Gold World News Flash |
- There’s Always More Money to Print
- In The News Today
- Hourly Action In Gold From Trader Dan
- Paging Dr. Copper, A Long Term Investment Opportunity, Front Lines China Perspectives
- The German Government Has Had Enough
- Silver Investors Should Diversify, Too
- We're Not Out of the Housing Mess Just Yet
- Golden Goose vs. Black Swans
- Liquidity? What's That? (Short-Sale Ban in EU)
- JPMorgan et al Slam the Precious Metals Again
- An update on the Gold Bull Market and the SP 500 Index
- Two Choices, Restructure Debts or Debase Currencies
- Greek Banking Crack-Up Exposed... Afghan Poppy Farmers Attacked by NATO?
- LGMR: Gold "Vulnerable" as Euro, Stocks & Commodities Rally, But "Downside Protected"
- Brief Update 9:00AM EST
- Ambrose CAPITULATES!
- Jim?s Mailbox
- Today?s Action In Gold
- Special GSR Gold Nugget: Dr. Ron Paul & Chris Waltzek
- Debt Default ‘Deferral’ of Greece a Dangerous Precedent – Got Gold?
- Grantham “Guarantees” that Gold Will Crash
- The Case Against the Fed Book Review
- Silver and Gold Prices are Perched Precariously Because of Their Recent Huge Gains
- Gold Seeker Closing Report: Gold and Silver End Mixed
- Bought Paper Gold Today
- Emerson Electric CEO David Farr Stated Jobs in the United States Are Being Destroyed
- 11 Signs That The U.S. Government Has Become An Overgrown Monstrosity That Almost Every American Is Dependent Upon For Economic Survival
- Gold and the Tragedy of the Commons
- China is Outpacing Europe and the US but its Economy is a Bubble
- Debt Default 'Deferral' of Greece a Dangerous Precedent - Got Gold?
- We Will Have Hyperinflation, Economic and Human Misery as Well as Social Unrest.
- One Huge Investment Trend for the Next Decade
- Rand Paul wins Republican Senate nomination in Kentucky
- The Threat of Hyperinflation Real or Not?
- Chinese Boom Brings Home Its Best and Brightest
- There’s Always More Money to Print
- Richard Russell: Get out of stocks now
- Gov't stupidity: Germany to ban short selling at midnight tonight
- Some Not So Deep Thoughts On Gold
- TUESDAY Market Excerpts
- Thoughts For The Day
- These charts say a crash could be coming
- Congressman Weiner DEMOCRAT attacks GOLD DEALERS
- How to know if the bull market's over
- Short Sale Ban in EU? Liquidity, What's That?
- Still Waiting for a Bearish Breakout in the Financial Markets
- The Great Money Shift
- Stewart Thomson's latest - Gold and Her Friends Technicals Update
| There’s Always More Money to Print Posted: 18 May 2010 07:26 PM PDT In my darker moments, usually just before I go freaking berserk and start yelling and screaming about how "We're freaking doomed!" from the idiotic Obama administration deficit-spending So Freaking Much (SFM) money and the idiocy of the Federal Reserve creating So Freaking Much (SFM) money, all of which is guaranteed – guaranteed! – to make consumer prices rise in a terrifying, catastrophic, ruinous inflationary spiral that will destroy us all, I sometimes get myself in the mood for a nice, long, loud Mogambo Banshee Wail Of Outrage (MBWOO) by merely mulling over the term "dynamic stochastic general equilibrium." This incomprehensible term reveals itself, as the term itself implies, as laughably worthless, but, even worse, it is the name of the stupid economic theory to which the moronic Federal Reserve hews so strongly and which has failed so, so miserably. But if the Fed did not create the money that creates inflation in prices, then the Obama administration's insane deficit-spendi...
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| Posted: 18 May 2010 07:26 PM PDT View the original post at jsmineset.com... May 18, 2010 09:32 AM Dear CIGAs, In one paragraph Egon has caught the gist of the entire matter. ALEA IACTA EST by Egon von Greyerz – Matterhorn Asset Management Yes this is it! We have crossed the Rubicon and events in the world economy are now likely to unfold in a totally uncontrollable fashion. Clueless governments still don't understand that it is their ruinous actions that have created a credit infested and bankrupt world. They will continue to prescribe the same remedy that caused the problem in the first place, namely more credit and more printed money. The consequences are clear; we will have hyperinflation, economic and human misery as well as social unrest. More Jim Sinclair’s Commentary Do not be concerned by natural reactions in a gold bull market which is going to $1650 and beyond. Jim Sinclair’s Commentary Uptick rules are infinitely more effective than a clear ban of shorting. Mer...
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| Hourly Action In Gold From Trader Dan Posted: 18 May 2010 07:26 PM PDT View the original post at jsmineset.com... May 18, 2010 10:42 AM Dear CIGAs, Price capping near the $1250 level has been effective at thwarting the continued rise in gold and has resulted in new short selling by locals looking to capitalize on the backstopping of the bullion bank sell programs. I was hoping to see the longs hold steady and not run but that appears to have not been the case today. Apparently they have been properly conditioned by the Feds to run at the first sign of a stall in upside momentum. That is how this market has traded for nearly a decade now so it is just wishful thinking to believe that might have changed. The charade in gold could end tomorrow if we had not raised a generation of computer nerds who never learned how to think for themselves. Keep in mind however that what started out as a mild dip in gold was widely announced to have been a lessening of fears concerning Europe's credit woes. That is what caused the big spike in the equity markets early t...
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| Paging Dr. Copper, A Long Term Investment Opportunity, Front Lines China Perspectives Posted: 18 May 2010 07:26 PM PDT The 5 min. Forecast May 18, 2010 12:16 PM by Addison Wiggin & Ian Mathias [LIST] [*] Dr. Copper offers dismal diagnosis… popular metal slips into bear market [*] Chris Mayer reveals “one of the great investment opportunities of the next decade” [*] Nations of the world flee to American Treasuries… one surprising country that’s increased U.S. bond holdings nearly sevenfold [*] Frank Holmes on how much (and what kind) of gold you should own right now [*] Plus, Addison’s first hand report from the Beijing gold market [/LIST] Today’s a good day for a checkup from “Dr. Copper.” The useful metal has “a Ph.D. in economics,” the kitschy saying goes. If the world starts using less -- in their homes, their electronics, etc. -- a fall in copper demand should precede a global slowdown. It’s used in damn near everything, after all. So if prices are down, that has to mean som...
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| The German Government Has Had Enough Posted: 18 May 2010 07:26 PM PDT Market Ticker - Karl Denninger View original article May 18, 2010 11:13 AM If you thought the German government was going to be a lapdog for Sarcozy, or worse, was going to fellate Brussels and the ECB, you got a rude shock today. It appears that the German Government has just plain had enough of the crap that the banksters have tried to pull, and has decided to do what Barack Obama should have done in early 2009. That is: [LIST] [*]No more naked credit crap, especially against sovereigns but not only against sovereigns. No insurable interest, no CDS - period. [*]Naked shorting will now be actually stopped in 10 leading financial institutions. [*]Germany has had it with naked shorting of Gold, and specifically noted bank manipulation of gold prices via naked shorts beyond intent or ability to deliver. [*]Germany has also said that they're not going to permit Euro derivatives that are not a "bonafide" FX hedge. That is, no more naked bets on Euro movements eithe...
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| Silver Investors Should Diversify, Too Posted: 18 May 2010 07:26 PM PDT Diversification is the most important part to any solid financial plan, and precious metals are no exception. Silver investors should plan to diversify within their silver holdings to protect their wealth and to allow for opportunities to profit in the future. Diversification in Silver The variety of silver products available to investors is unreal. From junk silver and American Eagles to the generic silver round and bars, silver investors have more choices than any other kind of investor. However, despite having numerous choices, silver investors often choose to buy only their favorite coin, bar, or round without effectively diversifying their metal portfolio. Size Diversification Size is one area where many silver investors fail to diversify. Rather than owning a few 1 ounce rounds, 10 ounce bars or bags of junk silver, many investors just buy the same kind of silver week after week, year after year. Most investors would be better served with a...
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| We're Not Out of the Housing Mess Just Yet Posted: 18 May 2010 07:26 PM PDT Perhaps more than stock and bond investors, precious metals investors must be privy to important macroeconomic indicators. Of the most important is money supply, followed immediately by lending and credit availability. These three factors all come together to establish how expensive or inexpensive paper currencies are and how silver and gold should be relatively priced to their paper counterparts. Fear in Housing The housing market that pushed the whole economy towards economic calamity is still in full swing today, and many believe the worst is yet to come. Thanks to exotic loans made to homeowners who couldn't afford the lifestyle they wished to have, mortgage resets at higher rates, and presumably higher monthly payments, will continue through late 2012. To date, only about $400 billion of mortgages have been reset. However, that relatively small number has exerted a profound effect on the economy. Whole neighborhoods are on the auction block, an...
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| Posted: 18 May 2010 07:26 PM PDT From the May 2010 HRA Journal David Coffin & Eric Coffin, HRA Advisories April ushered in both broader evidence of recovery in parts of the Western economy, and a series of both ecological and economic “events” that are quite worrisome. It’s unlikely any of the April events (including, we fervently hope, sovereign debt) would be, in and of itself, shattering. What each does is to impact the psychology under which markets are operating and hence how they perform. The cumulative impact of these events after a strong uptick means sell buttons are being pushed, and should be signaling profits taking by you. How much is the question. The notion of an event impacting markets hard isn’t news. In the last decade both the 9-11 destruction of New York’s twin towers and the flooding of New Orleans by Hurricane Katrina made the list. The Black Swan by Nassim Taleb that became popular after the Credit Crunch meltdown emphasized the concept. We wou...
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| Liquidity? What's That? (Short-Sale Ban in EU) Posted: 18 May 2010 07:26 PM PDT Market Ticker - Karl Denninger View original article May 18, 2010 09:34 AM In a display of idiocy reminiscent of what was done here in the US a couple of years ago Reuters has up a wire report (headline only) that Germany intends to ban "short sales" at midnight (presumably their time) this evening. Zerohedge is reporting that this is only "naked" short sales but will apply to naked CDS, which means it will damage hedging activity for EU-area bonds. Does anyone remember our short-sale ban - in 2008? European (and US) markets skyrocketed, only to collapse just days later and continue collapsing for the next six months! This sort of thing kills liquidity. Again we have governments that refuse to address the actual issue, which is the OTC nature of these derivative products where nobody can tell who's got what open - that is, what the open interest is, along with the bid and offer. In addition nobody is forced to post margin against a central counterparty, which furth...
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| JPMorgan et al Slam the Precious Metals Again Posted: 18 May 2010 07:25 PM PDT As one would expect under the current financial circumstances, gold began a steady rise in early Far East trading on Monday... this despite an 80 basis point surge in the U.S. dollar that was happening at the same time. Since the big dollar rally didn't slow down gold's advance one iota, 'da boyz' had to resort to something else. So, moments before midnight in New York... 1:00 p.m. in Hong Kong trading... the selling pressure began, even though the dollar had reached it's Monday high 90 minutes before that... and was in steady decline from that point on. Gold hit its London low just minutes before New York opened... and once New York opened, a rally began that lasted right up until the London p.m. gold fix was in... and that was all she wrote, as the gold 'fell' another $17 into it's low of the day [$1,218.20 spot] at precisely 4:00 p.m. Eastern time. Gold closed about four bucks off that low. Gold's high of the day was around $1,243 spot shortly before 1:00 p.m. in ...
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| An update on the Gold Bull Market and the SP 500 Index Posted: 18 May 2010 07:25 PM PDT Back in the third week of April I predicted here on Kitco.com a topping in the broader market indices. The theory was the VIX levels were extremely and historically too low concomitant with extremely high historical readings in investor bullish sentiment gauges. After thirteen Fibonacci months of a bull cycle rally, it was likely an A B C correction to the downside would begin. In further follows ups on TheMarketTrendForecast.com service I run on April 20th, I again outlined concerns with falling volumes on small cap stocks and too many “stories” being run up too far ahead of the economics. At this point in the Bull market, it is common to have the crowd of investors move from a bias towards viewing all news as positive, to a negative slant on all news. Nothing has changed dramatically on the problems the world had before with Debt and currencies, but the reaction to those events turns negative. This works off the overly optimistic Elliott Wave pat...
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| Two Choices, Restructure Debts or Debase Currencies Posted: 18 May 2010 07:25 PM PDT Excerpt from the Hussman Funds' Weekly Market Comment (5/17/10): [INDENT]Last week, the European Central Bank pledged to spend as much as 750 billion euros (about a trillion US dollars) in an attempt to discourage market concerns about European debt, particularly that of Greece, Portugal and Spain. The intended message was to show the markets - particularly bond market "vigilantes" speculating against European debt - that the ECB has deep enough pockets to thwart the mounting pressure on European debt and the euro itself. ECB President Jean-Claude Trichet has been quick to deny concerns that the move by the ECB will be inflationary, emphasizing that the intervention will be "sterilized" in order to prevent a major increase in the amount of euros outstanding. This is "totally different," he argued last week, from the massive increase in monetary base that has occurred as the U.S. Federal Reserve has bought up over $1.25 trillion in debt obligations of ...
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| Greek Banking Crack-Up Exposed... Afghan Poppy Farmers Attacked by NATO? Posted: 18 May 2010 07:25 PM PDT Greek Banking Crack-Up Exposed Tuesday, May 18, 2010 – by Staff Report There are disconcerting parallels between Argentina's catastrophic decade, 1991-2001, which ended in massive default, and Greece's recent and impending difficulties. In both cases, international credit organisations were to blame and both countries were beset by widespread protests and riots over austerity measures imposed by the IMF. Argentinian economist Adrian Salbuchi offers a hard-hitting analysis of this engineered crisis which knows no boundaries. ... When Argentinians watch the news today and see the terrible things that are happening in Greece, we cannot but say, "Hey!! This is EXACTLY like Argentina in December 2001 and beginning of 2002...!". Then too, Argentina underwent its worst systemic banking, public debt and monetary collapse ... Half of all Argentinians fell below the poverty line (most were never to make it back to the traditional Argentina middle class), private ...
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| Posted: 18 May 2010 07:25 PM PDT London Gold Market Report from Adrian Ash BullionVault 08:45 ET, Tues 18 May Gold "Vulnerable" as Euro, Stocks & Commodities Rally, But "Downside Protected" THE PRICE OF WHOLESALE gold bullion bars fell further in London dealing on Tuesday, extending the discount to 3.2% from Friday's record high against the Dollar as world stock markets and commodity prices bounced sharply. The US Dollar eased back, losing 1% from yesterday's four-year high to the Euro. Government bonds were little changed. The Greek government today received the first €20 billion ($25bn) of its €110bn European rescue package. Athens has an €8.1bn bond repayment due on Wednesday. "Gold still looks vulnerable to more sell-offs, as stocks and the Euro look capable of rebounding," says one Asian trader in a note. "Support at low $1210s will be given stern test." "Gold seems to be losing momentum," agrees Walter de Wet at Standard Bank, adding that the metal "failed to rally yester...
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| Posted: 18 May 2010 07:25 PM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here May 18, 2010 05:04 AM Gold – As noted last Wednesday night with gold trading at $1,236, my technical work suggested we could see a significant consolidation/correction with the worst case downside of $1,185. As I type, gold is trading around $1,210. I noted Friday appeared to be an "Outside" day and follow through selling has confirmed it. We're seeing typical technical selling like suggested in this Market trades blog post. All of this is healthy and does nothing to impact my 2010 target of $1,300 – $1,500. There's a neckline support key support around the already psychological $1,200 number. We may never even test that area. I'll watch the next day or two’s trading and follow-up with my analogy of it, but don't lose sight that all this to me is just a pause that refreshes. U.S. Stock Market – The "Don't Worry, Be Happy" crowd has a chance to gain back some ground off ...
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| Posted: 18 May 2010 07:25 PM PDT Market Ticker - Karl Denninger View original article May 18, 2010 04:10 AM Now I have seen it all - "inflation is the solution to all problems" Pritchard has officially capitulated in print! [INDENT]Personally, I have changed my mind on Greece. My initial reaction earlier this year was that it had to be saved to avoid a sovereign Lehman. Many posters on this blog cried "shame", saying it was just another moral hazard rescue for bankers. They were right. I flagellate myself and wear a dunce's hat. The correct policy would have been – and still is – to help Greece out of its debt-deflation death spiral through an orderly "pre-emptive debt restructuring" along the lines of the IMF package for Uruguay. In Greece's case it would require a haircut of 50 per cent or so for foolhardy creditors, ie your bank and mine, your pension fund and mine. This would not do much good unless Greece also devalued by 30 per cent to 40 per cent to retrieve competitiveness and put the whole fixed-exchan...
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| Posted: 18 May 2010 07:25 PM PDT View the original post at jsmineset.com... May 17, 2010 04:31 PM Dear Jim, Why was silver so weak today? Regards, CIGA Green Hornet Dear Green Hornet, Silver was up strongly on the discussions of JP Morgan who we were informed had a Department of Justice examination of their activities in silver. This was reported as fact. The reports were 50% correct in that JP Morgan was being looked into concerning their derivative dealings, however the target of exchange listed silver was not mentioned in the official report. Since silver went up hard on euro weakness, as the euro strengthened gold reacted downwards, and silver gave up part of its recent significant gains. Regards, Jim...
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| Posted: 18 May 2010 07:25 PM PDT View the original post at jsmineset.com... May 17, 2010 04:37 PM Dear CIGAs, Tomorrow is the first day Greece receives a tranche of emergency funding which of course caused some euro short covering from below 1.2236 to the present 1.2394. Recall I gave you the 121 1/2 to 122 1/2 as support under the break of 126. The present relationship, although short term, is that gold is moving in the same direction, of the US dollar. That means that as the US dollar falls markets interpret that as a relief of the euro crisis which results in longs taking profits and shorts establishing positions in gold. A softer dollar today as a product of short covering in the euro for very modest technical and fundaments tidbits means temporarily lower gold as the euro crisis has caused a rush to gold by euro holders. That relationship will stop, but the euro must cease first. As I explained to you in detail, the next target of credit default derivatives after battering the euro is to batter the US dollar....
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| Special GSR Gold Nugget: Dr. Ron Paul & Chris Waltzek Posted: 18 May 2010 07:00 PM PDT Special GSR Gold Nugget: Dr. Ron Paul & Chris Waltzek
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| Debt Default ‘Deferral’ of Greece a Dangerous Precedent – Got Gold? Posted: 18 May 2010 06:04 PM PDT If the implications of the recent Greek tragedy were not so serious it would have been seen more as a Greek comedy (of fiscal errors). In fact, however, to deploy another metaphor, Greece's sovereign debt is seen as the proverbial canary in the coal mine - a microcosm of the relentlessly growing sovereign debt that has taken much of Europe by storm and is threatening to spread to the U.S.
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| Grantham “Guarantees” that Gold Will Crash Posted: 18 May 2010 05:40 PM PDT
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| The Case Against the Fed Book Review Posted: 18 May 2010 05:37 PM PDT
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| Silver and Gold Prices are Perched Precariously Because of Their Recent Huge Gains Posted: 18 May 2010 04:17 PM PDT Gold Price Close Today : 1214.30Change: -13.40 or -1.1%Silver Price Close Today : 18.855Change 2.0 cents or 0.1%Platinum Price Close Today: 1674.20Change: 9.30 or 0.6%Palladium Price Close Today:... This is a summary only. Visit GOLDPRICE.ORG for the full article, gold price charts in ounces grams and kilos in 23 national currencies, and more!
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| Gold Seeker Closing Report: Gold and Silver End Mixed Posted: 18 May 2010 04:00 PM PDT Gold remained near unchanged for most of trade in Asia before it fell as much as $21.10 to as low as $1206.50 by a little before 8AM EST in London and next rallied back higher for most of the rest of the morning in New York, but it then fell back off a bit in afternoon trade and ended with a loss of 1.09%. Silver dropped 25 cents to as low as $18.62 before it also climbed back higher and saw a $0.248 gain at $19.118 by late morning in New York, but it then fell back off in last couple of hours of trade and ended with a gain of just 0.05%.
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| Posted: 18 May 2010 02:39 PM PDT
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| Emerson Electric CEO David Farr Stated Jobs in the United States Are Being Destroyed Posted: 18 May 2010 01:39 PM PDT Late last year, David Farr shot off his mouth and made a lot of people mad. But the insights that spring from his candid comments could make a lot of other people rich. Including you. With the inspired help of my colleague, David Gonigam, here's the story... Mr. Farr is the CEO of Emerson Electric. The firm makes electrical equipment, mostly for industrial customers. That said, its best-known product is likely in your kitchen sink - the InSinkErator garbage disposal. In 2009, Emerson broke into the top one-fifth of the Fortune 500 - jumping nearly 20 positions, from 111 to 94. Impressive, considering what happened to the stock market and the economy in 2008. Not that Emerson was spared the pain. The company slashed its work force nearly 14% in 2009 - 20,000 jobs gone. And Farr doesn't see things getting much better in 2010 - owing largely to the decisions coming out of the nation's capital. Which brings us to the things he said that made a lot of people mad. The forum: The Baird Industrial Outlook Conference last November in Chicago. "Washington is doing everything in their manpower capability to destroy US manufacturers," he said. "Cap and trade, medical reform, labor rules. What do they want to do? Raise taxes. They're just going to destroy jobs." Result? "Jobs are going to be created offshore. They're going to be created in India and China, places where people want the products and where the government welcomes you. They actually do something." Step back for a moment and take that in. India was once larded down by decades of Nehru socialism. China's economy was crushed by Mao's madman schemes. But now a major American CEO says that these countries offer a friendlier environment for manufacturers than the United States. "What do you think I am going to do? I'm not going to hire anybody in the United States. I'm moving. They are doing everything possible to destroy jobs." Farr's remarks in Chicago set off a firestorm that raced 300 miles down Interstate 55 to St. Louis. Since Emerson's founding in the 1890s, the firm has called the Gateway City home. Outraged letters to the editor poured into the St. Louis Post-Dispatch. One labeled Farr and his fellow executives "unscrupulous parasites interested in nothing more than short-term profits." Another addressed Farr directly: "How dare you try to blame Washington for your greed." Farr responded on the paper's Op-Ed page a couple of weeks later. Clearly, the public relations people had gotten to him in the interim. His Chicago remarks were passionate and spontaneous. The column read as if vetted by a conference room full of PR pros...and maybe a couple of lawyers. "We are a nation of varied beliefs and perspectives," the committee - er, Farr - wrote, "and there is room for honest disagreement on all of these issues. But none of us wants to see our country weakened to the point where it is no longer the global economic leader. "Greater government debt and diminished competitiveness mean global investment and good jobs will go elsewhere," Farr continued, "and America will risk slipping into second-tier economic status. That's not the legacy any of us want to leave future generations." He might have mentioned that the United States has the second-highest corporate tax rate, after Japan. The mushy article concluded with the truly bold declaration, "Action is needed now." That's OK, Dave. We know your true feelings. Atlas isn't shrugging. But he is outsourcing and moving offshore. Farr isn't just ranting against the Obama administration. He knows emerging markets firsthand. He ran Emerson's Asia-Pacific division in the 1990s. And Emerson has been steadily moving jobs overseas for years. That's where the growth is. First came the new factory jobs. Then came the new white-collar jobs - engineers and product designers. "If half of your sales go outside of the United States, you're going to have half of your engineering outside of the United States, too," Farr told Forbes back in 2004. That was at a time when manufacturing output in emerging markets was growing 8% a year...and just 3% in the United States. And that was supposed to be a healthy post-recession figure. Another factor in Farr's reasoning is something we highlighted last month. Don't forget about all those foreign-born engineering students at US universities who are choosing to return home. This could be one reason that 54% of US executives surveyed by the search firm Korn/Ferry say they'd be willing to accept a post overseas. That compares with just 37% four years ago. Already, 24% of the freshly minted MBAs from MIT have accepted overseas posts. A year earlier? Just 19%. Already by 2009, emerging markets accounted for one-third of Emerson's revenue. (That's up from just 14% when Farr became CEO, in 2000.) Foreign markets as a whole account for more than half of sales. That puts Emerson in pretty good company. Nearly one out of every five S&P 500 companies now generates a majority of its sales overseas. (Coca-Cola is perhaps the iconic example: 74% of its revenue comes from outside the States.) Those stand to be among the best performers among the blue chips in the years ahead. They're exposed to healthier business environments overseas. And they'll be insulated from the shock of a weakening dollar. But Emerson (for example) has already had a good run over the last year. Besides, if it's overseas exposure you're after, why not go for the real thing? David Farr and other American CEOs find emerging markets a friendlier place to do business. And if American blue chips get a good reception, imagine how well the homegrown companies are treated. That's the idea behind a fairly new exchange-traded fund (ETF) with a mouthful of a name: The Dow Jones Emerging Markets Composite Titans Index Fund (NYSEARCA:EEG). We prefer to think of it as the emerging markets "fund of tens." That is, it aims to buy the 10 top-ranked stocks in each of 10 sector indexes Dow Jones has developed for emerging markets economies. The sectors are the usual suspects - energy, financials, basic materials, telecom and so on. So the fund is never spread among more than 100 stocks. Not a bad way to hedge your bets if this is your first time getting into emerging markets investing. (And from the e-mail we get, we know you're skittish about this.) The practical result of this mix is that right now the fund is about 25% China and 25% Brazil - two emerging markets on a tear. The other BRIC countries, India and Russia, make up another 25%. South Africa, Mexico and other countries make up the remaining quarter. You even get a little exposure to former Soviet bloc countries like Poland, Hungary and the Czech Republic. The top three holdings account for a little over 15% of the total:
The fund is fairly new, launching last July. For its first year, it's keeping expenses limited to a guaranteed 0.75%. Investing by sector, as EEG does, will give you the emerging markets exposure you're looking for, without too much exposure to any one country. Addison Wiggin
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| Posted: 18 May 2010 01:37 PM PDT
The U.S. government has become the "Big Mother" that we all scramble to for a handout when we get into trouble. When you sit down and really analyze it, you quickly realize that there is no way that the U.S. government can be extricated from the U.S. economy now. Instead of the free enterprise system that we once had in this country, today we have a situation where the U.S. government has become the very core of the economy. It is the hub around which everything else in the economy revolves. You don't believe this? The following are 11 signs that the U.S. government has become an overgrown monstrosity that almost every American is dependent upon for economic survival.... #1) The Explosion Of Government Handouts 39.68 million Americans are now on food stamps. Millions of others are completely dependent on the extended unemployment benefits that they are receiving. Millions of other Americans are able to survive financially because of the dozens of other welfare programs that the U.S. government subsidizes. More Americans are receiving some form of welfare than ever before in history, and each month the numbers continue to go up. Could there come a day when we all receive government handouts every month? #2) The Entitlements Programs That Threaten To Destroy U.S. Government Finances Entitlements are the single biggest U.S. government expense. These programs include Social Security, Medicare, Medicaid and other social Ponzi schemes. Tens of millions of Americans receive government assistance through these programs. In fact, nearly 51 million Americans received $672 billion in Social Security benefits in 2009. We all have friends or family members who receive these kinds of payments. But cutting so many people a check year after year is slowly but surely destroying U.S. government finances. According to an official U.S. government report, rapidly growing interest costs on the national debt together with spending on major entitlement programs will absorb approximately 92 cents of every dollar of federal revenue by the year 2019. That is before a penny is spent on anything else. This is clearly not a sustainable financial situation by any definition, but who wants to tell tens of millions of Americans that their checks are going to be reduced? #3) The U.S. Government Is Now Even Paying Mortgages Yes, you read that right. As part of the "stimulus" package, the U.S. government is going to send money to some of the states that were hit the hardest by the real estate crisis. So what is that money going to be used for? Well, Florida, Michigan, California and Arizona have all announced that they plan to use $1.4 billion the Obama administration is sending their way to help the unemployed and the "underwater" pay their mortgages. #4) Without The Student Loan Program A Huge Percentage Of College Students Would Not Get An Education The federal student loan program (which was recently entirely nationalized) helps millions of college students pay for their education. Without this assistance by the government, a lot less students would be going to college. In fact, many of you that are reading this article directly benefited from the federal student loan program. #5) The Bailout Of AIG One of the biggest insurance companies in the world, AIG, would not be in existence today if not for direct federal government intervention. It kind of makes you wonder what George Washington and Thomas Jefferson would think about a federal government that hands big bags of cash to a giant insurance company so that it can survive. Whether it was so they could pay off their debts to Goldman Sachs or whether it was so that they could keep paying out record-setting bonuses, the truth is that AIG would not have made it without the federal government stepping in. #6) The "Too Big To Fail" Banks But it wasn't just AIG that got bailed out. A number of big banks may have gone under if not for the U.S. government. The U.S. government decided that they were "too big to fail". Well, what about all the small banks that are going under? The truth is that they are "too small to bother with". We now live in a nation where the U.S. government is the one who decides which banks live and which banks die like dogs. Doesn't that just make you feel all warm and fuzzy? #7) The Bailout Of General Motors But not only does the federal government bail out financial institutions - it is also now in the car business. Yes, grand old General Motors may have ended up on the scrap heap of history if not for the U.S. government stepping in. So if you work for General Motors or if you work for any company that does business with General Motors, you can thank Uncle Sam for the fact that you still have a job. #8) The Bailouts Of Fannie Mae and Freddie Mac If the U.S. government had not bailed out Fannie Mae and Freddie Mac, we may not have much of a mortgage industry at this point at all. According to Inside Mortgage Finance, government-related entities backed 96.5% of all home loans during the first quarter of 2010, which was up from 90% in 2009. So if you borrowed money to buy a home over the past couple of years, there is a very strong likelihood that the U.S. government was involved. #9) The U.S. Government - The Nation's Biggest Employer According to the Bureau of Labor Statistics, approximately 2 million civilians work for the federal government, excluding the Postal Service. When you add in all U.S. military personnel, that number goes much higher. The truth is that as the government continues to expand (become more bloated), more Americans than ever are hopping aboard the gravy train. Today, the average federal worker now earns about twice as much as the average worker in the private sector. So if you want to do little work, produce little of real value and enjoy super cushy benefits, maybe you should apply for a job with the federal government too. #10) Millions Of Americans Are Employed By Firms That Rely On Government Contracts When considering the impact of the U.S. government on the economy, you can't forget the hundreds of companies that would go out of business if their U.S. government contracts were taken away. There are literally millions of people who work for companies that do business with the government. If the government disappeared it would cause economic chaos for those firms. The truth is that a whole lot of people make a really good living plugging into the sweetest revenue source of them all - the U.S. government. #11) The U.S. Government Takeover Of The Health Care System The U.S. government takeover of the health care system is going to fundamentally change the economics of the health care industry. The U.S. government will now play a major role in deciding which hospitals get built and which do not. Approximately 17% of U.S. GDP is spent on health care, and now the U.S. government has unprecedented control over where that money goes. Over a dozen new taxes have been established by the new health care reform law, and the U.S. government is going to pour an unprecedented amount of money into the system. So will this result in all of us getting better health care? We'll just have to wait and see. The truth is that the Founding Fathers never envisioned a federal government that completely dominated that national economy. But that is what we have got. As of now, only a very small percentage of Americans are still able to say that they are completely financially independent of the U.S. government. You see, in economic terms the U.S. government is not just the elephant in the room. It is the elephant that sat on the room and nearly suffocated everything else out of existence. As Americans, we live in an economy that is so intertwined with the government that it is impossible to separate the two anymore. But the really bad news is that the U.S. government is in massive financial trouble. According to one new report, the U.S. national debt will reach 100 percent of GDP by the year 2015. Many economists regard that as an incredibly dangerous threshold to cross. If U.S. government finances collapse, it will mean the collapse of the entire U.S. economy as well. There is simply no separating the two. And considering the fact that the U.S. government has piled up the biggest mountain of debt in the history of the world, things don't look promising. America is headed for an unprecedented economic collapse, and the U.S. government is leading the way. If you can get financially independent, now is the time to try to do that, but the reality is that we will all feel massive economic pain when this thing comes crashing down.
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| Gold and the Tragedy of the Commons Posted: 18 May 2010 01:18 PM PDT The Greek crisis is but a symptom of the general problem afflicting the world economy. It is still the canary in the coal mine, but EU officials replaced it with a dead parrot when the market wasn't looking.
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| China is Outpacing Europe and the US but its Economy is a Bubble Posted: 18 May 2010 12:56 PM PDT Boom, Baby, Boom... What's going on in China? That's what we've come here to find out. We paid a visit to China 25 years ago and haven't been back since. More on China in just a minute... Let's look at what is going on in the West, first. Yesterday, the Dow rose slightly - after taking a beating last week. Gold settled at $1,228. Dear Readers are out of stocks. So we're not particularly worried. But we're deeply interested. Has the bear market/Great Correction resumed - as we said it would? Or is this just more 'noise' - with no particular meaning? We don't know. But we intend to be in cash and gold when we find out. Back to the Middle Kingdom... First impression: this is not the same country it was a quarter of a century ago. The last time we were here there were almost no private cars. Everyone dressed in drab grey outfits and rode bicycles. There were no shiny new buildings. There were almost no restaurants. And if you saw a truck, it was likely to be broken down beside the road, with a couple legs sticking out from beneath it. Second impression: wow! So many daring new buildings...such broad streets...so many construction cranes...so many fancy cars...so many electric bicycles... ..there is no doubt that China is far outpacing Europe and the US in many respects...that the 21st century will be defined by what happens here, not what happens in the West. Third impression: China is in trouble. "Stocks dive on housing fears," says the headline at China Daily. The Shanghai Composite index suffered its biggest drop of the year yesterday - down 5% after losing 20% since January. According to the papers, the market has been spooked by the government's efforts to restrain real estate speculation. The Chinese have a lot of money. And Chinese investors have relatively few places to put it. They tend to buy real estate...or stocks. This has pushed up property prices by as much as 100% in some areas, over the last 12 months. And it has caused the government to worry about a bubble. Is the Chinese economy a bubble? Most likely - yes. Will it blow up? Again, most likely, yes. In fact, it seems to be blowing up right now. After leading the world in the bounce phase, it now may be leading the world in a return of the Great Correction. In a nutshell - China's economy is unbalanced...with far too much weight given to exports. Typical of successful export-oriented Asian economies, it has built too much capacity. The last big economy to run into this problem was Japan. After the big boom of the '80s, Japan had too many factories...and too much capital invested in the export sector. When the stock market realized it, a big sell-off began. That bear market lasted at least until 2009 - 19 years. For all we know, it's still not over. Stock markets are always discovering what things are really worth. Right now, they're realizing that China's companies are not worth quite as much as they thought a few weeks ago. Will the sell-off continue? We don't know. But most likely - yes. Because a big boom is typically followed by a big bust. But wait a minute. How can we reconcile Impression #2 with Impression #3? How can China be the country of the future and still face a big financial upheaval? Well, that is the future! Much the same thing happened in the US after 1929. The US faced a tough period of adjustment - made worse by the efforts of the Hoover and Roosevelt administrations. Instead of letting the problem take care of itself - as they did during the 19th century - the feds intervened heavily. In effect, they were trying to keep the future from happening. You can slow the future... You can make it more painful. You can drag your feet and shut your eyes...but the future is going to happen, whether you like it or not. As it came about, the future for the US was bright. It just had to live through the Great Depression and WWII first. China must be facing its own tests and challenges. Maybe they will be political. Maybe they will be only economic. But they are bound to be monumental... And the events in Thailand show us how they can be bloody too. "Thai street battles escalate," says today's Financial Times. As of this morning, 29 people have died. More than 230 have been hurt. And a quarter of the country is locked down in a 'state of emergency.' Thailand's troubles look less and less like street protests and more and more like a civil war. Who's right? Who's wrong? Who are the good guys? Who are the bad guys? Who knows? As in most civil wars, it's probably a shame that both sides can't lose. But it shows what can happen.... Bill Bonner
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| Debt Default 'Deferral' of Greece a Dangerous Precedent - Got Gold? Posted: 18 May 2010 12:42 PM PDT If the implications of the recent Greek tragedy were not so serious it would have been seen more as a Greek comedy (of fiscal errors). In fact, however, to deploy another metaphor, Greece's sovereign debt is seen as the proverbial canary in ...
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| We Will Have Hyperinflation, Economic and Human Misery as Well as Social Unrest. Posted: 18 May 2010 12:13 PM PDT  When will the world finally begin to understand that we have reached the point of no return and that "the voyage of their life is bound in shallows and in miseries" (Shakespeare, Julius Caesar). Sadly, we are probably not very far from that point. It is already starting to happen in many countries. The latest EU and IMF package of $ 1 TRILLION (Euro 750 billion) is yet another futile attempt by governments to abolish poverty by printing paper. Let's be absolutely clear, this money does not exist and the EU governments are hoping by declaring such a large amount that they can con the Wolfpack speculators. At this point the EU has just picked a large round figure of out the air. But when their bluff is called by the Wolfpack and the next attack happens, EU governments will after initial huffing and puffing start printing unlimited amounts of paper. So the world is now on its road to ruin and there is no action, no leader and no new amount of printed money that can save the world or prevent a hyperinflationary depression. Never in history has the world been in a situation when virtually all industrialised countries are bankrupt. Therefore there is no precedent for what will happen in the next few years. What we can be quite certain about is that events will happen in a seemingly random pattern and that it will be impossible to forecast where the next crises will start. More Here.. 
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| One Huge Investment Trend for the Next Decade Posted: 18 May 2010 12:00 PM PDT We hit the streets of Beijing yesterday to start getting a look at street-level economics. We visited a Carrefour hypermarket. Carrefour is the big French retailer and the world's second largest. It was also one of the early birds to crack China, opening its first store in 1995. Today, it has over 150 stores and is a multibillion-dollar business. The hypermarket we visited was typical for China, but huge by US standards. We visited one on a late Sunday afternoon. There were 54 checkout counters, and all but one were open. Every open checkout had a line five or six deep. You see for yourself here:
It was an amazing sight. All that talk of the Chinese middle class – well, you can see the idea in action here as bluejeans-wearing shoppers in sneakers pack the aisles. Carrefour's hypermarkets are a kind of Wal-Mart operation that sells everything from fresh meat and produce to deodorant and air conditioners. We saw Crest toothpaste, set off in its own display area as if were designer perfume or something. The name 'Carrefour' means 'crossroads.' And this store was certainly a crossroads of Western-style consumerism meets Chinese tastes and sensibilities. The aisles were brightly lit and wide and all the world's brands seemed to be on the shelves. Yet we saw tanks of live fish and fresh-cut meat. It also had the feel of an indoor street market, with people barking out sales and offers like street hawkers. We also visited an IKEA, which was similarly mammoth and packed. And our local contact here told us that on a Saturday, or in the middle of the day, these places would literally be elbow-to-elbow jammed with people. It speaks to one of the great investment opportunities of the next decade: catering to the emerging middle class in China, India and Indonesia. Chris Mayer One Huge Investment Trend for the Next Decade originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."
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| Rand Paul wins Republican Senate nomination in Kentucky Posted: 18 May 2010 11:58 AM PDT By David Espo http://news.yahoo.com/s/ap/us_primary_rdp WASHINGTON -- Political novice Rand Paul rode support from tea party activists to victory in Kentucky's Republican Senate primary Tuesday night, delivering a jolt to the GOP establishment and providing fresh evidence of widespread voter discontent in a turbulent midterm election season. Paul had 59 percent of the vote -- with returns counted from 29 percent of the precincts -- to 37 percent for Secretary of State Trey Grayson, who had been recruited to run by the state's dominant Republican, U.S. Senate Minority Leader Mitch McConnell. ... In Kentucky, Grayson had the support of McConnell as well as other establishment figures. But Paul countered with endorsements -- and the political energy that flowed along with them -- from tea party activists, former Alaska Gov. Sarah Palin, and Sen. Jim DeMint of South Carolina, a conservative eager to push his party rightward in advance of the broader fall campaign. Eager to avoid long-term fallout from a bruising primary, GOP leaders set a unity breakfast for Saturday. The Kentucky Senate seat is one of 10 or more that appear likely to remain competitive until Election Day, and one that Republicans can ill afford to lose if they are to make a serious run at challenging the Democratic majority. The seat is now held by Sen. Jim Bunning, but McConnell was so concerned about Bunning's ability to win a new term that he muscled the two-term lawmaker to the sidelines and recruited Grayson to run. Paul, the son of Rep. Ron Paul, R-Texas, a former GOP presidential contender, entered the race with other ideas. ... ADVERTISEMENT Prophecy to Become Coal Producer This Year Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen. For Prophecy's complete press release about its production plans, please visit: http://www.prophecyresource.com/news_2010_may11.php Join GATA here: World Resource Investment Conference * * * Support GATA by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Coming Friday-Sunday, June 11-13, at the Dallas-Fort Worth Airport Marriot: The conference will explore the dangers and opportunities in today's bullion markets and the need for investors to diversify bullion holdings outside of bullion banking and commodities markets. Speakers will include David Morgan of Silver-Investor.com, Gold Anti-Trust Action Committee Chairman Bill Murphy, and Duncan Cameron and Philip Judge of Anglo Far-East Bullion Co. The earliest conference attendees on Saturday will be able to schedule one-on-one interviews for personal consultation with Anglo-Far East's experts on Sunday. To learn more about and register for the Anglo Far-East Bullion conference, please visit: http://www.anglofareast.com/seminar-registration/
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| The Threat of Hyperinflation Real or Not? Posted: 18 May 2010 11:09 AM PDT Higher Gold and Petrol prices are one of the clearest signs that inflationary forces are gathering steam. Do not confuse inflationary forces with inflation; inflation is defined as an increase in the supply of money.
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| Chinese Boom Brings Home Its Best and Brightest Posted: 18 May 2010 11:00 AM PDT "Talents heed the call of home," says China Daily. For many years, some of the brightest and best of young Chinese left the country. They considered the opportunities for education, entrepreneurship, and career advancement better overseas. Often, they went to the finest universities in Britain, Canada and America. Then, they took top jobs at multi-national companies, research institutes…and in academia. But now they're coming home, says the paper. We met a number of these people yesterday. US-educated…sometimes US-raised…the overseas Chinese are now finding more opportunities back in China. Why? Because there is more money in China. Growth rates are higher. And new businesses find capital more easily. In short, China is booming. And booms bring prodigal sons back home. "I studied law in America…" "I went to university in Montreal, Canada…" "I used to work for Baker Mckenzie…" "I grew up in Tennessee…" It seemed like everyone we met had ties to the US or Canada. But now they're doing business in China, not in North America… Boom, Baby, Boom… Bill Bonner Chinese Boom Brings Home Its Best and Brightest originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."
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| There’s Always More Money to Print Posted: 18 May 2010 10:00 AM PDT In my darker moments, usually just before I go freaking berserk and start yelling and screaming about how "We're freaking doomed!" from the idiotic Obama administration deficit-spending So Freaking Much (SFM) money and the idiocy of the Federal Reserve creating So Freaking Much (SFM) money, all of which is guaranteed – guaranteed! – to make consumer prices rise in a terrifying, catastrophic, ruinous inflationary spiral that will destroy us all, I sometimes get myself in the mood for a nice, long, loud Mogambo Banshee Wail Of Outrage (MBWOO) by merely mulling over the term "dynamic stochastic general equilibrium." This incomprehensible term reveals itself, as the term itself implies, as laughably worthless, but, even worse, it is the name of the stupid economic theory to which the moronic Federal Reserve hews so strongly and which has failed so, so miserably. But if the Fed did not create the money that creates inflation in prices, then the Obama administration's insane deficit-spending would mean that the government would have to borrow the money in the private market, sucking up a huge $2 trillion a year out of the accounts of people and agents who saved money, which is impossible because all of the savings accounts in the whole USA amount to a lot less than that! How things have gotten to this point is made clear in The Free Market newsletter from the Ludwig von Mises Institute, where Jonathan M. Finegold Catalan writes, "The current situation is not unprecedented. High public and private debt has been the bane of large governments for the entirety of written history." It is, he notes, what Ludwig von Mises described as the "crisis of interventionism", which Mr. Mises himself describes as "Intervention aims at confiscating the 'surplus' of one part of the population and giving it to the other part. Once this surplus is exhausted by total confiscation, a further continuation of the policy is impossible" which Mr. Catalan notes is made simpler with the immortal quote, "The problem with socialism is that eventually you run out of other people's money." Of course, I had many, many questions, like, "Is your name really Finegold, or is that some kind of coded message signifying that The Marvelous Mogambo (TMM) was right when he said to buy gold, silver and oil?" and I wanted to know, "Are you saying, that we ought to run out and buy gold right now?" and, of course, "What does the 'M' stand for in your name?" But of course Mr. Mises was writing when money was gold and gold was money, and thus they did not realized that with a fiat currency, the government can never run out of money because they can always just print more. More correctly, the problem with socialism is that eventually the money runs out of buying power, which is another whole problem, but one which will not be a problem to those who have looked at the problem and bought gold, silver and oil instead of dollar-denominated assets! "Whee!", I say. "This investing stuff is easy!" The Mogambo Guru There's Always More Money to Print originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."
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| Richard Russell: Get out of stocks now Posted: 18 May 2010 09:58 AM PDT From Richard Russell in Dow Theory Letters: Just as for years I asked, cajoled, insisted, threatened, demanded, that my subscribers buy gold, I am now insisting, demanding, begging my subscribers to get OUT of stocks (... not including golds) and get into cash or gold (bullion if possible). If the [Dow Jones Industrials and Transports] violate their May 7 lows, I see a major crash as the outcome... ... Do your friends a favor. Tell them to "batten down the hatches" because there's a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don't need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won't recognize the country. They'll retort, "How the dickens does Russell know -- who told him?" Tell them the stock market told him. Crux Note: Learn more about the excellent Dow Theory Letters here. More from Richard Russell: Richard Russell: The bear market is coming Richard Russell: Why the bull market in gold has much farther to go Richard Russell: The super-wealthy are terrified of a currency collapse
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| Gov't stupidity: Germany to ban short selling at midnight tonight Posted: 18 May 2010 09:50 AM PDT ...[T]he German Finance Minister will institute a short-selling ban at midnight. [T]his is huge, as it means the market will become massively dislocated once again. We can show charts of how Thailand, US and Greek markets reacted when this was introduced (short jump followed by significant slide lower), but you get the image. One wonders just how horrible the news flow over the next 24 hours will be for... Read full article... More on the euro crisis: GOLD RUSH: Europe now in a panic to own gold Euro shocker: Rumors fly that Germany will drop out of the Eurozone Forget the Eurozone... this country could be the next to suffer a massive debt crisis
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| Some Not So Deep Thoughts On Gold Posted: 18 May 2010 09:49 AM PDT From the "Department Of It's A Sure Thing", we have, once again, investors being told that an asset is a sure thing just as it is making new highs. Yes, they tell us it is different this time, but how many times do you have to hear that ...
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| Posted: 18 May 2010 09:40 AM PDT Gold slips as euro-zone fears subside The COMEX June gold futures contract closed down $13.50 Tuesday at $1214.60, trading between $1206.60 and $1226.80 May 18, p.m. excerpts: see full news, 24-hr newswire… May 18th's audio MarketMinute
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| Posted: 18 May 2010 09:38 AM PDT Dear CIGAs, The euro below $1.20 would strongly suggest Chairman Volcker is right on the subject. The euro below $1.10 would confirm that Volcker is correct. Presently there is key support at $1.2150. The euro today traded as high as 1.2448 and dropped below $1.2150 trading now at $1.2202. That is outrageous activity for a major currency There is no central bank nor is there any intervention that can stand against the tool of credit default derivative swaps. Gold is you're only safe harbor. Dear Jim, I know you have a deep respect for Chairman Volcker. It surprises me that he would make a public statement concerning the euro that was akin to pouring gas on the fire. Sincerely, Dear Arlen, Volcker would seek any advantage he could for the benefit of the US. You must remember that his activities in the 80s totally slammed both South America and Africa when he ran overnight money to above 20% and 10 year to 14 7/8%. The developing nations all imploded based on what the Chairman deduced as an action in the best interest of the USA. It very well might be seen as in the best interest of the USA to not have a euro to compete with. Volcker has already stated that the present problem is the Sum of All Fears that can be cured only by doing politically impossible things. I do not believe he holds out much hope for that. Exacerbating the euro problem might just speed this crisis along. Regards,
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| These charts say a crash could be coming Posted: 18 May 2010 09:37 AM PDT From The Money Game: We don't mean for it to be doom and gloom day, but Richard Russell isn't the only big name pundit to be calling for a fall. Raoul Pal, who writes Global Macro Investor newsletter, and whose bio cites stints at GLD and Goldman Sachs, is out with a very specific crash call. In his latest note he calls for a big move down in just two days to two weeks. That's refreshingly specific! So what's the reason? It's all about... Read full article... More on stocks: Don't be surprised when the market tanks Crash alert: Dow Industrials plummet nearly 1,000 points Jeff Clark: "Today will go down in history as a market changing event"
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| Congressman Weiner DEMOCRAT attacks GOLD DEALERS Posted: 18 May 2010 09:36 AM PDT This is another way to attack Glen Beck too.:realmad: Goldline girds for Weiner assault Forget Goldman. New York Rep. Anthony Weiner has been shooting a bit lower in the finance food chain, going after gold dealers. His latest target, the company Goldline, which has made its name profiting -- with the help of conservative talkers -- off fees for buying and selling gold against public anxiety. A representative of the company circulated an email this afternoon: Tomorrow May 18th Congressman Weiner (NY-D) will be either having a press conference or sending out a press release that will involve Goldline International and Glenn Beck. Congressman Weiner will also be going after other conservative supporters that endorse Goldline International. We are not sure what exactly Weiner will be saying but we do know that it will not be favorable to either Goldline or any of the conservative personalities that support Goldline. Goldline wants to make sure that you are aware of this situation. Mark Albarian (President and CEO of Goldline) and Scott Carter (Executive Vice President of Goldline) are available at any time to address questions and concerns. A Weiner aide forwards his advisory, headed, "'Goldline' Rips Off Consumers, Profits Off Public Fears, Likely Violates Federal Law."
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| How to know if the bull market's over Posted: 18 May 2010 09:33 AM PDT From Gold Scents: Until the pattern of higher highs and higher lows is broken this will remain a cyclical bull market. Shorts trying to jump the gun run the risk of getting caught opposite the Fed's printing press. The secular bear trend can't resume until a yearly cycle bottom is broken. That yearly low came this year on... Read full article... More on stocks: Three penny stocks to sell immediately Stocks could fall much farther from here Top analyst Rosenberg: 400 point rally is a huge bearish sign
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| Short Sale Ban in EU? Liquidity, What's That? Posted: 18 May 2010 09:11 AM PDT Karl Denninger submits: In a display of idiocy reminiscent of what was done here in the US a couple of years ago, Reuters has up a wire report (headline only) that Germany intends to ban "short sales" at midnight (presumably their time) this evening. Zero Hedge is reporting that this is only "naked" short sales, but it will also apply to naked CDS, which means it will damage hedging activity for EU-area bonds. Complete Story »
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| Still Waiting for a Bearish Breakout in the Financial Markets Posted: 18 May 2010 09:07 AM PDT It is time again to take a long hard look at our view on the markets, to look at critical pricing levels of the major asset classes and to try and interpret what the market is telling us. We try to keep things very simple, so our underlying philosophy goes something like this;
The media and popular market commentators would have us believe that the "austerity" measures taken by European nations are going to affect the global economy/economic recovery and the price of fish in New Zealand. They would also have us believe that there is a reasonable probability that the EU is going to be disbanded and that it is all over for the euro. We have no idea of what is going to happen to the euro, but we will say that this sort of commentary is a text book example of what happens either at or very near a cyclical market bottom. Let us not forget all the commentary that predicted the end of the world back in October 2008 and the six months that followed! We find it rather amusing that most of the doomsayers who were predicting the end game in late 2008/early 2009 are the very commentators who are predicting the end of Europe and the euro right now! Complete Story »
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| Posted: 18 May 2010 09:00 AM PDT It will be a thoughtful reckoning today. Put on your thinking cap. There is a lot to think about. What exactly is going on in the world and what, if anything, can you do about it? Let's start with China, where Shanghai stocks fell 5.1% yesterday and are 26% off the index's 52-week high. If Chinese stocks are leading the economy, one crash is in and another could be just beginning. About the only bright side of any crash in Chinese equities – and any slump in the Chinese economy – is that we're talking about a run-of-the-mill kind of crash and not a systemic failure. That might not sound positive. But it is. It means that while the pain of a China crash would be sharp and probably not short, it wouldn't be the end of the world. Just the end of the world as we know it. And that would be fine too. Because over the next few decades, you get the sense that the balance of economic power in the world will have decisively shifted. It's shifting away from the over-indebted industrialized Western Welfare States and toward the higher-saving nations of the developed world. A few years ago, we called this "The Money Migration." And our view then was that this shift favored Australia, despite Australia's own massive private debt levels. But who knew that so much paper money would be destroyed in the transit between points A and B? Markets in Europe and the Americas were again indifferent yesterday. It's like investors can't quite believe that they're actually watching a junior reserve currency (the euro) slowly take off its shoes and socks and lower its disheveled self into its deathbed. Can this really be it for the euro? Well, there is always the possibility that reports of the euro's demise are simply premature. That's how the 24/7 news media cycle works these days. Everything is a crisis all the time, especially right now. A lot of what passes for urgency is just manufactured panic. Despite the theatrics, though, there's something rotten at the heart of the currency. The real problem for the euro is that it is the unbacked liability of a political union that is slowly unraveling. The central planners and bureaucrats of Europe probably cannot imagine an economic landscape without their common currency. But they better start imagining it…and printing D-marks. This must be what it's like to live on the slopes of a dormant volcano. You plant a colorful green garden in the fertile soil and live on the gentle slopes and pass your days comfortably. And then one fine day, in the twinkling of an eye, you are erased from existence by a searing hot pyroclastic flow. Game over. Except, switching metaphorical gears, we have always feared that the volcano underlying a global financial system built on debt could erupt at any time. It was never truly dormant. Throwing virgins into the crater to appease the gods – like throwing Fed money onto bank balance sheets – could not ever be a realistic survival strategy. Virgins don't prevent volcanic eruptions any more than easy money prevents insolvency. So what IS a realistic survival strategy? Well, the conventional wisdom – and we say this not really knowing what conventional people think – is probably to not try and time the market, to have a diversified portfolio with an asset allocation strategy designed to suit your risk and your financial goals, and to let time do your work for you, with annual rebalancing to make sure you are not over-exposed or under exposed to any particular asset class. That's how they write it up in the textbooks. For most of the last twenty years, that strategy has worked. But will it keep working in a world where you may see de facto default by sovereign governments or, if they manage to avoid that, massive inflation? What do you reckon? Dan Denning The Great Money Shift originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."
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| Stewart Thomson's latest - Gold and Her Friends Technicals Update Posted: 18 May 2010 08:35 AM PDT |
Gold futures for June delivery slid 1.1% in New York, having earlier fallen as much as 1.8%. This year, gold has rallied 12% amid Europe's sovereign-debt crisis, while the euro slumped 14% against the dollar. "The troubles in Europe aren't over, and the euro will go down even further, but gold prices are not cheap, and the market is exceedingly long, so you're getting some selling here," said Leonard Kaplan, president of Prospector Asset Management…| You are subscribed to email updates from Gold World News Flash To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
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