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The Goldbugg Report – January 26, 2010
January 26, 2010
- “4 Reasons Why Silver is the Most Undervalued Commodity.”
-“Why Physical Silver Investors Love ETFs But Do Not Own Them.”
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 40 to 1 with gold at $1,500 the silver price would be $37.50
Gold to silver ratio at 30 to 1 with gold at $1,500 the silver price would be $50.00
Gold to silver ratio at 20 to 1 with gold at $1,500 the silver price would be $75.00
Gold to silver ratio at 15 to 1 with gold at $1,500 the silver price would be $100.00
-It struck us, especially as long-time gold bulls, what little attention silver gets even though the two precious metals are driven by similar developments over time. The reality is that bullish sentiment on gold right now is infinitely higher than it is for silver; and keep in mind that while gold is the most malleable metal of all (the only metal that will look the same 1,000 years from now as it does today), silver pieces going all the way back to pre-biblical times were the primary medium-of-exchange (fiat paper currency, in the overall scheme of things, is a relatively new phenomenon and a convenient one for politically sensitive central banks). How well known is that up until 1968, silver certificates were redeemable for an equivalent amount of silver?
Since that time, these have been replaced by the Federal Reserve Notes declared as being official Legal Tender and backed by a printing press (now operated by none other than Ben Bernanke, who in four years has managed to create out of thin air 60% of the entire monetary base of the country since the United States was established 233 years ago). And how well known is it that theCoinage Act of 1965 removed all the silver from newly-minted quarters and dimes?
The difference between precious metals and fiat money is that the latter is not backed by any physical asset and as such has no intrinsic value whatsoever a medium of exchange, perhaps, but backed by nothing except its ‘legal tender’ status. Keep that in mind when you flip through your wallet (the term ‘dollar’, as an aside, was not a made-in-U.S.A. development but in fact was adopted from the Spanish dollar which itself was a silver coin from a Bohemian mine).
Silver also is very likely the metal that has the most industrial uses from batteries to mirrors to video equipment, so it is more than just a store of value as gold is. The silver price is more than 60% below its prior peaks even after the impressive rally of the past year. And when you take a look at where silver trades to gold, which is still flirting near record highs, it would have to triple to get to where gold was in relative terms at the peak back in January 1980 (gold was trading near $740/oz more than 30% below where it is today when silver was trading at its record peak back in January 1980 at $45/oz).
Relative to oil, silver could surge 4x from here and it still wouldn’t match the prior high in this relationship over three decades ago. Considering the problems that plague every major currency in the world, from the U.S. dollar, to the Yen, to the Euro, to sterling, and knowing from the McKinsey report that the need to monetize the surge in public debt will be required to cushion the economic blow from what will likely be another 5-6 years of deleveraging in the private sector, and given the much more stable supply outlook for silver (all the low-cost shallow mines on the planet have already been gutted) and where it trades relative to gold, not to mention what little attention the metals grabs and how under-owned it still appears to be, exposure to silver, whether it be in bars, coins, ETFs or mining companies, is likely going to be prove to be a very attractive investment in coming years. David Rosenberg-Gluskin/Sheff
-Silver has been of late and may remain over the near-term, a more profitable way to play the bull market in precious metals, considering how less “overbought” it is relative to gold bullion. The net speculative long position is high 45.059 contracts (5,000 troy ounce) but nowhere near the relative highs that have been hit in the gold market. David Rosenberg-Gluskin/Sheff
-Ted Butler is enthused about CFTC movement on position limits. Read more here-http://www.gata.org/node/8244
-Howard Ruff silver interview. Read more here-http://news.goldseek.com/GoldSeek/1263588641.php
-4 Reasons Why Silver is the Most Undervalued Commodity. Read more here-http://news.silverseek.com/SilverSeek/1264140240.php
-Why Physical Silver Investors Love ETFs But Do Not Own Them. Read more here-http://news.silverseek.com/SilverSeek/1264106417.php
-Silver set to shine. Read more here-http://www.fin24.com/articles/default/display_article.aspx?ArticleId=1518-2438-2439_2568072 or http://personalfinance.iafrica.com/moreinvest/2173160.htm
-A Decade of Hot Commodities. Gold had the most positive years its streak now stands at nine straight years after a 5.5 percent loss in 2000, when the bullion price dipped below $265, roughly a quarter of the current price. Oil, platinum and silver all had eight positive years during the decade, while nickel had six down years. Read more here-
http://news.goldseek.com/GoldSeek/1263920761.php
GOLD
-2010 Sectors to Watch: Gold. Cramer finished his weeklong series on 2010’s top investing themes with a focus on gold. The precious metal shot up 24% last year, marking the ninth straight year where the price increased.
“And I don’t think gold is done,” Cramer said. Gold historically has been considered a defensive play. Investors buy it to protect against both inflation and overall market volatility. The idea is that while some stocks in a portfolio are dropping, gold heads the other way, thereby helping to stem big losses. But the commodity has been rallying right along with stocks, turning it into an offensive play as well.
That’s because gold has developed into a legitimate growth investment. As more and more people flood in net investment in gold jumped fivefold in 2008 the price increases. A big driver has been investors’ seeking safety as world governments issue billions in cash to fund their economic stimulus programs, and, as a result, debase their currencies.
Many developing nations have used the same strategy, buying gold to maintain their exchange rates because they no longer trust devalued dollars and euros. The central banks of Russia, India and China all have upped their gold holdings over recent years.
Another relevant gold trend concerning the BRIC nations involves their growing middle classes. What do people do with their newly found disposable income? They spend it, of course. And a healthy chunk is going toward gold jewelry. “Central banks, currencies, interest rates this stuff is all important,” Cramer said. “But don’t underestimate the power of bling.”
A last couple of points regarding gold: The economy eventually will rebound, meaning inflation is on its way. And again gold is a play on that. So expect the price to rise accordingly. Also, gold producers have reduced their hedges, which is a sign that they too think prices are going higher. Not to mention, they can’t find enough gold to meet the growing demand, and that will play a part here as well.
-The bottom line here is that every portfolio should contain some gold. It plays on both sides of the ball: defensively it protects against market trouble, and offensively it capitalizes on the commodity’s growth. “Consider it term life insurance for your nest egg,” Cramer said. Read and watch more here-http://www.cnbc.com/id/34772171
-Five Fundamental Reasons Gold Will Hit $5,000. Read more here-http://www.dailymarkets.com/economy/2010/01/14/five-fundamental-reasons-gold-will-hit-5000/
-Gold price to hit $1,600 an ounce in 2010. Read more here-http://www.commodityonline.com/futures-trading/technical/Gold-price-to-hit-$1-600-an-ounce-in-2010-14027.html
-Two Important Messages from the Fear Index. The Fear Index remains within its decade-long bullish uptrend, so we therefore know as a consequence that gold also remains within an uptrend. But the Fear Index is also giving us another important message. It is that gold remains undervalued.
Gold’s valuation is indispensable information given its exceptional appreciation this decade. In other words, even though gold has risen nine years in a row against the US dollar, it remains relatively cheap. This conclusion is illustrated with the following chart.
The dashed horizontal line on this chart marks 2.63%, which is the average value of the Fear Index since August 1971. That is the date when President Nixon with total disregard to the US dollar’s 180-year history turned the dollar into irredeemable fiat currency, in effect declaring by presidential edict that the monetary requirements of the Constitution were null and void.
The Fear Index is presently 2.05%. Note that it is lower today than August 1976 when the Fear Index was 2.28% and gold was $104. Therefore, gold at $1106 its December 31, 2009 price is even more undervalued than it was at $100 back in 1976. How is that possible? How can gold be more than 10-times more ‘expensive’ today and still be better value?
Simple. A 2010-dollar is not the same as a 1976-dollar. The dollar’s name has not changed, but the dollar has been terribly debased over the past 34 years. It has lost much of its moneyness its innate value as money in two insidious ways.
It has lost purchasing power because of inflation. Secondly, it also has 0.23% less gold-backing today than it did at the low point of the Fear Index in 1976. Even though dollars can no longer be redeemed for gold, dollars are still partially backed by gold.
The Fear Index measures to what extent gold backs the dollar, assuming of course that the 261.5 million ounces in the US Gold Reserve really exist and have not been loaned out, encumbered or put in play as part of the gold price suppression scheme led by the US government.
What is clear from the above chart is that one cannot use the dollar price of gold to determine whether or not gold is good value. The purchasing power of the dollar and the extent of its gold-backing are ever-changing. So the dollar is not a good measuring stick. It is not a numéraire.
The important conclusion from the above chart is that gold remains relatively cheap. We should therefore continue to accumulate it. James Turk-Read more here-
http://www.fgmr.com/two-important-messages-from-the-fear-index.html
-Gold still on a feverish pitch. Read more here-http://www.moneycontrol.com/news/business/gold-still-onfeverish-pitch_436812.html
-Schmidt’s Gold Thoughts. Read more here-http://www.kitco.com/ind/Schmidt/jan182010.html
-In nominal dollars, new-home prices have retreated to 2003 levels. Priced in gold ounces, however, the median new-home “price” has collapsed to 1984 territory. After Nixon’s 1971 severing of the dollar’s tie to gold, price inflation, recession, and economic stagnation followed.
With similar conditions extant today, we expect gold to retake and then exceed its prior purchasing power high of 100 ounces buying a median-priced U.S. McMansion. Indeed, the “100-ounce house” would today require $2,000 gold, a target we think will be easily achieved. But a far more plausible scenario pairs a rising gold price with persistent home price weakness.
The possibility of the “50-ounce house” could be ahead of us. Read more here-http://caseyresearch.com/displayCcs.php?e=true
-The Overwhelming Evidence For Peak Gold. Read more here-http://www.businessinsider.com/peak-gold-is-happening-everywhere-2009-12
-Jim Sinclair: The Games Of The Paper Gold Market. Read more here-http://jsmineset.com/2010/01/21/the-games-of-the-paper-gold-market/
-Russia’s Central Bank Boosts Gold Holdings 4.1% in Month. Read more here-http://www.bloomberg.com/apps/news?pid=20601012&sid;=af8ronprmsBE
-Adrian Douglas: The ‘tiny’ gold market is actually the world’s biggest. Read more here-http://www.gata.org/node/8248
-Is There Gold in Fort Knox? Read more here-http://moneywatch.bnet.com/economic-news/article/is-there-gold-in-fort-knox/385523/
CHART OF THE WEEK-QUOTES-QUICK HITS
-Chart of the week: Workers Are Unemployed So Long, They’re Forgetting Their Skills. As highlighted by The Economist, only 400,000 more Americans were employed in 2009 vs. 1999 despite the fact that the population had grown by 30 million.
Yet it gets worse Not only has unemployment skyrocketed, but long-term unemployment has skyrocketed even higher. (Shown in the chart below.) The Economist: Long-term unemployment is what will make this economic downturn inordinately tough for many Americans to bear.
Regardless of what headline U.S. GDP data may do, many of the people represented by the spike below will experience a multi-year personal economic downturn regardless. Of course, it’s worth asking whether the skills they forget will even be valuable by the time things turn around. Read more here-http://www.businessinsider.com/chart-of-the-day-long-term-unemployment-2010-1
-Should you be a trader or a long-term Investor? Good question. How many of you that got into the gold market made a ton of money trading it from its $35 low in 1973 to its 1976 high of $200 had any profit left over when it suddenly dropped back to $100 in 1977? I’m willing to bet that not one of you got back in when gold soared passed $200 or passed $300 or $500 by the Fall of 1979?
But most everyone was jumping in as gold gapped up as much as $30 a day into its ultimate high of $850+ into December 1979. Instead of reaping fortunes most traders ended up in the hole, while those slow dumb investors who just grabbed on to the Bull and hung on became very rich. Aubie Baltin
-Why do we enjoy volatility? We do not like or dislike volatility, we are neutral to fluctuations. We do, however, like opportunity, and volatility often creates opportunity. In fact, I would go so far as to say volatility usually creates opportunity. How does this happen? Human nature is driven by greed and fear, among many other motivating influences.
However, the insecurities that lead to greed and fear are more urgent in many people, and greed and fear motivate more personal behavioural volatility. If the markets are volatile, you can be certain that some people are losing money. Those who are losing money often decide to sell down to the sleeping level at a time when the price is low and a buyer with cash and moxie can do very well.
Many huge fortunes have been built on this principle. For these reasons, and for other reasons too numerous to mention, the markets often create great opportunities to buy valuable assets at a low price. Monty Guild
-According to Egon von Greyerz a leading gold commentator, gold could reach $10,000 per oz due to the state of the world paper currencies. He has released a hard hitting analysis of the effects of toxic loans and printing of money to prop up the economies.
Greyerz, a former Deputy Chairman of Dixons and now Managing Partner of GoldSwitzerland, also states that we could see hyperinflation and the collapse of the dollar. The public’s perception of gold will change dramatically in the next 12-18 months.
With the likely major decline of currencies like the dollar and the pound and the resurgence of problems in the financial system, the coming rapid appreciation of gold will make major headlines.
At that point the media will totally change their attitude and treat gold with the respect that it requires as the only surviving currency of the last 6,000 years. Gold at $1,135 will be regarded as an absolute bargain in 12 months time. Listen here-http://goldswitzerland.com/index.php/bbc-radio-interview-with-egon-von-greyerz/
-As for the equity market well, it is more than just fractionally overvalued more like 25% at the least. In our morning reading, we came across this little ditty in the New York Times from the venerable Jeffery A. Hirsch, the editor of the Stock Trader’s Almanac: “The market has been pricing in a pretty robust and unwavering recovery.
The selloff today is the market coming back to the reality that it did get a little bit ahead of itself, and that it we’re probably going to have some struggles going forward.” We wouldn’t disagree. David Rosenberg-Gluskin/Sheff
-Both the average and median one-year forward P/E multiple on the TSX is just over 14x, so our earnings projection would yield a ‘fair value’ on the Canadian market at around 10,150. That would suggest a current overvaluation of 15%.
Even the consensus earnings view of $750 which would imply over a 20% profits surge this year (highly unlikely in our opinion) would spin out a fair-value index level of 10,725 nearly 9% overvalued. No matter how you slice it, this is an overvalued market perhaps not egregiously so and certainly not as overdone as is the case in the USA, but it is expensive nonetheless. David Rosenberg-Gluskin/Sheff
-Mr. Market has sent out an early message this year that he is going to be far more discriminating this will not be another year when the rising tide lifts all the boats. The shorts have long been covered, the hedge funds have reached their high-water marks, mutual fund manager cash ratios are back at the lows, and the VIX index is half the level it was a year ago in a show of how the market has shifted from being completely catatonic to completely complacent. David Rosenberg-Gluskin/Sheff
-Russia diversifies into Canadian dollars. Read more here-http://www.ft.com/cms/s/0/22f1bd26-05db-11df-8c97-00144feabdc0.html
-Canada Keeps Lending Rate 0.25%, Repeats June Pledge. The Bank of Canada left its benchmark interest rate at a record low and repeated a pledge to leave it unchanged through June as a strong currency and weak U.S. demand slow an economic recovery. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=aLnRrLuuIK8k
-Is America’s financial collapse inevitable? Read more here-http://www.wnd.com/index.php?fa=PAGE.view&pageId;=122030
-Illinois enters a state of insolvency. As Illinois’ fiscal crisis deepens, the word “bankruptcy” is creeping more and more into the public discourse. “We would like all the stakeholders of Illinois to recognize how close the state is to bankruptcy or insolvency,” says Laurence Msall, president of the Civic Federation, a fiscal watchdog in Chicago.
“Bankruptcy is the reality that looms out there,” Republican gubernatorial candidate Andrew McKenna Jr. says. Read more here-http://www.chicagobusiness.com/cgi-bin/mag/article.pl?articleId=32910&seenIt;=1
-Unfunded Benefits Dig States’ $3 Trillion Hole. Everyone seems to know the current path of federal fiscal policy is a deathtrap over the long term. What’s peculiar is the relative inattention to the balance sheets of state and local governments.
Hidden behind accounting fictions, the politically unspeakable reality is that public employee pension systems are under-funded by more than $2 trillion. Add more than $1 trillion in unfunded health-care benefits for retired public employees, and state governments face protracted structural deficits ranging from challenging to insurmountable.
Unfunded promises are the equivalent of government debt. The burden of promises made by state governments to their employees effectively an invisible wealth transfer from future taxpayers to current and prospective public-sector employees amounts to about one quarter of U.S. gross domestic product. The strength and durability of the current economic recovery are unknowable; that state and local governments, which employ one in nine workers, will be a drag on that recovery is certain.
Ultimately, mathematically unsustainable trends must reverse. As with New York City in the late 1970s, eventually the federal government may get involved in redefining the services state and local governments provide, the benefits paid to public employees and the burdens on taxpayers. States cannot kick the can down the road ad infinitum. Read more here-
http://www.bloomberg.com/apps/news?pid=20601039&sid;=aKQk6SUcSr3A
-Jobless Claims in U.S. Unexpectedly Rise on Backlog. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=apSsE1zr0Syo
-Jobless rates seen high for many more years. Read more here-http://www.reuters.com/article/idUSTRE60J0WB20100120
-NYC Jobless Rate Rise to 10.6%, Highest Since 1993. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aDG58D9xbVsk
-Capital One US credit card charge-offs hit 10 pct. Capital One Financial Corp’s U.S. credit-card charge-offs rose to double digits in December, showing consumers became increasingly stressed in the holiday shopping month.
In a regulatory filing on Friday, Capital One said the annualized net charge-off rate debts the company believes it will never collect for U.S. credit cards rose to 10.14 percent in December from 9.60 percent in November. Read more here-http://www.reuters.com/article/idUSN1517993820100115
-Britain’s recession the steepest for 88 years. Read more here-http://business.timesonline.co.uk/tol/business/economics/article6986312.ece
-U.K. families face years of pain, says bank. Families must steel themselves for years of hardship even though the recession is all but over, the governor of the Bank of England has warned. Read more here-http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7030904/Families-face-years-of-pain-says-Bank.html
-Britain borrowed £15.7bn to balance the books last month, the highest December figure on record, as two-and-a-half years of financial crisis and recession took a toll of the public finances. Read more here-http://www.guardian.co.uk/business/2010/jan/21/government-borrowing-december-record
-European Ministers Say Greece Must Tackle Deficit. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=anQmz0rOyhjY
-ECB prepares legal grounds for euro rupture as Greece festers. Read more here-http://www.gata.org/node/8246
-Doug Casey: Stock Market Set to Crash. Read more here-http://www.321gold.com/editorials/casey/casey012110.html
-Martin Armstrong New Year’s message to the masses. Read more here-http://www.scribd.com/doc/25227935/Behind-The-Curtain-The-Full-Monty
-Martin Armstrong bio. Read more here-http://en.wikipedia.org/wiki/Martin_A._Armstrong and http://armstrongeconomics.com/about/
-China, which cut Treasury holdings by the most in five months in November, may scale back purchases of U.S. debt on concern the dollar will decline, said Liu Yuhui, an economist at the Chinese Academy of Social Sciences. Read more here-http://www.bloomberg.com/apps/news?pid=20601083&sid;=aCbMn3vSkuGI
-Boomers see retirement later, less likely. People just starting to consider retirement are less optimistic about their ability to stop working than older people, but many still want to move when they reach traditional retirement age, according to a survey commissioned by homebuilder Pulte Homes Inc.
Of those who turn 50 this year, 41 percent say they will never be financially capable of retiring and 23 percent have not even started to save, Pulte revealed at the International Builders’ Show, homebuilding’s annual industry event, held here this week.
The study compared attitudes toward retirement by older and younger baby boomers, the massive age cohort born between 1946 and 1964 whose sheer size makes it a prize demographic across industries. Read more here-http://www.reuters.com/article/idUSTRE60J5CA20100120
-Don’t Like the Numbers? Change ‘Em. If a CEO issued the kind of distorted figures put out by politicians and scientists, he’d wind up in prison. Politicians and scientists who don’t like what their data show lately have simply taken to changing the numbers.
They believe that their end socialism, global climate regulation, health-care legislation, repudiating debt commitments, la gloire française justifies throwing out even minimum standards of accuracy.
It appears that no numbers are immune: not GDP, not inflation, not budget, not job or cost estimates, and certainly not temperature. A CEO or CFO issuing such massaged numbers would land in jail. Read more here-http://online.wsj.com/article/SB10001424052748704586504574654261655183416.html?mod=rss_Today%27s_Most_Popular
-U.S. counter terror agency lacks “Google-like” search. Read more here-http://www.reuters.com/article/idUSTRE60J5FA20100120
-Iran Says Western Warships Would Be Targeted in Event of Attack. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=ajBZ7h4oXTak
-FBI Chief Tells Congress Terrorist Threat Grows More Worrisome. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aSYnKM0fj_HY
-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/HistoricalPriceTrackingsystem.html
-Watch BTV interview of Harold Seigel on colored diamonds and his website http://www.rarecoloreddiamonds.com/. Watch video here-http://www.rarecoloreddiamonds.com/watchnow.html
-Rio Tinto Diamonds announced last week that production at its fully owned Argyle mine in Australia was 33% lower than the same quarter of 2008. Israelidiamond.co.il
-Diamonds as good an investment as gold. Gold may be the preferred metal when it comes to investment, but with availability of small diamonds even the sparkler is being fancied by many. “If you compare gold and diamond in terms of return in last 10 years then both stand almost equal.
Both have given average 15 to 20 per cent return per year over a period of 10 years despite a three year recession period in both”, said Rohit Mehta, president of Surat Diamond Association. Read more here-http://timesofindia.indiatimes.com/city/surat/Diamond-as-good-an-investment-as-gold/articleshow/5474352.cms
OIL-NAT GAS
-Oil Shortages to Reappear in 2011, Goldman Sachs Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=axnm2BeGMveI
-There’s oil in them thar wealth funds. Read more here-http://blogs.reuters.com/globalinvesting/2010/01/14/theres-oil-in-them-thar-wealth-funds/
-Triple Digit Oil and Economic Change. Read and watch more here-http://jessescrossroadscafe.blogspot.com/2010/01/triple-digit-oil-and-economic-change.html
-Venezuela Power Shortage May Push Oil Above $100. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=akwFudCxmFUM
-Cheap Oil is Gone, and That’s Good News. Read more here-http://news.goldseek.com/GoldSeek/1263591623.php
-China completes 1st phase of nat”l strategic oil reserve project. Read more here-http://www.kuna.net.kw/NewsAgenciesPublicSite/ArticleDetails.aspx?id=2055244&Language;=en
-China’s Round-The-Clock Auto Factories Still Cannot Meet Demand. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=av3dPlponcBw
-Henry Ford Raising Wage May Give China Tip on Worker Prosperity. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=au7tdjzgHks8
-U.S. Overtakes Russia as Biggest Natural Gas Producer. Read more here-http://www.bloomberg.com/apps/news?pid=20601095&sid;=a48PBeFePGE8
INSIDER STOCK BUYING DROPS TO LOWEST LEVELS IN A YEAR
-As the recession on Main Street continues the negative trends in insider buying get even worse. Insider buying fell to a new low of $7.8MM on the week. Selling dropped from $318MM to $293.22MM, but remains at very high levels.
I continue to believe this is a reflection of the ongoing secular bear market as corporate insiders see little to no real recovery in revenues and sustainable organic growth. Due to this, they have little to no faith in the long-term sustainability of future increases in their own corporation’s stock prices. This is best reflected in the incredibly lopsided insider transactions. Read more here-
http://pragcap.com/insider-buying-drops-to-lowest-levels-in-a-year
JAPAN POST BUBBLE RALLIES
-Here’s a new chart that gives a closer view of the cyclical rallies and their duration during Japan’s secular bear market, now in its 20th year. Read more here-http://www.dshort.com/articles/2010/Japan-post-bubble-rallies.html
S&P; 500 ANNUALIZED TOTAL RETURN ROLLER COASTER
-Imagine that ten years ago you invested $10,000 in the S&P; 500. How much would it be worth today, adjusted for inflation with dividends reinvested? Brace yourself: Your investment has shrunk to about $7,246, an annualized return of -3.17%. That’s a 27.5% loss.
And this is an improvement over the same ten-year return as of March, when your annualized return would have been -5.93%, for a total loss of 45.7%. Read more here-http://www.dshort.com/articles/2010/SP-Composite-annualized-total-return-roller-coaster.html
BANKING CRISIS
-Banks Stand to Lose Billions in Value, Face Skeptical Investors if FASB Rule Adopted. Banks are likely to lose hundreds of billions of dollars in total common equity possibly damaging their ability to attract investors and raise capital if a shift in accounting rules to be proposed this quarter goes into effect.
That’s the conclusion of Fitch Ratings, the New York-based credit ratings agency, which just released a study of the impact that fair value accounting would have on loans.
In its report on fair value, Fitch analyzes the impact of the change on 20 large banks, concluding that those institutions alone would experience a decrease in shareholder equity of $130 billion, or 14% on average, if the standards change had been implemented last fall. An exposure draft is expected this quarter, but a rule would not be implemented before 2011. Read more here-
http://www.fincriadvisor.com/2010-01-17/fitchonFASB
-Barclays, Lloyds May Need 25 Billion Pounds to Bolster Capital. Barclays Plc and Lloyds Banking Group Plc, two of the U.K.’s biggest banks, may need to raise as much as 25 billion pounds ($41 billion) to meet new rules on how much capital to hold against losses, according to Matrix Corporate Capital LLC and Credit Suisse Group AG.
Lloyds, Britain’s largest mortgage lender, may need to raise as much as 7.8 billion pounds, Matrix said, while Barclays may require as much as 17 billion pounds, according to Credit Suisse. The country’s biggest bank, HSBC Holdings Plc, will also have its capital buffer reduced under the proposed new Basel Committee on Banking Supervision rules, according to Matrix, though it won’t be forced to raise money.
The Basel Committee works under the Bank for International Settlements to set financial company capital rules and is proposing regulation that may come into effect in 2012. Regulators want lenders to hold better-quality capital to prevent a repeat of the crisis that followed the 2008 collapse of Lehman Brothers Holdings Inc. when trillions of dollars of taxpayers’ money was used to prevent bank failures.
“Changes in regulations for bank capital are a game changer for the sector,” according to Andrew Lim, analyst at Matrix in London. The proposals will “increase the quantum of capital in the system, improve its quality, force out complexity from balance sheets and ultimately drive down return on equity,” he said.
Banks probably will have to maintain a so-called core capital ratio of at least 6 percent under the Basel Committee proposals. The ratio is a measure of financial strength that compares a bank’s capital to its loans and other at-risk assets. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a622iFzFpcBU&pos;=5
-Banks pull another $1 billion from small business lending. The nation’s biggest banks cut their collective small business lending balance by another $1 billion in November, according to a Treasury report released late Friday. The drop marked the seventh straight month of declines.
The 22 banks that got the most help from the Treasury’s bailout programs have cut their small business loan balances $12.5 billion since April, when the Treasury began requiring them to file monthly reports on the tally. The banks’ total lending has fallen 4.6% in that seven-month period, to $256.8 billion.
As Wall Street megabanks return to health and celebrate with lavish bonuses President Obama and his administration have been pushing financiers to help spur a Main Street recovery. Small business owners are still reporting difficulty finding banks willing to extend the credit they need to launch, run and grow their ventures.
In December, the President met with a dozen CEOs of the nation’s biggest banks to pressure them to reverse their small business lending declines. Read more here-
http://money.cnn.com/2010/01/18/smallbusiness/small_business_lending_drop/index.htm
-FDIC geared up for busy year of bank failures. Read more here-http://www.reuters.com/article/idUSTRE60J53220100120
-Regulators shutter small banks in Illinois and Minnesota. Read more here-http://money.cnn.com/2010/01/15/news/economy/bank_failure/index.htm or http://www.fdic.gov/
-Utah’s Barnes Banking Company closed by regulators. Read more here-http://www.marketwatch.com/story/utahs-barnes-banking-company-closed-by-regulators-2010-01-15-201570
-President Barack Obama’s proposal to regulate banks should include a requirement that chief executive officers and their spouses forfeit their assets when companies fail, billionaire Warren Buffett said on Fox Business Network.
“There ought to be a huge downside,” said Buffett, whose Berkshire Hathaway Inc. is the largest shareholder in Wells Fargo & Co. “Make it so that the CEO of an institution that fails, or goes to the government and needs help, really gets destroyed himself financially. Why should he come out any better than somebody that gets laid off as an auto worker at General Motors?” Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=awAvKWXCljy8
INFLATION
-The CPI chart reflects our estimate of inflation for today as if it were calculated the same way it was in 1990. The CPI on the Alternate Data Series tab here reflects the CPI as if it were calculated using the methodologies in place in 1980.
In general terms, methodological shifts in government reporting have depressed reported inflation, moving the concept of the CPI away from being a measure of the cost of living needed to maintain a constant standard of living. Read more here-http://www.shadowstats.com/alternate_data/inflation-charts
-Consumers Squeezed as Inflation Outpaces Wages. Read more here-http://moneynews.com/InvestingAnalysis/US-Economy/2010/01/15/id/346518
U.S. DEBT CRISIS
-US Fed’s balance sheet liabilities hit record. The U.S. Federal Reserve’s balance sheet rose to a record in the latest week, boosted by its ongoing efforts to support the mortgage market, Fed data released on Thursday showed. The Fed’s balance sheet a broad gauge of its lending to the financial system rose to $2.274 trillion in the week ended Jan. 13 from 2.216 trillion in the prior week.
After declining early last year, the balance sheet generally has been accumulating mass amid the Fed’s asset-buying program, in which the central bank’s holdings of agency debt and mortgage-backed securities have grown to more than $1 trillion.
The latest rise in the balance sheet came on the back of a jump in its holdings of agency mortgage-backed securities, which rose to $968.59 billion in the week ended Jan. 13 from $908.74 billion in the previous week. The Fed’s holdings of agency debt totalled $160.83 billion in the week ended Jan. 13 versus $159.88 billion the previous week.
By the end of March, the Fed plans to have bought $1.25 trillion worth of mortgage-backed securities and about $175 billion worth of agency debt. Read more here-
http://www.reuters.com/article/idUSN1423394420100114
-Democrats propose $1.9T increase in debt limit. Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $1.9 trillion to pay its bills, a record increase that would permit the national debt to reach $14.3 trillion. Read more here-http://news.yahoo.com/s/ap/20100120/ap_on_bi_ge/us_congress_debt_limit_11
-Debt ceiling fight: It’s back. Read more here-http://money.cnn.com/2010/01/19/news/economy/debt_ceiling/index.htm
REAL ESTATE-FORECLOSURES-MORTGAGES
-In my view, three years after the detonation in residential real estate, it is still all about housing. And it will be interesting to see how the markets handle a near-term renewed decline in the Case-Shiller home price index since the consensus is that housing values have bottomed, and what happens if home
prices do fully mean revert and drop another 10-15% from current levels (on top of the 30% decline already posted). The implications for confidence, wealth, spending, foreclosures, writedowns and bank credit growth are enormous.
But not only are house prices still overvalued relative to wages and rents, but there is still far too much supply relative to the underlying demand, a message that has come out ringing loud and clear in each of the last two NAHB surveys:
• There are two million U.S. homes sitting vacant with a “For Sale” sign.
• There is another 3.4 million homes that are vacant but are being “held off the market” for unspecified reasons. In other words, the “shadow” inventory of foreclosed units that has yet to be listed.
• There are an additional 3.5 million homes that are occupied but are listed for sale right now.
• We have 235,000 newly built units sitting vacant too.
• There are a record 4.6 million vacant rental units nationwide that are competing for all this outstanding supply of houses, and rents are deflating at a record rate, which is impeding the relative improvement in the costs of homeownership.
So we have supply, both potential and actual, of over nine million homes and condos nationwide. That is a huge overhang. On top of that, an 11%-plus rental vacancy rate as a viable option for households looking for a place to live.
For some reason, this does not add up to anything but a long and winding road for continued house price depreciation going forward. There may be subprime areas of Florida, California, Nevada and Arizona that look very attractive, but the overall market also includes the northeast and Midwest and the mid to high-end part of the real estate space where deflation is going to remain a reality for years to come. David Rosenberg/Gluskin/Sheff
-Homebuilder Confidence in U.S. Unexpectedly Decreases. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aWgr38GummuE
-U.S. life insurers, a group led by MetLife Inc. and Prudential Financial Inc., may face $15 billion in additional commercial real estate losses, most of which will be recognized in the next two years, Fitch Ratings said.
The life insurers have already booked about $5 billion in such losses since the economic crisis began, bringing the expected total to $20 billion, Douglas L. Meyer, a Fitch analyst, said today in an interview. Most future losses will be taken this year and in 2011, he said. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aA2KSAm14FVQ
-Record 3 million households hit with foreclosure in 2009. Read more here-http://money.cnn.com/2010/01/14/real_estate/record_foreclosure_year/index.htm or http://www.reuters.com/article/idUSTRE60D0LZ20100114
-Treasury Delay on Home-Equity Debt Imperils Housing. Read more here-http://www.bloomberg.com/apps/news?pid=20601214&sid;=acBzdzGqrIoI
-Loan Modification Recipients Fall Short, Drop Out. About 25 percent of homeowners who received trial loan modifications through President Barack Obama’s main foreclosure prevention plan are failing to keep up with their new reduced payments, the Treasury Department said. Read more here-http://www.bloomberg.com/apps/news?pid=20603037&sid;=aBE9Z4fJhiAg
-Homeowners opt to flee instead of fight as loan modifications start to lose luster. Read more here-http://www.palmbeachpost.com/money/real-estate/homeowners-opt-to-flee-instead-of-fight-as-183341.html?printArticle=y
-$8 million in assets and can’t get a mortgage. The wealthy have money problems, too yeah they do. Even refinancing a mortgage for their fancy digs or getting a new loan can be near impossible these days thanks to skittish lenders. And the higher the loan value, the more they worry.
Still, that people with high six-figure incomes, stellar credit histories and gobs of assets get mortgage requests turned down seems weird. “It’s amazing really,” said Susan Bruno, a financial planner with Beacon Wealth Consulting in Rowayton, Conn., “but it makes sense when you think about it.”
For one thing, many rich folks have fallen behind on their loans. About 12% of U.S. mortgages of $1 million and larger were late this fall, twice the rate for loans under $250,000 and nearly triple the default rate on million dollar mortgages 12 months earlier, according to First American CoreLogic Inc., a California-based research firm. Read more here-
http://money.cnn.com/2010/01/20/real_estate/mortgage_woes_for_wealthy/index.htm
© 2009, Worldwide Precious Metals.
www.wwpmc.com
The Goldbugg Report – January 26, 2010
Posted by Worldwide Precious Metals on Tuesday, January 26, 2010
The Goldbugg Report – January 19, 2010
January 19, 2010
-As Events Around the World Continue to Change we should use Gold to Protect our Wealth. – David Levenstein
-From its $8.79 low barely fourteen months ago after the de-leveraging and mass liquidation of assets resulting from the Lehman Brothers collapse, silver has climbed an astounding 110%. But the upside fireworks have hardly begun.
-Gold’s stellar performance set to continue in 2010. Historically gold bull markets have lasted as many as 15 to 25 years, this one has only been going since 2001
SILVER
Gold to silver ratio at 80 to 1 with gold at $2,000 the silver price would be $25.00
Gold to silver ratio at 70 to 1 with gold at $2,000 the silver price would be $28.57
Gold to silver ratio at 60 to 1 with gold at $2,000 the silver price would be $33.33
Gold to silver ratio at 50 to 1 with gold at $2,000 the silver price would be $40.00
Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00
Gold to silver ratio at 30 to 1 with gold at $2,000 the silver price would be $66.67
Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00
Gold to silver ratio at 15 to 1 with gold at $2,000 the silver price would be $133.33
-LBMA silver forecasts here-http://www.lbma.org.uk/pubs/forecasts
-Silver forecasts.
| high | low | average | |
| YTD actual at 14-Jan-10 | $1153 | $1122 | $1134 |
| Average forecasts | $1,394 | $983 | $1,199 |
| Philip Aubertin UBS Investment Bank | $1,415 | $950 | $1,225 |
| Robin Bhar Calyon Credit Acricole CIB | $1,350 | $1,050 | $1,215 |
| Joerg Ceh Landesbank Baden-Württemberg | $1,470 | $920 | $1,198 |
| Jeffrey Christian CPM Group | $1,400 | $1,000 | $1,163 |
| Suki Cooper Barclays Capital | $1,365 | $925 | $1,180 |
| Peter Fertig QCR Quantitative Commodity Research Ltd | $1,350 | $950 | $1,185 |
| Rene Hochreiter Allan Hochreiter (Pty) Ltd | $1,400 | $960 | $1,200 |
| Vincent Huang Solar Applied Materials Technology Corp | $1,345 | $1,012 | $1,285 |
| Michael Jansen JPMorgan Chase Bank | $ | $ | $1,218 |
| Michael Kempinski Commerzbank | $1,505 | $975 | $1,295 |
| Tom Kendall Mitsubishi Corporation (UK) Plc | $1,430 | $1,050 | $1,215 |
| Philip Klapwijk GFMS Ltd | $1,340 | $990 | $1,172 |
| Michael Ludwig BNP Paribas | $1,530 | $1,050 | $1,290 |
| Nick Moore RBS Global Banking & Markets | $1,250 | $900 | $1,000 |
| Martin Murenbeeld Dundee Economics | $1,345 | $995 | $1,205 |
| Ross Norman TheBullionDesk | $1,425 | $1,080 | $1,236 |
| Frederic Panizzutti MKS Finance S.A. | $1,480 | $950 | $1,268 |
| Jeffrey Rhodes INTL Commodities DMCC | $1,280 | $980 | $1,137 |
| Ruchi Singh ICICI Bank | $1,350 | $1,020 | $1,280 |
| Daniel Smith Standard Chartered | $1,500 | $900 | $1,150 |
| James Steel HSBC Bank USA NA | $1,300 | $950 | $1,150 |
| Bob Takai Sumitomo Corporation | $1,350 | $950 | $1,100 |
| Matthew Turner Virtual Metals | $1,350 | $950 | $1,179 |
| Bhargava Vaidya B.N. Vaidya & Associates | $1,300 | $925 | $1,075 |
| David Wilson Société Générale | $1,650 | $1,090 | $1,388 |
| Wolfgang Wrzesniok-Rossbach Heraeus Metallhandelsgesellschaft m.b.H. | $1,375 | $1,050 | $1,175 |
| high | low | average | |
| YTD actual at 14-Jan-10 | $18.84 | $17.17 | $18.11 |
| Average forecasts | $23.50 | $14.80 | $19.00 |
| Philip Aubertin UBS Investment Bank | $22.25 | $14.50 | $18.25 |
| Robin Bhar Calyon Credit Acricole CIB | $22.50 | $16.50 | $19.25 |
| Stephen Briggs RBS Global Banking & Markets | $21.00 | $14.00 | $17.00 |
| Joerg Ceh Landesbank Baden-Württemberg | $24.80 | $14.00 | $19.25 |
| Jeffrey Christian CPM Group | $21.00 | $12.00 | $17.50 |
| Suki Cooper Barclays Capital | $23.20 | $13.50 | $18.00 |
| Peter Fertig QCR Quantitative Commodity Research Ltd | $23.00 | $16.00 | $20.20 |
| Rene Hochreiter Allan Hochreiter (Pty) Ltd | $23.00 | $17.00 | $20.00 |
| Vincent Huang Solar Applied Materials Technology Corp | $31.00 | $17.00 | $26.00 |
| Michael Jansen JPMorgan Chase Bank | $ | $ | $19.80 |
| Michael Kempinski Commerzbank | $22.85 | $14.85 | $19.45 |
| Tom Kendall Mitsubishi Corporation (UK) Plc | $24.40 | $16.30 | $19.90 |
| Philip Klapwijk GFMS Ltd | $22.00 | $14.40 | $18.07 |
| Michael Ludwig BNP Paribas | $30.00 | $15.00 | $22.50 |
| Ross Norman TheBullionDesk | $21.50 | $17.17 | $19.55 |
| Frederic Panizzutti MKS Finance S.A. | $30.00 | $15.00 | $22.25 |
| Jeffrey Rhodes INTL Commodities DMCC | $21.75 | $15.25 | $17.14 |
| Ruchi Singh ICICI Bank | $24.00 | $12.00 | $17.00 |
| Daniel Smith Standard Chartered | $22.00 | $14.00 | $18.00 |
| James Steel HSBC Bank USA NA | $19.50 | $14.50 | $17.00 |
| Bob Takai Sumitomo Corporation | $19.50 | $14.50 | $16.90 |
| Matthew Turner Virtual Metals | $24.00 | $14.00 | $18.65 |
| Bhargava Vaidya B.N. Vaidya & Associates | $20.75 | $12.00 | $15.50 |
| David Wilson Société Générale | $26.00 | $16.80 | $21.83 |
| Wolfgang Wrzesniok-Rossbach Heraeus Metallhandelsgesellschaft m.b.H. | $25.00 | $15.00 | $16.50 |
-James Turk-Silver Begins 2010 with an Impressive Start. Silver jumped out of the gate to begin 2010 with a flying start. It climbed a remarkable 9.7% in this year’s first week of trading to end the week at $18.458.
From its $8.79 low barely fourteen months ago after the de-leveraging and mass liquidation of assets resulting from the Lehman Brothers collapse, silver has climbed an astounding 110%. But the upside fireworks have hardly begun.
As I discussed in my outlook for 2010, there exists the real possibility of a short squeeze in silver this year or 2011. That short squeeze will propel silver to and probably over its January 1980 record high of $50 per ounce. That event will mark an important step in silver’s bull market. Everything that has occurred in silver over the last thirty years is simply base-building, as can be seen in the following chart.
The base-building is marked by the two long-term purple lines that look like the outline of a bowl (or as one reader,TT, suggested, a “huge smile”). This pattern reflects the buying-and-selling that was occurring in silver. From 1980 to the 1991 low, silver was being ‘distributed’. In other words, there were more sellers than buyers. Eventually, those circumstances changed, and silver’s price stopped falling.
The so-called smart money started recognizing silver’s extraordinary undervaluation. Buying power began to exceed selling pressure, with the result that silver started being ‘accumulated’. Its price began to rise and has been working its way higher ever since. Silver has been rising this decade within the uptrend channel marked by the two green parallel lines.
Silver’s rise from $3.51 in February 1991 to $18.458 at present approximately a 9.1% annual rate of appreciation over this 19-year period pales in comparison to what lies ahead. Silver is still in stage-1 of its bull market; the big price gains don’t start occurring until widespread participation by the public begins in stage-2, but that will not begin until silver breaks out of its base when $50 is eventually hurdled.
With that event silver will start garnering worldwide attention just like gold started doing when gold entered stage-2 of its bull market by hurdling above $1000. The speculative stage-3 for silver, which will be marked by extraordinary price gains like those of silver’s last stage-3 in 1979-1980, is still far in the future. Read more here-http://www.fgmr.com/silver-begins-2010-with-an-impressive-start.html
-James Turk-M3 Declines from One Year Ago. Read more here-http://www.fgmr.com/m3-declines-from-one-year-ago.html
-David Morgan, founder of Silver-Investor.com, says silver will hit $20-$25 in 2010 and will eventually reach $100 an ounce. He reveals the top ways to make money off of this volatile precious metal. Watch more here-http://www.thestreet.com/_yahoo/video/10658412/silver-top-2010-trade.html#61230006001
-Silver prices will hit new highs in 2010. The prospect of a surge in industrial demand, buoyed by investment could see silver reaching as high as $25 per ounce say analysts at CPM Group. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=93063&sn;=Detail
-On King World News, Ted Butler says silver futures market data is bullish. Listen here-http://www.gata.org/node/8225
-Unemployment: A Boon for Silver. Read more here-http://news.silverseek.com/SilverSeek/1263340083.php
GOLD
-US Gold’s McEwen Says Gold May Hit $5,000 by 2012. US Gold Corp. Chief Executive Officer Rob McEwen said global gold prices may increase to $5,000 an ounce between 2012 and 2014 as rising U.S. government debt weakens the dollar.
“Money supply has expanded so rapidly that there are a lot more dollars looking for a steady home,” McEwen, also founder of Goldcorp Inc., said today in a Bloomberg Television interview. “Governments cannot help themselves. They want to help the economy. They are printing money. They are going into debt on a horrific scale, and that will depreciate the value of the dollar.”
His forecast for gold, which is more than quadruple the current price, represents a “once-in-every-300-years” phenomenon, McEwen said. He maintained his previous forecast that gold will rise to $2,000 an ounce by the end of this year. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=ajm6lryLYViQ
-LBMA experts gold price forecasts for 2010 look for $1,394 high and $1,199 average. As a conservative predictor of gold price trends, the LBMA’s annual poll of experts in the field is looking for further increases in 2010. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=95806&sn;=Detail
-LBMA gold forecasts here-http://www.lbma.org.uk/pubs/forecasts
-Gold forecasts
| high | low | average | |
| YTD actual at 14-Jan-10 | $1153 | $1122 | $1134 |
| Average forecasts | $1,394 | $983 | $1,199 |
| Philip Aubertin UBS Investment Bank | $1,415 | $950 | $1,225 |
| Robin Bhar Calyon Credit Acricole CIB | $1,350 | $1,050 | $1,215 |
| Joerg Ceh Landesbank Baden-Württemberg | $1,470 | $920 | $1,198 |
| Jeffrey Christian CPM Group | $1,400 | $1,000 | $1,163 |
| Suki Cooper Barclays Capital | $1,365 | $925 | $1,180 |
| Peter Fertig QCR Quantitative Commodity Research Ltd | $1,350 | $950 | $1,185 |
| Rene Hochreiter Allan Hochreiter (Pty) Ltd | $1,400 | $960 | $1,200 |
| Vincent Huang Solar Applied Materials Technology Corp | $1,345 | $1,012 | $1,285 |
| Michael Jansen JPMorgan Chase Bank | $ | $ | $1,218 |
| Michael Kempinski Commerzbank | $1,505 | $975 | $1,295 |
| Tom Kendall Mitsubishi Corporation (UK) Plc | $1,430 | $1,050 | $1,215 |
| Philip Klapwijk GFMS Ltd | $1,340 | $990 | $1,172 |
| Michael Ludwig BNP Paribas | $1,530 | $1,050 | $1,290 |
| Nick Moore RBS Global Banking & Markets | $1,250 | $900 | $1,000 |
| Martin Murenbeeld Dundee Economics | $1,345 | $995 | $1,205 |
| Ross Norman TheBullionDesk | $1,425 | $1,080 | $1,236 |
| Frederic Panizzutti MKS Finance S.A. | $1,480 | $950 | $1,268 |
| Jeffrey Rhodes INTL Commodities DMCC | $1,280 | $980 | $1,137 |
| Ruchi Singh ICICI Bank | $1,350 | $1,020 | $1,280 |
| Daniel Smith Standard Chartered | $1,500 | $900 | $1,150 |
| James Steel HSBC Bank USA NA | $1,300 | $950 | $1,150 |
| Bob Takai Sumitomo Corporation | $1,350 | $950 | $1,100 |
| Matthew Turner Virtual Metals | $1,350 | $950 | $1,179 |
| Bhargava Vaidya B.N. Vaidya & Associates | $1,300 | $925 | $1,075 |
| David Wilson Société Générale | $1,650 | $1,090 | $1,388 |
| Wolfgang Wrzesniok-Rossbach Heraeus Metallhandelsgesellschaft m.b.H. | $1,375 | $1,050 | $1,175 |
-Average gold price to rise almost 30 pct in 2010 on investment demand Ross Norman. Ross Norman has proved to be one of the most accurate gold price forecasters in the London Bullion Market Association’s annual gold price prediction survey and his precious metals price forecasts for this year are all positive. Read more here-
http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=95532&sn;=Detail
-Gold to average $1,175/oz in first-half ‘09 GFMS. Read more here-http://www.reuters.com/article/idAFN1220371220100113?rpc=44
-China eager to buy IMF gold for $1,000 per ounce. Read more here-http://www.commodityonline.com/news/China-eager-to-buy-IMF-gold-for-$1000-per-ounce-24708-3-1.html
-Gold’s stellar performance set to continue in 2010. Historically gold bull markets have lasted as many as 15 to 25 years, this one has only been going since 2001. Read more here-
http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=95624&sn;=Detail
-Gold’s Steadfast Performance. From the end of 2001 ($276.50) to the end of 2009 ($1104.00), gold has exactly quadrupled in value, registering fairly modest and methodical gains each and every year for the past eight years.
From any fair-minded assessment, there is certainly nothing frothy or bubbly about its performance of the past year as it compares very typically to the range of these other annual metrics on a percentage basis. Read more here-http://news.goldseek.com/GoldSeek/1262884486.php
-Gold: A “Bridge over Troubled Water”. Gold is quite simply, on a powerful run. In 2009 it traded at more than $1,200 an ounce over 4 times higher than its low point in 2000. For 9 years in a row, the price of gold has increased. Can you name another asset class which has shown this kind of performance during the first decade of the new century?
As a result, gold is gradually appearing on people’s radar screen and finding its way into Main Street portfolios. At the top of gold’s last bull market in 1980, the nominal high price was $850. To reach that same level on an inflation-adjusted basis today using the CPI as calculated by the government the price would rise to somewhere between $2,000 and $3,000.
And what if the U.S. decided to return to a gold standard to back its paper dollars? Gold would have to be valued at more than $6,000 per ounce. Major investment banks and brokerage firms that were long silent on gold are now talking it up. Merrill Lynch has reiterated its forecast that gold could top $1,500 during the next year or so. Read more here-
http://news.goldseek.com/GoldSeek/1263197100.php
-David Chapman 2010 outlook. One of the reasons gold and commodities should continue to do well is the declining US$. Since the Federal Reserve System was created in 1913 the US$ has lost 92 per cent of its purchase value. The decline of the US$’s purchasing power has accelerated from the time President Richard Nixon took the world off the gold standard in August 1971. Recall that at the time gold was convertible into US$ at a fixed price of $35 an ounce.
With the closing of the gold window (in effect a default by the USA) the world embarked on another experiment in fiat currencies. History is replete with failures of fiat currencies; probably the most famous collapse was in Germany in 1919-23, where the Mark fell from 12 to the US$ to 4.2 million to the US$. More recently Zimbabwe saw its currency collapse as monetary inflation reached an incredible 231 million per cent a year.
The US$ has fallen roughly 35 per cent since 1970 and almost 53 per cent from the peak in 1985. The period 1980-85 saw US dollar strength. The weak US$ in the 1970s coincided with gold’s accent to $850 in 1980. When the US$ began a period of strength following the long decline of the 1970s, gold followed by falling sharply. Naturally the US$ overshot on the upside and the US at the time was quite concerned about the strong dollar and its negative impact on exports.
This led to the Plaza Accord to intervene in foreign exchange markets to get the US$ down and (primarily) the Japanese yen up. Gold, after bottoming in 1985, embarked on a period of varying strength over the next several years as the US$ weakened. But once again in 1994, during a period of US$ weakness and concern over the potential for a financial crisis and international currency crisis, it was agreed to strengthen the US$ and weaken the yen, this time to help the ailing Japanese economy.
The result was gold eventually falling to $250. Since 2001 the US$, burdened by growing deficits, huge trade deficits and then an economic crisis, has once again seen its currency weaken. Gold once again began to rise and since all commodities are priced in US$, metals, energy and others also began a period of strengthening prices that continues today. Read more here-http://news.goldseek.com/UnionSecurities/1262973600.php
-Another year of high metal prices ahead RMG. Respected Swedish research organization, Raw Materials Group, is predicting rising metal prices in the year ahead although there could be a price correction in the first half of the year. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=95719&sn;=Detail
-The Aden Sisters: Going for the Gold. From Costa Rica, they dispense advice on precious metals and other investments that regularly beats other indexes and they’re still bullish on gold. Read more here-http://www.businessweek.com/magazine/content/10_03/b4163062981758.htm
-Gold Outlook for 2010: Gold Resuming its Historical Monetary Role as the Anti-Currency. In conclusion, the events of the past year bode well for the price of gold in 2010. At the recent highs of $1,200 many thought that gold was overbought.
For those who feel this way, I would like to close with some recent words from investment legend Richard Russell who said, “If gold is going parabolic, then there’s no such thing as ‘overbought’,” Almost any of the events of 2009 I have highlighted could trigger such a parabolic rise.
Right now the Chinese and Indian public, the non-Western central banks, the sovereign wealth funds, the pension funds and the hedge funds of the world are all looking for ways to increase their long-term gold holdings. The pull-back from the recent highs of $1,200 seems to be over, providing an attractive entry point for investors. In 2010 we will likely see prices rise to at least $1,300 to $1,500. Nick Barisheff-Read more here-http://news.goldseek.com/GoldSeek/1263228488.php
-The Dow/Gold Ratio Will Decline Further. Read more here-http://news.goldseek.com/GoldSeek/1262971500.php
-As Events Around the World Continue to Change we should use Gold to Protect our Wealth. Read more here-http://www.kitco.com/ind/Levenstein/jan042010.html
-Canadian Broadcasting Corp. radio’s “The Current” program with Anna Maria Tremonti yesterday featured a debate about gold between Sprott Asset Management’s chief investment strategist, John Embry, and Larry Swedroe, principal and director of research for the Buckingham Family of Financial Services in St. Louis. Embry, of course, is pro-gold, and Swedroe is against it.
While the debate was entertaining, it was more so because Swedroe doesn’t know much about gold’s current circumstances. Read more here-http://www.gata.org/node/8235
-GATA’s Murphy, Douglas, Powell interviewed by King World News. Listen here-http://www.gata.org/node/8223
-Max Keiser’s ‘On the Edge’ interviews GATA secretary Chris Powell. Watch here-http://www.gata.org/node/8219
CHART OF THE WEEK-QUOTES-QUICK HITS
-Chart of the day: The Shorts Are Massing To Kill These Five NYSE Stocks. Short traders are piling onto Exxon Mobil, Host Hotels, Citi, Qwest, and Ford according to latest short interest data from the New York Stock Exchange (NYSE).
While Citi’s short interest may be sort of expected by now, what’s most surprising here is the massive 104% jump in Exxon short interest. This happened within just a two-week period from December 15th to December 31st, one where overall NYSE short interest actually fell 3.5%. As for Nasdaq stocks, note that the shorts just pig-piled onto Apple as well. Read more here-
http://www.businessinsider.com/chart-of-the-day-the-biggest-increases-in-nyse-short-interest-2010-1
-250,000: Number of jobs the U.S. economy would have to create every month for the next five years to cut the jobless rate to five per cent. Avery Shenfeld, CIBC World Markets-Read more here-http://www.edmontonjournal.com/business/Every+number+tells+story+even+doesn+always/2431933/story.html
-Highlights: Quotes from U.S. financial crisis commission hearing. Read more here-http://www.reuters.com/article/idUSTRE60C3AI20100113
“It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars,” he said of Goldman’s practice of selling subprime mortgages while betting against the securities.
“Some already speak of the financial crisis in the past tense. The truth is, it is still here.” “People are angry. They have a right to be. I see this commission as a proxy for the American people. If we ignore history, we’re doomed to bail it out again.” Phil Angelides-Commission Chairman, former California State treasurer
-Goldman Sachs’ chief Lloyd Blankfein acknowledged Wednesday that the investment bank engaged in “improper” behavior in 2006 and 2007 when it made huge bets on a housing downturn while peddling as safe more than $40 billion in securities backed by risky U.S. home loans. Read more here-http://www.mcclatchydc.com/251/story/82270.html
-Gold is now over $1,100 an ounce. Silver is still only $18 an ounce. The average person can’t afford to buy any real quantity of gold, and it would be like stocking up $1,000 bills which would not be very useful in a difficult environment where you might to use gold and silver as money.
The number of people who would be able to buy some silver will vastly out-number the people who will be able to buy gold. That is one of the most important reasons I favor silver over gold. Howard Ruff-Read more here-http://www.kitco.com/ind/Ruff/ruff_jan112010.html
-We did a forecast on gold in spring of 2009 at a New Jersey conference and said $1250-1260 on the December, 2009 futures. I think we got $1226, which is pretty close. After our current correction is completed I expect $1325 to $1375 this spring. Trading ranges are going wider and faster. Gold can easily swing $50 in one daily session.
After our new corrective base for silver is established at $16.48-$17.48, we forecast the March, 2010 silver futures reach a new intermediate high of $21.50-$22.00. Higher is possible. Roger Wiegand-http://www.kitco.com/ind/Wieg_cor/roger_jan082010.html
-The Next Meltdown. The man who predicted the real-estate crash says to buy gold. Bob Wiedemer is explaining to a roomful of hedge-fund investors that the end of America as we know it won’t be as bad as they think. Wiedemer is co-author of the new book Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown. Sound overblown?
That’s what they said about his first book, America’s Bubble Economy, in which Wiedemer and his co-authors, his Ph.D. brother David and writer Cindy Spitzer, predicted that the U.S. residential real-estate market was overvalued and due for a crash. That was in 2006, months before the crash actually occurred.
Now Wiedemer is warning people that another bubble is about to collapse: America itself. More specifically, it is Wiedemer’s view that the U.S. dollar will be the next bubble to burst. The government’s fiscal position, he explains, is unsustainable. America owes six times what it collects in tax revenues each year, and that ratio is projected to explode with the retirement of the baby boomers.
On top of that, nearly 40 percent of U.S. debt must be refinanced each year, leaving the government highly vulnerable to rising interest rates. The Fed’s printing presses have been working overtime throughout the crisis, buying Treasuries and other securities to keep the economy afloat.
This is a recipe for hyperinflation, and the New York Hedge Fund Roundtable has invited Wiedemer to this small conference room overlooking Park Avenue to tell investors how they can protect themselves from the fallout. His advice in one word: “Gold.” Read more here-http://article.nationalreview.com/?q=ZDdhODgyOGNhYWY5MWRlOTI4NDNiNjdiYmE1ZTI4ZTE=
-The U.S. is headed for a major debt crisis, Marc Faber says. It won’t hit us this year or next year. But within 5-10 years, the United States will be forced to quietly default on its debt, most likely by printing money and destroying the value of the currency.
The main problem comes down to two things: 1) ballooning debts and 2) future interest costs. Read more and view charts here-http://www.businessinsider.com/henry-blodget-marc-faber-we-are-doomed-2010-1 or http://www.youtube.com/watch?v=wTvv0nNvFnQ&feature;=player_embedded
-One overvalued stock market. As we had mentioned last week, the S&P; 500 on a normalized Shiller P/E basis is overvalued by 27% (latest estimate from Shiller) at the current time. If you think that is a high degree of excess, a report by Smithers & Co. suggests that the degree of overvaluation is closer to 50%.
Then go to Kopin Tan’s column in this week’s Barron’s and you will see that: The degree of bullish sentiment in the latest Investor Intelligence Poll is a huge 72%, Fully 85% of S&P; 500 stocks are now above their 50-day moving averages, and The median P/E multiple is now a whopping 22.2x. Caveat emptor. David Rosenberg-Gluskin/Sheff
-Horizon Bank is the first to fail in 2010. The first bank to fail in 2010 is Horizon Bank, based in Bellingham, Washington. State regulators seized the bank’s 18 branches on Friday. Read more here-http://money.cnn.com/2010/01/09/news/economy/first_2010_bank_failure/index.htm
-The Treasury estimated net losses on its $700 billion bailout program at $68.5 billion for the fiscal year ended September 30, 2009. Read more here-
http://www.reuters.com/article/idUSTRE60A4XU20100111
-The U.S. government has provided more than $1 trillion of support to financial companies in a bid to keep credit flowing to the U.S. economy. But a new law may give billions of dollars to bankrupt financial companies that will never make another loan. Instead of allowing lenders to keep credit flowing, these subsidies could mainly help hedge funds that buy distressed debt and equity.
This past week, for instance, Washington Mutual Inc. and subprime lender Downey Financial Corp., both bankrupt, said the new law will allow them to apply for an estimated $2.75 billion combined in tax refunds. Read more here-http://www.gata.org/node/8233
-Federal Reserve Seeks to Protect U.S. Bailout Secrets. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=a4PnUdySIink
-Obama Says Bank Fee Aimed at Recovering Rescue Money. President Barack Obama said the levy he wants to impose on as many as 50 large financial firms is aimed at getting back “every single dime” that taxpayers put in to bailing out those companies.
“My determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at some of the very firms who owe their continued existence to the American people,” Obama said at the White House. “We want our money back, and we’re going to get it.”
The fee would apply to financial companies with assets of more than $50 billion. It would be based on bank liabilities and imposed starting June 30 on companies such as Citigroup Inc., American International Group Inc. and Bank of America Corp.
The administration estimates the levy will raise $90 billion over 10 years and $117 billion over 12 years. An administration official who briefed reporters said the budget office estimates the 10-year figure will be enough to recoup all the losses in the Troubled Asset Relief Program. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=auzqsRLscCSY
-America slides deeper into depression as Wall Street revels. December was the worst month for US unemployment since the Great Recession began. Read more here-
-Survivor, America: “It’s Only Going to Get Worse,” Gerald Celente Says. Read more here-http://finance.yahoo.com/tech-ticker/survivor-america-%22it%27s-only-going-to-get-worse%22-gerald-celente-says-401199.html
-U.S. Has Record December Budget Gap of $91.9 Billion. The U.S. registered its largest December budget deficit on record as higher unemployment reduced revenue and the government spent money to help the economy recover.
The excess of spending over revenue rose to $91.9 billion last month, compared with a deficit of $51.8 billion in December 2008, the Treasury Department announced today in Washington in its monthly budget statement. The U.S. has posted a record 15 straight monthly deficits. Read more here-http://www.bloomberg.com/apps/news?pid=20601103&sid;=a8VuOcZLKw4E
-US must cut spending to save AAA rating, warns Fitch. Fitch Ratings has issued the starkest warning to date that the US will lose its AAA credit rating unless acts to bring the budget deficit under control, citing a spiral in debt service costs and dependence on foreign lenders. Read more here-http://www.telegraph.co.uk/finance/economics/6969163/US-must-cut-spending-to-save-AAA-rating-warns-Fitch.html
-Dollar Crisis Looms if US Doesn’t Curb Debt: Experts. US faced grim future without action to curb debt. The US economy is heading down a path of lower living standards and diminished confidence without action to stem the massive budget deficit, a group of prominent researchers said on Wednesday.
A National Research Council panel said the country faces difficult choices on tax increases and spending cuts to achieve a more sustainable fiscal balance. “The federal government is currently spending far more than it collects in revenues, and if current policies are continued, will do so for the foreseeable future,” the report said.
“No reasonably foreseeable rate of economic growth would overcome this structural deficit. Thus, any efforts to rein in future deficits must entail either large increases in taxes to support these programs or major restraints on their growth or some combination of the two.”
The US government closed its 2009 fiscal year with a record 1.417-trillion-dollar budget deficit and the White House forecasts an even bigger gap of 1.502 trillion dollars in fiscal 2010, said the committee from the National Research Council and the National Academy of Public Administration. Read more here-http://www.cnbc.com/id/34848783 or http://www.channelnewsasia.com/stories/afp_world_business/view/1030492/1/.html
-Bankruptcy could be good for America. In Winnie-the-Pooh, there is a significant moment when the bear is asked whether he wants honey or condensed milk with his bread. He replies “both”. You can get away with this sort of thing if you are a much loved character in children’s literature.
But it is more problematic when great nations start behaving in a childish fashion. When Americans are asked what they want lower taxes, more lavish social spending or the world’s best-funded military machine their collective answer tends to be “all of the above”.
The result is that the US is piling up debt. A budget deficit of about 12 per cent of gross domestic product is understandable as a short-term reaction to a huge financial crisis. What should worry Americans is that, with entitlement spending set to surge, there is no credible plan to bring the budget deficit under control over the medium term. Read more here-
http://www.ft.com/cms/s/0/a8486284-fee9-11de-a677-00144feab49a.html
-Harsh Realities: 85K Jobs Lost in December, “Real” Unemployment Rate at 17.3%. Read more here-http://finance.yahoo.com/tech-ticker/harsh-realities-85k-jobs-lost-in-december-%22real%22-unemployment-rate-at-17.3-400222.html
-How nation’s true jobless rate is closer to 22%. Read more here-http://www.nypost.com/f/print/news/business/how_nation_true_jobless_rate_is_N4E6MjtfhnMcCi537pucaJ
-Record 40% Of Unemployed Without Job For 27+ Weeks. Read more here-http://www.zerohedge.com/article/record-40-unemployed-without-job-27-weeks
-The Disposable Worker. Pay is falling, benefits are vanishing, and no one’s job is secure. How companies are making the era of the temp more than temporary. Read more here-
http://www.businessweek.com/print/magazine/content/10_03/b4163032935448.htm
-Last Friday, the Labor Department reported that nonfarm payrolls (jobs) decreased by 85,000 in December while the data for November was revised upward and now shows a gain of 4,000 jobs. For some perspective, today’s chart illustrates the percent increase in the number of jobs for every decade since the 1940s (the data goes back to 1939).
As today’s chart illustrates, the number of jobs at the end of a decade has been anywhere from 20% to 38% greater than 10 years prior. That 20% plus growth has been the case until the decade just passed during which the number of jobs basically ended the year where it began. Read more here-http://www.chartoftheday.com/20100108.htm?T
-Too many job seekers, not enough jobs. Read more here-http://money.cnn.com/2010/01/12/news/economy/jolts_november/index.htm
-Consumer Credit in U.S. Drops Record $17.5 Billion. Consumer credit in the U.S. dropped a record $17.5 billion in November as unemployment close to a 26- year high discouraged borrowing and banks limited access to loans.
A labor market that’s shed 7.2 million jobs since the recession started in December 2007 is restraining consumer spending that accounts for about 70 percent of the economy. Fed policy makers have said tighter bank lending standards and reductions in credit lines are hampering the recovery. Read more here-http://www.businessweek.com/news/2010-01-08/consumer-credit-in-u-s-declined-in-november-by-most-on-record.html
-U.S. Retail Sales Unexpectedly Fall After Bigger Gain. Sales at U.S. retailers unexpectedly fell in December following a gain the prior month that was larger than previously estimated, signaling a consumer recovery will be uneven.
The 0.3 percent decrease came after a 1.8 percent jump the prior month, Commerce Department figures showed today in Washington. The government last month calculated the November gain at 1.3 percent. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=afCJaukUq4ug
-U.S. state tax collections fell the most in 46 years in the first three quarters of 2009 as the recession shrank revenue from sources including personal income, the Nelson A. Rockefeller Institute of Government said. Revenue dropped 13.3%, or $80 billion, compared with the same nine months of 2008, to $523 billion, the institute said.
Collections in the third quarter alone sank 10.9% to about $162 billion. The first three quarters of 2009 were the worst on record for states in terms of the decline in overall state tax collections, as well as the change in personal income and sales tax collections, Rockefeller analysts Lucy Dadayan and Donald J. Boyd wrote.
Budget gaps have opened in 31 states since fiscal year 2010 began, Dadayan and Boyd wrote 2010 is going to be very difficult for the states and the next year is likely to be significantly worse, Rockefeller Deputy Director Robert Ward said. Bob Chapman-Read more here-http://news.goldseek.com/InternationalForecaster/1263398400.php or
http://news.goldseek.com/InternationalForecaster/1263194100.php
-Trichet Says Interest Rates Appropriate for Recovery. European Central Bank President Jean-Claude Trichet signaled officials will wait for more signs of economic recovery before withdrawing emergency measures further.
“The current rates remain appropriate,” Trichet told reporters in Frankfurt today after the bank left its benchmark interest rate at a record low 1 percent. Trichet, who warned Greece it can’t expect any special treatment from the European Union, said the euro-area economy still faces a “bumpy road” and a “great level of uncertainty.” Read more here-
http://www.bloomberg.com/apps/news?pid=20601110&sid;=a7Ntzl5ZC99Y
-Trichet Says Greece Won’t Receive ‘Special Treatment’. European Central Bank President Jean-Claude Trichet said Greece won’t win any special treatment from European officials, increasing pressure on the country to cut the continent’s biggest budget deficit.
“No government, no state can expect any special treatment,” he said in Frankfurt today when asked about Greece. “Some governments, one in particular, have very difficult decisions to take.” Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aUqRuv3lvU3g
-Euro zone unemployment jumped to an 11-year high in November, data showed, and is likely to rise more next year in what could add to the instability of economic recovery now based on fickle inventory rebuilding and exports.
The European Union’s statistics office Eurostat said the number of people without jobs rose by 102,000 in November to 15.712 million, or 10 percent of the workforce in the 16 countries using the euro the highest since August 1998. Read more here-http://www.reuters.com/article/idUSLDE60714M20100108?type=marketsNews
-Ambrose Evans-Pritchard: A global fiasco is brewing in Japan. I have felt rather lonely after suggesting in my new year predictions that Japan is dangerously close to blowing up on its sovereign debts, with consequences that will be felt across the world.
My intended point overly condensed was that 2010 will prove to be the year that Japan flips from deflation to something very different: the beginning of debt monetization by a terrified central bank that will spin out of control, perhaps crossing into hyperinflation by the middle of the decade. Read more here-http://www.gata.org/node/8234
-Billionaire predictions for 2010. Read more here-http://finance.yahoo.com/career-work/article/108521/billionaire-predictions-2010?mod=career-leadership
-53% of Wealthy Americans Fear Outliving Savings. Fifty-three percent of wealthy Americans said they were concerned about having sufficient retirement assets to last through their lifetimes, according to a Bank of America Corp. survey. Read more here-http://www.bloomberg.com/apps/news?pid=20603037&sid;=aWT5F3D9RKUE
-The Dallas Cowboys’ first postseason game in their new $1.1 billion stadium has no cheap seats for fans or cheap parking for cars. The Cowboys, who host the Philadelphia Eagles in the first round of the National Football League playoffs tomorrow, are charging as much as $500 for seats along the sidelines at Cowboys Stadium in Arlington, Texas, more than twice the regular-season price.
Tickets start at $35 for standing-room that doesn’t guarantee a view of the field. Before they even get into the stadium with a 60-yard-long video screen, $13 Kobe beef burgers and $9 Shiner Bock beers, fans have to fork over as much as $75 to park to see owner Jerry Jones’s Cowboys in the playoffs. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=atYAGYyMI7oI
-‘Doomsday Clock’ Moved Back on Less Nuclear War Fear. Scientists today moved back the minute hand on the symbolic “Doomsday Clock” to six minutes to midnight to reflect reduced concern that the world is facing the threat of nuclear annihilation. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aCyse9bx242U
-Rare Liberty Head nickel coin fetches over $3.7M at auction. Read more here-http://www.nydailynews.com/news/world/2010/01/09/2010-01-09_rare_coin_fetches_over_23_million_in_auction_.html
-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/HistoricalPriceTrackingsystem.html
-Watch BTV interview of Harold Seigel on colored diamonds and his website http://www.rarecoloreddiamonds.com/. Watch video here-http://www.rarecoloreddiamonds.com/watchnow.html
This 1.61-carat, radiant-cut, fancy purplish-red stone has an estimated worth of $2 million and has been dubbed the “Kimberley Red.”
-Diamond from ‘08 tender reborn as ‘Kimberley Red’. A 1.77-carat, radiant-cut, fancy deep purplish-pink diamond that didn’t attract a buyer at Rio Tinto’s 2008 Argyle Pink Diamond tender has been recut into a stone that has everybody seeing red, literally.
Joshua Sheby, a gemologist with New York-based Scarselli Diamonds who specializes in natural-color diamonds, said Scarselli purchased the diamond in partnership with a few other companies in the first half of 2009 after it went unsold in 2008.
Though Argyle pink diamonds are difficult to cut because they are heavily included, Sheby said they saw potential in this stone and took a chance. The result: a 1.61-carat, radiant-cut, fancy purplish-red stone worth an estimated $2 million. “It was a just a matter of readjusting some of the angles and bringing out that red component,” Sheby said.
The Gemological Institute of America (GIA) graded the stone, and Argyle Pink Diamonds, the marketing arm of mining company Rio Tinto, issued a letter of rarity signed by its business manager Josephine Archer stating that they’ve dubbed the diamond “the Kimberley Red.”
The letter notes that in the past 10 years, only one other diamond larger than 1.5 carats and graded by the GIA as “fancy purplish red” has been featured in the Argyle tender. “This is an important stone from Australia’s Argyle mine. Given the approaching end of mine life, this gem is a significant legacy of the rare and unique fancy colored diamonds produced in this remote part of the world,” the letter states.
As for what the future holds for this rare, red diamond, Sheby said that remains to be seen. The diamond could be sold through an auction house, retail outlet or to a collector and/or investor.
A museum also could decide to buy the stone or rent it for a specified amount of time, he said. “We haven’t ruled out anything,” Sheby said. Read more here-http://www.nationaljewelernetwork.com/njn/content_display/diamonds/supply/e3i55cc6046dcbcc6454a2b63789b1aa034
PLATINUM-PALLADIUM
-LBMA platinum-palladium forecasts here-http://www.lbma.org.uk/pubs/forecasts
| -Platinum forecasts. | high | low | average |
| YTD actual at 14-Jan-10 | $1153 | $1122 | $1134 |
| Average forecasts | $1,394 | $983 | $1,199 |
| Philip Aubertin UBS Investment Bank | $1,415 | $950 | $1,225 |
| Robin Bhar Calyon Credit Acricole CIB | $1,350 | $1,050 | $1,215 |
| Joerg Ceh Landesbank Baden-Württemberg | $1,470 | $920 | $1,198 |
| Jeffrey Christian CPM Group | $1,400 | $1,000 | $1,163 |
| Suki Cooper Barclays Capital | $1,365 | $925 | $1,180 |
| Peter Fertig QCR Quantitative Commodity Research Ltd | $1,350 | $950 | $1,185 |
| Rene Hochreiter Allan Hochreiter (Pty) Ltd | $1,400 | $960 | $1,200 |
| Vincent Huang Solar Applied Materials Technology Corp | $1,345 | $1,012 | $1,285 |
| Michael Jansen JPMorgan Chase Bank | $ | $ | $1,218 |
| Michael Kempinski Commerzbank | $1,505 | $975 | $1,295 |
| Tom Kendall Mitsubishi Corporation (UK) Plc | $1,430 | $1,050 | $1,215 |
| Philip Klapwijk GFMS Ltd | $1,340 | $990 | $1,172 |
| Michael Ludwig BNP Paribas | $1,530 | $1,050 | $1,290 |
| Nick Moore RBS Global Banking & Markets | $1,250 | $900 | $1,000 |
| Martin Murenbeeld Dundee Economics | $1,345 | $995 | $1,205 |
| Ross Norman TheBullionDesk | $1,425 | $1,080 | $1,236 |
| Frederic Panizzutti MKS Finance S.A. | $1,480 | $950 | $1,268 |
| Jeffrey Rhodes INTL Commodities DMCC | $1,280 | $980 | $1,137 |
| Ruchi Singh ICICI Bank | $1,350 | $1,020 | $1,280 |
| Daniel Smith Standard Chartered | $1,500 | $900 | $1,150 |
| James Steel HSBC Bank USA NA | $1,300 | $950 | $1,150 |
| Bob Takai Sumitomo Corporation | $1,350 | $950 | $1,100 |
| Matthew Turner Virtual Metals | $1,350 | $950 | $1,179 |
| Bhargava Vaidya B.N. Vaidya & Associates | $1,300 | $925 | $1,075 |
| David Wilson Société Générale | $1,650 | $1,090 | $1,388 |
| Wolfgang Wrzesniok-Rossbach Heraeus Metallhandelsgesellschaft m.b.H. | $1,375 | $1,050 | $1,175 |
| high | low | average | |
| YTD actual at 14-Jan-10 | $18.84 | $17.17 | $18.11 |
| Average forecasts | $23.50 | $14.80 | $19.00 |
| Philip Aubertin UBS Investment Bank | $22.25 | $14.50 | $18.25 |
| Robin Bhar Calyon Credit Acricole CIB | $22.50 | $16.50 | $19.25 |
| Stephen Briggs RBS Global Banking & Markets | $21.00 | $14.00 | $17.00 |
| Joerg Ceh Landesbank Baden-Württemberg | $24.80 | $14.00 | $19.25 |
| Jeffrey Christian CPM Group | $21.00 | $12.00 | $17.50 |
| Suki Cooper Barclays Capital | $23.20 | $13.50 | $18.00 |
| Peter Fertig QCR Quantitative Commodity Research Ltd | $23.00 | $16.00 | $20.20 |
| Rene Hochreiter Allan Hochreiter (Pty) Ltd | $23.00 | $17.00 | $20.00 |
| Vincent Huang Solar Applied Materials Technology Corp | $31.00 | $17.00 | $26.00 |
| Michael Jansen JPMorgan Chase Bank | $ | $ | $19.80 |
| Michael Kempinski Commerzbank | $22.85 | $14.85 | $19.45 |
| Tom Kendall Mitsubishi Corporation (UK) Plc | $24.40 | $16.30 | $19.90 |
| Philip Klapwijk GFMS Ltd | $22.00 | $14.40 | $18.07 |
| Michael Ludwig BNP Paribas | $30.00 | $15.00 | $22.50 |
| Ross Norman TheBullionDesk | $21.50 | $17.17 | $19.55 |
| Frederic Panizzutti MKS Finance S.A. | $30.00 | $15.00 | $22.25 |
| Jeffrey Rhodes INTL Commodities DMCC | $21.75 | $15.25 | $17.14 |
| Ruchi Singh ICICI Bank | $24.00 | $12.00 | $17.00 |
| Daniel Smith Standard Chartered | $22.00 | $14.00 | $18.00 |
| James Steel HSBC Bank USA NA | $19.50 | $14.50 | $17.00 |
| Bob Takai Sumitomo Corporation | $19.50 | $14.50 | $16.90 |
| Matthew Turner Virtual Metals | $24.00 | $14.00 | $18.65 |
| Bhargava Vaidya B.N. Vaidya & Associates | $20.75 | $12.00 | $15.50 |
| David Wilson Société Générale | $26.00 | $16.80 | $21.83 |
| Wolfgang Wrzesniok-Rossbach Heraeus Metallhandelsgesellschaft m.b.H. | $25.00 | $15.00 | $16.50 |
| high | low | average | |
| Average forecasts | $570 | $342 | $446 |
| Philip Aubertin UBS Investment Bank | $585 | $320 | $440 |
| Robin Bhar Calyon Credit Acricole CIB | $560 | $350 | $464 |
| Joerg Ceh Landesbank Baden-Württemberg | $650 | $280 | $385 |
| Jeffrey Christian CPM Group | $500 | $370 | $468 |
| Suki Cooper Barclays Capital | $610 | $330 | $470 |
| Peter Fertig QCR Quantitative Commodity Research Ltd | $550 | $300 | $440 |
| Rene Hochreiter Allan Hochreiter (Pty) Ltd | $800 | $400 | $600 |
| Vincent Huang Solar Applied Materials Technology Corp | $550 | $390 | $455 |
| Michael Jansen JPMorgan Chase Bank | $ | $ | $413 |
| Tom Kendall Mitsubishi Corporation (UK) Plc | $535 | $340 | $445 |
| Philip Klapwijk GFMS Ltd | $480 | $335 | $409 |
| Michael Ludwig BNP Paribas | $740 | $350 | $545 |
| Rory McVeigh Commerzbank | $650 | $368 | $484 |
| Nick Moore RBS Global Banking & Markets | $475 | $350 | $400 |
| Ross Norman TheBullionDesk | $625 | $420 | $522 |
| Frederic Panizzutti MKS Finance S.A. | $780 | $390 | $578 |
| Daniel Smith Standard Chartered | $400 | $250 | $328 |
| James Steel HSBC Bank USA NA | $450 | $350 | $400 |
| Glyn Stevens INTL Commodities Inc | $545 | $280 | $365 |
| Bob Takai Sumitomo Corporation | $600 | $300 | $450 |
| Matthew Turner Virtual Metals | $550 | $350 | $425 |
| David Wilson Société Générale | $440 | $390 | $408 |
| Wolfgang Wrzesniok-Rossbach Heraeus Metallhandelsgesellschaft m.b.H. | $475 | $300 | $375 |
| high | low | average | |
| Average forecasts | $1,843 | $1,277 | $1,558 |
| Philip Aubertin UBS Investment Bank | $1,900 | $1,300 | $1,600 |
| Robin Bhar Calyon Credit Acricole CIB | $1,800 | $1,300 | $1,526 |
| Stephen Briggs RBS Global Banking & Markets | $1,750 | $1,350 | $1,450 |
| Joerg Ceh Landesbank Baden-Württemberg | $2,400 | $1,200 | $1,711 |
| Jeffrey Christian CPM Group | $1,750 | $1,400 | $1,566 |
| Suki Cooper Barclays Capital | $1,910 | $1,390 | $1,690 |
| Peter Fertig QCR Quantitative Commodity Research Ltd | $1,700 | $1,200 | $1,465 |
| Rene Hochreiter Allan Hochreiter (Pty) Ltd | $1,900 | $1,200 | $1,500 |
| Vincent Huang Solar Applied Materials Technology Corp | $1,780 | $1,285 | $1,685 |
| Michael Jansen JPMorgan Chase Bank | $ | $ | $1,506 |
| Tom Kendall Mitsubishi Corporation (UK) Plc | $1,720 | $1,340 | $1,565 |
| Philip Klapwijk GFMS Ltd | $1,605 | $1,240 | $1,433 |
| Michael Ludwig BNP Paribas | $2,578 | $900 | $1,739 |
| Rory McVeigh Commerzbank | $1,740 | $1,180 | $1,570 |
| Ross Norman TheBullionDesk | $1,900 | $1,496 | $1,776 |
| Frederic Panizzutti MKS Finance S.A. | $1,880 | $1,450 | $1,625 |
| Daniel Smith Standard Chartered | $1,800 | $1,200 | $1,513 |
| James Steel HSBC Bank USA NA | $1,800 | $1,350 | $1,600 |
| Glyn Stevens INTL Commodities Inc | $1,735 | $1,075 | $1,335 |
| Bob Takai Sumitomo Corporation | $1,900 | $1,300 | $1,550 |
| Matthew Turner Virtual Metals | $1,700 | $1,250 | $1,470 |
| David Wilson Société Générale | $1,700 | $1,460 | $1,565 |
| Wolfgang Wrzesniok-Rossbach Heraeus Metallhandelsgesellschaft m.b.H. | $1,600 | $1,225 | $1,400 |
-Palladium forecasts.
| high | low | average | |
| YTD actual at 14-Jan-10 | $1153 | $1122 | $1134 |
| Average forecasts | $1,394 | $983 | $1,199 |
| Philip Aubertin UBS Investment Bank | $1,415 | $950 | $1,225 |
| Robin Bhar Calyon Credit Acricole CIB | $1,350 | $1,050 | $1,215 |
| Joerg Ceh Landesbank Baden-Württemberg | $1,470 | $920 | $1,198 |
| Jeffrey Christian CPM Group | $1,400 | $1,000 | $1,163 |
| Suki Cooper Barclays Capital | $1,365 | $925 | $1,180 |
| Peter Fertig QCR Quantitative Commodity Research Ltd | $1,350 | $950 | $1,185 |
| Rene Hochreiter Allan Hochreiter (Pty) Ltd | $1,400 | $960 | $1,200 |
| Vincent Huang Solar Applied Materials Technology Corp | $1,345 | $1,012 | $1,285 |
| Michael Jansen JPMorgan Chase Bank | $ | $ | $1,218 |
| Michael Kempinski Commerzbank | $1,505 | $975 | $1,295 |
| Tom Kendall Mitsubishi Corporation (UK) Plc | $1,430 | $1,050 | $1,215 |
| Philip Klapwijk GFMS Ltd | $1,340 | $990 | $1,172 |
| Michael Ludwig BNP Paribas | $1,530 | $1,050 | $1,290 |
| Nick Moore RBS Global Banking & Markets | $1,250 | $900 | $1,000 |
| Martin Murenbeeld Dundee Economics | $1,345 | $995 | $1,205 |
| Ross Norman TheBullionDesk | $1,425 | $1,080 | $1,236 |
| Frederic Panizzutti MKS Finance S.A. | $1,480 | $950 | $1,268 |
| Jeffrey Rhodes INTL Commodities DMCC | $1,280 | $980 | $1,137 |
| Ruchi Singh ICICI Bank | $1,350 | $1,020 | $1,280 |
| Daniel Smith Standard Chartered | $1,500 | $900 | $1,150 |
| James Steel HSBC Bank USA NA | $1,300 | $950 | $1,150 |
| Bob Takai Sumitomo Corporation | $1,350 | $950 | $1,100 |
| Matthew Turner Virtual Metals | $1,350 | $950 | $1,179 |
| Bhargava Vaidya B.N. Vaidya & Associates | $1,300 | $925 | $1,075 |
| David Wilson Société Générale | $1,650 | $1,090 | $1,388 |
| Wolfgang Wrzesniok-Rossbach Heraeus Metallhandelsgesellschaft m.b.H. | $1,375 | $1,050 | $1,175 |
| high | low | average | |
| YTD actual at 14-Jan-10 | $18.84 | $17.17 | $18.11 |
| Average forecasts | $23.50 | $14.80 | $19.00 |
| Philip Aubertin UBS Investment Bank | $22.25 | $14.50 | $18.25 |
| Robin Bhar Calyon Credit Acricole CIB | $22.50 | $16.50 | $19.25 |
| Stephen Briggs RBS Global Banking & Markets | $21.00 | $14.00 | $17.00 |
| Joerg Ceh Landesbank Baden-Württemberg | $24.80 | $14.00 | $19.25 |
| Jeffrey Christian CPM Group | $21.00 | $12.00 | $17.50 |
| Suki Cooper Barclays Capital | $23.20 | $13.50 | $18.00 |
| Peter Fertig QCR Quantitative Commodity Research Ltd | $23.00 | $16.00 | $20.20 |
| Rene Hochreiter Allan Hochreiter (Pty) Ltd | $23.00 | $17.00 | $20.00 |
| Vincent Huang Solar Applied Materials Technology Corp | $31.00 | $17.00 | $26.00 |
| Michael Jansen JPMorgan Chase Bank | $ | $ | $19.80 |
| Michael Kempinski Commerzbank | $22.85 | $14.85 | $19.45 |
| Tom Kendall Mitsubishi Corporation (UK) Plc | $24.40 | $16.30 | $19.90 |
| Philip Klapwijk GFMS Ltd | $22.00 | $14.40 | $18.07 |
| Michael Ludwig BNP Paribas | $30.00 | $15.00 | $22.50 |
| Ross Norman TheBullionDesk | $21.50 | $17.17 | $19.55 |
| Frederic Panizzutti MKS Finance S.A. | $30.00 | $15.00 | $22.25 |
| Jeffrey Rhodes INTL Commodities DMCC | $21.75 | $15.25 | $17.14 |
| Ruchi Singh ICICI Bank | $24.00 | $12.00 | $17.00 |
| Daniel Smith Standard Chartered | $22.00 | $14.00 | $18.00 |
| James Steel HSBC Bank USA NA | $19.50 | $14.50 | $17.00 |
| Bob Takai Sumitomo Corporation | $19.50 | $14.50 | $16.90 |
| Matthew Turner Virtual Metals | $24.00 | $14.00 | $18.65 |
| Bhargava Vaidya B.N. Vaidya & Associates | $20.75 | $12.00 | $15.50 |
| David Wilson Société Générale | $26.00 | $16.80 | $21.83 |
| Wolfgang Wrzesniok-Rossbach Heraeus Metallhandelsgesellschaft m.b.H. | $25.00 | $15.00 | $16.50 |
| high | low | average | |
| Average forecasts | $570 | $342 | $446 |
| Philip Aubertin UBS Investment Bank | $585 | $320 | $440 |
| Robin Bhar Calyon Credit Acricole CIB | $560 | $350 | $464 |
| Joerg Ceh Landesbank Baden-Württemberg | $650 | $280 | $385 |
| Jeffrey Christian CPM Group | $500 | $370 | $468 |
| Suki Cooper Barclays Capital | $610 | $330 | $470 |
| Peter Fertig QCR Quantitative Commodity Research Ltd | $550 | $300 | $440 |
| Rene Hochreiter Allan Hochreiter (Pty) Ltd | $800 | $400 | $600 |
| Vincent Huang Solar Applied Materials Technology Corp | $550 | $390 | $455 |
| Michael Jansen JPMorgan Chase Bank | $ | $ | $413 |
| Tom Kendall Mitsubishi Corporation (UK) Plc | $535 | $340 | $445 |
| Philip Klapwijk GFMS Ltd | $480 | $335 | $409 |
| Michael Ludwig BNP Paribas | $740 | $350 | $545 |
| Rory McVeigh Commerzbank | $650 | $368 | $484 |
| Nick Moore RBS Global Banking & Markets | $475 | $350 | $400 |
| Ross Norman TheBullionDesk | $625 | $420 | $522 |
| Frederic Panizzutti MKS Finance S.A. | $780 | $390 | $578 |
| Daniel Smith Standard Chartered | $400 | $250 | $328 |
| James Steel HSBC Bank USA NA | $450 | $350 | $400 |
| Glyn Stevens INTL Commodities Inc | $545 | $280 | $365 |
| Bob Takai Sumitomo Corporation | $600 | $300 | $450 |
| Matthew Turner Virtual Metals | $550 | $350 | $425 |
| David Wilson Société Générale | $440 | $390 | $408 |
| Wolfgang Wrzesniok-Rossbach Heraeus Metallhandelsgesellschaft m.b.H. | $475 | $300 | $375 |
-Platinum to beat gold, says Goldman Sachs. Platinum may be a better investment bet than gold, analysts at Goldman Sachs have said. Read more here-http://www.telegraph.co.uk/finance/personalfinance/investing/gold/6990199/Platinum-to-beat-gold-says-Goldman-Sachs.html
-US Platinum ETF seen as precursor for significant investment buying. Some analysts are calling for platinum to be the year’s best performer as a result of new investor interest and access to the metal. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=95665&sn;=Detail
CHINA TAKING OVER
-China banks eclipse US rivals. Chinese banks have cemented their position as the most highly valued financial institutions, taking four of the top five slots in a ranking of banks’ share prices as a multiple of their book values.
China Merchants Bank, China Citic, ICBC and China Construction Bank lead the table, followed by Itaú Unibanco of Brazil, all with a price-to-book multiple of more than three. Over the past six years, the average price-to-book value of the biggest 50 banks has halved from two to one.
This means that investors believe the average bank is worth no more than the value of its balance sheet. Most western banks are trading at well below their book value. Read more here-
http://www.ft.com/cms/s/0/1c13f7f2-fe16-11de-9340-00144feab49a.html
-China becomes biggest exporter, edging out Germany. Already the biggest auto market and steel maker, China edged past Germany in 2009 to become the top exporter, yet another sign of its rapid rise and the spread of economic power from West to East.
Total 2009 exports were more than $1.2 trillion, China’s customs agency said Sunday. That was ahead of the 816 billion euros ($1.17 trillion) forecast for Germany by its foreign trade organization, BGA.
China’s new status is mostly symbolic but highlights its growing presence as an industrial power, major buyer of oil, iron ore and other commodities and, increasingly, as an investor and key voice in managing the global economy.
Its ability to unseat longtime export leader Germany reflects the ability of agile, low-cost Chinese manufacturers to keep selling abroad even as other exporters have been hammered by a slump in global demand. Read more here-http://apnews.myway.com/article/20100110/D9D5277O0.html
-China Ends U.S.’s Reign as Largest Auto Market. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aE.x_r_l9NZE
-China Raises Banks’ Reserve Ratio to Cool Economy. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ahHL2F10BqD0&pos;=2
REAL ESTATE-FORECLOSURES-MORTGAGES
-Yale’s Shiller sees new drop in US housing prices. Renowned Yale University economist Robert Shiller said on Tuesday he sees U.S. housing prices falling further in coming months, fueling more fears about the broader economy. Housing prices have already dropped nearly 30 percent since their peak in early 2006, in a freefall at the center of the global financial crisis.
Shiller, pioneer of the benchmark Standard & Poor’s Case-Shiller home price index, told Reuters more declines could derail the country’s fragile recovery by dragging more financial institutions to the brink of collapse and further discouraging sorely needed lending.
Renewed worries about housing are shared by many economists, given the continuing U.S. foreclosure crisis and the number of Americans who now find themselves “under water,” with homes that are worth less than their mortgages.
The Case-Shiller index, a measure of housing prices in 20 metropolitan areas, showed impressive gains last summer but it rose just 0.4 percent in October from the previous month on a seasonally adjusted basis. “We saw this big upturn but it seems to be flagging,” said Shiller.
When November data is published on Jan. 27, he said the index was likely to post its first overall decline since April, snapping five consecutive months of gains. “I think it’s more likely to be a decline than a rise in the next few months,” Shiller said. Read more here-http://www.alertnet.org/thenews/newsdesk/N12200896.htm
-Home prices: There remains a glut of at least two years supply on the market when the ‘shadow’ foreclosed housing inventory data are included in the calculation and home prices on average have 10-15% downside before fully mean reverting with respect to residential rents and wage income.
This is the canary in the coalmine when it comes to wealth, confidence, spending and writedowns (the market is expecting write-ups this year) in the banking sector. The big surprise will be the renewed turndown in the closely-watched Case-Shiller (CS) index of home prices, which in the past two months has slowed to an average gain of +0.25% after 1%+ advances in July-August, which gave beta-hungry investors more reason to add risk to their portfolios.
But the CS series is a three-month average and for all we know, the renewed price declines we expect to see may already be occurring now. Note that two home price series are already back in decline for two straight months LoanPerformance and Radar Logic. This is key for any sector that remotely touches the housing industry from the homebuilders, to the financials, to the consumer discretionary group. David Rosenberg-Gluskin/Sheff
-U.S. Foreclosures May Rise to 3 Million This Year. A record 3 million U.S. homes will be repossessed by lenders this year as high unemployment and depressed home values leave borrowers unable to make their house payment or sell, according to a RealtyTrac Inc. forecast.
Last year there were 2.82 million foreclosures, the most since RealtyTrac began compiling data in 2005. More than 4.5 million filings are expected this year, including default or auction notices and bank seizures, said Rick Sharga, senior vice president for the Irvine, California-based seller of default data and forecasts. There were 3.96 million filings in 2009.
“This will be the peak year, and the main reasons are unemployment and house prices that have stabilized way below mortgage amounts,” Kenneth Rosen, chairman of the University of California’s Fisher Center for Real Estate and Urban Economics in Berkeley, said in an interview. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=awkMBx3KjWfk or
http://apnews.myway.com/article/20100114/D9D7AN7O0.html
-Delinquency, Foreclosure Hit One in 7.5. One in every 7.5 homeowners in the U.S. is either delinquent on their loans or in foreclosure, according to Lender Processing Service. In its December 2009 Mortgage Monitor report, Florida-based LPS said total delinquencies, excluding foreclosure, rose to a record 9.97%, an increase of more than 21% from a year earlier.
It also found that more than 5% of loans have moved to a more delinquent status, while 1.52% have improved. It did note, however, that the number of foreclosure starts has continued to decline, thanks to loss mitigation efforts such as the federal government’s Home Affordable Modification Program. Read more here-http://www.emii.com/Articles/2371639/Banking–Brokerage/Banking–Brokerage-Articles/Delinquency-Foreclosure-Hit-One-in-7.5.aspx
-Dubai’s First Foreclosure May Open Floodgates in Worst Market. Dubai’s housing rout sent prices down 52 percent in the past year, prompting some homeowners to abandon their cars and mortgage payments and flee the country. Not one received a foreclosure notice.
Until now. Barclays Plc won the sheikdom’s first foreclosure cases in court, clearing the way for lenders holding about $16 billion of Dubai home loans to take action when borrowers don’t pay. Islamic lender Tamweel PJSC, the emirate’s biggest mortgage bank, has several of its own foreclosure claims pending and estimates about 3 percent of its mortgages are in default. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=a4TwfiSIfjdM&pos;=10
-More Homeowners Struggling As Option ARMs Reset Higher. Thousands of American homeowners are starting to see their monthly mortgage payments skyrocket, dealing a fresh blow to the already shaky housing recovery.
The widely feared reset of thousands of option adjustable-rate mortgages where both interest and principal payments rise sharply is already leaving many homeowners struggling to keep a roof over their head.
“It’s going to kill off housing,” warns Patrick Pulatie, CEO of Loan Fraud Investigations, a predatory lending audit firm. “We have pretty close to 500,000 option ARM payments going higher in California over the next couple of years. The impact of the higher payments will be devastating for homeowners who are having trouble now making ends meet.”
Option ARM mortgages, which have been around since 1981 and are aimed primarily for people who had fluctuating incomes, became popular during the housing boom. Terms of the loan usually allowed the borrower to make low monthly payments initially sometimes by just paying interest only.
But as the terms of those mortgages now readjust, homeowners are facing much higher mortgage payments at a time when the value of their house has plummeted and many are out of work. In some cases, homeowners who chose a very low starting interest rate have actually seen the overall amount of their mortgage increase known as negative amortization putting them even deeper in debt. Read more here-http://www.cnbc.com/id/34729005?source=patrick.net
-Chart of U.S. home loans that are about to reset. Take a look at the next few years. Read more here-http://jsmineset.com/wp-content/uploads/2010/01/clip_image00114.jpg
-Real Estate Bull Laub Sees Unprecedented Workout From Bad Debt. Kenneth Laub has been through three commercial real estate boom and bust cycles during almost five decades as a broker and consultant to corporations such as Hess Corp. and International Paper Co. He says the current downturn will overshadow all of the others, Bloomberg Markets reports in its February 2010 issue.
“It won’t be a typical part of a cycle where we’re down for two or three years and things recover,” says Laub, 70, whose New York firm, Kenneth D. Laub & Co., says it has handled more than $40 billion of real estate transactions since its inception in 1969. “It will be longer than we’ve gone through before.” Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=alzZnpmtLZK8&pos;=11
-U.S. apartment vacancy rate hits 30-year high. The U.S. apartment vacancy rate rose to an almost 30-year high of 8 percent in the fourth quarter, and rents dropped in the biggest one-year slump in 2009, according to real estate research company Reis Inc. Read more here-http://www.reuters.com/article/idUSN0614064020100107
-At 17 pct, US office vacancy rate hits 15-year high. Read more here-http://www.reuters.com/article/idUSN0719919220100108
-A Slow-Motion Wreck for Commercial Real Estate. Read more here-http://www.time.com/time/magazine/article/0,9171,1952317,00.html
-Manhattan Office Space for Lease Increases 38%, Cushman Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aStyY.jU6X10
GEOPOLITICAL NEWS
-Obama wants record $708 billion for wars next year. President Barack Obama will ask Congress for an additional $33 billion to fight unpopular wars in Afghanistan and Iraq on top of a record $708 billion for the Defense Department next year, The Associated Press has learned – a request that could be an especially hard sell to some of the administration’s Democratic allies.
The extra $33 billion in 2010 would mostly go toward the expansion of the war in Afghanistan. Obama ordered an extra 30,000 troops for that war as part of an overhaul of the war strategy late last year.
Military officials have suggested that the 2011 request would top $700 billion for the first time, but the precise figure has not been made public. Read more here-http://apnews.myway.com/article/20100113/D9D6RFGG1.html
-U.S. Has Contingency Plan for Dealing With Iran, Petraeus Says. The U.S. has a contingency plan for dealing with Iran’s nuclear program if diplomacy and sanctions fail, General David Petraeus, the top U.S. military commander in the region, said in an interview to be aired today on CNN.
“It would be almost literally irresponsible if Centcom were not to have been thinking about the various ‘what ifs’ and to make plans for a whole variety of different contingencies,” Petraeus said in comments posted on CNN’s Web Site. The general, commander of U.S. forces in the Middle East and Central Asia, is head of U.S. Central Command, or Centcom. Read more here-
http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aaoKCuivpap4 or http://www.telegraph.co.uk/news/worldnews/middleeast/iran/6963311/Iran-can-be-bombed-says-General-Petraeus.html
-Iran Says U.S., Israel May Be Behind Killing of Nuclear Expert. Iran said U.S. and Israeli spy agencies may have conspired with dissident Iranians to kill a nuclear scientist in a bomb attack today in Tehran.
Massoud Ali-Mohammadi, a professor of nuclear physics, was killed by a remote-controlled device planted on a motorcycle in front of his home in the Qeytarieh neighborhood, state-run Press TV said. The Kingdom Assembly of Iran, a political group that seeks to end Iran’s religious rule, took responsibility for the bombing in a statement, the state-run Fars news agency said. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aT3gNEy3PnhQ&pos;=8
-Al Qaeda linked to rogue aviation network. In early 2008, an official at the U.S. Department of Homeland Security sent a report to his superiors detailing what he called “the most significant development in the criminal exploitation of aircraft since 9/11.”
The document warned that a growing fleet of rogue jet aircraft was regularly crisscrossing the Atlantic Ocean. On one end of the air route, it said, are cocaine-producing areas in the Andes controlled by the leftist Revolutionary Armed Forces of Colombia. On the other are some of West Africa’s most unstable countries.
The report, a copy of which was obtained by Reuters, was ignored, and the problem has since escalated into what security officials in several countries describe as a global security threat.
The clandestine fleet has grown to include twin-engine turboprops, executive jets and retired Boeing 727s that are flying multi-ton loads of cocaine and possibly weapons to an area in Africa where factions of al Qaeda are believed to be facilitating the smuggling of drugs to Europe, the officials say.
Al Qaeda in the Islamic Maghreb (AQIM) has been held responsible for car and suicide bombings in Algeria and Mauritania. Read more here-http://www.reuters.com/article/idUSTRE60C3E820100113
© 2009, Worldwide Precious Metals.
www.wwpmc.com
The Goldbugg Report – January 19, 2010
Posted by Worldwide Precious Metals on Tuesday, January 19, 2010
The Goldbugg Report – January 12, 2010
January 12, 2010
© 2009, Worldwide Precious Metals.
www.wwpmc.com
The Goldbugg Report – January 12, 2010
Posted by Worldwide Precious Metals on Tuesday, January 12, 2010
The Goldbugg Report – January 05, 2010
January 5, 2010
-PMI’s Week in Review
-$1500 gold next year and higher levels to come.
-NIA Declares Silver Best Investment for Next Decade.
December 31st, 2009
The Week in Review
Happy Holidays and a prosperous New Year to everyone! This week we have another shortened trading week as we end the first decade of the 21st century and head into the New Year.
There were conflicting reports out on Wednesday regarding manufacturing and employment. The Institute for Supply Management-Chicago released a report stating that its “business barometer” rose to 60, the highest reading since January 2006 with employment figures hitting the biggest monthly gain since September 2008. Economists immediately jumped on the data as proof that Midwest manufacturing was into full recovery and growth mode. In a separate and apparently conflicting report, the Federal Reserve Bank of Kansas City stated that the monthly manufacturing index fell in December, indicating slowing growth.
A US trade panel gave final approval Wednesday to duties on Chinese-made steel pipe. The duties will range from 10 to 16 percent and come on the heels of a 35% duty on Chinese-made tires that President Obama approved back in September. In retaliation, China has accused the US of protectionism and filed its own set of complaints at the World Trade Organization. As trade friction increases between the two countries we can expect market volatility to increase.
In a move perhaps showing how the health care reforms will begin negatively affecting insurers, Aetna announced that it expects to lose as many as 650,000 members in the first quarter of 2010. Combined with massive charges that the company expects to take in order to cover previously announced job cuts, Aetna stated that they expect 2010 to be a “repositioning year”.
Additional analysts are getting behind Nobel Prize-winning economist Joseph Stiglitz’s warning that there’s a “significant” chance that the US economy will contract in the second half of 2010. Len Blum, managing director at Westwood Capital, stated that “The only reason that the US economy is doing as well as it is, is because of the government stimulus package.” He went on to say “if the government doesn’t introduce another stimulus package, this one will burn off in the first half [of 2010] and in the second half we could easily slip back into recession.”
The US dollar traded basically sideways this week against the euro and yen.
Crude oil moved near 80 dollars a barrel, backing off slightly as inventory numbers came out showing a lower than expected drop in inventory.
Perhaps showing that there are still troubles ahead in the housing and banking industries, GMAC Financial Services received a fresh $3.8 billion in cash bailouts from the government to help it stem huge losses in its home mortgage unit. The new deal gives the government a 56 percent ownership in the troubled company.
Consumer confidence hit a 3 month high in December according to a report released by The Conference Board, an industry group. Despite the increase in optimism, consumers still rated their present situation “the worst since February 1983.”
Here are your Short Term Support and Resistance Levels for the upcoming week.
Volatility should be expected to continue. Despite a recent pull back in the price of gold, analysts continue to tout the metal as a sound investment. Jim Rogers, chairman of Rogers Holding went so far as to say “I wouldn’t think of selling, if gold goes to $1,000 (per ounce) – or pick a number – I hope that I’m smart enough to buy more.” As confidence in paper currencies continues to erode and more and more countries reveal problems with their “Sovereign Debt” (Spain is the latest to hit the news with financial troubles, following on the heels of Dubai and Greece), we can expect further volatility in the US dollar. We believe, as do many, many analysts, that 2010 will be an exceptional year for price increases in precious metals. The increases in precious metals, year over year, that we have seen in 2009 provided exceptional opportunities for your portfolios. We believe, as do many analysts, that the appreciation in prices over 2010 will be even greater, as has been proven out over the last nine years. Any price pullbacks at these levels should be taken advantage of if they occur. Remember, the key to profitability through the ownership of physical precious metals is to own them and hold them for the long term. Never over-extend your ability to maintain ownership over the long term.
Trading Department – Precious Metals International, Ltd.
GOLD
-Confident on gold, Nichols: $1500 in 2010 and $2000-$3000 longer term. Specialist gold analyst Jeff Nichols, is still bullish on gold despite the recent price correction and would not be surprised to see $1500 gold next year and higher levels to come.
Gold has enjoyed a long and enviable climb, rising some 380 percent from a cyclical low near $255 an ounce in April 2001 to an all-time high just over $1,225 early this month. Nevertheless, the bull market in gold has a long way to go both in magnitude and direction. Looking ahead to 2010, don’t be surprised to see gold trade at $1,500 or higher sometime during the New Year.
And that’s not all: I’ve been telling clients that the yellow metal’s price will continue its long-term upswing for at least a few more years, very likely reaching $2,000 an ounce and possibly hitting $3,000 or more before the gold price cycle begins its next long-term cyclical “bear” phase. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=94913&sn;=Detail
-Asia Central Bankers Say It With Gold. Strong dollar equals falling gold price, right? Except, perhaps, when Asia’s central bankers are involved. Three-quarters of the region’s $5 trillion in foreign-exchange holdings are parked in U.S. dollars. A desire to diversify away from the greenback, though, has become evident. The dollar’s share in reserve accumulation dropped to less than 30% in the third quarter, Barclays Capital estimates.
Admittedly, knowing exactly what is in central-bank reserves takes guesswork, but analysts think most diversification in 2009 favored the euro. Recently, gold has turned up as a second alternative. The Reserve Bank of India stirred markets when it revealed it purchased 200 tons of gold from the International Monetary Fund in October, increasing gold’s share of central bank reserves to 6.4% from 3.6%.
Even if other central banks don’t start making large purchases like India’s, they will likely remain a substantial buyer as reserves continue to pile up. In the 12 months through November, the banks added around $800 billion to their foreign-exchange holdings, a side effect of their efforts to slow the appreciation of local currencies.
China, which has seen its reserves rise by more than 50% in the past two years to about $2.3 trillion, has bought 450 tons of gold during the period, Merrill Lynch estimates. That is a substantial chunk in a market where annual turnover is about 3,800 metric tons. Accumulation of reserves by Asia’s central banks will likely continue as long as strong regional growth and high interest rates continue to attract foreign investors.
A shift in portfolios, like India’s, would only add to this, and there is scope for this to happen. Gold accounts for around 2% of reserves in emerging markets, Merrill Lynch calculates. That compares with a 10% average globally, and more than half of all holdings in the case of the U.S. Federal Reserve, and France’s and Germany’s central banks.
Asia’s central bankers will move slowly, particularly with gold prices still above $1,000 an ounce. But a shift toward the global average would mean more buying regardless of what the dollar does.
Read more here-http://online.wsj.com/article/SB20001424052748704718204574616280863871104.html or http://www.gata.org/node/8186
-Can China beat US in gold reserves in 10 years? Read more here-http://www.commodityonline.com/printnews.php?news_id=24146 or http://www.businessinsider.com/china-gold-23-12-2009
-Beijing residents in gold rush at year end. Gold jewellery sales jumped more than 30 percent over the weekend in Beijing, as bargain shoppers swarmed the city’s major jewelry stores on year-end promotions. Read more here-http://www.gata.org/node/8185 or http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=94990&sn;=Detail
-Gold brings a smile to the world’s central bankers. Read more here-http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6969058.ece
-Gold has been the decade’s best performer. The statistics show that gold has outperformed virtually all other asset classes over the past ten years despite permanent talking down by the gold skeptics. Happy holidays wishes to all, with a special season’s greetings to the permanent gold skeptics.
The decade that ends Thursday is on track to be the worst in recorded history for the U.S. stock market worse than all of the many boom-and-bust cycles of the 19th century, worse than the Great Depression-era 1930s, worse than the recession-plagued 1970s.
The S&P; 500 opened the decade at 1,469.25 on January 3, 2000. When the market closed on Christmas Eve, the S&P; 500 stood at 1,125.46 – with four trading days left in the decade, the index’s annual performance over that span is negative 2.6 percent. The Dow Jones Industrials has lost about 1 percent per year over the same period, and the Nasdaq Composite is down a whopping 5.9 percent annually.
When adjusted for inflation, the 10-year returns for these indices are even lower. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=95006&sn;=Detail
-Clive Maund gold market update. Read more here-http://news.goldseek.com/CliveMaund/1262017342.php
-Where will gold go? Read more here-http://www.perthnow.com.au/business/where-will-gold-go/story-e6frg2qc-1225814442433
-The current bull market in gold is far from over. In fact it is only beginning. While it has come off its highs, gold is still up 30% this year and, many factors still point to a long term bull trend. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=94993&sn;=Detail
-Jim Rogers Is “Flabbergasted” By Roubini’s Wrongheaded Call On The Gold Bubble. Read more here-http://www.businessinsider.com/jim-rogers-is-flabbergasted-by-roubinis-wrongheaded-call-on-the-gold-bubble-2009-12
-Jim Rogers: Gold Can’t Be in a Bubble if Nobody Even Owns it Yet. Jim Rogers, who has long been bullish on commodities, tells CNBC’s Maria Bartiromo that despite the recent spike in the gold’s price; the market is not experiencing a bubble.
“I wouldn’t think of selling [gold],” Rogers said. “If gold goes to $1,000 or pick a number I hope that I’m smart enough to buy more. Until last year central banks around the world were selling gold. Now you have the opposite. They’ve stopped selling and they are starting to buy as well. That’s a huge shift in the gold market and many other people worry about paper-money as well. So I think gold will certainly go to a couple of thousand dollars over the next decade. I mean that’s not a radical assumption.”
According to Rogers, gold will power the great commodities bull run that will last for the next decade. With many people worried about the deficit and paper money, gold will be a great investment and relatively few people are invested in it.
At a speech in Prague Rogers surveyed about 300 people, including big money managers, and 76 percent had never owned gold, he said. “So when you say it’s a bubble nobody owns gold yet,” Rogers said. Still, silver is preferable, with silver 70 percent off its all-time high and gold near it’s all-time high, he said. Watch video here-http://www.cnbc.com/id/34376063/
-Aden Sister gold commentary. For those who think gold is already too expensive consider this from our dear friend Ian McAvity and his great newsletter, Deliberations. Gold is about 52% higher than it was at its January, 1980 peak.
Meanwhile, the CPI, which is the consumer measure of inflation is 177% higher, the money supply is 464% higher and the stock market is nearly 900% higher. He notes, “I don’t think it untoward to suggest that gold is badly lagging a number of important yardsticks and at these levels it has some catching up to do.”
We couldn’t agree more and this will likely happen in the year ahead, and beyond. Read more here-http://www.321gold.com/editorials/aden/aden123009.html
-Today we stand on the threshold of one of the great moves in financial history. The signal comes as what is called a pullback to support. It will be my goal in this article to convey to you the immense power of such a formation. So simple, yet fraught with such potential for profit. Howard S. Katz-Read more here-http://www.321gold.com/editorials/katz/katz122809.html
-Why Gold Will be the “Greatest Trade Ever”. Read more here-http://moneymorning.com/2009/12/28/bull-market-gold/
-Olive: Don’t believe hype over gold. Investing zealots betting the precious metal will top $15,000 U.S. an ounce in the years to come will see their bubble burst again. Read more here-
http://www.thestar.com/business/article/742619–olive-don-t-believe-hype-over-gold
-Gordon Brown’s untimely decision to sell cost the UK billions. Gordon Brown’s decision to sell the bulk of the Bank of England’s gold at historically low prices has cost the country $10 billion (£6,260 million).
In what might be regarded as the definition of calling the bottom of the market, Mr Brown, who was then Chancellor, sold nearly 400 tonnes of the Bank’s gold at an average price of $275 an ounce. The sale raised about $3.9 billion between 1999 and 2002 but had he sold the metal this year, he would have raised $13.8 billion, based on an average price of $978 an ounce. Read more here-http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6969042.ece
-GATA sues Fed to disclose gold market intervention records. Read more here-http://www.gata.org/node/8192
SILVER-PLATINUM-PALLADIUM
Gold to silver ratio at 80 to 1 with gold at $2,000 the silver price would be $25.00
Gold to silver ratio at 70 to 1 with gold at $2,000 the silver price would be $28.57
Gold to silver ratio at 60 to 1 with gold at $2,000 the silver price would be $33.33
Gold to silver ratio at 50 to 1 with gold at $2,000 the silver price would be $40.00
Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00
Gold to silver ratio at 30 to 1 with gold at $2,000 the silver price would be $66.67
Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00
Gold to silver ratio at 15 to 1 with gold at $2,000 the silver price would be $133.33
-Clive Maund silver market update. Read more here-http://news.silverseek.com/CliveMaund/1261952914.php
-NIA Declares Silver Best Investment for Next Decade. We are less than three weeks away from entering the next decade. The most important thing you need to know entering 2010 is that silver is the single best investment for the next decade. In our opinion, investing into silver is the only sure way to tremendously increase your purchasing power over the next ten years.
Throughout world history, only ten times more silver has been mined than gold. If you go back about 1,000 years ago between the years 1000 and 1250, gold was worth ten times more than silver worldwide. From year 1250 to 1792, the gold to silver ratio slowly increased from 10 to 15 and the Coinage Act of 1792 officially defined a gold to silver ratio of 15.
The ratio remained at 15 until forty-two years later when the ratio was increased in 1834 to 16, where it remained until silver was demonetized in 1873. The gold to silver ratio remained between 10 and 16 for 873 years! It is only over the past 100 years that the gold to silver ratio has averaged 50.
History will look back at the artificially high gold to silver ratio of the past century as an anomaly, caused by the dollar bubble and the world being deceived into believing that fiat currencies are real money, when in fact they’re all an illusion. Next decade, the fiat currency experiment will end badly in a currency crisis. The wealthiest people will be those who bought silver today. Read more here-http://www.silverbearcafe.com/private/12.09/investment.html
-SEC clears way for platinum and palladium ETFs. Read more here-http://www.gata.org/node/8181
CHART OF THE WEEK-QUOTES-QUICK HITS
-Chart of the week: That Horrible Q3 GDP Report Was Even Worse Than You Thought. Last week the Commerce Department announced that in Q3 GDP had been revised down to 2.2% growth after first clocking in at a brisk 3.8%. The number was the latest blow to those who are still holding out hopes of a V-shaped recovery.
Not only was the headline number disappointing, but a deeper drill-down is also depressing. As Goldman Sachs analyst Jan Hatzius pointed out in a recent note, major GDP components, including consumption, residential investment, and business investment decline in lockstop. There were no outliers distorting the number. Quite simply, across the board, things aren’t as good as we thought or hoped. Read more here-http://www.businessinsider.com/chart-of-the-day-gdp-q3-2009-12
-Treasuries Set for Worst Year Since 1978 as U.S. Steps Up Sales. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a7tGSaeWa7V0
-Chart of the week: Government Bonds Were The Dumbest Bet Of The Year. If you bought a ten-year U.S. bond at the beginning of the year, it was a horrible bet. At the time, long-term interest rates had collapsed as much of the world looked for a ’safe haven’ in U.S. government debt. Yet 10-year bond buyers forgot that bonds do well in a crisis only if you own them before everyone has panicked, not after.
As shown below, the 10-year bond yield has increased substantially year to date, rising to about 3.8% from 2.5% in early January. That’s a huge move in 10-year bond terms. Bond prices move in the opposite direction of market yields, thus the old 10-year bond that went for $100 in January would now go for about $90 (Using a simple bond calculator) given that it has to pay 3.8% yield with its old low coupon.
Look at any U.S. long-term bond ETF, it’ll be down for the year. Meanwhile, stocks and even junk bonds have rallied. Worse yet, if U.S. interest rates are hiked, or U.S. inflation picks up, the ten year bond in our example will likely fall even further in value. Simply put, it’s not a ’safe haven’ investment when everyone is herding into it. Read more here-
http://www.businessinsider.com/chart-of-the-day-10-year-treasury-note-2009-2009-12
-Chart of the week: The End Of Newspapers. Newspapers had a nice run from the 1970s to the 1990s. Unfortunately, as this chart from the Bureau of Labor Statistics makes clear by way of Marketwatch it’s over.
Newspaper employment has utterly collapsed in the last 15 years, with employment numbers now around where they were in the mid-1950s. The good news: It’s a great opportunity. The next decade will give birth to new forms of reporting, more in tune with today’s technology and news consumption habits. Read more here-http://www.businessinsider.com/chart-of-the-day-workers-employed-in-newspaper-publishing-2009-12
-”Life expectancy would grow by leaps and bounds if green vegetables smelled as good as bacon.” Doug Larson
-As we approach the New Year it seems the party has already begun, and the commentators are all full of spirits. I can’t find a bear in the woods. According to them the equity market is going up, the dollar is going up, commodities are going up, and even lip service is being paid to gold, but lip service only. The conviction being blasted out there is a line up of former pro-gold guys like Faber and Rogers.
Today they rolled out Barton Biggs for his bullish equity-bullish dollar forecast. Soros and Buffett have already made their contribution to a dollar rally. Now go back to February of 2009. You could not find a bull on anything anywhere. I did an interview for a major F-TV station where I specifically said that the bottom of the equity market would occur in March 09. Even the interviewer argued with me.
Right now it is the absolute opposite even though the economic improvement given as green shots do not equal the real rate of inflation at the checkout counter. In my opinion, the economy as a result of unprecedented stimulation is simply bottom bouncing, an experience seen in 1932. I am posting this interview so you can travel back in time to witness the absolute opposite of the present pep rally for everything tradable that is taking place.
I do not buy this spirited party but it is damn lonely out here. I take comfort from having seen the best of my friends in full retreat in the 70s, leaving me out there looking like an army of one. With credit card write offs (more than 90 days past dueno payment) rising today above 10%, and unemployment staying high this recovery looks more like bottom bouncing lacking the proper input to adjust for inflation at the checkout counter.
Asia is a different story because their stimulation was more towards business than the banksters. They execute, not bail out, banksters. As I see it gold will return and better $1224 then move on to $1274- $1278 before visiting $1650. I would bet on Alf and Martin’s numbers more than mine. Jim Sinclair-Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=95075&sn;=Detail
-I have been continuously promoting investment in gold for several years. I expect in the short term it will reach US$1,300 per ounce, and will reach US$5,000 per ounce over the next three to five years. This price (by 2014 or so) would imply a collapse of faith in the dollar and eventually a political crisis leading to a restoration of the gold standard in some form.
Other commodities will continue on their upward path also until 2014, especially the lagging soft commodities, such as corn, wheat, sugar, rice, beef, coffee, soya beans and palm oil (cocoa, today, is at a 25-year high). Robert Lloyd-George: Chairman, Lloyd George Management, Hong Kong-Read more here-http://www.321gold.com/editorials/thomson/thomson122409.html
-A year ago, Bud Conrad predicted that gold would top $1,150 by year-end 2009. His call was bolder than most forecasters’ but he was right. Looking at the numbers today, Bud’s new baseline 2010 forecast is for gold to top $1,450. He sees a “possibility of further international instability or currency debasement as adding to that baseline.” Bud Conrad-Casey Research
-While some are claiming gold has peaked, I believe gold is nowhere near a top and will reach a new nominal high between $1,300-$1,500 during 2010. Silver will outperform gold reaching $24 or higher as the gold/silver ratio dips towards 55. Remember, gold can perform well during periods of inflation or deflation. While I believe deflation is the greater threat during 2010, this will occur primarily in credit-based markets such as real estate.
Cash-based markets such as precious metals are likely to experience inflation as record amounts of new money have been printed during the past year. Look for more central bank purchases during 2010, as well as significant purchases from China and other countries that are eager to diversify away from dollars.
The gold/silver suppression story will continue to gain steam and with more and more investors demanding delivery, pressure will increase on shorts and COMEX regulators. There will be some type of rule change or restructuring at minimum and the potential for default is possible. Lastly, the Dow/Gold ratio will decline after bouncing in 2009. Jason Hamlin-Read more here-
http://www.kitco.com/ind/Hamlin/dec282009.html
-Is the recession over? Are happy days really here again? Paraphrasing Dickens, my answer is, “For people who are prepared, 2010 will be the best of times. For many, 2010 will be the worst of times.” The following are a few of my predictions and reasons behind them.
Prediction #2: Gold, silver, and oil will continue to be safe investments in 2010. In 2009, the Dow rose approximately 18%. Gold rose approximately 25%. Silver rose approximately 50%. By the end of 2010, I predict gold will be at $1,775 an ounce, silver at $24 an ounce, and oil at $85 a barrel. If Israel attacks Iran, these predictions will be blown away. Robert Kiyosaki-Read more here-
http://finance.yahoo.com/expert/article/richricher/211091
-Gold touches $1,500 per oz. in 2010, representing about a 50% gain from the current level. Silver goes up in sympathy, reaching $25 per oz. HUI passes $600 with many junior gold/silver miners doubling and tripling. Gold would be treated as the only solid asset sought by both ordinary people and foreign central banks with further deterioration of fiat money. Thomas Tan-Read more here-
http://www.321gold.com/editorials/tan/tan123009.html
-Mainstream economists called this downturn “The Great Recession”. This is truly a gentle way of saying “Depression”. When we can have the courage to come to grips with the fact that we did in fact experience a depression of sorts, which is by definition a credit event, then and only then can we draw a conclusion that a sustainable recovery will not get underway until the ratio of household credit to personal disposable income reverts to the mean (and goes to an excess in the opposite direction).
I know it sounds harsh, but we shall endure believe it. Transition is rarely without pain. The ratio of household debt to disposable income is up from a 30% ratio back in the 1950s to 125% today (though down from 139% at the peak in 2007).
Mean reverting to a ratio closer to 60% means that the deleveraging process will be a multi-year event and by the time it is over, more than $7 trillion in additional household credit will have to be extinguished. For more on this see the unbelievably grotesque article on the front page of last Thursday’s (December 10) Wall Street Journal he New American Dream. David Rosenberg-Gluskin/Sheff
-As we have seen so illustriously over the past year, all Ponzi schemes eventually fail under their own weight. The US debt scheme is no different. 2009 has been witness to spectacular government
intervention in almost all levels of the economy. This support requires outside capital to facilitate, and relies heavily on the US government’s ability to raise money in the debt market.
The fact that the Federal Reserve and US Treasury cannot identify the second largest buyer of treasury securities this year proves that the traditional buyers are not keeping pace with the US government’s deficit spending. It makes us wonder if it’s all just a Ponzi scheme. Eric Sprott-Read more here-http://www.sprott.com/Docs/MarketsataGlance/12_2009_MAAG.pdf
-In Hungary the Financial Crisis has picked up a Second Wind. Hungarians are bracing for worse times ahead, some feel that a social explosion is imminent. Read more here-
http://www.heise.de/tp/r4/artikel/31/31771/1.html
-Fitch warns that Britain and France risk losing their AAA rating. Fitch Ratings has given its bluntest warning to date that Britain and France risk losing their AAA status unless they map out a clear path to budget discipline over the next year. Read more here-http://www.telegraph.co.uk/finance/economics/6867797/Fitch-warns-that-Britain-and-France-risk-losing-their-AAA-rating.html
-Senate Votes to Increase U.S. Debt Ceiling by $290 Billion. The U.S. Senate cleared legislation increasing the U.S. debt limit by $290 billion before recessing for the year. The vote today was 60-39 to raise the limit on federal borrowing to $12.39 trillion, enough to tide the government over for about two months.
The House approved the legislation Dec. 16. The measure, which would be the fourth debt-limit increase in 18 months, now heads to President Barack Obama for his signature. Read more here-
http://www.bloomberg.com/apps/news?pid=20601110&sid;=a08myrVKeF6g
-The Federal Reserve needs more money to continue purchasing US government debt, the aggregate amount of which is soaring because of ballooning deficits. But the Fed has a problem. The US government doesn’t pay its bills with ‘cash currency’, the green paper Americans carry around in their pocket. So the Fed cannot crank up the printing press like central banks did in Weimar Germany in the 1920s, or in recent years, in Zimbabwe. James Turk-Read more here-http://www.fgmr.com/december-30-2009-federal-reserve-needs-more-money.html
-We are not sure if this is a well known “fact”, but the U.S. government has a record $2.5 trillion of its debt, including bills, bonds and notes, rolling over in 2010. That, my friends, is 35% of the outstanding level of Uncle Sam’s marketable obligations having to be refinanced in one single year.
One has to wonder how the Fed is going to be able to raise interest rates in such a backdrop of massive rollovers; and if it doesn’t and the economy manages to exceed expectations or we get some inflation, how it is that the near-record steepness in the yield curve doesn’t continue in the coming year.
But very clearly, sovereign risk globally has taken over as the major potential flare-up for the coming year. Looking at the official projections for 2010, we have Japan’s government debt-to-GDP ratio hitting 227%; Italy at 120%; the U.S. and the U.K. both at 94%; Germany and France at 83%, and Canada at 79% (all levels of government). Rarely, if ever, has Canada been the one-eyed man to this extent in the land of the blind. David Rosenberg-Gluskin/Sheff
-Credit-Card Writeoffs Increase And Could Keep Getting Worse. Read more here-http://www.cnbc.com/id/34621258?__source=CNBC|newsnow|know1|2009 or http://www.reuters.com/article/idUSN2918944320091229
-Home equity lines have dried up across U.S. As home prices collapse, banks cut off credit, further souring the economy. Read more here-http://www.msnbc.msn.com/id/34601242/ns/business-personal_finance/
-Even as the US economy recovers, a decade of joblessness and flat wages could lie ahead. Read more here-http://www.google.com/hostednews/canadianpress/article/ALeqM5h1Glm2GssKMiFMvrdG6O-y5xeStA
-ShadowStats.com founder John Williams explains the risk of hyperinflation. Read more here-http://www.fairfieldweekly.com/article.cfm?aid=16014
-Morgan Stanley has been sued by a Virgin Islands pension fund that accused the Wall Street bank of defrauding investors by marketing $1.2 billion of risky mortgage-related notes that it expected to fail. Read more here-http://www.reuters.com/article/idUSTRE5BS34F20091229
-A small Chinese power generator on Tuesday rejected demands from a Goldman Sachs unit to pay for nearly $80 million lost on two oil hedging contracts, part of a long-running dispute over how China deals with derivatives losses. Read more here-http://www.reuters.com/article/idUSSGE5BS09T20091229
-10 big U.S. financial scandals of 2009. Read more here-http://www.reuters.com/article/idUSTRE5BS3WW20091229
-Tiger Woods Scandal Cost Shareholders up to $12 Billion, UC Davis Study Says. Read more here-http://www.reuters.com/article/idUSTRE5BS38I20091229
-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/HistoricalPriceTrackingsystem.html
-Watch BTV interview of Harold Seigel on colored diamonds and his website http://www.rarecoloreddiamonds.com/. Watch video here-http://www.rarecoloreddiamonds.com/watchnow.html
-Carrie Underwood’s Engagement Ring Estimated at $150 K. The flawless yellow diamond engagement ring Carrie Underwood received from her fiancé Mike Fisher is estimated at around $150,000 and reportedly is a 5-plus carat round diamond with diamond side stones.
MTV News reported the ring’s estimated cost Monday, citing the Diamond Information Center (DIC). Underwood was spotted wearing the ring, designed by jeweler Johnathon Arndt, last Monday at an Ottawa Senators hockey game. Read more here-http://www.idexonline.com/portal_FullNews.asp?id=33405 or http://www.idexonline.com/portal_FullNews.asp?id=33394
Carrie Underwood has displayed her affinity for yellow diamonds before, like with the ring she wore to the 2007 Grammy Awards (above)
This 1.61-carat, radiant-cut, fancy purplish-red stone has an estimated worth of $2 million and has been dubbed the “Kimberley Red.”
-Diamond from ‘08 tender reborn as ‘Kimberley Red’. A 1.77-carat, radiant-cut, fancy deep purplish-pink diamond that didn’t attract a buyer at Rio Tinto’s 2008 Argyle Pink Diamond tender has been recut into a stone that has everybody seeing red, literally.
Joshua Sheby, a gemologist with New York-based Scarselli Diamonds who specializes in natural-color diamonds, said Scarselli purchased the diamond in partnership with a few other companies in the first half of 2009 after it went unsold in 2008.
Though Argyle pink diamonds are difficult to cut because they are heavily included, Sheby said they saw potential in this stone and took a chance. The result: a 1.61-carat, radiant-cut, fancy purplish-red stone worth an estimated $2 million. “It was a just a matter of readjusting some of the angles and bringing out that red component,” Sheby said.
The Gemological Institute of America (GIA) graded the stone, and Argyle Pink Diamonds, the marketing arm of mining company Rio Tinto, issued a letter of rarity signed by its business manager Josephine Archer stating that they’ve dubbed the diamond “the Kimberley Red.”
The letter notes that in the past 10 years, only one other diamond larger than 1.5 carats and graded by the GIA as “fancy purplish red” has been featured in the Argyle tender. “This is an important stone from Australia’s Argyle mine. Given the approaching end of mine life, this gem is a significant legacy of the rare and unique fancy colored diamonds produced in this remote part of the world,” the letter states.
As for what the future holds for this rare, red diamond, Sheby said that remains to be seen. The diamond could be sold through an auction house, retail outlet or to a collector and/or investor.
A museum also could decide to buy the stone or rent it for a specified amount of time, he said. “We haven’t ruled out anything,” Sheby said. Read more here-http://www.nationaljewelernetwork.com/njn/content_display/diamonds/supply/e3i55cc6046dcbcc6454a2b63789b1aa034
STOCK MARKET PERFORMANCE-CORRECTION COMING
-Since End of 1999, U.S. Stocks’ Performance Has Been the All-Time Clunker; Even 1930s Beat It. The U.S. stock market is wrapping up what is likely to be its worst decade ever. In nearly 200 years of recorded stock-market history, no calendar decade has seen such a dismal performance as the 2000s.
Investors would have been better off investing in pretty much anything else, from bonds to gold or even just stuffing money under a mattress. Since the end of 1999, stocks traded on the New York Stock Exchange have lost an average of 0.5% a year thanks to the twin bear markets this decade. The period has provided a lesson for ordinary Americans who used stocks as their primary way of saving for retirement.
Many investors were lured to the stock market by the bull market that began in the early 1980s and gained force through the 1990s. But coming out of the 1990s when a 17.6% average annual gain made it the second-best decade in history behind the 1950s stocks simply had gotten too expensive. Companies also pared dividends, cutting into investor returns. And in a time of financial panic like 2008, stocks were a terrible place to invest.
With two weeks to go in 2009, the declines since the end of 1999 make the last 10 years the worst calendar decade for stocks going back to the 1820s, when reliable stock market records begin, according to data compiled by Yale University finance professor William Goetzmann. He estimates it would take a 3.6% rise between now and year end for the decade to come in better than the 0.2% decline suffered by stocks during the Depression years of the 1930s.
The past decade also well underperformed other decades with major financial panics, such as in 1907 and 1893. “The last 10 years have been a nightmare, really poor,” for U.S. stocks, said Michele Gambera, chief economist at Ibbotson Associates. While the overall market trend has been a steady march upward, the last decade is a reminder that stocks can decline over long periods of time, he said. Read more here-http://finance.yahoo.com/banking-budgeting/article/108453/investors-hope-the-10s-beat-the-00s?mod=bb-budgeting
-Adjusted for inflation, Dow’s gains are puny. Many investors realize that stocks have been among the worst investments of the past decade. But they may not realize quite how bad the decade was, because most people forget about the effects of inflation.
Despite its 2009 rebound, the Dow Jones Industrial Average today stands at just 10520.10, no higher than in 1999. And that is without counting consumer-price inflation. In 1999 dollars, the Dow is only at 8140.38 and would have to rise another 29% to return to 1999 levels. Using today’s dollars and starting at 10520.10, the Dow would have to surpass 13595.49 to get back to its 1999 level in real, inflation-adjusted terms.
Controlling for inflation takes extra work and makes stock gains look punier, so it is easy to see why stock analysts almost never do it. The media almost never do it either. But other things do get measured in real dollars. When economists report whether the economy is growing, they account for inflation.
When analysts judge long-term gains in commodities such as gold or oil, they often adjust for inflation, noting that gold hit a record this month in nominal terms but remains far from its 1980 record in real terms. Because analysts almost never do the same with stocks, it leaves investors with an exaggerated view of their portfolios’ performance over time.
“Looking at returns on a nominal basis can be very misleading,” says Richard Bernstein, a former chief investment strategist at Merrill Lynch who is launching a New York money-management firm called Richard Bernstein Capital Management. He checks inflation-adjusted performance to monitor investments’ real value. Read more here-http://www.gata.org/node/8182
-Stocks higher? Famed investor says don’t bet on it. Homes are selling at their fastest clip in nearly three years, the unemployment rate is falling and stocks are up 66 percent since their March lows the best performance since the 1930s. What’s not to like?
Plenty, according to Mohamed El-Erian, chief executive of giant bond manager Pimco. The investor says the recovery may be gaining steam but is no different than a kid who eats too much candy at one of the birthday parties his 6-year-old daughter attends.
“We’re on a sugar high,” El-Erian says. “It feels good for a while but is unsustainable.” His point: This burst of economic activity fed by government spending and near-zero interest rates will soon peter out. As CEO at Newport Beach, Calif.-based Pimco, El-Erian, 51, oversees nearly $1 trillion in assets, more than the gross domestic product of most countries. So when he talks, people listen.
What he’s saying now: Stocks will drop 10 percent in the space of three or four weeks, bringing the Standard & Poor’s 500 index below 1,000 though he’s not predicting when. The unemployment rate will be hovering above 8 percent a year from now.
U.S. gross domestic product will grow at an average 2 percent or so for years to come a third slower than we’re used to. Read more here-http://apnews.myway.com/article/20091227/D9CRQ57O0.html
-Sprott Says S&P; 500 to Tumble Below its March Low. The Standard & Poor’s 500 Index will collapse below its March lows as an expected rebound in economic growth fails to materialize, according to hedge fund manager Eric Sprott.
The Toronto-based money manager, whose Sprott Hedge Fund returned about 496 percent in the past nine years as the S&P; 500 lost 32 percent in Canadian dollar terms, said the index’s 66 percent rally since March 9 reflects investors misinterpreting economic data. He’s predicting the gauge will fall 40 percent to below 676.53, the 12-year low reached on March 9.
“We’re in a bear market that will last 15 or 20 years, and we’ve had nine of them,” Sprott, chief executive officer of Sprott Asset Management LP, which oversees C$4.3 billion ($4.09 billion), said in an interview Dec. 18. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=aNKd7Uck3FoM Listen to interview here-http://www.bloomberg.com/avp/avp.htm?N=adviser&T;=Sprott%20Says%20S%26P%20500%20Will%20Plunge%20Below%20March%20Low&clipSRC;=mms://media2.bloomberg.com/cache/vCQhQnyune14.asf
-U.S. Equity Risk Tops Credit Woes in Europe, Asia: Chart of Day. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=a26.tmngy8z8&pos;=15
-Pessimism on Stocks Drops to Lowest Since 1987 Following Rally. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aJs8muvFSlro&pos;=5
-Zero Hedge: Stocks would be flat without after-hours goosing. Read more here-http://www.gata.org/node/8177
U.S. DOLLAR
-A new global currency should replace the US dollar as the international reserve currency, as the long-term deterioration of America’s economy and the greenback is fuelling a “currency-regime crisis,” says Martin Wolf, associate editor and chief economics commentator of the Financial Times. Read more here-http://www.gata.org/node/8183
-Renminbi set to replace US dollar for trade in Asia Pacific. Read more here-http://www.risk.net/asia-risk/news/1566563/renminbi-set-replace-us-dollar-trade-asia-pacific
-Central Banks Avoiding Dollar to Kill 2010 Rally, Barclays Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=a9vtCAwBPV_E
-Biggs, Faber Predict Dollar Rally as S&P; 500 Surges. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=aeByrayLjqdA
U.S. UNEMPLOYMENT
-“I don’t think many people grasp just how much job creation we need to climb out of the hole we’re in. You can’t just look at the eight million jobs that America has lost since the recession began, because the nation needs to keep adding jobs more than 100,000 a month to keep up with a growing population.
And that means that we need really big job gains, month after month, if we want to see America return to anything that feels like full employment. How big? My back of the envelope calculation says that we need to add around 18 million jobs over the next five years, or 300,000 a month.
This puts last week’s employment report, which showed job losses of “only” 11,000 in November, in perspective. It was basically a terrible report, which was reported as good news only because we’ve been down so long that it looks like up to the financial press.” Paul Krugman-Read more here-http://www.nytimes.com/2009/12/28/opinion/28krugman.html
-Unemployment is expected to rise into 2011 as population grows and few new jobs are created. Population growth requires 100k+ new jobs each month just to keep the unemployment rate unchanged. The calculations for the chart below suggest that new jobs do not start appearing in quantity until 2012.
Of course, the more unemployed, the bigger the unemployment payments:
Likewise, tax revenues decline due to the fall-off in wages paid to the employed.
The combination of rising unemployment, larger unemployment payments and falling tax revenues makes the already disastrous deficit worse. For the sake of its own budget, as well as the political consequences, the government wants to get people back to work and so this will be a rising focus of the administration. Bud Conrad-Casey Research-Read more here-http://www.caseyresearch.com/displayCdd.php?id=309
-Back in July, we first showed this chart of the states that have essentially bankrupted their unemployment insurance systems, and are now forced into borrowing from the Federal Unemployment Trust Account. Since then, the number of states relying on Federal money, in order to keep sending out weekly checks, has grown from 18 to 26. And the total amount borrowed has zoomed over 100% from $12.0 billion to $25.1 billion.
This exponential growth trend is clearly not sustainable. We suspect that 2010 will see many state tax rate hikes on employers and employees, in order to fund their respective unemployment schemes. This will only further burden business’s ability to operate profitably, and reduce the take-home pay of already stretched consumers. Read more here-http://caseyresearch.com/displayCcs.php?e=true
REAL ESTATE
-Homeownership in U.S. May Decrease, New York Fed Study Finds. The rate of homeownership in the U.S. may fall in coming years as households rebuild equity wiped out by the worst slump since the Great Depression, according to a study by economists at the Federal Reserve Bank of New York.
“The official homeownership rate will likely experience significant downward pressure in the coming years,” Andrew Haughwout, Richard Peach and Joseph Tracy wrote in a paper posted on the bank’s Web site. Owners whose mortgages are larger than the properties are worth “very likely will convert officially to renters,” assuming prices don’t climb in the next several years, they said.
U.S. homes have lost about $5.9 trillion in value since the market’s peak in March 2006 as mounting foreclosures and the recession weighed on prices, according to Zillow.com. The homeownership rate peaked at 69 percent in 2006 and has since dropped to 67.3 percent, a level not seen since 2000, the authors wrote. Read more here-
http://www.bloomberg.com/apps/news?pid=20601068&sid;=aLjHdmnKUlPo
-Home Prices in 20 U.S. Cities Rose for Fifth Month. Home prices in 20 U.S. cities rose in October for a fifth consecutive month, putting the housing market and economy farther along the path to recovery.
The S&P;/Case-Shiller home-price index increased 0.4 percent from the prior month on a seasonally adjusted basis, after a 0.2 percent rise in September, the group said today in New York. The gauge was down 7.3 percent from October 2008, the smallest year over year decline since October 2007.
Tax credits for first-time buyers and mortgage rates that are less than a percentage point from record lows may prevent the market from retreating after sales jumped 35 percent over the first 11 months of 2009. Rising home and stock prices over the past two quarters enabled households to recover 28 percent of the record $17.5 trillion of wealth lost since mid 2007. Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=agYdt1d2yhOs&pos;=2
-Treasury pledges unlimited bailouts for Fannie and Freddie. Read more here-http://www.gata.org/node/8178
GEOPOLITICAL NEWS
-Obama Says U.S. Missed ‘Red Flags’ on Bomb Attempt. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=azQdRTMbIx3s&pos;=8
-Al-Qaeda Group Says It Planned Airline Attack, IntelCenter Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aBvOcg_aHBZE&pos;=8
-Obama Vows ‘Pressure’ as Al-Qaeda Says it Planned Plane Attack. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=adK5NJh6lsfI
-Attempted Airline Attack Raises New Security Concerns. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=alfEBuFJcjlA&pos;=8
-Plane Attack Highlights Yemen Al-Qaeda Threat to U.S. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aFllUcZvX2C8
-’Hundreds of al-Qaeda militants planning attacks from Yemen’. Read more here-http://www.timesonline.co.uk/tol/news/world/article6970574.ece
-U.S. intelligence: ‘Time is running out’ in Afghanistan. Read more here-http://www.mcclatchydc.com/251/story/81358.html
-Pakistan: US Men Had Maps of Nuclear Power Site. Read more here-http://www.nytimes.com/aponline/2009/12/26/world/AP-AS-Pakistan-US-Arrests.html
-Maverick Iraqi politician claims Iran could go nuclear within weeks. Read more here-http://www.jpost.com/servlet/Satellite?cid=1261364500273&pagename;=JPost%2FJPArticle%2FPrinter
-North Korea has been taking equipment left at a nuclear reactor site that was mothballed when an international consortium halted work on grounds the communist state was breaking an agreement, a news report said on Wednesday. Read more here-http://www.reuters.com/article/idUSTRE5BT0AF20091230
-Vladimir Putin calls for more weapons to stop America doing ‘whatever it wants’. Read more here-http://www.timesonline.co.uk/tol/news/world/europe/article6970921.ece
© 2009, Worldwide Precious Metals.
www.wwpmc.com
The Goldbugg Report – January 05, 2010
Posted by Worldwide Precious Metals on Tuesday, January 5, 2010
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