Newsroom
The GoldBugg Report – March 31 , 2009
March 31, 2009
WORLD FINANCIAL REPORT ON RADIO MARCH 27 2009 SHOW
Worldwide Precious Metals will be at the Calgary Resource & Clean Energy Investment Conference
April 4&5, 2009.
Conference is free if you pre-register now at:http://www.cambridgehouse.ca/ch_calgary2009.html#exhibitors
Call Worldwide Precious Metals for more details, 1-866-623-2002.
-A continued global economic tsunami and the increasingly urgent scramble for an investment lifeline will combine to power gold prices
-Bill Murphy of GATA interviewed by Bloomberg TV. Watch the Clip
-Silver and Gold New Rally Underway.
GOLD
-A continued global economic tsunami and the increasingly urgent scramble for an investment lifeline will combine to power gold prices ominously higher and into uncharted territory later this year. This is the consensus of opinion among the CEO’s of a dozen emerging to mid-tier gold mining companies who were recently interviewed by BNW Business Newswire. Gold will be trading in the $1,100 to $1,500 range by year’s end, they all agreed. Read more here-http://www.kitco.com/ind/Davis/printerfriendly/mar202009.html or http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=80626&sn;=Detail
-Gold appears to be enjoying a rehabilitation of its historical might and role as a financial asset, as investors look toward safe haven assets in these volatile times, says a new CPM gold report. A report by the CPM precious metals and commodities research group in New York City asserts “gold is entering a new era,” thanks to “a major rehabilitation of gold as a financial asset around the world” as investors look for safe havens in volatile times.
“Not since the Great Depression and World War II has sentiment about the state of financial and economic conditions been so pessimistic,” CPM noted in its newly released Gold Yearbook 2009. “The market consensus appears to be that the gold price will remain strong, at least through the first four months of 2009. All of the factors that have been driving investors to buy gold continue to be in place,” CPM analysts said.
As the value of paper assets has been greatly diminished, CPM asserts that the “value of gold has been greatly advanced.” The report projects that investors “will buy significantly more gold in 2009″ adding a record 52.3 million ounces to their holdings this year. “In this environment, with gold prices relatively tight, such levels would be expected to propel gold prices to a new record high, surpassing their record $1033.90 in March 2008,” CPM analysts advised.
“Further demand for gold should be expected, and further price appreciation most likely will follow as well,” they predicted. The analysts suggest that “the tremendous increase in investor could buying and the consequent rise in prices since 2001 instead may represent the beginning of a major restoration of gold as a financial asset in the world, with a concomitant upward revaluation in the price of gold.” Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=80858&sn;=Detail or http://www.resourceinvestor.com/pebble.asp?relid=49258
-New Gold Upleg from Adam Hamilton. Read more here-http://news.goldseek.com/Zealllc/1237565903.php
-Young Japanese retail investors are turning to gold purchasing plans at an unprecedented rate as they seek to protect their finances amid a deepening recession, an official at the nation’s largest bullion retailer said.
“We’ve never seen anything like this,” said Noriyuki Abe, an executive at the precious metals division of Tanaka Kikinzoku Kogyo K.K. The company has signed up more than 4,000 customers a month for its gold accumulation plan since October. Previously “the tally wouldn’t exceed 1,000″ he said in an interview. Read more here-
-Bank crisis spawns new kind of gold rush. 2009 recession and banking crisis has set off a rush to invest in gold and other precious metals at unprecedented levels.
http://www.theglobeandmail.com/servlet/story/RTGAM.20090319.wrgold20/BNStory/energy/?page=rss&id;=RTGAM.20090319.wrgold20 or http://www.gata.org/node/7282
-Gold market will remain robust as economic and financial risks remain paramount Citigroup. Although investments in other commodities have collapsed, Citigroup says surging investment demand is keeping the gold market robust. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=80498&sn;=Detail
-Gold to stay near $1,000 for years. Steve Shepherd, a J. P. Morgan analyst, has joined the growing consensus that expects gold prices to remain strong for years to come. Read more here-http://www.financialpost.com/personal-finance/story.html?id=1424300
-CIBC stands pat on $950 gold this year, $1050 in 2010. CIBC World Markets says Kinross takes top honors in adding total ounces per share last year, while Agnico-Eagle did the best at finding gold ounces. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=80494&sn;=Detail
-Barclays lifts 2009 gold forecast to $940/oz. Barclays Capital has lifted its gold price forecast for 2009 to $940 an ounce. Read more here-
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=80597&sn;=Detail
-Clive Maund gold market update. Read more here-http://news.goldseek.com/CliveMaund/1237822969.php
-Beware base metals optimism stick to gold and silver for wealth protection. Base metals may still be vulnerable as global industry remains well below its peaks so gold and perhaps silver probably remain the best bets for wealth preservation for the moment. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=80788&sn;=Detail
-Central banks sit on their bullion reserves. Falling gold sales and loans provide price support; IMF has 400 tons to unload. Read more here-http://www.marketwatch.com/news/story/Central-banks-sell-less-gold/story.aspx?guid={0573231B-37D7-4328-A126-76FED1FC90B2}&print;=true&dist;=printMidSection
-Gold’s Seasonality has changed! Read more here-http://news.goldseek.com/GoldForecaster/1238008454.php
-Got gold? You’re right on the money. Read more here-http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/got-gold-youre-right-on-the-money.aspx
-Why the gold price is not yet soaring. Read more here-http://news.goldseek.com/GoldSeek/1238002413.php
-Why we should bring back the Gold Standard. Read more here-http://www.moneyweek.com/investments/bring-back-the-gold-standard-14680.aspx
-Making gold nanoparticles hollow holds promise for cancer therapy. A new metal nanostructure developed by researchers has shown good results in cancer therapy and could be used for chemical, biomedical and other applications. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=80729&sn;=Detail or http://www.newswise.com/articles/view/550293/?sc=rsla
-Bill Murphy of GATA interviewed by Bloomberg TV. Watch video here-http://www.youtube.com/watch?v=j0kM9BJSZwI or http://www.youtube.com/watch?v=bjxZtFJY-jk
-More documentation of central bank gold rigging buried. Read more here-http://www.gata.org/node/7295
-The Next Gold Rush: Your Living Room. Read more here-http://www.cbsnews.com/stories/2009/03/24/eveningnews/main4890550.shtml?source=RSSattr=U.S._4890550 or http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=80789&sn;=Detail
-The New California Gold Rush Modern-day gold diggers party like it’s 1849. Read more here-http://www.nbclosangeles.com/news/local/NEW-CALIFORNIA-GOLD-RUSH.html
SILVER
Gold to silver ratio at 80 to 1 with gold at $1,500 the silver price would be $18.75
Gold to silver ratio at 70 to 1 with gold at $1,500 the silver price would be $21.43
Gold to silver ratio at 60 to 1 with gold at $1,500 the silver price would be $25.00
Gold to silver ratio at 50 to 1 with gold at $1,500 the silver price would be $30.00
Gold to silver ratio at 15 to 1 with gold at $1,500 the silver price would be $100.00
-Ted Butler silver commentary. Read more here-http://news.silverseek.com/TedButler/1237839396.php
-Clive Maund silver market update. Read more here-http://news.silverseek.com/CliveMaund/1237823048.php
-Silver and Gold New Rally Underway. Hopefully you have a solid foundation of gold and silver in your portfolio. If you don’t, it would have been great to buy at the low prices last week but that opportunity disappeared quickly. The next targets for gold are $1075 and silver in the $15 to $16 range on this rally. Timothy Silvers-Read more here-
http://news.silverseek.com/SilverSeek/1238077767.php
-Dow 3800 and silver better than gold? Bob Chapman interviewed here-http://news.silverseek.com/SilverSeek/1237579361.php
-Twenty-nine years ago this week, an attempt by Nelson Bunker Hunt and his brothers to buy up the silver market collapsed and took with it a large part of Hunt’s estate. Hunt, who was once considered the world’s richest private individual, was left with lawsuits, bankruptcy and tax problems in the aftermath of what has become known as ‘Silver Thursday.’ Read more here-http://www.cnbc.com/id/29826600 or http://www.chron.com/disp/story.mpl/chronicle/6330933.html
DEFINITIONS-QUOTES-QUICK HITS
-The term “toxic asset” is a nontechnical term used to describe certain financial assets when their value has fallen significantly and when there is no longer a functioning market for these assets, so that they cannot be reasonably sold. This term became common during the financial crisis that began in August 2007. Toxic assets played a major role in that crisis. When the market for such assets ceases to function, it is described as “frozen”.
Markets for some toxic assets froze in 2007, and the problem grew significantly worse in the second half of 2008. Several factors contributed to the freezing of toxic asset markets. The value of the assets were very sensitive to economic conditions, and increased uncertainty in these conditions made it difficult to estimate the value of the assets. Banks and other, major financial-institutions were unwilling to sell the assets at significantly reduced prices, since lower prices would force them to significantly reduce their stated assets, making them appear insolvent. Read more here-http://en.wikipedia.org/wiki/Toxic_asset
-So What’s A Toxic Asset? A Closer Look at The Financial Black Holes That Are Clogging Up The Nation’s Credit Flow. Read more here-
http://www.cbsnews.com/stories/2009/03/23/earlyshow/main4884103.shtml
-Confidence grows at the rate a coconut tree grows. It falls at the rate a coconut falls. Montek Ahluwalia-Bio here-http://en.wikipedia.org/wiki/Montek_Singh_Ahluwalia
-Giving money and power to government is like giving whiskey and car keys to teenage boys.” P.J. O’Rourke-Bio here-http://en.wikipedia.org/wiki/P._J._O%27Rourke
-I understand these are dark days for the newspaper business, but I hate it when people say that newspapers are obsolete. That’s totally untrue. I know from firsthand experience. I recently got a puppy, and you can’t housebreak a puppy on the Internet. Joe Biden U.S. Vice President
-”The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.” Thomas Jefferson-Bio here-
http://en.wikipedia.org/wiki/Thomas_Jefferson
-A recession should be a time of strengthening and regrouping for an economy. But as long as the government insists on maintaining the status quo by propping up failed institutions, we will continue to dig a bigger hole for ourselves. Ron Paul U.S. Congressman-Read more here-http://news.goldseek.com/RonPaul/1237834215.php
-The Fed said it will start monetizing Treasuries today notes with maturities from 2/16 to 2/19. Ya think China will sell some? We’d hit the bid if we held what China holds. Bill King, the King Report, March 25, 2009
-US markets are not only back in inflation mode, they are in virulent inflation mode. Bill King, the King Report, March 24, 2009
-Jim Dines expects gold to reach $3,000 to $5,000 an ounce. Marketwatch.com
-Investing legend Richard Russell has become supremely bullish. Last Friday he said: “I’ve written in the past that if you want to make ‘BIG’ money in the market, you have to take an over-sized position and be dead right on the trend.
The last time I did that was in late 1958. I did extremely well on that fateful ride, and I never again had the nerve to take that large a position until now. “I started building my gold position in 1999. My gold position now is comparable to my market position back in 1958 maybe 30% of my total worth. Why have I done this again?
“(1) I believe gold is in a major or primary bull market. I believe the gold bull market is currently in its second phase. This is the phase where sophisticated and seasoned investors and the funds enter the market.
“(2) If there is only one bull market in progress, it will attract broad new coverage and attention just as Thursday’s $70 rise in gold did.
“(3) I believe the bear market in stocks will continue erratically and the deflationary trends will persist. Bernanke will stop at nothing (including massive printing of dollars) in his effort to halt deflation.” Casey Daily Resource-Read more here-http://www.321gold.com/editorials/russell/russell032309.html
-International quantitative easing, zero percent interest rates and competitive currency devaluations will likely see all fiat currencies fall against the finite currency that is gold and we have likely only seen the early stages of this in recent months. Gold.ie-Read more here-http://news.goldseek.com/GoldSeek/1237983873.php or
http://news.goldseek.com/GoldSeek/1237552898.php
-Once inflation eventually kicks in, in reaction to all of this massive government spending, gold is going to soar, but this is going to take time. It’s not going to happen from one day to the next, but that’s the underlying foundation pushing gold’s bull market higher, and it’s not going away any time soon. So stay with your gold. It’s your best, and probably only solid bet looking out to the years ahead. Aden Sisters-Read more here-http://www.kitco.com/ind/Aden/aden_mar232009.html
-James Turk wonders: “How bad is it out there that the Fed would take this big gamble to risk hyper inflating the dollar to try saving insolvent banks? What does Bernanke see that he would expand the Federal Reserve’s balance sheet by another $1.2 trillion? What is he not telling us?” Read more here-http://www.marketwatch.com/news/story/bugs-triumphant-about-gold-terrified/story.aspx?guid={39440865-467F-4035-9154-5C30BB1B7EE6}&dist;=TNMostRead&print;=true&dist;=printMidSection
-’Gold was not only the currency of last resort, it was also the piggy bank of last resort, the ultimate source of liquidity.’ Brien Lundin-Read more here-http://www.marketwatch.com/news/story/can-gold-safe-haven-hero-again/story.aspx?guid={79839211-EDF0-4BE7-B47B-C241EC51356E}&dist;=TNMostRead&print;=true&dist;=printMidSection
-”When you look at the gold market, there is a huge dynamic in place, which is an increasing loathing of currencies,” said Nick Moore, an analyst at RBS Global Banking & Markets. “The only true currency, which is gold, is the beneficiary of that.” “If central banks around the world are keen to avoid deflation, then by definition they must have inflation, and that plays straight into gold’s hands,” he added. Casey Daily Resource
-”Investors would be wise to buy some gold, whether or not gold goes up, down, or remains unchanged next week,” Tom Hartmann, a commodity analyst at AltaVista Worldwide Trading LLC in Mission Viejo, California, said on March 19. “The larger picture here is greater than a one-week time frame. Inflation is certain to come.” Bloomberg
-”The dollar is still under some pressure,” said Stephen Platt, a commodity analyst at Archer Financial Services Inc. in Chicago. “There’s growing concern that the U.S. monetary base is expanding. That’s helping foster renewed buying interest in gold.” Bloomberg
-”The big picture is that they’re putting more liquidity into the system and that will eventually weaken the dollar and help gold,” said Frank McGhee, head dealer at Integrated Brokerage Services LLC in Chicago. Bloomberg
-A 10-20% portion of any financially viable family’s net worth should reside in physical gold. Tuck it away and forget about it (but not where you tuck it!) until it is needed to provide for you and yours or to pass on to your children and grandchildren. Michael Mickey Fulp-Read more here-http://www.kitco.com/ind/fulp/printerfriendly/mar242009.html
-Bob Moriarty interviewed by the gold report. TGR: Even Jim Cramer (Mad Money) says that now is a good time to buy gold.
BM: Cramer recommends everything. One day he’s saying, “Buy this,” and the next day he’s saying, “Sell this.” It has nothing to do with anything. He’s a trend follower, not a trend leader. The very best book on investing ever, Extraordinary Proper Delusions & the Madness of Crowds, was written around 1860, and it gives you about 30 stories of the insanity of mob behavior.
I saw it in real estate two or three years ago; literally everybody I knew was talking about how to make money in real estate. When that happens with gold, when you go to a cocktail party and everybody is talking about gold, you want to get out completely. Read more here-http://www.theaureport.com/pub/na/2387?utm_source=streamsend&utm;_medium=email&utm;_content=3379752
-There is a growing consensus that if China no longer wants to buy our bonds, we can simply print the money and buy them ourselves. This naïve view fails to consider the consequences implicit in such a change. When the Treasury sells bonds to China, no new dollars are printed. Instead, China prints yuan which it then uses to buy treasurers. This effectively allows America to export its inflation to China.
However, now that we will be printing the money ourselves, the full inflationary impact will fall directly on us. With such a policy in place, America has now become a banana republic. It won’t be too long before our living standards reflect our new status. Got Gold? Peter Schiff-Read more here-http://news.goldseek.com/EuroCapital/1237572152.php
-Economy: Worst in 26 years. The nation’s gross domestic product declined by 6.3% in the fourth quarter the biggest drop since 1982. Read more here-
http://www.bloomberg.com/apps/news?pid=20601068&sid;=aemO.zzB7LlE&refer;=home or http://money.cnn.com/2009/03/26/news/economy/gdp/index.htm?postversion=2009032609
-U.S. Jobless Rolls Increase to Record 5.56 Million. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aT1Ab3iuML6c&refer;=home
-Michigan jobless rate hits 12%. State’s unemployment rate rises about half a percentage point a smaller increase than last month, but still the highest since 1984. Read more here-
http://money.cnn.com/2009/03/25/news/economy/michigan_unemployment/index.htm?postversion=2009032517
-U.S. stocks will fall and the government will nationalize more banks as the economy contracts through the end of 2009, said Nouriel Roubini, the New York University professor who predicted last year’s economic crisis.
“The stock market is a bit ahead of the real macroeconomic and financial news,” Roubini, a professor at NYU’s Stern School of Business and the chairman of consulting firm Roubini Global Economics, said in an interview with Bloomberg Television in London today. “We’ll have some major banks going belly up that will need to be taken over.” Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=aUzSQ01UhV6s&refer;=home
-Nobel laureate economist Paul Krugman said the U.S. will eventually have to “seize” big banks as the economic and financial crisis deepens. “In the end, we’ll come to it,” Krugman said in an interview with Bloomberg Television today, referring to nationalizing banks. “You guarantee the liabilities of everybody but seize the big ones.” He also said the U.S. economy won’t stabilize until “late in the year.” Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ardgK6NSMTUk&refer;=home
-Counting on dividends? Not so fast. Poor economy puts dividend payments on track to decline by 22.6% this year, the most since 1938, S&P; analyst says. Read more here-
http://money.cnn.com/2009/03/20/markets/dividend_caution/index.htm
-Bear market rallies can be violent and exciting. Read more here-http://www.marketwatch.com/news/story/bear-market-rally-new-bull/story.aspx?guid={F4539F5D-2B3F-4EE5-B000-C84C617B4058}&dist;=TNMostRead&print;=true&dist;=printMidSection
-Airline Industry Loss Estimate Jumps to $4.7 Billion. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aZZidTwjfF6w
-March auto sales faring no better. Car sales are down about 40% so far this month, according to J.D. Power and Associates. Read more here-
http://money.cnn.com/2009/03/26/autos/jd_power_march_sales/index.htm
-U.S. regulator probing “rampant Ponzimonium.” Read more here-http://www.reuters.com/article/wtMostRead/idUSTRE52J48B20090320
-Canadian Fund Manager Ran $60 Million Ponzi Scheme, OSC Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=aPWE2bmvzufI&refer;=canada
-Millennium Bank in Caribbean Is Ponzi Scam, SEC Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a95is8wWQv5s
-What does 1 Trillion look like? View here-http://www.pagetutor.com/trillion/index.html
-PBS TV show on U.S. debt, ten trillion and counting. Watch show here-http://www.pbs.org/wgbh/pages/frontline/tentrillion/
-Americans are in a collective state of financial depression as many admit they could only cover their bills for two months at most if they found themselves suddenly jobless, a nightmare more and more worry may come true. Read more here-http://www.marketwatch.com/news/story/Fears-grow-more-consumers-just/story.aspx?guid={504D22FD-CC66-4FC1-BF8D-2F199C2AD042}&print;=true&dist;=printMidSection or http://www.foxbusiness.com/story/markets/industries/fears-grow-consumers-just-paycheck-ruin/
-Top hedge fund managers still raking in the money. Despite market turmoil, top 25 earners took home $11.6 billion in 2008, according to ranking by Alpha magazine. Read more here-
http://money.cnn.com/2009/03/25/markets/hedge_alpha/index.htm or http://www.theglobeandmail.com/servlet/story/RTGAM.20090325.WBstreetwise20090325072435/WBStory/WBstreetwise/
-North Korean Threat to End Talks Is ‘Provocative’, U.S. Says. The U.S. State Department rejected North Korea’s threat that it will pull out of talks on its nuclear program if there is any attempt in the United Nations to criticize a planned rocket launch. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aE9RBuX0CdyU&refer;=home
-Mr. Iran envisions ‘major’ war in coming months. Read more here-http://www.presstv.ir/detail.aspx?id=88605§ionid;=351020104
-Is this the end of America? U.S. law-making is riddled with slapdash, incompetence and gamesmanship. Read more here-
-Paradise goes bankrupt. Island paradise the Seychelles has the dubious honor of being perhaps the most indebted country in the world. Read more here-
http://money.cnn.com/2009/03/25/magazines/fortune/seychelles_bankrupt.fortune/index.htm
-The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G. Read more here-http://www.nytimes.com/2009/03/25/opinion/25desantis.html?_r=1
-Space storm alert: 90 seconds from catastrophe. Read more here-http://www.newscientist.com/article/mg20127001.300-space-storm-alert-90-seconds-from-catastrophe.html?full=true
-The Rare Colored Diamonds Historical Value Tracker system is the perfect tool for investors to view the potential future value of a rare colored diamond based on the current market trend of a particular type of diamond. Track the potential future value of colored diamonds here-http://www.rarecoloreddiamonds.com/HistoricalValueTracker.html
-Magnificent Jewels New York December 9th 2008. Read more here-http://www.sothebys.com/app/live/dept/Article.jsp?article_id=1260
419, Oval Fancy Vivid Yellow Internally Flawless Diamond Ring, 36.99cts, Sotheby’s $2,658,500
431, Rectangular Brilliant-Cut Fancy Pink Diamond Ring, 9.11cts, Sotheby’s $962,500
423, Emerald-Cut Fancy Vivid Yellow Diamond Ring, 10.05cts, Sotheby’s $536,500
399, Pair of Fancy Intense and Vivid Yellow Diamond Pendant-Earclips $422,500
-Magnificent Jewels Geneva November 19, 2008. Read more here-http://www.sothebys.com/app/live/dept/Article.jsp?article_id=1220
408, Fancy Pink diamond ring weighing 8.02 carats, Sotheby’s $1,321,107
273, Rectangular-cut Fancy Intense Yellow Diamond ring 63.22cts, Christie’s $1,284,414
-Magnificent Jewels Geneva May 15, 2008. Read more here-http://www.sothebys.com/app/live/dept/Article.jsp?article_id=1320
453, Fancy Vivid Blue pear-shaped diamond ring $4,955,097
437, Fancy Vivid Purplish Pink diamond ring $2,554,242
427, Fancy Light Pink diamond ring $1,593,901
430, Fancy Intense Yellow diamond ring, Van Cleef & Arpels $1,113,730
308, A Fancy Intense Yellow cushion modified brilliant-cut $1,049,707
-Christie’s upcoming jewellery sale is on April 22, 2009 in New York. Among the colored diamonds to be sold will be a fancy grayish yellowish green “chameleon” briolette-cut, 19.13-carat diamond pendant necklace with a pre-sales estimate of $800,000 to $1.2 million. The chameleon is the largest briolette-cut chameleon diamond in the world to be offered at auction, according to Christie’s. A marquise cut, fancy vivid yellow, 8.06-carat diamond will be another highlight among the colored diamonds. Read more here-
http://www.diamonds.net/news/NewsItem.aspx?ArticleID=25730 or http://www.idexonline.com/portal_FullNews.asp?id=32117
COMMODITIES
-Michael Aronstein, the strategist who predicted last year’s commodities collapse, is putting 20 percent of the money he manages into raw materials in a bet that prices have bottomed.
Aronstein started buying metals, agriculture and energy futures this month for the $115 million fund he helps manage at Oscar Gruss & Son Inc. in New York. The worst commodity rout in at least five decades forced producers to idle rigs and mines at the same time China and the U.S. spend $1.4 trillion on roads, bridges, schools and hospitals, reviving demand, he said.
“People have gotten way too negative about the global economy,” Aronstein, 55, said in an interview. “The markets did not react in a normal recessionary tract. It was like we went through the outbreak of a war or some enormous natural disaster that just closed down the global capital markets.” Aronstein, a graduate of Yale University who makes knives and tools as a blacksmith in his spare time, isn’t alone.
Merrill Lynch Global Wealth Management says commodities will benefit as the economy improves. Theresa Gusman, who manages $215 billion for Deutsche Bank AG’s DB Advisors unit, is telling clients to buy raw materials from copper to oil because of “dramatic” cuts in supplies. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=at9BPB7aQdPY&refer;=home
U.S. PLAN TO BUY TOXIC ASSETS-WILL IT WORK?-EXPANDED POWERS TO SEIZE NON BANKS-NEW REGS
-The Obama administration unveiled its plan to remove toxic assets from the books of the nation’s banks, betting that it can revive the U.S. financial system without resorting to outright nationalization.
The plan is aimed at financing as much as $1 trillion in purchases of illiquid real-estate assets, using $75 billion to $100 billion of the Treasury’s remaining bank-rescue funds. The Public-Private Investment Program will also rely on Federal Reserve financing and Federal Deposit Insurance Corp. debt guarantees, the Treasury said in a statement in Washington.
Barely two months after President Barack Obama took office, he and Treasury Secretary Timothy Geithner are staking much of the new administration’s economic credibility on the theory that removing the devalued loans and securities from banks’ balance sheets will help them start lending again and resuscitate the economy. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=ajiVjxYZ.AjM&refer;=home
-Geithner rescue package ‘robbery of the American people’. The US government plan to free beleaguered banks of up to $1 trillion (£690bn) of toxic assets will expose American taxpayers to too much risk, leading economist Joseph Stiglitz has cautioned. Read more here-http://www.telegraph.co.uk/finance/financetopics/recession/5045421/Geithner-rescue-package-robbery-of-the-American-people.html
-IMF says clean up banks to tackle dire world crisis. Read more here-http://www.reuters.com/article/bondsNews/idUSLN31921620090323
-Nobel-prize winning economist Paul Krugman said in remarks published on Monday that the latest U.S. Treasury bailout program is nearly certain to fail, triggering a sense of personal despair. U.S. Treasury Secretary Timothy Geithner on Monday unveiled a plan aimed at persuading private investors to help rid banks up to $1 trillion in toxic assets that that are seen as a roadblock to economic recovery.
“This is more than disappointing,” Krugman wrote in The New York Times. “”In fact it fills me with a sense of despair.” “The Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt,” the Princeton University economist said, citing weekend reports outlining the plan.
“This isn’t really about letting markets work. It’s just an indirect, disguised way to subsidize purchases of bad assets,” he added. Krugman called it a recycled idea of former Treasury Secretary Henry Paulson, who later abandoned the “cash for trash” proposal. “But the real problem with this plan is that it won’t work,” he says, adding that bad loans may be undervalued because there is too much fear in the current climate. Read more here-http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52M4SS20090323
-One Small Problem With Geithner’s Plan: It Will Bankrupt The Banks. Read more here-http://www.businessinsider.com/henry-blodget-one-small-problem-with-geithners-plan-it-will-bankrupt-the-banks-2009-3
-U.S. Seeks Expanded Power to Seize non bank firms. Read more here-http://www.washingtonpost.com/wp-dyn/content/article/2009/03/23/AR2009032302830_pf.html or http://www.reuters.com/article/ousiv/idUSTRE52O44820090325
-Geithner Calls for ‘New Rules of the Game’ in Finance. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aY.q5sTdMTHA&refer;=home
MASSIVE U.S. DEFICITS FOR THE NEXT 10 YEARS-NOBODY LEFT TO LEND TO U.S.?
-$1 trillion deficits seen for next 10 years. President Barack Obama’s budget would produce $9.3 trillion in deficits over the next decade, more than four times the deficits of Republican George W. Bush’s presidency, congressional auditors said Friday.
The new Congressional Budget Office figures offered a far more dire outlook for Obama’s budget than the new administration predicted just last month a deficit $2.3 trillion worse. It’s a prospect even the president’s own budget director called unsustainable. Read more here-http://news.yahoo.com/s/ap/20090320/ap_on_go_pr_wh/obama_budget or http://www.reuters.com/article/bondsNews/idUSN2049806720090320
-Deficit estimate: Up to $1.85 trillion. Lawmakers’ budget agency evaluates the revenue and spending effects of the president’s budget proposals. Read more here-
http://money.cnn.com/2009/03/20/news/economy/cbo_obama_budget_deficit/index.htm or http://www.iht.com/articles/ap/2009/03/20/business/Obama-Budget.php
-The United States wouldn’t even be eligible to enter the European Union if it wanted to because of its debt levels, Sen. Judd Gregg (R-N.H.) claimed Thursday. “We won’t even be able to get into the EU if we wanted to,” Gregg said this morning on MSNBC, “because our government is so large and so huge.”
The European Union’s Stability and Growth Pact (SGP) adopted in 1997 requires a budget deficit to be less than three percent, and requires a national debt beneath 60 percent of Gross Domestic Product (GDP). “We’ve been lectured by France on the fact that we’re not fiscally responsible right now,” Gregg, the would-be commerce secretary, noted with incredulity. Read more here-http://briefingroom.thehill.com/2009/03/26/gregg-us-couldnt-even-join-eu-due-to-debt-levels/
-Soon there may be nobody left to lend to America. Read more here-http://business.timesonline.co.uk/tol/business/columnists/article5950258.ece?openComment=true
CALIFORNIA DEBT AND UNEMPLOYMENT NUMBERS KEEP GROWING
-California Returns with $6.5 Billion Deal, Biggest Since 2004. California sold the biggest U.S. tax-exempt bond issue in almost five years to jump-start capital spending after tight credit and a record budget impasse kept the state out of the municipal market since June.
California boosted its sale 64 percent to $6.54 billion yesterday, following a state advertising push that stretched to New York City for the first time and helped drive about $3.2 billion in purchases by individual investors. The “huge demand” allowed the state to offer bonds to mutual funds and other institutions a day earlier than planned, said Tom Dresslar, spokesman for State Treasurer Bill Lockyer. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=asRKFvW8CL0E
-California economy worsens, unemployment at 10.5 pct. California’s unemployment rate rose to 10.5 percent in February it’s highest in nearly 26 years, as most industries in the most populous U.S. state slashed payrolls. The increase underscores how the U.S. financial crisis and slump in consumer spending it prompted is battering California’s economy, the world’s eighth largest and compounding troubles brought on by its prolonged housing downturn.
At 10.5 percent, California’s unemployment rate is at its highest level since April 1983 and has increased for 11 consecutive months, economist Steve Levy of the Center for the Continuing Study of the California Economy said on Friday after officials reported on the state’s labor market. Read more here-
U.K. DEBT AND DEFICIT CRISIS
-UK will have the worst deficit in Western world, warns IMF. Britain is now tumbling towards the biggest budget deficit in the Western world, the International Monetary Fund has warned.
Next year the Treasury will have to borrow a record 11pc of gross domestic product as it fights the crisis equating to more than £150bn and far more than has ever been borrowed before in British history, according to a devastating new assessment by the Fund.
The assessment coincided with the publication of official figures showing a further deterioration in the public finances during February as the recession ate further into tax revenues. The IMF also confirmed, as had been leaked earlier this week that it now expects the world economy to shrink this year for the first time since the Second World War. It also expects the UK to endure a more severe and longer-lasting contraction than almost any other major economy. Read more here-http://www.telegraph.co.uk/finance/financetopics/recession/5018214/UK-will-have-the-worst-deficit-in-Western-world-warns-IMF.html
-Mervyn King warns Gordon Brown to stop spending. The Governor of the Bank of England laid bare tensions between Gordon Brown and the Treasury yesterday by warning that Britain could not afford a second economic stimulus in the Budget.
Mervyn King threw caution to the wind as he sided with Alistair Darling and the CBI against Downing Street in raising strong doubts over any prospect of another round of “significant fiscal expansion” next month. Read more here-http://www.timesonline.co.uk/tol/news/politics/article5971296.ece
-The Bank of England and No.10 at war: We can’t afford Budget spending spree, Governor tells Brown. Brown to borrow £351billion in the next two years, that’s more than Britain’s total debt from 1691 to the 1997 election. Read more here-http://www.dailymail.co.uk/news/article-1164440/Brown-borrow-351billion-years-thats-Britains-total-debt-1691-1997-election.html
-The devalued Prime Minister of a devalued Government U.K. Daniel Hannan, MEP for South East England, gives a speech during Gordon Brown´s visit to the European Parliament on 24th March, 2009. Watch video here-http://news.goldseek.com/GoldSeek/1237993698.php
U.K. TREASURY AUCTION FAILS TO SELL BONDS
-City alarm as Treasury fails to sell Government gilts. Britain’s ability to borrow tens of billions of pounds to fight the economic crisis has been called into question after the Treasury failed to sell Government gilts for the first time in more than a decade. Read more here-http://www.telegraph.co.uk/finance/financetopics/recession/5051738/City-alarm-as-Treasury-fails-to-sell-Government-gilts.html
-The U.K. failed to find enough buyers for 1.75 billion pounds ($2.55 billion) of bonds for the first time in almost seven years as debt investors repudiated Prime Minister Gordon Brown’s plan to stem the worst economic crisis in three decades.
Gilts slumped after the London-based Debt Management Office, which manages bond auctions on behalf of the Treasury, said investors bid for 1.63 billion pounds of the 40-year securities. The last time the U.K. government was unable to attract enough investors was in 2002 when it tried to sell 30- year inflation-protected bonds. The yield on the 4.25 percent gilt due 2049 rose one basis point to 4.6 percent today. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=ab62rFruCiiM
-U.K. Gets Increased Demand for Inflation Bond after Failed Sale. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a745DTateo0U
20 FAILED U.S. BANKS AND COUNTING
-3 banks fail, 20 so far this year. The FDIC estimates that the cost of the three failures will run in excess of $200 million. One bank was not able to find a buyer, two others were. Read more here-http://money.cnn.com/2009/03/20/news/companies/bank_failure/index.htm
-Feds shut banks in Georgia, Colorado, Kansas. Regulators close banks in Georgia, Colorado, Kansas; 20 bank failures so far this year. Read more here-
http://finance.yahoo.com/news/Feds-shut-bank-in-Georgia-18-apf-14706705.html
-U.S. seizes 2 big credit unions. U.S. takes over two credit unions after tests find vulnerability. U.S. Central Federal Credit Union and WesCorp have combined assets of $57 billion. Read more here-http://money.cnn.com/2009/03/20/news/companies/credit_unions/index.htm
CURRENCY WARS
-UN panel touts new global currency reserve system. Read more here-http://www.breitbart.com/article.php?id=CNG.18e9e5692442aa61d7510553b5ffc14e.8b1&show;_article=1
-China ‘Super Currency’ Call Shows Dollar Concern, G-20 Ambition. China’s call for a new international reserve currency may signal its concern at the dollar’s weakness and ambitions for a leadership role at next week’s Group of 20 summit, economists said. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ae6ezzIMK6cs&refer;=home
or http://www.reuters.com/article/marketsNews/idINPEK18455820090323?rpc=44 or http://www.telegraph.co.uk/finance/breakingviewscom/5042739/Paper-gold-nice-idea-shame-about-the-politics.html
-China’s leaders may press at the Group of 20 summit for specific steps to protect its more than $1 trillion of dollar assets as U.S. fiscal policies risk sparking a “currency war,” a senior Chinese researcher said. The dollar weakened after the Federal Reserve said March 18 it would buy as much as $300 billion of Treasuries and the U.S. this week outlined plans to buy as much as $1 trillion of illiquid bank assets.
U.S. purchases of Treasuries are “irresponsible” because they may weaken the dollar, Li Xiangyang, of the government- backed Chinese Academy of Social Sciences, told a forum in Beijing today. “Chinese leaders are likely to articulate their concern to their U.S. counterparts strongly and ask for specific measures.”
President Barack Obama is relying on China to continue its purchases of Treasuries as the government seeks to fund a $787 billion stimulus package and a deficit this year forecast to reach $1.5 trillion. China’s President Hu Jintao is due to meet with his U.S. counterpart at the G-20 summit in London next week.
“China is a hostage,” said Andy Xie, an independent Shanghai-based analyst who was formerly Morgan Stanley’s chief Asia economist. “China is America’s bank and America basically says there’s nothing you can do to me. If I go down you don’t get paid.” Treasuries have handed investors a loss of 1.6 percent in yuan terms this year, according to Merrill Lynch & Co.’s U.S. Treasury Master index. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=a6VAJqVQF2FM
-China hints at reduction in dollar holdings. Read more here-http://www.gata.org/node/7296
-China keeps faith with U.S. Treasuries: central banker. Read more here-http://www.reuters.com/article/gc04/idUSTRE52M12C20090323
-Falling greenback fuels BRIC dollar reserve rethink. Read more here-http://www.reuters.com/article/reutersEdge/idUSTRE52M5UZ20090323
-Treasury Secretary Timothy Geithner sent the dollar tumbling with comments about China’s ideas for overhauling the global monetary system, only to drive it back up by affirming that it should remain the world’s reserve currency. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aVevdIrBPtUE&refer;=home
-Obama dismisses idea of single global currency. Read more here-http://www.reuters.com/article/newsOne/idUSN2434732920090325
RECOVERY IN 2010?
-2009 will be hard, recovery in 2010 report. The economy will continue to sputter for the rest of this year, but see some relief next year, according to the UCLA Anderson report. Read more here-http://money.cnn.com/2009/03/25/news/economy/ucla_forecast/index.htm
-Feldstein: Recession to run into ‘10. Prominent Harvard professor Martin Feldstein says nation will probably need another large stimulus package. Read more here-
http://money.cnn.com/2009/03/24/news/economy/us_recession_feldstein.reut/index.htm
REAL ESTATE-FORECLOSURES-MORTGAGES-EVICTION
-California Home Prices Decline 41% on Foreclosures. California home prices dropped 41 percent last month from a year earlier, more than double the U.S. decline, as surging foreclosures drove down values, the state Association of Realtors said today.
The median price for an existing, single-family detached home in California sank to $247,590 in February from $418,260 a year earlier, the Los Angeles-based group said in a statement. The U.S. median price fell 16 percent during the same period, the second-biggest drop on record, according to the National Association of Realtors.
Home prices have been falling since their 2006 peak, pushed down by rising foreclosures blamed for the U.S. credit crisis. California, the most populous state, has one of the highest rates of foreclosure, according to RealtyTrac Inc., an Irvine, California-based seller of real estate data. Lenders usually sell foreclosed properties at a discount, dragging down the median price, so it doesn’t necessarily reflect the value of most homes, the California Association of Realtors report said.
“The median, for all its imperfections, tells a really interesting tale right now,” Andrew LePage, an analyst at research firm MDA DataQuick, said in an interview. “It tells you what is and what is not selling. What’s selling right now is foreclosures.”
Foreclosures accounted for 58 percent of existing California home sales in February, compared with 33 percent a year earlier, according to San Diego-based MDA DataQuick. Inland California, where prices are lower than coastal areas, accounted for half the state’s mortgage defaults in the last three months of 2008, MDA DataQuick said. Read more here-
http://www.bloomberg.com/apps/news?pid=20601110&sid;=aUnHHxyqfsyA
-Purchases of new homes in the U.S. unexpectedly rose in February from a record low as plummeting prices and cheaper mortgage rates lured some buyers. Sales increased 4.7 percent to an annual pace of 337,000 after a 322,000 rate in January, the Commerce Department said today in Washington. The median sales price fell 18 percent, and unsold homes at the current sales pace were the fewest since June 2002. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aAZ4tL_FZ32w&refer;=home
-U.S. Sales of previously owned homes unexpectedly climbed in February as record foreclosures brought bargain hunters into the market to take advantage of lower prices. Purchases increased 5.1 percent to an annual rate of 4.72 million from 4.49 million in January, the National Association of Realtors said today in Washington. The median price slumped 15.5 percent from a year ago, the second-biggest drop on record, and distressed properties accounted for 45 percent of all sales. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=aNyqmWIhEdZA&refer;=home
-U.K. house prices face an “utterly unprecedented” decline of 40 percent in nominal terms, as interest rate cuts fail to slow the momentum of decline, according to analysts at Sanford C. Bernstein in London. “A 40 percent nominal house price fall is utterly unprecedented in the U.K.,” analysts led by Bruno Paulson wrote in an e-mailed note to investors today. Prices have already declined 20 percent, it said. Read more here-http://www.bloomberg.com/apps/news?pid=20601102&sid;=avdOXgz7yQNM&refer;=uk
-London has been pushed off its top spot by Monaco as the most expensive place to buy residential property, with the capital and the home counties suffering some of the biggest price falls in the world.
Monaco is now the world’s most expensive residential market, where prime property is being sold for €50,000 (£47,000, $68,000) per square metre (up 2.1 per cent in 2008), followed now by London, at €28,000 per square metre, and then Manhattan, at €16,500 per square metre (down 4.1 per cent). London also saw one of the biggest falls in value of any part of the world, down 17 per cent, beaten only by the 25 per cent falls in prices in Hong Kong. Read more here-http://www.ft.com/cms/s/0/0714c9fc-174a-11de-9a72-0000779fd2ac.html
-Soros Predicts U.S. Commercial Real Estate Values Will Fall 30%. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a2pBt4Vo5uHk&refer;=home
-Commercial Real Estate: The Banks’ Next Big Problem. Read more here-http://www.time.com/time/business/article/0,8599,1886767,00.html
-U.S. banks, battered by record losses from the worst housing slump since the Great Depression, now must weather increasing loan delinquencies from owners of skyscrapers and shopping malls. The country’s 10 biggest banks have $327.6 billion in commercial mortgages, which face a wave of defaults as office vacancies grow and retailers and casinos go bankrupt. A projected tripling in the default rate would result in losses of about 7 percent of total unpaid balances, according to estimates from analysts at research firm Reis Inc.
Commercial property prices are down almost 20 percent in the past year, and with the global recession worsening, there’s “significant stress” in the market, said William Schwartz, a credit analyst at DBRS Inc. in New York. Moody’s Investors Service is reviewing the financial strength ratings of 23 regional lenders, as “these losses are likely to meaningfully weaken the capital position of many banks in 2009,” said Managing Director Robert Young in New York.
Bank of Hawaii Corp., City National Corp., Comerica Inc. and Sovereign Bancorp Inc. were among the companies put on Moody’s list of lenders with a “negative outlook” on March 12, partly because of their “risk concentrations” in the commercial market. Wells Fargo & Co. and Bank of America Corp. account for about half of commercial mortgages owned by the 10 largest banks, company reports show. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=aR72TKlxCQ7A&refer;=exclusive
-Global recession stalls skyscraper construction. Read more here-http://www.reuters.com/article/bondsNews/idUSN1729195720090323
-The U.S. 30-year fixed mortgage rate fell to 4.85 percent, the lowest on record, on a government plan to increase purchases of mortgage-backed bonds and buy as much as $300 billion of Treasuries.
The average rate is the lowest in the Freddie Mac weekly survey dating to 1971, the McLean, Virginia-based mortgage buyer said today in a statement. The rate fell from 4.98 percent a week earlier, Freddie Mac said. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=arq_Xb9SN7_s&refer;=home
-Tenant evicted even though she pays rent on time. Brown and her family are being evicted not because of anything they did, but because her landlord defaulted on the mortgage and the house fell into foreclosure. The house was recently sold at auction.
The bad news came just seven months after Brown had moved in. A real estate broker came to the door and handed her an eviction notice, telling her she had 30 days to vacate. “I was hysterical, I was like, what do you mean?” Read more here-http://www.cnn.com/2009/US/03/23/landlord.foreclosure/index.html
© 2011, Worldwide Precious Metals.
www.wwpmc.com
The GoldBugg Report – March 31 , 2009
Posted by Worldwide Precious Metals on Tuesday, March 31, 2009
The GoldBugg Report – March 24 , 2009
March 24, 2009
WORLD FINANCIAL REPORT ON RADIO MARCH 20 2009 SHOW
Worldwide Precious Metals will be at the Calgary Resource & Clean Energy Investment Conference
April 4&5, 2009.
Conference is free if you pre-register now at: http://www.cambridgehouse.ca/ch_calgary2009.html#exhibitors
Call Worldwide Precious Metals for more details, 1-866-623-2002.
March 20th, 2009
Memo from PMI
The Week in Review
US unemployment now in excess of 5.4 million and on its way to 10%.
AIG has been consuming the Federal Government and the media, over 165 million in bonuses paid out from Tax Payer money. (We think the Government has more important issues to deal with)
Oil is back over $50.00 per Barrel, up 10% this week.
March 18th, 2009, we believe will become the turning point for the downward move on the US Dollar. (See our Memo of March 18th, 2009)
Precious Metals had a volatile week. We saw lows for Silver of $11.89 and Gold $882.70 on Wednesdays trading only to spike to close in Friday’s New York Market at $13.84 Silver and $957.90 Gold.
That’s an increase of $1.95 or 16.4% for Silver and $75.20 or 8.52% for Gold in just 2 Trading Days. This sharp rebound in prices was caused by the actions of the Federal Reserve, announced at 2:15 pm Wednesday (Refer to our March 18th, 2009 Memo)
Here are your short term Support and Resistance Levels for the upcoming week.
The volatility exhibited this past week, exhibits all of the support for a “Long Term” approach to the ownership of Precious Metals Bullion Products. The lows we saw early in the week were an excellent opportunity for buying (not panic selling or forced liquidations as those trading in futures contracts obviously experienced).
Always remain conservatively pro-active without overextending your ability to own and hold for the Long Term. If you have the resources try to buy the dips whenever they might take place to add product to your portfolio. We feel that current price levels are very attractive for purchasing for Long Term appreciation.
Trading Department – Precious Metals International, Ltd.
GOLD
Dollar Remains Key for Gold Outlook
Silver and Gold Prices Looked Confused When the Comex Closed Today
http://goldprice.org/silver-and-gold-prices/2009/03/silver-and-gold-prices-looked-confused.html
-Gold: ‘Inflation will beat deflation and gold will hit $3,000′. Gold looks set to move substantially higher as governments all around the world embark on a programme of “quantitative easing.” Ian Williams-Read more here-http://www.telegraph.co.uk/finance/personalfinance/investing/gold/4967209/Gold-Inflation-will-beat-deflation-and-gold-will-hit-3000.html
-Gold is currency and has been currency for three millenniums despite the fact that Richard Nixon took us off the gold standard in August 1971. To now not own gold we believe is just irresponsible given all of the wealth destruction and the ongoing destruction of paper currencies. Paper is just paper whether it is stocks or bonds or la-la land paper aka derivatives. Gold, silver, platinum are real and hard. They are no one else’s liability.
Let’s take a look at the performance over the years of Gold vs. the Dow Jones Industrials. We will start with August 1971 when Richard Nixon took us off the gold standard. Sure there are periods to own gold and there are periods to own the DJI (Stocks-paper). This is not one of them. In January 1980 the DJI/Gold ratio was 1:1. In 1999 it was 45:1. Today it is under 8:1.
Over all time frames since Richard Nixon took us off the Gold Standard only one time frame, 25 years, has the Dow Jones Industrials (stocks) outperformed Gold. That advantage, however, is slowly being whittled away. Yet Gold remains an underappreciated asset class is viewed by many as extremely risky and many portfolio managers, pension fund managers and investment advisors shun it.
Rather than having gold at the top of the risk pyramid gold should actually be at the bottom of the pyramid as one of the most stable asset classes going. It should be a foundation for portfolios not considered the equivalent of venture capital mining stocks that are truly volatile and high risk. Even large cap gold stocks are a higher risk then owning Gold itself. And the ETF’s and other forms of holding Gold are not a panacea as their alleged holdings are not verifiable.
We see the argument that Gold was useless in previous deep recessions and depressions. It didn’t save you. Yet if Gold is a stable asset class we can only note that for example in the Great Depression Gold officially rose from a fixed price of near $20 to $35/ounce in 1933 a gain of 75 per cent.
The real gains, however, came in gold stocks as measured by Homestake Mining that went up from 1929-1932 even as the DJI was losing 89%. It is not fair to measure that performance against the DJI until after August 8, 1971 when the gold standard ended. There is a period to own gold and a period to own paper. The last ten years has not been a period to own paper yet the vast majority of portfolio managers and investment advisors continue to hold paper not gold.
This is why we believe that the best is yet to come for Gold. Our chart of Gold shows that we may have completed a big wave up from the double bottom lows of 1999 and 2001. The recent correction that started in March 2008 and ended in November 2008 may have been the wave 2 correction. We cannot confirm that yet. We believe we will only confirm that once we exceed $1250 for Gold.
Until that happens there is a risk of further corrective action that could retest those lows near $680. Currently we are seeing a correction in Gold after once again reaching to $1000. Once a new wave up happens it should be a spectacular one to the upside as it would be a third wave. The DJI/Gold ratio will go to a minimum 1:1 before this over. We just cannot tell what that absolute level will be though even as some have speculated that it could reach as high as $10,000.
Jason lives! He has devastated many portfolios and economies in the past year. The key to defeating Jason is to own Gold Bullion or as we say Bullion Gold, silver, platinum. Being a gold bug is not being a wild eyed speculator. Being a gold bug is just prudence. Precious Metals stocks have a role but it is not a substitute for the real thing.
Owning bullion is a low risk strategy. Owning stocks today is high risk. So why do so few have it when the evidence suggests they should? Bullion should be the foundation of portfolio management and in today’s environment the asset allocation should be overweight. David Chapman-Read more here-http://news.goldseek.com/UnionSecurities/1236968741.php
-Gold is likely to hit record highs, spurred on by the concerns about the U.S. dollar and doubt about the world economy, the chairman of Barrick Gold Corp. said this week. There was even a possibility, although not a probability, central banks, including China’s, might switch from dollar holdings to gold, which could cause the metal’s price to treble or more.
From a gold producers’ perspective, one negative is that the cost of bringing on production has remained high. “Gold is at record levels in every currency except dollars. Even within dollar terms it is within a few percentage points of an all-time high at a time when all the other major commodities are falling,” Peter Munk told Reuters at the World Economic Forum meeting in Davos. Read more here-http://www.canada.com/Business/Recession+good+news+gold+Munk+says/1233730/story.html or http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=80496&sn;=Detail
-Rogers, Faber, Cheng, Merath Own Words on Gold’s Outlook. Watch more here-
-Clive Maund says gold is going to soar. Read more here-http://news.goldseek.com/CliveMaund/1237478622.php
-U.S. Mint suspends production of more gold and silver coins. The United States Mint has officially announced the suspension of another slate of gold and silver products. The affected products are 2009 dated American Gold and Silver Eagle coins produced for collectors. These coins are considered collectible versions of the bullion coins.
Although these are collectible coins, they represent a sizable amount of precious metals sales and represent a method of gold and silver investment for many individuals. Last year, the US Mint sold 1,157,911 ounces of silver in the form of Silver Eagle coins minted for collectors. They also sold 155,740 ounces of gold in the form of Gold Eagle and Gold Buffalo coins minted for collectors. Read more here-http://www.gata.org/node/7258
-World mints report soaring demand for gold coins. Read more here-http://www.reuters.com/article/newsOne/idUSTRE52C21520090313
-John Embry commentary, own gold the metals not a paper promise. Read more here-http://www.sprott.com/pdf/investorsdigest/digest.pdf
-Gold heading for $200 or $10,000? Read more here-http://news.goldseek.com/EricHommelberg/1237233600.php
-William Rees-Mogg, Is Gold Money? Read more here-http://www.lewrockwell.com/orig10/rees-mogg3.html
-Chemistry Looks Good for Gold-Foster. Geologist Joseph M. Foster-a Van Eck Associates portfolio manager who also leads its International Investors Gold Fund-sees nothing but good news for gold in the months and years to come. Interview with The Gold Report. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=80219&sn;=Detail
-Gold dehedging decelerates-but may pick up again on investor appetite for gold upside. The delivery profile for the gold miners’ hedge book at end-December calls for deliveries of 60 tonnes this year and 70 tpa through to 2012. Investor appetite for upside price exposure, however, means that the actual rate is likely to be higher. Read more here-
http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=80084&sn;=Detail
-Central Banks Are Buying Gold for Their Reserves Now! Read more here-http://news.goldseek.com/GoldForecaster/1237480037.php
-Georgians could pay future state taxes in gold. Read more here-http://atlanta.bizjournals.com/atlanta/stories/2009/03/09/story12.html
-Gold being used to buy bread in Zimbabwe. Watch video here-http://www.youtube.com/watch?v=7ubJp6rmUYM
-GATA commentary on the Call for IMF gold sale to aid Africa. Read more here-http://www.gata.org/node/7276
-Patrick Heller: Gold price manipulation more blatant. Read more here-http://www.gata.org/node/7274
SILVER
Gold to silver ratio at 80 to 1 with gold at $1,400 the silver price would be $17.50
Gold to silver ratio at 70 to 1 with gold at $1,400 the silver price would be $20.00
Gold to silver ratio at 60 to 1 with gold at $1,400 the silver price would be $23.33
Gold to silver ratio at 50 to 1 with gold at $1,400 the silver price would be $28.00
Gold to silver ratio at 15 to 1 with gold at $1,400 the silver price would be $93.33
-Silver’s discount to gold sticks out like sore thumb. Silver’s trading at an eye-catching discount to gold these days, and some analysts have been debating whether the white metal is severely undervalued given its many industrial uses and its ability to double as a precious metal.
History shows that the gold-to-silver ratio had been around 15 to 1 since 600 B.C. up until about the late 19th century when it climbed, according to Mark O’Byrne, director at Gold and Silver Investments Ltd. He explains that geologically there are 15 parts of silver to every one part of gold in the earth’s crust so the ratio makes logical sense. The ratio reverted back to 15 to 1 as recently as 1980, he said. But now that ratio is more like 70 to 1.
Silver sales are up by 150% year on year, according to Nigel Moffatt, treasurer at The Pert Mint, which is owned by the government of Western Australia. The higher sales are largely due to “world economic issues with more people realizing that most currencies in the world are paper based, with no intrinsic value,” he said. “People are looking for more tangible assets and the stock markets aren’t looking very attractive so at this stage, they seem to be flocking towards precious metals.”
“Precious metals clearly have had a strong place as an investment medium for the past 5,000 years and probably no more so than today as people look for ways to preserve their savings,” he said. Investment demand in the silver market is strong, especially in the exchange-traded funds, said Chintan Parikh, a commodity analyst at CPM Group in New York. And “physical demand in the form of bullion coins and bars also remains strong.”
Silver may soon get the catalyst it needs. After all, “since 80% of silver that is mined annually is as a by-product of base-metal mining, the potential supply for silver this year will be dramatically down,” said Paul Mladjenovic, author of Precious Metals Investing for Dummies. “Base-metals mining is being cancelled or curtailed due to the deteriorating world economy,” he said. “With many mines closing down, that means that much less silver will come into the market and since investor demand for silver is still very strong, that bodes very well for silver.”
And when the U.S. and world economy shows signs of “meaningful recovery, recovery sufficient to prompt a pick up in silver fabrication demand, that’s when silver will outshine gold once again and the gold/silver ratio will trend down,” said Jeffrey Nichols, managing director at American Precious Metals Advisors. Hopefully that recovery will happen in 2010 or 2011, he said. “In short, I’m looking for gold to outperform in the short term and silver to outperform later on,” he said.
Mladjenovic said silver has the “realistic potential” to achieve an intermediate high of about $25 by year-end and within the 2 to 3 years, “current fundamentals, from both industrial and investment demand, coupled with much lower supply, will drive the price of silver to $50.” That’s silver’s nominal record level from 1980.
Chintan Karnani, an analyst at Insignia Consultants in New Delhi sees “an immediate-term target of $16 for silver $23 to $25 in the longer term, such as the end of 2009 or first quarter of 2010.” “Silver has the most sound fundamentals and will significantly outperform the precious metals and the base metals in the coming years,” said O’Byrne. “It is both a safe haven and financial insurance, but also has potential for significant returns perhaps more than any commodity, currency or asset class in the world today.” Read more here-http://www.marketwatch.com/news/story/silvers-discount-gold-sticks-out/story.aspx?guid={C0A2E965-87CE-4676-8A55-E0B3BF3DBD3E}&tool;=1&dist;=bigcharts&print;=true&dist;=printMidSection
-The Hennessee Group, an adviser to hedge fund investors, believes silver is currently under-priced relative to gold and is therefore advising clients to accumulate positions in the precious metal. Charles Gradante, co-founder of the Hennessee Group, says: ‘While we see both gold and silver as safe haven investments, particularly as a hedge against the longer term risk of hyper-inflation, we believe gains in silver will outpace gold.
‘The gold to silver ratio has reached elevated levels in recent months due in large part to gains in gold. And while we expect gold to continue experiencing gains, we anticipate silver to outperform on a relative basis and lead to a reversion in the gold to silver ratio.’
The Hennessee Group believes the supply/demand dynamics of silver present a strong case for the appreciation in the precious metal going forward, specifically due to its increased global industrial demand (caused by emerging markets) outpacing supply. Read more here-http://www.hedgeweek.com/articles/detail.jsp?content_id=307118
-’Silver is money as well as Gold’. Quite simply Silver is in a bull market and has not seen any overly enthusiastic investment yet. The price has risen sharply over the past few years, from $4 in 2002 to over $20 today. Read more here-http://www.commodityonline.com/news/Silver-is-money-as-well-as-Gold-16047-3-1.html
-It is one thing to analyze on a long-term basis, and quite another to make short-term predictions. There is no doubt in my mind that silver is a rock solid long-term investment opportunity, with an absolutely spectacular risk to reward ratio and value. It’s just a matter of time before silver is priced substantially higher. As I try to point out week after week, the rise in the price of silver is inevitable. That’s all that should matter to long-term investors. Silver is the ultimate buy and hold.
Asked when this dramatic silver price rise will take place, I have always answered that the exact timing is impossible to know, even though prices have already climbed substantially over the past few years. The important point is that prices are still depressed, principally due to the manipulation, offering the long-term investor an attractive entry opportunity. Still, silver is a very interesting topic to many of us, and it is hard not to try to consider the short-term factors. Ted Butler-Read more here-http://news.silverseek.com/TedButler/1237228354.php
-David Morgan silver commentary. Read more here-http://news.silverseek.com/SilverInvestor/1236922191.php
-Is the Gold/Silver ratio nearing a peak? Read more here-http://www.fxstreet.com/technical/market-view/is-the-goldsilver-ratio-nearing-a-peak/2009-03-18.html
-Falling gold-silver ratio is bullish for precious metals. Read more here-http://www.commodityonline.com/news/Falling-gold-silver-ratio-is-bullish-for-precious-metals-15994-3-1.html
-Highly volatile, but silver to rule for sometime. Read more here-http://www.commodityonline.com/news/Highly-volatile-but-silver-to-rule-for-sometime-15973-3-1.html
-Why Silver plays second fiddle to Gold. Read more here-http://www.commodityonline.com/news/Why-Silver-plays-second-fiddle-to-Gold-16000-3-1.html
-James Turk: Extraordinary stress in the silver market. Turk reports that the silver market has been in backwardation for 38 days, which he believes is unprecedented and signifies enormous stress in the market a serious shortage. Backwardation is when material for immediate delivery is priced higher than material for later delivery, often because buyers doubt that the material can be delivered later. Read more here-http://goldmoney.com/en/commentary/2009-03-15.html
-Got Gold Report notes ’shocking’ short concentration in silver. Read more here-http://www.gata.org/node/7267
TRILLIONS PRINTED OUT OF THIN AIR
-Fed launches bold $1.2T effort to revive economy. With the country sinking deeper into recession, the Federal Reserve launched a bold $1.2 trillion effort Wednesday to lower rates on mortgages and other consumer debt, spur spending and revive the economy.
To do so, the Fed will spend up to $300 billion to buy long-term government bonds and an additional $750 billion in mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac. Fed Chairman Ben Bernanke and his colleagues wrapped a two-day meeting by leaving a key short-term bank lending rate at a record low of between zero and 0.25 percent. Economists predict the Fed will hold the rate in that zone for the rest of this year and for most if not all of next year.
The decision to hold rates near zero was widely expected. But the Fed’s plan to buy government bonds and the sheer amount $1.2 trillion of the extra money to be pumped into the U.S. economy was a surprise. “The Fed is clearly ready, willing and able to be the ATM for the credit markets,” said Terry Connelly, dean of Golden Gate University’s Ageno School of Business in San Francisco. Read more here-http://news.yahoo.com/s/ap/20090319/ap_on_bi_ge/fed_interest_rates or http://www.nytimes.com/2009/03/19/business/economy/19fed.html
or http://www.bloomberg.com/apps/news?pid=20601087&sid;=aO1HjC9dTCBM&refer;=home or http://www.iht.com/articles/2009/03/18/business/fed.php
-IMF poised to print billions of dollars in ‘global quantitative easing’. The International Monetary Fund is poised to embark on what analysts have described as “global quantitative easing” by printing billions of dollars worth of a global “super-currency” in an unprecedented new effort to address the economic crisis. Read more here-
-Bank of England policy makers voted unanimously to start printing as much as 75 billion pounds ($105 billion) in money to fight the recession as they made their final cut in the benchmark interest rate. The bank, in its first vote on so-called quantitative easing, agreed the sum to spend over three months after debating purchases between 50 billion pounds and 100 billion pounds, according to minutes of the March 5 decision released in London.
All nine policy makers backed a half-point cut in the key rate to 0.5 percent and to pay no interest on overnight deposits. Governor Mervyn King said yesterday that the outlook for inflation will determine when policy makers reverse the program of buying bonds with newly created money and start raising interest rates. The bank last month forecast that inflation will slow to 0.3 percent in 2011, below the 2 percent target.
“The initial program of asset purchases needed to be on a scale large enough to demonstrate that the committee would do whatever was needed to boost nominal spending sufficiently to keep inflation at target in the medium term,” according to the minutes released today. “Should the first injection prove too small, there was a risk that observers would wrongly infer that such asset purchases were not an effective policy tool.” Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aAoeQUhSK4Ko
-China’s new loans more than quadrupled in February from a year earlier after the government pressed banks to support a 4 trillion yuan ($585 billion) stimulus package for the world’s third-biggest economy.
Banks extended 1.07 trillion yuan of local-currency loans, the central bank said on its Web site today. M2, the broadest measure of money supply, climbed 20.5 percent from a year earlier, the fastest pace in more than five years, after growing 18.8 percent in January. Read more here-http://www.bloomberg.com/apps/news?pid=20601080&sid;=a.m6cK4ZzxpM&refer;=asia
-Bank of England warns tensions in banking system at fever pitch. Tensions in the financial system are approaching the fever pitch they reached before the collapse of Lehman Brothers last October, the Bank of England has warned. Read more here-http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4996806/Bank-of-England-warns-tensions-in-banking-system-at-fever-pitch.html
-Trace Meyer: Fed will fail with quantitative easing. Read more here-http://www.gata.org/node/7278
AIG BONUS SCANDAL
-The U.S. House, moving swiftly in response to public outrage, voted to impose a 90 percent tax on employee bonuses at American International Group Inc. and other companies getting at least $5 billion in taxpayer bailout funds.
The 328-93 vote came amid a national furor over $165 million in bonuses paid last week by AIG after it received $173 billion in federal bailout funds. The measure would cover companies receiving 75 percent of federal bailout funds, according to the House Ways and Means Committee. “These people are getting away with murder,” said Ways and Means Chairman Charles Rangel of New York. “They’re getting paid for the destruction they’ve caused to our communities.”
The 90 percent tax would apply to people with income exceeding $250,000, including bonuses. The tax would apply to bonus payments made after Dec. 31, 2008, and it would cease when the U.S. government’s investment in the company fell below $5 billion. The tax wouldn’t apply to any bonus returned to a company. The tax wouldn’t apply to commissions or fringe benefits.
About $3.6 billion in Merrill Lynch & Co. bonuses wouldn’t be affected by the new legislation because they were paid before Dec. 31. Bonuses for employees at Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley would be affected because they were paid after Dec. 31. The measure also would affect employees of Fannie Mae and Freddie Mac, Rangel said Wednesday. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aoM5xj0ITgQM&refer;=home#
or http://www.bloomberg.com/apps/news?pid=20601110&sid;=abB3un2F_9jY
-Senators Propose 70% Tax on Bonuses for TARP Workers. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a8ACNNjDheOQ&refer;=home
-Bonus tax: Feels good, but is it? Running on grassroots rage, House passed a bill to recapture dollars from AIG bonuses. Senate is next. Tax experts weigh in on whether it’s a smart move. Read more here-http://money.cnn.com/2009/03/19/news/economy/bonus_tax_policy/index.htm?postversion=2009031918
-Judge orders release of Merrill bonus recipient names. Read more here-http://www.cnn.com/2009/US/03/19/merrill.lynch.bonuses/
-Four Fannie Mae execs to get big bonuses. Read more here-http://edition.cnn.com/2009/BUSINESS/03/18/fannie.bonuses/index.html
DEFINITIONS-QUOTES-QUICK HITS
-Communism is a socioeconomic structure and political ideology that promotes the establishment of an egalitarian, classless, stateless society based on common ownership and control of the means of production and property in general. Karl Marx posited that communism would be the final stage in human society, which would be achieved through a proletarian revolution.
“Pure communism” in the Marxian sense refers to a classless, stateless and oppression-free society where decisions on what to produce and what policies to pursue are made democratically, allowing every member of society to participate in the decision-making process in both the political and economic spheres of life. Read more here-
http://en.wikipedia.org/wiki/Communism
-The term quantitative easing refers to the creation of a pre-determined quantity of new money ‘out of thin air’ through open market operations by a central bank as the start of a process to increase the money supply. This new money is injected into the private banking system when the accounts of the vendors of the securities purchased by the central bank through the open market operations are credited. Read more here-http://en.wikipedia.org/wiki/Quantitative_easing
-What is Debt Monetization? Debt monetization occurs when a nation’s central bank (e.g. the Federal Reserve in the United States) buys government bonds. When a government’s expenses exceed its tax revenue, if nothing is done the government will draw resources (capital) out of the private market.
Since there is a limited amount of capital available in the market, there will be less available to fund business growth if the government takes out a substantial portion. If the debt is monetized, the capital is thereby returned to the private market. Excessive debt monetization can be inflationary, which in some eyes can be seen as a flat tax because the ultimate result is that the government acquires additional funds and the currency decreases in value.
However, monetization helps the government temporarily to meet its short term commitments at the beginning. On the other hand, some degree of debt monetization is useful for increasing the money supply, to keep up with increased production or economic growth. Read more here-http://economistsview.typepad.com/economistsview/2005/09/what_is_debt_mo.html or http://en.wikipedia.org/wiki/Monetize
-Liquidity is when you look at your retirement funds and wet your pants. Anonymous
-Men are so simple and so much inclined to obey immediate needs, that a deceiver will never lack victims for his deceptions. Machiavelli
-When you see that trading is done, not by consent, but by compulsion when you see that in order to produce, you need to obtain permission from men who produce nothing when you see money flowing to those who deal, not in goods, but in favours when you see that men get richer by graft and pull than by work, and your laws don’t protect you against them, but protect them against you when you see corruption being rewarded and honesty becoming a self-sacrifice you may know that your society is doomed. Ayn Rand, Atlas Shrugged (1957)
-True individual freedom cannot exist without economic security and independence. People who are hungry and out of a job are the stuff of which dictatorships are made. Franklin D. Roosevelt
-Silver is ‘both a safe haven and financial insurance, but also has potential for significant returns perhaps more than any commodity, currency or asset class in the world today.’ Mark O’Byrne-Gold and Silver Investments
-Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort.” Antony C. Sutton-Read more here-http://en.wikipedia.org/wiki/Antony_C._Sutton
-I think we may still have a rally in the S&P; until about the end of April, and probably then a total collapse in the second half of the year sometimes, when it becomes clear that the economy is a total disaster. Marc Faber, CNBS, 17 March 2009
-As usual the “man in the street” and most of the public is selling their gold (jewellery scrap supply) while the smart money, many large investors and institutions are buying gold. The man in the street and the retail sector has not caught gold mania yet and is selling gold rather than buying. This in itself is a bullish contrarian indicator. Gold.ie
-Those who have talked with me personally about this, will confirm that I always say that when the real silver price move comes, they will not have to ask me if this is the real move. They will know it simply by observing the price action. It will be unmistakable. Ted Butler, 16 March 2009
-You ask about when to sell gold. There is a good argument that gold will not fall like it did in 1980. As gold reaches $1650, we will examine the sell question, but before that there is no need. Jim Sinclair
-We have consistently been advising that precious metals are for the “long term” and that the maintenance of staying power is the key to long term profitability. We have also suggested to all that with all of the woes of the world’s financial markets, and banking institutions, that “inflation’ and perhaps even, God forbid, hyperinflation is just around the corner. All we can say is “inflation, inflation, inflation”. All precious metals owners have to do is hold on and enjoy this long term ride. Precious Metals International
-Just on the basis of some preliminary work I’ve done, for April 2010 I’m forecasting a gold price of $1,375 to $1,468. Those are new numbers for me. I’ve not put them in writing nor said it before. As I recall, Jim Sinclair had something similar around $1,400 as well. This gives me great comfort because he’s been one of the best ever in gold trading.
Silver was oversold in its relationship to gold during the last quarter of 2008. It went to a $21.50 high and fell back to $8 plus change. Meanwhile gold was up much higher and didn’t fall nearly as far. During the last couple of months, silver has been playing catch-up in a faster rally buying mode than gold. It rose to the $13 to $14 range. There’s price congestion at $16 and $17 and there’s an obvious hard resistance at $21.50, where it was before.
For 2009, we must first achieve $21.50 and then see what happens. I don’t expect we can make $21.50 this spring. However, you could see $16 or $17. I’m looking for silver at $21.50 and perhaps something higher in the last quarter of 2009. Presuming we have no more Lehman events, silver might touch $25 to a potential $30 for a 2009 high. Roger Wiegand-Read more here-http://news.goldseek.com/GoldSeek/1237328142.php
-The Fed will print up to $300 billion to buy long-term government bonds and print an additional $850 billion to buy mortgage-backed securities issued by the discredited and now nationalised Fannie Mae and Freddie Mac ($1.15 Trillion in total). The Federal Reserve’s plan is extremely high risk and astute observers are very concerned regarding the potential for very significant inflation in the coming months.
This explains gold’s surge in value after the announcement. The huge scale of the debt monetization is unprecedented and may lead other central banks to follow the Federal Reserve leading to competitive currency devaluations which could result in an international monetary or currency crisis. The Federal Reserve is creating trillions of dollars in order to buy their own US national debt which resembles the monetary policies of Third World banana republics and will likely lead to a severe depreciation in the dollar in the coming months.
Talk of the dollar becoming confetti is hyperbole but the US authorities had better be careful that in their desperation to allay deflation they do not release the virulent forces of stagflation and even hyperinflation. Gold.ie
-You do not need to be highly qualified in economics to see where this is leading. You flood an indebted banking system with money, you get inflation and the relative value of fixed debt goes down. But this is not a magic bullet. You get inflation back in the system, and anybody on a fixed income becomes poorer as prices rise. If you are an investor your dollars become worth less, and eventually worthless.
That is why the gold price jumped this week. And it is going to go a lot higher as investors reach for a safe haven. Beware being left sat on cash when you should be owning gold and silver as a hedge against desperate actions by the central banks. Peter Cooper
-”Investors are worried the Fed will print as much money as they need to, and this is going to lead to some insanely hot inflation, so they’re out buying gold,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. “The dollar got clobbered. You print more money and it buys you less.” Bloomberg
“We’ve got a massive increase in the Fed’s balance sheet, and the markets are taking it to be both inflationary and as devaluing the dollar,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “This reinforces the potential for hyperinflation, which would drive commodity prices higher.” Bloomberg
-”Nobody anticipated the Fed would monetize debt,” said Leonard Kaplan, of Prospector Asset Management in Evanston, Illinois. “This is highly inflationary.” Whether this is the stimulus gold has needed to push it back over $1,000 remains to be seen, but Wednesday may well have marked a major turning point, as the inflation genie is out of the bottle now.
As Jim Sinclair, writing on jsmineset.com, exclaimed: “Mugabe is the Chairman of the Federal Reserve. What a horrible mistake this is! Now you can count on Confetti Money.” Nothing could be more gold bullish. Casey Daily Resource
-”The Fed is printing money to buy government debt,” said Tom Hartmann, a commodity analyst at AltaVest Worldwide Trading Inc. in Mission Viejo, California. “This stokes fears of inflation again that’s why we’re seeing gold take off.” Bloomberg
-The Swiss are probably wishing their currency were still gold-backed. Switzerland’s central bank said it will intervene to bring down the value of Swiss franc, and that’s very gold bullish, especially since if one of the world’s most solid currencies is going to be revalued downward, that could set off a chain reaction in which other countries may follow suit. Read more here-
http://www.ft.com/cms/s/0/a9ec76dc-0f40-11de-ba10-0000779fd2ac.html?nclick_check=1
-Platinum Gains Most in Six Months on Demand for Store of Value. Read more here-http://www.bloomberg.com/apps/news?pid=20601012&sid;=a9WNcmzHqd20&refer;=commodities
-Russia wants new international reserve currency. Read more here-http://www.gata.org/node/7261
-China said to support Russia on replacing dollar. Read more here-http://www.gata.org/node/7279
-U.N. panel says world should ditch dollar. A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies, a member of the panel said on Wednesday, adding to pressure on the dollar. Read more here-http://www.reuters.com/article/Funds09/idUSTRE52H2CY20090318
-China’s warning to the US: Honor your commitments. Beijing comments fuel fears China could offload its dollar reserves. Read more here-
-There is mounting evidence that China’s central bank is undertaking the process of divesting itself of longer-dated US Treasuries in favor of shorter-dated ones. There is also mounting evidence that China’s increasingly energetic new campaign of capitalizing on the global crisis by making resource buys across the globe may be (1) helping its central bank to decrease exposure to the dollar, while (2) simultaneously positioning China to make much greater profit on its investment of its reserves into hard assets whose prices are now greatly beaten down,
while (3) also affording it greatly increased control of strategic resources and the geopolitical clout that goes with it. This is turning out to be a win-win-win situation for China as it capitalizes upon the important opportunities afforded it by the present global crisis. Read more here-http://www.atimes.com/atimes/China_Business/KC18Cb01.html
-China has lost tens of billions of dollars of its foreign exchange reserves through a poorly timed diversification into global equities just before world markets collapsed last year. The State Administration of Foreign Exchange, the opaque manager of nearly $2,000 billion of reserves, started making huge bets on global stocks early in 2007 and continued this strategy at least until the collapse of the US mortgage finance providers Freddie Mac and Fannie Mae in July 2008, according to analysts and people familiar with SAFE’s operations.
By that point SAFE had moved well over 15 per cent of the country’s $1,800 billion reserves into riskier assets, including equities and corporate bonds, according to people familiar with its strategy. SAFE never discloses its holdings except to the top Chinese leadership, so it is impossible to know exactly how much it has lost from diversifying before markets crashed.
But judging from the subsequent fall in global stock prices and a conservative estimate that Safe held about $160 billion worth of overseas equities, Chinese losses on those investments would exceed $80 billion, or more than 50 per cent, according to Brad Setser, an economist at the Council on Foreign Relations in New York. Read more here-http://www.gata.org/node/7260
-Some in OPEC see $60 a barrel oil in 2009. Read more here-http://www.reuters.com/article/rbssEnergyNews/idUSLI67972320090318
-OPEC agreed to maintain current production quotas, concerned that a fourth cut since September risked increasing energy costs during the worst global economy in six decades. The Organization of Petroleum Exporting Countries, supplier of about 40 percent of the world’s crude oil, will aim to complete existing production cutbacks agreed to late last year and meet again on May 28 to review policy, Secretary-General Abdalla el-Badri said after yesterday’s meeting in Vienna.
OPEC members still need to trim about 800,000 barrels a day to comply with the record output reductions decided in December after oil slumped more than $100 a barrel from July’s record. Global inventories have started to fall, indicating the policy is working. A new cut threatened a price increase that could harm the economy, Saudi Arabian Oil Minister Ali al-Naimi said. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a_xYLno_MiPc&refer;=home
-Oil: Low prices are behind us. OPEC cuts and a pullback in investments are beginning to raise prices, but $147 is a long way off while the world’s economy remains in the doldrums. Read more here-http://money.cnn.com/2009/03/18/markets/oil_prices/index.htm
-Natural Gas Rigs Shutting Means Prices May Double. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=aP7N7ZkaXSAw&refer;=exclusive
-The Standard & Poor’s 500 Index may fall 25 percent in the next few months as earnings slump for a seventh quarter and the recession deepens, Morgan Stanley said. Read more here-
http://www.bloomberg.com/apps/news?pid=20601213&sid;=aUX5fDy9mtbQ&refer;=home
-The Standard & Poor’s 500 Index’s 17 percent ascent from March 9 through yesterday exceeded any advance by the main benchmark for American equities over a seven-day period since 1939, an indication to technical analysts that the rally may stall. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&refer;=home&sid;=aJZ0WGhBuJLs
-Naked Short Sales Hint Fraud in Bringing Down Lehman. The biggest bankruptcy in history might have been avoided if Wall Street had been prevented from practicing one of its darkest arts. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=aB1jlqmFOTCA&refer;=home
-Hedge-Fund Liquidations Jumped to Record in 2008. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aeFi3XUMI4iM
-U.S. household wealth fell by a record $5.1 trillion from October to December, almost twice the decrease in the previous quarter, as home values and stock prices plunged, Federal Reserve figures showed.
Net worth for households and non-profit groups decreased to $51.5 trillion, the lowest level in four years, from $56.6 trillion in the third quarter, according to the Fed’s quarterly Flow of Funds report yesterday. Wealth dropped $11.2 trillion in 2008 from the year before, the biggest annual decline since the government began keeping quarterly records in 1952. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&refer;=home&sid;=aaRlfL4VyFwU
-Canada’s household net worth fell the most since at least 1990 in the fourth quarter as stock prices dropped, government figures show. Read more here-
http://www.bloomberg.com/apps/news?pid=20601082&sid;=a.Px9uqUGnkM&refer;=canada
-U.S. credit card defaults rise to 20 year-high. Read more here-http://www.reuters.com/article/bondsNews/idUSN1639142420090316?sp=true
-The real story behind those greedy AIG bankers. Read more here-http://agonist.org/numerian/20090317/the_real_story_behind_those_greedy_aig_bankers
-A Massachusetts bank that has defied the odds and remained free of bad loans amid the economic crisis is now being criticized by the Federal Deposit Insurance Corp. for the cautious business practices that caused its rare success. Read more here-http://www.foxnews.com/story/0,2933,509584,00.html
-Auto Suppliers Getting $5 Billion in U.S. Assistance. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aG5_sobFbOxg&refer;=home
-Bank Medici, which managed $3.2 billion in funds that were invested in the Ponzi scheme operated by Bernard L. Madoff, will return its banking license after talks with possible buyers of the bank failed, the Austrian lender said Thursday. Read more here-http://www.iht.com/articles/2009/03/19/business/medici.php
-Citigroup eyes reverse split, defends $10 million office reno. Read more here-http://www.reuters.com/article/wtUSInvestingNews/idUSTRE52I3MU20090319
-Citigroup Inc. plans to spend about $10 million on new offices for Chief Executive Officer Vikram Pandit and his lieutenants, after the U.S. government injected $45 billion of cash into the bank. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aLYT6sSkjKzw
-CNN poll: Americans fear a new Great Depression. CNN poll reveals a growing number of Americans fear the recession could turn into another Great Depression. Read more here-
http://money.cnn.com/2009/03/17/news/economy/economy_poll/index.htm
-Pictures from the U.S. recession. View pictures here-http://www.boston.com/bigpicture/2009/03/scenes_from_the_recession.html
-Americans are in a collective state of financial depression as many admit they could only cover their bills for two months at most if they found themselves suddenly jobless, a nightmare more and more worry may come true. Read more here-http://www.marketwatch.com/news/story/Fears-grow-more-consumers-just/story.aspx?guid={504D22FD-CC66-4FC1-BF8D-2F199C2AD042}&print;=true&dist;=printMidSection
-Beverly Hills pawnshops snap up artwork, Rolexes. Read more here-http://www.breitbart.com/article.php?id=CNG.947e1a922805936ddb8dec512a872cdb.311&show;_article=1
-Jon Stewart puts spotlight on CNBC and meltdown. Read more here-http://news.yahoo.com/s/ap/20090313/ap_on_re_us/meltdown_financial_reporters
-British motor show cancelled for first time since 1939. Read more here-http://www.guardian.co.uk/business/2009/mar/19/automotive-industry-recession
-Undercover Putin in KGB Reagan Ruse. Read more here-
-The words of Howard Beale more true today than they were in 1976. Watch video here-http://www.youtube.com/watch?v=dib2-HBsF08
-Sesame Street Explains the Madoff Scandal. Watch video here-http://www.youtube.com/watch?v=XJ8OjAB_e3g
RARE COLORED DIAMONDS
-The Rare Colored Diamonds Historical Value Tracker system is the perfect tool for investors to view the potential future value of a rare colored diamond based on the current market trend of a particular type of diamond. Track the potential future value of colored diamonds here-http://www.rarecoloreddiamonds.com/HistoricalValueTracker.html
-Australia was the eighth largest producer of rough diamonds in 2007, according to the latest data compiled by the Kimberley Process. The vast majority of the country’s diamonds are produced at Rio Tinto’s fully owned Argyle mine. Rio Tinto reported in January that production at Argyle fell 12 percent to 5.3 million carats in the December quarter 2008.
The company has scaled back production at Argyle in response to prevailing weak economic conditions and as part of its debt-reduction scheme. Rio Tinto has also slowed down the transition of Argyle to underground mining for the same reasons. Diamonds.net-Read more here-http://www.diamonds.net/news/NewsItem.aspx?ArticleID=25685
-U.K. jeweler Laurence Graff sold a diamond for $5 million. Graff’s big transaction came on the VIP day last week at the European Fine Art Fair Tefaf in the city of Maastricht.
Graff sold an emerald-cut white diamond, of about 30 carats, for $5 million to a U.S. client. The highlight of his booth was a 20-carat blue diamond priced about 25 million euros.
“Cash is useless at the moment,” said Francois Graff, Laurence’s son, and chairman of the jewelers that bear his name. “The lower end of the jewelry market has slowed, but the gems at the top remain steady,” he said. Read more here-http://www.bloomberg.com/apps/news?pid=20601088&sid;=aQJ08IXwvmgQ&refer;=home
-Rare Colored Diamonds. Diamonds in Brilliant Colors Even Rarer Than Colorless. Read more here-http://minerals.suite101.com/article.cfm/rare_coloured_diamonds
U.S. DEBT-U.K. DEFICIT
-National debt hits record $11 trillion. The eye-popping national debt surpassed $11 trillion Monday, the largest in U.S. history. The new Treasury Department figures on the national debt were released as the non-partisan Congressional Budget Office is expected to project that the annual budget deficit will be higher than previously estimated by the White House’s Office of Management and Budget. The debt, which refers to the cumulative amount of money the government owes, hit $10.9 trillion on Friday. Read more here-
http://www.politico.com/news/stories/0309/20139.html
-U.K. Budget Deficit Swells to 9 Billion Pounds as Taxes Slump. Britain had a 9 billion-pound ($12.8 billion) budget deficit in February, the biggest for the month in at least 16 years, as the recession slashed tax receipts and the highest unemployment in a decade drove up spending. The shortfall compares with 1.1 billion pounds a year earlier, the Office for National Statistics said in London. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=axW.JBk4.7W0
GLOBAL RECESSION-DEPRESSION?
-World economy to shrink ‘for first time in 60 yrs’. The International Monetary Fund Thursday said that the world economy, reeling from financial crisis, was on track to shrink for the first time in 60 years in 2009, by as much as 1.0 percent. Read more here-http://www.breitbart.com/article.php?id=CNG.fe9fec32d48b8af35fec6efbf0bf940b.461&show;_article=1
-The recession that started as a slump in the U.S. housing market has rippled its way across the globe taking down every economy in its path. One estimate warns that job losses during this recession could top 50 million worldwide by the end of 2009. With most key indicators pointing towards a prolonged recession, if not depression, the unemployment lines might make the bread lines of the Great Depression once again a familiar sight. Casey Charts
-President Barack Obama’s top economic adviser said it’s impossible to predict when the recession will end and cautioned that monthly job losses of about 600,000 are unlikely to end soon. Lawrence Summers, director of the White House’s National Economic Council, said on ABC’s “This Week” program that job cuts are “probably not going to stop imminently.” When asked if the economic downturn is over, he said, “no one can make that judgment.” Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=agWe6qXeItgs
-Krugman Says Relatively Mild U.S. Recession Became a ‘Plunge.’ Nobel laureate economist Paul Krugman said the world is in a “coordinated global slump” that “looks worse in Europe and in Japan” than in the U.S. and he called for more public spending to combat the crisis.
“What began as a relatively mild recession” in the U.S. “has now turned into a plunge,” Krugman said in Brussels today. “This is a crisis that’s hitting manufacturing really hard.” Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=ab5gjFF0veXo
-Ben Bernanke’s Greatest Challenge. Fed Chairman Discusses Recession, Financial Rescues And Recovery In Wide-Ranging 60 Minutes Interview. Watch and read more here-
http://www.cbsnews.com/stories/2009/03/12/60minutes/main4862191.shtml
-Britain showing signs of heading towards 1930s-style depression, says Bank. Britain is showing signs of sliding towards a 1930s-style depression, the Bank of England says today for the first time. Read more here-http://www.telegraph.co.uk/finance/financetopics/recession/4996994/Britain-showing-signs-of-heading-towards-1930s-style-depression-says-Bank.html
JIM ROGERS-BAILOUTS ADD TO RISK OF DEPRESSION
-The U.S. risks sending the world into a depression as its bailouts of failed companies rob healthy businesses of capital, investor Jim Rogers said. “The U.S. is taking assets from competent people and giving them to incompetent people,” said Rogers, chairman of Singapore-based Rogers Holdings and the author of books including “Investment Biker” and “Adventure Capitalist.” “That’s bad economics.”
The U.S. government should let American International Group Inc. go bankrupt, Rogers added in a Bloomberg Television interview today. AIG, whose fourth-quarter loss was the worst in corporate history, had earmarked $1 billion in retention pay for about 4,600 of the company’s 116,000 employees so they won’t leave the insurer.
The Treasury this week intends to provide more information about a $1 trillion plan to remove distressed mortgage assets from banks’ balance sheets. The Federal Reserve is also scheduled this week to start the first phase of a $1 trillion program to revive the market for securities backed by consumer and business loans.
The Treasury forced the New York-based insurer to reduce some retention payments in 2009 by 30 percent. AIG said it still planned to distribute about $165 million in payments because of legally binding contracts. The U.S. is repeating the mistakes made by Japan in the 1990s and risks creating “zombie banks” by rescuing failed lenders that should have been allowed to go under, Rogers said. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ak4qxkA34RHE&refer;=home
-Jim Rogers Interview on the Impending Depression. Watch video here-http://axisoflogic.com/artman/publish/article_29859.shtml
REAL ESTATE
-The median home price in San Francisco Bay Area last month dropped below $300,000 for the first time in almost a decade, spurring an increase in sales, MDA DataQuick said today. The median price fell to $295,000, down a record 46 percent from $548,000 a year earlier and reaching the lowest level since 1999, the San Diego-based real estate research company said in a statement. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&refer;=home&sid;=alP0is59EVdo
-Lost Bonuses Mean Manhattan Home Prices to Drop Most Since ‘80. Patty Farmer bought a $5.6 million one-bedroom apartment at the Plaza on Fifth Avenue in 2006, when buyers were lining up for the landmark building. When she put it up for sale two years later for $8.4 million, there were no takers.
“The offers were so silly,” said Farmer, a former model who manages her own money for a living. “People were like: ‘Oh, an apartment in the Plaza, why don’t you show it to me?’ But people weren’t buying.” She took the unit off the market in December.
Manhattan apartment sales declined 23 percent last year as the Dow Jones Industrial Average fell the most since the Great Depression. Now co-operative and condominium prices are dropping as Wall Street firms cut the bonuses that contributed to the property market boom of the past decade.
A 50 percent reduction in bonuses would push down prices by about 24 percent from their peak through mid-2010, said Sam Chandan, chief economist at property research firm Real Estate Economics LLC in New York. That would mark the biggest slide since 1980 when appraiser Miller Samuel Inc. started tracking Manhattan prices.
“This will probably be the worst price correction the city has seen,” said Marisa Di Natale, senior economist at Moody’s Economy.com in West Chester, Pennsylvania. When bonuses climbed 114 percent between 1998 and 2000, Manhattan co-op and condo prices followed, rising 51 percent during those years, data compiled by Miller Samuel show. Read more here-
http://www.bloomberg.com/apps/news?pid=20601213&sid;=afditfRjlofE&refer;=home
-Investors find real estate gold in Detroit. Jeremy Burgess likes the location and layout of the three-bedroom, one-and-a-half bath home in the Grandmont neighborhood of Detroit, Michigan.
The home is large for the area, around 1,600 square feet. By far the most attractive feature for Burgess is the price. While he says it may appraise at around $110,000, he bought it on March 11 for a mere $12,000. “I’m selling it next week to an out-of-state investor for a little over $17,000,” he says. Read more here-
http://www.cnn.com/2009/US/03/17/rtr.detroit.opportunity/index.html
-Corporate meltdown leaves renters in limbo. Large apartment complexes abandoned to receivership and unruly weeds. Read more here-http://www.msnbc.msn.com/id/29697413/
-London Homes Offer U.K.’s Worst Rental Prospects, Survey Shows. London’s rental home market was the worst regional performer in the U.K. for the three months ended Jan. 31 as a record number of properties were up for lease, the Royal Institution of Chartered Surveyors said. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&refer;=home&sid;=a.OZJseoZ9fQ
-Homebuilder confidence near record low. Index unchanged in March as economic concerns continue to depress the market. Read more here-
http://money.cnn.com/2009/03/16/real_estate/homebuilder_confidence/index.htm?postversion=2009031613
-Mortgage fraud at an all-time high. As the number of home sales dwindles and lenders tighten requirements for dolling out loans, desperation breeds dishonesty. Read more here-
http://money.cnn.com/2009/03/16/real_estate/mortgage_fraud/index.htm?postversion=2009031616 or http://www.usatoday.com/money/economy/housing/2009-03-16-mortgage-fraud_N.htm?csp=34
© 2011, Worldwide Precious Metals.
www.wwpmc.com
The GoldBugg Report – March 24 , 2009
Posted by Worldwide Precious Metals on Tuesday, March 24, 2009
Memo to All Retail Dealers
March 18, 2009
The downward turn in the prices of Gold, Silver, Platinum and Palladium earlier this week (Monday, Tuesday & Wednesday through to the NY Close at 1:30 p.m.) has been caused predominantly by the upward price movement of the Dow, Citi, Bank America, and Wachovia.
Today’s lows for Silver $11.89 and Gold $882.70 surely must have had all wondering and perhaps even disheartened.
We have consistently been advising that Precious Metals are for the “Long Term” and that the maintenance of staying power is the key to Long Term profitability.
We have also suggested to all that with all of the woes of the World’s Financial Markets, and Banking institutions, that “inflation’ and perhaps even, God forbid, hyperinflation is just around the corner.
Well for the first time the Fed actually;
1. Came to the Rescue of Precious Metals Prices and;
2. Have clearly shown they are turning a blind eye, or perhaps purposefully using inflationary tactics to bring about a recovery.
1. Today the Federal Reserve took steps to almost double its balance sheet to THREE Trillion dollars by
2. Adding an additional 750 Billion to purchase Mortgage backed securities.
3. Stating they will purchase 300 Billion in Long Term Treasuries over the next 6 months; and
An additional 100 Billion in agency debt bring the total to 200 Billion.
Their actions announced at 2:15 pm NYT caused the following
1. An immediate across the board downturn of the US Dollar against all major currencies.
2. An immediate an dramatic rebound in the prices for Gold and Silver ($48.00 up on Gold and .78¢ up on Silver within a matter of 5 minutes)
All we can say is “Inflation, Inflation, Inflation”. All Precious Metals Owners have to do is Hold on and enjoy this Long Term Ride.
Trading Department – Precious Metals International, Ltd
© 2011, Worldwide Precious Metals.
www.wwpmc.com
Memo to All Retail Dealers
Posted by Worldwide Precious Metals on Wednesday, March 18, 2009
The GoldBugg Report – March 17 , 2009
March 17, 2009
WORLD FINANCIAL REPORT ON RADIO MARCH 13 2009 SHOW
Last Week in Review
The Dow closed the week up 709 pts from Last Friday’s close of 6514 and now stands at 7233.
We did see the market test below 6500 in early trading but comments for Citi’s, Mr. Pandit and the Fed’s Mr. Bernanke some how seemed to re-assure “investors” that the worst is over.
Even our friend at CNBC Mr. Mark Haynes, has miraculously turned positive and actually stuck his neck out and called the Early Week Lows as the “Bottom” of the downward spiral. Someone at CNBC must have had a talk with Mark. So we’ve lost the only realist at CNBC.
Most of the week saw serious and boring coverage of “POOR” Mr. Madolf who made off with over 50 Billion and expects everyone to believe he did it “all by himself.” The only good news is the Judge finally put this crook behind bars, pending his final sentencing.
The most important news and yes its “true”, China is now making serious statements about the potential of cashing in their US Treasuries. There’s a movie starring Kris Kristofferson called “Rollover”, we suggest as worth while viewing. Its not about the Chinese, it’s about the Saudi’s pulling their money out of the US and what it did to the price of Gold. (Pure Fiction of Course) Surely nothing like this could ever happen!!!!! COULD IT????
Precious Metals had a bit of a bumpy ride this week but finished with what seems to be becoming a habit of Down at the Beginning of the week and recovering to key Support Levels toward the end of the week.
Here are your short term Support and Resistance Levels for the upcoming week
We have a few comments about the Dow and the US Dollar.
The Dow
As we mentioned in our Feb. 28th memo, we believe the Dows upside activity this week is the “manipulated short term Bear Market Rally” we discussed. As we approach the end of the 1st Quarter of 2009, Hedge Funds, Mutual Funds and the Banks are back in the markets conducting short covering and looking to increase the Net Value of their portfolio by the end of the quarter. We feel this is predominately, “Fee Based” and therefore the Rally will quickly run out of Steam after the quarter is finished March 31st 2009. If you have not exited your stocks, this might be your last opportunity prior to the next downward move.
The US Dollar
With the mere thought of the Chinese cashing out of their US Treasuries, the markets and the world should become extremely concerned of a rapid retracement of the US Dollar. We will have to watch this very closely.
As always volatility should continue so be conservative, pro-active and do not overextend your capability to stay the Long Term as Current Precious Metals Prices are very attractive for Long Term appreciation and insurance.
Trading Department – Precious Metals International
Worldwide Precious Metals will be at the Calgary Resource & Clean Energy Investment Conference
April 4 &5, 2009. Conference is free if you pre-register now at: http://www.cambridgehouse.ca/ch_calgary2009.html#exhibitors
Call Worldwide Precious Metals for more details, 1-866-623-2002.
GOLD
-Gold may hit $2,000 if dollar falls: Schroders. Read more here-http://www.reuters.com/article/GlobalMiningandSteel09/idUSTRE5282EF20090309
-Gold will hit $2,000 this year: Greg McCoach. Yes. This is where you’re going to see gold really go to levels that people can’t even comprehend. Up to this point, gold has been a surprise to many in the mainstream media. What investors need to understand about the bull market in gold thus far is that the numbers that we’re dealing with, $960 an ounce gold right now, is nowhere near the 1980 high in gold of $875 an ounce.
You have to inflation-adjust those 1980 numbers for 28 years of true inflation. If you did that, the $875 high in gold would have to be $6,500 an ounce in inflation-adjusted terms. For silver, it’d be $400 dollars an ounce. So when you see silver at its current rate of $14 an ounce and gold at $960 an ounce, in real inflation-adjusted terms, those prices are still dirt cheap, relatively speaking, compared to where they’re going to be going.
As we see the world financial system continue to unravel, the dollar along with all fiat currencies will just implode leaving gold as the currency of last resort. Gold, and silver will go into the stratosphere as this happens. People need to remember that what took gold and silver to their all-time highs in 1980 pales in comparison to what we are dealing with now. The world has never witnessed the likes of the financial destruction that is now underway. It is truly frightening. Read more here-
http://www.commodityonline.com/news/Gold-will-hit-$2000-this-year-Greg-McCoach-15821-3-1.html
-Four digit floor and record highs predicted for gold this year and forward Blanchard. Donald Doyle, Chairman and and CEO of gold coin dealers Blanchard & Co is looking to a four digit gold price floor this year as investors fear inflation or even hyperinflation.
Considering the federal government’s stimulus package and bailout initiatives, pouring hundreds of billions of dollars into the economy and guaranteeing investments, loans, and deposits worth about $8 trillion, analysts at Blanchard and Company say these actions will create rampant inflation and dollar devaluation that will drive gold to $1,500 this year, and higher over the long-term.
“Confronted with a collapsing economy and a dysfunctional financial system, the Fed has vastly expanded its balance sheet, essentially creating money out of thin air to fund a variety of new programs,” says Donald W. Doyle, Jr., Chairman and CEO of Blanchard and Company.
“Think about it,” Doyle says. “If you add up just the funds that have already been committed to the current U.S. Bailout, you get a figure that is larger in today’s dollars than the cost of the Marshall Plan, the Louisiana Purchase, the New Deal, the Korean War, Vietnam, and the Savings and Loan crisis combined.”
Doyle says he believes that the most accurate forecast for future gold prices can be derived by scrutinizing investor activity, and investors of all varieties are buying gold bars and coins in record amounts, continuing to shun risky assets for the relative safety of bullion because of fears about the health of the global financial system.
“The fact that major investment banks like Morgan Stanley are forecasting inflation, and even admitting the possibility of hyperinflation in the years to come, suggests that investors will continue to increase their safe haven buying of gold,” Doyle says. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=79777&sn;=Detail
-UBS told investors on Tuesday to increase the weight of gold in their portfolios, warning that bullion prices could soar because the prospects of either deflation or inflation were “becoming more extreme.”
The Swiss bank, one of the most active gold dealers, warned of “a potential upside of $2,500 an ounce” as some hedge fund investors who made money last year by betting against investment banks are now buying gold as a way of betting against central banks.
“The current environment is one which can best be characterized as having a ‘low margin of error’ for central bankers; with the prospects for deflation or inflation as becoming more extreme,” said Daniel Brebner, an analyst at UBS in London. “Given the broad uncertainties in the current macro climate we believe that investors should look to gold given its historic tendency to act as a hedge against these risks.” Read more here-http://216.157.72.247/wp-content/uploads/2009/03/gold_q_09-upsideo-to-2500-per-oz.pdf or http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=80076&sn;=Detail
-Jim Willie CB on Gold & the Panic Phase. During the panic phase, the response in the gold & silver prices will be profound, with advances to date only a prelude to a march to $2000 gold and $50 silver. Read more here-http://www.321gold.com/editorials/willie/willie030609.html
-Sovereign wealth fund official recommends gold, wary on dollar and sterling. Yeoh Lam Keong, director of economics and strategy for one of the world’s largest sovereign wealth funds, reckons gold, sovereign bonds and some key currencies would be best investments.
An official from the Government of Singapore Investment Corp. (GIC) said he expects more weakness in financial markets in the next 12-18 months, and recommended investors hold gold and other safe assets such as government bonds. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=80031&sn;=Detail
-In their new essay, “As Safe as Gold,” Eric Sprott and Sasha Solunac make the case for the premier precious metal, and they’re careful to distinguish between real metal and exchange-traded-fund metal. Basically, they wouldn’t touch the GLD ETF with a ten-foot cattle prod and as you know neither would I. That goes for the SLV, too. “Why take the risk? Don’t settle for a paper asset a second-rate knock-off. In this environment, counterparty risk lurks around every corner. Buy the real thing: GOLD, not GLD.” Read more here-
http://www.sprott.com/pdf/marketsataglance/MAAG.pdf
-Bloomberg TV airs doubt about gold ETFs. Watch video here-http://www.bloomberg.com/avp/avp.htm?N=video&T;=Barratt%20Prefers%20Buying%20Physical%20Gold%20Over%20Miners%27%20Stocks%20&clipSRC;=mms://media2.bloomberg.com/cache/vS0rgfNuHBQs.asf
-Now you can see and hear Ambrose Evans-Pritchard, international business editor of The Telegraph in London, as he talks about gold with the Robert Miller of Telegraph TV. Evans-Pritchard says gold has decoupled from commodities, has regained its position as an international currency, and likely will continue to do well as central banks strive to avert debt deflation. Watch video here-http://www.telegraph.co.uk/finance/financevideo/?bcpid=3469233001&bclid;=1315742414&bctid;=14812960001
-In a world where most investment classes are taking a knock, gold has been firmly on the way up. The way things are going, $5,000 an ounce (one troy ounce equals 31.1 grams) for the yellow metal maybe a reasonable target in a few years, says John Rubino, co-author of The Collapse of the Dollar and How to Profit From It. Read more here-
http://www.dnaindia.com/report.asp?newsid=1237005
-Prognosticator Byron Wein: The Outlook for ‘09, Take 2. The price of gold would go to $1200 per ounce. I still feel terrific about that. Read more here-
http://www.time.com/time/business/article/0,8599,1883828,00.html
-With few technical or fundamental road signs left, two equity strategists have devised a top 10 list for investors searching for signs of a bottom not to be confused with a bear-market rally. At turns both serious and tongue-in-cheek, BNY ConvergEx Group analysts Nicholas Colas and Oren Klachkin offer the following as their top 10 signs of a market bottom. Gold at $2,000 an ounce. “Gold is the ultimate capital-markets panic play.
A quick double in the metal would be a strong contrarian indicator that it was time to buy stocks,” the analysts said. “I’m not sure I want to live in a world where gold is $2,000 an ounce. It would mean something is tremendously wrong. From an equity standpoint, the best thing you can say about gold right now is that it hasn’t broken out to record highs even in the face of uncertainty,” Colas said in an interview with MarketWatch. Read more here-http://www.marketwatch.com/news/story/analysts-devise-list-10-signals/story.aspx?guid={80474254-89F7-4859-80CC-9A9D807C28C8}&dist;=TNMostRead
“Gold is still an attractive portfolio diversifier for long-term investors, despite the risk of lower prices in the short term, Banc of America Securities-Merrill Lynch said in a research note on Thursday.
“There are significant risks to the yellow metal in the near term, in our view, but gold’s history of diversification continues to support a small allocation for longer-term-oriented portfolios,” the bank said. Investors often hold small amounts of gold to hedge against risk, which tends to affect the precious metal differently to other assets.
Analyst Francisco Blanch said gold could rise to $1,500 an ounce over the next three years, from just over $900 currently. Gold has been the third best diversifying asset to a U.S. equity portfolio in the last five years, after art and long-term treasuries, according to the bank’s analysts. They said investors seeking longer-term diversification “should include a small allocation of gold in a portfolio”. Read more here-http://in.reuters.com/article/domesticNews/idINLC46565220090312?rpc=401&
-Newmont CEO sees gold in range of $1,200. Read more here-http://www.reuters.com/article/GlobalMiningandSteel09/idUSTRE52A5N220090311
-Now or Never. Face The Gold Cliff & Buy. Buy gold now! Read more here-http://www.321gold.com/editorials/thomson_s/thomson_s_031109.html
-Wave of money to fuel inflation and boost gold. Read more here-http://uk.reuters.com/article/fundsNews/idUKLNE52A00N20090311
-Swiss investors pile in on money markets, gold. Read more here-http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSLQ36583820090311?rpc=401
-India’s love affair with gold continues. Read more here-http://www.commodityonline.com/news/Indias-love-forever-GOLD-15847-3-1.html
-Banks were January net buyers of 1.1 million oz of gold: CPM. Read more here-http://www.platts.com/Metals/News/7719694.xml?sub=Metals&p;=Metals/News&?undefined&undefined;
or http://www.gata.org/node/7250
-Fund managers cautiously bullish on gold. Read more here-http://www.reuters.com/article/GlobalMiningandSteel09/idUSTRE52952F20090310
-China energy head would buy more gold, oil, commodities. Read more here-http://www.gata.org/node/7242
-Jim Sinclair says the U.S. fed cannot contain gold. Read more here-http://jsmineset.com/index.php/2009/03/10/why-the-fed-cannot-contain-gold/
-Russia Today broadcasts interview with GATA board member Adrian Douglas. Watch interview here-http://www.gata.org/node/7248
-John Embry gold interview. Read more here-http://news.goldseek.com/GoldSeek/1236751500.php
-Barrick founder sets no limits on gold price. Read more here-http://www.gata.org/node/7236
-Patrick A. Heller: Number 1 reason to own gold. What do the following industry-leading companies have in common?
Alcoa, AIG, AMBAC, American Express, AMR (American Airlines), Bank of America, Bear Stearns, CBS, Citigroup, Countrywide Credit, Delphi, Dow Chemical, Eastman Kodak, Fannie Mae, Ford, Freddie Mac, Gannett, General Electric, General Motors, Goodyear Tire, Harley-Davidson, The Hartford, International Paper, JDS Uniphase, Lear, Lehman Brothers, Liz Claiborne, Macy’s, MBIA, Merrill Lynch, MetLife, MGIC, MGM, Motorola, JC Penney, Prudential, Saks, Sears, SprintNextel, Tenet Healthcare, UAL (United Airlines), United States Steel, Wachovia Bank, Washington Mutual, Whirlpool, and Xerox.
The answer: Since the middle of 2007, all of these companies have seen their stock values decline by more than 80 percent. At the close of markets on June 29, 2007, gold was at $648. Its price now is more than 40 percent higher than it was then. Gold has outperformed the stocks in these companies by at least seven-fold in the past 20 months. Read more here-http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId;=6302
-Gold dehedging decelerates – but may pick up again on investor appetite for gold upside. The delivery profile for the gold miners’ hedge book at end-December calls for deliveries of 60 tonnes this year and 70 tpa through to 2012. Investor appetite for upside price exposure, however, means that the actual rate is likely to be higher. Read more here-
http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=80084&sn;=Detail
-Hedge funds buying much more paper gold than the real metal. Read more here-http://www.gata.org/node/7240 or http://www.gata.org/node/7237
-Michael Kosares: Gold coin shortage likely to become chronic. Read more here-http://www.gata.org/node/7239
-While safe-haven buying is pushing gold higher, the global economic slowdown is suppressing the price of crude, driving the gold/oil ratio to 21, well above its 40-year average near 15. Translation: expect higher gold and lower oil. Casey Charts
SILVER
Gold to silver ratio at 80 to 1 with gold at $1,300 the silver price would be $16.25
Gold to silver ratio at 70 to 1 with gold at $1,300 the silver price would be $18.57
Gold to silver ratio at 60 to 1 with gold at $1,300 the silver price would be $21.67
Gold to silver ratio at 50 to 1 with gold at $1,300 the silver price would be $26.00
Gold to silver ratio at 15 to 1 with gold at $1,300 the silver price would be $86.67
-Speaking at the Prospectors and Developers of Canada Association (PDAC) annual convention, German investment fund manager Oliver Frank told the media that silver will likely end the year in the $25 per ounce. This bold projection is almost double current silver prices.
The reason for this unprecedented surge is a late surge in pent-up buying demand, particularly among Europeans. Frank, CEO of the Butzbach-based investment fund Silver Capital AG, said the heightened global investment demand will also help gold to breach the hallowed $1,500 mark by year’s end an appreciation of about 60% over its March 2005 spot price close.
Both scenarios should stem from investors continuing to flock to gold and silver as safe haven investments in response to the onset of a hyper-inflation in the US economy. Read more here-http://www.commodityonline.com/news/Gold-to-hit-$1-500-Silver-to-zoom-to-$25-15876-3-1.html
-Silver will seriously outshine Gold in 2009. Read more here-http://www.kitco.com/ind/Davis/printerfriendly/mar062009.html
-$35 silver in 2 years. Watch video here-http://cosmos.bcst.yahoo.com/up/player/popup/?rn=289004&cl;=12283291&src;=finance&ch;=633473 or http://www.thestreet.com/video/10466919/35-silver-in-2-years.html
-Silver beats gold for first time since 2006. Money managers are buying precious metals as a refuge from the 50 percent plus drop in the Standard & Poor’s 500 Index in the past year and growing concerns that Treasuries will fall as the U.S. government pledges $9.7 trillion to revive the economy. While gold will rise 25 percent this year, silver may jump 58 percent to $18 an ounce, said Philip Klapwijk, chairman of London-based precious metals research company GFMS Ltd.
“Silver will have a nice catch-up rally,” said Peter Sorrentino, who helps manage $15.5 billion at Huntington Asset Advisors in Cincinnati. “There’s a flight to precious metals as a storehouse of wealth. Silver got left behind and it’s been closing in quickly but there’s still a performance gap.” Huntington has about 7 percent of its assets in silver and 3 percent in gold.
“Silver’s woken up recently, but it isn’t flying yet,” said Chip Hanlon, president of Delta Global Advisors Inc. in Huntington Beach, California, which manages $1 billion. “As gold goes higher, it gets psychologically harder to pay for gold. So people turn to silver.” He expects silver to reach $20. Investors prefer precious metals to almost all other investments after more than $1.2 trillion of writedowns and losses at the world’s biggest financial companies sent the global economy into a recession.
“Silver is poor man’s gold, and there’s a lot more poor men than there used to be,” said Doug Hepworth, director of research in New York at Gresham Investment Management LLC. “Gold and silver are the only commodities that can overdo it in this environment.”
Silver jumped to $50 an ounce in early 1980 from $6 at the start of 1979 after Nelson and William Hunt of Dallas hoarded the metal. They were convicted in 1988 of conspiracy for attempting to manipulate prices and were forced to pay $130 million in fines.
“If enormous doom and gloom overwhelms financial markets, if you see investors are incredibly bearish and the Dow trading at 5,000, silver could get as high as $24,” said Jeff Christian, managing director of CPM Group in New York. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=arweARZI9J.Y&refer;=Canada or http://www.independent.ie/business/stocks-markets/silver-beats-gold-for-first-time-since-2006-1658772.html
-Ted Butler silver commentary. Read more here-http://www.investmentrarities.com/ or http://news.silverseek.com/TedButler/1236702001.php
-Coeur D’Alene CEO sees silver prices rising. Read more here-http://www.reuters.com/article/GlobalMiningandSteel09/idUSTRE52951220090310
-Gold bullish, silver volatile, ‘as no quick fix’ to global financial crisis is likely. ScotiaMocatta says silver outperformed gold last month, but volatility in silver is likely to remain high. PGM ETFs rising. Read more here-http://www.mineweb.co.za/mineweb/view/mineweb/en/page32?oid=79914&sn;=Detail
-UK House Prices in Terms of Ounces of Silver. Read more here-http://blog.goldassets.co.uk/2009/03/12/uk-house-prices-in-terms-of-ounces-of-silver/
DEFINITIONS-QUOTES-QUICK HITS
-Socialism refers to a broad set of economic theories of social organization advocating public or state ownership and administration of the means of production and distribution of goods, and a society characterized by equality for all individuals, with a fair or egalitarian method of compensation.
Modern socialism originated in the late 19th-century intellectual and working class political movement that criticized the effects of industrialization and private ownership on society. Karl Marx posited that socialism would be achieved via class struggle and a proletarian revolution, and would represent a transitional stage between the capitalist and communist modes of production. Read more here-http://en.wikipedia.org/wiki/Socialism
-When the great ship Titanic made her maiden voyage across the North Atlantic and its blinded leader struck the iceberg, it would have been absurd to announce: “All hands on deck to man a bucket brigade; this ship is too big to fail!”
To require men, women and children to try to bail out the Titanic until its final plunge, while its captain and officers took refuge in the few lifeboats is not unlike what taxpayers are being forced to do in this financial meltdown. Just as then, the correct response would be not “too big to fail,” but instead, “Too Big to Bail.” Charles Schisler, Buenos Aires Herald, March 7, 2009
-When the curtailment of government spending is imperative, they demand more welfare projects. When the need for men of productive ability is desperate, they demand equality for the incompetents. When the country needs the accumulation of capital, they demand that we soak the rich. When the country needs more savings, they demand a “redistribution of income.”
The Ayn Rand Letter July 1, 1974
-Government has no wealth of its own. Before it gives anything to anyone, it must take from those who produced it. John Stossel
-March 10 2009 is a date of an important and dubious Nasdaq anniversary: Nine years ago the tech-laden index closed at its all-time high of 5048.62. The Nasdaq closed Monday at 1268.64, 75% percent below the March 10, 2000 peak. Cnnmoney.com
-If you think your stock portfolio is sickly, consider how you would feel if you were an investor in Japan. Yesterday, stocks on the Tokyo market hit their lowest point since Oct. 6, 1982. Yes, 1982.
The last time Tokyo was this low, Ronald Reagan was in his first term, the Falklands War was about to break out in the South Atlantic, recording companies were introducing the compact disc, and rocker Ozzy Osbourne was still biting the heads off bats. The Nikkei 225 index was down 1.2 per cent from Friday, closing at 7,086.83 after more bad news about the U.S. and Japanese economies. Read more here-http://business.theglobeandmail.com/servlet/story/RTGAM.20090310.wibjapan10/BNStory/Business/?cid=al_gam_nletter_newsUp
-The past seventy-five years have seen the growth of government from a relatively small entity charged with defending the borders, adjudicating disputes, and delivering the mail, to a bloated nightmare creature whose tentacles reach into every corner of our existence. Doug Hornig, Casey Research
-We suspect that when the Dow hits 4,000 and the average pension fund will have assets to cover 30% to 40% of benefits. That said they will probably cut payouts by some 50% or more. This should occur in a year or two. In 2 to 3 years public pensions and Social Security will be cut an equal amount. You should start adjusting to these probable realities now by investing what you have in gold and silver related assets. Bob Chapman-Read more here-http://news.goldseek.com/InternationalForecaster/1236838320.php and
http://news.goldseek.com/InternationalForecaster/1236578820.php
-We have been down this road before. In 1974 global stock markets crashed and governments resorted to inflationary measures to reduce debts and bail out their economies. Gold prices initially took a sharp fall in 1975-6, a bit like last autumn, but then surged eight-fold into a spike in 1980.
History never exactly repeats itself, and central banks will surely be trying to do it differently this time. But if you want to put some money on them making even more policy errors – and they got us into this mess after all then buy and hold gold, or better still look at a diversified portfolio of precious metal stocks for higher performance, although you will have to live with the volatility as well. Peter Cooper-Read more here-http://news.goldseek.com/PeterCooper/1236605797.php
-I remain very bullish on precious metals. I don’t believe general equities are entering a new secular bull market and therefore won’t take away reasons to own gold. In fact, they appear to have strong potential to co-exist for awhile based on my belief that deflation is going to be replaced by inflation before most perceive at this time. In the early stages of inflation, general equities will be enhanced but eventually higher inflation should put an end to whatever run the stock market has. Precious metals meanwhile, should continue higher.
Despite all sorts of talk about a strong U.S. dollar and great gains over the last year or so, the U.S. Dollar Index remains trapped in a narrow trading range. Again, when the market isn’t fir-filling the expectations of the majority, it does many times suggest that belief is already baked into the price. I also believe its way overblown in how well the dollar has supposedly done. The Index went from 120 to 70 and has only managed to retrace not even half of that loss. If the dollar was truly still a safe haven, it would be much, much higher and gold wouldn’t be even close to $1,000 an ounce. Peter Grandich
-Investors would be wise to continue to “tune out” and ignore short term movements and focus on the big picture fundamentals of declining supply and very robust international demand for physical bullion. Gold likely remains in a secular bull market and corrections are normal and healthy. They force the weak hands out of the market and allow strong hands to increase their allocations providing strong foundations in order to support the next move up in prices.
This was seen very clearly in the 1970’s and in 1976 when gold fell by some 50% (from some $200/oz to some $100/oz) prior to rallying more than 800% to over $850/oz in 1980. We believe that the recent correction will be viewed similarly in the coming years. Gold.ie
-”Gold is under pressure as money flows back into the broader market,” according to Kevin Kerr, editor of Global Commodities Alert. In addition, Kerr said, “It seems that for the moment the inflation fears and systemic risk fears are starting to diminish and investors who have access to funds are starting to see opportunities in the other commodities as well as equities.”
But looking ahead, Kerr noted that, “Inflation remains a major problem down the road and all of this stimulus and printing of money is going to exacerbate it,” creating the strongest possible conditions for a prolonged gold bull market. Casey Daily Resource
-A “secular bull market” in commodities remains intact and prices of oil and copper will rebound in the second half, according to Theresa Gusman, the head of equity research for Deutsche Bank AG’s DB Advisors unit.
Government spending in China and the U.S. will boost infrastructure construction and spur gains in demand for industrial commodities, Gusman said today. Increasing cash injections will accelerate inflation and bring gains in gold prices, she said. Limited supplies and declines in exploration budgets will also help underpin raw materials, she said.
“Policy makers are hell-bent on stabilizing the financial system,” Gusman, who manages $215 billion, said at a meeting with reporters in New York. “This will bring greater demand for commodities and make prices go higher.” Read more here-http://www.bloomberg.com/apps/news?pid=20601081&sid;=aAx8xh9m5oQk&refer;=australia
-Rogers Says Farmers Will Drive Lamborghinis, Not Brokers. Watch more here-http://www.bloomberg.com/avp/avp.htm?N=av&T;=Rogers%20Says%20Farmers%20Will%20Drive%20Lamborghinis%2C%20Not%20Brokers&clipSRC;=mms://media2.bloomberg.com/cache/vIkN8p6h6t28.asf
-China to Overcome Global Recession First, Rogers Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aHIAbg22FYxo&refer;=home or http://www.gata.org/node/7238
-Huge cargoes of crude are anchored, awaiting a price hike. Read more here-http://www.financialpost.com/news-sectors/story.html?id=1363233 or http://www.bloomberg.com/apps/news?pid=20601109&sid;=aIb2RKA.AWu8&refer;=home%22target=%22_blank%22
-TCF Financial Corp., the Wayzata, Minnesota-based bank that never made a subprime loan and hasn’t lost money since 1995, is asking why it should help clean up the mess made by Wall Street. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=anmrn4H8hXfw&refer;=exclusive
-How Iceland blew itself up financially. Read more here-http://www.vanityfair.com/politics/features/2009/04/iceland200904?printable=true¤tPage;=all
-A.I.G., Where Taxpayers’ Dollars Go to Die. Read more here-http://www.nytimes.com/2009/03/08/business/08gret.html
-The Looting of America’s Coffers. Sixteen years ago, two economists published a research paper with a delightfully simple title: “Looting.” The economists were George Akerlof, who would later win a Nobel Prize, and Paul Romer, the renowned expert on economic growth. In the paper, they argued that several financial crises in the 1980s, like the Texas real estate bust, had been the result of private investors taking advantage of the government.
The investors had borrowed huge amounts of money, made big profits when times were good and then left the government holding the bag for their eventual (and predictable) losses. In a word, the investors looted. Someone trying to make an honest profit, Professors Akerlof and Romer said, would have operated in a completely different manner.
The investors displayed a “total disregard for even the most basic principles of lending,” failing to verify standard information about their borrowers or, in some cases, even to ask for that information. The investors “acted as if future losses were somebody else’s problem,” the economists wrote. “They were right.” Read more here-http://www.nytimes.com/2009/03/11/business/economy/11leonhardt.html?_r=1&ref;=business&pagewanted;=print
-45 percent of world’s wealth destroyed: Blackstone CEO. Read more here-http://www.reuters.com/article/wtUSInvestingNews/idUSTRE52966Z20090310
-U.S. household wealth fell by a record $5.1 trillion from October to December, almost twice the decrease in the previous quarter, as home values and stock prices plunged, Federal Reserve figures showed.
Net worth for households and non-profit groups decreased to $51.5 trillion, the lowest level in four years, from $56.6 trillion in the third quarter, according to the Fed’s quarterly Flow of Funds report today. The government began keeping quarterly records in 1952. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=amGoohXNCdss&refer;=home
or http://money.cnn.com/2009/03/12/news/economy/flow_funds/index.htm?postversion=2009031214
-Global Financial Assets Lost $50 Trillion Last Year, ADB Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aZ1kcJ7y3LDM&refer;=worldwide
-Largest U.S. pension plans’ assets fall $217 billion short. Read more here-http://www.usatoday.com/money/perfi/retirement/2009-03-11-pension-plan-assets-short_N.htm
-Norway’s sovereign wealth fund, the world’s third largest, lost a record 633 billion kroner ($90.5 billion) last year, wiping out gains since the fund started investing the country’s oil revenue 12 years ago. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aEjVEd6auCJY
-Obama: Economic crisis ‘not as bad as we think’. Read more here-http://www.breitbart.com/article.php?id=D96SP30G5&show;_article=1
-Obama still has the approval of the people, but the establishment is beginning to mumble that the president may not have what it takes. Read more here-
http://www.newsweek.com/id/188565/output/print
-Judge freezes Stanford’s assets. Allen Stanford is accused of running a massive Ponzi scheme. Assets to be frozen indefinitely. Read more here-
http://money.cnn.com/2009/03/12/news/companies/Stanford.reut/index.htm or http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aYoeAypDq1Kg
-Stanford, Invoking Constitutional Rights, Won’t Testify in Case. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aSBXbsrhUILM
-Madoff Is Guilty in Ponzi Scheme; Ordered to Jail. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&refer;=home&sid;=arlJGM_6.zsM#
-Millions are no longer millionaires. Research report shows the number of American households with $1 million net worth declined 27% last year. Read more here-
http://money.cnn.com/2009/03/11/news/economy/millionaires_2008/index.htm?postversion=2009031115 or http://www.bloomberg.com/apps/news?pid=20601213&sid;=adXPm5eV874A&refer;=home
-Gates is world’s richest as recession shrinks billionaires. Read more here-http://www.breitbart.com/article.php?id=CNG.5ce05834a0919b70bceb002f810b5e70.f91&show;_article=1
or http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=a1qg9z7jQ.DM Watch video here-http://www.breitbart.tv/?p=296163
RARE COLORED DIAMONDS
-The Rare Colored Diamonds Historical Value Tracker system is the perfect tool for investors to view the potential future value of a rare colored diamond based on the current market trend of a particular type of diamond. Track the potential future value of colored diamonds here-http://www.rarecoloreddiamonds.com/HistoricalValueTracker.html
-44% Drop in Australian Diamond Production Expected. Diamond production in Australia is expected to be slashed, the Australian Government said in an economic forecast Tuesday. Production in fiscal 2008-2009 is expected to fall to 13.618 million carats a 17.61 percent drop in volume. By comparison, in the 2007-2008 period, Australia’s diamond production totalled 16.528 million carats. Idexonline.com-Read more here-http://www.idexonline.com/portal_FullNews.asp?id=32033
RUN ON U.K. BANKS SEES INVESTORS PULL 1 TRILLION
A silent $1 trillion “Run on Britain” by foreign investors was revealed yesterday in the latest statistical releases from the Bank of England. The external liabilities of banks operating in the UK that is monies held in the UK on behalf of foreign investors fell by $1 trillion (£700bn) between the spring and the end of 2008, representing a huge loss of funds and of confidence in the City of London.
Some $597.5bn was lost to the banks in the last quarter of last year alone, after a modest positive inflow in the summer, but a massive $682.5bn hemorrhaged in the second quarter of 2008 a record. About 15 per cent of the monies held by foreigners in the UK were withdrawn over the period, leaving about $6 trillion. This is by far the largest withdrawal of foreign funds from the UK in recent decades about 10 times what might flow out during a “normal” quarter.
The revelation will fuel fears that the UK’s reputation as a safe place to hold funds is being fatally compromised by the acute crisis in the banking system and a general trend to financial protectionism internationally. This week, Lloyds became the latest bank to approach the Government for more assistance. A deal was agreed last night for the Government to insure about £260bn of assets in return for a stake of up to 75 per cent in the bank.
The slide in sterling it has shed a quarter of its value since mid-2007 has been both cause and effect of the run on London, seemingly becoming a self-fulfilling phenomenon. The danger is that the heavy depreciation of the pound could become a rout if confidence completely evaporates. Read more here-http://www.independent.co.uk/news/business/news/run-on-uk-sees-foreign-investors-pull-1-trillion-out-of-the-city-1639413.html
-The men who broke a bank. Eric Daniels and Sir Victor Blank took Britain’s safest bank and turned it into a basketcase and left the taxpayer on the hook too. Read more here-
17th U.S. BANK FAILS-WHAT HAPPENS WHEN A BANK FAILS?
-17th bank fails this year. The FDIC said that the failure of Freedom Bank of Georgia will cost it $36.2 million. Read more here-
http://money.cnn.com/2009/03/06/news/companies/bank_failure/index.htm or http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aGUhu.fda1AI
-Your Bank Has Failed: What Happens Next? 60 Minutes Gets A Rare Look At How The FDIC Takes Over Banks And Reassures Depositors. Read more here-
http://www.cbsnews.com/stories/2009/03/06/60minutes/main4848047.shtml
-IMF chief says bank cleanup too slow. Read more here-http://www.reuters.com/article/topNews/idUSTRE52A0QF20090311
-Five biggest U.S. banks are ‘dead men walking’. Read more here-http://www.gata.org/node/7245
NEXT CRISIS-CREDIT CARDS
-Whitney says credit cards are the next credit crunch. Prominent banking analyst Meredith Whitney warned that “credit cards are the next credit crunch,” as contracting credit lines will lower consumer spending and hurt the U.S. economy.
“Few doubt the importance of consumer spending to the U.S. economy and its multiplier effect on the global economy, but what is underappreciated is the role of credit-card availability in that spending,” Whitney wrote in the Wall Street Journal.
She said though credit was extended “too freely over the past 15 years” and rationalization of lending is unavoidable, what needs to be avoided was “taking credit away from people who have the ability to pay their bills.”
Whitney said available lines were reduced by nearly $500 billion in the fourth quarter of 2008 alone, and she estimates over $2 trillion of credit-card lines will be cut within 2009, and $2.7 trillion by the end of 2010. Read more here-http://www.reuters.com/article/newsOne/idUSTRE52921M20090310
-Counting cards at American Express. The global economic downturn prompts the big credit card issuer to try to rid itself of risky customers as default rates rise. Read more here-
http://money.cnn.com/2009/03/09/news/amex.growth.fortune/index.htm?postversion=2009030915
-Credit card delinquencies hit index record. For the second month in a row, a record number of U.S. consumers were late on their payments, according to Fitch. Read more here-
http://money.cnn.com/2009/03/10/pf/fitch_default/index.htm
-Credit Cards Raise ‘Canary in Coal Mine’ Alert at Canada Banks. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aX4Mnpl5yPeQ
U.S. BUDGET DEFICIT GROWS
-The record U.S. budget deficit widened further in February as a shrinking economy cut income-tax payments by companies and individuals. The excess of spending over revenue rose to $192.8 billion, still less than economists forecast, compared with a gap of $175.6 billion in the same month a year earlier. Spending was little changed at $280.1 billion, and revenue dropped 17 percent to $87.3 billion. Corporate tax revenue in the past five months has plunged 45 percent from a year earlier.
The deficit five months into the 2009 fiscal year already exceeds the record set in the entire previous year. Rising foreclosures and 14 straight months of job losses are cutting tax receipts while the government commits hundreds of billions of dollars of taxpayer funds to bolster the economy, now in its second year of recession. “The budget balance has deteriorated badly,” Steven Wood, president of Insight Economics LLC in Danville, California, wrote in a note to clients. “The budget deficit for fiscal year 2009 will rocket higher.”
Before today’s report, economists in a Bloomberg News survey forecast a February deficit of $205 billion. The median estimate was based on projections from 31 economists. During the first five months of fiscal 2009, which began Oct. 1, the country’s deficit swelled to a record $764.5 billion for the period, compared with a $265 billion shortfall during the same period a year earlier. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aGiQzUhSOlfA or http://money.cnn.com/2009/03/11/news/economy/treasury_budget/index.htm?postversion=2009031116
-The United States faces a Zimbabwe-style economic collapse if it keeps “spending a bunch of money we don’t have,” South Carolina Gov. Mark Sanford said Wednesday. Read more here-http://www.cnn.com/2009/POLITICS/03/11/stimulus.sanford/
IMF SEES GREAT RECESSION
-IMF Sees ‘Great Recession’ as Global Economy Shrinks. The International Monetary Fund expects the global economy to contract this year and the slump will be the worst “in most of our lifetimes,” Managing Director Dominique Strauss-Kahn said.
The global financial crisis that has slashed international trade can now be termed the “Great Recession,” Strauss-Kahn said in a speech to African central bank governors and finance ministers in Dar es Salaam, Tanzania today.
“The IMF expects global growth to slow below zero this year, the worst performance in most of our lifetimes,” Strauss- Kahn said. “Continuing deleveraging by world financial institutions, combined with the collapse in consumer and business confidence is depressing domestic demand across the world.”
The IMF had forecast in January that the global economy would expand 0.5 percent this year. The World Bank said in a March 8 report that the international economy was likely to shrink for the first time since World War II, and trade will decline by the most in 80 years.
European governments from Dublin to Athens have committed more than 1.2 trillion euros ($1.5 trillion) to protect their banking systems and leaders pledged to spend a combined 200 billion euros to try and lift their economies out of the worsening slump. The U.S. is spending $787 billion on an economic stimulus package to revive its economy. Read more here-
http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aSlPjPhmvqrY or http://www.iht.com/articles/2009/03/08/business/econ.php
-US Recession Could Last Up to 36 Months: Roubini. Read more here-http://www.cnbc.com/id/29598949
-Recession on track to be longest in postwar period. Read more here-http://apnews.myway.com/article/20090308/D96Q45M00.html
-Depression Dynamic Ensues as Markets Revisit 1930s. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=a1ItlrP4MeQQ&refer;=exclusive
BUFFETT-U.S. ECONOMY HAS FALLEN OFF A CLIFF
-Billionaire Warren Buffett, whose Berkshire Hathaway Inc. posted its worst results ever in 2008, said the economy “has fallen off a cliff” and that efforts to stimulate recovery may lead to inflation higher than the 1970s.
The American public is fearful, confused and changing their buying habits, which is showing up at Berkshire’s operating units, Buffett said during an appearance on the CNBC television network today. While the recession will end and future generations will live better than their parents, the economy “can’t turn around on a dime,” Buffett said, adding that some inflation is appropriate right now.
“We are doing things now that are potentially very inflationary,” he said. Buffett called on Congress to unite behind President Barack Obama, comparing the economic crisis to a military conflict that needs a commander-in-chief. “Patriotic Americans will realize this is a war,” he said.
Berkshire’s shares have lost almost half their value in the past year as the bear market dragged down financial assets and the recession put pressure on profit from the company’s more than 70 operating businesses. The Geico insurance unit and Dairy Queen ice cream business have gained ground while the jewelry units are “just getting killed,” he said.
Bailouts of the banking system and “quasi-banks” such as American International Group Inc. were necessary, even if everyone dislikes what’s been done to salvage the New York-based insurer, Buffett said. He favored insuring all bank deposits, and in response to a question about nationalizing lenders, Buffett said he doesn’t see any moral hazard in the U.S. seizing an institution when shareholders are already almost wiped out. Read and watch video here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a7Osj04vDEK8&refer;=home
or http://www.breitbart.tv/?p=293633
INFLATION-DEFLATION
-Pimco Predicts Inflation, Joining Buffett, Marc Faber. Pacific Investment Management Co. which runs the world’s biggest bond fund, joined investors Warren Buffett and Marc Faber in saying inflation will quicken, sounding a warning for Treasury investors. U.S. government and Federal Reserve efforts to snap the recession will increase costs for goods and services as soon as 2010, Pimco said in a report today on its Web site by Chris Caltagirone and Bob Greer.
Commodity producers are also delaying projects, which may limit supply and lead to higher prices when global growth resumes, according to Pimco. “Inflation will rise,” Pimco said. Treasury securities that give investors protection against higher prices in the economy are “attractive now.” Pimco is among a growing list of investors who are warning that programs to counter the U.S. slump will increase consumer prices as the economy starts to revive.
Investor Jim Rogers, author of the books “Hot Commodities” and “Adventure Capitalist,” said this week U.S. policies will hurt conventional Treasuries, those that don’t offer inflation protection. President Barack Obama is asking Congress to pass a budget that will result in a record $1.75 trillion deficit. He has already signed into law a $787 billion package of tax cuts and government spending. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aFftQ9jDTjsA&refer;=home
-36 South Investment Managers Ltd., a New Zealand-based hedge fund firm set up by derivatives traders, will close its Black Swan Fund after it gained 236 percent in the last 12 months and start a fund that wagers on inflation. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&refer;=home&sid;=aMnfuo6KKyQU
-The Bank of England opens a new front in its effort to ward off deflation this week as it prepares to buy government bonds with newly created money. The central bank said today it will purchase 2 billion pounds ($2.7 billion) of gilts, its first deployment in a three month plan that may see it spend 75 billion pounds. Read more here-
http://www.bloomberg.com/apps/news?pid=20601110&sid;=a.du3DDTqTxc
-Bank of England Governor Mervyn King, criticized for his initial response to the credit crisis, is now embarking on one of the biggest risks in British economic history. The central bank yesterday won authority to print as much as 150 billion pounds ($212 billion) and pump it into an economy facing its worst recession since World War II, after cutting interest rates close to zero. With markets clogged and economic activity shriveling, King can’t be sure the gamble will work. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=aX3izMTqAyJg&refer;=home
STOCK MARKET
-Roubini Says S&P; 500 May Drop to 600 as Profits Fall. The Standard & Poor’s 500 Index is likely to drop to 600 or lower this year as the global recession intensifies, said Nouriel Roubini, the New York University professor who predicted the financial crisis.
The benchmark index for U.S. stocks would have to slump 12 percent from last week’s closing level to meet his forecast. Roubini is assuming that companies in the S&P; 500 will report profit of $50 a share this year and investors will pay 12 times that for equities. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&refer;=worldwide&sid;=a0oeKmwfkr9k
-Graham Shows S&P; 500 Still Too High as Buffett Loses. Benjamin Graham, the father of value investing and mentor of Warren Buffett, would find most U.S. stocks expensive even after the Standard & Poor’s 500 Index dropped 56 percent in 17 months.
Graham measured equities against a decade of profits to smooth out distortions, a method that shows the S&P; 500 trading at 13.2 times earnings, according to data compiled by Yale University Professor Robert Shiller. At the bottom of the three worst recessions since 1929, the average ratio fell below 10. To reach that level, the S&P; 500 would sink another 27 percent.
The rout set off by the subprime-mortgage collapse in August 2007 has fooled investors from Legg Mason Inc. money manager Bill Miller to Traxis Partners LP’s Barton Biggs, who said shares were cheap as they continued to fall. Even Buffett, the billionaire chief executive officer of Omaha, Nebraska-based Berkshire Hathaway Inc., who worked for Graham in the 1950s, was taken by surprise. He said he was buying on Oct. 17. The S&P; 500 lost 28 percent since then, ending March 6 at 683.38.
“We are in a depression, therefore I would expect Graham’s and Shiller’s earnings ratios to get down to a single figure,” said Robin Griffiths, who first studied Graham in 1966 and helps oversee $15.5 billion at Cazenove Capital Management in London. “If it is a bad depression, it could take the S&P; 500 to 400 or 500. It is clearly becoming better value as the market comes down, but it is nowhere as cheap as it can get.” Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid;=aiRGwBBIVLTo&refer;=home
REAL ESTATE-FORECLOSURES
-House prices ‘could fall by further 55 per cent’. House prices may fall by a further 55 percent and there is a “very real probability” that Britain will be bankrupted, a leading investment bank has warned in a private note to clients. Read more here-http://www.telegraph.co.uk/finance/economics/houseprices/4974499/House-prices-could-fall-by-further-55-per-cent.html
-Americans battered by the biggest slump in home prices on record are facing higher property taxes as local governments struggle to plug budget deficits. Read more here-
http://www.bloomberg.com/apps/news?pid=20601213&sid;=aWSD3gPg9s7o&refer;=home
-Greenwich, Connecticut, home sales dropped 77 percent in February from a year earlier as Wall Street firms cut jobs and buyers retreated from multimillion-dollar purchases, Prudential Connecticut Realty said.
Seventeen homes sold last month, down from 75 a year earlier, the broker said in a report. Sales of houses priced from $2 million to $3 million fell 80 percent, with two properties selling last month. The median sales price declined 2 percent to $1.76 million. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid;=avVD1FvGmD3o&refer;=home
-Foreclosure filings in the U.S. climbed 30 percent in February from a year earlier as the worsening economy thwarted efforts by the government and lenders to prevent homeowners from losing property, RealtyTrac Inc. said.
A total of 290,631 homes received a default or auction notice or were seized by the lender, the Irvine, California-based seller of default data said in a statement today. It was the third-highest monthly total in RealtyTrac records dating to 2005. February filings increased 6 percent from January.
“More people have lost their incomes or are underwater on their mortgages, so a new housing plan won’t change those facts by itself,” Barry Eichengreen, professor of economics at the University of California, Berkeley, said in an interview.
The U.S. housing crisis is deepening as President Barack Obama attempts a $275 billion rescue to help borrowers with sinking home values or unaffordable loans. Declining prices sapped $2.4 trillion in value from the nation’s residential market last year, according to First American CoreLogic. Prices in 20 U.S. cities have fallen every month since January 2007, the S&P;/Case Shiller index shows.
Rising unemployment also is making it harder for homeowners to keep up with payments. The U.S. jobless rate rose to 8.1 percent in February, the highest in more than 25 years, according to the Labor Department. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aqtJdtiZTJtk
-Cleveland and Detroit lead the U.S. in commercial mortgage delinquencies, a sign the housing crisis that brought down Wall Street is spreading beyond the residential market. Office, retail, apartment and industrial properties with mortgage payments 60 days late or more rose to 3.93 percent as of March in the Cleveland area and to 3.75 percent in the Detroit area, according to data compiled by Bloomberg. The North American commercial property delinquency rate is 1.1 percent, according to Standard & Poor’s.
“There is really no part of the country being spared,” said Robert Bach, chief economist at Santa Ana, California-based broker Grubb & Ellis Co. “Cleveland and Detroit are just the first to feel the stress. They’re the canaries in the coal mine.” The second year of the U.S. recession is reducing demand for commercial real estate after prices hit a record in 2007. The slump in housing and rising unemployment will probably take a toll on retail and office landlords, Bach said.
Loans secured by properties that were written assuming rental growth have been unable to meet targets, leading to increased defaults. The delinquency rate for North American commercial real estate loans in mortgage backed securities may triple in 2009 as loans default, Standard & Poor’s credit analyst Eric Thompson said in a Feb. 17 statement. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=as25TfJvijsM
© 2011, Worldwide Precious Metals.
www.wwpmc.com
The GoldBugg Report – March 17 , 2009
Posted by Worldwide Precious Metals on Tuesday, March 17, 2009
The GoldBugg Report – March 10 , 2009
March 10, 2009
WORLD FINANCIAL REPORT ON RADIO MARCH 6 2009 SHOW
Quote from Cicero in 55 BC:
“The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.”
So what have we learned in two millennia?
Evidently, not a thing!
GOLD
-With so many gold bugs in Toronto, speculation on where the price of bullion is headed is a popular subject on the convention floor at PDAC 2009. Suggestions that gold would head much, much higher abound among junior exploration companies. Vancouver-based PMI Gold Corp., for example, was quick to suggest the spot price could well soar to US$2,000 an ounce by year-end given equity market uncertainty. Hawthorne Gold Corp., also of Vancouver, is less bullish with a forecast of between US$1,200 and US$1,300 through this year and next. Nationalpost.com
-Clive Maund gold commentary. Read and view more here-http://news.goldseek.com/CliveMaund/1235945873.php
-James Turk gold commentary. Read and view more here-http://goldmoney.com/en/commentary/2009-03-01.html
-Peter Grandich gold and silver commentary. Read more here-http://news.goldseek.com/Grandich/1236178022.php
-Postcards from the Edge: China turns to gold in hard times. The world’s shops may be empty and consumers nursing their savings at home but one product in China is bucking the trend: golden bulls. Read more here-http://www.telegraph.co.uk/finance/financetopics/recession/china-economic-slowdown/4862739/Postcards-from-the-Edge-China-turns-to-gold-in-hard-times.html
-Burnished by Bad News, Gold Looks Like a Good Each-Way Bet. Read more here-http://www.economist.com/finance/displayStory.cfm?story_id=13185396&source;=hptextfeature or
-Gene Arensberg: Gold, silver pull back as expected, but may be brief. Read more here-http://www.stockhouse.com/Columnists/2009/March/2/Gold,-silver-pull-back-as-expected–Got-Gold-Repor or http://www.gata.org/node/7218
-Bill Murphy of GATA with his commentary on gold. Read more here-http://news.goldseek.com/LemetropoleCafe/1236240000.php
-Emerging economies may seek gold as dollar fears rise. Read more here-http://www.gata.org/node/7219
-Gold glitters in troubled times. Read more here-http://www.suntimes.com/business/currency/1455787,CST-FIN-terry02.savagearticle
-Gold bull market just beginning-Sascha Opel. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=79363&sn;=Detail
-Folks need to be aware that gold will remain volatile. But I don’t believe the run in gold will be over for quite some time. Gold has been rising sort of quickly for eight years, and I expect it should continue to do so. Bill Fleckenstein-Read more here-http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/nationalization-isnt-the-worst-fear.aspx?page=all
-Justice Litle: Official sales won’t hurt gold anymore. Read more here-http://www.taipanpublishinggroup.com/taipan-daily-022409.html or http://www.gata.org/node/7211
-Why gold prices will keep rising. Safety-seeking investors are pouring money into gold despite prices that, though lower recently, remain near historic highs. The more we worry, the higher gold will go. Read more here-http://articles.moneycentral.msn.com/learn-how-to-invest/why-gold-prices-will-keep-rising.aspx?page=all
-Survey: Over Two-Thirds of Chinese Economists Favour Gold over US Bonds. Read more here-http://www.chinastakes.com/story.aspx?id=1030
-Numerous factors have contributed to gold’s decline since Feb. 23, according to Jeffrey Nichols, managing director of American Precious Metals Advisors. The market has had to absorb a large amount of old scrap as record high prices in local currencies around the world along with falling income and rising unemployment has prompted many people to cash in their old gold jewelry.
“The combination of rising prices, growing secondary supplies, and surging investment buying created a simply unstable and unsustainable situation as higher prices attracted ever-greater volumes of scrap to be absorbed by investors,” Mr. Nichols said in a report. “Only an ever-increasing volume of investor purchases could keep prices near $1000 an ounce. As investor buying relaxed, prices just had to come down.”
“It’s important for gold-market participants to remember that long-term trends are always rational but short-term volatility is often emotional and sometimes just meaningless noise,” he added. “Although we remain bullish for the long-term and foresee more than a doubling of the gold price in the next few years, the immediate picture is less rosy and the yellow metal remains vulnerable to further short-term selling.” Casey Daily Resource
-”Sometimes there is movement out of all assets, even safe havens,” said Tom Pawlicki, an analyst at MF Global Research. “The weakness we’re seeing in equities could be driving gold lower.” Casey Daily Resource
-”As things get a little uglier in the stock market, we might see some selling of gold for margin calls,” said Frank McGhee, the head dealer at Chicago-based Integrated Brokerage Services. “There’s some weight on gold now.”
Even so, the recent slide in gold prices will likely attract new investors looking for a store of value. Keep in mind, the metal is still up more than 6% this year and close to all-time highs, while the S&P; 500 has dropped more than 21% and is at its lowest level in 12 years.
“Gold is a good placeholder of value,” said Tom Hartmann, a commodity analyst at Altavest Worldwide Trading Inc. in California. “If one is scared about their cash sitting in the bank or short-term stock volatility, then perhaps gold would be a place to tuck away some money.” Casey Daily Resource
-The OC’s rich rush to cash in on gold. Read more here-http://news.bbc.co.uk/2/hi/americas/7920895.stm
-German ‘Pot of Gold’ Lies in Mobile Phones Tossed in the Trash. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=aa.IvaqdRZiU&refer;=home
SILVER
Gold to silver ratio at 80 to 1 with gold at $1,200 the silver price would be $15.00
Gold to silver ratio at 70 to 1 with gold at $1,200 the silver price would be $17.14
Gold to silver ratio at 60 to 1 with gold at $1,200 the silver price would be $20.00
Gold to silver ratio at 50 to 1 with gold at $1,200 the silver price would be $24.00
Gold to silver ratio at 15 to 1 with gold at $1,200 the silver price would be $80.00
-Ted Butler silver commentary. Read more here-http://news.silverseek.com/TedButler/1236094346.php
-Clive Maund silver commentary. Read and view more here-http://news.silverseek.com/CliveMaund/1235945878.php
-David Morgan silver commentary. Read more here-http://news.silverseek.com/SilverInvestor/1235717400.php
-$35 silver in 2 years. Watch video here-http://cosmos.bcst.yahoo.com/up/player/popup/?rn=289004&cl;=12283291&src;=finance&ch;=633473 or http://www.thestreet.com/video/10466919/35-silver-in-2-years.html
-Silver beats gold for first time since 2006. Money managers are buying precious metals as a refuge from the 50 percent plus drop in the Standard & Poor’s 500 Index in the past year and growing concerns that Treasuries will fall as the U.S. government pledges $9.7 trillion to revive the economy. While gold will rise 25 percent this year, silver may jump 58 percent to $18 an ounce, said Philip Klapwijk, chairman of London-based precious metals research company GFMS Ltd.
“Silver will have a nice catch-up rally,” said Peter Sorrentino, who helps manage $15.5 billion at Huntington Asset Advisors in Cincinnati. “There’s a flight to precious metals as a storehouse of wealth. Silver got left behind and it’s been closing in quickly but there’s still a performance gap.” Huntington has about 7 percent of its assets in silver and 3 percent in gold.
“Silver’s woken up recently, but it isn’t flying yet,” said Chip Hanlon, president of Delta Global Advisors Inc. in Huntington Beach, California, which manages $1 billion. “As gold goes higher, it gets psychologically harder to pay for gold. So people turn to silver.” He expects silver to reach $20. Investors prefer precious metals to almost all other investments after more than $1.2 trillion of writedowns and losses at the world’s biggest financial companies sent the global economy into a recession.
“Silver is poor man’s gold, and there’s a lot more poor men than there used to be,” said Doug Hepworth, director of research in New York at Gresham Investment Management LLC. “Gold and silver are the only commodities that can overdo it in this environment.”
Silver jumped to $50 an ounce in early 1980 from $6 at the start of 1979 after Nelson and William Hunt of Dallas hoarded the metal. They were convicted in 1988 of conspiracy for attempting to manipulate prices and were forced to pay $130 million in fines.
“If enormous doom and gloom overwhelms financial markets, if you see investors are incredibly bearish and the Dow trading at 5,000, silver could get as high as $24,” said Jeff Christian, managing director of CPM Group in New York. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=arweARZI9J.Y&refer;=Canada or http://www.independent.ie/business/stocks-markets/silver-beats-gold-for-first-time-since-2006-1658772.html
-What gold? Go for silver! Read more here-http://www.commodityonline.com/news/What-gold-Go-for-silver!-15695-3-1.html
-Silver Shimmers in Otherwise Dark Market. Read and watch more here-http://www.cnbc.com/id/29490970?__source=RSS*blog*∥=RSS or http://www.mainstreet.com/article/money/investing/cramer-silver-fresh-look-shining-commodity
-$50bn less cash will be spent in mining in 2009 and perhaps in 2010 too. The VM Group tells how less capex spend in the mining industry will impact on resource prices, mergers and acquisitions and China’s presence in resources. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=79365&sn;=Detail
DEFINITIONS-QUOTES-QUICK HITS
-Capitalism is an economic system in which wealth, and the means of producing wealth, are privately owned and controlled rather than commonly, publicly, or state-owned and controlled. Through capitalism, the land, labour, and capital are owned, operated, and traded by private individuals or corporations, and investments, distribution, income, production, pricing and supply of goods, commodities and services are determined by voluntary private decision in a market economy.
A distinguishing feature of capitalism is that each person owns his or her own labour and therefore is allowed to sell the use of it to employers. In a “capitalist state”, private rights and property relations are protected by the rule of law of a limited regulatory framework. In the modern capitalist state, legislative action is confined to defining and enforcing the basic rules of the market, though the state may provide some public goods and infrastructure. Wikipedia.org-Read more here-http://en.wikipedia.org/wiki/Capatalism
-We can’t expect the American People to jump from Capitalism to Communism, but we can assist their elected leaders in giving them small doses of Socialism, until they awaken one day to find that they have Communism. Nikita Khrushchev (1894-1971)
-The true reflection of the value of any currency, the only one that’s really left, is how much gold it can buy. James West
-As long as the perils of a global reserve currency crash are deemed more dreadful than the consequences of continuing to support it, the paper Gold emporium which is the US futures market will still be able to manipulate what is known as the US Gold “price”. Bill Buckler, Gold This Week, 28 February 2009
-With their relatively large stocks of physical gold, and the complicity of institutional agents such as JP Morgan to help suppress “paper gold” in futures markets, the bankers still have enough influence over bullion’s price to temporarily suspend the laws of supply and demand. Rick Ackerman
-People asked me why I moved from Inco to Anglo-Gold about 15 months ago, and I made the observation that in my view, gold as a commodity was trading below its inherent value. I’d say there has only been one hard currency for 5,000 years. That’s gold. Other currencies reflect someone’s trust in an institution created by people over 100 years, or over 1,000 years.
But when that trust is shaken in any way, shape or form, they go back to gold and have done so for 5,000 years. And what we’re seeing now is what has occurred over 5,000 years. The world is going back to what it has always known that there is only one hard currency. Mark Cutifani
-It’s immoral to transfer wealth from the productive to the non-productive members of society. The stimulus and the bailouts will only make the problem worse. Government needs to get out of the way and let the market sort itself out. Ron Paul-Watch video here-http://news.goldseek.com/RonPaul/1236150660.php
-”This is not a bubble in gold. The only bubble that is ongoing is the fantasy land that all is okay. Gold is undergoing a healthy pullback, backfilling after rising from $700 to $1,000 over the past couple months. The $900 area exhibits excellent support and a continued influx of investment capital will continue to support the market. $1,000 was a strong technical barrier and it was played by many trader-technicians.
I believe that we will be building a firm support in the $900 area from where gold can then make another assault on the $1,000 area. It is my belief that gold is heading for $1,200 and higher in the coming months. Record investment inflows will overwhelm this market and send it significantly high as the economic, financial and soon to be monetary crisis unfolds further.” Peter Spina
-Two things happened in the 1960s. Most importantly, that decade ended. Second, consumers and investors began learning to not be fooled by governmental policies and actions. That learning experienced was reinforced by the many policy errors of the 1970s. At the start of those two decades, consumers and investors did not understand the future effects of excessive government spending. Monetization of debt and price increases was not part of their experience.
Only after inflation ravaged their investments down into bottom in 1974 did they fully comprehend how damaging governments might be. The important lesson consumers and investors learned was to anticipate what government policies would do to them. Importantly, they learned to alter their investment postures and consumption spending to defend themselves from governments. And finally, they learned that the purpose of government is to deprive them of wealth and liberty, not to provide those to them.
Markets look forward, discounting events in advance, That they have done with a vengeance. From the middle of summer through confirmation by November election, U.S. investors began to anticipate Obama’s policies. They began to immediately discount the soon to be most investor unfriendly U.S. administration in history. Knowing that jobs and wealth would be destroyed by adverse tax policies, consumers retrenched further.
Yes, Obama, by vocalizing in advance his wealth damaging intentions, owns these financial markets and unfolding U.S. depression. Gold has rallied incredibly since the October low, shortly before the Obama election victory. It recently reached an intensely over bought condition from which it is now correcting. With daily doses of fantasy over possibility of the U.S. government actually creating an effective economic solution to the Obama Depression, investors have stepped back.
Yes, change has indeed arrived. Your financial wealth has been changed to a considerably lesser amount. Gold’s value has been changed into a higher amount. Ned W. Schmidt-Read and view more here-http://news.goldseek.com/NedSchmidt/1236063900.php
-U.S. government plans to spend more than $11.6 trillion to revive the economy are going to accelerate the pace of inflation and send raw-material prices surging, said Michael Pento, the chief economist at Delta Global Advisors who correctly predicted last year’s commodity collapse. Expectations for U.S. inflation during the past two years have anticipated changes in commodity prices measured by the Reuters/Jefferies CRB Index.
In May, the Reuters/University of Michigan survey of consumers’ expectations for five-year inflation climbed to the highest since 1995, and by July, the CRB index had surged to a record. Inflation expectations tumbled in the second half of last year, and by December had reached the lowest since September 2002. During that period, the CRB had its biggest six-month decline since the index was created in the 1950s. Expectations for inflation have since rebounded, signalling commodities will climb, Pento said.
“The government has created a massive increase in the monetary base, and it means we are entering a massive inflation cycle,” Pento said in a telephone interview from Holmdel, New Jersey. “Inflation will be intractable. All of these commodities will start to act as an alternative to currency and start to pick up. Gold should be the primary investment, and energy and base metals should be secondary.” Gold may jump as much as 54 percent to between $1,250 and $1,400 an ounce by late 2009 or early 2010, Pento said. Copper will surge 77 percent to $3 a pound, he said. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=aIwFmyvJJiv4&refer;=home
-The U.S. Financial System Is Effectively Insolvent says Nouriel Roubini. Read more here-http://www.forbes.com/2009/03/04/global-recession-insolvent-opinions-columnists-roubini-economy.html
-Citigroup, Once World’s Biggest Bank, Sees Stock Drop Below $1. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aKLJO8S5nFaU&refer;=home
-It may be tough to get financing for a new car these days, but in Detroit you can buy a house with a credit card. The median price of a home sold in Detroit in December was $7,500, according to Realcomp, a listing service. Not $75,000. Remove a zero it’s seven thousand five hundred dollars, substantially less than the lowest-price car on the new-car market. Read more here-http://www.chicagotribune.com/news/nationworld/chi-detroit-housingjan29,0,6397784,print.story
-Chinese yuan set to replace dollar. Beijing has launched the experiment of using the yuan as a reserve currency in relations with 8 countries. Chinese exporters are asking to charge in yuan instead of dollars, because the U.S. currency is losing value. But China needs to revise its model of development, too much inspired by eighteenth century mercantilism. Read more here-http://new.asianews.it/index.php?l=en&art;=14131
-MI5 alert on bank riots. Top secret contingency plans have been drawn up to counter the threat posed by a “summer of discontent” in Britain. The “double-whammy” of the worst economic crisis in living memory and a motley crew of political extremists determined to stir up civil disorder has led to the extraordinary step of the Army being put on standby.
MI5 and Special Branch are targeting activists they fear could inflame anger over job losses and payouts to failed bankers. Read more here-
http://www.express.co.uk/posts/view/86981/MI5-alert-on-bank-riots
-Record 31.8 million on food stamps. Government shows increase of 700,000 food stamp recipients in a single month. Read more here-
http://money.cnn.com/2009/03/05/news/economy/foodstamps.reut/index.htm
-Latham & Watkins LLP, the fourth- largest U.S. law firm, is offering incoming lawyers $75,000 to take the year off. Read more here-
http://www.bloomberg.com/apps/news?pid=20601110&sid;=aO3WnlIQ_yik
-Ryanair May Charge Passengers to Use On-Board Toilet. Read more here-http://www.bloomberg.com/apps/news?pid=20601093&sid;=aSRnCg8YMWAQ&refer;=home
RARE COLORED DIAMONDS
-The Rare Colored Diamonds Historical Value Tracker system is the perfect tool for investors to view the potential future value of a rare colored diamond based on the current market trend of a particular type of diamond. Track the potential future value of colored diamonds here-http://www.rarecoloreddiamonds.com/HistoricalValueTracker.html
-Rio Tinto’s Argyle Diamond Mine is set to showcase its rare blue diamonds to the world in a unique sale known as the “Once in a Blue Moon” collection. Whilst the Argyle Diamond Mine is well known for producing rare pink and champagne diamonds, it is a lesser known fact that it produces other colors such as rare blue diamonds. The “Once in a Blue Moon” collection comprises a range of premium and commercial diamonds and features single cuts, a number of matching pairs and a selection of smaller diamonds.
Josephine Archer, Sales and Marketing Manager for Argyle Pink Diamonds, comments on this rare offering, “We are excited to showcase our first ever collection of precious blue and violet Argyle diamonds, sourced from several years of production at the mine. It is an enchanting collection that will appeal to connoisseurs and collectors alike.”
With only ten years production left from the Argyle mine, and only a sporadic occurrence of blue diamonds, this collection is likely to attract considerable attention, both within Australia and overseas. It is a closed tender and will be showcased in Perth, Hong Kong and Tokyo, prior to bids closing on April 8. Diamonds.net
RECESSION-DEPRESSION-U.S. ECONOMY
-What Are the Odds of a Depression? International evidence suggests there is a 20% chance our stock-market crash will lead to much worse. Read more here-
http://online.wsj.com/article/SB123612575524423967.html
-U.S. rescue efforts may risk double-dip recession. Read more here-http://www.reuters.com/article/ousiv/idUSTRE52168Y20090302
-We need shock and awe policies to halt depression. Read more here-http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4884975/We-need-shock-and-awe-policies-to-halt-depression.html
-The U.S. recession, now in its 15th month, will probably continue well into 2010 or beyond, several prominent economists wrote in today’s New York Times. “I find it quite easy to imagine two consecutive years of contraction,” Niall Ferguson, a financial historian at Harvard University, said in one of 11 assessments by economists. “I don’t rule out two more lean years after that,” he said. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a487Kmeq1Eog
-The Greatest Depression under Way. Read and listen to more here-http://www.rense.com/general85/gdep.htm Listen here-http://www.howestreet.com/index.php?pl=/goldradio/index.php/mediaplayer/1124
-Even ‘Dr. Doom’ Is Scared: Economy Much Worse Than Roubini Predicted. Read and watch video here-http://finance.yahoo.com/tech-ticker/article/197164/Even-%27Dr.-Doom%27-Is-Scared-Economy-Much-Worse-Than-Roubini-Predicted?tickers=^dji,^gspc,QQQQ,DIA,SPY
-U.S. Economy: GDP Shrinks 6.2%, More Than Previously Estimated. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aKMkV532Xkq0&refer;=home
-The U.S. economy “deteriorated further” in almost all corners of the country over the last two months as consumer spending slumped and manufacturing declined, the Federal Reserve said in its regional business survey.
Ten of 12 Fed district banks reported “weaker conditions or declines” in their regional economies, and respondents didn’t expect a “significant pickup” until late 2009 or early 2010, the Fed said today in its Beige Book release, published two weeks before officials meet in Washington to set monetary policy. Housing “remained in the doldrums in most areas,” the Fed said. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aQU8_2hWghsU&refer;=home
-U.S. ISM Manufacturing Drops for 13th Straight Month. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aI00J8iplevY&refer;=home
-U.S. Jobless Claims Exceed 600,000 for a Fifth Week. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aanaFt_TxFEM
-ADP Says U.S. Companies Reduced Payrolls by 697,000. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&refer;=home&sid;=aLv6_YlVF3V8
-Calif. jobless hits double digits. Crumbling housing and consumer sectors propel unemployment rate to 10.1%, the highest in 25 years. Read more here-
http://money.cnn.com/2009/02/27/news/economy/california_econ.reut/index.htm
-After steep January cuts, more than 1 in 10 Californians is out of work. It’s even worse in L.A. County. Read more here-http://www.latimes.com/business/la-fi-jobs28-2009feb28,0,7903208.story
-Feb. consumer bankruptcies up 29%. American Bankruptcy Institute sees filings in 2009 surpassing last year’s level. Read more here-
http://money.cnn.com/2009/03/04/news/economy/February_bankruptcy/index.htm?postversion=2009030415
-Track U.S. unemployment and foreclosures. View more here-http://www.cnn.com/SPECIALS/2009/map.economy/index.html
TWO MORE BANKS CLOSE IN U.S.-FDIC FUND IN TROUBLE
-Regulators shutter 2 more banks. The FDIC said the failures of Heritage Community Bank and Security Savings Bank will cost the Deposit Insurance Fund a combined $100.7 million.
Banks in Nevada and Illinois were seized by regulators, bringing this year’s tally to 16, as tumbling home prices and surging unemployment caused more borrowers to fall behind on loan payments.
Security Savings Bank of Henderson, Nevada, and Heritage Community Bank of Glenwood, Illinois, with combined assets of $471.2 million, were shut by state regulators and the Federal Deposit Insurance Corp. was named receiver, the FDIC said yesterday. Bank of Nevada in Las Vegas is assuming Security Savings’ $175.2 million in deposits, while Heritage Community’s $218.6 million will go to MB Financial Bank of Chicago. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aPVBF9vLzekc or http://money.cnn.com/2009/02/27/news/companies/bank_failure/index.htm
-One of the Chicago market’s leading lenders says it’s “very possible” that 25 to 30 banks in the Chicago area could end up failing. Read more here-
http://www.chicagotribune.com/business/chi-mb-financial-failing-banks-mar3,0,5288080.story
-FDIC’s Bair Says Insurance Fund Could Be Insolvent This Year. Read more here-http://www.bloomberg.com/apps/news?pid=washingtonstory&sid;=alsJZqIFuN3k
or http://www.washingtonpost.com/wp-dyn/content/article/2009/02/26/AR2009022603005_pf.html
-Bank failures may cost FDIC $80 billion. FDIC predicts $65 billion in bank failures between 2009 and 2013, on top of the $18 billion cost of 2008 failures. Read more here-
http://money.cnn.com/2009/02/27/news/companies/bank_fail.reut/index.htm
-FDIC Emergency Fee May Cost Banks $13 Billion, UBS Analysts Say. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=av0GO8aN0oeo
BANKING SYSTEM IN TROUBLE
-Federal Reserve Chairman Ben S. Bernanke said policy makers may need to expand aid to the banking system beyond the $700 billion already approved and take other aggressive measures even at the cost of soaring fiscal deficits.
“Without a reasonable degree of financial stability, a sustainable recovery will not occur,” the Fed chairman said today in testimony prepared for the Senate Budget Committee. “Although progress has been made on the financial front since last fall, more needs to be done.” Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aabXQOXBRk8E&refer;=home
-Treasury Secretary Timothy Geithner said the U.S. bank rescue program may cost more than the $700 billion. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a1F7AwUKZPp4&refer;=home
-President Barack Obama’s administration will seek congressional approval for as much as $750 billion in new aid to bolster U.S. financial institutions if it is needed, White House budget director Peter Orszag said. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&refer;=home&sid;=aqcvi7_O_1nI
-Fed’s Lockhart says U.S. banks still under strain. Read more here-http://www.reuters.com/article/ousiv/idUSTRE52239N20090303
-Fed Refuses to Release Bank Data, Insists on Secrecy. The Federal Reserve Board of Governors receives daily reports on loans to banks and securities firms, the institution said in response to a Freedom of Information Act lawsuit filed by Bloomberg News.
The Fed refused yesterday to disclose the names of the borrowers and the loans, alleging that it would cast “a stigma” on recipients of more than $1.9 trillion of emergency credit from U.S. taxpayers and the assets the central bank is accepting as collateral. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aG0_2ZIA96TI&refer;=home
-Europe’s banks face a $2 trillion dollar shortage. European banks face a US dollar “funding gap” of almost $2 trillion as a result of aggressive expansion around the world and may have difficulties rolling over debts, according to a report by the Bank for International Settlements. Read more here-http://www.telegraph.co.uk/finance/financetopics/recession/4939796/Europes-banks-face-a-2-trillion-dollar-shortage.html
-The World Bank, the European Bank for Reconstruction and Development and the European Investment Bank will provide up to 24.5 billion euros ($31 billion) to help central and east European banks and businesses cope with the global financial crisis. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=a1NA0ExzemLU&refer;=home
U.S. DEBT-OBAMA BUDGET PLAN
-President Barack Obama’s promise to slash a record deficit may rely on economic-growth projections for the coming years that are too optimistic. The $3.55 trillion budget proposal for 2010 the president unveiled yesterday projects 3.2 percent economic growth next year, thanks to a $787 billion fiscal-stimulus measure he signed into law earlier this month that is aimed at creating jobs and consumer demand.
That is twice the 1.5 percent growth projected by the Congressional Budget Office before the stimulus bill was enacted and higher than the 2.1 percent consensus growth estimate by analysts in the Blue Chip Economic Indicators survey. Even those projections may be too optimistic: Federal Reserve Chairman Ben S. Bernanke said this week the U.S. is suffering a “severe” contraction, and a government report today showed the economy shrank at a 6.2 percent annual rate in the fourth quarter, more than forecast.
“One glaring, central risk to the budget’s projections is the economic outlook,” said Joseph Minarik, a senior vice president at the Committee for Economic Development, a Washington-based public policy institution. The budget assumes “the economy is going to turn around more rapidly,” said Minarik, a former associate director at the Office of Management and Budget under President Bill Clinton. Read more here-http://www.bloomberg.com/apps/news?pid=20601070&sid;=aPqpdkuwfD7w&refer;=home
-Obama budget plan forecasts soaring deficits. Read more here-http://www.reuters.com/article/businessNews/idUSTRE51O6JA20090226?feedType=RSS&feedName;=businessNews&rpc;=23&sp;=true
-Obama buries Reaganomics under $3.6 trillion mountain. The president has killed off the idea of small government with a vast schedule of tax and spend to combat recession. Read more here-http://www.timesonline.co.uk/tol/news/world/us_and_americas/article5821963.ece
INTEREST RATES
-Bank of Canada Cuts Lending Rate to 0.5%, Lowest Ever. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&refer;=home&sid;=a.5ZUs6vmUZ4
-Bank of England Cuts Rates, Starts Asset Purchases. Bank of England Governor Mervyn King will take the unprecedented step of printing money to buy assets after reducing the benchmark interest rate by a half point to almost zero. The bank said it will pump cash into the economy by purchasing as much as 150 billion pounds ($211 billion) in government and corporate bonds. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a2pcVi73z0to
-The European Central Bank cut interest rates to a record low in an attempt to stem the worst recession since World War II. Officials meeting in Frankfurt reduced the benchmark lending rate by half a percentage point to 1.5 percent. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aktBuIwzfMXg
-Australia Leaves Rate at 3.25% after Recent Cuts. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aglXG8NJk38g&refer;=home
GE STOCK GETS HIT
-General Electric Co. cut its annual dividend for the first time since at least 1940 as Chief Executive Officer Jeffrey Immelt moved to preserve cash and protect the company’s top AAA rating during a global recession, a person familiar with the decision said. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aW0iLm71OIcg&refer;=home
-GE’s 1st Payout Cut Since 1938 Fails to Secure Rating. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aWrthV.bqHAg
-GE Treated Like a ‘Leper’ as Investors Punish Shares. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a4NseogwqNqE
-GE Shares Drop below $6 for First Time Since 1991. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aQpGpsEl3QK0
-GE’s Biggest Investor May Have $920 Million Loss on New Shares. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aegi8zNU9URY
MASSIVE AIG LOSSES
-American International Group Inc., the insurer deemed too important to fail, will get as much as $30 billion in new government capital and relaxed terms on its loans after posting the worst loss by a U.S. corporation. The fourth-quarter loss widened to $61.7 billion from $5.29 billion in the year-earlier period. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=a11QFJcR8HSI&refer;=home
-AIG Bailout, From ‘Recovery’ to Open-Ended Support: Timeline. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=a8HzgnuhpSDw
-Fed’s Kohn Says Risks of Not Rescuing AIG Too Large. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aY_hCygOzVGA&refer;=home
-The following table lists the biggest quarterly losses over the last 15 years for companies currently on the Standard & Poor’s 500 Index. American International Group Inc., the insurer deemed too important to fail, reported a record fourth-quarter loss of $61.7 billion.
The chart excludes companies that don’t currently trade on the S&P; 500 including Merrill Lynch & Co., Fannie Mae and Freddie Mac, which each produced quarterly losses in excess of $10 billion at least once in the last year.
WARREN BUFFETT IN THE NEWS
-Warren Buffett’s Berkshire Hathaway Inc. posted a fifth-straight profit drop, the longest streak of quarterly declines in at least 17 years, on losses from derivative bets tied to stock markets.
Fourth-quarter net income fell 96 percent to $117 million, or $76 a share, from $2.95 billion, or $1,904 a share, in the same period a year earlier, the Omaha, Nebraska-based firm said in its annual report. Book value per share, a measure of assets minus liabilities that Buffett highlights in his yearly letter to shareholders, slipped 9.6 percent for all of 2008, the worst performance since Buffett took control in 1965. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a6N1EO2wE.EE&refer;=home
-Highlights of Warren Buffett’s annual investors’ letter. Read more here-http://www.reuters.com/article/newsOne/idUSTRE51R16220090228
-Buffett’s Berkshire Cuts Jobs, Closes Facilities Amid Recession. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aSSpoxn31YQ0
-Berkshire Credit Swaps Rise to Record, Imply ‘Junk’. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aHc37dvgJRn4
-Billionaire investor Warren Buffett said the worst financial crisis in 70 years could have been avoided if lenders had learned from lax mortgage underwriting in the mobile-home industry during the 1990s. Read more here-http://dailyherald.com/story/?id=276045 or http://dailyherald.com/story/print/?id=276045
-Billionaire Warren Buffett said the economy will be “in shambles” for the rest of this year as financial firms take losses tied to reckless loans made during the housing boom. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a1L50vuf_HiM&refer;=home
-Buffett says U.S. Treasury bubble one for the ages. Read more here-http://uk.reuters.com/article/businessNews/idUKTRE51R1Q720090228
JIM ROGERS IN THE NEWS
-Jim Rogers: U.S. stocks have yet to hit bottom. Read more here-http://www.reuters.com/article/ousivMolt/idUSTRE5226B120090303
-Jim Rogers Doesn’t Mince Words About the Crisis. Read more here-http://www.businessweek.com/print/magazine/content/09_10/b4122017811535.htm
-Jim Rogers Buys Land Starts Farming. Read and watch more here-http://www.cnbc.com/id/29477080
STOCK MARKET
-Obama Says Now May Be Good Time to Buy Stocks. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aBndLi5PmOvc
-Dow 6K on the Way? Watch video here-http://www.cnbc.com/id/15840232?video=1050302108&play;=1
-Dow Could Hit 4,000. Read more here-http://www.marketwatch.com/video/asset/dow-could-hit-4000/1973951D-B6AB-41F1-B91D-06032C304AFB
-VIX Premium Shows Stocks Bear Market Lasting 2 Years. Options investors are paying twice this decade’s average to protect against losses in U.S. stocks through 2011, signalling the bear market that already wiped out $10.4 trillion of equity value may last two more years.
“There’s a real panic in the markets, with some people wanting to buy long-term insurance at any price,” said Peter Sorrentino, who helps manage $16 billion, including $130 million in options at Huntington Asset Advisors Inc. in Cincinnati. “People have lost hope.” Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid;=acEymYZ6h7Mk&refer;=home
-Big Bear Markets of the Past 100 Years. The recent drop in the broad market has raised the specter of further declines and the beginning of a new nightmare. We doubt it. While we certainly can’t rule out new lows, with the Dow Jones Industrials falling to 6,500, we believe that should help set up a bottom and the beginning of rally that will last several months.
The background news is increasingly gloomy, telling us that this bear market probably has years to run. But we are overdue for a rebound of some substance.
We haven’t had that yet. Even the 1929-32 collapse saw a 50 per cent rebound over a period of several months before the real nightmare got underway. This recession is no garden variety recession. We suspect it will make the recessions of 1973-75, 1980-82, 1991-92 and certainly 2001-02 seem quaint by comparison. This is the worst crisis since the Great Depression and there is a serious chance that we may at some point technically register a depression (a cumulative decline in GDP of over 10 per cent).
But for now at least the broader market is trying to find a bottom and we are getting closer to that bottom. We have few thoughts of a much deeper collapse at this time. Investors should remain vigilant but keenly aware of the risks over the next month or two. David Chapman-Read more here-http://news.goldseek.com/UnionSecurities/1235719800.php
-Short-Sale Rule Undermined as Bernanke Backs Review. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=aGUH0BxOIyEM&refer;=home
-Banks May Fall to 7% of S&P; 500 Before Losses End, Analysts Say. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid;=aZ7mKR2ZSJqU&refer;=home
-The financial services industry, hammered by job cuts and record losses, is in for an even bigger contraction as the global recession deepens, said Marc Faber, publisher of the Gloom, Boom & Doom Report.
“The financial sector will contract and it will contract much more than we’ve seen so far,” said Faber, who was in Tokyo to speak at an event hosted by CLSA Ltd. Financial professionals have “been in paradise for the past 25 years.”
More than 275,000 jobs in the financial industry have been lost in the last two years, according to Bloomberg data, while losses and writedowns at global companies exceeded $1 trillion in the past year. Faber said the contraction could rival declines seen in the 1970s following the collapse of Bernard Cornfeld’s Investors Overseas Services that shook confidence in the industry for a decade.
“The financial sector has been occupying themselves with trading against each other all day and it’s totally unproductive,” said Faber, 62, who told investors to abandon U.S. stocks a week before 1987’s so-called Black Monday crash, according to his Web site. “It’s like a huge casino and that will come to an end.” Read more here-
http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aa4KTmib46Uw
-Peter Grandich stock market commentary. Read more here-http://news.goldseek.com/Grandich/1236020865.php
-How Low Can The Market Go? Read more here-http://www.businessinsider.com/new-low-on-shiller-pe-12x-normal-trough-low-is-8x-2009-3
THE MAN WHO FIGURED OUT MADOFF-FUND MANAGER FRAUD
-It has been two and a half months since Bernard L. Madoff was picked up and charged with what is believed to be the largest financial fraud in history. Yet we still don’t know much more about the alleged $50 billion scam than what Madoff initially told the FBI agents who arrested him. There are still no indictments as federal prosecutors continue to unravel the case and try to figure out exactly what happened and who was involved.
But the proof that it happened can be found in the ruined lives of thousands of victims. The one person who knows the most and is willing to talk about it is Harry Markopolos, the man who figured out Madoff’s scheme before anyone else. Read more here-http://www.cbsnews.com/stories/2009/02/27/60minutes/main4833667.shtml
-Ruth Madoff, the wife of accused fraudster Bernard Madoff, said she owns a Manhattan apartment, $45 million in bonds, and $17 million in cash that are “unrelated” to her husband’s alleged Ponzi scheme. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aWVQJMrRh7Qc
-Fund Manager Diverted Money to Mansion, Snowmobiles, U.S. Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a.dzSw.RHY7A&refer;=home
VEHICLE MAKERS IN TROUBLE
-Auto sales plunge 41%. Dismal sales reports from GM, Ford and Toyota cause the industry to have its worst month in 27 years. Read more here-
http://money.cnn.com/2009/03/03/news/companies/auto_sales/index.htm
-Ford February U.S. Sales Fell 48%; Toyota’s Slid 40%. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ailpRc0A.y1s&refer;=home
-Toyota U.S. Sales Plunge Record 40% as Slump Widens. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aQTXshkXsagM&refer;=home
-President Barack Obama’s chief auto advisers, Ronald Bloom and Steven Rattner, may travel to Detroit next week to meet with executives at General Motors Corp. and Chrysler LLC, people familiar with the matter said. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=auEUy6naw0SA&refer;=home
-GM Bondholders Said to Tell Panel Plan May Not Work. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aw.hS69ru3BI or http://www.reuters.com/article/newsOne/idUSTRE52428I20090305
-GM: ‘Substantial doubt’ about survival. Automaker pummelled by weakening demand and mounting losses discloses that its auditors have raised serious questions about its future. Read more here-http://money.cnn.com/2009/03/05/news/companies/GM_10K/index.htm
REAL ESTATE-FORECLOSURE-MORTGAGE
-Fewer Americans than forecast signed contracts to buy previously owned homes in January as the housing slump deepened at the start of its fourth year. The index of pending home resales fell 7.7 percent after a 4.8 percent gain in December, the National Association of Realtors said today in Washington. A lack of credit and record foreclosures that are pushing property values even lower may keep prospective buyers out of the market for much of 2009. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=atAM8ptyWEU8&refer;=home
-Manhattan Apartment Sellers Cut Prices Most in 5 Years in 2008. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&refer;=home&sid;=aDZ_c0FbatiY
-More than 8.3 million U.S. mortgage holders owed more on their loans in the fourth quarter than their property was worth as the recession cut home values by $2.4 trillion last year, First American CoreLogic said.
An additional 2.2 million borrowers will be underwater if home prices decline another 5 percent, First American, a Santa Ana, California-based seller of mortgage and economic data, said in a report today. Households with negative equity or near it account for a quarter of all mortgage holders.
“We have way too much supply and not enough demand,” Sam Khater, senior economist for First American, said in an interview. “People aren’t going to purchase a home as long as prices keep falling, and someone who is worried about their job isn’t going to purchase a home either.”
The total value of residential properties in the U.S. fell to $19.1 trillion by the end of 2008, down from $21.5 trillion a year earlier, First American said. California lost more than $1.2 trillion in value last year, accounting for roughly half of the national decline in housing values.
Prices in 20 U.S. cities fell 18.5 percent in December from a year earlier, the fastest drop on record, according to the S&P;/Case-Shiller index. Sales of previously owned homes, which account for about 90 percent of the market, fell in January to the lowest since 1997, and new-home purchases plunged to the lowest since records began in 1963, the National Association of Realtors and Commerce Department said. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aOpE4o.BuHfM&refer;=home
-Americans fell behind on their mortgages and banks seized homes at a record pace in the fourth quarter as unemployment rose to a 15-year high and real estate values tumbled. ortgage delinquencies increased to a seasonally adjusted 7.88 percent of all loans, the highest in records going back to 1972, the Mortgage Bankers Association said today. Loans in foreclosure rose to 3.30 percent, also an all-time high.
The U.S. real estate market lost $2.4 trillion in value last year, according to First American CoreLogic, and unemployment jumped to 6.9 percent in the fourth quarter, the most since 1993. As the recession enters a second year, unemployment is becoming a major cause of delinquencies, said Jay Brinkmann, the Washington- based trade group’s chief economist.
“When it’s a loan structure issue, you can deal with that, but when it’s an unemployment issue, unless you go out and find them a job there’s not much you can do,” Brinkmann said in an interview. “Eventually that loan will go into foreclosure.”
The combined percentage of loans in foreclosure and at least one past due was 11.18 percent, the highest ever recorded by the Mortgage Bankers. The percentage of loans 60 days past due and 90 days or more past due all broke records set last quarter. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aJcQVxGs3oqc&refer;=home
-One in 8 U.S. homeowners late paying or in foreclosure. About one in eight U.S. homeowners with mortgages, a record share, ended 2008 behind on their loan payments or in the foreclosure process as job losses intensified a housing crisis spawned by lax lending practices, the Mortgage Bankers Association said on Thursday. Read more here-
http://www.reuters.com/article/businessNews/idUSTRE52442X20090305
-11% of mortgages are troubled. More than 1.5 million homes are seriously delinquent and close to foreclosure. Read more here-
http://money.cnn.com/2009/03/05/real_estate/record_delinquency_rates/index.htm
-U.S. mortgage delinquencies seen up 50 percent. More U.S. consumers are filing for personal bankruptcy or relying on credit cards as the recession deepens and unemployment rises, a top credit bureau executive told Reuters on Thursday. Dann Adams, president of U.S. Information Systems for Equifax Inc, reported a 37 percent rise in Chapter 7 bankruptcy filings. Under Chapter 7, assets are liquidated for those unable to pay their debts.
Also, Equifax reported a 50 percent increase in the number of homeowners who fell at least a month behind on mortgage payments in January, compared with last year. Mortgage delinquencies foreshadow a rise in future foreclosures, short sales and home price declines as banks repossess homes and sell them at deep discounts. Over the next six to eight months, the mortgage delinquency rate will reveal whether the government’s plans to put a floor under housing prices is succeeding, Adams said.
“If the government can stabilize that number, it will mean at least things are not getting worse,” he said. According to Equifax, the number of consumers who missed payments on bank-issued cards rose 29.5 percent, with 4.17 of cardholders at least 60 days late on payments in January. Those 60 days behind on auto loans from carmakers rose 18.8 percent, with 1.9 percent 60 days behind in January. Read more here-http://www.reuters.com/article/gc03/idUSTRE51P72L20090226
-U.S. Mortgage-Modification Rules to Require Proof of ‘Financial Hardship.’ The Obama administration set loan modification guidelines for its $75 billion homeowner rescue plan, agreeing to pay lenders for altering troubled mortgages while reducing borrowers’ interest rates to as low as 2 percent. Read more here-
http://www.bloomberg.com/apps/news?pid=20601070&sid;=aPdRXuqc58RU&refer;=home
-Bank Charges May Surge as Mortgages Marked to Market. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aayr7s9dpgpw
-Property Values Approaching ‘Stupid’ Lows, Vornado’s Roth Says. Stephen Roth, chief executive officer of Vornado Realty Trust, said it may take as long as four years for commercial real estate demand to catch up with supply. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=ae_oe0PCMDOo
GEOPOLITICAL NEWS
-Russian Scholar Says U.S. Will Collapse Next Year. Read more here-http://www.foxnews.com/story/0,2933,504384,00.html
-Possible Threat To Obama’s Security Discovered. Read more here-http://www.wpxi.com/news/18818589/detail.html#-
-Iran urges world Muslim ‘resistance’ against Israel. Read more here-http://www.breitbart.com/article.php?id=CNG.21c84721b2a4459b107dfbfb9ada315a.2f1&show;_article=1
-Mullen Says He Thinks Iran Has Enough Nuclear Material for Bomb. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=arbqKJ05OviU
-Iran calls U.S. nuclear bomb statement “propaganda”. Read more here-http://in.reuters.com/article/worldNews/idINIndia-38287820090302
-Iran missiles can reach Israel atom sites-commander. Read more here-http://uk.reuters.com/article/oilRpt/idUKBLA44999020090304?sp=true
-President Hugo Chavez seized a unit of American food giant Cargill on Wednesday and threatened to take over Venezuela’s largest private company, renewing a nationalization drive as the OPEC nation’s oil income plunges. Chavez’s clash with the food companies, demanding they produce cheaper rice, came less than three weeks after he won a referendum on allowing him to run for reelection and marked his first nationalization in seven months.
“I warn you this revolution means business,” said Chavez, whose government has struggled with lower oil income and minor food shortages this year. Read more here-http://www.reuters.com/article/newsOne/idUSN0426337720090305 or http://www.reuters.com/article/newsOne/idUSTRE52405L20090305
-Mexico’s drug war becomes Canadian security issue. Read more here-http://www.theglobeandmail.com/servlet/story/LAC.20090305.BCGANGSMEXICO05/TPStory/National
-Mexico army to take over policing in drug-hit city. Read more here-http://www.reuters.com/article/worldNews/idUSTRE52359220090305
© 2011, Worldwide Precious Metals.
www.wwpmc.com
The GoldBugg Report – March 10 , 2009
Posted by Worldwide Precious Metals on Tuesday, March 10, 2009
Memo to All Retail Dealers
March 6, 2009
The Week in Review
1. Today’s New Jobless Report up a whooping 651,000 bringing the total unemployed in America to 4.4 Million and the unemployment rate to 8.1%.
2. Crude Oil prices are trying to push back up through $45.00 per barrel.
3. China unveils a second tier stimulus plan causing Copper prices to increase almost 30% in less than a week.
4. US Bank Stocks trading at all time Historic Lows. As we pen this Memo Citi – $1.02, BAC- $3.11, J.P. Morgan-$15.38, UBS – $7.60, MS – $17.51, GS – $74.63.
5. The Dow Jones as predicted in our February 28th Memo broke down through the psychological level of 7000 and, as we pen this Memo 12:45 p.m. March 6th, 2009 is currently trading down $76.14 to 6514.
A breakdown through 6500, which may come today, seems inevitable and when that occurs there is little if anything to prevent a 5600 Dow in the very near future.
6. The US Dollar is now showing signs of Topping Out so watch for the upcoming downward turn to commence in the next few weeks.
7. AIG was as predicted back in the news on Monday, and yes, the Government shelled out another 30 Billion.
8. GM is back in the forefront of possible Bankruptcy and now we have the Guru of Bankruptcy – Donald Trump campaigning on National Television to save the US Automakers.
9. President Obama attended the Columbus, Ohio Police Academy graduation ceremonies this morning – touting how Ohio is going to benefit from his Job Creation Program.
Now to our products and their activity this week.
We experienced a drop from Fridays close due to liquidations by Hedge Funds for 1) Profit taking and 2) The need for cash to meet margin calls in the Equity Markets. This was projected in our Memo of February 28th. Tuesdays Trading saw lows of $12.38 Silver and $901.00 Gold and we have seen a healthy rebound through out Wednesday, Thursday and today’s Markets, with Silver pushing the $13.40 level and Gold back up to $944.00.
Here are your short term support and resistance levels for the upcoming week.
We expect to see the upward trend to continue week over week and month over month, but don’t be surprised if we see temporary pull backs. The precious metals markets have never before had all of the characteristics and reasons for exceptional long term appreciation.
As always, remember not to be overaggressive with your purchasing and give yourself the ability to stay the Long Term.
Trading Department – Precious Metals International, Ltd.
© 2011, Worldwide Precious Metals.
www.wwpmc.com
Memo to All Retail Dealers
Posted by Worldwide Precious Metals on Friday, March 6, 2009
The GoldBugg Report – March 03 , 2009
March 3, 2009
WORLD FINANCIAL REPORT ON RADIO FEB 27 2009 SHOW
February 28th, 2009
Memo to All Retail Dealers
February 2009 is now in the “Record Books”, so let’s look at what we can see as “Historic Milestones” and how some of these will affect our future.
The US 2009 Federal Budget released this week. A whopping 1.75 Trillion Dollars Deficit. (That’s a New Record!!!)
US 4th Quarter GDP Down 6.2% (That’s a New Record!!!)
US Car manufactures to receive 40 Billion in Government Bail Out Aide (That’s a New Record!!!!) We thought they were only looking for 22 Billion when they flew their private jets to Washington, just a couple of months ago. Oh well! What’s 18 Billion among US taxpayers??? Figures released this past week showed that the exceptional management skills of the upper echelon of the Big 3 are losing 83 million a Day. At this rate they will burn through this 40 Billion in 482 Days. (That’s June 2010) Then WHAT???
The White House, The Treasury and The Fed showed their true colors. – They will and are doing anything to deceive the US Tax Payers, and the rest of the world, including telling us lies to our face. (Face to Face) We are talking about “Nationalization of Banks.” Last week in our Memo of Feb. 20th we touched on this topic. We have in several of our past Memos also cautioned about CitiBank Group. This week statements were made Monday through Thursday by various Government Departments. (President Obama, Mr. Bernanke, Mr. Geitner, etc) that the Government does not want to interfere in the Private Banking Sector, and has no intention or desire to “Nationalize” any US Banks.
Well folks that’s all just one BIG LIE. As of Friday Feb 27th, 2009 the US
Government now owns 36% of Citi. This was accomplished by the conversion
of Government Owned Preferred Shares to Common Stock (a $3.25 per share)
resulting in an immediate paper loss of $2.35 per share for US Taxpayers and a
74% dilution of existing common shareholders. We are told by the
Government that this is not the same as “Nationalization.” We are all so
enamored with their wizardry and economic savvy that we will believe
everything they tell us. (This definitely belongs in the “Record Book”)
The Dow Jones closed the month at 7062.93 down .302.74 for the week and below the 7200 level we discussed in our Feb. 20th Memo. 7062.93 is just a above the key support of 7061 so next week will be “interesting” to say the least. There really is not much out there to encourage a rebound save a manipulated short term Bear Market Rally. It really looks like further deterioration is going to take place especially if the market breaks down below that key psychological level of 7000.
Currently we are at 1997 Levels on the Dow and the S+P (That’s a New Record!!!!)
Watch out for News on AIG. If the US Government does not provide additional support to the tune of 20 to 30 Billion, AIG will be history. The problem will be how any move they make will negatively impact all Shareholders, Mutual funds, and Hedge Funds who hold the common stock in their portfolios (This will be a New Record)
So let’s see how we faired for the Month of February
Closing Prices for all Metals were down from the Feb. 20th prices due to short term profit taking and liquidations in the futures markets to generate cash to meet margin calls in the Dow.
This correction should be short lived, but will provide opportunity for those who wish to take advantage, to acquire at these lower levels, prior to the next upturn.
Here are the Short Term Resistance and Support Levels
Platinum Palladium
Support 1065/1045/1005 190/178/163
Resistance 1080/1120/1155 198/208/218
Please maintain Strong Equity [we suggest 35 to 40%) when acquiring New product in these levels] as volatility should continue during these tumultuous times.
Trading Department – Precious Metals International
GOLD
-Aden Sisters-gold: More Strength on the Way. Gold could jump to the $1200 level as its next target. Read more here-http://news.goldseek.com/AdenResearch/1235417719.php
-Marc Faber says Fed responsible for global crisis, gold prices to exceed Dow Jones index. Read more here-http://www.bi-me.com/main.php?id=31904&t;=1&c;=62&cg;=4&mset;
-Gold has given up some of last’s weeks very large gains. With gold up some 9% so far in 2009, some correction and consolidation may be necessary prior to overcoming resistance at $1,000/oz.
The inverse correlation between stock markets and precious metals was seen again last week as gold and silver surged by over 6% last week while most major stock markets were down by some 6% (S&P; 500 was down by 6.8%). This inverse correlation looks set to continue for the foreseeable future and as has happened in other stock bear markets/ gold bull markets, the Dow/Gold ratio looks set to retest lows seen in 1933 and 1980.
-As can be seen in the above chart featured in this week’s Economist, the Dow/Gold Ratio has been falling sharply since 2000 when the Dow Jones was over 13,000 and gold at some $260/oz. Since then gold has risen to nearly $1,000/oz and the Dow Jones has fallen to 7365. Thus the ratio is now just above 7:1. One ounce of gold can buy seven units of the DJIA.
Given that the financial and economic conditions today are far worse than in 1980 and arguably as bad as they were in the early 1930’s (as warned of by Soros and Volcker over the weekend), it seems extremely likely that the Dow/Gold ratio will again reach a low in this cycle around the 1:1 or 2:1 level.
This would mean that gold could reach it’s inflation adjusted high in 1980 of $2,400/oz and the Dow Jones fall to as low as 2,400 or 4,800. Given the degree of money printing and credit creation we believe that soon deflation will abate and will be superceded by virulent inflationary pressures. This could lead to a Dow/Gold ratio of 1:1 or 2:1 at higher levels (the DJIA at 5000 and gold at $5000/oz or the DJIA at 6000 and gold at $3,000/oz). Gold.ie
-Much mainstream media coverage of gold remains uninformed and lukewarm to negative despite the appalling financial and economic conditions challenging us. This is a sign that gold remains in the early to middle stages of its bull market. Talk of “gold fever” or a “gold rush” in the gold market is very misguided as only a tiny fraction of retail investors have any allocation to gold whatsoever let alone being overweight gold.
There are no accurate statistics but I would confidently estimate that less than 2% of retail investors have any allocation to gold whatsoever. The “man in the street” barely knows what the price of gold is in dollars, let alone in sterling or euros. The majority of retail investors (and indeed financial advisors) know little or nothing about why one should invest in gold, nor indeed how one would invest in gold.
Gold is featured in the non specialist financial media once in a blue moon (every few months at best) and when it is covered it is nearly always covered in a negative or at least lukewarm fashion. Factually incorrect statements such as “most analysts warn that gold could be overvalued and there could be a painful correction on the way” are commonplace. The fact is that the majority of analysts are bullish on gold as can be seen in the Reuters Precious Metals Poll and the Bloomberg Gold Survey (both of which we take part in).
Most analysts and experts in the precious metal markets remain positive towards gold due to the unprecedented global financial and economic meltdown we are now suffering. Many of the analysts who are negative are in fact product sellers, stockbrokers and other vested interests who have always been negative on gold and will likely always be so as they simply do not understand and have not bothered to inform themselves about the market.
We will have a gold bubble and a gold mania in the coming years. There is no fever like gold fever. However, we are a long way from there yet and gold will have to reach its inflation adjusted 1980 high of $2,400/oz in 1980 before it can be classes as overvalued. It is currently less than half the value that it was in 1980. There cannot be a bubble in an asset class unless it rises to all time inflation adjusted highs and often times asset bubbles result in prices of multiples of their previous record highs.
In January 1980, just before the Federal Reserve avoided an inflationary catastrophe, the gold price peaked at $875. That is $2,430 in today’s dollars. But the pools of speculative capital are much larger now than in 1980. A true gold bubble could well leave this benchmark far behind.
And if the dollar collapses as some fear and the US suffers virulent stagflation or hyperinflation then we will rise way above the 1980 inflation adjusted high. Gold rose by more than 2,400% (from $35 to $850 or up X 24 times) in the 1970’s. Should a similar bubble form now gold would have to rise from a low of $250 in 2000 to over $6,000/oz.
The Nasdaq rose some 1600% from some 300 in 1990 to over 5000 in 2000 (up X 16 times). Should a similar bubble form now, gold would have to rise from a low of $250 in 2000 to over $4,000/oz. Even the Dow Jones went from 1900 in late 1987 (after crash) to over 14,000 (up X 7 times). Should a similar bubble form now, gold would have to rise from a low of $250 in 2000 to over $1,750/oz.
To take an even longer term and classic, archetypal example of a bubble, we only need to look to the South Sea Bubble which saw a nearly 10 fold increase in less than a year (a real proper mania). Should a similar bubble form now, gold would have to rise from a low of $250 in 2000 to over $2,500/oz (which coincidentally is gold’s inflation adjusted high of 28 years ago).
Gold has no fever, rush or mania yet with little or no retail participation and most of the media covering gold semi annually. More importantly returns have been slow and steady as seen in the performance table above. Always good to keep a historical perspective especially in these unprecedented and very challenging financial and economic times. Gold.ie-Read more here-
http://news.goldseek.com/GoldSeek/1235138206.php
-Gold Most Favored Investment This Year, World Gold Council Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601012&sid;=aJSqfjl4bjF8&refer;=commodities
-Gold, Silver Dealers Report Strongest-Ever Coin, Bar Demand. Read more here-http://messages.finance.yahoo.com/ETFs_(A_to_Z)/ETFs_I/threadview?m=tm&bn;=29797&tid;=24402∣=24402&tof;=12&frt;=2
-Gold coin shortage as demand soars. The rush by retail investors into bullion coins is creating shortages as mints across the world struggle to meet the surge in demand, dealers and mint officials say. The scarcity is lifting coin premiums to as much as 5 per cent above the spot gold price, a level reached briefly after the collapse of Lehman Brothers last September, when coin shortages also surfaced.
“There is demand for double or triple what the US mint is able to produce,” said Michael Kramer, president of MTB in New York, one of the four US gold dealers authorised to purchase bullion coins directly from the government’s mint. The US Mint has sold 193,500 ounces of its popular American Eagle gold coin in the first seven weeks of this year, the same amount it shipped during the whole of 2007 and about the same as in the first six months of last year.
“The demand is extraordinary. All the coins we got on Monday are gone today [Tuesday] and we will not be able to take any order until the following week,” Mr Kramer said. “It is the same with other mints.” Read more here-http://www.ft.com/cms/s/0/666b7ff0-036c-11de-b405-000077b07658.html or http://www.gata.org/node/7203
-Rand Refinery Ltd., the world’s largest gold refinery, increased coin output to the highest in about 23 years as demand for South African Krugerrands rose. The Johannesburg refinery last month doubled weekly production to 20,000 ounces of blank coins for minting by the State’s SA Mint as Kruger coins, Johan Botha, head of precious metals sales, said by phone from the city today.
Gold, the best-performing metal in 2008, is trading near its March 17 record of $1,032.70 an ounce as investors seek safer bets than equities and currencies. Goldman Sachs Group Inc. raised its three-month gold forecast by 43 percent to $1,000 an ounce this month. “Demand for our blanks is higher than we’ve seen since 1986,” Fourie said. “In the early 1980s gold then was a novelty and people wanted to own physical gold.”
Rand Refinery has manufactured, marketed and delivered more than 46 million ounces of Krugerrands since the gold coin was introduced in 1967, according to the company’s Web site.
“Record stock market lows are translating into record highs for gold and Krugerrands,” Alan Demby, chairman of the South African Gold Coin Exchange, said in an e-mailed statement last week. Investors are “piling into Krugerrands and Nelson Mandela gold medallions,” he said. Bloomberg
-Finance Minister Giulio Tremonti supports a proposal to use the Bank of Italy’s gold reserves to guarantee loans, MF reported, citing comments made by the president of the finance committee in parliament.
Gianfranco Conte, who heads the commission in the Chamber of Deputies, is close to Tremonti and yesterday called on Central Bank Governor Mario Draghi to address parliament on the issue to help “ease credit,” the newspaper said. Bloomberg
-Gold: an investment you hope won’t pay off. Read more here-http://www.reuters.com/article/ousiv/idUSTRE51N0RW20090224
-Gold to keep rising, base metals to lag BMO. Read more here- http://uk.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUKN2334883620090223?pageNumber=2&virtualBrandChannel;=0&sp;=true
-Jim Cramer is going for gold. He explains why gold is not too high. Watch video here-http://www.thestreet.com/_yahoo/video/10465560/cramer-going-for-the-gold.html?cm_ven=YAHOOV&cm;_cat=FREE&cm;_ite=NA&s;=1
-Gold market surplus to widen in 09. The VM Group looks at what lies ahead for the gold market this year in its Yellow Book. Read more here-
http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=79138&sn;=Detail view yellow book here-http://www.virtualmetals.co.uk/pdf/FYB0209.pdf
-Gold hedging slows but gold ETFs have grown more so far in 2009 than in whole of 2008. VM group report shows global gold hedging in Q4 08 fell 1.5 Moz (45t) to 15.5 Moz (483t). ETF offtake at 10.3 Moz (321t) in 2009 already higher than in all of 2008. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=79191&sn;=Detail
-Gold’s purchasing power. The overall conclusion is that gold is a significantly better store of value than paper currencies. While the purchasing power of gold is up four times, the purchasing power of major currencies is down 5-10 times, except for the Swiss Franc and the Japanese Yen, whose depreciation is significantly less. Read more and view charts here-
http://www.dollardaze.org/blog/?post_id=00583
-Gold Premiums Rise Again Despite Record Prices. Read more here-http://news.goldseek.com/GoldSeek/1235484585.php
-South African gold output lowest for 86 years. South Africa’s Chamber of Mines reports a 13.6% decline in annual gold output in 2008 the lowest since a strike-hit 1922. Read more here-
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=79052&sn;=Detail
-Sharia compliant gold security to be launched in Dubai. A gold backed ETF-type security which complies with Islamic Sharia investment principles is to launched in Dubai next week. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=79038&sn;=Detail
-Gold ETFs the World’s best-performing securities. Retail-style gold bullion ETFs this week hit record levels, holding 45m ounces of gold, more than China and India combined. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=79200&sn;=Detail
-Ex-Treasury official confirms gold suppression scheme. Read more here-http://www.gata.org/node/7197
-Swiss Populist Party wants gold recalled from U.S. Read more here-http://www.gata.org/node/7189
SILVER
Gold to silver ratio at 80 to 1 with gold at $1,100 the silver price would be $13.75
Gold to silver ratio at 70 to 1 with gold at $1,100 the silver price would be $15.71
Gold to silver ratio at 60 to 1 with gold at $1,100 the silver price would be $18.33
Gold to silver ratio at 50 to 1 with gold at $1,100 the silver price would be $22.00
Gold to silver ratio at 15 to 1 with gold at $1,100 the silver price would be $73.33
-Ted Butler on Silver; Past, Present, Future Phoenix Silver Summit Speech. Read more here-http://news.silverseek.com/TedButler/1235407708.php
-James Turk-Silver Is Again Outperforming Gold. Read more here-http://www.kitco.com/ind/Turk/turk_feb232009.html
-Factors in place to keep silver bull running for 3 years-BMO. Silver’s recent outperformance suggests that the market may be starting to see it as it sees gold-as ultimate money. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=78926&sn;=Detail
-Silver and Gold Short Term Top. Read more here-http://www.silverbrothers.com/022409.html
-Silver outshines gold for investors. Read more here-http://money.ninemsn.com.au/article.aspx?id=756803
DEFINITIONS-QUOTES-QUICK HITS
-The Austrian School of economics (also known as the “Vienna School” or the “Psychological School”) is a heterodox school of economics. It emphasizes the spontaneous organizing power of the price mechanism, holds that the complexity of subjective human choices makes mathematical modelling of the evolving market extremely difficult (or impossible) and therefore advocates a laissez faire approach to the economy.
Austrian School economists advocate the enforcement of voluntary contractual agreements between economic agents, but otherwise the smallest imposition of coercive force (especially government-imposed) on commercial transactions. Although often controversial, the Austrian School has been historically influential, dating back to the early 20th century. The Austrian School derives its name from its predominantly Austrian founders and early supporters, including Carl Menger, Eugen von Böhm-Bawerk and Ludwig von Mises.
Despite this name, supporters and proponents of the Austrian School can come from any part of the world, and there are now few Austrian School economists of Austrian nationality. Prominent Austrian School economists of the 20th century include Joseph Schumpeter, Nobel Laureate Friedrich Hayek, Henry Hazlitt and Murray Rothbard. The Austrian School now lies somewhat outside the mainstream, and currently contributes relatively little to mainstream economic thought. Read more here-http://en.wikipedia.org/wiki/Austrian_School_of_Economics
-”Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again.” Sir Josiah Stamp 1880-1941 former Director, Bank of England
-For those who have yet to cross over to the world of precious metals ownership we do not feel it is too late as we see long term price appreciation having a long way to go. If we see similar appreciation over the next four months we could see Gold approach $1,500.00 and Silver in the $25.00 range which would put the Silver/Gold ratio at 60/1. Precious Metals International
-Indeed there are interesting parallels with the mid 1970’s and today. Gold rose from $35/oz to $200/oz or nearly 6 times. Then gold prices fell from $200/oz to $100/oz in 1976 prior to surging by more than 800% from $100/oz to over $800/oz in the latter part of the 1970’s.
Gold fell from $1,030/oz in March 2008 to a low of just above $700/oz in late 2008. If gold were to repeat the performance of the mid to late 1970’s then it could rise to over $5,000/oz (8x $700/oz = $5,600/oz) in the coming years. Thus besides essential safe haven diversification attributes, gold also has significant potential for real and substantial capital gains that could help investors recoup some of the significant losses they have suffered in property and equity markets in recent years. Gold.ie-Read more here-http://news.goldseek.com/GoldSeek/1235483570.php
-CLSA’s equity strategist Christopher Wood confidently insists that the gold price will more than triple to reach $3,500/oz in 2010. Read more here-
http://ftalphaville.ft.com/blog/2009/02/23/52800/whats-coming-next-from-the-man-who-saw-it-coming/
-As governments print more money to pull the global economy out of a recession, Hans Goetti, CIO of LGT Bank in Liechtenstein tells CNBC that gold may spike to $3,000 a troy ounce as a result. Watch more here-http://www.cnbc.com/id/15840232/?video=1043867279&play;=1
-”People have been buying gold on economic Armageddon, so to see Obama and Bernanke paint a rosier picture, I’m not surprised to see gold come down a little bit,” said Matt Zeman, of LaSalle Futures Group in Chicago. Casey Daily Resource
-Investors have been buying gold this year as a store of value, driving the price up 9.3% and investment in the SPDR Gold Trust to a record 1,029 metric tons last week. Sales of 1-ounce American Eagle gold coins more than quadrupled to 92,000 in January, according to the U.S. Mint. Still, a decline in prices may be an opportunity to buy, some investors said.
“Those who’ve not yet bought gold as insurance against economic chaos have their opportunity to do so now and we would strongly urge that,” Dennis Gartman, an economist and editor of the Gartman Letter in Suffolk, Virginia, told his clients this week. Casey Daily Resource
-The sell-off in gold occurred partly in reaction to a congressional appearance by Federal Reserve Chairman Ben Bernanke coupled with back-and-fill movement that often occurs in a market that has seen considerable bullish enthusiasm, said Dave Meger of Alaron Trading.
Additionally, Meger said, the gold market underwent the kind of retracement that often occurs after a surge such as the one that took April gold to the $1,000 level Friday for the first time since July. “There was a significant amount of demand from small retail investors over the last several days,” he said. “As gold hit $1,000, it started becoming the talk of the town once again. That created an explosive rally. “A bit of a retracement off of that level is normal market trading.” Casey Daily Resource
-”Gold and other precious metals should continue to receive inflows of investment due to their ongoing outperformance of other asset classes,” said Tom Pawlicki, an analyst at MF Global Ltd. in Chicago. “Support will continue to come from disappointment in efforts to stem the financial crisis, and the weakness in the stock market that has resulted.” Casey Daily Resource
-”That $1,000 level stopped gold,” said Frank Lesh, of FuturePath Trading in Chicago. “Gold is overbought. This isn’t the end of the bull run. You’d rather see a slower, steadier build.”
“Gold is about the only commodity that’s going higher,” Lesh said. “There’s a lack of confidence in paper assets. Right now, the gold ETF is getting a lot of capital that would normally go to a bank or equities. There’s a perception that gold is going to hold its value.” Casey Daily Resource
-”Gold is pushing its record highs from last year, resistance will be formidable, but whether it does it in the next few weeks or in a few months, gold is clearly headed higher, much higher. $1,200 and higher gold is now a possibility in the short-term. Pullbacks will see continued strong investment demand, both from institutional and retail investors.
At the rapid rate global paper currencies are being diluted, the destruction of trust and integrity within the financial and banking system and destabilizing consequences such actions will promote, gold and silver are going to attract record amounts of capital seeking wealth preservation.” Peter Spina, of Goldforecaster.com
-Fannie Mae, the mortgage-finance company seized by regulators in September, asked the U.S. Treasury for $15.2 billion in assistance after a sixth consecutive quarterly loss drove its net worth below zero.
A wider fourth-quarter net loss of $25.2 billion, or $4.47 a share, pushed the company to make its first draw from a $200 billion federal lifeline, Washington-based Fannie said in a filing today with the Securities and Exchange Commission. Credit quality deteriorated and debt costs soared, forcing the company to record higher expenses and write down the value of its assets. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=akgfBZuPt29Q
-Moody’s May Lower $402 Billion of Subprime-Loan Debt. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=agQpgFBepZFw
-Chancellor of the Exchequer Alistair Darling took a step closer to nationalizing U.K. banks, boosting his control of Royal Bank of Scotland Group Plc and pressing former Chief Executive Fred Goodwin to give up his pension. The Treasury will allow its stake in RBS to climb up to 84 percent in return for guaranteeing 325 billion pounds ($462 billion) in toxic assets. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=a_1cNIMZjc7I
-China is taking advantage of the economic downturn to go on a major shopping spree, investing in energy and other natural resources that could give it an economic advantage it has never had before.
Some economic analysts say they believe that China’s investments pose a threat to competitors like the United States. In the last move, Beijing said last Friday that one of its big state-owned banks, the China Development Bank, would lend the Brazilian oil giant Petrobras $10 billion in exchange for a long-term commitment to send oil to China. Read more here-
http://www.nytimes.com/2009/02/21/business/worldbusiness/21yuan.html
-Clinton wraps Asia trip by asking China to buy US debt. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=apSqGtcNsqSY&refer;=worldwide or
http://www.breitbart.com/article.php?id=CNG.42a44b0f5d9cf5c9762e80574e79a3d5.831&show;_article=1
-Bernanke Sees 2010 Recovery ‘Only If’ Banks Stabilize. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=apuPjf3aW_H8&refer;=home
-John Bogle Says Recession May Last Another Two Years. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a1ks4UgzX1oQ
-’Dow Theory’ Says Worst Isn’t Over for U.S. Stocks as YRC Falls. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid;=aMvcBJYDRy4k&refer;=home
-Dividends Falling Means S&P; 500 Is Still Expensive. The fastest reduction in U.S. dividends since 1955 is depriving investors of the only thing that gave stocks an advantage over government bonds in the last century.
U.S. equities returned 6 percent a year on average since 1900, inflation-adjusted data compiled by the London Business School and Credit Suisse Group AG show. Take away dividends and the annual gain drops to 1.7 percent, compared with 2.1 percent for long-term Treasury bonds, according to the data.
A total of 288 companies cut or suspended payouts last quarter, the most since Standard & Poor’s records began 54 years ago, when Dwight D. Eisenhower was president. While the S&P; 500 is trading at the lowest price relative to earnings since 1985 and all 10 Wall Street strategists tracked by Bloomberg forecast a rally this year, predictions based on dividends show shares are overvalued by as much as 46 percent. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid;=a0ppsUZhKieU&refer;=home
-Prechter Sees ‘Two More Years’ of U.S. Stock Bear Market. Watch video here-http://www.bloomberg.com/avp/avp.htm?N=av&T;=Prechter%20Sees%20%60Two%20More%20Years%27%20of%20U.S.%20Stock%20Bear%20Market&clipSRC;=mms://media2.bloomberg.com/cache/vqnWdbAyUyzI.asf or http://www.bloomberg.com/apps/news?pid=20601110&sid;=aPCwImB7U3Kg
-NYSE May Relax $1 Share Price Requirement to Prevent Delistings. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aAvFOhfgN4ME
-Federal Reserve Chairman Ben S. Bernanke said there may be a benefit in resurrecting a rule that restricts short-selling stocks when share prices are falling amid the current bear market.
“In the kind of environment we have seen more recently” the so-called uptick rule “might have had some benefit,” Bernanke said in testimony before the House Financial Services Committee today. The rule, scrapped by the U.S. Securities and Exchange Commission in 2007, barred investors from betting against a stock until it sells at a higher price than the preceding trade. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aGxThJ3_70z0&refer;=home
-GM Posts $30.9 Billion Loss as Wagoner Seeks New Aid. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=amy46Gg9ybgs
-General Motors Corp. Chief Executive Officer Rick Wagoner pressed his case for as much as $16.6 billion in U.S. aid to a White House auto task force in a session that ran almost six hours, according to a person familiar with the matter. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a_SuDCJjYVnI
-4 ways to fix Detroit but none is easy. Force a merger? Fund a GM bankruptcy? Allow Chrysler to die? There are no good choices for Washington in dealing with the auto crisis. Read more here-http://money.cnn.com/2009/02/23/news/companies/federal_auto_options/index.htm
-Ken Rogoff says Fed needs to set inflation target of 6pc to help ease crisis. A leading US economist has called on the Federal Reserve to target an inflation rate of 5pc to 6pc over the next two years to erode the debt burden and slow the pace of job losses. Read more here-http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4701569/Ken-Rogoff-says-Fed-needs-to-set-inflation-target-of-6pc-to-help-ease-crisis.html
-U.S. Consumer Confidence Collapsed to Record Low. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aL6kjgG.mveU&refer;=home
-Europe Confidence at Record Low as Recession Deepens. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=a7B18hucKvz0&refer;=home
-U.S. Gov’t says ‘mass layoffs’ soared in January. Read more here-http://www.breitbart.com/article.php?id=D96INEM80&show;_article=1
-American Express Co., the largest U.S. credit-card company by purchases, is paying some cardholders $300 each to close accounts so the lender can reduce the risk of defaults as the recession deepens. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid;=a32RTgL8bFSw&refer;=home
-Obama in Canada Finds Best Financial System Without Bad Banks. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=aFwQUD5r.PzQ&refer;=canada
-Stanford Employees Yelled “Ponzi Scheme!” 3 Years Ago. Read more here-http://www.businessinsider.com/stanford-employees-alleged-ponzi-scheme-three-years-ago-2009-2
-90 year old Madoff victim back to work. Read more here-http://cosmos.bcst.yahoo.com/up/player/popup/index.php?cl=12126414
-CNBC’s Santelli incites traders in Chicago, calls for a ‘tea party’. Read more here-http://www.dailyfinance.com/2009/02/19/cnbcs-santelli-incites-traders-in-chicago-calls-for-a-tea-par/
-Hard times in Beverly Hills. Watch video here-http://www.cnn.com/video/#/video/us/2009/02/21/finnstrom.recess.90210.cnn?iref=videosearch
-Shiseido, Kao Beat Recession With Creams Priced as Much as Gold. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=a_kCGlkmTw80&refer;=home
RARE COLORED DIAMONDS
-The Rare Colored Diamonds Historical Value Tracker system is the perfect tool for investors to view the potential future value of a rare colored diamond based on the current market trend of a particular type of diamond. Track the potential future value of colored diamonds here-http://www.rarecoloreddiamonds.com/HistoricalValueTracker.html
-Penelope Cruz at the Oscars accessorized with a 69-carat cushion cut diamond necklace, a 21-carat starburst yellow diamond ring, and 11-carat diamond stud earrings from Chopard. The total value of the lady’s diamonds came to $3 million. Diamonds.net
-Rare colored diamond sales have been solid as a rock in recent months. In fact, the Wittelsbach blue diamond sold for $24.3 million at Christie’s in London on Dec. 11, 2008, setting a record price for any diamond or jewel sold at auction. The buyer was billionaire Laurence Graff. Christie’s Rahul Kadakia believes rare colored gems will remain at respectable price levels. “When it comes to colored diamonds, especially blues and pinks, those are rare in any market,” he says.
Says Lisa Hubbard of Sotheby’s, “Those appear to be holding their value, and they have not been subject to the ups and downs of the white diamond market.” Sotheby’s has also logged strong results in its recent colored diamond sales. An oval-shaped, vivid yellow diamond weighing 36.99 carats, internally flawless, sold at Sotheby’s New York in December 2008 for $71,870 per carat.
These gems are still the most sought after by famous private purveyors like the William Goldberg Diamond Corp. in New York, which has produced some of the most extraordinary colored diamonds in history, including the 30-carat, $50 million Blue Lili and the 5.11-carat, $20 million Red Shield, the largest red diamond ever graded by the Gemological Institute of America.
“I’ve heard different talk totally, about mines shutting down, like the Argyle mine in Australia,” says Barry Berg of the William Goldberg Diamond Corp., adding that he expects pink and blue diamonds to become ever scarcer. “It’s very hard to find a blue today, rough or polished,” he says. “Yellow is a little more available, but orange, I haven’t seen in ages.”
The Goldberg family business has seen prices for important stones remain strong. “We recently sold a 10-carat intense pink diamond for more than $8 million,” notes Eve Goldberg. “We also sold a bracelet with 58 carats of fancy colored diamonds, all over one carat, for close to $3 million.”
Clients have started to ask the Goldbergs whether they should consider buying diamonds as an investment and a shelter from plunging markets. Sotheby’s Hubbard is not surprised. Diamonds have an international market, and they are seen as a way to preserve wealth, she says. Read more here-http://www.forbes.com/2009/02/12/diamonds-jewelry-goldberg-lifestyle-collecting_0212_diamond_jewelry_print.html
COMMODITIES-OIL-NAT GAS
-Donald Coxe put his money on commodities just as they went bust. Now, he’s betting on inflation, China and India. Read more here-
http://www.theglobeandmail.com/partners/free/globeinvestor/investment/feb09/wrong.html
-Commodities Bouncing Back in 2009. Read and view chart here-http://www.321gold.com/editorials/holmes/holmes021909.html and http://www.321gold.com/editorials/holmes/holmes021909/1.jpg
-China prepares to buy foreign oil companies. Read more here-http://www.gata.org/node/7191
-Venezuela plans to boost oil output at least 12 percent in a joint venture with foreign investors that will cost more than twice what the government previously estimated, a confidential document shows.
The project would increase Venezuela’s daily output of 3 million barrels a day by 400,000 barrels a day within seven years, according to the document, which was obtained by Bloomberg News. The project would cost $18.4 billion, the report says, up from Energy and Oil Minister Rafael Ramirez’s June estimate of $8 billion.
The new estimate follows a 76 percent drop in oil prices from record highs in July and decisions by companies to delay exploration and drilling efforts from Canada to Kuwait amid the global credit squeeze. State-owned Petroleos de Venezuela SA wants the project and two others in the Orinoco oil belt to be the government’s first ventures with outsiders since President Hugo Chavez nationalized crude assets in 2007.
“It will be very tricky for companies, big or small, to get that level of funding,” said David Thomson, a Latin America energy analyst for Wood Mackenzie in Edinburgh. “Even if there wasn’t a credit crunch on, raising $10 billion to $20 billion for Venezuela wouldn’t be the easiest.”
Given past nationalization moves by Chavez, a self-avowed revolutionary socialist, Thomson said, “Banks aren’t going to touch it with a bargepole.” Read more here-
http://www.bloomberg.com/apps/news?pid=20601109&sid;=a8_6GQ9KdEQk&refer;=exclusive
-CFTC Probing United States Oil Fund in Crude Trades. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=alP0VeN7qr_I
-U.S. Gas Production Seen Sliding for 4 Years. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=anyXBvUCQa_M&refer;=exclusive
U.S. BUDGET-SPENDING
-’09 budget spends $11,833 for every American. Drudgereport.com
-President Barack Obama’s budget director said on Thursday that without a shift in policies the U.S. deficit would reach $9 trillion over the next decade. White House budget chief Peter Orszag said the Obama administration’s budget outline reflects costs for the war in Iraq and other items that were previously not included in the budget.
“All told we are showing $2.7 trillion in costs in this budget that were excluded from previous budgets and I think that is a mark of the honesty and responsibility contained in this document,” he said. Reuters
-Obama Seeks $1 Trillion Tax Increase on High Earners, Companies. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a.4tqh0vPi1k&refer;=home
-President Obama’s new budget blueprint estimates a stunning deficit of $1.75 trillion for the current fiscal year, which began five months ago, then lays out a wrenching change of course as he seeks to fund his own priorities while stanching the flow of red ink. Read more here-http://www.nytimes.com/2009/02/27/us/politics/27web-budget.html?ref=business or http://money.cnn.com/2009/02/26/news/economy/obama_budget_outline/index.htm?postversion=2009022614
-Analysis: Obama plans eclipsing New Deal spending. Read more here-http://www.breitbart.com/article.php?id=D96FI9CO0&show;_article=1
-Obama Pledges $634 Billion for Health Care, Says More Is Needed. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aB4axwgbnT2E
-Congress went on a pork-a-palooza, approving a massive spending bill with big bucks for Hawaiian canoe trips, research into pig smells, and tattoo removal all while the nation faces an economic crisis. Read more here-http://www.nypost.com/php/pfriendly/print.php?url=http://www.nypost.com/seven/02262009/news/politics/congress_porky_pols_pig_out_on_fine_wine_157027.htm
-Obama’s deficit goal: Hurdles ahead. Reducing the deficit in good times isn’t easy or popular. Doing it while trying to put out other fires will present quite a challenge. Read more here-
http://money.cnn.com/2009/02/23/news/economy/obama_promise_deficit/index.htm?cnn=yes or http://www.bloomberg.com/apps/news?pid=20601087&sid;=aB0FYEQkR4Es&refer;=home
VOLCKER SAYS U.S. ECONOMY MAY SUFFER FOR A LONG TIME-STRONG RESTRICTIONS ON HEDGE FUNDS
-The U.S. economy will suffer from the effects of the global financial crisis for “a long time” as a slowdown in demand spreads to other countries, former Federal Reserve Chairman Paul Volcker said. “We’re in the middle of a kind of massive economic crisis,” Volcker, who heads President Barack Obama’s Economic Recovery Advisory Board, said today at a Columbia University conference in New York. “We’re going to hear the reverberations about this for a long time.”
Volcker characterized the downturn that started in December 2007 as “not like a typical recession in the U.S. or elsewhere.” He also cautioned that U.S. government and central bank efforts to revive credit markets should only be temporary to alleviate the risk of inflation. Volcker said he is “shocked” by the international reach of the slowdown.
“The rest of the world has not held up,” making it harder for the U.S. to rely on strong export growth to emerge from its economic slump, he said. “Industrial production in most countries is going down faster than in the United States,” Volcker said.
The U.S. economy will contract 2 percent this year, making it the deepest annual slump since 1946, according to a Bloomberg News survey of economists taken this month. Gross domestic product shrank at a 3.8 percent annual pace in the last three months of 2008, the Commerce Department said in January.
Volcker also discussed rising prices, saying even “a little inflation is bad.” The cost of living in the U.S. rose last month for the first time in six months as the consumer price index rose 0.3 percent, the Labor Department said today in Washington. Bloomberg-Video here-http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/v1f0XHSKvGuc.asf
-Volcker Urges ‘Strong’ Restrictions on Hedge Funds. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aEPhoxeCfsvs&refer;=home or http://money.cnn.com/2009/02/26/news/economy/banks_volcker.reut/index.htm?postversion=2009022610
TALEB SAYS CRISIS IS HARDER TO END THAN DEPRESSION
-The financial crisis will be harder to end than the Great Depression and may force banks to be nationalized, “Black Swan” author Nassim Nicholas Taleb said. A more complex financial system makes the current problems, which cut global stock market value by 55 percent to $28 trillion since October 2007, worse than the contraction in the 1930s, Taleb said in a Bloomberg Television interview. Bonuses paid on Wall Street encouraged risk taking with no regard for losses, he added.
Rare and unforeseen events are known as “black swans,” after Taleb’s 2007 book, “The Black Swan: The Impact of the Highly Improbable.” The financial crisis isn’t one, he said.
“The black swan for me would be for us to emerge out of this unscathed and return to normalcy,” Taleb said. Compared with the Great Depression, this crisis is “very different, and it requires much more drastic action.”
Taleb’s book was published in May 2007, about three months before the credit crunch led banks to announce writedowns and credit losses that now total more than $1 trillion. As the founder of New York-based Empirica LLC, a hedge-fund firm he ran for six years before closing it in 2004, Taleb built a strategy based on options trading to bullet-proof investors from market slumps while profiting from rallies.
He now advises Universa Investments LP, a Santa Monica, California-based firm opened in 2007 by Mark Spitznagel, Taleb’s former trading partner, using some of the same strategies they had used since 1999. Taleb also is professor of risk engineering at New York University. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=a1U3n.FGDcpU&refer;=home
SOROS SEES NOT BOTTOM FOR WORLD FINANCIAL COLLAPSE
-Renowned investor George Soros said on Friday the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis. Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union.
He said the bankruptcy of Lehman Brothers in September marked a turning point in the functioning of the market system. “We witnessed the collapse of the financial system,” Soros said at a Columbia University dinner. “It was placed on life support, and it’s still on life support. There’s no sign that we are anywhere near a bottom.”
His comments echoed those made earlier at the same conference by Paul Volcker, a former Federal Reserve chairman who is now a top adviser to President Barack Obama. Read more here-http://www.reuters.com/article/businessNews/idUSTRE51K0A920090221?feedType=RSS&feedName;=businessNews&rpc;=23&sp;=true
-Soros Says Financial Crisis Marks End of a Free-Market Model. Billionaire investor George Soros said the current economic crisis has its roots in the financial deregulation of the 1980s and marks the end of a free-market model that has since dominated capitalist countries.
Liberalization of the financial industry begun by the Reagan administration has led to a series of breakdowns forcing government intervention, Soros told economists and bankers last night at a private dinner at Columbia University in New York. The global recession, triggered by the collapse of the U.S. housing market, has “damaged the financial system itself,” he said.
Regulators are in part to blame because they “abrogated” their responsibilities, Soros, 78, said. The philosophy of “market-fundamentalism” was now under question as financial markets have proved to be inefficient and affected by biases rather than driven by all the available information, he said.
“We’re in a crisis I think that’s really the most serious since the 1930s and is different from all the other crises we have experienced in our lifetime,” Soros said. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=ay0FPxGdth_k&refer;=home
NAILL FERGUSON PREDICTS PROLONGED FINANCIAL HARDSHIP-CIVIL WAR BEFORE GREAT RECESSION ENDS
-Harvard author and financial crisis guru Niall Ferguson has landed with a thud in Ottawa, spreading messages that could make even the most confident policy makers squirm. The global crisis is far from over, has only just begun, and Canada is no exception, Mr. Ferguson said in an interview before delivering a presentation to public-policy think tank, Canada 2020.
Policy makers and forecasters who see a recovery next year are probably lying to boost public confidence, he said. And the crisis will eventually provoke political conflict, albeit not on the scale of a world war, but violent all the same. Read more here-http://www.theglobeandmail.com/servlet/story/RTGAM.20090223.wferguson0223/BNStory/crashandrecovery/?pageRequested=all&print;=true
U.S. PROBLEM BANK LIST HITS 250-BANKING NEWS
-Problem bank list tops 250. FDIC reports that number of troubled institutions soared during the fourth quarter to the highest level since 1994. The government’s closely watched listed of troubled banks grew during the fourth quarter to its highest level since 1994, regulators said Thursday.
The Federal Deposit Insurance Corp. reported that the number of firms on its so-called “problem bank” list grew to 252 during the last three months of 2008, compared with 171 banks making the list in the prior quarter. “There is no question that this is one of the most difficult periods we have encountered during the FDIC’s 75 years of operation,” agency Chairman Sheila Bair said Thursday.
Problem banks typically face difficulties with their finances, or are suffering through operations or management issues that pose a threat to their existence. The institutions that wind up on the list are considered the most likely to fail, although few of them actually reach that point. On average, just 13% of banks on the FDIC’s problem list have failed. Read more here-
http://money.cnn.com/2009/02/26/news/companies/fdic_banks/index.htm?postversion=2009022614
-Regulators close Oregon’s Silver Falls Bank. Firm becomes the 14th U.S. bank to fail this year, as the struggling economy and falling home prices take a toll on financial institutions. Read more here-http://money.cnn.com/2009/02/20/news/companies/oregon.bank.reut/index.htm
-Get ready for a wave of bank failures. In less than two months, regulators have seized 14 banks. Experts think many more banks will collapse before the financial crisis is over. Read more here-http://money.cnn.com/2009/02/20/news/companies/bank_failures/index.htm
-Bernanke Rejects ‘Anything Like’ Bank Nationalization. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a4qVJ6vmPZ3I
-Gross Says Banks Need Credit, Not Nationalization. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aSVGILBa.kgM
-U.S. Banks Post First Loss since 1990 in Fourth Quarter. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aMztGISzhkDM
-Fed Urges Banks to Put Bailout Funds Into Loans, Not Dividends. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=anNhXj.NDVT8&refer;=home
-CNN’s Allan Chernoff explains Washington’s ’stress test’ for financial institutions to see if they can withstand the recession. Watch video here-
http://money.cnn.com/video/#/video/news/2009/02/26/news.chernoff.022609.cnnmoney
-U.S. Sets a 6-Month Deadline for New Bank Capital. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aZrnsIQYbIBU&refer;=home
-The granddaughter of the man who founded Bank of America in San Francisco in the early 1900s called the bank’s current condition “totally repulsive” and blasted the bank’s management for being “idiots.” Read and watch more here-http://cbs5.com/business/bank.of.america.2.942327.html
-U.S. Congressman Ron Paul’s Opening Statement and Questioning of Ben Bernanke Before the House Financial Services Committee this week. Watch more here-
http://news.goldseek.com/RonPaul/1235584997.php
-For all the $9.7 trillion pledged by the U.S. to combat the financial crisis, money markets show the world’s biggest banks see no recovery before 2010. The premium banks charge each other for short-term loans, the so-called Libor-OIS spread, rose above 1 percentage point last week for the first time since Jan. 9. Contracts traded in the forward market indicate the gauge, which measures banks reluctance to lend, will remain higher for the rest of the year than before Sept. 15, when the bankruptcy of Lehman Brothers Holdings Inc. froze credit markets.
“Libor-OIS remains a barometer of fears of bank insolvency,” former Federal Reserve Chairman Alan Greenspan said in an interview. “That fear has been substantially reduced since mid-October, but the decline has stalled well short of any semblance of normal markets.” The lack of lending between banks helped send the U.S. economy into a recession and may delay any recovery.
Turmoil in money markets stoked last year’s tumble in stocks and fueled demand for the relative safety of Treasuries, gold and Japanese yen. Since Lehman collapsed, the Standard & Poor’s 500 Index lost 35 percent, 10-year Treasury yields fell below 3 percent, gold topped $1,000 an ounce and the yen climbed 12 percent. “The fundamental outlook hasn’t changed,” said Jay Mueller, who manages about $3 billion of bonds at Wells Fargo Capital Management in Milwaukee. Read more here-
http://www.bloomberg.com/apps/news?pid=20601110&sid;=avRdLtxSSUwk
-Roubini Says Europe’s Banking Risks ‘More Severe.’ Read more here-http://www.bloomberg.com/apps/news?pid=20601085&sid;=aVCi5uDwQFhc&refer;=europe
REAL ESTATE-FORECLOSURES
-Home prices in 20 U.S. cities declined 18.5 percent in December from a year earlier, the fastest drop on record, as foreclosures climbed and sales sank. The decrease in the S&P;/Case-Shiller index was more than forecast and followed an 18.2 percent drop in November. The gauge has fallen every month since January 2007, and year-over-year records began in 2001. Separately, the Federal Housing Finance Board said prices in 2008 fell a record 8.2 percent.
Record foreclosures are contributing to declining property values and household wealth, crippling the consumer spending that makes up about 70 percent of the economy. The Obama administration has pledged to spend $275 billion to help stabilize the housing market, including $75 billion to bring down mortgage rates and encourage loan modifications.
“The massive inventory overhang in the market and the surge in foreclosures mean prices will continue to fall rapidly,” Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York, said today in a note to clients. “The administration’s rescue plan will, in time, slow the rate of decline, but it won’t happen immediately.” Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aIr7LleihO1E&refer;=home
-Sales of previously owned U.S. homes unexpectedly declined even as falling prices made them more affordable, signaling that the housing slump is further from a bottom than previously estimated.
Purchases fell 5.3 percent to an annual rate of 4.49 million, the fewest since 1997, the National Association of Realtors said today in Washington. The median price dropped 15 percent from a year ago to a six-year low of $170,300. Distressed properties accounted for 45 percent of all sales.
“This is actually a very disappointing set of numbers,” Ethan Harris, co-head of economic research at Barclays Capital Inc., said in a Bloomberg Television interview. “We’re still in this phase of the recession where it’s really kind of a dramatic pulling back” in purchases of big-ticket items, due to a “tremendous loss of confidence in the economy.” Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=acdWmjTuKCCg&refer;=home
-New-Home Sales in U.S. Plunge to Record-Low 309,000. Sales of new homes in the U.S. plunged in January to a record low as soaring unemployment and mounting foreclosures drove buyers away.
Purchases dropped 10 percent to an annual pace of 309,000, the lowest level since data began in 1963, the Commerce Department said today in Washington. The median price decreased 13.5 percent, the most in almost four decades. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=ank_aa66.Mbg
-Luxury homeowners are falling behind on mortgage payments at the fastest pace in more than 15 years, a sign the U.S. financial crisis that began with the poorest Americans has reached the wealthiest. About 2.57 percent of prime borrowers who took out jumbo loans last year were at least 60 days delinquent, according to LPS Applied Analytics, a mortgage data service in Jacksonville, Florida.
They got to that level within 10 months, almost twice as quickly as 2007 borrowers and the fastest rate since at least 1992, when LPS Applied Analytics began tracking the market. The jump in late payments on jumbo loans, while still lower than the 20 percent delinquencies in subprime mortgages, signals that the borrowers with the most money and the best credit are hurting as the U.S. recession deepens in its second year. It also means these loans will be even more difficult to obtain and more expensive to pay off.
“The biggest influence in rising delinquencies is related squarely to the economy rather than poor underwriting,” said Keith Gumbinger, vice president of HSH Associates, a Pompton Plains, New Jersey-based mortgage research firm. “We are apparently all suffering to some degree. It’s certainly more severe for some but still, it’s pretty much widespread.” Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid;=ab4hyMC6aJf0&refer;=home
-Manhattan’s luxury real-estate market is rotting, as Wall Street layoffs and tight credit squeeze demand. Why prices could slip another 30%. Read more here-
http://online.barrons.com/article_print/SB123517384563737163.html?mod=googlenews_barrons
-California Home Sales Double as Prices Plummet 41%. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aCsmO5e6mSb8&refer;=home
-Shiller: House Prices Still Way Too High. Watch video here-http://finance.yahoo.com/tech-ticker/article/190712/Shiller-House-Prices-Still-Way-Too-High?tickers=^gspc,^dji,hd,kbh,tol,ctx,xhb
-Office Sales in U.S. Fall to Eight-Year Low, Real Capital Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=arbyl5N95jvQ
-Dubai Rents to fall as Much as 40% in High-End Areas. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aGFDbiICCoBQ
-Getting an expensive housing reality check. Read more here-http://www.nytimes.com/2009/02/22/nyregion/westchester/22houseswe.html
-On May 1, 2007, a very different economic era, Janet Faello put her former marital home on the market for $829,000. She and her husband were divorcing. It seemed like a good price for the house, a six-bedroom, three-and-a-half-bath ranch in Dix Hills. But it didn’t sell at that price, or at $750,000, where it landed six months later, or at $699,000, where it stands now.
“It’s not the Taj Mahal, but it’s a nice, well-maintained home,” said Ms. Faello, a 53-year-old massage therapist with two daughters in college who remains in the house, which she and her ex-husband still jointly own. Her ex-husband lives elsewhere. “I haven’t been entertained once with an offer, and I’m still not getting any bites.”
With the house unsold, Ms. Faello said she and her ex-husband are struggling to meet expenses. Taxes alone are $13,860 a year. “I’m not ashamed to say to you, I have had to borrow money from my father,” she said. “We each want to move on. We’re just hoping and praying things will turn around.” Read more here-
http://www.nytimes.com/2009/02/22/nyregion/long-island/22Rstuck.html
-Chinese Scoop Up SoCal Foreclosures. Read more here-http://www.nbclosangeles.com/around_town/real_estate/Chinese_Scoop_Up_SoCal_Foreclosures_Los_Angeles.html
-House of Cards: The Faces behind Foreclosures. Read more here-http://www.time.com/time/printout/0,8816,1881854,00.html
GEOPOLITICAL
-FBI Director Warns of Terror Attacks on U.S. Cities. Read more here-http://www.washingtonpost.com/wp-dyn/content/article/2009/02/23/AR2009022301850_pf.html
-U.S. Ready to Respond to N.Korea Missile. Admiral Keating Tells ABC News U.S. Prepared to Shoot Down Missile If Obama Gives OK. Read and watch more here-
http://abcnews.go.com/International/story?id=6965611&page;=1
-Iran hails military ties with Russia. Read more here-http://www.breitbart.com/article.php?id=D96FD6000&show;_article=1
-Iran Says Test of First Nuclear Power Plant Begins. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aML9A_9W9oLw
-Officials: US troops to exit Iraq by August 2010. Read more here-http://apnews.myway.com/article/20090224/D96I7EGO0.html
-Russia “will respond” to military moves in Arctic. Read more here-http://uk.reuters.com/article/gc07/idUKTRE51M3ES20090223
© 2011, Worldwide Precious Metals.
www.wwpmc.com
The GoldBugg Report – March 03 , 2009
Posted by Worldwide Precious Metals on Tuesday, March 3, 2009
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