Thursday, January 31, 2008
NEW YORK (AP) -- MBIA Inc. reported write-downs of $3.5 billion on souring credit derivatives in the fourth quarter Thursday, raising the possibility that the world's largest bond insurer could lose its top credit rating.
GDP slows to 0.6% in fourth quarter, U.S. says
Housing investments fall at fastest pace in 26 years; core inflation higher
WASHINGTON (MarketWatch) - The U.S. economy barely grew in the fourth quarter, pulled down by a worsening slump in housing and heightened caution by consumers and businesses, the Commerce Department reported Wednesday.
The 0.6% annualized growth rate in gross domestic product was lower than the 1.1% expected by economists surveyed by MarketWatch. The drag from inventories was larger than expected.
"The GDP hit stall speed," wrote Joseph Brusuelas, chief U.S. economist at IDEAglobal.
GDP hadn't been any slower since the end of 2002, when the economy was struggling to recover from the recession a year earlier.
And so the story goes...or should we say grows? Big Ben and his cadre of financial knuckleheads gave the financial markets what they wanted yesterday, a fat 50 point Fed Funds interest rate cut. There was Euphoria first [the rush of getting your junkie fix] by Wall Street wizards. But this was low grade "stuff" and the high crashed quickly. What you saw in the stock market yesterday was a classic short squeeze. Those that bet the Fed would only cut 25 points and the market would tank on the news were short going into the announcement. They were tripping over themselves to cover their asses in the minutes following the 50 point cut anouncement. Once their new short plays were covered there were NO buyers left, and the market rush stalled and fell quickly back to earth.
Perhaps the realization that things aren't as "under control" in the credit markets as the Fed would like everbody to believe is beginning to scare people out of the stock market....and eventually into the safe and welcoming arms of Gold. There is a Gold investment tsunami, building on the sea of liquidity that these monetary mudheads at the Fed has unleashed, that is going to lift Gold to unimaginable heights in 2008.
O.6% growth in 4th quarter GDP? Imagine that number if the US Government wasn't involved in rigging it. The US has already slipped into a recession. To suggest otherwise is purely delusional. Many of the elements "normally" associated with the "end" of a recession are occuring now at the begining: rising unemployment, bankruptcy, foreclosure. We are ONLY entering a recession, and these elements are already hogging the headlines. Imagine then for a moment, how bad things are going to get before we see the "end" of this recession. We'll be lucky if all we get is a recession.
The 50 point cut yesterday proved that the Fed is not out to save the stock market as much as they are out to save their banking buddies. Despite Capt. Bernanke's assurances back in May 2006 that the subprime "issue" was contained and would not be a threat to the whole economy, things are begining to look pretty dark for the banks. MBIA news this morning is certainly not going to result in any high fives in the accounting offices of banks holding stacks of decaying mortgage securities. The entire corporate and municipal bond market is now at risk of imploding and bringing down the investors holding a lot of what will soon be deemed "junk" because of the insures inability to back these bonds up. What a catastrophe.
What is really at the root of all the peril on Wall Street and in the financial world today? One word: GREED. It was greed that destroyed the Roman Empire. And it is greed that has, is, and will destroy our once great nation America. Don't blame, or allow anybody in Washington to blame, the Chinese. It was American business that went to China to build things cheaper, to fatten their margins, and enrich their shareholders that destroyed America's manufacturing base. It was those backing NAFTA, that cost Americans jobs. It was Alan Greenspan that suggested everybody take out an adjustable rate loan and that "derivatives were good" because they helped spread the risk around. Yeah they certainly do...right around the neck of America like a hangmans noose. Wasn't it Lenin who once said, "American capitalists will hang themselves one day, and we'll supply them the rope."?
There was also a short Squeeze in Gold and Silver yesterday following the Fed's Folly. Some were dumb enough to bet the Fed would dissappoint. Even if the Fed had ONLY cut 25 points, it still would have been Gold positive. As a matter of fact, there has probably NEVER been a more positive environment to own Gold, in any of our lifetimes, than there is today. Gold is STILL cheap at $930 an ounce. Silver is cheaper than cheap at $16.70 an ounce. It may be safe to say now that "the sky is the limit"...at the very least anyways. The Moon is still up there.
Gold and Silver have performed in stunning fashion this January. Both our at or near our interim tops [ +/- 20 at 950 Gold and 17.43 Silver ]. February is seasonally a neutral month for the Precious Metals, and a bit of consolidation soon would be good for the Bulls going forward. I would not rule out another visit to the 50 day moving average, quite possibly in the next six weeks. Always remember, NO market goes straight up, or down. However, that being said, the real risk in Precious Metals now, is being OUT of the market. If you must trade, ALWAYS, maintain a "core" position for those days certain to come when you sit there wishing you were in when you're sitting on the sidelines empty handed.
Tuesday, January 29, 2008
“Dobbs: Our leaders have squandered our wealth” “President Bush's assurances that we'll all be "just fine" if he and Congress can work out an economic stimulus package seem a little hollow this morning. Much like Federal Reserve Board Chairman Ben Bernanke's assurances last May that the subprime mortgage meltdown would be contained and not affect the broader economy.” cnn.com, 1-23-2008
Lou, you mean…you mean we're really in deep financial doo doo? I thought the US had the perfect economy and could never fail. So, Lou, what do we do now?
“The irresponsible fiscal policies of the past decade have led to a national debt that amounts to $9 trillion. The irresponsible so-called free trade policies of Democratic and Republican administrations over the past three decades have produced a trade debt that now amounts to more than $6 trillion, and that debt is rising faster than our national debt. All of which is contributing to the plunge in the value of the U.S. dollar.” cnn.com, 1-23-2008
OK, OK. I’ve got the message. Our economy is in deep and very serious trouble. So what conclusion do we come to?
“All Americans will soon have to face a bitter and now obvious truth: Our national, political and economic leaders have squandered this nation's wealth, and the price of this profligacy has just come due for us all.” cnn.com, 1-23-2008
--David N. Vaughn, Gold Letter, Inc.
Half of gold in central banks gone?
U.S. central banks may have less than half the gold they claim to possess in their vaults, charges a watchdog group in an ad scheduled for publication in the Wall Street Journal this week.
As WND reported, the Gold Anti-Trust Action Committee, or GATA, claims the Federal Reserve and the U.S. Treasury are surreptitiously manipulating the country's gold reserves by participating in undisclosed leases, according to an advance copy WND obtained of the ad running in Thursday's edition of the Journal.
GATA believes much of the borrowed gold out on lease will never be returned to the central banks.
"With the demand for gold so strong worldwide, it has become impossible to return much of the leased gold without driving the price to the moon," said GATA's chairman, William J. Murphy III.
"Most observers calculate central bank reserves are supposed to have about 30,000 tons of gold worldwide in their vaults, but we believe the amount of gold actually there may be more like 15,000 tons," Murphy said. "The rest of the gold is gone."
"Gold's recent rise toward $900 per ounce shows that the price suppression scheme is faltering," GATA says. "When it is widely understood how central banks have been suppressing gold, its price may rise to $3,000 or $5,000 an ounce or more."
Consumer-price inflation in the United States was last pegged at 4.1% per year, leaving US bond yields wildly negative – a strong incentive for money to continue flowing into rare, tangible assets such as Gold, as investors seek a reliable store of value.
"A lot of stops were being triggered when the Gold Price broke $925," said William Kwan, a gold dealer in Singapore for Phillip Futures, to Reuters earlier.
"In the spot market I am looking at $945 for the upside.
"Looking ahead, "we may see some sell-off after the Fed's announcement," reckons Ronald Leung of Lee Cheong Gold Dealers in Hong Kong. "Gold may consolidate after that."
And so we all wait on the edge of our seats for the Great and All Powerful "Fed" to make their magical announcement regarding interest rates. If they cut 50 points, then the message is, "America is on the edge of economic calamity". If they cut but 25 points, then the message is, "We wanted to cut a full ONE point last week, but we didn't want to send the wrong message and make things worse." If there is no interest rate cut announced, then the Fed wasted 75 points last week because the stock market will drop like a brick in the ocean. I just can't help laughing at the whole situation. If the only thing holding the stock market above water is Fed Funds interest rate cuts, then we have already passed the point of no return and the only thing left to hear is the "thud" when we hit bottom. Of course, since we have quite a ways to fall yet, it could be some time before we hear that "thud".
I don't really care what the Fed does. Gold, and Silver, will be going a lot higher in the weeks, months, and years ahead. If for whatever reason the price of Gold, and Silver, goes down...buy more. There will plenty of folks queuing up to buy some that wished they'd bought it last month.
It's a Bull Market folks...ain't no doubt about it.
Monday, January 28, 2008
The primary motivation for creating the Federal Reserve was to address banking panics (bank runs). The Federal Reserve briefly describes the circumstances that led to its creation, the purpose for creating it, and functions of the system in The Federal Reserve in Plain English:
- to address banking panics (bank runs)
- to serve as the central bank for the United States
- to strike a balance between private interests of banks and the centralized responsibility of government
- supervising and regulating banking institutions
- protect the credit rights of consumers
- maximum employment
- stable prices
- moderate long-term interest rates
- maintain the stability of the financial system and containing systemic risk in financial markets
- providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation’s payments system
- national functions
- facilitate the exchange of payments among regions
- strengthen U.S. standing in the world economy
- regional functions within the nation
-to be responsive to local liquidity needs
Fascinating discovery. The page has a great historical representation of the Federal Reserve at the link above as well. Did you know that the present Federal Reserve is the THIRD central bank of the United States? Neither did I.
Now nowhere in that description above does it say that the Fed is supposed to save the stock markets. It perhaps could be construed by the supposed mandate, "maintain the stability of the financial system and containing systemic risk in financial markets" that the Fed should rescue the stock market, but one continues to wonder.
You may ask why I have all these questions. "Well, shouldn't you as well?" I might reply. But I began to wonder if the Fed would also cut interest rates at their big pow-wow this week. I'm convinced that if they fail to cut rates again on the 30th, then there inter meeting cut was purely in an effort to stave off a crash in the stock markets. And if they do cut rates some more on Wednesday, the situation in the credit markets is far-far worse than we've been led to believe or could imagine.
At the end of the day I found it disturbingly amusing that the only thing holding up the stock markets are Fed rate cuts and the hopes for more. Gary North covers this thought with great insight in his recent essay At the Edge of the Abyss:
We appear to be in the early phase of a financial earthquake that will get into the history textbooks. The volatility of the American stock market indicates something severe, yet at present is being contained. Contained by what? By rumors and hope. http://news.goldseek.com/LewRockwell/1201461355.php
Friday, January 25, 2008
SUBPRIME MORTGAGE BOND LOSSES TOTAL OVER $1 TRILLION
THE TOTAL MORTGAGE BOND LOSSES ARE OVER $3 TRILLION
THE OFFICIAL ESTIMATES ARE WRONG BY A FACTOR OF 10 !!!
Thursday, January 24, 2008
If the U.S. and world economy fail to grow exponentially, then the banking elite temporarily lower interest rates to “stimulate” the economy. Under low interest rates, people are more willing to borrow, and more money is created to slosh around in the economy. If the economy still does not grow, then the effect of the extra money will noticed immediately as increases in prices of products and services. Because wages never increase as fast or as high as the price increases, society must accept ever increasing prices of all products and services and a decreasing standard of living.
If money cannot be pumped into the system fast enough or the people receiving the money cannot be encouraged to spent it in ways that support and maintain economic growth, then the money will not get distributed around the economy in a way that permits all borrows to pay their debts. Then, big trouble begins. When people fail to make payments, mortgages fail, and banks fail; when banks fail, the money supply contracts; when the money supply contracts, wages and Government tax receipts fall; when wages and tax receipts fall, both Government and people can pay even less. So, a vicious reinforcing cycle develops. Yes, the details on how this scenario can be triggered and progress can be mind-numbingly complex. Suffice it to say, a “Great Depression” is very bad.
One way the Federal Reserve can expand the U.S. money supply is to lower interest rates. That is why the Fed just announced an emergency 0.75% interest rate cut, today January 22, 2008. That move cut short what was shaping up to be a 400+ day drop in the Dow Index. What they did not say was than any tangible effect of a rate cut will not be felt in the economy for six months. The move was purely psychological. If the bleeding does not stop, more cuts will come, and the Fed will use other tricks as well. But, rest assured that the Fed will fight tooth and nail to prevent a contraction in the money supply. Ben Bernanke arrogantly believes the Fed has all the tools and methods today needed to always successfully increase the money supply and avoid depression. He might be right. Then again, he might not. The Titanic was unsinkable until it sank.
If the bankers succeed in preventing depression, there will be inflation, and lots of it. Gold and silver will be excellent investments. And, the horrible monetary/banking system will continue until world population growth and resource exploitation can no longer be maintained. Then, the mother of all crashes will occur.
The dust has almost settled on recent "events". Hopefully, many of the "weak hands" in the Precious Metals have been finally washed away. In tomorrow's post we will take a look at where we've been, and where we may be going soon. Support at $850 Gold and $15 Silver look set now. Is the sky the limit?
Monday, January 21, 2008
Thursday, January 17, 2008
Wednesday, January 16, 2008
Tuesday, January 15, 2008
Monday, January 14, 2008
At a symposium in New York, Fed Governor Frederic Mishkin said the central bank "has been acting and will continue to act decisively" to counter rapidly deteriorating financial market conditions.
The financial giant is in talks to sell a large stake to a Chinese bank and several other investors, including foreign governments, in a deal that could raise $10 billion, people briefed on the plan said Friday.
Friday, January 11, 2008
Wednesday, January 9, 2008
Each contract will represent 1 kilogram of gold, with the minimum margin requirement set at 7 percent, the exchange said in a statement on its Web site on Dec. 29.
- Investment Guru Jim Rogers
- Fed Chairman Ben Bernanke May 17, 2007
Monday, January 7, 2008
Oil Futures Fall on Economic Concerns - AP - Oil futures fell sharply Monday, extending their retreat from $100 as investors sold on concerns that a cooling economy will curb demand for oil and gasoline.
Paulson: No Easy Answer to Mortgage Woes - AP - The Bush administration is working to combat the country's severe housing crisis but there is no simple solution, Treasury Secretary Henry Paulson said Monday, adding that a correction in the housing market is "inevitable and necessary."
US F-18 fighter jets crash in Persian Gulf - CNN International - The US Navy did not immediately know the cause of the F-18 crash. There is no indication of hostile fire action, the officials said.
US-Iran naval confrontation in Gulf raises tensions - Christian Science Monitor - Five Iranian fast boats confronted a small flotilla of US Navy ships in the Persian Gulf in a "careless, reckless and potentially hostile" incident Sunday, Pentagon officials said.
Henry Paulson and President Bush both delivered speeches Monday declaring the economy is fundamentally sound. Boy, I feel better already. Where is that credit card offer I got in the mail last week? Things must be getting REALLY BAD if the Treasury Secretary AND the President both have to make speeches to assure us the the economy is A-OK. I guess that means the price of Oil can go back up.
Speaking of the price of Oil. How many times have we seen a "dip" in the price of Oil blamed on the "potential" of an economic slowdown and the subsequent effects that "potential" slowdown will have on demand? Who could keep count? And wonder of wonders...the price of Oil continues to go UP, in spite of all these "worries" over an economic slowdown. As if the entire "World's" insatiable demand for Oil is going to vanish because the USA's Economy catches a cold. Puh-leeeeeze! America may use 25% of the World's Oil today, but the rest of the World is catching up fast. They would love to get their hands on any Oil we won't need because of a recession.
Gold and Silver were adrift today primarily because of a "dip" in Oil prices. However I suspect that very soon, Precious Metals will not be led around by energy costs much longer. Precious Metals, and commodities in general, are all beginning to breakout to new,and often all-time,highs in many currencies now. Gold is becoming recognized as a safe-haven by investors around the World now and will soon become the "currency of choice" as the growing World banking crisis spirals ever further down the toilet.
Today the US Dollar was "up" for only the second day in the last 10. Weeeeeeeeeeeeeeeeee! And it hit it's head on it's steeply descending 50 day moving average and quickly retreated. The NEXT low for the Dollar will be 72 as Gold breaches $900, and Silver nears $17.
Sunday, January 6, 2008
The possibility for a quick reaction in the Precious Metals this week is better than 50%. Don't get shaken out of you posistion. The potential for a much more "profitable", and tradeable, interim high should present itself as February arrives.
Flight to gold as investors lose faith in money
Telegraph.co.uk, United Kingdom 05-Jan-Sat
Mining bosses complain that the earth's crust is yielding less gold. Output in South Africa has fallen to the lowest since 1932. Canada has passed peak output. Gregory Wilkins, head of Barrick Gold, says: "Global mine supply is going to decrease at a much faster rate than people generally believe."
Fed: $60 Bil More Into Economy
Saturday, January 05, 2008 - FreeMarketNews.com
The Federal Reserve will increase the size of two scheduled auctions of emergency loans by 50 percent to $30 billion as part of a global attempt by central bankers to restore faith in the money markets.
When the Dollar Crashes, All That Glitters Will Be Gold
by Lee Thomas
It is not a matter of “if” the demise of the U.S. dollar is going to happen, but a matter of “when”. We have seen signs of its weakening in the last couple of years and it does not look like it will recover any time soon. The actions of a number of other countries are adding fuel to the fire and can only confirm that the best U.S. dollar hedge is gold.
Bullish on bullion
By Javier Blas
Analysts diverge on whether prices will test $1,000 an ounce or remain flat, although at elevated levels, in the medium term. But either way, behind this secular change that is keeping prices high is sustained interest by investors in owning gold.
Into The Abyss
By: Alf Field
The world is dealing with a Sub-Prime crisis, an Evaporation of Credit crisis, a Banking Solvency crisis, a US Dollar crisis and an International Monetary crisis. These roll into one to produce the “Mother of All Crises”, the “Perfect Storm” crisis.
Eyes Wide Shut
By: Peter Schiff, Euro Pacific Capital
As our economic ship continues to spring leaks, the goldilocks crowd still clings to the false belief that the Fed can easily keep us afloat with a few more rate cuts. This comfort has sustained many upbeat forecasts despite overwhelming evidence of an unfolding economic and monetary catastrophe of historic proportions.
Enter 2008: The System Breaks
By: Jim Willie CB, Golden Jackass
The year 2008 will be the year that THINGS JUST PLAIN BREAK. It will be a truly deadly year, unavoidably lethal to the US Economy and especially to the US banking sector. Nothing has been repaired.
Manipulation / Management: Controlling the Gold Price
By: Julian Phillips, Gold Forecaster
Manipulation / Management of market prices is an integral part of the structure of all markets all institutions and all nations. The system demands it. But eventually market forces will and do overcome all but the most stringent of actions by government and when they impose such stringency, eventually they do pay a heavy price. The path of the gold price over the last three years and more are proof positive of this.
Friday, January 4, 2008
Coming before reporters after the preliminary results had been broadcast by major news organizations, Senator Obama focused on the message he will bring forward to the next contests.
"We are choosing hope over fear, we are choosing unity over division and sending a powerful message that change is coming to America," he said.
Yes, change IS coming to America. Unfortunately that "change" will have little if anything to do with who sits in the White House, and quite frankly, I don't think Americans are going to like the "change" at all. America is going broke, LOL...America IS bankrupt, and NOBODY wants to admit it or talk about it. Yup, a lot is going to change: $5 loaf of bread, $6 gallon of gas, $8 gallon of milk, 10%+ unemployment, a lot more "street people", and worst of all: NO MORE CREDIT CARD OFFERS IN THE MAIL.
What happens to a country that for years has "bought now and paid later" is no longer able to do so? It falls into KAOS as the Have-nots and the Haves go to war. The 60s race riots will look like a picnic compared to the disillusion this country will begin to face in 2009 - 2012. Americans today take WAY TOO MUCH for granted, and soon will wake up to a "world turned upside down" and the "life as we know it" will be just a memory. Can't happen? LOL, remember Rome? Of course the Mexicans will be blamed, so I suggest they hit the road in a hurry.
On a serious note: Today is Non-farm Payrolls Day! Weeeeeeeeee. This is the day, each month, where the government creates jobs out of thin air. December is a notoriously slow month for jobs creation. Why would a company take on new hires as the year ends if they want to make their budget? They don't. Of course the government's hugely FLAWED Birth/Death model will surely help them conjure up some nonexistant jobs. Unfortunately I doubt it will be very many, and Wall Street has finally come to the realization that these jobs numbers are a JOKE anyways. So I don't expect much of a benefit to the woeful Dollar today from any of the bogus econmic data released at 8:30AM.
The Asians appeared to lighten their load a bit into the close today as the week ended there...that is not unusual. In London, Gold appears to be treading water ahead of the revevered payrolls number. Gold opens just before the payrolls number is released and we shouldn't be surprised to see the Crooks on the COMEX try and push Gold down out of the box today as they did yesterday. What an utter failure that was yesterday...
The investment theme for 2008, judging by action so far in the new year, appears to be a big instutional push into commodities. That is a big wall of money coming our way. And money that is looking for a home, and not a park bench, to hang out in. This "investment" money should go a long way towards putting a strong floor under the Precious Metals. This type of "big money" usually rushes the market for the first couple weeks of the new year as it stakes it's position. Expect a small quick "reaction" in prices towards the end of next week. This dip will be a risk to short... A more tradeble interim high should present itself early in February. Feruary tends to be a "slow" month for metals. Be prepared to take some profits then, and begin to look for opportunity that will take us over $1000 Gold deep into Spring. Silver will be riding shotgun for Gold throughout, don't be surprised though if it often takes the point as both move higher. There is always downside risk in the Precious Metals, but it should be limited though the first half of 2008. Gold appears to now have support around 830 and Silver at 14.70.
Thursday, January 3, 2008
What does it all mean? Well, if you like tofu, you're going to need a second job to pay for your mealy habit. The price of food isn't going to be getting cheaper anytime soon. Your commute to work is going to get even more expensive. Your Gold and Silver portfolio is leaving orbit and has it's sights set squarely on the Moon...yep, it's still up there. And lastly, it means NONE of these clowns that covet the big chair at the White House have even a clue of what they're all angling to get themselves into. [I heard a rumor there was an election this Fall]
At the time I heard this rumor a small factoid was dropped on the listeners: It has been 80 years since a Presidential election last featured two candidates where neither nominee was an incumbent President or Vice-President. In 1928, Herbert Hoover won in a Landslide. In his acceptance speech a week after the Republican convention ended, Secretary Hoover said: "We in America today are nearer to the final triumph over poverty than ever before in the history of this land... We shall soon with the help of God be in sight of the day when poverty will be banished from this land." History has documented well the eventual futility of that statement. History calls it The Great Depression. Be vary wary this year of candidates "promising" to fix things and make them better...
Word Of Gold Rush Spreading
by Sean Brodrick
Gold logged big gains in 2007 — up about 30% for the year. I believe the yellow metal should do even better in 2008. I wouldn't be surprised to see gold crack the $1,100 barrier in 2008, and probably go higher than that. Let's look at a few reasons why ...
Force #1: Tightening Supply-Demand Outlook For Gold. Gold comes from a bunch of sources. Mines are one. There's also central bank selling and sales of gold scrap. Another source is hedging, or forward selling of gold production by miners — that's different from regular production in that it locks in future sales of mine production at a set price and helps price stability.
Taken together, these make up the total supply of gold. And despite soaring prices, the total supply of gold is barely keeping up with demand.
Force #2: New Demand From Gold Investment Vehicles. Worldwide demand for gold as an investment rose to 138 metric tonnes in the third quarter, up a stunning 618% from the 19.2 tonnes in the year-earlier period!
Exchange-traded funds that hold physical gold — GLD and IAU in the U.S., GOLD in Australia, GLD in Johannesburg, GBS in France and Britain — held approximately 741 metric tonnes of gold at the end of November — up from just 39.4 tonnes in 2003.
The huge rush of gold buying by the ETFs is helping drive the market — the easier it is for investors to buy gold, the more they buy, and the higher the price goes.
Force #3: Global Mine Output Is Falling. Global gold production was down a full 3.1% in 2006 and was nearly flat in 2007.
Barrick Gold CEO Gregory Wilkins recently told the press:
"There's not much gold out there."
In fact, Barrick expects gold production will fall 10-15% below market expectations over the next three to five years!
Wall St start to new year worst in 25 years
US blue-chip stocks on Wednesday suffered the worst start to a new year in 25 years after an index of manufacturing fell sharply, raising fears that the US economy is slowing more than expected.
Energy stocks were a lone bright spot as crude oil prices touched $100 a barrel, but the spike in crude accentuated selling of a broad range of transport and industrial companies. Technology stocks were particularly weak after an analyst downgraded several semiconductor companies.
What about mining stocks? The HUI INDEX was up 6.29% and the XAU INDEX was up 6.35%. This is all the proof I need that Gold and Silver remain ignored investment vehicles by the "media". We all know this will be changing soon, but when the average investor finally shows up, Precious Metals are going to be very expensive. These sale prices we've been experiencing won't be lasting much longer. To be sure, there will be many "sales" during our trip to the Moon, take advantage and buy more!
COMMODITIES-Oil hits $100 as 2008 starts with investment binge
Forbes - By Alden Bentley NEW YORK (Reuters) - Crude oil surged to $100 a barrel for the first time on Wednesday, and gold bullion broke above its 1980 high as the first taste of investor sentiment suggested commodities were the flavor of the new year.
CNBCFed Officials Lowered Growth Outlook at Last Meeting (Update4)Bloomberg - By Scott Lanman Jan. 2 (Bloomberg) -- Federal Reserve officials said economic growth in 2008 will fall short of their own forecasts, reflecting weaker consumer spending and a deeper housing slump.
"And when the levee breaks, have no place to stay." Page, Plant, Bonham, Jones
You've got that right boys. That is unless of course you've had the forsight to invest in Gold and Silver. Save yourself, save your loved ones, and ditch your dog. Buy Gold and Silver NOW!
Tuesday, January 1, 2008
Add to the above the meteoric rise of the oil price and we saw gold beginning to act as a counter for dropping confidence in the monetary system attracting more investment demand.
“Many $ holders, including central banks and sovereign wealth funds as well as private investors, clearly want to diversify into other currencies. Since foreign $ holdings total at least $20,000 billion, even a modest realization of these desires could produce a free fall of the U.S. currency and huge disruptions to markets and the world economy. Fears of such an outcome have risen sharply in both official circles and the markets.
However, none of the countries into whose currencies the diversification would take place want to receive these inflows. The Eurozone, the UK, Canada, and Australia among others believe that their exchange rates are already substantially overvalued. But China and most of the other Asian countries continue to intervene heavily to keep their currencies from rising significantly. Hence, further large shifts out of the $ could indeed push the floating currencies far above their equilibrium levels, generating new imbalances and a possibly severe slowdown in global growth.”
This is the atmosphere that has driven investment demand for gold and in turn the gold price. We expect that in the year ahead, this climate will deteriorate substantially driving investment demand to new record levels. But let’s be clear about this, we are not talking of a simple rising of investment demand, we believe we will see a large acceleration in that demand taking it well through four figures in tonnage terms as well as in price terms.
We have said in the past that a level of 3,000 tonnes holdings by the gold E.T.F.’s is possible and will attract the biggest players. At the time many thought it was far fetched, but as total holdings by such funds [including the Canadian equivalent] crosses the 860 tonne level, such forecasts are proving more than credible.
Bear in mind that the huge financial power of the Mutual / Pension etc funds is now able to invest almost directly in gold [via these shares]. This buying power was just not present before the creation of the gold E.T.F.’s. Each day this demand grows as new gold Investors come into this market and there is a massive amount out there still to come in. Funds before the Exchange Traded Fund concept were just not permitted to hold gold. The nearest they could come to that was to own gold shares with all their inherent risks. Now that investing power is unleashed needing only the education that gold in share form is now available to them. It is this power that is becoming the main driving force behind the rise in gold.