Sunday, March 30, 2008
Tuesday, March 25, 2008
-Thomas Jefferson, President of the United States 1801-1809
During the first half of 2007, overall investment in gold was relatively weak; identifiable investment was 22% lower than one year earlier while statistically residual "inferred investment" was substantially negative. In Q3, while inferred investment was close to zero, identifiable investment soared as a result of record quarterly inflows into gold Exchange Traded Funds (ETF). In Q4 identifiable investment was more subdued, as retail investors took profits and ETF inflows steadied, but inferred investment became strongly positive. In dollar terms total net gold investment in Q4 reached just over $8bn – a quarterly record.
Sunday, March 23, 2008
Stock markets faced new selling pressure today as leading broker MF Global demanded more cash from clients to cover derivative positions.
The club of weak hands, that is.
-Peter Schiff, Euro Pacific Capital, Inc.
We're five days into this correction. We should know who the fools are by April 1. There is nothing pretty about this. As a matter of fact it sucks, but it comes with the territory. Fundamentally, the reasons for owning Gold and Silver are probably sounder today than they were one week ago. Corrections in a Bull Market are are to be expected, and this one, like those in the past, should prove to be constructive as Gold sets its sights on Infinity.
Seasonality. For the past six years Gold has bottomed in mid-march and rallied into May. For more on this phenomenon please take the time to read HUI Bull Seasonals 2 by Adam Hamilton, Zeal Intelligence LLC. You will be glad you did. IMO, the man's work is brilliant. You will find this excellent essay on the seasonality of Gold here: http://news.goldseek.com/Zealllc/1206256080.php
Wednesday, March 19, 2008
The Group was established explicitly in response to events in the financial markets surrounding October 19, 1987 ("Black Monday") to give recommendations for legislative and private sector solutions for "enhancing the integrity, efficiency, orderliness, and competitiveness of [United States] financial markets and maintaining investor confidence".
As established by Executive Order 12631, the Working Group consists of:
The Secretary of the Treasury, or his designee (as Chairman of the Working Group);
The Chairman of the Board of Governors of the Federal Reserve System, or his designee;
The Chairman of the Securities and Exchange Commission, or his designee; and
The Chairman of the Commodity Futures Trading Commission, or her designee.
The Chairman of the Commodity Futures Trading Commission is a seated member of the Plunge Protection Team. Did not know that...do now. At 2PM est on Monday, March 17, 2008 President Bush met with the group above at the White House. Together they put together a plan that was hoped to baffle the investing public with their BULLSHIT! It worked for a day. Today the Dow gave back 2/3 of yesterday's 420 point gain. There are no more Aces up their sleeves.
Obviously with the Chairman of the CFTC present, a plan was hatched to use some of the counterfeit money the Treasury and Fed are printing, and handing out like candy on Halloween to the investment banks, to terrorize the Precious Metals Markets. Giving new meaning to "A Fool And His Money Are Soon Parted", fool after fool headed for the exits at the same time. Interestingly, none of the fools live on the other side of the planet. The Asians, Indians, Russians, and Europeans all awoke to a sale on Gold...and they were buying. They bought through the evening, thru the night, and into the morning. That is until, while the Chairman of the CFTC looked the other way, The NY COMEX opend at 8:20 and once again with brazen criminal intent, flaunted the "free market" system in the face of Precious Metals Bulls. More fools soon parted with their money and headed for the exits as the Fed sponsored investment banks used freshly printed US Dollars to sell "paper contracts" into the Precious Metals markets and force prices lower. I wish I could buy Precious Metals with money I printed at home, but that's illegal. Of course so is what the investment banks are doing. But when their actions are condoned by the individual who's responsibility it is to maintain the legitimacy of these markets is encouraging the crime, it's no wonder our financial system is on life support.
The rest of the planet must be giddy with anticipation. "These Americans must be some of the dumbest SOBs on God's Earth. Selling their Gold as their financial system implodes? Thank you very much for the Silver and Gold. You won't be getting an opportunity to buy it back anytime soon."
Do any of these Fools have any idea how small the Precious Metals markets really are? There are approximately [supposedly] 135 million ounces of Silver in the NY COMEX warehouses. Do any of these fools realize that for the "chump change" sum of just $2.5 Billion [at today's prices], all of that Silver could be bought? $7.05 Billion would by all the Gold at the NY COMEX. For less than $10 Billion you could wipe out the NY COMEX. $10 Billion is camel piss. The Fed just handed JP Morgan $30 Billion to buy up Bear Stearns. Why do you think they are called Precious Metals fools. Because there ain't much of them around. And the rest of the world knows it, and the rest of the world is standing in line to buy them on sale.
LOL, is it any wonder these Fed sponsored "investment" banks are ALL on the brink of bankruptcy? Is it any wonder the United States of America is already bankrupt? These criminals have been trying to keep Gold down for the past seven years. Gold has quadrupled in price instead. The more they work to suppress it, the higher it will go.
Pissed off? Yeah I'm pissed of, tired of the BULLSHIT. As I said yesterday, Gold is up 39% since the Fed began cutting interest rates back in August 2007. The Fed has now cut interest rates by 71% since August. 1/4 of that total 3.00 cut came just yesterday. You're telling me that Gold is NOT going higher from here? Your telling me that I should sell my Gold because the Fed just did the right thing and saved the world financial system? BULLSHIT! The ONLY hope for the world financial system is Gold. Buy, Buy, Buy!
I will not even attempt to dissect this move in the Precious Metals here. Technical analysis is useless in an environment such as this. Focus on the Metals 50 day moving averages. ALL fundamentals suggest Gold should be screaming towards infinity [it was Sunday evening] yet it is not. It is not because it does not trade in a "free market". Gold is going higher though. A lot higher. If you maintain that conviction, be a SHITKICKER. Refuse to sell your Gold. Refuse to sell your Silver. Don't be a FOOL.
Paulson Is 'F**king Incompetent'
Within the space of a week, the Federal Reserve announced the emission of $400 billion in cash to bail out the bankrupt U.S. banking system,...
The soaring price of oil, and the consequent price of gasoline, are effects of this bailout operation. The price of oil is set, not by OPEC, but by the financial markets, and so every time you fill up your car with $3-plus/gallon gasoline, you are paying a hidden tax to bail out the banking system. The same thing happens when you buy a loaf of bread, because of the speculation on wheat which has sent prices soaring. The hyperventilating you do when you fill up your car or buy groceries, is actually caused by the hyperinflationary collapse of the financial system, and these foolish attempts to save it. http://www.larouchepub.com/other/2008/3512paulson_incomptnt.html
Tuesday, March 18, 2008
The department's Producer Price Index, which measures inflation pressures before they reach the consumer, rose 0.3 pct in February following a 1.0 increase in January. Core inflation rose 0.5 pct for the month, the largest gain since November 2006. In January, core prices rose 0.4 pct.
Sunday, March 16, 2008
Wednesday, March 12, 2008
Tuesday, March 11, 2008
We begin the day at 5AM est with news out of London that Gold was edging higher.
Gold edges higher on continued dollar weakness
LONDON (Thomson Financial) - Gold was higher in early London trade as investors eyed continued weakness in the dollar, but gains have been capped by investors cashing in, with prices at elevated levels.
At 10.08 am, gold was trading at 977.60 usd an ounce against 970 usd in late New York trades yesterday. Last week, gold hit a record high of 992.90 usd before consolidating on profit-taking ahead of the much touted 1,000 usd mark.
"Gold has seen a steady start this morning and is likely to remain extremely volatile in the short-term as the metal is caught between further profit taking from investors and speculators forced to cover margin requirements, and ongoing investment demand given the bullish tone across the commodities spectrum," said TheBullionDesk.com analyst James Moore.
Funds have been pouring into commodities to hedge against dollar weakness and recessionary fears in the US. Gold has benefited from its traditional role as a safe haven asset during times of economic turmoil, as well as being boosted by inflation concerns and its use as an alternative holding to the US currency.
Later today, investors will be watching the release of US balance of trade data for January at 12.30 pm GMT, which could weaken the dollar further, in turn boosting gold, analysts said.
Gold has cleared 975 overnight and Silver has tagged along and risen into the 19.80s. At 5:30AM est the following headlines rolls across our screen, and Gold and Silver are exploding higher. With the US Trade Deficit numbers coming out later this morning, we anticipate a big reversal in the Precious Metals today.
European government bonds extend losses after above-forecast German ZEW
LONDON (Thomson Financial) - European government bonds extended losses after a better-than-expected German ZEW survey raised hopes that the downturn in Europe's largest economy may not be as severe as previously thought.
The ZEW economic expectations index rose to -32.0 points in March from -39.5 in February, well above forecasts for a deterioration to -40.0.
"March's surprise rise in the German ZEW index provides some encouragement that investors do not expect a deteriorating outlook for the US and problems in financial markets to spell disaster for the German economy," said Jennifer McKeown at Capital Economics.
Although the index remains at a very low level and most responses will have been taken before last week's dismal US payrolls data, today's ZEW survey "could clearly have been far worse".
"It seems that the recent run of broadly positive news on the Germany economy, including January's strong industrial production figures, has reduced investors' pessimism," she said.
Resilient data, official's remarks boost euro
Also contributing to the euro's gains were remarks by German Bundesbank President Axel Weber, who is also a member of the European Central Bank's rate-setting governing council. He said German economic growth for 2008 would likely come in near potential.
"Demand is broadly based and supported by increasing employment. Therefore we are sticking to our forecast that GDP growth should be around potential," Weber said, according to Dow Jones Newswires.
Weber said price pressures remain a worry, however, after German inflation hit 3% last autumn. "It is not at all sure that the average inflation rate will subside significantly," he said.
The Euro promptly knocked the US Dollar to the canvas and began dancing circles around it reaching 1.5494 over the next hour. Gold and silver vaulted higher as the Dollar re-entered its death spiral. Gold quickly reached 985.50 in London and Silver 20.28. The race to $1000 Gold looked like is was back on with a vengeance.
Coincidentally, perhaps, perhaps not, the Wall Street Journal published an article this morning suggesting that the Fed might have some new tricks to help ease the credit crisis up its sleeve.
Will Fed Try Something New to Aid Markets?
With worsening strains in credit markets threatening to deepen and prolong an incipient recession, analysts are speculating that the Federal Reserve may be forced to consider more innovative responses -- perhaps buying mortgage-backed securities directly.
"As credit stresses intensify, the possibility of unconventional policy options by the Fed has gained considerable interest, said Michael Feroli of J.P. Morgan Chase.
He said two options are garnering particular attention on Wall Street: direct Fed lending to financial institutions other than banks and direct Fed purchases of debt of Fannie Mae and Freddie Mac or mortgage-backed securities guaranteed by the two shareholder-owned, government-sponsored mortgage companies.
Fed officials have said that, at times like these, the prudent course is to evaluate all sorts of ideas, many of which may be rejected.
Since 1932, the Fed has had the authority to lend, against collateral, to individuals, partnerships or corporations other than banks in "unusual and exigent circumstances," subject to the vote of five members of the Board of Governors. (The board has seven seats, but two are currently vacant.) This power has never been used.
Mr. Feroli noted that Congress in 1966 gave the Fed temporary authority, made permanent in 1979, to purchase obligations of government-sponsored enterprises, such as Fannie Mae and Freddie Mac.
Since 1932, the Fed has had the authority to lend, against collateral, to individuals, partnerships or corporations other than banks in "unusual and exigent circumstances," subject to the vote of five members of the Board of Governors. One pauses to ponder just what that may entail. The lender of last resort, that's what it means. The Fed is desperate... And before I can brew my morning cup of coffee and almost at exactly the same moment the US Trade Deficit numbers are released along side a stunning news report from the Fed.
Trade gap widens to $58.2 billion in January
WASHINGTON (MarketWatch) -- The U.S. trade deficit widened slightly in January as strong exports were offset by higher oil prices, the government reported Tuesday.
The nation's trade gap widened by 0.6% in January to $58.2 billion, the Commerce Department reported.
The trade deficit for January was still below the consensus forecast of Wall Street economists, who were expecting a deficit of $59.5 billion in January.
U.S. stock futures jump on new Fed lending program
LONDON (MarketWatch) - U.S. stock futures on Tuesday surged after the Federal Reserve announced it's expanding a securities lending program, which helped to offset another record high for oil prices and downbeat outlooks from Texas Instruments and WellPoint.
To promote liquidity and "foster the functioning of financial markets more generally," the Federal Reserve said Tuesday it's expanding its securities lending program. The Fed will lend up to $200 billion of Treasury securities to primary dealers secured for a term of 28 days, rather than overnight, as in the existing program.
Fed turns on the spigot of money again
Mortgage-backed securities will be swapped for safer Treasurys
WASHINGTON (MarketWatch) -- The Federal Reserve and other leading central banks doubled to more than $400 billion the amount of money they're willing to lend to banks and bond dealers, hoping to flood dysfunctional credit markets with enough money to get them working again.The Fed announced a new temporary lending program on Tuesday that will allow participants in the bond markets to swap the mortgage-backed securities that they can't currently sell for highly liquid Treasurys that they can. The hope is that the extra money in the financial system will restore trust and keep prices of illiquid securities from plunging.
Read Fed press release here:
If this doesn't smell like a BLATANT effort by the Fed to prop up the stock and bond markets, then the effort has never been made. Incredulous! The Fed is going to PRINT MORE MONEY and buy literally worthless securities from floundering banks? Yes they are! Gold and Silver promptly turn tail and plunge back towards Monday's lows. The Dollar miraculously gets up off the mat and scorches the Euro in it's rebound on this "news". I scratch my head and ask myself if this is Dollar positive. How can it be? The Fed has just devised a way to pump BILLIONS of Dollars into the financial system and avoid an inter-meeting Fed Funds rate cut. The shorts on Wall Street are caught completely off guard by this news, and the stock markets open up with jaw dropping gains. No matter how you slice it, this is NOT good news...it's very bad news. VERY VERY bad news...Things are WAY worse than even the most pessimistic prognosticators could even imagine.
The Fed is following up on their promise to do anything and everything to save the stock and bond markets...the financial system... And sadly, this "trick" will fail just as the countless other before it have. Wall Street is Euphoric today...a false sense of hope at the expense of those caught short when the Fed pulled a fast one on them. If this "move" isn't inflationary, then I don't know what inflation is. I just wish I could print money they way these criminals do.
Needless to say the "weak hands" dumped Gold and Silver into the "smart hands" today to chase the latest pipe dream of the US Federal Reserve. The Dollar rally? Just another short squeeze in a market that is going so low it may never see the sun again. Nobody wanted the Dollar at 5AM est this morning, and the lines to buy Gold and Silver were growing in length. 8:30AM rolls around and the Fed unveils another in a long line of tricks to prop up the US financial markets, and it was lights out. And the cockroaches of Wall Street once again covered the floor. This "Dollar rally" will fool a few, but amuse many more as the opportunity to buy Gold and Silver on sale has been extended.
Dollar soars as Fed announces liquidity measures
"In a nutshell, this demonstrates the Fed will use every means at its disposal to get the economy going," said Jonathan Lewis, founder of Samson Capital Advisors in New York.
Some market participants, however, said the dollar's gains were probably not sustainable, especially as recent U.S. economic data has been almost universally gloomy. Some economists believe the economy is already in a recession.
"The economic rationale for buying the dollar is that this encourages confidence in the U.S. financial system, but, earlier this morning, the market was selling the dollar on exactly the same logic," said Alan Ruskin, chief international strategist at RBS Greenwich Capital, in a note to clients.
Ruskin said the dollar's rally probably has more to do with the market being caught off guard by the Fed's liquidity injection and being forced to cover short dollar positions.
But there's another story today, one from yesterday that is now forgotten, the story that most likely led to the Fed's call to the printing presses this morning:
Market panic after Bear Stearns reports
Panic swept the credit markets on reports of an insolvency crunch at both the US investment bank Bear Stearns and the mortgage giant Fannie Mae, triggering a dramatic surge in default insurance and rumours of yet another emergency rate cut by the US Federal Reserve.
Credit default swaps (CDS) measuring bankruptcy risk on Bear Stearns debt rocketed from 246 points to 792 on fears that it had been unable to raise capital to cover mortgage losses and was preparing to invoke Chapter 11 bankruptcy protection.
The company denied the reports, insisting that it had $8bn of ready credit lines and enough funds to meet its debt obligations for the next year without having to sell assets or take out fresh debt. "There is no truth to the liquidity rumours," said a spokesman.
The Fed has been "loaning" [giving money away] to floundering banks in exchange for "collateral" since the beginning of the year via their TAF bi-weekly auctions. They've given away BILLIONS already to date, and none of it has helped a damn thing. As a matter of fact, the credit markets are in worse shape going into today than they were when the Fed began handing out money in January. What makes anybody believe that this new "sleight of hand" is going to work any better than the last? Today's Fed response to the "credit crisis" is but another new drug for the zombies on Wall Street convinced that the floundering Fed can and will fix this whole mess. THEY CAN'T! The can try to, pretend to, but they never will. The problem can not be fixed. The Fed offers another bandage to a patient that desperately needs a tourniquet.
A week from now, probably less, the Dollar will once again be digging new lows, Gold and Silver vaulting to new highs. The US Dollar was raped today, soon to be left in a heap alongside the curb. Whose going to pay for this deceit, this deception, this CRIME? We all are... for years and years to come.
And in case you forgot to check the price of Oil and gasoline this morning:
Oil hits record above 109 usd/bbl as weak dollar triggers buying
Gas Prices Rise to New National Record
Yep, good idea...sell your Gold and buy Dollars. LOOOOOOOOOOOOOOOOOOOOOOOL!
Sunday, March 9, 2008
Take a look at the fundamentals that have driven gold higher; have they changed? Have they been exhausted? Not at all! Has the $’s fall terminated? Has the oil price stopped rising? Has the credit crunch been resolved? Has the world’s money system been repaired and solidified? Has the wealth’s move from West to East stopped? Has confidence in the U.S. housing market and the global economy been restored? Can any of these matters worsen? Is the investment climate globally looking solid and worth more investment? Will the potential Tsunami of capital stay in one place only? If the answer to these questions remains negative gold has good reason to rise further.
When people ask whether the USDollar has hit bottom, a simple question goes out as my reply. HAS ANYTHING BEEN FIXED? HAVE ALL DESPERATE MEASURES BEEN INVOKED? The answer to the first question is NO WAY! and to the second question NOT EVEN CLOSE!
The weak jobs report was widely seen as indicating the Federal Reserve will have to continue cutting rates to stimulate the economy.
Thursday, March 6, 2008
Sunday, March 2, 2008
March 1 (Bloomberg) -- The dollar fell to the weakest ever against the euro and to a three-year low versus the yen after Federal Reserve officials signaled they will keep cutting interest rates to support the economy.