4u8&refer=home
-Zimbabweans play the zero game. Quadrillion, quintillion, sextillion crazy numbers with lots of zeros, that independent Zimbabwean economist John Robertson found himself chewing over with colleagues in the capital Harare this week. Read more here-http://news.bbc.co.uk/2/hi/africa/7516874.stm
-The spectre of stagflation Things can only get worse. Read more here-http://www.economist.com/world/britain/displayStory.cfm?source=hptextfeature&story_id=11750900
STOCK MARKET SHORT SELLERS BETTING BIG
-Never Have So Many Short Sellers Made So Much Money. Investors worldwide are betting more than $1 trillion on a collapse in stock prices. Managers from William Ackman to Jim Rogers made a total of at least $1.4 billion in July with wagers against U.S. mortgage financiers Fannie Mae and Freddie Mac, according to data compiled by Bloomberg.
Harbinger Capital Partners staked $665 million that U.K. mortgage lender HBOS Plc would drop and Sao Paulo-based hedge-fund manager Francisco Meirelles de Andrade's short selling of Cia. Vale do Rio Doce is also paying off. More than $1.4 trillion of equities worldwide are now on loan, about a third higher than at the start of 2007, data compiled by Spitalfields Advisors, the London-based firm specializing in securities lending, show.
Almost all of that is being used to speculate that shares will fall, according to James Angel, a finance professor at Georgetown University who studies short selling. The global economic slowdown, $447 billion in bank losses and an explosion of funds that can profit from stock declines spurred the increase in short selling, helping send 22 of 23 countries in the MSCI World Index into bear markets.
"It's a huge amount of money,'' said Peter Hahn, a London- based research fellow for Cass Business School and a former managing director at Citigroup Inc. ``Shorts have come a long way. They are getting into the mainstream, and long holders need to understand the shorts are not evil.'' Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid=aNDnqybULZdo&refer=home
GM-FORD BANKRUPT? FORD 8.7 BILLION LOSS
-GM, Ford `On the Verge of Bankruptcy,' Altman Says. General Motors Corp. and Ford Motor Co., the two biggest U.S. automakers, have about a 46 percent chance of default within five years, according to Edward Altman, a finance professor at New York University's Stern School of Business.
"Both are in very serious shape and the markets reflect that,'' Altman, the creator of the Z-score mathematical formula that measures bankruptcy risk, said in an interview with Bloomberg Television. The model shows that these companies are ``on the verge of bankruptcy,'' he said. Read more here-
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=at7uOKMDbgnA
-Ford Has $8.7 Billion Loss, Shifts Away From Trucks. Ford Motor Co., the world's third- biggest automaker, posted a record quarterly loss of $8.7 billion and accelerated a shift to fuel-efficient vehicles to wean itself from money-losing large trucks.
The second-quarter deficit of $3.88 share compared with a profit of $750 million, or 31 cents, a year earlier. The figure included $8 billion in pretax writedowns for plant closings and the declining value of truck leases at Ford Motor Credit Co.
Ford said it will convert three North American truck factories to make small cars, sell more European autos in the U.S. and double production of hybrid vehicles. The revamping is a response to record gasoline prices that have ravaged sales of large pickups and sport-utility vehicles and derailed Chief Executive Officer Alan Mulally's turnaround plan. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=akwgsY7fdLoY&refer=home
REAL ESTATE
-Sales of U.S. Existing Homes Fell to 10-Year Low. Sales of previously owned U.S. homes fell in June to the lowest level in a decade, signaling tumbling real-estate prices and consumer confidence are hurting demand.
Resales dropped 2.6 percent to a lower than forecast 4.86 million annual rate from a 4.99 million pace the prior month, the National Association of Realtors said today in Washington. The median home price dropped 6.1 percent from June last year.
The biggest housing recession in a generation, now being exacerbated by a tightening in credit and rising borrowing costs as financial losses spread, threatens to stall economic growth. Mounting foreclosures are depressing home prices even more, prompting some buyers to hold out for bigger bargains.
"People are waiting until prices hit bottom, and credit is still difficult to obtain,'' Gus Faucher, director of macroeconomics at Moody's Economy.com in West Chester, Pennsylvania, said before the report. ``We expect to see home sales fall further.'' Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aQZucM.VdAMA&refer=home
-U.S. home prices drop 4.8% in May. Government report also notes prices fell 0.3% April to May, seasonally adjusted; price index down nearly 5% from 2007 peak. Read more here-
http://money.cnn.com/2008/07/22/real_estate/homes_prices.ap/index.htm?postversion=2008072211
-U.K. Home Prices Drop Most Since 2002, Rightmove Says. U.K. house prices dropped in July from a year earlier for the first time since Rightmove Plc started measuring them in 2002, as the squeeze on lending pushed up the number of unsold properties to a record.
The average asking price for a home fell an annual 2 percent to 235,219 pounds ($469,544), Britain's most-used property Web site said in a statement today. On the month, prices declined 1.8 percent, the biggest drop since December. Prices increased in London by 0.3 percent from June.
House prices will fall about 10 percent this year and 6 percent in 2009, the Ernst & Young Item Club, a forecasting group which uses the same model as the Treasury, said today. Britons, laden with a record 1.4 trillion pounds of debt, are struggling to afford homes as banks curb lending and credit costs increase.
"Banks need to be careful they do not get blamed for a second crash in 20 years'' by limiting loans, Miles Shipside, commercial director of Rightmove, said in the statement. ``The `doom and gloom' attitude should be about the drastically low levels of sales which affect the wider economy.''
House prices may fall further by as much as 30 percent and unemployment will increase as the U.K. slips into a recession, Bank of England policy maker David Blanchflower said in an interview published in the Guardian today. The economy may already be contracting, the newspaper cited him as saying. Read more here-
http://www.bloomberg.com/apps/news?pid=20601068&sid=aIY_Nok2Xfrc&refer=home
-Los Angeles condo sells for $2,848 (per square foot). Candy Spelling's penthouse in Century City will have a $47-million view. Read more here-
http://www.latimes.com/news/local/la-fi-condoprice22-2008jul22,0,2752571.story
FORECLOSURE-MORTGAGE
-California foreclosures up 261% from '07 levels. Read more here-http://latimesblogs.latimes.com/laland/2008/07/cal-foreclosure.html
-California foreclosures hit 20-year high. Research firm says 63,061 homes were lost to foreclosure between April and June. Read more here-
http://money.cnn.com/2008/07/22/real_estate/calif_foreclosures.ap/index.htm
-Calif. To Be Hit Hard Among Nation's 1 Million Foreclosures. A forecast released Friday has predicted that 1 million homes will be in foreclosure nationwide by the end of the year. Read more here-http://www.knbc.com/money/16926514/detail.html
-U.S. Home Vacancies Rise to a Record on Foreclosures. The number of vacant houses hit an all-time high in the second quarter as the U.S. real estate recession pushed homeowners into foreclosure. A total of 18.6 million U.S. homes stood empty, more than at any time in history, as lenders seized a record number of properties. The figure was 6.9 percent higher than a year earlier, the U.S. Census Bureau said in a report today. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid=a_D15g491b9w
-Mortgage Writedowns to Total $1 Trillion, Gross Says. Falling U.S. home prices will force financial firms to write down $1 trillion from their balance sheets, crimping bank lending and sparking sales of assets, said Bill Gross, who manages the world's biggest bond fund. A total of $5 trillion of mortgage loans, or almost half of the nation's home loans, belong to "risky asset categories'' such as subprime and Alt-A, Gross of Pacific Investment Management Co. said in commentary posted on the firm's Web site today.
About 25 million U.S. homes are at risk of negative equity, which could lead to more foreclosures and a further drop in prices, he said. A home has negative equity when it's worth less than the mortgage with which it was bought. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a.0jQ66fMGPQ
-'Take cash and leave' says U.K. lender. A former sub-prime mortgage lender is offering an 8% discount to its borrowers if they redeem their loans. Edeus, which started up in 2006, is making the cash-back offer to 400 customers and may extend it to thousands more if it proves popular. The lender wants to get the loans off its books but can no longer find professional investors willing to buy. A spokesman admitted the idea sounded "bizarre" but it was cheaper than selling the loans in any other fashion. Read more here-
http://news.bbc.co.uk/2/hi/business/7516830.stm
-Commercial mortgage delinquencies up. Missed payments on office and retail mortgages rise in June, but remain below average. Read more here-
GEOPOLITICAL
-Iran to get new Russian air defences by '09. Iran is set to receive an advanced Russian-made anti-aircraft system by year-end that could help fend off any preemptive strikes against its nuclear facilities, senior Israeli defence sources said on Wednesday. Read more here-http://www.alertnet.org/thenews/newsdesk/L21512727.htm
-Ahmadinejad vows no Iran concessions in nuclear crisis. President Mahmoud Ahmadinejad on Wednesday vowed that Iran would not yield in the crisis over its nuclear drive as world powers awaited a response from Tehran to a proposal aiming to end the standoff. "The Iranian people are steadfast and will not step back an inch against the oppressive powers," Ahmadinejad told a rally in the southwestern province of Kohgelouyeh-Boyerahmad. Read more here-http://www.breitbart.com/print.php?id=080723105224.tisqv4n4&show_article=1
-Obama Says a Nuclear-Armed Iran Poses Grave Threat. Democratic presidential candidate Barack Obama said that as president he would protect Israel's security and would ``take no options off the table'' to prevent Iran from obtaining a nuclear weapon. "A nuclear Iran would pose a grave threat,'' Obama told reporters today in Sderot, Israel. ``The world must prevent Iran from obtaining a nuclear weapon.'' Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=awbx1sfQC.cU&refer=home
-Iran May Face Further Sanctions, Brown Tells Knesset. Iran may face new sanctions unless it freezes nuclear enrichment, U.K. Prime Minister Gordon Brown said, after talks failed to resolve the stalemate between world powers and the Persian Gulf country over its atomic program. "Iran now has a clear choice to make,'' Brown said in a speech to the Knesset in Jerusalem today.
It must "suspend its nuclear program and accept our offer of negotiations or face growing isolation and the collective response not of one nation but of many nations.'' The comments added to the pressure on Iran to suspend enrichment efforts that the U.S. and European allies say are a cover for weapons development.
Secretary of State Condoleezza Rice said today that Iran cannot continue to "stall'' and has two weeks to respond to incentives to freeze enrichment or face more sanctions, Agence France-Presse reported. On July 19, European Union foreign policy chief Javier Solana said after meeting in Geneva with Iran's top nuclear official, Saeed Jalili, that Iran needs to give a clear answer within weeks to an offer of economic and diplomatic incentives.
The package was proposed by the five permanent members of the United Nations Security Council China, France, Russia, the U.K. and the U.S. plus Germany, and Solana said the world powers "did not get'' what they were looking for at Geneva. Read more here-
http://www.bloomberg.com/apps/news?pid=20601110&sid=axUFbrJlw7KE
-Israel makes arrests in alleged plot against Bush. Israel accused six Arabs on Friday of trying to set up an al Qaeda cell in Israel and said one of them had proposed attacking helicopters used during a visit by President George W. Bush. Israel's Shin Bet counter-intelligence agency said one of the suspects had used his mobile phone to film helicopters at a sports stadium in Jerusalem that was used as a landing site for Bush's delegation.
The suspect then posted queries on Web sites frequented by al Qaeda operatives, asking for guidance on how to shoot down the helicopters, the agency said in a statement. Bush visited Israel in January and again in May. Read more here-http://www.reuters.com/article/topNews/idUSN9173242220080718?feedType=RSS&feedName=topNews&rpc=22&sp=true
-Obama Calls for Greater Afghan Commitment From Europe. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a2z_b5Vnmjyc&refer=home
-Chertoff: European terrorists trying to enter US. European terrorists are trying to enter the United States with European Union passports, and there is no guarantee officials will catch them every time, Homeland Security Secretary Michael Chertoff said Thursday. Read more here-http://apnews.myway.com/article/20080718/D920562O1.html
-Chavez Goes Weapons Shopping in Russia Amid Arms Race. Venezuelan President Hugo Chavez heads to Moscow today to shop for air defense systems, submarines and other weaponry as Latin America's arms race quickens amid signs that his regional influence is waning. Past Venezuelan arms purchases from Russia have strengthened ties with Moscow as its rivalry with the U.S. intensifies over President George W. Bush's plans for an Eastern Europe missile defense system and other issues. Read more here-
http://www.bloomberg.com/apps/news?pid=20601109&sid=aLF7tPXrBVYE&refer=home
-Venezuela's Chavez calls for alliance with Russia. Venezuelan President Hugo Chavez, visiting Moscow to pursue weapons and energy deals, on Tuesday called for a strategic alliance with Russia to protect his country from the United States. Chavez has repeatedly accused Washington of plotting an invasion to destabilize his government, despite U.S. denials.
The alliance would mean "we can guarantee Venezuela's sovereignty, which is now threatened by the United States," Chavez told reporters shortly after his arrival in Moscow. Read more here-http://www.breitbart.com/print.php?id=D9230QC80&show_article=1
© 2009, Worldwide Precious Metals.
www.wwpmc.com
The GoldBugg Report - July 29, 2008
Posted by Worldwide Precious Metals on Tuesday, July 29, 2008
The GoldBugg Report - July 22, 2008
July 22, 2008
-Safe-haven lure likely to buoy gold over summer lull.
-$1000 gold and $20 silver in sights again as investors flee financial stocks.
-Gold is the only finite currency as JP Morgan once testified to Congress, "Gold is money and nothing else". Even more pertinently and more recently Alan Greenspan said "Gold still represents the ultimate form of payment in the world. Fiat money, in extremis, is accepted by nobody. Gold is always accepted" (Speech to Senate Banking Committee in May 1999).
GOLD
-Safe-haven lure likely to buoy gold over summer lull. Read more here-http://www.marketwatch.com/news/story/metals-stocks-golds-safe-haven-sparkle/story.aspx?guid={4383ED87-2F51-4DB8-ABBD-803A497F5B24}&dist=hpts
-What if gold gave a party and everyone came? Generalists, momentum players may join bugs as metal surges. Read more here-http://www.marketwatch.com/news/story/story.aspx?guid={01A873BE-B409-4973-8E35-073A84CA0F51}&siteid=rss
-Gold secular bull market is still intact and remonetization has begun! Austria's Erste Bank predicts a ‘shiny outlook' for gold in a very detailed Special Report. With seemingly massive support seen around the $850 level, the report suggests that the price will remain in the $850-$950 band during the summer months with the $1000 mark being clearly passed again later in the year. Passing $1200 is seen as the first target and in the long run the price is seen as passing the inflation-adjusted all-time high of $2,300. Read more here-
http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=56597&sn=Detail
-$1000 gold and $20 silver in sights again as investors flee financial stocks. The collapse of world stock markets is again pushing gold's safe haven status to the forefront within the investment community. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=56823&sn=Detail
-UBS forecasts $1000 average gold price next month and $1050 next three months. Continuing financial turmoil has caused UBS to increase its short term gold forecasts on safe haven scenario. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=56726&sn=Detail
-Special Got Gold Report-Fearful Funds Flood Into Gold ETFs. Read more here-http://www.resourceinvestor.com/pebble.asp?relid=44321
-Investors shun gold mining stocks, in favour of ETFs. Major gold miners, suffering from rising costs and falling output, are being deserted by investors favouring gold ETFs. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=56852&sn=Detail
-There's nothing like the prospect of war to kick-start the gold price again. Sabre rattling in the Middle East from Iran and Israel is again having a positive impact on the gold price, while other fundamentals are supportive too. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=56625&sn=Detail
-Saudi market faces scrap gold shortage. Saudi Arabia, the Middle East's largest gold jewellery consumer, is facing a shortage of scrap as jewellers and buyers expecting record prices to rise further hold onto their gold, traders and experts said. Read more here-http://www.kuwaittimes.net/read_news.php?newsid=MjgxNzc5OTky
-Just in case you have been on Mars for the last week, Fannie Mae and Freddie Mac in the U.S. seem to be having some financial trouble. For those outside the U.S., these two private companies are involved in funneling money to the U.S. housing market. Well, funneling might not be the right word. Shoveling, with big ones, might be more appropriate.
Now that they are having financial problems a major question must be answered. Who will eat the losses? The shareholders have already had more than $900 million of market value vaporized. If shareholders' equity does not cover future losses, who then takes the losses?
Apparently the Secretary of the Treasury along with some pals in Congress seem to think the taxpayers should take those losses. For you see, if bonds take the hit, selling new bonds will be difficult. And who does that hurt? The brokers that sell the bonds would get hurt, and that is apparently against the policies of the U.S. Treasury.
For those not aware, 2008 is an election year in the U.S. Each and every member of the House of Representatives is up for election, and one third of the Senate. Passing a law that puts those losses on the taxpayers while making bond investors whole would seem to be a long shot this year. Some big risks exist in how this is resolved.
The chart above is the ownership of U.S. government and agency debt by official foreign institutions, and held at the Federal Reserve. Agency debt includes that of Fannie Mae and Freddie Mac. Foreign official ownership of agency debt is just shy of a trillion dollars. The chart to right shows net purchases of agency debt over the past year. These foreign institutions have purchased more than $230 billion of agency debt in the past year.
How will foreign institutions react to the possibility of losses on these holdings? I imagine they will not take it well. This situation is another solid brick in the foundation of the dollar's long-term bear market and the bull market in Gold. So, we have another reason to own Gold in portfolios. Likewise, Israel making an adjustment in Iran's thinking on nuclear weapons is a good reason for owning Gold. Ned W. Schmidt
-Monetary problems, monetary solutions & the role of gold. Capie and Wood, World Gold Council Study. In this study, Professors Forrest Capie and Geoffrey Wood of City University, London discuss some of the major monetary problems facing policy makers today and consider whether there are lessons to be drawn from the role of gold in the past. Read more here-
http://www.gold.org/assets/file/pub_archive/pdf/RoleofGold.pdf
-Will we see big gold sales to help try and stabilise the dollar? The prospect of new Central Bank sales of gold to try and contribute to dollar stabilisation is likely to be under consideration. Will this happen, and, if it does, what will be the likely effect on the gold market. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=56945&sn=Detail
-Rare coins better than gold as inflation hedge. Coin and precious metals investment firm Blanchard & Company says Fed's policies have dollar, economy locked into long-term negative cycle while inflation and producer prices will continue to drive tangible assets higher. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=56965&sn=Detail
-Twelve month view on metals rankings. Aluminium seen as the likely star performer in comprehensive metals review. Read more here-
http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=56971&sn=Detail
-Fort Knox: Secrets Revealed. History Video-Doug Simmons's brief account of his time in Fort Knox. Read more here-http://www.history.com/media.do?id=money_fortknox_irongrip_broadband&action=clip
SILVER
-In fact, I am hard pressed to come up with a better current investment than silver, considering how poor the alternatives appear. To be sure, I must include gold in the insurance buying category. If ever there were a time to own gold, this would appear to be the right time. And investors seem to be moving to the safety of gold, judging by price changes and the increase in ETF holdings. At times like these, owning assets that are no one else's liability are comforting to everyone looking to preserve hard earned savings against catastrophic and unexpected loss.
But if one decides to own an asset that is no one else's liability for insurance purposes, then it makes sense to own the very best asset available. That would be silver, for the simple reason that there is much less of it available than gold and it is less than two percent of gold's price. Plus, there are strong indications that silver may finally be in the long-awaited wholesale shortage, while logic dictates there will never be an industrial shortage of gold, simply because it is not industrially consumed.
It is the dual role of silver as an industrial commodity and investment asset that makes it so unique and attractive. Of the two roles, it is investment demand that holds the greatest potential for causing the price to rocket in a flash. And while it is impossible to predict and measure, nothing can impact investment demand more than an emotional flight to quality by those suddenly nervous about their alternative investments and deposits. The key, as always, is to position yourself before any potential panic into silver.
Remember, if silver improves relative to gold to just 3 percent of gold's price from the current 2 percent, it will mean that silver will return 50 percent more than whatever gold returns. And that should be a very minimal expectation, in my opinion. Given the facts available, it is hard to imagine how silver's price won't improve relative to gold's. More than ever, a switch to silver from gold for those underexposed to silver makes sense.
While price volatility goes hand in hand with these emotional and uncertain financial times, it is important to remain as grounded as possible. One way to do that is by owning assets you don't have to worry about over the long term. That silver is the asset least to worry about in stormy times, makes it the best asset to own. Ted Butler-Read more here-
http://news.silverseek.com/TedButler/1216139643.php
-Gold/Silver Market Updates from Clive Maund. For those not already long, silver is rated a strong buy here. Read more here-http://www.321gold.com/editorials/maund/maund071408.html
-As can be seen above, within inflationary times, silver to gold relativity brings extremes closer to 15 than 50, which is where we are right now. Of course this is the opportunity, where if you do the math here, assuming gold goes up to its Consumer Price Index (CPI) adjusted 1980 price of approximately $2400, then at even just 20, silver would go to $120 before the party is over.
At 15 this would obviously be much better, with silver running all the way to $200. And if shadowstats.com is correct about inflation over the past 30 years, then gold should rise to $5000. We will let you do the math on that one in terms of where silver is going if gold runs all the way to $5,000. Did you do the math? Does this figure seem impossible to you? If so, keep in mind that markets like to do what the majority of participants think is not possible.
In this respect, right now the bullion banks believe it's not possible for them to lose control of the silver market, which as we have been saying, is why silver will lead the next leg of the precious metals bull market when this occurs. What's more, most market(s) participants still believe silver is a dead asset class, and that the stock market is still the place to be.
This is why in spite of the stock market breaking long-term support(s) yesterday, no panic exists as of yet, seen here in still low put-call ratios and VIX. This is of course why stocks will keep falling then, because of complacency towards the decline. Eventually the lights will come on for increasing numbers however, who will then switch from stocks to the newly perceived safety of precious metals, which will crash stock(s) to silver ratios. Read more here-http://news.goldseek.com/CaptainHook/1216053299.php
-Bar Graphs of Silver vs. Money. Read more here-http://news.silverseek.com/GoldIsMoney/1215755880.php
-Silver has been Exploding for 5 years now. Read more here-http://news.silverseek.com/GoldIsMoney/1215782763.php
-Silver Shorts Reported (And what to do about it) - Jason Hommel - http://www.silverstockreport.com/2008/shorts.html
-Marketing initiative launched by Silver Institute to boost sales. Former World Gold Council executive Michael Barlerin is helping to launch the Silver Marketing Initiative aimed at encouraging sterling silver jewelry sales. Read more here-http://www.mineweb.net/mineweb/view/mineweb/en/page32?oid=56899&sn=Detail
DEFINITIONS-QUOTES-QUICK HITS
-Naked Shorting. The illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. But due to various loopholes in the rules and discrepancies between paper and electronic trading systems, naked shorting continues to happen. While no exact system of measurement exists, most point to the level of trades that fail to deliver from the seller to the buyer within the mandatory three-day stock settlement period as evidence of naked shorting.
Naked shorts may represent a major portion of these failed trades. Naked shorting is illegal because it allows manipulators a chance to force stock prices down without regard for normal stock supply/demand patterns. In 2007, the Securities and Exchange Commission (SEC) amended Regulation SHO to further limit possibilities for naked shorting by removing loopholes that existed for some broker/dealers.
Reg SHO requires lists to be published that track stocks with unusually high trends in "fail to deliver" shares. Some analysts point to the fact that naked shorting, albeit inadvertently, may help markets stay in balance by allowing the negative sentiment to be reflected in certain stocks' prices. Investopedia.com
-SEC to Limit Short Sales of Fannie, Freddie, Brokers-Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aEd6iHTmqiOY&refer=home
-U.S. Exchanges May Seek Exemption to SEC "Naked Short Sale" Ban. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aWbkDUiKUgp4&refer=home
-SEC to Probe Manipulation Through False Information. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=ankVMKVBnc_Y&refer=worldwide
-"These companies (Fannie Mae and Freddie Mac) were going to go bankrupt if they hadn't stepped in to do something, and they should've gone bankrupt with all of the mistakes they've made,'' Jim Rogers said. "What's going to happen when you Band-Aid and put some Band-Aids on it for another year or two or three? What's going to happen three years from now when the situation's much, much, much worse?'' Bloomberg
-America's Second Biggest Bank Failure. James Turk commentary-http://goldmoney.com/en/commentary.php
-Analysts say more U.S. banks will fail. As home prices continue to decline and loan defaults mount, U.S. regulators are bracing for dozens of American banks to fail over the next year.
But after a large mortgage lender in California collapsed late last Friday, Wall Street analysts began posing two crucial questions: Just how many banks might falter? And, more urgently, which one could be next? Read more here-http://www.iht.com/articles/2008/07/14/business/14bank.php
-Bloomberg TV Interview of Nouriel Roubini. Worst Financial Crisis Since the Great Depression and Worst U.S. Recession in Decades. I was on Bloomberg TV this morning being interviewed about financial markets, the economy and the upcoming testimony by Bernanke. As I put it in the interview: "This is a systemic financial crisis, there is no end to it,'' Nouriel Roubini, professor of economics and international business at New York University, told Bloomberg Television.
"It's a vicious circle between a contracting economy and greater credit and financial losses feeding on the economy.'' Regular readers of this blog are familiar with my views. But here is a summary and significant extended update of my views that this will turn out to be the worst financial crisis since the Great Depression and the worst US recession in decades. Watch video here-http://media2.bloomberg.com/cache/vrIG4cHtP.HQ.asf
-Louise Yamada was quoted on CNBC as predicting Gold at $5000 within 5 to 10 years. Jsmineset.com
-"Gold has been completely overwhelmed by monetary and speculative demand." Frank McGhee, Integrated Brokerage Services
"Physical demand tends to provide a floor to prices, while investment demand tends to drive prices." Suki Cooper, Barclays Capital
-"While the need for cash prompts some investor liquidation of gold in the short term, we expect the backdrop of geopolitical concerns and financial market jitters to limit price weakness, with the metal well-placed to challenge above $1,000 an ounce," said James Moore, of TheBullionDesk.com. Kitco Daily Resource
-Gold and Oil for George Soros. Soros finally shorted oil at $137 a barrel and put on a long position in gold; he expects to see gold hold its ground even if oil continues to decline. In fact, the gold bug clique believes in a consistent 10-to-1 ratio for gold and oil. It holds that either gold will rise to 10 times a barrel of oil ($1,350 an ounce) or oil will fall to $96 a barrel one tenth the present market price of gold. Croesus was told Tuesday that statistics spanning many decades support, on average, this 10-to-1 ratio. Read more here-
http://www.forbes.com/opinions/2008/07/16/soros-gold-merrill-oped-cx_rl_0717croesus.html
-It's no wonder that, "People are freaked out," as Matt Zeman, a metals trader at LaSalle Futures Group in Chicago, said. "Gold is catching a flight-to-quality bid. People are looking for hard assets to put their money in." And Zeman sees more of the same to come. "People weren't as concerned about inflation in March, but that's kind of changed now," he said. "The credit-market losses are going to continue, you're going to see more banks failing, and the dollar should continue to lose ground. You'll see a more sustained run on gold." Kitco Daily Resource
-While risk appetite has increased with equity markets having a renewed bout of misplaced exuberance, this is likely to be short lived as equity markets experience another dead cat bounce. Barclays reports overnight that their "sentiment-based equity risk indicator remains within extremely bearish territory, and suggests that equities may continue to sell-off aggressively."
Poor returns and volatility in equity markets internationally is leading to safe haven diversification into gold. With the outlook for equities and bonds looking increasingly uncertain (especially in the light of the onward march of inflation in the U.S. and internationally), gold is set to continue to outperform other major asset classes for the foreseeable future. Gold.ie
-Gold is a safe haven asset and the only asset class that is not someone else's liability and this is why it is thriving in the current environment and will likely reach it's inflation adjusted high of $2,300 per ounce in the coming 3 to 5 years. All portfolios should have a minimum allocation of 10%. Given the extent of current macroeconomic and systemic risk, an increase in this allocation to at least 20% would be very prudent. Gold.ie
-Gold is the only finite currency as JP Morgan once testified to Congress, "Gold is money and nothing else". Even more pertinently and more recently Alan Greenspan said "Gold still represents the ultimate form of payment in the world. Fiat money, in extremis, is accepted by nobody. Gold is always accepted" (Speech to Senate Banking Committee in May 1999). Gold.ie
-Dan Norcini, writing on jsmineset.com, commented that, "It was amusing reading the wire service commentary attempting to explain the drop in gold this morning. "One provider stated that gold declined because Bernanke said that inflation is too high and is a top priority for the US government.
Oh sure it is! And to show how serious it is, the Fed is going to immediately begin a rate hike cycle in which they will add 100 basis points before the end of the year is out. Of course, they will be sure to do just that while the feds bail out FRN and FRE and while the FDIC attempts to clean up the mess at Indy Mac.
Don't forget Washington Mutual whose share price is trading closer to $4.00 than the $44 it was trading at a year ago. Yes indeed, that is just what the financial stocks ordered a hawkish Fed talkfest! Meanwhile they are forced to print Dollars like candy wrappers to hold things together! I am sure China and the rest of the sovereign wealth funds are thrilled." Kitco Daily Resource
-U.S. Federal deficit grows to $268.7 billion. The new year-to-date deficit was the third-highest on record as the stimulus check program drained federal coffers. Read more here-
http://money.cnn.com/2008/07/11/news/economy/bc.federalbudget.ap/index.htm
-As the Bush administration proposes backstopping mortgage giants Fannie Mae and Freddie Mac with a $300 billion line of credit and Congress contemplates another economic stimulus, the question is who will bail out the government? "People seem to think the government has money," said former U.S. Comptroller General David Walker. "The government doesn't have any money."
A rare consensus has developed across the political spectrum that the government's own fiscal affairs are precarious, with an astonishing $53 trillion in long-term liabilities, according to the Government Accountability Office. To put that number in human terms, the debt has reached $455,000 per U.S. household. As that debt grows, the United States increasingly relies on foreigners, including China and Middle East oil producers, for financing. Read more here-http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/17/MN8Q11OT2M.DTL&tsp=1
-Obama may produce US$1trillion deficit, Bill Gross Says. Bill Gross, manager of the world's biggest bond fund at Pacific Investment Management Co., said a Barack Obama administration may have no other choice than to produce the first $1 trillion U.S. budget deficit.
"You have inherited a mess," Gross, co-chief investment officer of Pimco, said in an open letter to Obama, the likely Democratic presidential nominee, published on the Newport Beach, California-based company's Web site today. "What do I think you should do as the new president to rectify this mess? All I know is that any solution will come with a high price tag.'' Read more here-http://www.financialpost.com/story.html?id=627477
-U.S. `Misery Index' Climbs to 15-Year High on Prices. Misery hasn't had this much company in more than 15 years. The jump in consumer prices reported today by the Labor Department means the so-called Misery Index, the sum of the unemployment and inflation rates, is the highest since President Bill Clinton took office in January 1993. The measure, created by Arthur Okun, an economics adviser to President Lyndon Johnson, rose to 10.5 in June from 9.7 in the prior month. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=aHXJY.fS72Ss&refer=home
-Mood's still extremely gloomy: University of Michigan. Read more here-http://www.marketwatch.com/news/story/consumers-still-extremely-gloomy-univ-mich/story.aspx?guid={58B2ADE2-96D3-412A-810D-03D9DBC0F05D}&dist=hplatest
RARE COLORED DIAMONDS
-Diamonds Attract Funds as Largest Gem Prices Surge 76% in Year. Diamonds, like art, are a commodity that is gaining attention as an alternative investment. Increases in the price of the rarest colorless and colored diamonds are attracting wealthy investors and structured funds as stock markets and real-estate values decline. The price of 5-carat gems with the potential to be sold at $1 million or more has risen 76.5 percent in the year to May 2008, according to Idexonline.com, the Web site of the International Diamond and Jewelry Exchange.
"There's a group of very savvy, tremendously wealthy people who have put a small portion of their fortunes aside to invest in diamonds,'' said Francois Graff, managing director of London- based Graff Diamonds International, in a telephone interview. ``They've made incredible returns.'' Five years ago, dealers were paying $70,000 per carat for colorless diamonds of 10 carats and more, said Graff. "Now we're paying over $200,000 per carat,'' he said. There are only about 200 highest-grade, D-flawless colorless diamonds of more than 5 carats discovered per year, according to Raymond Sancroft-Baker, Christie's International's European director of jewelry.
The annual yield of large-scale blue and pink stones is considerably smaller. "Diamonds are getting rarer. The earth just isn't giving them up,'' said Sancroft-Baker in a telephone interview. The commodity asset-management firm Diapason Commodities Management SA listed a specialist investment fund, Diamond Circle Capital Plc, on the London Stock Exchange on June 25. Diapason did not immediately respond to e-mailed requests for comment.
Public Listing-Diamond Circle Capital is the first publicly listed fund to invest in rare colored and colorless diamonds, according to International Diamond and Jewelry Exchange's Web Site. The fund, which in June 2007 was due to have a $400 million start-up, raised $74.32 million through its initial public offering, said the Web site.
"Over the last 12 months, the best pink and blue diamonds have increased in price between 75 and 100 percent,'' said the New York diamond dealer Alan Bronstein in an interview. Bronstein's Aurora Collection of 296 colored diamonds is currently on loan to the Natural History Museum in London. "These are some of the rarest and most colorful things in the world,'' said Bronstein, whose diamonds are specimen examples of less than 3 carats.
Rarity Value-"They used to be viewed as curiosities,'' said Joanna Hardy, senior specialist at Sotheby's jewelry department in London. "Now buyers are taking colored diamonds much more seriously. People want to have something different. And they value rarity.'' In May, the Codium Fund, specializing in investing in colored diamonds of at least 1 carat, was to be launched in the Netherlands Antilles with a target investment of $100 million, Arab Times said on its Web site.
Over the last five years, managers of art-investment funds, which buy and sell a pool of works for a set management fee and a share of any profit made, have been keen to promote art as an alternative asset class. So far, the Fine Art Fund, started in 2004, is the only one of these vehicles that has remained conspicuously active in the West.
Individual Choice-"The diamond market, like the art market, is based on individual transactions,'' said Graff, whose father Laurence is a bidder at many Sotheby's and Christie's contemporary-art auctions. "The wealthy don't need to invest in funds. They can just pick up a telephone and buy the things for themselves.'' Graff said that within the last three months he has sold a D-flawless, emerald-cut colorless diamond of 243.96 carats to an Asian buyer for in excess of 50 million pounds ($99.6 million).
"There were quite a few people ready to buy that stone,'' said Graff, who has placed a similar price on a flawless 20-carat fancy deep-blue diamond. The record for any gemstone sold at auction is the $16.5 million with fees paid for the 100.1-carat ``Star of the Season'' pear-shaped colorless diamond at Sotheby's, Geneva in May 1995, according to Sotheby's. "When stock markets go down, it's always good for us,'' said Hardy.
"People with a lot of surplus cash turn to something more tangible.'' Sotheby's was selling diamonds to buyers from a record number of countries, Hardy said. ``We've got a lot of customers from the Middle East, Russia and the Ukraine. And there are more buyers from Europe than America at the moment,'' she said. Hardy does not expect prices for large-scale colored and colorless stones to fall within the next six months. ``It's not as if there are suddenly going to be more of them,'' she said. Full story here-
http://www.bloomberg.com/apps/news?pid=20601093&sid=aKVjxYejpss0&refer=home
-Super-rich still pay dear for rare diamonds. The rapid rate of increase in wholesale prices of rare polished diamonds is unsustainable, but for now the growing number of super-rich are paying rising prices for top-tier diamond jewelry. Charles Wyndham, founder of PolishedPrices, a leading index of wholesale diamond prices, said on Friday prices of larger, rare, near-flawless gemstones had shot up by roughly 200 percent over the past 18 months. Read more here-http://www.reuters.com/article/newsOne/idUSL0416926920080705
-Demand for rarest diamonds outstrips supply. Read more here-http://www.reuters.com/article/reutersEdge/idUSL0646558820080606
-Five percent price hike for rough diamond prices by De Beers. De Beers has raised its rough diamond prices by 5% due to strong demand from Asian markets outstripping supply. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page37?oid=56605&sn=Detail
-Global diamond company Gem Diamonds Ltd. said four of its yellow diamonds, totaling 15.7 carats, were sold on tender in Antwerp for an average price of $28,860 per carat. The sales included a 7.1 carat cushion-cut, vivid yellow diamond, which sold for $52,000 per carat and a 2.3 carat cushion-cut, vivid yellow diamond which sold for $19,000 per carat, the company said. CNBC.com
-Rio Tinto production down at argyle mine. Production of diamonds at Rio Tinto's 100 percent-owned Argyle mine in Western Australia in the second quarter of 2008 improved from the previous quarter but was 32 percent below the corresponding quarter of 2007.
Some 2,992,000 carats were produced from 1,794,000 tons of ore processes from AK1. Access to the high grade areas of the pit, which had been restricted due to geotechnical issues and wet weather earlier in the year, was re-established midway through the quarter resulting in improved feed grade and higher throughput. Variability in feed grades and production rates will continue as the open pit approaches the end of its life and the mine transitions to an underground operation. Diamondintelligence.com
-Argyle Underground Pink Diamond Mine on Track as Costs Swell. Despite major blows to its budget, the world's largest supplier of diamonds says it's on track to move from open cut to underground mining, Australian Broadcasting Corporation (ABC) News reported. The transition of the Argyle diamond mine, in the Kimberley region of Western Australia, is now halfway to completion in 2011.
The projected costs of the project have doubled from $800 million to $1.6 billion, according to the report. But chief operating officer Kevin McLeish said that they are already finding more of the rare pink diamonds. "The great news is the pink diamonds are in the ore body from the top to the bottom," he said. "We're currently processing some development ore that we need to take out of the mine as we build it and there's been pink diamonds in that." Israelidiamond.co.il
OIL-GASOLINE
-With the price of a barrel of oil trading over $140, today's chart provides some perspective by presenting the current trend of West Texas Intermediate crude. As today's chart illustrates, crude oil traded within the confines of a relatively steep upward trend channel in 2007. As a result of several significant issues (i.e. ever increasing global demand, ongoing geopolitical tensions, etc.), the steepness of that upward trend has only increased in 2008. Chartoftheday.com
-Venezuela's Chavez says oil could reach $300. Venezuelan President Hugo Chavez said on Sunday oil prices could hit $300 per barrel if U.S. oil company Exxon Mobil again freezes Venezuelan assets in a dispute over a nationalized oil project. Read more here-http://uk.reuters.com/article/rbssEnergyNews/idUKN1338614020080713
-OPEC's empty toolkit. The leaders of OPEC says its members have plenty of oil to meet demand. So why aren't they putting more on the market? Read more here-http://money.cnn.com/2008/07/15/news/economy/okeefe_oil.fortune/index.htm?postversion=2008071604
-Peak Oil Is A Done Deal. Read more here-http://321energy.com/editorials/cohen/cohen071708.html
-The National Iranian Oil Company (NIOC) and Russia's giant gas company Gazprom have signed an agreement for the development of Iran's oil and gas fields. Read more here-
http://www.tehrantimes.com/index_View.asp?code=173227
-Gas, diesel hit new records. Average price of unleaded gasoline and diesel fuel reach new highs. Read more here-http://money.cnn.com/2008/07/16/news/economy/gas/index.htm?cnn=yes
-Gas Lines Coming This Fall. Read more here-http://seekingalpha.com/article/84966-gas-lines-coming-this-fall
INFLATION
-Inflation: Price jump worst since '91. Record gas and higher costs prices spark a 5% annual jump in Consumer Price Index. Read more here-
http://money.cnn.com/2008/07/16/news/economy/cpi/index.htm
-Inflation grows at fastest pace in 27 years. June wholesale prices surge 1.8%, propelled by soaring gas and food costs; biggest monthly rise since November. Read more here-
http://money.cnn.com/2008/07/15/news/economy/prices_june.ap/index.htm
-U.K. Inflation Rate Jumps to 11-Year High, House Prices Fall. U.K. inflation accelerated to the fastest pace in at least 11 years and the housing slump worsened, making it harder for the Bank of England to stave off a recession by cutting interest rates. Consumer prices climbed 3.8 percent from a year earlier, exceeding the government's 3 percent upper limit for a second month and the highest result since records began in 1997, the Office for National Statistics said today in London. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ayEBwCJC4S7k
Real U.K. rate of inflation could be 10 per cent, says John Major. The true annual rate of inflation is as much as 10 per cent, Sir John Major claimed as he warned that Britain was on the brink of recession. The former Conservative prime minister forecast more job losses and bankruptcies and accused the Government of under-stating the real impact of price rises.
He said changes to the way inflation is calculated had been "extremely misleading", with increasing food prices and heating bills not reflected by the official statistics on the cost of living.
He told BBC1's Andrew Marr Show: "I would say inflation is probably double the RPI [Retail Prices Index] figure, so we're between 8 and 10 per cent." Read more here-
-India-Inflation shoots up to 11.9%. Read more here-http://economictimes.indiatimes.com/Inflation_shoots_up_to_1191/articleshow/3246282.cms
-New Zealand Inflation Accelerates to 18-Year-High. New Zealand's consumer prices rose at the fastest pace in 18 years in the second quarter, fanned by fuel and food costs, adding to signs the economy is facing stagflation as it slips into recession.
The consumer prices index rose 1.6 percent from the first quarter, Statistics New Zealand said in Wellington today. The median estimate of 12 economists surveyed by Bloomberg was for 1.4 percent. From a year earlier, prices rose 4 percent. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=awAYfYP0enro&refer=home
-South Korea May Use Price Controls to Cool Inflation. South Korea's government indicated it may implement price controls to cool decade-high inflation, a day after the central bank warned wage demands could ignite a "vicious cycle" of spiraling prices. Read more here-http://www.bloomberg.com/apps/news?pid=20601013&sid=a.9i_ixgslIw&refer=emergingmarkets
-Zimbabwe's inflation rate a punishing 2.2 million per cent. Zimbabwe's official inflation rate climbed to a record 2.2 million per cent, the country's central bank announced Wednesday, meaning prices are doubling every 25 days. Read more here-http://www.cbc.ca/world/story/2008/07/16/zimbabwe.html
-Newell ups prices 22%, lowers outlook. Sharpie pen manufacturer, struggling with rising energy costs, will exit some products, raise prices on others. Read more here-
http://money.cnn.com/2008/07/15/news/companies/newell_outlook.ap/index.htm
INTEREST RATES
-Canada Keeps Rate at 3%; Says Price Risks `Balanced'. The Bank of Canada kept its key interest rate unchanged, saying risks are ``balanced'' between the slowest economic expansion since the country's last recession and inflation twice as fast as the bank's target.
Governor Mark Carney and his five deputies held the rate on overnight loans between commercial banks at 3 percent, the lowest since December 2005. All 28 economists in a Bloomberg survey predicted the decision, the second time policy makers have held borrowing costs after four reductions between December and April. Read more here-
http://www.bloomberg.com/apps/news?pid=20601082&sid=an7NSuwjaxNk&refer=canada
-Japan holds rates steady at 0.5%. Bank of Japan takes wait-and-see approach amidst slowdown, rising inflation; rates unchanged since February 2007. Read more here-
http://money.cnn.com/2008/07/15/news/international/japan_rates.ap/index.htm
-Fed debated need for rate hikes. Minutes from the central bank's meeting in June showed that some Fed members believed interest rate increases were needed 'very soon' in order to curb inflation. Read more here-http://money.cnn.com/2008/07/16/news/economy/fed_minutes/index.htm
-Dr. Ron Paul takes on Federal Reserve chairman Ben Bernanke. Opening Statement and Q&A. Read more here-http://news.goldseek.com/RonPaul/1216235654.php
CREDIT CRISIS
-Bank losses from credit crisis may run to $1,600bn, warns Bridgewater. Bridgewater Associates has issued an apocalyptic warning to clients that bank losses from the worldwide credit crisis may reach $1,600bn (£800bn), four times official estimates and enough to pose a grave risk to the financial system. The giant US hedge fund said that it doubted whether lenders would be able to shoulder the full losses, disguised until now by "mark-to-model" methods of valuing structured credit.
"We are facing an avalanche of bad assets. We have big doubts as to whether financial institutions will be able to obtain enough new capital to cover their losses. The credit crisis is going to get worse," said the group in a confidential report, leaked to the Swiss newspaper SonntagsZeitung. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/08/cnbridge108.xml
-IMF sticks by $1 trillion U.S. subprime fallout. The International Monetary Fund is sticking to its estimate that losses on U.S. assets from the subprime crisis and its wider fallout would be about $1 trillion despite fresh U.S. banking problems recently, a senior IMF official said on Wednesday.
"Basically, we think this is a reasonable figure and we are not revising the figure every day," Jaime Caruana, director of the IMF's monetary and capital markets department, told reporters in Brussels. Earlier he told the European Parliament that the financial system, still suffering from a near year-long credit crisis, may have more difficulty in extending credit needed for the economy to grow. Reuters
-Merrill Lynch Posts Fourth Straight Quarterly Loss. Merrill Lynch & Co., the third- biggest U.S. securities firm, reported a fourth straight quarterly loss that was wider than analysts estimated as the company added to its credit-market writedowns.
The second-quarter net loss of $4.65 billion, or $4.97 a share, compared with earnings of $2.14 billion, or $2.24, a year earlier, Merrill said in a statement. Analysts' estimates ranged from a loss of 93 cents to a loss of $4.21 a share, according to a survey by Bloomberg. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aWxkYTOAJ0Tw&refer=home
BANKING CRISIS
-Who's Next? List of Troubled Banks Worries Wall Street, DC. Banks in Colorado, Maryland, Georgia and California top privately-prepared lists of troubled banks being circulated on Wall Street and in Washington. Read more here-http://abcnews.go.com/Blotter/story?id=5374205&page=1
-A new American reality: The government as provider. In a country that holds itself up as a citadel of free enterprise, Washington has morphed from being the lender of last resort into effectively the only resort for home loans for millions of Americans engaged in the largest transactions of their lives. Before, the government's more modest mission was to make more loans available at lower rates. Now it is to make sure the loans that matter most to middle class Americans are made at all. Read more here-
http://www.iht.com/articles/2008/07/13/business/guarantee.php
-Banking regulators close IndyMac. The Office of Thrift Supervision shuts down mortgage lender IndyMac and transfers the operations to the Federal Deposit Insurance Corporation. Read more here-http://money.cnn.com/2008/07/11/news/companies/indymac_close.ap/index.htm or http://www.bloomberg.com/apps/news?pid=20601087&sid=atyF3ydPUlk8&refer=home
-IndyMac customers line up to withdraw money. Hundreds gathered Monday to pull savings; many fear losses as largest regulated thrift fails. Read more here-
http://money.cnn.com/2008/07/14/news/companies/indymac_withdraw.ap/index.htm?postversion=2008071414
-IndyMac Failure May Prompt Rush to Pull Bank Deposits. IndyMac Bancorp Inc.'s collapse may spur withdrawals from banks ranging from First BanCorp in Puerto Rico to Los Angeles-based Nara Bancorp Inc. as customers trim accounts below the $100,000 limit on deposit insurance, according to Sandler O'Neill & Partners LP.
"IndyMac's failure has people worried about others,'' Mark Fitzgibbon, a principal at Sandler O'Neill, said in an interview. Fitzgibbon told clients in a report this week that signs of weakness may prompt customers "to more actively move deposits to banks that are perceived to be healthier.'' Read more here-
http://www.bloomberg.com/apps/news?pid=20601110&sid=aAY7lu28X.t8
-FBI probes possible home-loan fraud at IndyMac. Read more here-http://www.breitbart.com/print.php?id=D91V68080&show_article=1
-Making Sense of Problems at Fannie and Freddie. Read more here-http://www.nytimes.com/interactive/2008/07/11/business/20080711_FANNIE_GRAPHIC.html
-Fannie, Freddie Nationalization May Be an Option, Bernanke Says. Federal Reserve Chairman Ben S. Bernanke said nationalizing Fannie Mae and Freddie Mac, the largest U.S. mortgage-finance companies, is among a number of long-term options lawmakers can consider to reduce taxpayer risk. Read more here-
-Fannie, Freddie: Taxpayers on the hook. How big a burden taxpayers would bear if Uncle Sam lends a hand to the two mortgage finance giants depends on a lot of hard-to-estimate variables. Read more here-http://money.cnn.com/2008/07/16/news/economy/fannie_freddie_taxpayer_impact/index.htm
-Fannie, Freddie bailout would imperil budget, dollar. Read more here-http://www.reuters.com/article/idUSN1135284920080711
-Fannie Plan a `Disaster' to Rogers; Goldman Says Sell. The U.S. Treasury Department's plan to shore up Fannie Mae and Freddie Mac is an ``unmitigated disaster'' and the largest U.S. mortgage lenders are ``basically insolvent,'' according to investor Jim Rogers.
Taxpayers will be saddled with debt if Congress approves U.S. Treasury Secretary Henry Paulson's request for the authority to buy unlimited stakes in and lend to Fannie Mae and Freddie Mac, Rogers said in a Bloomberg Television interview. Rogers is betting that Fannie Mae shares will keep tumbling.
"I don't know where these guys get the audacity to take our money, taxpayer money, and buy stock in Fannie Mae,'' Rogers, 65, said in an interview from Singapore. "So we're going to bail out everybody else in the world. And it ruins the Federal Reserve's balance sheet and it makes the dollar more vulnerable and it increases inflation.''
The chairman of Rogers Holdings, who in April 2006 correctly predicted oil would reach $100 a barrel and gold $1,000 an ounce, also said the commodities bull market has a ``long way to go'' and advised buying agricultural commodities. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aSLF543SCO4A&refer=home
-Japan mortgage exposure seen over $95 billion. Nikkei: combined total of private-sector financial firms topped Y10 trln. Japan's private-sector financial institutions held slightly more than 10 trillion yen ($95 billion) in debt securities issued by U.S. mortgage lenders such as Fannie Mae and Freddie Mac as of the end of the fiscal year in March, according to a published report. Read more here-http://www.marketwatch.com/news/story/japan-private-firms-us-mortgage/story.aspx?guid={70653466-BF9E-4393-97B3-A8E989C04154}
U.S. GLOBAL FUNDING CRISIS
-US faces global funding crisis, warns Merrill Lynch. The US Treasury is running out of time before foreign patience. Merrill Lynch has warned that the United States could face a foreign "financing crisis" within months as the full consequences of the Fannie Mae and Freddie Mac mortgage debacle spread through the world.
The country depends on Asian, Russian and Middle Eastern investors to fund much of its $700bn (£350bn) current account deficit, leaving it far more vulnerable to a collapse of confidence than Japan in the early 1990s after the Nikkei bubble burst. Britain and other Anglo-Saxon deficit states could face a similar retreat by foreign investors.
"Japan was able to cut its interest rates to zero," said Alex Patelis, Merrill's head of international economics. "It would be very difficult for the US to do this. Foreigners will not be willing to supply the capital. Nobody knows where the limit lies." Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/16/ccusdebt116.xml
GLOBAL RECESSION
-The new new world order. Skyrocketing oil prices. Double-digit inflation. Is the great global economic boom finally coming to an end? Read more here-
http://money.cnn.com/2008/07/11/magazines/fortune/gimbel_global.fortune/index.htm
-This recession could easily tip into a depression. The experience of the 1930s makes me think that the present downturn will be relatively long and difficult. Read more here-
http://www.timesonline.co.uk/tol/comment/columnists/william_rees_mogg/article4326794.ece
-Kick-starting the U.S. economy while it's down. Many economists have concluded that a second dose of government stimulus spending is required to prevent a broad economic unraveling in the United States - and to provide relief to millions of Americans grappling with joblessness, plunging home prices and tight credit.
Democratic leaders in the U.S. Congress are already fashioning a package of measures, even though President George W. Bush and the Federal Reserve chairman, Ben Bernanke, have pronounced such action premature. Read more here-http://www.iht.com/articles/2008/07/16/business/stimulus.php?WT.mc_id=newsalert
U.S. DOLLAR-FOREIGN CURRENCY
-Sovereign funds cut exposure to weak US dollar. Some of the world's largest sovereign wealth funds are seeking to scale back their exposure to the US dollar in a sign of global concern about the currency. One big sovereign fund in the Gulf has cut its dollar-denominated holdings from more than 80 per cent a year ago to less than 60 per cent, while China's State Administration of Foreign Exchange (SAFE) has been looking to strike deals with private equity firms in Europe as a part of a strategy to reduce its dollar holdings.
Sovereign wealth funds have played a leading role in helping to recapitalize faltering US banks, but have lost money so far on such investments. Continuing market turbulence has further shaken their faith in US policy and policymakers. Kenneth Shen, head of the strategic and private equity group at Qatar Investment Authority, another Middle Eastern fund looking to do more deals in Europe than the US, aired such concerns publicly at a conference in Hong Kong late last year. "The outlook for the US dollar is a significant issue for investors contemplating US-related investments," Mr. Shen said. Read more here-http://www.ft.com/cms/s/0/fc250ac2-5361-11dd-8dd2-000077b07658.html?nclick_check=1
-Canada Dollar Equal to U.S. Currency for First Time in 6 Weeks. Canada's dollar traded equal to its U.S. counterpart for the first time in six weeks on concern that widening credit-market losses will drag the U.S. economy into a recession. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid=aBIGbAjYwIgA&refer=canada
-Euro races to record high $1.6038 on US woes. Read more here-http://www.breitbart.com/print.php?id=080715101632.yn3b8q4z&show_article=1
-Gross Likes Dollar More Than Euro for 1st Time on EU. For three years euro bulls used the prospect of higher interest rates in Europe to justify the currency's 32 percent rally against the dollar. No more. A growing number of the world's biggest investors say a slowdown in the region's economy may be more severe than in the U.S., forcing the European Central Bank to reverse this month's rate increase.
By January, the euro will be lower against the dollar, yen and even the pound, according to the median estimate of strategists surveyed by Bloomberg. Bill Gross, manager of the world's biggest bond fund, turned bearish on the euro for the first time since the currency's inception in 1999.
"We might have hit a point where the euro doesn't have a lot to stand on,'' said Emanuele Ravano, co-head of European strategy in London for Gross's Pacific Investment Management Co., which runs the $129 billion Pimco Total Return Fund. "The euro is ultimately very overvalued. It could be quite a bit lower at some point in time over the next couple of years.'' Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid=awbjHoEJmCAA&refer=home
-China's Currency Reserves Rise 36% to $1.81 Trillion. China's foreign-exchange reserves climbed by more than a third to a record $1.81 trillion at the end of June, evidence that investors may be betting on further gains by the yuan.
Currency holdings rose 35.7 percent from a year earlier, the People's Bank of China said today on its Web site. The assets grew $126.6 billion from the end of March, after a $153.9 billion gain, the biggest on record, in the first quarter. Read more here-http://www.bloomberg.com/apps/news?pid=20601013&sid=aECcub3xCGlU&refer=emergingmarkets
-Lack of bank note paper threatens Zimbabwe economy. It has come to this: Zimbabwe is about to run out of the paper to print money on. Fidelity Printers & Refiners, the state-owned company that tirelessly churns out bank notes for the Robert Mugabe regime, was thrown into a crisis early this month after a German company stopped supplying bank note paper because of concerns over Zimbabwe's recent violent presidential election, widely seen as fraudulent by international observers. Read more here-
http://www.latimes.com/news/nationworld/world/la-fg-money14-2008jul14,0,3947241.story
GLOBAL MONEY SUPPLY
-Global Money Supply. This essay makes comparisons between the money supply of 25 selected economic areas and discusses the ratios between the values of official gold reserves to outstanding currency.
For the purposes of this essay, the Euro-Zone includes the thirteen countries that use the Euro currency: Austria, Belgium, Czech Republic, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia and Spain. China includes Hong Kong. All other economic areas are individual countries. These 25 economic areas include 38 countries and make up 89.6% of the world's GDP and 65.1% of the world's population. Read more here-http://dollardaze.org/blog/?post_id=00412
STOCK MARKET
-What am I thinking about these bright summer days? I'm thinking, as usual, about a long list of things, but one item I've been zeroing in on is the 50% Principle as it applies to the current market. The 50% Principle works like this we have the Dow low of 7286 recorded in October 2002. And we have the record Dow high of 14164 recorded in October 2007. The 50% or halfway level between Dow 7286 and Dow 14164 comes in at 10725. As of today's close, the Dow was just 375 points above the 10725 halfway level.
The 50% Principle tells us that if the Dow closes decisively below 10725, then there is a good chance the Dow will continue down to test the level from which the entire advance started that level is 7286. And I wonder to myself what would happen if the Dow breaks below 10725 and then declines to the 7286 area? My immediate thought is disaster. And probably a severe recession or even a depression. Remember, the Dow is only 375 points away from the halfway or 50% level. Richard Russell-Read more here-
http://www.321gold.com/editorials/russell/russell071408.html
-MSCI World Index May Drop 14% Before Bear Market Ends. The MSCI World Index, the global benchmark for stocks in developed nations that tumbled into a bear market last week, may not stop falling until it reaches a three-year low, if history is any guide.
The measure of 1,742 companies in 23 markets slid 1.1 percent to 1,345.47 on July 11, bringing the loss since its October record to 20 percent. A decline of another 14 percent would match the average slump of seven bear markets since calculations on the index began in 1969, data compiled by Birinyi Associates Inc. and Bloomberg show.
Shares around the world dropped for six straight weeks, the longest streak since October 2002, as losses and writedowns at banks exceeded $400 billion, oil prices rose to a record and growing concerns about the health of Fannie Mae and Freddie Mac caused their stocks to plunge more than 60 percent. Companies in the Standard & Poor's 500 Index will report a 14 percent decline in second-quarter profits, according to estimates of analysts compiled by Bloomberg.
``It is unlikely we have seen the low point for equity markets,'' said Tony Dolphin, director of strategy and economics at Henderson Global Investors in London, which oversees about $125 billion. ``The next few months will see worse news on economic growth, profits and inflation, and worries about the financial sector are also likely to persist.'' Read more here-
http://www.bloomberg.com/apps/news?pid=20601213&sid=aC7dtlD5k7vM&refer=home
-Avoid Financials as `Fires' Continue, Birinyi Says. Investors should avoid most financial companies because their shares will probably keep declining, said Laszlo Birinyi, president of Birinyi Associates Inc.
"Stay away from these stocks and take a very low profile,'' Birinyi, who oversees more than $350 million in Westport, Connecticut, said in an interview on Bloomberg Television. ``There's an awful lot of fires that need to be put out. I'm concerned about how we get them all out." Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid=alOnpCf1.cPM
REAL ESTATE
-U.K. June House-Price Drops Stay Close to 1978 Low. U.K. house-price declines in June stayed close to the most widespread since the Royal Institution of Chartered Surveyors started measuring the property market in 1978, pushing the country closer to a recession.
The number of residential property agents and surveyors saying prices fell exceeded those reporting gains by 88 percentage points, the London-based group said today. That compares with 92.2 percent the previous month, and 94.2 in April, the worst since the series began. The reading for London prices was minus 80. Property sales fell to the lowest on record, RICS said. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid=abxAzQeivsqg
-U.K. house prices could fall back a long way after their excessive rises. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/14/ccom114.xml
-Credit crunch leaves U.K. homeowners with no easy way to bale out. Read more here-http://www.guardian.co.uk/business/2008/jul/08/housingmarket.creditcrunch
-Turns out U.K. sites predicting a property crash were clairvoyant. Read more here-http://blogs.iht.com/tribtalk/properties/roof/?p=455
-UK in denial on housing, says the prophet of fear. Read more here-http://www.thisislondon.co.uk/standard-business/article-23513270-details/UK+in+denial+on+housing,+says+the+prophet+of+fear/article.do
-Savills says London prices could fall 25 percent in the next year. Read more here-http://blogs.iht.com/tribtalk/properties/roof/?p=451
-In South Africa, agent's memo predicting 40 percent drop in luxury home prices creates stir. Read more here-http://blogs.iht.com/tribtalk/properties/roof/?p=457
-Canadian house sales seen falling this year: Royal LePage. Read more here-http://www.cbc.ca/money/story/2008/07/17/houseprices.html
-San Diego County housing prices dropped a record 25.3 percent on a year-over-year basis last month to stand at $370,000, DataQuick Information Systems reported Tuesday. Read more here-http://www.signonsandiego.com/news/business/20080715-1250-bn15housing.html
-U.S. Economy: Single-Family Home Construction Hits 17-Year Low. Builders started work in June on the fewest single-family U.S. homes since 1991 and manufacturing in the Philadelphia region contracted for an eighth straight month, signaling the economic slowdown is worsening.
Construction starts fell to an annual pace of 647,000, the Commerce Department said today in Washington. A change in New York City building codes spurred total starts, which include condominiums and apartment buildings, to a four-month high.
The figures underscore the housing recession was already deepening before the financial turmoil this month at Fannie Mae and Freddie Mac threatened to further curb mortgage financing. Today's drop in the Philadelphia Federal Reserve's factory gauge showed manufacturers cut orders and employment in July as confidence in the economic outlook deteriorated.
"Hopes for a bottom'' this year in home construction ``are rapidly fading,'' said David Resler, chief economist at Nomura Securities International Inc. in New York. The housing recession "has been spilling over to manufacturing for months,'' contributing to ``recessionary conditions,'' he said. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=aaYaMnGNn1Z0&refer=home
-Homebuilder Confidence in U.S. Reached Record Low in July. Confidence among U.S. homebuilders dropped to a record low in July, signaling the housing recession will continue. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid=am55kKPOiubg
-Hamptons House Prices Fall Amid Wall Street's Decline. The Hamptons housing market is feeling the heat of Wall Street's meltdown. Second-quarter sales volume dropped 29 percent and the median price fell 11 percent to $735,000 from a year earlier in the resort communities on the East End of New York's Long Island, Suffolk Research Service Inc. said in a report today. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid=afmt9iswmvIw&refer=home
-Tennis star Andre Agassi's resort project in Idaho double faults. Read more here-http://blogs.iht.com/tribtalk/properties/roof/?p=448
FORECLOSURES-MORTGAGES
-Foreclosures Are The Name Of The Game In California. Read more here-http://thehousingbubbleblog.com/?p=4751
-Tequila and sympathy: Bars offer foreclosure specials. Padre's Modern Mexican is turning the downturn into a marketing opportunity: Bring in a foreclosure notice, get a free drink. Read more here-http://money.cnn.com/2008/07/02/smallbusiness/tequila_sympathy.fsb/index.htm
-Need a mortgage now? Bring lots of cash. Between higher fees and larger down payment requirements, buyers have to pony up more money than ever these days just to land a loan. Read more here-http://money.cnn.com/2008/07/15/real_estate/Need_mortgage_bring_money/index.htm?postversion=2008071616
-New 20% Down Payment Makes Savers From Profligate U.S. Spenders. The U.S. housing crisis may accomplish what years of parental hectoring couldn't: Turn Americans from spenders into savers. Spending will fall because homeowners can no longer use rising real estate values to borrow cash $837.5 billion in 2006, according to a report by former Federal Reserve Chairman Alan Greenspan and James Kennedy.
With mortgage lenders requiring down payments of 20 percent, the average household, which puts away less than 1 percent of after-tax pay, will have to save 10 percent for 10 years to buy a home. The housing market shaved almost 1.6 percent off gross domestic product growth in the first quarter and cut in half the growth rate of consumer spending, which accounts for more than two-thirds of the economy, said Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pennsylvania.
"The loss of housing wealth is the difference between a recessionary economy and a growing economy,'' said Zandi, an adviser to presumptive Republican presidential nominee Senator John McCain. ``Consumers have powered the global economy for the past 25 years. For the foreseeable future, maybe the next 25 years, the savings rate will move higher.''
The worst housing crisis in at least a quarter century still has a long way to go, Zandi said. It will take until 2015 for the median home price to return to its July 2006 peak of $230,200, while home sales and residential construction will never again reach the record highs of 2005 and 2006, he said. Read more here-
http://www.bloomberg.com/apps/news?pid=20601213&sid=a0nvmaoJLWEE&refer=home
GEOPOLITICAL NEWS
-President George W Bush backs Israeli plan for strike on Iran. Read more here-http://www.timesonline.co.uk/tol/news/world/middle_east/article4322508.ece
-U.S. reverses course, will send envoy to talks with Iran. Read more here-http://www.cnn.com/2008/POLITICS/07/16/us.iran/index.html
Story Highlights
A senior U.S. diplomat will join a meeting with Iran negotiator this weekend
Meeting with Iranian is a break from previous U.S. position
William Burns is only ordered to listen to Iran and not negotiate
U.S. says Iran must suspend enrichment program before direct talks can occur
-Ex-PM Tony Blair called off a visit to Gaza yesterday after fanatics linked to al-Qaeda plotted to "kidnap and slaughter" him. Read more here-
http://www.thesun.co.uk/sol/homepage/news/article1427567.ece
-Pakistan sets limits on hunt for Osama bin Laden. Read more here-http://www.iht.com/articles/2008/07/13/asia/binladen.php
-Iraqis demand end to ‘occupation'. Read more here-http://www.thenational.ae/article/20080714/FOREIGN/48914182/1002/NEWS
-Iran Pours Cash Into Afghanistan, Seeking Leverage Against U.S. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aNaIqaODpvrU&refer=home
© 2009, Worldwide Precious Metals.
www.wwpmc.com
The GoldBugg Report - July 22, 2008
Posted by Worldwide Precious Metals on Tuesday, July 22, 2008
The GoldBugg Report - July 15, 2008
July 15, 2008
-Gold charts point to $1,000.
-Silver Prices Ready to Rocket; Four Reasons Why.
-Fed official admits inflation figures are phony.
GOLD
-Gold: the precious laggard that will hit $2,000. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/03/bcngold103.xml
-Gold charts point to $1,000. Read more here-http://uk.reuters.com/article/fundsNews/idUKCAS74342020080707?pageNumber=1&virtualBrandChannel=0
-Gold's rally probably won't get a summer break. Most analysts expect gold to rise even during the off season. Read more here-http://www.marketwatch.com/news/story/golds-rally-probably-wont-get/story.aspx?guid={5DAFA28E-53A4-4EDE-82D9-3F752907C81A}&dist=TNMostRead&print=true&dist=printMidSection
-Gold has now on three consecutive days this week tested the 100 day moving average at $915 and is in a tight range between $915 and $935. This will encourage bulls who are likely to feel more confident about going long in the coming days which could see us challenge the $945-$950 level. A firm close above this level will be needed prior to retesting the psychological level of $1,000 per ounce. Gold.ie
-Coins, bullion appeal to investors as stocks sink. Read more here-http://www.lvbusinesspress.com/articles/2008/07/07/news/iq_22468788.txt
-Go long on gold and the Swiss franc, advises Leslie Phang, head of investments at Schroders Private Clients. He cautions investors against emerging markets currencies and the greenback. He tells CNBC's Martin Soong why. Watch video here-http://www.cnbc.com/id/15840232?video=783523053&play=1
-UAE gold rush to continue despite soaring costs. Value of gold sales in the UAE increased by 15 per cent in the first quarter of 2008, a trend expected to continue in the next six months despite increases in the price of the precious metal. Read more here-http://www.gulf-news.com/business/Commodities/10226966.html
-The Indian Gold Train is Leaving the Station. Indians who sold their gold in 2007 to buy stocks are now paying out the wazoo for their gross misjudgment. In January of 2008, the Bombay Stock Exchange fell by more than 4,000 points. It is now a full 8,000 points short of its January 8th peak, while gold is $70 higher than it was then. Read more here-
http://www.321gold.com/editorials/wallenwein/wallenwein070908.html
-ETF Securities physical gold ETF holdings soar 15 pct. Read more here-http://uk.reuters.com/article/idUKL0773519920080707
-A Palace of Gold Is Sold Off For Its Melt Value, but Not the Throne. At $800 an ounce, the golden bathroom sink had to go. At $1,000, say goodbye to the golden horse-drawn chariot. But don't even think about touching the golden toilet. Read more here-http://online.wsj.com/article/SB121538740506731077.html?mod=todays_us_nonsub_page_one
SILVER
-Silver Prices Ready to Rocket; Four Reasons Why. Silver prices have vaulted an extraordinary 106% in the past two and a half years. More impressive, silver prices have gained 33% since mid December.
Like gold, silver is a safe haven from inflation and a weak dollar. The prices of the two metals often move parallel to one another. However, silver is poised to rocket - handing investors not only gains in our bear-market economy, but steeper gains than gold.
James Turk, founder of GoldMoney, said in his annual forecast that 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." From silver's current price of $18.33 an ounce, $30 an ounce would be a 63.7% gain. And here are four reasons why that's more than probable:
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 four to five years for gold). That's because only a portion of silver demand comes from investors. Commercial demand for silver is growing, whether for jewellery, electrical conductors, photographic film or disinfectants. And the rate at which industry finds new, unique uses for the white metal is staggering compared to gold.
Above Ground Supply: Unlike gold, which has been hoarded by central banks for decades, there's no appreciable aboveground supply of silver. Therefore, whatever is needed must be mined. And there's very little threat of central banks selling large tranches of silver into the market, which is always an overhanging concern with gold.
Emerging Markets: Despite fears to the contrary, robust industrial demand for silver will continue even if United States slips into recession. That's because the true driver toward higher commodity prices, in general, is emerging markets like 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.
Market Capitalization: The silver market is much less capitalized than the gold market. Fewer dollars trade daily on the silver exchange than on the gold exchange. As a result, every dollar spent on silver will have a greater impact on the silver market than 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. Mike Caggeso-Moneymorning.com
-Sean Rakhimov: "Three-Digit Silver Ahead." I try not to make short-term predictions since it is a futile exercise. Silver is too small and volatile a market with too many moving parts and relationships to base metals, economics, gold and who knows what else.
Over the longer term, however, I believe silver will do spectacularly well. I absolutely believe we will see three-digit prices, perhaps over $200, and possibly over $300 as outrageous as it may sound right now. The looming financial crisis will be much more severe and prolonged than anything we can imagine. There will be a depression of sorts, especially in the U.S. and I expect silver to be one of the stellar performers. Read more here-http://www.theaureport.com/pub/na/1447?utm_source=streamsend&utm_medium=email&utm_content=925481&utm_campaign=The%20Gold%20Report%20-%20Semi-Weekly%20Update%20July%208,%202008
-Will Arabian investors do a Hunt to silver? The best-read article on this blog is about the selling of Hunt Petroleum for $4.2 billion recently and the possibility that some of this vast sum might be invested in the silver market, in some kind of a re-run of the Hunt Brothers' silver pool of the later 1970s. That is pure speculation, but there is nothing speculative about the outlook for silver.
You do not get many opportunities to make a fortune in a lifetime but buying and holding silver at these price levels over the next few years is almost guaranteed to be one of them. All it takes is a little imagination to see that all that glitters does not have to be gold. Peter J. Cooper-Read more here-http://news.silverseek.com/SilverSeek/1215438577.php
-The Gold to Silver Ratio Alternative Look. The Gold / Silver ratio is declining along with the rise in the price of metals. Sometimes silver lags and sometimes it laps gold. It tends to accelerate its rise in the last part of particular upswing, rather than at the beginning.
Since we are still early in the second stage of the bull market, silver's rather poor performance in comparison with gold is pretty natural and we expect it to change in the future. Stay alert for strong moves in the price of the white metal, especially those connected with minor changes in the price of gold. They may signal that we are on the brink of another spectacular, parabolic rise. Read more here-http://www.kitco.com/ind/Radomski/printerfriendly/jul092008.html
-Ted Butler silver commentary. Long-term silver investors should be positioning themselves for that inevitable day when all hell does break loose. If I knew which day that was, I would tell you. What I do know is that the evidence in front of us show that day is closer than ever. Read more here-http://news.silverseek.com/TedButler/1215537964.php
-David Morgan silver commentary. I recently read an "advertorial" suggesting silver to be a fantastic investment, and I could not agree more. However, the author was stating that all short positions have to eventually be covered with physical silver and that when this took place there would be a price explosion. Read more here-
http://www.kitco.com/ind/morgan/printerfriendly/jul072008.html
PLATINUM-PALLADIUM-MOLY
-Platinum, Palladium Set to Skyrocket. No other precious metal has a tighter supply than platinum. Though platinum prices have remained high over the last few years, supplies are getting thinner by the day as South African production draws to a standstill. Lately, these tight supplies have helped platinum prices shoot up north of US$2,000.
In fact, platinum has climbed so high that its sister metal, palladium is becoming the new exciting speculation. Right now, palladium is sitting at 56% off its all-time high in 2001 of US$1,100 an ounce. The platinum-to-palladium differential hit its widest level in history in late May as platinum prices rocketed to new highs. So the question is: Has the price of platinum climbed so high that industries will start switching to palladium? Read more here-http://seekingalpha.com/article/84217-platinum-palladium-set-to-skyrocket
-How New Diesel Emission Control Systems Affect Demand for Rhodium & Platinum. Read more here-http://www.resourceinvestor.com/pebble.asp?relid=44280
-Precious metals turn catalytic converters into theft targets. Read more here-http://www.newbritainherald.com/site/news.cfm?newsid=19836001&BRD=1641&PAG=461&dept_id=10109&rfi=6
-CPM says global molybdenum supply deficits will grow in 2009 and 2010. In its latest molybdenum market study, CPM says tight credit market s and other developments have caused molybdenum's forward supply curve to shift over the past year. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page36?oid=56480&sn=Detail
DEFINITIONS-QUOTES-QUICK HITS
-Salad Oil Scandal. One of the worst corporate scandals of its time. It occurred when Allied Crude Vegetable Oil Company discovered that banks would make loans secured by its salad oil inventory. When the ships full of salad oil would arrive in the docks, inspectors would test it and confirm that the ship was full of salad oil. However, the company didn't remind anyone that oil floats on water.
They had filled salad oil tanks with water and put a few feet of oil on top, fooling everyone. The company would even transfer oil to different tanks while taking inspectors out to lunch. In 1963, the scam was busted and over $175 million worth of salad oil was missing. American Express took one of the biggest hits from the scandal, losing nearly $58 million and experiencing a 50% drop in AMEX stock as a result. Investopedia.com
-"No man will make a great leader who wants to do it all himself, or to get all the credit for doing it." Andrew Carnegie
-Charles Oliver of Sprott Asset Management says that gold will reach $2000 and silver $40 in the next 4 years. BNN July 7 2008
-"It's very possible to now see $2000 gold or more in the next 12 to 24 months. What you are about to read is the single most important commentary I've written since I first began publishing The Grandich Letter in 1984. Peter Grandich-http://news.goldseek.com/Grandich/1215622800.php
-Many quantitative funds believe there is a 10-to-1 relationship in the price of gold to oil. If you buy this, then either gold goes to $1,400 an ounce, or oil retreats to $95. Robert Lenzner-
Golden Opportunity In Fed's Pickle-Read more here-http://www.forbes.com/2008/07/03/gold-oil-commodities-oped-cx_rl_0707croesus_print.html
-Saxo Bank is predicting that the dollar will stay weak in the coming months and therefore maintains its bullish outlook for gold and a retest of the $1,000 level in the coming weeks. Gulf-daily-news.com
-"Gold's inverse correlation to equity and bond markets over the medium to long term has clearly been shown in recent months and this inverse correlation will likely continue in the coming months," wrote Mark O'Byrne, of Gold & Silver Investments, Ltd. Kitco Daily Resource
-Gold will likely continue to outperform oil in the coming weeks and months as the gold to oil ratio reverts to its post World War II mean average of 15 or 15 barrels of oil to one ounce of gold. Currently it is at near an all time record low at 6.46, or one ounce of gold can only buy 6.46 barrels of oil (based on gold at $920 divided by oil at $142.20). Thus, gold remains extremely cheap vis a vis oil. Gold.ie
-With geopolitical risk remaining high and financial risk elevated as seen with U.S. financial stocks Wednesday experiencing their largest one day fall since the start of the current financial crisis nearly a year ago meaning that the benchmark S&P 500 is officially in a bear market.
Gold is again receiving safe haven and inflation hedging investment flows which is resulting in higher prices. The S&P 500 was down by 2.3% Wednesday on further concerns regarding Fannie and Freddie the government sponsored mortgage buyers and the S&P 500 is now down by more than 20% since its record high last October.
Importantly, the real return on the S&P 500, the benchmark U.S. equity index, since 1998, after subtracting the underestimated consumer price inflation (CPI) is an extremely poor minus 2%. The last time this happened was in 1983. Showing that those who insist that this is not as bad as the 1980s have not realized the magnitude of the huge financial, economic and systemic risks facing the U.S. and global economy. Gold.ie
-Peter Spina, of GoldSeek.com says confidently that, "Gold will continue to attract increasing monetary demand and the result will be a much higher price. Sub-$1,000 gold days are drawing to a close and by the end of this year, I would find it difficult to explain a sub-$1,000 gold price. Kitco Daily Resource
-Veteran Harry Schultz says we're in 'major global upheaval.' Schultz suggestions: "Gold has in the last week given us chart signals that price will not visit the 820 support area again, and technical signs now point to a new high within a few weeks. After some to and fro around $1,000, it will likely move to $1,150, for consolidation in that area. Prices should move to $1,600 in any case." Read more here-http://www.marketwatch.com/news/story/schultz-settles-apocalyptic-mode/story.aspx?guid={CE9F808B-C32A-485E-BC35-E538C2F010CB}&dist=MostReadHome&print=true&dist=printMidSection
-After a long period of quoting land prices in Vietnamese dong, landlords are now setting prices in gold instead in order to avoid risks from the dong's devaluation. Seeking buyers for a house of 42 square meters by four storeys at No. 79 Cau Giay alley. Price 1.65 billion Vietnamese dong or 88 taels of gold. Read more here-http://www.gata.org/node/6412
-How can a US banking system survive while losing $700 billion or more in real estate loans alone when they only have $1.4 trillion of capital? Incidentally almost four years ago we projected $700 billion in losses and no one wanted to listen. This does not include the eminent collapse of the $2.6 trillion municipal bond market.
As you can see, the problems for the dollar and America are not going to go away they are systemic and it is only a matter of time before the dollar loses reserve status and gold trades several thousand dollars higher. Bob Chapman-Read more here-http://news.goldseek.com/InternationalForecaster/1214415236.php
-China's economy to become world's biggest in 2035: study. Read more here-http://www.breitbart.com/print.php?id=080708201459.iw1grzgd&show_article=1
-Russian Car Market Passes Germany as Europe's Biggest. Read more here-http://www.bloomberg.com/apps/news?pid=20601013&sid=aFZiwVa9qCdE&refer=emergingmarkets
-Women not saving enough for retirement study. Longer lives and lower pay mean women need to save more for retirement. But a study finds a widening of the financial gender gap. Read more here-http://money.cnn.com/2008/07/09/pf/bc.apfn.womenretiringpoo.ap/index.htm
-Mutual fund pioneer, John Templeton, dies at 95. Founder of Templeton Funds and philanthropist who established $1.4B prize to promote spirituality, was knighted in 1987. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aOGiN456OwHY
RARE COLORED DIAMONDS
-"America is having a love affair with all that's natural. It started with natural beauty aids. Natural colored diamonds begin with the word natural. The affluent want natural today."
Diane Warga-Arias-jckonline
-"The US is in recession, sales in mid-quality diamonds are falling and retailers are going bankrupt. It is a very confusing situation. There is this recessional middle market where people are spending less on diamonds and luxuries in general because of rising oil and mortgage costs. But there is at the same time a rapidly expanding high end of the market driven by new wealth in China, India, Russia and the Gulf which is beyond anybody's control." Martin Rapaport-Telepgraph.co.uk
-"As wealth continues to spread to more people globally, demand is increasing for very fine quality diamonds weighing 2 carats or more, and very fine colored gems in varying sizes, but the supply of these gems is actually diminishing as existing mines are depleted." Antoinette Matlins-Newsreleaewire.com
-Super-rich still pay dear for rare diamonds. The rapid rate of increase in wholesale prices of rare polished diamonds is unsustainable, but for now the growing number of super-rich are paying rising prices for top-tier diamond jewelry. Charles Wyndham, founder of PolishedPrices, a leading index of wholesale diamond prices, said on Friday prices of larger, rare, near-flawless gemstones had shot up by roughly 200 percent over the past 18 months.
The surge has been driven by increased interest from a growing number of multi-millionaires in emerging markets, a shortage of rough diamonds, and the dollar's slide, he said. Diamond jewelry prices have risen in tune with wholesale diamond prices, but fine jewelers like Graff and Cartier say demand is holding up well for top-tier diamond jewelry in upscale retail outlets on Bond Street in London and in New York.
The wholesale price of internally flawless 3-carat round polished diamonds has jumped to $100,000 per carat as of June 1, from $55,000 last December, according to PolishedPrices.com. The world's rarest polished gemstones have experienced staggering price rises in recent months. Wyndham estimated 13-carat perfect diamonds now to be worth in excess of $200,000 per carat wholesale, an all-time peak.
"If you have a perfect stone, you will get unbelievable prices," Wyndham said. The main PolishedPrices index, which incorporates a range of diamond categories, stood at 136.3 points this week, 6 percent above the level this time last year. "There are signs that the high prices being paid for fine qualities are beginning to trickle down into the commercial categories, with commercial one carat diamonds also setting an all-time high," PolishedPrices said in its latest market report.
"As long as you're talking about good quality diamonds, the scene has been pretty positive. However, commercial, lower end (gem-quality) diamonds have had a very rough time," he said. Read full story here-http://www.reuters.com/article/newsOne/idUSL0416926920080705
-Demand for rarest diamonds outstrips supply. Read more here-http://www.reuters.com/article/reutersEdge/idUSL0646558820080606
-IDEX Online Research: Record Leaps in Polished Diamond Prices in June. Read more here-http://www.idexonline.com/portal_FullNews.asp?id=30689
-Diamonds Rained Down During Ice Age. Read more here-http://www.livescience.com/strangenews/080707-canada-diamonds.html
OIL
-NBC News: Oil to $300-$400 a Barrel if Iran Attacked. Network's chief foreign correspondent warns Middle East turmoil could more than double petroleum price. Read more here-
http://www.businessandmedia.org/articles/2008/20080702114938.aspx
-Oil's Rapid Rise Stirs Talk of $200 a Barrel This Year. Read more here-http://online.wsj.com/article/SB121538739112131075.html?mod=hpp_us_whats_news
-OPEC president blames ethanol for crude-price rise. Khelil again predicts price climbs, citing biofuels, weak dollar, tensions. Read more here-http://www.marketwatch.com/news/story/opec-president-blames-oil-prices/story.aspx?guid={E003D4C9-0739-4868-8F69-D9C51BB53CB5}&dist=TNMostRead&print=true&dist=printMidSection
-OPEC president warns no end to oil price rises. OPEC president Chakib Khelil warned Sunday that oil prices will continue to rise because of the falling dollar, in an interview in the Algeria-News. Read more here-http://www.breitbart.com/print.php?id=080706103759.7yiaee4q&show_article=1
-Pemex Cuts Crude Supply to Shell, Valero Refineries. Petroleos Mexicanos, Mexico's state- owned oil company, reduced the amount of crude oil it supplies to Texas refineries operated by Royal Dutch Shell Plc and Valero Energy Corp. as falling production curbs exports.
The guaranteed amount of Mayan oil for a Deer Park, Texas, refinery jointly operated with Shell, Europe's biggest oil company, was cut by 15 percent, the Mexico City-based company said in a regulatory filing. Pemex also lowered oil supplies by 5.8 percent to the Port Arthur, Texas, refinery of Valero, the largest U.S. refiner. Read more here-
http://www.bloomberg.com/apps/news?pid=20601072&sid=auZVwiaKyuk4&refer=energy
-Congress vs. oil prices round 2. Deadlock in Washington over oil drilling and tighter rules for speculators may end soon as voters make clear that high gas prices are their top concern. Read more here-http://money.cnn.com/2008/07/09/news/economy/congress_energy/index.htm?postversion=2008070914
-Pelosi calls on Bush to release reserve oil. House leader says releasing of a 'small portion' of the 700 million barrels of oil in the nation's Strategic Petroleum Reserve won't risk national security. Read more here-http://money.cnn.com/2008/07/08/news/pelosi_oil/index.htm
-Airlines: Curb oil speculation. In open letter, 12 U.S. airlines call on Congress to curb excessive speculation that they say drives up oil and fuel prices, slamming the airline industry. Read more here-http://money.cnn.com/2008/07/09/news/companies/airlines_speculation_letter/index.htm?postversion=2008070918
-Alberta's Fort McMurray is experiencing explosive growth as the new center of Canada's oil industry. Watch video here-
http://money.cnn.com/video/#/video/news/2008/07/09/news.velshi.canada.boomtown.cnnmoney
-Pickens Sticks with $150 Oil; Could Fall to $100. Legendary oil investor Boone Pickens stood by his forecast that oil prices will hover around $150 a barrel now and told CNBC that they may fall to about $100 in two years. Read more here-http://www.cnbc.com/id/25564736
-'Pickens Plan' promotes wind, natural gas. Billionaire pitches how to make U.S. less dependent on foreign oil. Read more here-http://www.marketwatch.com/news/story/pickens-plan-aims-lessen-us/story.aspx?guid={C4B81BD5-F01F-428B-8AC9-E83061A6D33D}&dist=TNMostRead
GASOLINE
-Utah goes to 4-day workweek to save energy. Starting next month, thousands of government employees will only work 4 days per week, in an effort aimed at reducing energy costs and commuters' gasoline expenses. Read more here-http://money.cnn.com/2008/07/03/news/economy/utah_work.ap/index.htm
-Nascar Hits a Wall as $4 Gas Makes Races Too Costly for Fans. Allan Peer, a Southerner, a stock-car fan and an avowed enemy of drivers Jeff Gordon and Jimmie Johnson, has attended 11 straight Nascar races at Richmond International Raceway dating back to 2003. The streak may soon end as $4 gasoline takes a toll on fans, many of whom travel to races in fuel-guzzling recreational vehicles.
``It's pretty expensive,'' said Peer while attending a race in May. He has made the 70-mile (113-kilometer) trip to the Virginia track twice annually. ``I might just make it to one race this year,'' skipping Nascar's return to Richmond in September, he said. Read more here-http://www.bloomberg.com/apps/news?pid=20601079&sid=a_3wbO7weiC4&refer=home
NATURAL GAS
-Natural Gas to Converge With Oil Price, Exporters Say. Natural gas, trading at a 40 percent discount to crude, may rise to reach the record price of oil as demand for cleaner-burning fuels increases, according to energy ministers from Qatar, Algeria and Iran. Read more here-http://www.bloomberg.com/apps/news?pid=20601072&sid=akTqrgFhmUWY&refer=energy
-Natural Gas Panic. Much the way the United States consumes more than 24% of the world's crude oil, it also consumes more than 22% of the world's natural gas. The critical distinction between the two, however, is that at least for the time being domestic production is capable of meeting the vast majority (84%) of our natural gas needs. Read more here-
http://www.321energy.com/editorials/karn/karn070308.html?print=on
COMMODITIES-FOOD
-G-8 Says Oil, Food Prices Pose Risk to World Economy. Read more here-http://www.bloomberg.com/apps/news?pid=20601072&sid=aBdGt7NWCc9Y&refer=energy
-Commodities outperform equities by 40% in 2008 first half. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=56181&sn=Detail
-As food costs soar, it's back to basics for meal planners. Read more here-http://www.usatoday.com/money/industries/food/2008-07-07-food-prices_N.htm
-Britons are throwing away £1 billion of food a year. As supermarket prices spiral Brown tells families: 'Stop wasting food'. Read more here-http://www.dailymail.co.uk/news/article-1032605/As-supermarket-prices-spiral-Brown-tells-families-Stop-wasting-food.html
-G8 summit: Gordon Brown has eight-course dinner before food crisis talks. Read more here-http://www.telegraph.co.uk/news/worldnews/asia/japan/2262534/G8-summit-Gordon-Brown-has-eight-course-dinner-before-food-crisis-talks.html
GLOBAL FINANCIAL CRISIS
-Deutsche Bank's Jain: Crisis is Solvency, Not Liquidity. Read more here-http://www.housingwire.com/2008/07/03/deutsche-banks-jain-crisis-is-solvency-not-liquidity/
-U.S. Credit Crunch Is Worsening, Nomura Says: Chart of the Day. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid=a7qi_mdXLUz8&refer=home
-SEC Ratings Probe Reveals Conflicts in Grading Debt. A U.S. Securities and Exchange Commission investigation into credit-rating companies found the firms improperly managed conflicts of interest and violated internal procedures in granting top rankings to mortgage bonds. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aIewdZU2.amE&refer=home
-Bernanke Says Fed May Extend Wall Street Lending Access to 2009. The Federal Reserve may extend securities dealers' access to direct loans from the central bank into 2009 as long as emergency conditions ``continue to prevail,'' Chairman Ben S. Bernanke said.
"The Federal Reserve is strongly committed'' to financial stability and is "considering several options, including extending the duration of our facilities for primary dealers beyond year-end,'' Bernanke said in a speech to a conference in Arlington, Virginia. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aSvgnK_7DdYU&refer=home
-Fannie, Freddie `Insolvent' After Losses, Poole Says. Chances are increasing that the U.S. may need to bail out Fannie Mae and the smaller Freddie Mac, former St. Louis Federal Reserve President William Poole said in an interview. Freddie Mac owed $5.2 billion more than its assets were worth in the first quarter, making it insolvent under fair value accounting rules, he said.
The fair value of Fannie Mae's assets fell 66 percent to $12.2 billion, data provided by the Washington-based company show, and may be negative next quarter, Poole said.
"Congress ought to recognize that these firms are insolvent, that it is allowing these firms to continue to exist as bastions of privilege, financed by the taxpayer,'' Poole, 71, who left the Fed in March, said in the interview Wednesday. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a7NPAG.LEjHQ
-The Fannie and Freddie doomsday scenario. It's time to wonder what would happen if Fannie Mae and Freddie Mac failed. Here's a scary, and relevant, question to ponder as the housing market continues to slide: What would it take for the government to step in and help Fannie Mae and Freddie Mac, and how would a rescue affect the American taxpayer? Read more here-http://money.cnn.com/2008/07/09/news/companies/benner_fanniefreddie.fortune/index.htm?postversion=2008070914
-Fannie, Freddie Tumble on Bailout Concern, UBS Cut. Fannie Mae and Freddie Mac, the two biggest providers of financing for U.S. home loans, tumbled to the lowest in 17 years in New York trading after a former Federal Reserve president said the companies may need a government bailout. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=abre2XqlMrbg&refer=home
-McCain Says Fannie, Freddie `Vital,' Must Not Fail. John McCain said the federal government can't allow the government-sponsored mortgage companies Fannie Mae and Freddie Mac to fail amid the worst housing slump since the Great Depression. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=akg56Xb4UX.U&refer=home
-Lehman shares tumble on credit fears. Investment bank takes a dive after Fed chief Bernanke and Treasury secretary Paulson say more bank failures could come. Read more here-
http://money.cnn.com/2008/07/10/news/companies/bc.apfn.lehmanbrothers.m.ap/index.htm
-U.S. Treasury Secretary Henry Paulson said he's been assured by the regulator for Fannie Mae and Freddie Mac that the two government-chartered mortgage companies have enough capital. The Office of Federal Housing Enterprise Oversight ``has made clear that they are adequately capitalized,'' Paulson said in prepared testimony for the House Financial Services Committee. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=amMUcmRCRhcg&refer=home
-IndyMac Blames Senator's Comments for Withdrawals. IndyMac Bancorp Inc., the U.S. mortgage company that stopped most of its lending as losses mounted and capital deteriorated, blamed Senator Charles Schumer for ``elevated levels of deposit withdrawals.''
Schumer's comments last month about the lender's reliance on deposits purchased from third parties are causing customers to pull their money and making it harder to raise funds, the company said in a regulatory filing today. Schumer responded calling IndyMac a ``junior version'' of Countrywide Financial Corp. and said bad lending practices date back several years. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aaB4cryHdFxk
U.S.-U.K. RECESSION
-It's a recession: 75% of Americans say. Vast majority of Americans believe economy is still in a recession with no signs of recovery, though negative views are dwindling, according to a recent CNN poll. Read more here-http://money.cnn.com/2008/07/07/news/economy/recession_poll/index.htm
-It's All Over But the Dating for U.S. Recession. The U.S. economy has been leaking jobs for six straight months, seven if you exclude government hiring. Granted, it's been a slow leak in terms of the length of time and the magnitude of the losses (an average of 73,000 jobs a month), but there's nothing to suggest an imminent about-face in the labor-market trend. Read more here-http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_baum&sid=aFR.kFWcXvEw
-U.S. Economy to Stall as `Perfect Storm Returns.' Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid=aFzG_q8oA2ls
-A cloudy forecast for the US economy. Buckle your seat belts the housing crisis has not yet run its course, and the recession will continue well into next year. This bad news will be amplified by the hundreds of billions of additional write-downs of debt associated with bad mortgages, credit card and auto loans. The fall in the dollar will lead to higher import prices, pushing inflation and long-term rates higher.
While the dollar must decline much further to bring the trade deficit into line and ultimately provide the basis for recovery the short-term effect of higher inflation and higher interest rates will not be pleasant. In short, when it comes to bad news on the US economy, we're just at the beginning. Read more here-http://www.guardian.co.uk/commentisfree/2008/jul/07/useconomicgrowth.housingmarket
-Yellen warns U.S. could hit another rough patch. S.F. Fed president says central bank on watch for 'wage-price spiral.' The fragility of the U.S. housing and bank system could further throw a kink in financial markets before an anticipated recovery in 2009, said San Francisco Federal Reserve President Janet Yellen on Monday, with commodities presenting their own set of troubles.
Though Yellen anticipates "market functioning" to greatly improve by next year, balance-sheet pressures on financial institutions and other problems dogging the financial system could stick around "for some time." "Things could get worse before they get better," Yellen said in remarks prepared for delivery to University of California, San Diego's Economics Roundtable. Read more here-http://www.marketwatch.com/news/story/feds-yellen-says-things-could/story.aspx?guid={26EA6B75-9915-4994-97DB-8AF2D7AC860C}&print=true&dist=printMidSection
-News Corp. Chief Rupert Murdoch Says He's `Very Bearish' on Economy. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid=a0z1E6gYNErU
-Economic Views-Whether the pressure on the economy might not let up so quickly, with Nouriel Roubini, RGE monitor.com. Watch video here-http://www.cnbc.com/id/15840232?video=789413982&play=1
-Strip Mall Vacancies Spike to Levels Last Seen in 1995. For the first time since 1980, more space became available to rent at strip malls than was rented out about 3.2 million square feet more. Part of the available space came in the form of 5.7 million square feet of new development that came on the market during the quarter. Read more here-
http://globaleconomicanalysis.blogspot.com/2008/07/strip-mall-vacancies-spike-to-levels.html
-Steve & Barry's files for bankruptcy. The Port Washington, N.Y.-based low-priced fashion retailer chain said on Wednesday that it filed for Chapter 11 in the face of limited consumer spending. Read more here-http://money.cnn.com/2008/07/09/news/companies/bc.apfn.steve.barry.s.ba.ap/index.htm?postversion=2008070914
-Levi's profits plummet 98pc to $1m. Levi Strauss, the maker of the iconic 'shrink to fit' 501 jeans, has seen its profits shrivel down to a skinny-legged $1m, as cash-strapped Americans snub Levi's jeans amid a struggling US economy. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/09/bcnlevi109.xml
-3,200 Martial Arts Studios Went Out Of Business In May. How do studio owners - especially those with 90% kids expect parents to pay $100 per month plus testing fee's? Now they have the added expense of $4 a gallon gas. This is a no brainier for parents: Cut out the kids Karate and Dance lessons. Read more here-
http://globaleconomicanalysis.blogspot.com/2008/07/3200-martial-arts-studios-went-out-of.html
-Cruellest summer for teen jobs since 1958. June employment for teenagers drops nearly 40% below 2007 levels as companies cut extra positions. Summer hiring for teens at lowest pace in 50 years. Read more here-http://money.cnn.com/2008/07/10/news/economy/teen_jobs/index.htm
-U.S. Loses 62,000 Jobs, Jobless Rate Holds at 5.5%. U.S. employers cut jobs in June for a sixth consecutive month as soaring fuel prices and a slowing economy forced companies to reduce costs. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid=ar679VAkm9T0&refer=home
-Down and out in Las Vegas. The good-time capital of the US has hit a losing streak. Guy Adams reports on an epidemic of bankruptcies, foreclosures and mass lay-offs. Read more here-
http://www.independent.co.uk/news/world/americas/down-and-out-in-las-vegas-860513.html
-King's Hands `Tied' as U.K. Economy Edges Closer to a Recession. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid=abtKsHT.J5UU
-U.K. Economy Faces `Serious' Recession Risks, BCC Survey Shows. Sales of services and manufactured goods in the U.K. fell in the second quarter, posing ``serious risks'' that the economy will tumble into a recession, the British Chambers of Commerce said. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid=ac95eRDekqOo
-Goodhart Says U.K. Faces `Quite a Recession,' Forcing Rate Cut. Former Bank of England policy maker Charles Goodhart said the U.K. economy faces ``quite a recession,'' which will force the central bank to cut the benchmark interest rate. "Output is going to fall, unemployment is going to rise, possibly quite sharply,'' Goodhart, a policy maker at the bank from 1997 until 2000, said in an interview on Bloomberg Television. "It's a horrible situation.'' Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid=aGARHtHCn23w&refer=home
INFLATION
-Fed official admits inflation figures are phony. The Federal Reserve's use of core inflation measures is harming its credibility, the new president of the St. Louis Fed wrote in an editorial released on Thursday. James Bullard, who took over from William Poole in April, said focusing on inflation indices that exclude food and energy work well when those prices are rising at rates similar to those of other prices, "but that is not what is happening today.
"It is hurting Fed credibility to say that we are trying to keep inflation low and stable, but at the same time we are not counting some of the prices that are going up at the most rapid pace," Bullard wrote in the bank's magazine, "The Regional Economist." Read more here-http://www.gata.org/node/6405
-Global Inflation: The Next Major Obstacle. It's still to be seen how this will end. But so far, this inflation rise is coinciding almost perfectly with the 200 year commodity cycle we've often shown. If this continues, and we believe that it will, then there's a lot more inflation to come in the years ahead.
What's currently happening also strongly favors the outlook for gold and the other commodities. It's going to boost demand for gold as a safe haven during inflationary times and these ongoing developments are telling us to stay with our gold and precious metals positions. In fact, gold's been telling us this all along. Now we're starting to see why. Mary Anne & Pamela Aden-Read more here-http://www.kitco.com/ind/Aden/aden_jul022008.html
-India's Inflation Accelerates to Fastest in 13 Years. Read more here-http://www.bloomberg.com/apps/news?pid=20601013&sid=aB6nlVyDOG5o&refer=emergingmarkets
-Iran's inflation rate over 26 percent. Read more here-http://news.xinhuanet.com/english/2008-07/05/content_8495680.htm
-Egypt Inflation Rate Rises to 20.2% Fastest in Decade. Read more here-http://www.bloomberg.com/apps/news?pid=20601116&sid=ayZopaD_zIAQ&refer=africa
-Inflation too high Fed official. Richmond Federal Reserve President Jeffrey Lacker says central bank should focus on combating 'unacceptably high' inflation. Read more here-
http://money.cnn.com/2008/07/08/news/economy/bc.us.fedofficial.inflat.ap/index.htm
-Head of ECB says inflation 'worrying'. President Trichet warned Wednesday that euro nations are seeing the first signs of a price spiral, calling on governments to take care not to fuel further price rises. Read more here-http://money.cnn.com/2008/07/09/news/international/bc.apfn.eu.economy.ap/index.htm
-U.S. sees 9.8% spike in '09 electric bills. Electricity forecast for 2009 is up sharply from last month; increase in price of natural gas a factor. Read more here-http://money.cnn.com/2008/07/08/news/economy/electricity_prices/index.htm
-TIPS flunk inflation test as fuel, food overtake CPI. Read more here-http://www.gata.org/node/6408
INTEREST RATES
-Fed's Loans to Wall Street May Prevent Raising Rates. The Federal Reserve may hold off on its first interest-rate increase since 2006 until policy makers judge that financial markets are stable enough to allow the central bank to withdraw its lending backstop for Wall Street. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a6FNi6VzqGjk&refer=home
-Bank of England Keeps Benchmark Interest Rate at 5%. The Bank of England kept the benchmark interest rate unchanged as policy makers weighed the threat of Britain's first recession in a generation against the risk of accelerating inflation. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8QjNjUJtJok
-Bank of Korea Maintains Key Rate at 5% as Inflation Accelerates. The Bank of Korea kept interest rates unchanged at the highest level in seven years amid signs the economy is cooling and inflation is accelerating. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aGuaZ9w.nTlk&refer=home
-Trichet Says ECB Rate Increase Will Help Bring Down Inflation. European Central Bank President Jean- Claude Trichet said today's interest-rate increase will help the bank bring inflation back below 2 percent. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a2AI5UBxO.yY&refer=home
-Spain, Ireland `Thrown to the Wolves' After ECB Rate Move. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid=a_PqhUStacAg
U.S. DOLLAR
-The Buck Doesn't Stop Here; It Just Keeps Falling. Things in the United States sure are tough. Brother, can you spare a euro? Signs saying "We accept euros" are cropping up in the windows of some Manhattan retailers. A Belgium company is trying to gobble up St. Louis-based Anheuser-Busch, the nation's largest brewer and iconic Super Bowl advertiser. Read more here-http://www.gata.org/node/6407
-The dollar stuck in a funk. The weak dollar is driving up prices for American consumers. None of the fixes will be easy. Read more here-
http://money.cnn.com/2008/07/06/news/economy/dollar_doldrums.ap/index.htm
-Dollar's Doomsday. Once the US Dollar index drops to a new low below 70, events will probably happen quickly. That will be the signal that the dollar's doomsday will not be far away.
Alf Field-Read more here-http://www.321gold.com/editorials/field/field070808.html
ADEN SISTERS-DOW 10,000 OR LOWER
-Adens see the bear necessities. They project Dow declining to 10,000 level or lower. They write: "The U.S. stock market took a turn for the worst this month, falling sharply, and it pulled the global markets down with it. A bear market took hold and while a rebound rise is probable, the risk of holding stocks is high." "The Dow could eventually decline to around the 10,000 level as a downside target. Interestingly, the average bear market decline over the past 50 years has been 29.2% on the S&P 500.
Extending this average decline to the Dow Industrials and using its 2007 peak at 14,164, gives us a downside target of 10,000 as well... this could quite possibly be the Dow's next downside target. If the Dow were to close below 10,725 it would be a bad sign, and especially below 10,000." How bad? The Adens point to a semi-log chart of the Dow since 1982. They write: "Note that it's been in a solid uptrend since then, but now the Dow is breaking below this 26-year uptrend the Dow's percentage growth is changing.
That is, the booming stock market days since 1982 are over and if the Dow were to eventually retrace 50% of its huge bull market rise from 1982 to 2007, then it could theoretically drop to near the 7,500 level, which would be similar to the bear market drop in 1974. The Adens' macro view: "Stagflation is becoming more dominant and the Fed is in a tight spot.
That's why it's keeping interest rates low because it'll help the economy, despite higher inflation." The Adens are bearish oh the dollar, bearish on bonds longer term. They expect gold to continue its "mega-bull market" after possibly building a base below $1,000 for the rest of the summer. Read full story here-http://www.marketwatch.com/news/story/adens-see-bear-necessities/story.aspx?guid={19466369-BC32-4129-872E-A42C41661F20}&dist=TNMostRead
STOCK MARKET-RETIREMENT
-Wall Street: Three cheers for the bear. Stocks, on average, have risen in the one, two, three, six and 12 months following bear markets since the 1950s. Read more here-
http://money.cnn.com/2008/07/08/markets/markets_bear/index.htm?postversion=2008070811
-S&P 500 May Lose Another 12% Before Bear Market Ends. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid=aOEdesvrleuY&refer=home
-Similarities between 1929 and 2008 terrifying. Read more here-http://www.sltrib.com/Opinion/ci_9794754
-The Decade of No Returns, Part I. What a difference a decade can make! Over the last 10 years of the 20th century, anyone buying and holding US stocks made a total return approaching 18% per year. Their initial stake, as a 2002 research paper noted, increased five times over. Now that's real money! But roll forward ten years, and the total return on the S&P500 was actually negative for the decade ending on 30th June 2008.
Yes, you read that right. For the 10 years to last Monday, the S&P index delivered less than zero. That's even after accounting for dividends (good) as well as inflation (bad). US equity buyers just suffered a "Decade of No Returns" in short. Looking back to the late Nineties from the late Noughties, it barely seems possible.
The S&P enjoyed two strong bull markets during that time. The first added nearly 50% in the 18 months following July '98; the second delivered more than 87% in the five years to Sept. '07. All told, the S&P rose in 69 months out of 120 and yet anyone holding the 500 stocks included in Standard & Poor's index just wound up with a total return of sweet fanny Adams. Read more here-http://news.goldseek.com/GoldSeek/1215619440.php
-Hedge Funds Fell 0.75%, Worst First-Half Performance. Hedge funds turned in their worst first-half performance in almost two decades as the collapse of subprime-mortgage bonds and rising commodity prices pushed stocks to the brink of a bear market. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aUiEVk4fW2q4&refer=home
-Hedge Fund Manager Describes Rock Bottom. One by one, John Devaney sold his treasures, hoping to forestall what was in the end inevitable. He sold his Renoir and his Gulfstream, his home and his helicopter. Even his cherished yacht gone.
But on Wednesday Mr. Devaney, who made and then lost a fortune trading mortgage investments, finally called it quits. He shut his hedge fund, and told his investors that all their money was gone too. "I'm devastated, I'm totally devastated," Mr. Devaney said by telephone from Aspen, Colo. "I feel horrible that I've lost my own money and that so many people who saw the skills I have and trusted in us have now been hurt."
It is a stunning downfall for Mr. Devaney, whose brash bets in the markets and equally brash public pronouncements on the perils and promises of subprime mortgages made him something of a Wall Street celebrity. Read more here-http://www.nytimes.com/2008/07/10/business/10fund.html?_r=2&ref=business&oref=slogin&oref=slogin
-Pension plans suffer huge losses. Report says weak markets, credit crunch have drained $280 billion from plans of largest U.S. companies. Read more here-
http://money.cnn.com/2008/07/07/pf/retirement/pension_losses/index.htm
-Investors' anxiety builds as retirement nest eggs show cracks. The bad news is in the mail. Read more here-http://www.boston.com/business/articles/2008/07/06/investors_anxiety_builds_as_retirement_nest_eggs_show_cracks/
-No skin in the game. With most funds, managers have none of their own funds at stake. Read more here-http://www.marketwatch.com/news/story/most-funds-managers-have-none/story.aspx?guid={907D8FC0-A948-415A-8133-F57A365CC367}&print=true&dist=printMidSection
REAL ESTATE
-Home Prices Fall in 23 of 25 U.S. Metropolitan Areas. Home values fell in 23 of 25 U.S. metropolitan areas in April, according to Radar Logic Inc., as sales of a record number of foreclosed homes pushed prices down. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aUKNXKCNLhGA&refer=home
-Pending U.S. Home Resales Drop 4.7% in May, More Than Forecast. Americans signed fewer contracts to buy previously owned homes in May for a third month in four, a sign house prices have yet to touch bottom. The index of pending home resales fell 4.7 percent, a bigger decline than forecast, after a revised 7.1 percent gain in April, the National Association of Realtors said today in Washington. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=atfgtqYBZpeY&refer=home
-Brooklyn Apartment Sales Drop 44% as Banks Tighten Loan Terms. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid=a9aZXkvf.GqM&refer=home
-Manhattan Second-Quarter Apartment Sales Fall by 22%. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=afobk1xd14tI&refer=home
-Housing market seen getting worse. An even gloomier scenario may be in store for an already ailing U.S. housing market if the overall economy slips into a recession, according to UBS Securities analysts. Foreclosures, which have been building over recent months as borrowers default on risky subprime home loans, are not expected to peak until late 2008 to mid-2009.
"It's kind of interesting that this subprime disaster that started a year or so ago just keeps spreading, spreading and spreading," said Tom Zimmerman, head of ABS, mortgage research at UBS Securities. He noted how securities backed by home equity lines of credit, or HELOCs, have moved to the forefront amid surging defaults.
As more and more homeowners slip into negative amortization situations, HELOCs will continue to erode, the analysts said. "Certain banks own enormous numbers of these things (HELOCs) and certain monolines wrapped them. You never know where this crisis is going to go next," said Zimmerman. Read more here-http://news.yahoo.com/s/nm/20080703/bs_nm/subprime_mortgage_ubs_dc&printer=1;_ylt=AvuNrUxNH8FRb7jRR3zY42Ob.HQA
-The Home-Equity Door Slams Shut. Some 122,000 borrowers with Countrywide home-equity lines of credit, or HELOCs, received letters in January informing them that they could no longer withdraw funds from their lines.
A few months later, thousands of customers of other major lenders including Bank of America, J.P. Morgan Chase, Citibank, SunTrust, USAA, Wachovia, Washington Mutual and Wells Fargo also received notice that their lines had been frozen or reduced. It's a jolt to borrowers who have relied on their home-equity line as an emergency fund or an all-you-can-eat buffet. Read more here-http://www.washingtonpost.com/wp-dyn/content/article/2008/07/04/AR2008070400061.html
-New York's Chrysler Building Bought by Abu Dhabi Fund. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aACZuFPo8cf8&refer=home
FORECLOSURES-MORTGAGES
-Six months, 343,000 lost homes. foreclosures Rose 53% in June, Bank Seizures Triple. U.S. foreclosure filings rose 53 percent in June from a year earlier and bank repossessions increased the most since RealtyTrac Inc. began collecting data in January 2005 as deteriorating property values forced more people to give up their homes.
One in every 501 U.S. households either lost the home to foreclosure, received a default notice or was warned of a pending auction, RealtyTrac, an Irvine, California-based seller of default data, said today in a statement. Bank seizures rose 171 percent. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=avi3kQ.t.fFw&refer=home
-Paulson: Many foreclosures can't be helped. Treasury secretary says many who bought homes they couldn't afford may lose them; praises industry group for helping some homeowners hang on. Read more here-http://money.cnn.com/2008/07/08/news/economy/foreclosures_prevention.ap/index.htm
-Arson Surges for Foreclosed Homes Lost to Subprime. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid=aelStm0.FmYo&refer=home
-Life after losing your home. The nation's housing meltdown is disrupting lives and devastating families. One New York grandmother is trying to put the pieces back together. Read more here-http://money.cnn.com/2008/07/10/news/economy/rios/index.htm?postversion=2008071014
-Foreclosures' financial strains take toll on kids. Read more here-http://www.usatoday.com/money/economy/housing/2008-07-08-children-foreclosure-homeless_N.htm
GEOPOLITICAL NEWS
-Iran tests more missiles as U.S. vows to defend allies. Read more here-http://www.reuters.com/article/newsOne/idUSL0925390620080710
-Israel hints at readiness to strike Iran. Read more here-http://www.breitbart.com/article.php?id=D91R2K500&show_article=1
-Rice warns Iran that US will defend Israel. Read more here-http://apnews.myway.com/article/20080710/D91QSRLO0.html
-Israel and U.S. Condemn Iranian Missile Test, Call for Halt. Iran's test-firing of a long-range missile capable of reaching Israel violates United Nations Security Council resolutions and further isolates it from the rest of the world, U.S. officials said. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=atRm8OSF2qHo&refer=home
-Israel successfully tests missile interceptor: report. Read more here-http://www.breitbart.com/print.php?id=080706073431.n5hjpfq6&show_article=1
-Gov't officials: US fears Israel gearing up for Iran strike. Read more here-http://www.jpost.com/servlet/Satellite?cid=1214726206803&pagename=JPost%2FJPArticle%2FPrinter
-Iran has resumed A-bomb project, says West. Iran has resumed work on constructing highly sophisticated equipment that nuclear experts say is primarily used for building atomic weapons, according to the latest intelligence reports received by Western diplomats. Read more here-http://www.telegraph.co.uk/news/worldnews/middleeast/iran/2259578/Iran-has-resumed-A-bomb-project,-says-West.html
-Iran to "hit Tel Aviv, U.S. ships" if attacked. Read more here-http://news.yahoo.com/s/nm/20080708/wl_nm/iran_attack_usa_dc
-OPEC warns against military conflict with Iran. The head of the Organization of Petroleum Exporting Countries warned Thursday that oil prices would see an "unlimited" increase in the case of a military conflict involving Iran, because the group's members would be unable to make up the lost production.
"We really cannot replace Iran's production it's not feasible to replace it," Abdalla Salem El-Badri, the OPEC secretary general, said during an interview. Read more here-
http://www.iht.com/articles/2008/07/10/business/opec.php
-Sizing up Iran's oil threat. The country can strangle nearly 30% of the world's oil output and could send prices to $250 a barrel, but some say all the tough talk is still just that. Read more here-http://money.cnn.com/2008/07/10/news/international/iran_oil/index.htm?postversion=2008071017
-Ahmadinejad Says `There Won't Be a War,' Pledges Peace Effort. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=arHGFJjk_QIY&refer=home
-Ahmadinejad target of 'Rome X-ray plot', diplomat says. Read more here-http://www.breitbart.com/article.php?id=080707101035.4mn1xrqi&show_article=1
-U.S. is in no shape to give advice, Medvedev says. Russia's new president, Dmitri Medvedev, less swaggering than his predecessor but as touchy about criticism from abroad, said in an interview that an America in "essentially a depression" was in no position to lecture other countries on how to conduct their affairs. Read more here-
http://www.iht.com/articles/2008/07/03/europe/03medvedev.php?WT.mc_id=newsalert
-Putin, Ahmadinejad discuss military-technical and energy cooperation. Read more here-http://www.itar-tass.com/eng/level2.html?NewsID=12848337&PageNum=0
-‘Germ warfare' fear over African monkeys taken to Iran. Hundreds of endangered monkeys are being taken from the African bush and sent to a "secretive" laboratory in Iran for scientific experiments. Read more here-http://www.timesonline.co.uk/tol/news/world/africa/article4276460.ece
-Iraqis lead final purge of Al-Qaeda. Read more here-http://www.timesonline.co.uk/tol/news/world/iraq/article4276486.ece
-Iraq insists on withdrawal timetable for US troops. Read more here-http://apnews.myway.com/article/20080708/D91PN8C80.html
-US removes uranium from Iraq. Read more here-http://apnews.myway.com/article/20080706/D91O8E100.html
-India's Kabul Embassy Hit By Suicide Bomb; 34 Die, 141 Injured. A suicide bomber drove a car packed with explosives near the Indian embassy in Afghanistan's capital, Kabul, killing 34 people and injuring 141 today, a government spokesman said. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aFPJhyUhlzkw&refer=home
-India Probes Afghan Bombing as Pakistan Denies Role. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=amT7qYGfBls0
© 2009, Worldwide Precious Metals.
www.wwpmc.com
The GoldBugg Report - July 15, 2008
Posted by Worldwide Precious Metals on Tuesday, July 15, 2008
The GoldBugg Report - July 08, 2008
July 8, 2008
-RBS issues global stock and credit crash alert. Barclays warns of a financial storm as Federal Reserve's credibility crumbles. BIS warns of Great Depression dangers from credit spree.
-"Buy gold! Buy silver! Buy them because they're the only defence against what's happening in all the other markets." Dale Doelling-Trends In Commodities
-Citigroup says long-term gold price could double or even triple.
GOLD
-"This Is It," Sinclair wrote. "Gold is preparing for an assault not on $1000, but for a brief penetration of $1200. Violent chopping will occur, then off it goes to $1650. This violent chop we have been living in here and now will resolve itself very soon and the take will be seen by history as having occurred in this last formation HERE AND NOW."
A bit less apocalyptic was Mark O'Byrne, of Gold and Silver Investments Ltd., who wrote that $952 is "now the key resistance for this market ... Any close above $952 should see us re-challenging the psychological $1,000 in very short order." Kitco Daily Resource
-On Friday 27 June 2008, gold surged $32.70 in what was the largest one day move since 1985 as the dollar weakened, oil prices surged to new record highs and stock markets fell sharply. While gold was up some 3%, most U.S. stock indices were down some 3%. Gold.ie
-"Buy gold! Buy silver! Buy them because they're the only defence against what's happening in all the other markets." Dale Doelling-Trends In Commodities
-"The Fed said that inflation is a major concern, but they're not going to do anything about it, which made gold go ballistic," said Leonard Kaplan, of Prospector Asset Management in Evanston, Illinois. "The dollar is going to get slammed again." Kitco Daily Resource
-Patrick Chidley, an analyst at Barnard Jacobs Mellet in Stamford, Connecticut, added that, "The Fed seems to have decided to protect growth by holding rates low and to accept the fact that this period of inflation is inevitable and unstoppable. Inflation is the lesser of two evils. Investors will increase their positions in gold, and it's likely to continue upward." Kitco Daily Resource
-"I look at gold as the only true way I can protect or accumulate real wealth and it is the only real store of wealth." Enrico Orlandini
-Russia's oil funds may invest in gold. Moscow-based agency RIA Novosti said, citing a finance ministry official. Russia's Reserve Fund and the National Wellbeing Fund were worth a combined $161.9 billion on June 1.
The Russian central bank along with the Chinese and other ‘emerging' market, second tier central banks has been increasing its gold bullion reserves in recent months. As more institutions, sovereign wealth funds and central banks increasingly diversify into gold, we will see gold rise to multiples of its current price as it is such a tiny marketplace when compared to the size of equity, bond and currency markets. Gold.ie
-Dale Doelling fromTrends In Commodities says he'll stick with his prediction of gold above $1,350 by the year's end and silver at $25. "I think you and I both have a better chance of winning the Lotto than metals prices have of falling at this juncture," said Doelling. Gold revs its engine and squeals down the track-Read more here-http://www.marketwatch.com/news/story/gold-revs-its-engine-squeals/story.aspx?guid={859C0FA3-EB68-4DC8-A361-0629E1A6F5D7}&dist=msr_1&print=true&dist=printMidSection
-Citigroup says long-term gold price could double or even triple. Citigroup suggests that inflation and the fabrication outlook favor gold. In their recent Gold Commodity Update, Citigroup metals analysts John H. Hill and Graham Wark also predicted that "longer term, we believe that gold is capable of doubling or tripling from current levels." Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=55618&sn=Detail
-Given the confluence of so many bearish factors for bond and equity markets, we remain firm in our belief that gold will reach our 2008 prediction of $1,200 per ounce before the end of 2008. Gold.ie
-Let Big Brokers Fail; Buy Gold Not Oil: Marc Faber. The Federal Reserve should let the big investment banks go bust if they made unwise investment decisions, and investors should take refuge in gold, because the central bank has been "misleading" the markets, Marc Faber, editor and publisher of "The Gloom, Boom & Doom Report," told "Worldwide Exchange."
Fears that another major investment bank may get into trouble have hammered stocks recently but some analysts have said the major Wall Street banks were safe as the Fed cannot afford to let them fail. "I think there's a good chance that the Fed itself will fail one day if they say 'We're not going to let you fail,' and the government will have to bail out the entire system," Faber said.
"If I'm a bad businessman and I go out of business, who's gong to help me?" he said. "But Bear Stearns and the Wall Street elite, because they are tied into the Treasury and the Federal Reserve and they have lunch together, it's a club and so forth, they're bailed out. It's a joke!" Read and watch more here-http://www.cnbc.com/id/25406894
-Blanchard looking for new record gold price highs by end of year. Investors are shifting out of equities and into tangible assets to protect wealth as equities markets continue to decline.
While the summer months are traditionally slow months for precious metals, Blanchard Chairman and CEO, Donald W. Doyle, Jr., says the current strength gold is exerting only underscores what his investment firm has been predicting since the beginning of the bull market in 2002 that gold is tremendously undervalued, and he sees new record prices by year's end potentially $1,150 or higher.
"Inflation, a weak dollar, the rising price of oil, Middle Eastern geopolitical tensions, and the new influence of emerging markets around the globe are all factors supporting the uptick in the gold price," Doyle says. "However, the key fundamental driver over the next six months will be renewed investment demand by institutions and individuals who are looking for a safe haven."
Doyle says the equities markets have not hit bottom, and as investors see negative returns in stocks and steep declines in their 401K holdings, they are seeking out alternative investments where ever they can, particularly as the value of the dollar remains near record lows. "It's not that the financials are over-bought" Doyle says, "it's that investors just aren't buying.
They're looking for non-traditional financial vehicles, such as gold, to save the money they have. The good news for these investors is that gold has generated very nice positive returns of 43 percent over the last year and 11 percent year to date in 2008, and Blanchard sees this trend continuing long term as the economy continues to grapple with major issues that aren't going away anytime soon unfortunately."
David Beahm, Vice President of Marketing and Economic Research for Blanchard says the firm has seen year-to-date new customer growth in 2008 that has already surpassed that of all of 2007. "The markets are a very volatile and uncertain place to be for many investors," Beahm says, "and people are waking up to the fact that there are other investment vehicles that can perform exceedingly well during times of economic crisis and uncertainty, and gold and other tangible assets are a great place to be right now, and long-term we see them continuing to outperform the equities markets." Read full story here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=55973&sn=Detail
-The price of gold will find resistance at the high $950s and again at the major round number of $1000. The opposition at the latter level will have more gusto. The second try on $1000 will be followed by a modest reaction. After this reaction, a third attempt will see the price of gold burst upwards through $1000. The pull from the $1200 magnet is irresistible and will be accomplished in 2008. All else is noise. Jim Sinclair
-Gold Fields CEO reckons gold price will rise to $1,200 by June 2009. Gold Fields CEO Nick Holland expects the gold price to rise to $1,200 by June 2009, but says production costs are also rising fast. "I would see the price at $1,000 in December and at $1,200 by June next year." Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=55673&sn=Detail
-Calm before the storm gold set to rise. The factors which propelled the gold price to an all time high in March are still in place and it is just a matter of time before the bullion prices once again breaches $1,000/oz. "This is the calm before the next stage of the hurricane. It is very much the case that the same factors that have been in place since March are still there.
Perhaps people to some extent got used to the sub prime issues," said Nikos Kavalis a senior analysts with GFMS in London. Traditionally the gold price languishes while those in the north head for the sea and the lakes for their holidays but come autumn and winter the gold price may look very different.
"The summer (northern hemisphere) months historically have been quite poor for gold, very often it is a quiet period for investment activity, you can see it in the market at the moment," said Kavalis. "The gold price north of $1,000/oz is extremely probably, the price testing $1,200/oz is not improbable at all," he said. Read more here-http://www.miningmx.com/gold_silver/641494.htm
-Gold to catch-up with oil as inflation brews. Thomas Winmill, portfolio manager of the $225-million Midas Fund, said that the gold/oil ratio has only be so skewed in favor of oil in two cases since 1979, and each time it was followed by a rally in gold, a recent study by research firm Ned Davis showed. Read more here-http://www.guardian.co.uk/business/feedarticle/7615459
-Too Late to Buy Gold? Read more here-http://news.goldseek.com/GoldSeek/1214583360.php
-South African NUM miners will strike on August 6th. The NUM said it would hold a series of protests in South Africa's nine provinces, starting on July 9 to July 23, culminating in the national strike by its members. South Africa's biggest miners union said on Wednesday it would down tools on August 6 in a national strike that could halt production in the world's biggest source of platinum and major gold producer. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=56054&sn=Detail
-Austria's central bank will sell little gold over the rest of the CBGA2. The World Gold Council says it expects Austria to continue selling small amounts of gold over the remainder of the second Central Bank Gold Agreement. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=55674&sn=Detail
-European Central Bank gold sales programme complete for this agreement year. The ECB has announced it has completed its sales of gold during the current sales agreement year, but overall it has sold 20% more metal this year than last. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=55960&sn=Detail
SILVER
-Embracing inflation. This economic cloud has a silver lining. It seems as if every time I go to the grocery store or gas pump lately the prices have moved higher, exponentially higher.
Most "experts" say it simply can't go on like this consumers can't handle it for much longer, right? In the meantime though, investors are looking for ways to ride out the wave of inflation and at the same time pray it's not a tsunami.
So what's an investor to do? Where can a consumer go to at least make it a more level playing field? Silver's path to protection. One way for investors to protect themselves from the impact of inflation and at the same time even make some profits, is to buy precious metals, most commonly gold. It's not a new situation for investors and consumers faced with rampant inflation to acquire gold and use it as a hedge for inflation it's been going on for a very long time.
As the U.S. dollar continues to fall and consumer staples keep trending higher and higher, gold's real worth shines through. Usually as gold moves higher the other metals do as well, and lately silver is even more attractive than gold. Silver has always been the poor red-headed stepsister to gold. Clearly, from a dollar standpoint, it will most likely never be more precious than gold, at least I don't think so anyway. When we examine silver more closely though we also discover that silver is as much an industrial metal as it is a precious metal.
Most people are unaware that it has many unique properties that make it ideal for use in the photography, technology, defence, and electronic industries as well as many other applications. As we continue to trudge through 2008, the rising global investment hunger for silver and worldwide industrial demand will become the key factors driving silver to new highs in 2009. Kevin Kerr-Read full story here-http://www.marketwatch.com/news/story/economic-cloud-has-silver-lining/story.aspx?guid=D54B7265-DE90-45ED-94D3-A7857E87F7D7&dist=SecMostMailed&print=true&dist=printMidSection
-Automakers turn to 'nanotechnology' as precious metal prices soar. The world's automotive manufacturers have gone well beyond the basic concept of PGM substitution, and are now looking to nanotechnology to reduce the use of precious metals.
Japan's Mitsui Mining and Smelting Co told Reuters last month it aimed to start commercial production in three years' time of a new catalyst that applies silver rather than platinum in diesel vehicles, at almost $2,000 an ounce cheaper. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=55405&sn=Detail
-Silver news from silver institute. Read more here-http://www.silverinstitute.org/news/2q08.pdf
-One question I often receive is how much money an investor should put into the precious metals. There is no simple answer, yet I want to remain consistent. When I wrote The Ten Rules of Silver Investing, it was stated that 10% was enough of a diversification. Since that book was published nearly a decade ago, I have told my readers that perhaps an allocation of up to 20% might be considered, due to the current economic environment on a worldwide basis.
In 2005, Ibbotson Associates prepared a study for Bullion Management Services Inc. This was the first modern asset allocation model that really defined the problem of true asset diversification, and it proposes a real world solution. On page 3 of this study we find, "Based upon the forward-looking resampled, efficient frontiers, asset allocations that include metals have a better risk-adjusted performance (as measured by the Sharpe Ratio) than asset allocations with the precious metals.
Investors can potentially improve the reward-to-risk ration in conservative, moderate, and aggressive asset allocations by including precious metals with allocations of 7.1%, 12.5%, and 15.7%, respectively. These results suggest that including precious metals in an asset allocation could increase expected returns and reduce portfolio risk." David Morgan-Read more here-http://www.kitco.com/ind/morgan/printerfriendly/jun272008.html
-The one thing I like about gold is its high price. This accentuates the great value of silver. It is the difference in price between these two comparable items that should be of interest to the long-term investor. Then a review of known facts and an application of sound common sense should cause the logical long term investor to run to buy silver. I know my calculations for the future price of silver will sound crazy to most, just like the Rabbi's advice sounded crazy.
I'll just ask you to remember that all great opportunities seemed crazy at first. If they didn't seem crazy, everyone would have invested already and there wouldn't be any great opportunity. There is 5 billion ounces of gold versus 2.5 billion ounces of silver (some, including Mr. Butler, would say it's more like 5 times as much). That means that gold should sell for half of the price of silver, or silver double the price of gold.
In 20 years, because we consume silver but accumulate gold mine production, there will be, for sure, five to ten times as much gold as silver. I honestly believe that silver must eventually sell for five to ten times what the price of gold may be. It will be many hundreds of dollars an ounce or more. Gold costs more than 50 times the price of silver today. The difference between where the price is today, versus where it should be, and where it will be in twenty years would shock you.
If you were to ask me how and why silver could be so under-priced compared to gold, I would tell you to read Mr. Butler's explanation of price manipulation. It is the only thing that makes sense to me. We may be in confusing times, but that doesn't mean we have to be confused about everything. If the Rabbi were here today, my guess is that he would say to buy silver. Ted Butler & Israel Friedman silver commentary here-http://news.silverseek.com/TedButler/1214918791.php
-First silver US coin with readable Braille unveiled. Read more here-http://ap.google.com/article/ALeqM5j7sdL1zUfJrW76TsqQVADojnZoqAD91LTN3G0
PLATINUM-PALLADIUM
-Look for more platinum price spikes in 2008. Assertive investor activity is likely to be sustained through 2008 according to CPM Group, looking for more metal than the market dynamics could supply from any excess in the underlying market. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=55528&sn=Detail
RARE COLORED DIAMONDS
-Diamond Investment Fund Falls Short of IPO Goal. Diamond Circle Capital listed on the London Stock Exchange yesterday as a closed-ended investment company under the Yahoo! ticker DIAM.L. It raised about $75 million, far short of its $150 million goal. However, the company raised $100 million prior to its IPO.
The fund plans to invest in high-quality diamonds. One unnamed source close to the deal told London's Financial News that the amount raised was lower than expected due to the fund being an innovative structure and the first of its kind. Diamonds.net
OIL
-Crude oil prices could rise to as high as $170 per barrel in the coming months but are unlikely to hit $200 and should ease towards the end of the year, OPEC President Chakib Khelil said in an interview on Thursday. "I forecast prices probably between $150-170 during this summer.
That will perhaps ease towards the end of the year," he told France 24 television, according to a text of the interview released by the station. The comments came as crude prices neared $135 per barrel, after rising about 40 percent this year. Khelil said he doubted prices would climb as high as $200. Read more here- http://www.bloomberg.com/apps/news?pid=20601087&sid=aclKiYe3Osv4&refer=home
-Options traders bet oil could rise another 40%. Read more here-http://www.gata.org/node/6393
-Saudi king says oil cheap, output hike will not help. Read more here-http://in.reuters.com/article/businessNews/idINIndia-34318820080701?sp=true
-Saudi king urges consumers to get used to high oil prices. King Abdullah of Saudi Arabia, whose nation is the world's number one oil exporter, called on consumer countries to get used to high prices in comments published on Tuesday. "Consumer countries have to adapt to the prices and the mechanisms of the market," the king said in an interview published by the Kuwaiti daily Al-Siyassah.
"We have nothing to do with the current sharp increase in crude prices," he said reiterating the Saudi position that speculation, rising demand and the taxation of oil products in consumer countries were to blame. "These countries must reduce their taxes on fuel if they want to contribute to easing the burden on ordinary consumers," he said. AFP
-Iran says OPEC powerless to reduce oil price-report. Read more here-http://uk.reuters.com/article/oilRpt/idUKDAH12693820080701
-U.A.E. Can Supply More Oil If Needed, Al-Hamli Says. The United Arab Emirates, OPEC's third-biggest oil producer, is ready to boost supplies to the market if needed, oil minister Mohamed al-Hamli said. ''As a member of OPEC, we're willing to supply more if the market needs more oil,'' al-Hamli said on the sidelines of the Asian Oil and Gas Show in Seoul today. "We believe the market is adequately supplied at this moment." Read more here-http://www.bloomberg.com/apps/news?pid=20601072&sid=aZo1EYTazm1A&refer=energy
-Canada Oil Sands Need Minimum Price $70 a Barrel, Statoil Says. Canadian oil sand deposits require crude prices of at least $70 a barrel to cover capital and operating expenses and provide an acceptable rate of return, a StatoilHydro ASA executive said. ''You cannot produce at $50 a barrel,'' Robert Skinner, StatoilHydro's senior vice president for commercial and business development in Canada, said in Madrid today. Rising costs mean New York oil prices need to be at least about $70 or $80 a barrel to make Canadian oil sands worthwhile, he said.
Oil sands, biofuels and exploration in harsh, untapped environments such as the Arctic, are among the possibilities for finding the ''third trillion barrels'' of oil resources, Saudi Aramco Chief Petroleum Engineer Khaled Buraik told a round-table panel today at the World Petroleum Congress in Madrid. About a trillion barrels of oil has already been produced and the world has another trillion of proven oil reserves, leaving the question of where the third trillion will be found. StatoilHydro is Norway's largest oil company. Bloomberg
-IEA says world in the grips of a 'third oil shock'. Energy watchdog says no end in sight for high oil prices as rapid growth in China and India drives demand. Read more here-
http://www.theglobeandmail.com/servlet/story/LAC.20080702.RIEA02/TPStory/Business
-Five-year oil squeeze predicted. International Energy Agency reports estimated daily oil needs will grow to 94M barrels by 2013 from some 87M today slightly less than supply. Read more here-http://money.cnn.com/2008/07/01/news/international/oil_supplies.ap/index.htm or http://www.bloomberg.com/apps/news?pid=20601072&sid=aG4Wm2P35WDc&refer=energy
-Offshore Drilling Won't Affect Prices Much, EIA Says. Expanded offshore drilling in the U.S. won't affect oil and natural-gas prices much, the head of the Energy Information Administration said. Guy Caruso, speaking today at a press conference in Washington, said his agency had considered the effect of more drilling in a 2007 report.
Higher energy prices this year might change the results, although the time needed for resource development would damp any outcome, he said. ''It does take a long time to develop those resources,'' Caruso said. ''Therefore the price impact is muted by that.'' Read more here-http://www.bloomberg.com/apps/news?pid=20601072&sid=adlgNMu.LrHg&refer=energy
-Matt Simmons, schools out let summer begin. See slide show on oil here-http://www.321energy.com/editorials/simmons/simmons070108/simmons070108.html
-Don't blame the oil 'speculators'. A campaign in Congress to punish traders for record oil prices reveals a fundamental misunderstanding of how futures markets work. Read more here-
http://money.cnn.com/2008/06/27/news/economy/birger_oil_speculation.fortune/index.htm
-Russia's Oil Output Falls in June, Extending Decline. Read more here-http://www.bloomberg.com/apps/news?pid=20601085&sid=aXC.9ub8iQL0&refer=europe
-Libya May Cut Oil Output on U.S. Threat to its Assets. Libya, the holder of Africa's largest oil reserves, threatened to cut oil output in response to a U.S. law that allows terror victims to seize assets of foreign governments as compensation.
Congress passed a law in January that would let families of American victims of Libyan-linked attacks confiscate Libyan assets and those of companies doing business with the North African nation. At least two lawsuits have already been filed in Washington. Read more here-http://www.bloomberg.com/apps/news?pid=20601072&sid=awsiwToPU570&refer=energy
GASOLINE
-Oil Shock: Analyst Predicts $7 Gas, "Mass Exodus" of U.S. Cars. Oil at $135? That was just the opening skirmish in the "peak oil" wars. The latest smart money? $200 oil in 2010, with gasoline at $7 a gallon. And that is going to turn Americans into car-shunning Europeans once and for all poor Americans, at least. That's the latest gloomy forecast from Jeff Rubin at Canadian brokerage CIBC World Markets, who just a few months ago figured $200 oil would be a thing of the distant future like 2012.
Mr. Rubin laughs off recent attempts to take the steam out of global oil markets. Saudi production promises of 200,000 barrels a day doesn't dent the 4 million barrel-per-day decline from aging fields every year, for starters. And it will just be "gobbled up" by increasing domestic consumption in Saudi Arabia, like other oil-producing countries that subsidize fuel. Read more here-http://blogs.wsj.com/environmentalcapital/2008/06/26/oil-shock-analyst-predicts-7-gas-mass-exodus-of-us-cars/
-Gas hits another all-time high. National average climbs to $4.087 a gallon. Alaska has the highest gas prices in the nation while drivers in South Carolina pay the least. Read more here-
http://money.cnn.com/2008/07/01/news/economy/gas/index.htm
-The record-high price of gasoline is putting a strain on motorists and spurring some to shift their habits. Here are their stories. Read more here-
http://money.cnn.com/galleries/2008/news/0805/gallery.real_people_gas/index.html
-Drivers blame D.C. for high gas prices. More than three-quarters of consumers say the government's energy policies are to blame for record fuel costs, according to Consumer Reports. Read more here-http://money.cnn.com/2008/06/26/news/economy/consumers_gas_prices/index.htm
COMMODITIES-FOOD
-Percentage change for the year, so far, in various items. Jim Sinclair
Crude oil up 42.5%
Ethanol up 20.7%
Heating oil up 43.9%
Natural gas up 76.5%
Unleaded gas up 39.5%
Cattle up 1.0%
Corn up 58.8%
Soy beans up; 26.4%
Coffee up 5.9%
Aluminum up 32.7%
Copper up 25.7%
Platinum up 33.4%
Gold up 6.0%
Silver up 13.4%.
S&P 500 down 10.24%
Frankfurt DAX down 18.32%
London FTSE down 12.23%
Paris CAC down 19.64%
Hong Kong Hang Sang down 18.33%.
Tokyo Nikkei down 9.47%
Singapore Straits down 14.04%.
Seoul Composite down 9.57%
Sydney All Ordinary down 15.76%
Taipei Telex down 7.40%
-U.S. Lawmakers' zeal versus speculators could backfire. Read more here-http://www.reuters.com/article/ousiv/idUSN2740094220080628
-Commodities Signal Bubble Bursting as First-Half Ends. Commodities finished their best first half in 35 years. The next six months may not be as rewarding because record prices for oil, copper and a dozen other raw materials may crimp consumption and encourage growth in supply.
The 19 commodities in the Reuters/Jefferies CRB Index jumped 29 percent through June 30, the most since 1973 and more than any second-half gain in at least five decades, data compiled by Bloomberg show. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid=aMdI79jc0i9w&refer=canada
-Food price spike: Is ethanol to blame? A devastated corn crop is likely to exacerbate costs at the grocer. Some people are pointing a finger at the ethanol production laws. Read more here-http://money.cnn.com/2008/06/27/news/economy/ethanol_food_prices/index.htm
-USDA says floods hurt corn crop. Farmers to harvest nearly 9% fewer acres than last year; food prices may rise as result. Read more here-
http://money.cnn.com/2008/06/30/news/economy/flooding_corn.ap/index.htm?postversion=2008063010
-Hoarding Nations Drive Food Costs Ever Higher. At least 29 countries have sharply curbed food exports in recent months, to ensure that their own people have enough to eat, at affordable prices. When it comes to rice, India, Vietnam, China and 11 other countries have limited or banned exports. Read more here-http://www.nytimes.com/2008/06/30/business/worldbusiness/30trade.html?_r=3&adxnnl=1&oref=slogin&partner=rssyahoo&emc=rss&adxnnlx=1214852783-23QcKmPzEpoBHeGpDRIZmw&pagewanted=print&oref=slogin
DIRE FINANCIAL WARNINGS
-RBS issues global stock and credit crash alert. The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks. "A very nasty period is soon to be upon us, be prepared," said Bob Janjuah, the bank's credit strategist.
A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets. Such a slide on world bourses would amount to one of the worst bear markets over the last century. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/18/cnrbs118.xml
-Barclays warns of a financial storm as Federal Reserve's credibility crumbles. US central bank accused of unleashing an inflation shock that will rock financial markets. Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero."
"We're in a nasty environment," said Tim Bond, the bank's chief equity strategist. "There is an inflation shock underway. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth."
Barclays Capital said in its closely-watched Global Outlook that US headline inflation would hit 5.5pc by August and the Fed will have to raise interest rates six times by the end of next year to prevent a wage-spiral. If it hesitates, the bond markets will take matters into their own hands. "This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that's possible. It has lost all credibility," said Mr Bond. Read more here-
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/27/cnbarclays127.xml
-BIS warns of Great Depression dangers from credit spree. The Bank for International Settlements, the world's most prestigious financial body, has warned that years of loose monetary policy has fuelled a dangerous credit bubble, leaving the global economy more vulnerable to another 1930s-style slump than generally understood.
Virtually nobody foresaw the Great Depression of the 1930s, or the crises which affected Japan and southeast Asia in the early and late 1990s. In fact, each downturn was preceded by a period of non-inflationary growth exuberant enough to lead many commentators to suggest that a 'new era' had arrived", said the bank.
The BIS, the ultimate bank of central bankers, pointed to a confluence a worrying signs, citing mass issuance of new-fangled credit instruments, soaring levels of household debt, extreme appetite for risk shown by investors, and entrenched imbalances in the world currency system. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/06/25/cncredit125.xml or http://www.gata.org/node/6401
-Broad Says Economy in Worst Slump Since World War II. Billionaire investor Eli Broad said the U.S. economy is in the worst recession since World War II and a recovery in the housing market is ''several years'' away. ''This is worse than any recession we've had since World War II,'' Broad, 75, said in an interview yesterday. Broad, the founder of homebuilder KB Home, said the U.S. should avoid a depression on the scale of the 1930s because the country now has sufficient ''safety nets.''
With home sales and prices declining and consumer confidence at a 28-year low, ''I don't see it turning around very quickly,'' Broad said. The economy expanded at an annual rate of 1 percent in the first quarter, the Commerce Department said last week. That caps the weakest six months of growth in five years. ''This is the worst period of my adult lifetime,'' Broad said, speaking about the U.S. economy.
"I do not think things are going to get any better'' before the next president takes office in January. Selling off vacant, unsold homes could take ''several years,'' he said. The U.S. will avoid a collapse as severe as the 1930s thanks in part to Federal Reserve oversight of the banking system and other safeguards that didn't exist then, he said. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=aAZwgRY7yikM&refer=worldwide
Definitions, Quotes and Quick Hits
-Interest Rate Risk. The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between two rates, in the shape of the yield curve or in any other interest rate relationship.
Such changes usually affect securities inversely and can be reduced by diversifying (investing in fixed-income securities with different durations) or hedging (e.g. through an interest rate swap). Interest rate risk affects the value of bonds more directly than stocks, and it is a major risk to all bondholders. As interest rates rise, bond prices fall and vice versa.
The rationale is that as interest rates increase, the opportunity cost of holding a bond decreases since investors are able to realize greater yields by switching to other investments that reflect the higher interest rate. For example, a 5% bond is worth more if interest rates decrease since the bondholder receives a fixed rate of return relative to the market, which is offering a lower rate of return as a result of the decrease in rates. Investopedia.com
-"Inflation is a lot like toothpaste once it is out, it is very hard to get back into the tube." David Beahm-Blanchard and Co. Inc.
-"The Dow Jones Industrial Average had its worst June since the Great Depression." Bloomberg
-Wall Street: The bear is back. Dow and Nasdaq end at bear market levels July 2, down more than 20% from October highs. Cnnmoney.com
-Ray Ellis, owner of Escondido Coin and Loan pawnshop, is used to customers coming in with rare or collectible coins for one of the four-month loans that is the industry standard. Recently, customers have been seeking larger amounts, up to $50,000, Ellis said. He said one gentleman came in with a sack of gold coins in order to pay off debts on his investment properties in Orange County.
The credit crunch and economic turmoil is sending bigger fish their way. We're seeing lots of people that we wouldn't have seen before, said Mike Robinson, treasurer of the Collateral Loan & Secondhand Dealers Association and owner of Crown Jewelry and Loan in San Diego. We're definitely seeing more affluent people coming through because I'm seeing bigger diamonds.
Irene Longoria, store manager of the Oceanside Gems N' Loans, estimates that about 30 percent of her customers are new this year. She said they're coming from Del Mar, Solana Beach and other upscale residential areas. We've had people come in with sandwich bags of jewellery. This recession is hitting everybody, Longoria said. New customers are finding out a lot more than they bargained for at their local pawnshop.
John Martin, a jewelry professional at Gems N' Loans, which has locations in Vista and Escondido, said a woman recently expected hundreds if not thousands of dollars for the diamond ring she received as a gift, only to find out it was zirconium. She said, it's a diamond, and I said, it's not, Martin recalled. Then she said, that son of a b...! Thehousingbubbleblog.com
-Lunch with Buffett will cost more than $2 million. Lunch with Berkshire CEO Warren Buffett will cost more than $2 million; proceeds go to charity. Read more here-
http://money.cnn.com/news/newsfeeds/articles/apwire/13366a320132ddc5239fe79c449bd37f.htm
INFLATION
-Euro zone inflation reaches record 4 pct. Read more here-http://www.guardian.co.uk/business/feedarticle/7619535
-Core inflation losing accuracy as price predictor. Read more here-http://www.reuters.com/article/GCA-inflation/idUSL2613674720080630
-Money Supply Surge to Lead to Inflationary Depression in U.S.? When official government statistics are abruptly discontinued and no longer available to the public and when other government statistics like the Consumer Price Index indicate that inflation remains contained, many wonder, "is it just me and everybody else I know that is paying a lot more for food and energy and just about everything else that we use?"
John Williams of Shadow Government Statistics points out that the government has changed the method of calculating CPI figures, especially within the last fifteen years, lowering inflation figures significantly. Even more bizarrely and worryingly, the U.S. government has discontinued publishing M3 money supply data. But the diligent analysts in Shadow Statistics have reconstituted and it shows M3 surging by over 20%.
John Williams and Shadow Statistics are garnering increasing respect for their excellent research in this regard and were recently featured on CNN. The interview is excellent and in it Williams outlines his belief that the U.S. will experience an inflationary depression. The interview was in February of this year and since then M3 money supply has surged by even more and is now at over 20% as seen in the chart below.
In the CNN Money interview, Williams recommends that investors become more defensive and sell equities and bonds and become more liquid and move to cash and hold gold in order to protect against inflation. Gold.ie Watch video interview here-http://money.cnn.com/video/#/video/news/2008/02/28/news.hunter.shadowstats.Feb28.cnnmoney
-Rising prices hammer seniors on fixed incomes. Read more here-http://www.usatoday.com/money/perfi/retirement/2008-07-01-retiree-fixed-income_N.htm
-Inflation: 'Destroying governments since 1789'. Read more here-http://www.thisismoney.co.uk/news/article.html?in_article_id=443494&in_page_id=2&ct=5
-Inflation Menace Has Echoes of Volcker's Days. Read more here-http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_hassett&sid=a30AR6y1nc4o
-Stayin' Alive in the New '70s. Read more here-http://news.goldseek.com/DailyReckoning/1214505689.php
GLOBAL-U.S. RECESSION
-Bean says economy facing most challenging time since 1990s. The economy is facing its most challenging time since the early 1990s or even earlier as policymakers grapple with two conflicting risks, Bank of England Deputy Governor Charlie Bean said on Wednesday.
In a written submission to parliament's Treasury Committee in his first week as deputy governor, Bean said it will be hard to get inflation to meet the 2 percent target without needless volatility in output. "There is no doubt that the UK economy presently faces the most challenging set of circumstances since at least the early 1990s and possibly earlier," said the central bank's former chief economist. Read more here-http://www.reuters.com/article/businessNews/idUKL0261445620080702
-New Zealand's Economy on Brink of First Recession in 10 Years. New Zealand's economy contracted last quarter, putting the nation on the brink of its first recession in 10 years as soaring credit costs damp domestic demand and a drought crimps exports. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aYKzCL.T4USs&refer=home
-Consumer confidence nears all-time low. Most blame high food and fuel prices in latest survey from University of Michigan. Read more here-
http://money.cnn.com/2008/06/27/news/economy/consumer_confidence/index.htm
-Company Bankruptcies in U.S. Outpace Individual Filings in June. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a5W2zQLF1PVc&refer=home
-Overdue Home-Equity Credit Lines Rise Most Since 1987, ABA Says. Consumers fell behind on loans secured by their homes at the fastest pace in two decades in the first quarter, signalling deeper distress in the U.S. economy, the American Bankers Association reported. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aEGQR1.P0t4A&refer=home
-American Express Says Late Card Payments Increasing. American Express Co., the biggest U.S. credit-card company by purchases and cash advances, said customers are falling further behind on their debt, signaling the economy is worsening. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a5XZ_dtNNtPc&refer=home
-Teens Skip $50 Jeans in Squeeze of Gas, Job Shortage. The financial pressures of adults are finally catching up with American teenagers. Since summer jobs dried up, gasoline prices topped $4 a gallon and parents ran out of spare cash, teens have had to cool it on spending for clothes.
''I've had to cut down on a bunch of stuff because I don't like spending my own money,'' said 14-year-old Haley McClelland from Waldwick, New Jersey, who was shopping at the nearby Paramus Park mall. She said her parents are ''more careful'' about what they give her. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid=a7WHUo_QBqkQ&refer=canada
-Starbucks to Close 600 Stores, May Cut 12,000 Jobs. Starbucks Corp. will close 600 U.S. coffee shops and eliminate as many as 12,000 jobs, the most in its history, as Chief Executive Officer Howard Schultz slows the chain's expansion after it doubled in size in four years. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=aeRM5wL1gkfQ&refer=home
-State, city layoffs: 45,000 and counting. A squeeze on tax revenues could force local leaders to cut tens of thousands of more jobs. That could add to the nation's economic woes. Read more here-http://money.cnn.com/2008/06/23/news/economy/local_government_layoffs/index.htm?postversion=2008062308
-Deepening Cycle of Job Loss Seen Lasting Into '09. Read more here-http://www.nytimes.com/2008/07/02/business/02jobs.html?_r=1&adxnnl=1&oref=slogin&partner=rssyahoo&emc=rss&adxnnlx=1215011051-UQMPUkMAgF4d49anb/SwkQ
-The Next Victim of the Real Estate Crisis. As the economy stalls, state and local governments will see less tax revenue roll in. Get ready for cuts in services. Read more here-
WORLD FINANCIAL CRISIS
-The Federal Reserve has auctioned another $75 billion in loans to squeezed banks to help them overcome credit problems and announced it will provide a fresh batch of the loans this month. The central bank on Tuesday released the results of its most recent auction -- the 15th since the program began in December. It's part of an ongoing effort to ease financial turmoil and credit stresses.
In the latest auction, commercial banks paid an interest rate of 2.340 percent for the 28-day loans. There were 77 bidders. The Fed received bids for $90.88 billion worth of the loans. The auction was conducted on Monday with the results made public on Tuesday. The Fed also said it will conduct two auctions in July. Banks will have an opportunity to bid on a slice of $75 billion in short-term loans in each auction. Read more here-http://biz.yahoo.com/ap/080701/fed_credit_crisis.html?.v=4&printer=1
-The Shrinking Influence of the US Federal Reserve. Humiliation for Mr. Dollar: Ben Bernanke, the chairman of the United States Federal Reserve Bank, faces a general investigation by the International Monetary Fund. Just one more example of the Fed losing its power. Read more here-http://www.spiegel.de/international/world/0,1518,562291,00.html
-CDO Defaults Reach $220 Billion on Deerfield Failure. Deerfield Capital Management LLC and Declaration Management & Research LLC pushed the amount of collateralized debt obligations in default to $220 billion, according to Wachovia Corp. analysts.
Downgrades to mortgage bonds and their underlying securities triggered so-called events of default on 200 CDOs since October, including Rosemont, Illinois-based Deerfield's Knollwood CDO Ltd. and Kent Funding II, managed by Declaration in McLean Virginia, Wachovia analysts wrote yesterday. The total compares with 191 CDOs totaling $212 billion on May 21, according to the bank. The failures are equivalent to 36 percent of CDOs that include U.S. asset-backed debt sold since 2003, and 19.3 percent of all CDOs, Charlotte, North Carolina-based Wachovia said.
Losses on the securities that pool assets including subprime mortgages contributed to the almost $400 billion of credit losses and writedowns by banks worldwide in the past year. CDOs repackage assets such as mortgage bonds and other debt into new securities that are then sliced into pieces with different ratings. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid=aqMZ6GS5sEcU
-Fed saved Bear to avert 'contagion'. According to newly released documents, the Federal Reserved backed Bear Stearns to avoid the collapse of the U.S. financial system. Read more here-http://money.cnn.com/2008/06/27/news/economy/fed_bear_stearns.ap/index.htm
-Paulson Calls for Process to Liquidate Failing Firms. U.S. Treasury Secretary Henry Paulson called for regulatory changes that would allow financial firms to fail without threatening broader market stability.
The Treasury chief also proposed steps providing for the president to approve of any use of taxpayer funds to aid a financial company. In a speech in London today, Paulson identified a legal gap that leaves unspecified how to deal with failures of companies that don't take deposits, such as investment banks. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=aAsOy1NUvRPw&refer=home
-Banks brace for tough second half. After two particularly rough quarters, analysts predict more writedowns, dividend cuts and executive shakeups for the financial sector. Read more here-http://money.cnn.com/2008/07/01/news/companies/banks_outlook/index.htm
-Banks should fear a rate hike. The Fed left rates alone Wednesday. But with inflation fears brewing, an eventual rate hike could spell more trouble for embattled banks. Read more here-http://money.cnn.com/2008/06/26/news/companies/banks_margins/index.htm
-Anatomy of a bank failure: When the liquidators come calling. Read more here-http://www.charleston.net/news/2008/jun/08/anatomy_bank_failure_when_liquidators_comes_callin/
-Ritchie Capital bars investors from leaving fund. After big losses, hedge fund manager A.R. Thane Ritchie has barred investors from leaving his fund, Ritchie Capital Management, the Wall Street Journal reported on its website on Tuesday.
The article said the fund is currently valued at $2 billion, down from almost $4 billion in 2005. Ritchie told the Wall Street Journal that keeping his investors' money in the fund is the best move right now, since the alternative is to sell securities at "fire-sale prices". Ritchie told the Wall Street Journal that he has already returned some of his investors' money and has promised to return the rest within three years. Reuters
-AIG to lose up to $5 billion from investments: report. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aoGjre8ctFFk
-Barclays May Need 9 Billion Pounds, Citigroup Says. Barclays Plc, Britain's fourth- biggest bank, may need an additional 9 billion pounds ($17.9 billion) to absorb credit-related writedowns and bring its capital in line with European peers, Citigroup Inc. said.
The London-based bank will raise 4.5 billion pounds in a share sale announced earlier this week, lifting its core-equity Tier 1 capital ratio to 5.8 percent from below 5 percent, analysts led by London-based Tom Rayner said today in a research note. That will lag behind Royal Bank of Scotland Group Plc and make Barclays Europe's ninth-weakest bank in terms of capital, he said. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid=aba5gLSqw7is
-Citigroup May Write Down $8.9 Billion, Goldman Says. Citigroup Inc., the bank that's posted the biggest losses from the collapse of the U.S. mortgage market, may take an additional $8.9 billion in net writedowns in the second quarter, Goldman Sachs Group Inc. said. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aXXvsTcMNBKM&refer=home
-Fortis Scraps $2 Billion Payout, Sells Shares, Assets. Fortis, Belgium's biggest financial- services company, scrapped a 1.3 billion-euro ($2 billion) cash dividend and will sell shares and assets to shore up capital as the earnings outlook deteriorates. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aptv8E16PvTE&refer=home
-Merrill's Loss, Writedown Estimates Raised by Lehman. Merrill Lynch & Co. had its second- quarter loss estimate increased by Lehman Brothers Holdings Inc. on expectations subprime-related writedowns will be more than twice as big as previously thought.
Lehman analyst Roger Freeman said New York-based Merrill, the third-largest U.S. securities firm, will probably lose $2.78 a share, compared with his earlier prediction of a 64-cent loss. Freeman increased his writedown estimate for the quarter to $5.4 billion, from $2.4 billion previously, he wrote in a note today. Read more here-
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSXHQl1.cX84
-Gone by the board? Why bank directors did not spot credit risks. Read more here-http://www.ft.com/cms/s/0/6e66fe18-42e8-11dd-81d0-0000779fd2ac.html
U.S. DOLLAR
-Avoid Dollar 'At All Costs,' Investor Rogers Says. Jim Rogers, who in April 2006 correctly predicted oil would reach $100 a barrel and gold $1,000 an ounce, said investors should steer clear of the dollar as the U.S. economy slows and favor commodities this year.
The dollar has slipped 7.7 percent against the euro and 5.9 percent versus the yen in 2008 as the Federal Reserve cut interest rates to stave off a U.S. recession. Oil prices have doubled in the past 12 months, while gold is up 44 percent.
Avoid the dollar ''at all costs,'' Rogers, chairman of Rogers Holdings, said in a speech in Shanghai today. ''The best investments in 2008 are commodities and natural resources. Agricultural prices have much higher to go over the next decade. We have a shortage of everything, including seeds.''
Oil and metal prices in New York have surged as a slumping U.S. currency made them cheaper for non-dollar investors to buy as a hedge against inflation in a slowing global economy. The dollar has stabilized in recent weeks, with currency volatility falling by the most since 1999 this quarter.
The comments from Rogers, 65, come two days after he told investors at a conference in Nanjing not to ''give up'' on Chinese shares, which have made China the world's second worst performers this year. Rogers, who first started buying Chinese stocks in 1999, said he hadn't sold any of his holdings. Read more here-
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aLr71mSZqOLI
-Sinking Currencies. Read more here-http://news.goldseek.com/GoldSeek/1214584561.php
-On the Precipice. It has been my view expressed in these alerts and elsewhere over the past several months that there will be a currency crisis this summer caused by a plummeting US dollar. Summer of course began a few days ago, so it is reasonable to ask whether my view has changed. It hasn't. The US dollar is now standing on the edge of the precipice. In fact, it is already peering over the edge as we can see in the following chart of the US Dollar Index. Read more here-http://goldmoney.com/en/commentary.php
-Bush's Dollar Drop Maps Loss of U.S. Clout at Final G-8 Summit. When President George W. Bush went to his first Group of Eight summit in 2001, a dominant issue was the dollar -- the strong dollar, that is. The U.S. currency was on a record-setting streak, and the free-marketeering president wasn't going to stand in the way.
On the eve of Bush's last G-8 appearance, the dollar's gyrations are again in the crossfire. This time, it is a weak currency, upended by slumping growth, a housing recession and record gas prices, that is gnawing away at the world economy.
The dollar's 41 percent drop against the euro during Bush's term writes the economic epitaph of an administration that set out to restore American preeminence. Instead, Bush heads to Japan next week for his final international summit with diminished leverage as Russian and Chinese influence grows. Read more here-
http://www.bloomberg.com/apps/news?pid=20601110&sid=aH0_cYGS8Avc
-Intervention Will Not Stop the Dollar's Slide. Bambi vs. Godzilla! Peter Schiff-Read more here-http://www.321gold.com/editorials/schiff/schiff062708.html
-Dollar pain hits close to home. When you pay more for oil and other imported goods, that's the fault of the weakened greenback. Read more here-
http://money.cnn.com/2008/06/27/markets/dollar/index.htm
EURO
-Euro May Be Poised for 'Explosive Breakout,' Citigroup Says. The euro may be nearing an "explosive breakout," reaching record levels against the U.S. dollar, according to a Citigroup Global Markets Inc. research note. The trading pattern, including a so-called double-bottom that tested lows, resembles the one before Feb. 26 that preceded the surge to $1.6019 per euro, analysts Tom Fitpatrick in New York and Shyam Devani in London wrote in the note today.
"We cannot help but feel that things might be about to get very bad again," the analysts said, referring to the possible combination of falling bond yields and rising oil prices. The exchange rate may approach $1.69 per euro by September if previous patterns are duplicated, the report said. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=azgZfuwN3MVM&refer=home
-East End businesses begin accepting payment in euros. Read more here-http://www.newsday.com/business/ny-bzeuro0702,0,303306.story
U.S. DEFICIT-$1 TRILLION?
-Obama May Produce $1 Trillion Deficit, Gross Says. Bill Gross, manager of the world's biggest bond fund at Pacific Investment Management Co., said a Barack Obama administration may have no other choice than to produce the first $1 trillion U.S. budget deficit.
''You have inherited a mess,'' Gross, co-chief investment officer of Pimco, said in an open letter to Obama, the likely Democratic presidential nominee, published on the Newport Beach, California-based company's Web site today. ''What do I think you should do as the new president to rectify this mess? All I know is that any solution will come with a high price tag.''
Higher taxes for hedge-fund managers and oil companies will not cover the $500 billion stimulus the economy needs, including the anticipated Obama tax cuts for the poor and middle-class, universal health care and aid to the depressed residential real estate market, said Gross, a long-time Republican. The likely expenditures and increased borrowing suggest that ''intermediate and long-term yields on government bonds have already bottomed and will gradually rise'' through the next four years and possibly beyond, Gross said.
Gross domestic investment in machines, houses and inventories has fallen by $200 billion since its 2006 peak, Gross said. Domestic consumption will soon be $300 billion short of what's needed for an economic rejuvenation, he said. With the deficit already pushing $500 billion even before the next president is sworn in, Gross anticipates it will reach $1 trillion deficit by 2011.
Republicans ''will blame you for years and label you 'Trillion-Dollar Obama,''' said Gross, in his analysis that assumes Obama will defeat his presumptive Republican adversary, John McCain. "There is, in fact, not much that you or any other President can do." Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aOyoFye9PC6U
-National debt makes U.S. vulnerable, experts say. Lender nations could wage 'financial warfare.' Read more here-http://www.jsonline.com/story/index.aspx?id=767295
-The financial challenges facing the U.S. See the presentation from Ross Perot here-http://perotcharts.com/challenges/
REAL ESTATE-RENTAL
-Paulson: U.S. home prices to fall. U.S. Treasury Secretary Henry Paulson said on Wednesday that high oil prices, further home price declines and capital markets turmoil will prolong the American economy's slowdown, while Europe and the UK were also showing signs of slower growth.
Paulson, in remarks prepared for delivery to the Chatham House think tank here, said U.S. home foreclosures will remain elevated and "we should not be surprised at continued reports of falling home prices." Read more here-http://www.reuters.com/article/ousiv/idUKLAE00017320080702
-KB Home Founder Broad Says U.S. Home Prices Will Drop 10% More. U.S. home prices likely will drop another 10 percent from their peak before the housing market begins to recover, said Eli Broad, founder of Los Angeles-based homebuilder KB Home. ''Every housing market's different, but you can expect housing prices to continue to decline in most markets for the next year or so,'' Broad said in an interview from Los Angeles with Bloomberg Television. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHOHd1MVIx8Y
-Homes Less Affordable as Prices Fall, Rates Rise, Zillow Says. Rising mortgage rates are driving up the cost of buying a house even as prices fall, making property more expensive across the U.S., according to a new study by Zillow.com, an online provider of home valuations.
Monthly payments on 30-year fixed mortgages are 6 percent to 10 percent higher in 41 of the top U.S. housing markets than they were two months ago. First-quarter prices have declined from a year earlier in 88 percent of those areas, Zillow said.
"We're going to need about a 30 percent decline in house prices if you are going to keep payments stable," said Morris Davis, a former senior economist with the Federal Reserve and now a real estate professor at the University of Wisconsin-Madison's School of Business. Read more here-
http://www.bloomberg.com/apps/news?pid=20601068&sid=aRDMJGbadcWY&refer=economy
-Manhattan Second-Quarter Apartment Sales Fall by 22%. Manhattan apartment sales dropped the most for a second quarter since 1998 and unsold inventory approached an eight-year record, two signs prices may be poised to drop in the nation's most expensive urban housing market. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=afobk1xd14tI&refer=home
-New home sales near historic lows. Sales of new homes last month were slightly higher than expected, but were down 2.5% from April and more than 40% versus last year. Read more here-http://money.cnn.com/2008/06/25/real_estate/new_home_sales/index.htm
-Existing home sales rise on price drop. Realtors' group says the number of existing homes sold in May gained 2% to an annual rate of nearly 5 million. Read more here-
http://money.cnn.com/2008/06/26/real_estate/existing_home_sales/index.htm
-Calif. home sales soar 18% as prices swoon. The median home price is down 35%, but that helped drive the number of sales higher in May. Read more here-
http://money.cnn.com/2008/06/25/real_estate/Calif_home_sales_soar/index.htm
-U.K. real estate, this is a real property crash. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/24/bcnhouse424.xml
-U.K. House Prices Drop Most Since 1992. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid=aFs.PFqy8CEk&refer=home
-Manhattan Office Rents Fall, First Time in 3 Years. Manhattan office rents fell 2.2 percent in the second quarter to $69.29 a square foot annually, the first decline in the most expensive U.S. office market since 2005, according to real estate broker Studley Inc. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=a.3zA59CZnFY&refer=home
MORTGAGES-FORECLOSURES
-L.A., Miami Foreclosures More Than Double, Property Shark Says. New foreclosures almost quadrupled in Los Angeles and doubled in Miami in the second quarter, with as much as $5 billion worth of loans going bad in L.A. alone, the on- line real estate data company PropertyShark.com reported. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=ad_l7Q0p9hGk&refer=home
-Three Million U.S. Mortgages Headed for Default, NYT Reports. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a0uc9das5pmM
-Homeowners Fall Further Behind on Mortgage Payments. Newly delinquent homeowners outnumbered those who caught up on overdue payments for a 26th straight month in May, according to a trade group that tracks loans to people who put down less than 20 percent.
In the worst housing slump since the Great Depression, 67,967 homeowners with mortgage insurance fell at least 60 days behind on their loans, compared with 40,687 who got back on track, the Mortgage Insurance Companies of America reported today. Borrowers who take on debt of more than 80 percent of a home's value are often required to buy coverage that pays lenders if they default.
"There's no doubt that 2008 is going to continue to be a challenging year," said Michael Fraizer, chief executive officer of Genworth Financial Inc., the fourth-largest U.S. mortgage insurer, at a conference in London last week. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ajUBvSExvb6Q
-Florida sues Countrywide. Southern state joins California and Illinois in lawsuits against the troubled mortgage lender for accepting loan applications without regard for borrowers' ability to pay the loan back. Read more here-http://money.cnn.com/2008/06/30/news/companies/countrywide_lawsuit.ap/index.htm
-Wachovia quits offering risky loan option. Consumer bank to stop offering a mortgage payment option that lets borrowers pay less each month than the bank charges in interest. Read more here-http://money.cnn.com/2008/06/30/real_estate/wachovia_mortgages.ap/index.htm
-Celebrity foreclosures. The effects of the foreclosure crisis are rippling throughout the country and even the rich and famous are not immune. Read more here-
http://money.cnn.com/galleries/2008/real_estate/0806/gallery.celebrity_foreclosures/index.html
GEOPOLITICAL NEWS
-Bin Laden May Die of Kidney Disease in 6 Months, Time Reports. Read more here-http://www.time.com/time/nation/article/0,8599,1819280,00.html
-Israel has a year to stop Iran bomb, warns ex-spy. A former head of Mossad has warned that Israel has 12 months in which to destroy Iran's nuclear programme or risk coming under nuclear attack itself. He also hinted that Israel might have to act sooner if Barack Obama wins the US presidential election. Read more here-http://www.telegraph.co.uk/news/worldnews/middleeast/israel/2212934/Israel-has-a-year-to-stop-Iran-bomb,-warns-ex-spy.html
-Israel May Attack Iran, Pentagon Official Tells ABC. Israel is increasingly likely to attack Iranian nuclear facilities this year, a U.S. Defense Department official told ABC News. Iran's government dismissed as propaganda the ABC report on the unidentified Pentagon official's comments. Israeli government officials declined to comment on the report. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=ap887dZ8sYUE&refer=home
-Iran says any attack would provoke fierce reaction. Read more here-http://apnews.myway.com/article/20080702/D91LMHB80.html
-Iran to ready thousands of graves for enemy soldiers. Read more here-http://www.breitbart.com/print.php?id=080629185519.5hi45ii3&show_article=1
-Military strike on Iran would be 'catastrophic:' Russian ministry. Read more here-http://www.breitbart.com/article.php?id=080702100331.vhmvywp7&show_article=1
-Bush Says Diplomacy Is First Choice to Deal With Iran. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=affNAkkwIUqE&refer=home
-Iran Doesn't Expect War in Persian Gulf, Foreign Minister Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aA8zm9jnvllo&refer=home
-Iran War Resolution May Be Passed Next Week. Introduced less than a month ago, Resolution 362, also known as the Iran War Resolution, could be passed by the House as early as next week. The bill is the chief legislative priority of AIPAC. On its Web site, AIPAC endorses the resolutions as a way to "Stop Iran's Nuclear Program" and tells readers to lobby Congress to pass the bill.
In the Senate, a sister resolution, Resolution 580, has gained co-sponsors with similar speed. The Senate measure was introduced by Indiana Democrat Evan Bayh on June 2. It has since gained 19 co-sponsors. The bill's key section "demands that the president initiate an international effort to immediately and dramatically increase the economic, political, and diplomatic
pressure on Iran to verifiably suspend its nuclear enrichment activities by, inter alia, prohibiting the export to Iran of all refined petroleum products; imposing stringent inspection requirements on all persons, vehicles, ships, planes, trains, and cargo entering or departing Iran; and prohibiting the international movement of all Iranian officials not involved in negotiating the suspension of Iran's nuclear program." Read more here-http://www.antiwar.com/blog/2008/06/23/iran-war-resolution-may-be-passed-next-week/
-Iran says Gulf oil route at risk if attacked. Read more here-http://www.reuters.com/article/topNews/idUSBLA82623620080628?feedType=RSS&feedName=topNews&rpc=22&sp=true
-U.S. Won't Let Iran Shut Strait of Hormuz, Fleet Says. The U.S. won't allow Iran to shut the Strait of Hormuz, through which the bulk of Middle East oil is shipped, a spokesman for the Fifth Fleet said.
''They will not close it,'' Lieutenant Nate Christensen said in a telephone interview today from Bahrain, where the fleet is based. ''The Strait of Hormuz is vital international waters.'' Vice Admiral Kevin Cosgriff, Fifth Fleet commander, made similar remarks to reporters in Bahrain today, Christensen said. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZ5V4GuTsk5g&refer=home
-Preparing the Battlefield. The Bush Administration steps up its secret moves against Iran. Read more here-
http://www.newyorker.com/reporting/2008/07/07/080707fa_fact_hersh
-Ahmadinejad target of 'Rome X-ray plot', diplomat says. Iranian President Mahmoud Ahmadinejad was the target of an "X-ray radiation plot" during his trip to Rome for the UN food summit earlier this month, the official IRNA news agency reported on Monday. The news agency quoted Iran's ambassador to Italy, Abolfazl Zohrehvand, as saying that the plot was to use extreme radiation in the place where Ahmadinejad was due to stay.
The diplomat spoke out after Ahmadinejad himself charged that he had been the target of an assassination plot during his landmark trip to Iraq in March and his aides spoke of a similar attempt in Rome. Read more here-http://www.breitbart.com/print.php?id=080630140409.4ox0xel3&show_article=1
-Lieberman: U.S. May Be Attacked In 2009. McCain Supporter Says Terrorists Have Tested New Presidents By Launching Attacks In First Year Of Term. Read more here-
http://www.cbsnews.com/stories/2008/06/29/ftn/main4217516.shtml
-Al-Qaeda plans UK attacks with ambulances bought on eBay. Read more here-http://economictimes.indiatimes.com/AQ_plans_UK_attacks_with_ambulances_bought_on_eBay/articleshow/3180761.cms
-Amid policy disputes, Al Qaeda grows in Pakistan. Read more here-http://www.iht.com/articles/2008/06/30/america/30tribal.php
-Coalition troop deaths in Afghanistan surpass Iraq. Read more here-http://edition.cnn.com/2008/WORLD/asiapcf/07/01/afghan.deaths/?iref=mpstoryview
Story Highlights
May and June death tolls for foreign troops were higher in Afghanistan than Iraq
46 U.S. and allied troops died in Afghanistan in June; 31 in Iraq
Afghan deaths included troops from U.S., U.K., Canada, Poland, Romania, Hungary
Same trend seen with civilian deaths, analysts say
-Inside the Taliban jailbreak. Read more here-http://www.theglobeandmail.com/servlet/story/RTGAM.20080702.wafghanistan02/BNStory/Afghanistan/?cid=al_gam_nletter_newsUp
-North Korea Destroys Cooling Tower at Nuclear Plant. North Korea destroyed part of its Yongbyon nuclear plant where it processed weapons-grade plutonium in a symbolic gesture today, after the U.S. began removing the communist nation from its terrorism blacklist. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid=a7vzVCKLSLpk
© 2009, Worldwide Precious Metals.
www.wwpmc.com
The GoldBugg Report - July 08, 2008
Posted by Worldwide Precious Metals on Tuesday, July 08, 2008
The GoldBugg Report - July 02, 2008
July 2, 2008
- BMO forecasts gold, precious metals in general to move higher this year.
- Silver: part industrial imperative and part investment essential.
-Precious metals are just that; precious. There is only so much gold and silver, and that is why these metals are such a reliable store of value. Real inflation of our currency was not possible until gold was disconnected from the dollar. A currency not tied to a solid commodity such as gold is doomed to fail. History tells us that. And as high as gold and silver have climbed so far this decade, they are destined to go far higher. Inflation guarantees that. James Macfarlane
-Buffett Says He's Concerned About U.S. Inflation, Stagnation.
-Barclays warns of disaster as Fed loses all credibility
GOLD
-Peter Spina, of GoldSeek.com, believes gold is a tightly coiling spring. With oil "now solidly above $100, gold should easily be above the four-figures mark," Spina said. "The longer the oil price stays above the $100 level, the more appealing gold will become and the investment buying will support the gold price during this traditionally weak seasonal period."
Overall, "Pressures are building within the gold and silver complex, this may be another pop higher followed by consolidation, but I expect one of these rallies to gain traction and ignite the next leg higher in the gold price," Spina wrote. "It could be well underway by summer's end." Kitco Daily Resource
-"In the medium to long term, the combination of strong international safe-haven demand and decreasing production and supply of gold in most major producers, and particularly in South Africa, will likely result in gold going significantly higher in the coming months," said Mark O'Byrne, a director at Gold and Silver Investments Ltd.
Strong fundamentals for gold include "a deteriorating global economy and concerns regarding global stagflation and this was added to by the very poor South African gold production figures this morning," said O'Byrne.
South African gold output in April fell more than 10% in volume terms, compared with a year earlier, he said in emailed comments. "South African production of gold was over 1,000 tonnes per annum in 1970 and has been steadily declining to nearly 250 tonnes per annum today," according to O'Byrne.
"South African gold production has fallen sharply after state-owned power utility Eskom struggled to provide sufficient power to mines," he said. That followed a near collapse in the electricity grid in January, which led to a five-day countrywide mine shutdown, he said.
"Eskom have admitted that the power and electricity problems are a major challenge and may take years to rectify which would likely result in further falls in gold production in South Africa," said O'Byrne. Gold.ie
-BMO forecasts gold, precious metals in general to move higher this year. BMO Capital Markets Bart Melek suggests that rising food and energy inflation and the equity market are "adding luster for gold." Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=55351&sn=Detail
-Gold/Silver Market Updates from Clive Maund. Read more with charts here-http://www.321gold.com/editorials/maund/maund062308.html
-Australia gold output falls 7 pct over past 12 mos. Read more here-http://money.ninemsn.com.au/article.aspx?id=584638
-U.S. government sued over seizure of Liberty Dollars. The federal government's attempt to stop a group of gold-standard activists from minting an alternative to the greenback is about to face its first legal test. Read more here-http://www.gata.org/node/6383
SILVER
-Bob Quartermain: Sterling Outlook for Silver. Mitsui has looked at replacing platinum or palladium, which they use in their catalytic converters, with silver because silver is a great catalyst. So far they're looking at only diesel applications, primarily for farm equipment. That's a very small and specific market. But as we all know, once you develop a new use for a commodity, technological advances often follow, which can then lead to wider applications.
Mitsui has talked about this initial small market, but using silver in catalytic converters creates a new inroad, and as we know, with higher oil prices and third world economies rapidly developing, there will be more vehicles on the road. If silver is another option for a better environment I think that is positive. Read more here-http://seekingalpha.com/article/82226-bob-quartermain-sterling-outlook-for-silver?source=feed
-Silver Two Sides of the Story. Silver does have a split personality: it is part industrial imperative and part investment essential. Here are some of the electrical uses for silver. Read more here-http://www.silver-investor.com/davidmorgancommentary/articles/6-20-08_ibtimes17_Silver-TwoSidesoftheStory.html
Superconductor Pioneers Honored With Nobel Prize
World's Smallest Light Source Comes From Silver
New Class of Silver Compounds May Advance Superconductivity
Silver Iodide Turned to Glass - Holds Promise for New Batteries and Displays
Lasers and Silver Atoms Hold Promise for Switching Future Optical Network
China Joins the Superconductor 100-Plus Meter Club
Silver to Star in New Superconductor Plant
Silver-Sheathed Motors For Ship Propulsion
New Technique Makes Silver Tougher
Silver Clusters Become the New Computer Memory
Electric Power and Silver Share a Long History
Silver-Sheathed HTS Coils to Power First 1,000-Horsepower Motor
Hi-T Superconductor Electricity Storage Device Unit Can Prevent Power Outages
Silver-Coated Wire Device Stores Electricity
Department of Energy Announces National Superconductivity Program
Tiny Silver-Coated Spheres Play Big Roles
Silver Boosts Efficiency of Electric Motors
Silver Provides Spark Plugs with Revolutionary Performance
-Ted Butler silver commentary. Read more here-http://news.silverseek.com/TedButler/1214325521.php
-Silver Delivery "Delays". Read more here-http://news.silverseek.com/SilverSeek/1214312789.php
-SLV Silver ETF. Read more here-http://www.321gold.com/editorials/hamilton/hamilton062108.html
-Austrian Mint Releases World's Largest Silver. After the Royal Canadian Mint released the new world record largest gold coin in 2007, it seemed logical that eventually we'd see a record shattering silver coin as well. Last week, perception was proven true when the Austrian Mint announced the production of the new world's largest silver, the Europe Taller 2008. The Mint chose this year's European Championship of Football as the forum to release the design, which will soon go on display at the Mint Museum in the city of Hall in Tirol, Austria.
Weighing in at 20.08 kg (aprox. 44 lbs.), with a diameter of 36 cm (14 inches), the Europe Taller puts a world record bullion coin a bit more in line with collectors budgets. The obverse of the coin mimics the design of a 500-year-old coin featuring the image of Kaiser Maximilian I, who crowned himself Emperor in 1508. The coin was issued as propaganda and heralded the ruler as the "King of all the lands in Europe." The inscription included the word "Europe" on a coin for the first time.
The reverse of the coin centers around famous Europeans from throughout history, beginning with Martin Luther, and continuing through time to feature composer Antonio Vivaldi, inventor James Watt and Nobel Peace prize winner Bertha von Suttner. In addition to the Europe Taller, the Mint will also issue smaller versions of the coin, weighing in at 120 grams of fine silver with a diameter of 6cm. These coins have been minted specially for sale in 2008. Full story here-http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=4786
PLATINUM-PALLADIUM
-CPM says millions of ounces of platinum, palladium held by investors. CPM Group says that the flood of money into the world has stimulated a large, seemingly sustainable increase for investment demand in commodities, especially PGMs. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=55330&sn=Detail
-Platinum, palladium supplies set to decline: report. Surplus in the metals' supplies likely to shrink as auto industry demand rises. Strong demand for platinum and palladium in the auto industry likely will help shrink supply surpluses for the metals this year, sending prices even higher, according to an annual industry report issued Tuesday. Read more here-
-PGM Prices to Remain Strong Moving Into 2009. Read more here-http://www.resourceinvestor.com/pebble.asp?relid=43885
-Palladium branding campaign heats up. Read more here-http://www.nationaljewelernetwork.com/njn/content_display/fashion/e3i58d6cda1cb00deaff5fba1bcda61a338
-Mining explosive prices detonate. Soaring natural gas prices and premiums being paid for agricultural-grade ammonium nitrate are hitting explosive prices for a mining industry already beleaguered by cost increases. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=55175&sn=Detail
DEFINITIONS-QUOTES-QUICK HITS
-Bullion. Gold and silver that is officially recognized as high quality (at least 99.5% pure), and is in the form of bars rather than coins. Traditionally, bullion has been a good hedge against inflation. Investopedia.com
-Ingot. Gold in bar form. Gold held in the vaults of banks and brokerages are usually in the form of ingot. Investopedia.com
-Faster Inflation May Unleash 'Financial Tsunami.' Full story here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a8j2MuFdqA3s&refer=worldwide
-Barclays warns of disaster as Fed loses all credibility - http://www.gata.org/node/6392
-Buffett Says He's Concerned About U.S. Inflation, Stagnation. Billionaire investor Warren Buffett says he's concerned about ''stagflation,'' or slowing in the U.S. economy while inflation accelerates. "We're right in the middle of it right now," said Buffett, chairman of Omaha, Nebraska-based Berkshire Hathaway Inc., in an interview on Bloomberg Television today.
I think the 'flation' part will heat up and I think the 'stag' part will get worse, but we'll come out of it, just like we came out of it before. But it's not going to be tomorrow, it's not going to be next month, and may not even be next year.'' Bloomberg
-Global inflation fears deepened as Chinese steelmakers agreed to a record increase in annual iron ore prices in a move likely to boost the cost of cars, machinery, and other products. Chinese millers agreed to pay Anglo-Australian miner Rio Tinto up to 96.5 per cent more for their ore supplies this year, the largest-ever annual increase and well above the 9.5 per cent increase paid last year. Read more here-http://www.gata.org/node/6388
-Things will get worse, warns Bank of England governor Mervyn King. Families will see their standard of living stagnate this year while the value of their homes will fall further, the Bank of England Governor has warned.
The coming months represent the biggest challenge for the economy for two decades, Mervyn King said, adding that some households will find them "particularly difficult." In his most sombre message yet, Mr. King said families were being squeezed hard by higher electricity and food prices on the one hand and slowly-increasing wages on the other. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/18/cnbank118.xml
-Financial Firms May Make Deeper Cuts, Eliminate 175,000 Jobs. The world's biggest financial firms may lose as many as 175,000 jobs by this time next year as Citigroup Inc. and other banks shed workers amid slowing revenue and billions in writedowns, executive recruiters say.
Financial companies have announced plans to trim more than 83,000 jobs since last July, according to figures compiled by Bloomberg. As more employees are fired, workforce reductions may exceed those from the market slump of 2000 to 2003 when technology-related shares collapsed, recruiters said.
''The worst is yet to come,'' Russ Gerson, head of New York- based recruiting firm Gerson Group, said yesterday in an interview. ''We are going to have a major contraction. This is affecting all areas of the investment banking universe and it's affecting all areas globally.'' Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a9D9UjMULF4o&refer=home
-Everything seemingly is spinning out of control. Midwestern levees are bursting. Polar bears are adrift. Gas prices are skyrocketing. Home values are abysmal. Air fares, college tuition and health care border on unaffordable. Wars without end rage in Iraq, Afghanistan and against terrorism. An Associated Press-Ipsos poll says a barrel-scraping 17 percent of people surveyed believe the country is moving in the right direction.
That is the lowest reading since the survey began in 2003. An ABC News-Washington Post survey put that figure at 14 percent, tying the low in more than three decades of taking soundings on the national mood. Read more here-http://news.yahoo.com/s/ap/20080621/ap_on_re_us/out_of_control&printer=1;_ylt=AptWf_4kzlWNSjXeV6PmE5lH2ocA
Peter Schiff-Read interview here-http://www.usnews.com/articles/business/your-money/2008/05/30/permabear-peter-schiffs-worst-case-scenario_print.htm
I think the stock market is headed lower. Gold is going to be $1,200 to $1,500 by the end of the year. That puts the Dow at a less-than-10-to-1 price ratio to gold. Right now, it's about 13 to 1. That's another 30 percent drop in the real value of stocks by the end of the year if you price them in gold. The Dow was worth 43 ounces of gold in 2000. It'll get to 10 by the end of the year and continue to fall from there.
Oil prices had a pretty big run and might not make more headway by the end of the year. But we could see $150 to $200 next year. I don't think oil will hit $250 because there will be enough destruction of demand in the United States to keep it from doubling. The big problem for us is if the Chinese substantially allow their currency to rise. It could increase at least fivefold against the dollar over the span of a year or two. That reduces the price of oil by 80 percent for 1.3 billion Chinese. Consumption would go through the roof, and that will drive prices through the roof for us.
At a minimum, the dollar will lose another 40 to 50 percent of its value. I'm confident that by next year we'll see more aggressive movements to abandon the dollar by the [Persian] Gulf region and by the Asian bloc. That's where the stuff really hits the fan.
-Israel 'will attack Iran' before new US president sworn in, John Bolton predicts. Read more here-http://www.telegraph.co.uk/news/worldnews/middleeast/israel/2182070/Israel-%27will-attack-Iran%27-before-new-US-president-sworn-in,-John-Bolton-predicts.html
-Oil prices won't come down: OPEC president.Oil prices "will not come down," OPEC president Chakib Khelil said Tuesday, assuring that the oil cartel has already done what it can on the matter. "OPEC has already done what OPEC can do and prices will not come down," Khelil told journalists as he arrived for a meeting with EU energy officials in Brussels. AFP
-Soros, the Man Who Cries Wolf, Now Is Warning of a 'Superbubble'. Read more here-http://online.wsj.com/public/article/SB121400427331093457.html?mod=2_1569_topbox
-Millionaires roster grows to 10.1M members globally in 2007, average member's wealth tops $4M. Read more here-http://biz.yahoo.com/ap/080624/world_wealth.html?.v=1&printer=1
RARE COLOURED DIAMONDS
-First publicly listed diamond fund to launch. The first publicly listed fund investing in rare white and coloured diamonds is close to launching on the London Stock Exchange, fund and market sources said on Tuesday. The closed-end fund will invest in the high-quality segment of the physical polished diamond market, according to a prospectus for the initial public share offer, expected to take place on June 24, obtained by Reuters.
Fund-raising will close on Wednesday and one industry source said institutional investors had raised nearly $100 million (50 million pounds). "Catalysts for growth in investment demand are in place for large high-quality diamonds, underpinned by the rising number of high net-worth individuals, especially in the Middle East, Southeast Asia and the Russian Federation," said the prospectus for investment company Diamond Circle Capital plc. The prospectus said a steadily declining mineral reserve base, compounded by limited exploration success, suggested tight supplies would continue, which industry analysts say could mean long-term growth for the fund.
"It is the first listed polished diamond fund," said Jamie Strauss, managing director, UK equity products, of BMO Capital Markets (Bank of Montreal), who closely tracks diamond markets. "It will be invested in white and colored diamonds. It will become one of the world's finest diamond collections." Read more here-http://www.reuters.com/article/investmentTrustsNews/idUSNOA83295920080618
-Pink Diamonds for Portia de Rossi. Ellen DeGeneres, 50-year-old Emmy Award-winning talk show host, has presented her 35-year-old girlfriend Portia de Rossi with a Neil Lane engagement ring with pink diamonds. Pinks diamonds are both extremely rare and very valuable due to the fact that there is only one main source for these stones in the world.
Israelidiamond.co.il
-James Bond Rolex surprises at auction. Notable lots sold included a $131,450 platinum and yellow-diamond ring and $107,550 for a "James Bond" Submariner Rolex Watch.
It was expected to bring in between $500-$1,000. Read more here-http://jewelryblogger.com/2008/06/19/james-bond-rolex-surprises-at-auction.aspx
-The U.S. Marshals Service had set it sights at raising $2 million by auctioning off diamond jewellery seized in a 2007 embezzlement case. Much to the U.S. Marshals Service's surprise, a Graff 11.88-carat platinum diamond ring sold for $1.7 million, making it the highest-selling piece of jewellery in Marshals Service history. By the end of the bidding, the 22-piece collection fetched more than $2.6 million. The jewelry was forfeited after former KeyBank executive David Verhotz pleaded guilty to embezzling $41 million in January 2007.
All of the auction's proceeds will go to the payment of restitution. A U.S. Marshals Service spokesperson said the collection sold for almost more than it would have cost to buy new. Prior to the auction, the Marshals Service valued the 11.88-carat diamond ring at $875,000. The next-highest-selling item, a pair of Harry Winston diamond earrings, turned out to be a bargain: Valued at $950,000, the earrings sold for $577,650. Another Graff ring, priced at $88,875, fetched $111,226. Israelidiamond.co.il
-Monet Lilies Push London Auction to Record 144.4 Million Pounds. Read more here-http://www.bloomberg.com/apps/news?pid=20601088&sid=aRlaMOBMS0bw&refer=home
COMMODITIES-FOOD
-Speculation Is Good, London Metals Chief Executive Says Amid Record Prices. Exchange Says Efforts to Curb Speculation 'Foolish'. Governments would be ''foolish'' to limit participation in commodity markets and curb speculation because prices are based on supply and demand, London Metal Exchange Chief Executive Officer Martin Abbott said.
Rising demand from emerging markets and a lack of investment by suppliers have created a ''structural change'' in commodity markets, fueling higher prices, Abbott said yesterday in an interview in New York. Increasing regulation to limit speculative interest won't lower prices and may hamper the market's role in price discovery, he said. Read more here-
http://www.bloomberg.com/apps/news?pid=20601109&sid=a_lDHpkarNuQ&refer=home
-U.S. Congress seeks ban on pension funds commodities investment. One congressional proposals suggests pensions with assets of $500 million or more be barred from commodities, while others call for a blanket ban on institutional funds, including pensions, from the sector. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page504?oid=55350&sn=Detail
-Marc Faber Favors Commodities as Inflation Quickens. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a5f.hQArQbQg&refer=home
-Security fears over food and fuel crisis. Read more here-http://www.ft.com/cms/s/0/29cff8ec-3ef4-11dd-8fd9-0000779fd2ac.html
-Troubles grow in global food crisis. Read more here-http://www.freep.com/apps/pbcs.dll/article?AID=/20080622/NEWS07/806220573
-Food relief line grows long, tense. Frustration rises, officials caught off-guard as thousands turn out for flood assistance. Read more here-http://www.jsonline.com/story/index.aspx?id=764962
-Record corn prices mean more expensive meat, dairy. Read more here-http://money.aol.com/news/articles/_a/record-corn-prices-mean-more-expensive/n20080622160709990014
-Russians tighten belts under soaring food prices. Read more here-http://www.abc.net.au/news/stories/2008/06/22/2282033.htm?section=world
-Shortages, Prices Hit California Food Banks as Schools Recess. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid=ayjMVLk5GvVU&refer=home
OIL
-Saudis: Don't blame us for oil prices. At King Abdullah's emergency meeting on oil prices, everyone agreed that the price of oil was a problem. But no one agreed on how to fix it. Read more here-http://money.cnn.com/2008/06/23/news/economy/gimbel_saudi.fortune/index.htm
-Saudi Arabia to produce more oil. World's largest oil producer says it will increase daily oil production to 9.7 million barrels from 9 million in July. Read more here-
http://money.cnn.com/2008/06/22/news/international/Saudi_summit/index.htm or http://www.bloomberg.com/apps/news?pid=20601116&sid=agZ1gqbuhxpo&refer=africa
-World energy use seen surging. Energy consumption expected to jump 50% by 2030; greenhouse gases will see similar rise. Oil prices seen ranging from $113 to $186 a barrel. Read more here-http://money.cnn.com/2008/06/25/news/economy/eia_outlook/index.htm?postversion=2008062510
-Possibly of $500 oil in the years to come. Watch video here of Dr. Robert Hirsch-http://www.youtube.com/watch?v=bGHpWOSsDZk&eurl=http://www.theoildrum.com/
-World Economy Would Collapse If Oil Hit $200, Deutsche Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid=am42p9xBTXh4&refer=canada
-World crude production has peaked: Pickens. Full story here-http://uk.reuters.com/article/ousiv/idUKN1734058420080617
-OPEC President Chakib Khelil said future oil prices will be determined by the evolution of the U.S. dollar and the geopolitical situation. Read more here-http://www.iii.co.uk/news/?type=afxnews&articleid=6776368&action=article
-Pemex Says Output Fell 10% in May on Cantarell Drop. Read more here-http://www.bloomberg.com/apps/news?pid=20601072&sid=aywKv8j5iQxo&refer=energy
-Saudi to Start Khursaniyah in August, Khurais in 2009. Read more here-http://www.bloomberg.com/apps/news?pid=20601072&sid=ah7rs46YNHf8&refer=energy
-Oil speculation: The great debate. Energy analyst Daniel Yergin tells Congress that trading plays a role in crude's overheated run up but not the only one. Read more here-
http://money.cnn.com/2008/06/25/news/economy/jec_oil/index.htm?postversion=2008062511
-America's untapped oil. Lawmakers lay into big oil for leaving million of acres untouched while at the same time asking to drill in Alaska and off the coasts. Read more here-
http://money.cnn.com/2008/06/23/news/economy/oil_drilling/index.htm?postversion=2008062316
GASOLINE
-China announced that it would increase both diesel and gasoline prices. With oil prices continuing to trade at historically high levels, it is not all that surprising to find that gasoline prices are following suit. Over the past four months, the average US price per gallon of unleaded has risen over one dollar per gallon. When adjusted for inflation, gasoline prices are at record highs and 18% above its old inflation-adjusted peak of 1981. Also, as illustrated by today's chart, gasoline prices have spiked above a trend channel (see red line) that has been in existence since the beginning of the century.
-Gas could fall to $2 if Congress acts, analysts say. Limiting speculation would push prices to fundamental level, lawmakers told. Read more here-http://www.marketwatch.com/news/story/gas-could-fall-2-if/story.aspx?guid={2673C102-68E0-41D9-9C9A-10EE2E723948}&dist=TNMostRead
-Gasoline Demand Falls 2.7% Amid Record Prices, MasterCard Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=atfoBCPxxwME&refer=worldwide
-Refiner Insiders Buy Most Stock Since 2000 on Oil Bet. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid=aFZBg9H3zsbQ&refer=home
-Life on the fringes of U.S. suburbia becomes untenable with rising gas costs. Read more here-http://www.iht.com/articles/2008/06/24/business/exurbs.php
-Fuel Costs May Force Some Kids To Walk. Read more here-http://www.washingtonpost.com/wp-dyn/content/article/2008/06/22/AR2008062202193_pf.html
FUTURE TRENDS
-The Trends Tell Us Our Immediate Future. Here is a list of what we can likely expect as the future moves into present time now through 2012. Read more here-http://www.321gold.com/editorials/macfarlane/macfarlane062308.html
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Inflation up
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Long term interest rates up
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Gold and silver up
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Energy prices up
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Unemployment up
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Volatility way up
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Food prices up
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Personal and municipal bankruptcies up
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US dollar down
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Real estate down
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Equity markets down
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Personal freedom down
What To Do? All we can do is hope for the best and plan for the worse. As a point of reference I will share with you the best advice I have run across.
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Lighten up on equity investments (securities)
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Buy gold and silver
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Buy food
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Become a farmer
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Stock up on the basics
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Keep some cash on hand
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Take some security precautions
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Buy a super-high gas mileage vehicle like a motorized bicycle
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Conduct a "disaster preparedness test"
U.S. RECESSION
-Economy on brink of recession, Greenspan says. Read more here-http://www.reuters.com/article/businessNews/idUSJAT00371420080624?feedType=RSS&feedName=businessNews&rpc=23&sp=true
-Economists should listen to consumers. Experts have a half-glass full outlook for the economy while average Americans are far more pessimistic. Here's why the consumer is probably right. Read more here-http://money.cnn.com/2008/06/24/news/economy/confidence_recession/index.htm?postversion=2008062415
-Economy has some states tangled in 'dire' financial snares. Read more here-http://www.usatoday.com/money/perfi/taxes/2008-06-19-statemoney_N.htm?loc=interstitialskip
-Store Closings: Symptoms of A Depressed Economy. Read the list of company closures here-http://www.gather.com/viewArticle.jsp?articleId=281474977364401
-American Express Says Late Card Payments Increasing. American Express Co., the biggest U.S. credit-card company by purchases and cash advances, said customers are falling further behind on their debt, signalling the economy is worsening. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aMUrOw6EhfR0&refer=home
-L.A. seeing more people living out of their cars. Having lost her job and her three-bedroom house, Darlene Knoll has joined the legions of downwardly mobile who are four wheels away from homelessness. Read more here-http://www.breitbart.com/print.php?id=D91FV1E80&show_article=1
-Hawaii suffers a tourism blow. High fuel prices have forced up airfare, pushing a Hawaiian vacation out of reach for many cash-strapped Americans. Read more here-
INFLATION-STAGFLATION
-Inflation is 'exploding,' Buffett tells CNBC. Inflation is "exploding" and the Federal Reserve should stress that fighting rising prices is a primary goal, Berkshire Hathaway Chairman Warren Buffett told CNBC on Wednesday. The Fed should be concerned about both inflation and economic growth, a tough thing to do, he explained. But inflation should be the Fed's main concern right now, Buffett added. "Inflation is really picking up," he said.
"Whether it's steel or oil we see it every place. It's exploding." The Fed has to be very careful not to signal that inflation is a secondary concern and something that can be dealt with later, Buffett explained. Read more here-http://www.marketwatch.com/news/story/inflation-exploding-buffett-tells-cnbc/story.aspx?guid={2A3FC12D-F48F-4E99-9EB0-CEBB49FDECAA}&dist=hplatest
-The spectre of inflation returned to haunt the global economy on Tuesday as companies ranging from Dow Chemical of the United States to South Korea's Posco unveiled sharp price rises to combat the soaring cost of energy and raw materials. Read more here-http://www.gata.org/node/6389
-Confronting Inflation, on Separate Continents. Read more here-http://www.nytimes.com/2008/06/24/business/worldbusiness/24rates.html?adxnnl=1&ref=worldbusiness&adxnnlx=1214338579-vxZcnzaDlUeL7erI8zpflw&pagewanted=print
-Inflation expectations a slippery lever for ECB. Read more here-http://www.guardian.co.uk/business/feedarticle/7603338
-Inflation risk overtakes credit crisis as focus of central bankers. Read more here-http://www.iht.com/articles/2008/06/22/business/econ23.php
-India's key inflation rate soared to a 13-year high of 11 percent for the first week of June, the government said Friday, lifted by a sharp increase in fuel prices. Read more here-http://articles.moneycentral.msn.com/Investing/JubaksJournal/InflationFromAsiaTheNextCrisis.aspx
-The Return of Inflation? Read more here-http://www.washingtonpost.com/wp-dyn/content/article/2008/06/23/AR2008062301830.html
-Thirty years on, inflation makes global comeback. Inflation, the curse of the 1970s, is staging a comeback, led by sky-high oil prices. This time, the menace is more genuinely global than three decades ago, and this time much of it is "Made in China." Read more here-http://www.reuters.com/article/ousiv/idUSL2044793420080623
-Bernanke's Inflation Cure Wanes as Import Costs Rise. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid=aa8yym0Dfc00&refer=home
-World Economy Has Entered Stagflation, Fidelity Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aVYWmLa2R6OQ&refer=home
INTEREST RATES
-Fed Keeps Rate at 2%, Ending Most Aggressive Easing Since 1980s. The Federal Reserve left its benchmark interest rate at 2 percent, ending the most aggressive series of rate cuts in two decades, as higher energy costs threaten to boost inflation. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=abQ3cIKi7qEQ&refer=home
-Indian Central Bank Lifts Rates, Boosts Reserve Limit. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid=aMLXq2j1gPkQ&refer=home
-Bank of Israel Raises Benchmark Rate for Second Time to 3.75%. The Bank of Israel raised its benchmark lending rate for the second time in as many months as the inflation rate reached a 5 1/2 year high and the economy expanded faster than the bank had forecast. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=auvwK7MTy8GQ&refer=home
-Mexico Central Bank Raises Rates, Ignoring Calderon's Remarks. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid=a3gmwaFcmCK4&refer=home
-Investors Call ECB's Bluff, Bet on Rate Increases. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aPJGqJr2KpzY&refer=home
CREDIT CRISIS
-Hedge Fund Managers in Monaco Say Credit Crisis to Worsen. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid=a5IgwR.6DR0s&refer=home
-Greenspan Says Market 'Crisis' May Extend Into 2009. Read more here-
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=adfgMmwZ1EuE
-New Crisis Threatens Healthy Banks. Read more here-http://www.washingtonpost.com/wp-dyn/content/article/2008/06/21/AR2008062101566.html
-Bond insurers trying to unwind contracts: report. Companies in talks with banks about 'commuting' $125 billion in guarantees. Read more here-
-Brokers threatened by run on shadow bank system. Regulators eye $10 trillion market that boomed outside traditional banking. Read more here-
-Kuwait's sovereign wealth fund has revealed that its January investments in Citigroup Inc. and Merrill Lynch & Co. totaled $5 billion. In a statement on its Web site Tuesday, the Kuwait Investment Authority said it agreed to invest $3 billion in Citigroup's $12.5 billion offering and $2 billion in Merrill Lynch's $6.6 billion offering. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aI6n0rZXY0eg&refer=home
-Countrywide Sued by California, Illinois, Over Mortgage Loans. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aEsd2SRYtj7A&refer=home
U.S. DOLLAR-SOUTH AMERICAN CURRENCY
-Asian Clearing Union to give euro equality with dollar. Central bank chiefs of the Asian Clearing Union (ACU) have agreed to introduce the euro alongside the U.S. dollar for settlement of payments among the member countries beginning January 2009. Read more here-http://www.gata.org/node/6387
-Brazilian President Luiz Inacio Lula da Silva recently revealed that the South American countries are planning for a common currency as part of the integration of the individual countries into the Union of South American Nations. This integration is patterned after the formation of the European Union, and parallels the plan for the North American Union. Read more here-
http://www.naturalnews.com/023480.html
STOCK MARKET
-15-Year Bear Market. Money manager David Tice says the Standard & Poor's 500 Index may tumble 40 percent during the next 12-24 months as the credit crisis undermines the economy, bankrupts households and companies and whacks profits. The drop would be worse than the 37 percent plunge in the index from 2000 through 2002. Tice predicts U.S. equities will enter a bear market that may exceed the 15-year slump from 1965 to 1980.
Moreover, he says if the Fed and Wall Street don't break their addiction to easy credit, the economy will eventually crash in a depression a condition marked by reduced purchasing power, unemployment and corporate failures. The U.S. can't continue to inflate bubbles in stocks, real estate and other assets without crippling the financial system, Tice says. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid=a8qiQmY7BEPc&refer=home
-Worse-Than-Average Recession to Drag Stocks Lower, Merrill Says. Full story here-http://www.bloomberg.com/apps/news?pid=20601087&sid=ab3XB1BO8kb8&refer=home
-Analysts Backtrack on Banking Stocks After Saying Worst Is Over. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid=afj3WAy4EYOA&refer=home
CONSUMER CONFIDENCE
-U.S. consumer confidence tumbles to 16-year low. Conference Board's measure is the fifth lowest ever as consumers fret jobs and the business outlook. Read more here-
http://money.cnn.com/2008/06/24/news/economy/consumer_confidence/index.htm
-German, Italian Consumer Confidence Fade on Rising Prices. Read more here-
http://www.bloomberg.com/apps/news?pid=20601085&sid=agm_sPMX8U2M&refer=europe
-South Korean Consumer Confidence at Lowest Since 2000. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a02y74Rey.QA&refer=home
REAL ESTATE
-Four years of gains in home prices wiped out. Home prices post record 15.3% drop. Prices in 20 cities fall for 21st month in a row. One sign of hope: Pace of decline eased in many areas. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aa8XB1YgGRoE&refer=home
-New-Home Sales in the U.S. Fell 2.5 Percent in May. Sales of new U.S. houses fell 2.5 percent in May, signaling the real estate slump will keep weighing on the economy. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a81SQWNpL1ys&refer=home
-Shaky job market threatens housing recovery. Read more here-http://www.marketwatch.com/news/story/housing-slump-shaping-up-worst/story.aspx?guid={2932BBD7-4139-4A56-9155-DA6941690F44}&dist=TNMostRead
-US housing market weakness long-term survey. Full story here-http://www.forbes.com/reuters/feeds/reuters/2008/06/20/2008-06-20T134509Z_01_N20429990_RTRIDST_0_USA-ECONOMY-HOUSING-SURVEY.html
-Australian Housing crisis a 'chronic disease'. Read more here-http://www.theaustralian.news.com.au/story/0,25197,23905700-25658,00.html
-$10M Calgary penthouse breaks price record. Read more here-http://www.cbc.ca/money/story/2008/06/24/astoria-condos.html
-Russian mogul pays Donald Trump $100 million for Florida mansion. Read more here-http://www.nydailynews.com/news/us_world/2008/06/21/2008-06-21_russian_mogul_pays_donald_trump_100_mill.html
-Dubai's $30m penthouse sale trumps record. Dubai government developer Nakheel hopes to sell a penthouse in Donald Trump's towers on Dubai's first artificial island for more than $30m, which would smash the emirate's record for its most expensive apartment. Read more here-http://www.ft.com/cms/s/0/9b67b19e-414b-11dd-9661-0000779fd2ac.html?nclick_check=1
-World's First 'Building In Motion' Set For Dubai. Italian Architect Poised To Build 80-Story Tower With Revolving Floors Powered By Wind Turbines. Plan In Place To Put Up Similar Buildings In Moscow, NYC. Read more here-http://wcbstv.com/national/dubai.david.fisher.2.756027.html
FORECLOSURES
-A four-day foreclosure auction that begins Wednesday will include more than 300 Atlanta-area dwellings. Lenders struck out trying to sell the properties the conventional way, so now they're looking to investors and bargain-hunting families to make their problems go away. Read more here-http://www.ajc.com/business/content/business/stories/2008/06/24/housing_auction.html?cxntlid=homepage_tab_newstab
GEOPOLITICAL NEWS
-Iran Could Make Nuke In 6 Months. Read more here-http://wcbstv.com/national/israel.iran.attack.2.755478.html
-Iran Calls Israeli Threats to Nuclear Work 'Hollow'. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aFxW3Btp5WOo
-Iran says Israel not capable of threatening it. Read more here-http://www.reuters.com/article/topNews/idUSDAH32979820080623?feedType=RSS&feedName=topNews&rpc=22&sp=true
-Israel shows abilities for Iran strike. A large Israeli military exercise this month may have been aimed at showing Jerusalem's abilities to attack Iranian nuclear facilities. In a substantial show of force, Israel sent warplanes and other aircraft on a major exercise in the Eastern Mediterranean, Pentagon officials said Friday. Israel's military refused to confirm or deny that the maneuvers were practice for a strike in Iran. Read more here- http://news.yahoo.com/s/ap/20080620/ap_on_go_ca_st_pe/us_israel_iran&printer=1;_ylt=AhBivbbc6TwGaCGp0bG5vuyWwvIE
-Israel Military Exercise May Be Warning to Iran, U.S. A wide-ranging Israeli military exercise in the eastern Mediterranean was likely aimed at warning both Iran and the U.S. about the possibility of a strike against Iranian nuclear facilities, a U.S. analyst said. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=arvI5tfzEI0c
-Israel's Drill May Curb Iran Nuclear Effort, U.S. Official Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aj5jLlSBbx5E&refer=home
-Iran Would Respond to Attack With 'Heavy Blow'. Iran would respond to an Israeli attack on nuclear facilities with a ''heavy blow,'' a senior cleric said, following a New York Times report that Israel carried out an exercise that could prepare it for such a strike. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=ah_hLOIClIA8&refer=home
-EU Widens Iran Sanctions, Shuts Bank Melli's European Offices. The European Union stiffened its sanctions against Iran's nuclear program, shutting down the EU offices of Bank Melli Iran and denying travel visas to more Iranian officials. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ajNkm9xRhzoE
-Russia's Lavrov warns against attack on Iran. Read more here-http://news.yahoo.com/s/ap/20080620/ap_on_re_eu/russia_iran&printer=1;_ylt=Al9Ae2ZIrSYy9LPWMe4UBl9bbBAF
-Leadership Void Seen in Pakistan. Read more here-http://www.nytimes.com/2008/06/24/world/asia/24pstan.html?_r=2&oref=slogin&partner=rssnyt&emc=rss&pagewanted=print&oref=slogin
-Saudi arrests 700 over 'oil attack' plots. OPEC kingpin Saudi Arabia has arrested 701 Islamists in the past six months on suspicion of plotting attacks on oil industry installations, the interior ministry announced on Wednesday. Read more here-http://www.breitbart.com/article.php?id=080625133954.jtgj6zkd&show_article=1
© 2009, Worldwide Precious Metals.
www.wwpmc.com
The GoldBugg Report - July 02, 2008
Posted by Worldwide Precious Metals on Wednesday, July 02, 2008
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