A unique and safe way to buy gold and silver 2013 Passport To Freedom Residency Kit
Buy Gold & Silver With Bitcoins!

Saturday, August 7, 2010

Gold World News Flash

Gold World News Flash

Yamana Gold, Inc. Q2 2010 Earnings Call Transcript

Posted: 06 Aug 2010 04:36 PM PDT

Yamana Gold, Inc. (AUY)

Q2 2010 Earnings Call Transcript

August 05, 2010 11:00 am ET


Complete Story »


US Government Redefines “Fixing the Economy”

Posted: 06 Aug 2010 04:05 PM PDT

The keen-eyed David Galland, Managing Director of Casey Research and regular contributor to The Daily Reckoning, notices something amiss. First he notes, staccato-style for emphasis, "Record total debt. Record government deficits. Record trade deficits. Massive additional government debt financing required to keep the doors open and avoid reneging on social contracts directly affecting the quality of lives of millions of people around the globe – the US, Japan, and Europe especially." Then, in a surprise move, he throws out, with the same punchy style, "Near record-low interest rates," whereupon he asks, with what I assume is a cynical and mocking tone to his voice, "Anything strike you as out of place?" Immediately, I instinctively blurt out, "Near record-low interest rates is an anomaly because a nation of deadbeats who can't pay their debts now should be charged higher interest rates to borrow money to offset the increased risk of non-repayment to the lender, at least, and a litt...


In The News Today

Posted: 06 Aug 2010 04:05 PM PDT

View the original post at jsmineset.com... August 06, 2010 07:23 AM To Our Beloved Disbelievers: Are there any more questions about the dollar's ability to return and violate its low? Are there any more questions about whether gold will return to its traditional relationship with the dollar? If you have solid gold stocks in your portfolio then get ready for good times. I am so concerned about things that I, Little Buddy and Freddie are going fishing today. I will post because later because I care. Regards, Jim   Jim Sinclair's Commentary There is no question it is coming. It will be done as I have outlined with a SDR gold ratio tied to a major indicator of world liquidity, and AFTER currency induced cost push inflation, it will work. Historically, currency induced cost push inflation results after the crisis. A commodity related currency has been the solution for a fix of sovereign paper. Replacing your defrocked currency with another country’s currency is no f...


Consumer Credit - Watch The Revisions!

Posted: 06 Aug 2010 04:05 PM PDT

Market Ticker - Karl Denninger View original article August 06, 2010 11:03 AM Gee, you don't think they're playing with the numbers, do you? [INDENT]Consumer credit decreased at an annual rate of 3-1/4 percent in the second quarter. Revolving credit decreased at an annual rate of 9-1/2 percent, and nonrevolving credit was about unchanged. In June, consumer credit decreased at an annual rate of 3/4 percent, revolving credit decreased at an annual rate of 6-1/2 percent, and nonrevolving credit increased at an annual rate of 2-1/2 percent. [/INDENT]Notice that there's no indication of the revisions here.  Both Q1 and the first two months of Q2 numbers were revised. Sigh.... distortions galore. "Better than expected" eh?  What did you expect? Non-revolving (autos, etc) are basically flat-lined at zero and revolving debt continues to decrease at a roughly 10% annualized rate. Improvement?  Where? As you can see from the "outstanding" chart, there's no real...


Gold Perma Bears Never Learn

Posted: 06 Aug 2010 04:05 PM PDT

The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! August 06, 2010 09:31 AM Read [url]http://www.grandich.com/[/url] grandich.com...


Reducing Krugman (And All Like Him) To Size

Posted: 06 Aug 2010 04:05 PM PDT

Market Ticker - Karl Denninger View original article August 06, 2010 07:11 AM Krugman has "explained" why deflation is "bad".  Well, he's tried.  But in fact he's made the case for deflation, especially following insane bouts of INflation. His idiocy requires a response.... Ok, point-by-point: [INDENT]So first of all: when people expect falling prices, they become less willing to spend, and in particular less willing to borrow. [/INDENT]Why is this bad?  Real capital formation comes from savings.  Indeed, it is the essence of capital formation of all sorts.  You can't lend except from excess capital (production ex required spending, that is, surplus) so being less willing to borrow or spend is a net public good over time. Yes, it makes the Madison Avenue people go nuts, and it particularly makes those people nuts who want to blow bubbles with borrowed money (which always ends in a bust with a huge number of people going bankrupt) but in terms of publ...


"War is Coming" -- Doug Casey

Posted: 06 Aug 2010 04:05 PM PDT

I wouldn't read a lot into Thursday's gold price action. However, having said that, shortly after New York trading began, gold broke through the $1,200 ceiling for the second day in a row and, for the second day in a row, it immediately got sold off to its low of the day [$1,189.20 spot]... as the usual not-for-profit sellers showed up to make sure that gold behaved itself. The low occurred minutes after London closed for the day... and from there, gold began recovering a bit. However, every tiny rally attempt during the New York session got sold off... and once Comex trading ended and electronic trading began, the 'volatility' disappeared as well. Here's the New York Spot Gold chart on its own. You can see that every little rally attempt got hit... as gold really wanted to go higher, but wasn't allowed to. It's obvious that some bullion bank is micro-managing the price and doesn't want it to break above $1,200 spot on a closing basis... at least...


Jobs Report and the Dollar: Comments

Posted: 06 Aug 2010 04:05 PM PDT

The following comments are from Peter Schiff, president of Euro Pacific Capital, Home | Euro Pacific Capital. Please feel free to excerpt for your reporting. Today's disappointing payroll report reveals that the U.S. economy has failed to respond to the massive fiscal and monetary stimuli that have flooded the nation over the past two years. Not only is the news bad for job seekers and political incumbents, but it's also a strong signal for traders to flee the U.S. dollar. The malaise in the U.S., where stimulus is still the word of the day, stands in contrast to active recoveries in Europe and Asia, where governments are actively removing stimulus. As a result, we are now headed for the eighth consecutive weekly decline in the Dollar Index. Inspired by comments this week from St. Louis Fed President James Bullard, it is now widely accepted that the continued domestic weakness will cause the Fed to significantly expand stimulus efforts through so called "quantitative easin...


Gold Resistance at 1220

Posted: 06 Aug 2010 04:05 PM PDT

courtesy of DailyFX.com August 06, 2010 07:12 AM 240 Minute Bars Prepared by Jamie Saettele Gold has topped. Please see the latest special report for details. Gold is making its way lower in an impulsive fashion. The short term count has changed slightly. It seems as though the first 5 wave decline ended following a terminal thrust from a triangle. The 3 wave correction is nearing completion. Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Monday evenings), technical analysis of currency crosseson Wednesday and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates at the DailyFX Forum. He is the author of Sentiment in the Forex Market. Follow his intraday market commentary and trades at DailyFX Forex Stream. Send requests to receive his reports via email to [EMAIL="jsaettele@dailyfx.com"]jsaettele@dailyfx.com[/EMAIL]....


Quick Update

Posted: 06 Aug 2010 04:05 PM PDT

The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! August 06, 2010 05:16 AM And I do mean quick! U.S. Stock Market – While those who have bet on a fall off the cliff continue to be disappointed, the "Don't Worry, Be Happy" crowd can't get no real satisfaction on the employment side. As hard as it seems to be for most, I continue to suggest a neutral position. I would consider some bearish spread plays if the DJIA somehow got up to 11,000 or so. Gold – When you think gold and Grandich, this is what should come to mind – "We're in the mother of all gold bull markets." And to all the crap about gold bubbles, tops, etc, I recommend this to the "Tokyo Roses" of the world. U.S. Dollar – There's a likely period of consolidation and even a little countertrend rally near as sentiment is extremely bearish and market deeply oversold. But while the 80+ area on the U.S. Dollar Index can hold for awhile, t...


Grandich Client Update – Silver Quest Resources Capoose Continues to Pleasantly Surpr

Posted: 06 Aug 2010 04:05 PM PDT

The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! August 06, 2010 04:17 AM Silver Quest announced good news, yet again, this morning.* They encountered 41 metres of 1.50 g/t of gold equivalent in D-10-116.* This represents one of the best intercepts on the property to date and also significantly expands the resource into the previously untested central portion of the deposit. Drill hole D-10-116 extends the eastern arm of the deposit by approximately 100 m to the west.* With a total of 26 drill holes completed this year, and only 4 released so far, this is a story that continues to evolve. D-10-116 and D-10-118, both released this morning have some excellent gold and silver intercepts.* D-10-118 was drilled further north and tested not only the boundary of the current mineralization but the depth extent of some of the historical drill holes.* Both of these holes released today, have great inte...


Crude Oil Uptrend Intact, Gold Win Streak Ends

Posted: 06 Aug 2010 04:05 PM PDT

courtesy of DailyFX.com August 05, 2010 10:51 PM Crude oil is holding onto this week’s solid gains ahead of Friday’s U.S. nonfarm payrolls numbers. The commodity remains close the top of an 11-month range. Gold’s win streak finally ended on Thursday, but the metal has been strong this week. Commodities – Energy Crude Oil Uptrend Intact Crude Oil (WTI) - $82.07 // +$0.06 // +0.07% Commentary: Crude oil fell $0.46, or 0.56%, on Thursday. The commodity has thus far held onto the bulk of gains registered earlier in the week. Were prices to end the week at current levels near $82, crude will have advanced nearly $3, or 3.8% in the period. Both oil and equities are maintaining an upward bias, as worse-than-expected economic data is not leading to sustained declines, while better-than-expected data is leading to large rallies. Keeping to this pattern, initial jobless claims were released on Thursday, and the sharp increase in claims only led to modest d...


Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Roughly 2% on the Week

Posted: 06 Aug 2010 04:00 PM PDT

Gold jumped to as high as $1210.85 after this morning jobs report was released before it moderated its gains a bit in the last few hours of trade, but it still ended with a gain of 0.45%. Silver climbed to as high as $18.563 before it also fell back off, but it still ended with a gain of 0.33%.


Canada's Biggest MEPP in Dire Straits?

Posted: 06 Aug 2010 03:37 PM PDT


Via Pension Pulse.

Tony Van Alphen of the Toronto Star reports, Workers in big pension plan could soon face cuts in benefits:

Canada’s biggest multi-employer pension plan says thousands of members could soon face future benefit cuts of 15 to 50 per cent depending on negotiations with companies.

 

The Canadian Commercial Workers Industry Pension Plan (CCWIPP), with 130,000 active members, said in a recent letter to members that companies in Ontario will need to increase their contributions by up to 40 cents an hour per worker by Sept.1 just to maintain current levels for future benefits.

 

Wayne Hanley, a senior trustee of the plan and president of the United Food and Commercial Workers, also said Thursday that if some employers don’t agree to negotiate adequate contributions in new contracts or in special bargaining, the amount of future benefits could quickly plunge by 50 per cent.

 

“If there is no additional negotiated contributions as of Sept.1, then members of the plan with that employer will go on to a benefit scale that is up to 50 per cent of what they are accruing on a future basis,” Hanley said in an interview.

 

He added the situation of continuing funding shortfalls in the plan could lead to labour unrest.

 

“There may be a few strikes over this,” Hanley said. “This is an important issue to the members.”

 

The letter from trustees also disclosed that inactive members who have left a contributing employer but are still eligible for a pension will take a 40-per-cent hit on future benefits next month. However, those inactive members over 50 years of age who would be eligible to draw a pension now won’t be affected by the reductions.

 

The plan, which has assets of more than $1.58 billion, provides benefits to about 20,000 retired union members and their spouses. It also has 130,000 active members working at more than 300 employers and another 150,000 deferred or inactive members.

 

The squeeze on the plan’s finances has not affected the pensions of retirees or accrued benefits of active members.

 

In the letter, the trustees said a significant recovery in 2009 hasn’t made up for the steep decline in financial markets in the second half of 2008.

 

“Assets have shrunk while liabilities have increased, leaving large unfunded liabilities,” the trustees’ letter added. “The CCWIPP, like all others, did not escape the financial crisis which has affected the funding status of the plan considerably.”

 

The trustees warned members of a “benefit restructuring” a year ago but would not comment on the possibility of any significant benefit cuts at that time. The plan had already cut future benefits for members by 20 per cent in 2005,

 

In 2008, the plan posted a negative 19.6 per cent return on investment but it turned into a 17.1-per-cent gain last year, which outpaced many other major plans.

 

The plan has not released an actuarial valuation for 2009. But at the end of 2008, actuarial liabilities topped assets by $759.3 million on a “going concern” basis, which underscored the plan’s difficulties.

 

Trustees representing the union have pushed employers to jack up their contributions to bolster the plan for more than a year.

 

Hanley said some companies such as the Metro Inc. grocery store chain have “stepped up” in bargaining to make the adequate hourly contributions to maintain future benefit levels.

 

But he said it is a major issue in current bargaining for a new contract covering thousands of workers at Loblaw Cos.

 

Greg Hurst, a prominent Vancouver-based pension consultant, said active plan

members not close to retirement should be “very concerned” if their company closes and they become a deferred or inactive member and a potential victim of a 40-per- cent cut.

 

“The impact of a decision or circumstance (which may not be in the individual’s control) that results in termination from the plan prior to retirement is draconian and extraordinary,” Hurst said. “If I were a member, I would make my concerns known to the Financial Services Commission of Ontario and my local MPP.”

 

A court fined nine trustees of the plan including Hanley and founder Cliff Evans a total of $202,500 earlier this year for spending too much of the fund’s money on questionable investments in Caribbean hotels and resorts.

Let's leave aside those "questionable investments in Caribbean hotels and resorts" for now. I went over the CCWIPP's 2009 Annual Report. The results were impressive, especially in public markets and hedge funds:

  • The Canadian Commercial Workers Industry Pension Plan (the “Plan”) had a strong year in 2009, achieving an aggregate rate of return of 17.1%, which outperformed the average Canadian pension fund return of 15.4%.
  • The Plan’s investment portfolio generated investment income of $232 million, increasing its net assets to approximately $1.6 billion.
  • The equity component (both domestic and foreign) of the Plan’s investment portfolio realized a combined 68.3% return in 2009, which outperformed each of its respective
    benchmarks (S&P/TSX Composite and MCSI World - CAD) of 35.1% and 12.9%. As at December 31, 2009, the Plan’s total equity allocation was valued at $657 million.
  • The fixed income component of the Plan’s investment portfolio achieved a 7.5% rate of return in 2009, which outperformed its benchmark (DEX Universe Bond Index) of 5.4%. Included in the Plan’s fixed income investments are a series of segregated long-term bond portfolios, collectively valued at $268 million, which are under management by CIBC Global Asset Management.
  • The hedge fund component of the Plan’s investment portfolio achieved a 32.9% rate of return in 2009, which outperformed its benchmark (HFRI Hedge Fund of Funds Index - CAD) of negative 3.8%. The Plan invests in hedge funds in an effort to increase diversification and generate returns, in both rising and falling markets, that are not highly-correlated to major stock market indices. As at December 31, 2009, the Plan’s total hedge fund allocation was valued at $90 million.
  • The private equity/private debt component of the Plan’s investment portfolio achieved a negative 28.2% rate of return in 2009. However, based on the assets held within this asset class, there is no industry-recognized benchmark from which to draw a comparison. The portfolio generated income of $5.3 million, which was offset by: a) currency adjustment in the amount of $38.6 million, resulting from the appreciation of the Canadian dollar; and, b) a negative market value adjustment in the amount of $55.2 million, resulting from the economic impact of the post-2008 worldwide reduction in travel on the Plan’s hospitality-related investments. As at December 31, 2009, the Plan’s total private equity/private debt allocation was valued at $233 million.
  • The real estate and loan component of the Plan’s investment portfolio realized a negative
    0.8% rate of return in 2009. As in the case of private equity/private debt, based on the assets held within this asset class, there is no industry-recognized benchmark from which to draw a comparison. As at December 31, 2009, the Plan’s total real estate allocation was valued at $51 million, the largest portion of which is comprised of the Plan’s investment in Citi Plaza (www.citiplazalondon.com), a mixed-use commercial property located in London, Ontario.

Weakness in 2009 was concentrated in the private equity and private debt portfolio, which should recover in 2010. However, I'm not familiar with the funds they chose to invest in this space, and cannot comment further on their performance and track record.

The outperformance in hedge funds could be due to the strategy selected. Remember, 2009 was the year of big beta, so I'm not surprised their hedge fund portfolio did well relative to the HFRI fund of funds index. The latter is not an appropriate benchmark if they're investing all the assets in L/S or global macro funds which did well last year.

But the biggest concern remains the plan's funded status:

The Plan’s actuary, Buck Consultants, prepares an annual valuation of the Plan’s financial position, which is filed with the Ontario regulatory authorities (Financial Services Commission of Ontario). The most recent valuation established a going-concern funding deficiency of $760 million as at December 31, 2008, based on a $1.68 billion actuarial value6 of assets and total liabilities of $2.44 billion. A going concern funding deficiency is not uncommon for a multi-employer pension plan (MEPP), particularly in the aftermath of the 2008 market meltdown.

 

The going-concern funded status assumes the Plan continues indefinitely. The Plan was 69% funded7 as at December 31, 2008, a decline of 12% over the previous year, and not surprising given the financial turmoil of 2008. The very favourable investment performance in 2009 will have a positive impact on the financial position of the Plan.

 

On a windup basis the Plan was 42% funded as of December 31, 2008, meaning that, if the Plan had been wound up on that date, accrued benefits would have had to be reduced significantly.

 

As part of the process in dealing with the deficiency in the 2008 valuation, the Trustees have approved a Funding Improvement Plan (FIP) designed to provide the Plan with a more solid financial foundation. In addition, the Plan is electing to become a Specified Ontario MEPP (SOMEPP), which allows for a more favourable funding framework to be applied.

Hopefully none of the companies will be closing their doors anytime soon. One major governance concern I have is in regards to the trustees:

The Plan is administered by a Board of Trustees, consisting of an equal number of individuals appointed by UFCW Canada and by the participating employers.

 

The Trustees receive no personal benefit, financial gain or fee payment from the Trust Fund for their role as fiduciaries of the Plan.

I happen to think you need some outside, independent experts (eg., an independent professor of finance with no industry ties whatsoever or a retired senior pension officer) to help them manage this fund. Trustees should be paid and they should be held accountable for the decisions they take on behalf of plan members.

Finally, while the funded status is a concern, the situation isn't hopeless. It's just that they need to raise contribution rates to close the gap and make up for the shortfall left after 2008. They're not alone. Others are also struggling with the same issues.

The Rising Cost of Food

Posted: 06 Aug 2010 01:54 PM PDT

No Bees, No Bats, No Food for main street affordable, Phenomenal rise in Food Costs. Add that to a major point in the HOT/DRY cycle pending, and eatables have only one way to go, up. However food and energy does not count in the standard inflationary figures, because you and I do not use them.

Jim

Headline: Rising coffee prices spell a higher cost for that cuppa joe

Getting caffeinated is going to get costlier.

The J.M. Smucker Co. just bumped up the price of most Folgers, Dunkin' Donuts, Millstone and Folger Gourmet Selections coffees that are sold retail IN THE U.S., according to Reuters.

The approximate nine percent hike is due to ongoing increases in the cost of green coffee beans.

Headline: Bacon Price Surge May Last Through August as Herd Cutbacks Tighten Supply

Bacon lovers in the U.S. are paying record prices during the seasonal summer peak for consumption, and costs may keep rising through August because smaller hog herds led to an unprecedented plunge in meat inventories.

Headline: America's Most Common Bat Headed for Eastern Extinction

By the time today's toddlers graduate from high school, the most common bat in North America may have vanished altogether from the eastern United States.

Researchers combined historical population trends with mortality counts in Myotis lucifugus colonies struck by White-Nose Syndrome, an extraordinarily virulent bat disease first identified in 2006. According to their models, M. lucifugus, better known as the little brown bat, has a 99 percent chance of vanishing from the east, soon.

Headline: Wheat near 2-year high on Russia export ban

Wheat prices in both the United States and Europe retreated on Friday but held just below two-year highs as markets reacted to the sudden imposition of a ban on grain exports from drought-hit Russia.

If the threat of deflation is real, why does it not manifest itself in the secular trends?

Spot Commodity Prices: CRB Spot Index (1947 – Present);
16-Raw Industrial Spot Price (1935-1947);
Great Britain Wholesale Price of All Commodities (1885-1935)

What is deflating other than the value of debt? The central planners, protecting the banking system and the currency that denominates its debt, print money to cushion debt implosion. They can do this because money is no longer anchored by gold. In other words, "Sound as a dollar" no longer means anything today.

The commodity bull is largely currency related. This illustrated in the following chart.

Spot Commodity Price Index (CRBSPOT) to Gold Ratio:

Source: Eric De Groot Insights

If the U.S. Dollar were to fall how important is gold to the States?

Posted: 06 Aug 2010 01:00 PM PDT

Since the demise of the Gold Standard, monetary authorities have tried as many ways as possible out there to sideline gold as part of the monetary system. Since the early eighties they have succeeded to some extent, but this was by discrediting it and by emphasizing the benefits of paper currencies.


FRIDAY Market Excerpts

Posted: 06 Aug 2010 10:21 AM PDT

Gold extends gains after jobs report, ends week up 1.8%

The COMEX December gold futures contract closed up $6.00 Friday at $1205.30, trading between $1194.50 and $1213.30

August 6, p.m. excerpts:
(from Marketwatch)
Gold edged higher, losing some steam as the session progressed but keeping a sizeable weekly gain as investors worried about the U.S. employment picture and the dollar remained under pressure. December gold futures gained 0.5%, up 1.8% on the week, while the dollar index dropped to 80.39, down from 80.81 Thursday but off its lows for the day. Losses in the U.S. job market as evidenced by a report Friday didn't amount to panic, but they did give gold a push higher…more
(from TheStreet)
Gold prices were popping as investors hedged their portfolios on the back of a weak U.S. unemployment report for July. The Labor Department said there were 131,000 jobs lost in July, and the private sector added only 71,000, while expectations had been for 100,000. The weaker reading spearheaded a flight to safety into gold and out of stocks. Gold prices sold off slightly before the report as traders took profits in the metal but climbed steadily past $1,200 after the weaker reading…more
(from Reuters)
Thomas Winmill, portfolio manager of Midas Fund, said gold benefited from economic fears after data showed a double-dip recession was still possible. Gold was also boosted by a weak dollar, which fell against the euro and approached a 15-year low against the yen. The usual inverse relationship between gold and the dollar has shown signs of a resurgence, after the link loosened earlier this year as extreme risk aversion benefited both assets…more
(from Dow Jones)
inflationPeople were also buying gold on the longer-term view that the dollar may weaken further and inflation may rise if a stuttering economic recovery causes the U.S. to inject more money into the system, according to Ira Epstein, director of the Ira Epstein division of the Linn Group. Bob Haberkorn, senior market strategist with Lind-Waldock, also said that people are buying gold "anticipating some major inflation coming down the pike," although he said he believes this will come from previous liquidity injections rather than anything new…more
(from Bloomberg)
Deutsche Bank AG forecast gold will average $1,275 in the third quarter, noting their "bearish outlook for the dollar." "The dollar is getting odious compared to the euro, which was the rankest thing around in the first half of this year," said Frank McGhee, head dealer at Integrated Brokerage Services LLC. "If the Fed has to do something more accommodative to spur the economy, you're going to see an explosive rally in gold."…more

see full news, 24-hr newswire…

August 6th's audio MarketMinute

US Government Redefines “Fixing the Economy”

Posted: 06 Aug 2010 10:00 AM PDT

The keen-eyed David Galland, Managing Director of Casey Research and regular contributor to The Daily Reckoning, notices something amiss.

First he notes, staccato-style for emphasis, "Record total debt. Record government deficits. Record trade deficits. Massive additional government debt financing required to keep the doors open and avoid reneging on social contracts directly affecting the quality of lives of millions of people around the globe – the US, Japan, and Europe especially."

Then, in a surprise move, he throws out, with the same punchy style, "Near record-low interest rates," whereupon he asks, with what I assume is a cynical and mocking tone to his voice, "Anything strike you as out of place?"

Immediately, I instinctively blurt out, "Near record-low interest rates is an anomaly because a nation of deadbeats who can't pay their debts now should be charged higher interest rates to borrow money to offset the increased risk of non-repayment to the lender, at least, and a little something extra to offset the loss of buying power of the currency due to overproduction of money by the despicably foul and feeble-brained Federal Reserve!"

In my excitement, I had forgotten that I was reading this at work, but was reminded when my officemates shouted out for me to shut up, shut up, shut up, which I, embarrassed, did.

Then I went back to Mr. Galland's essay just in time to read that the Fed's "beige book" of economic conditions makes it "clear that the Fed is (finally) beginning to understand the entrenched and endemic nature of this crisis. While the notes are written in shamanic double-speak, the point is clear: members of the Fed don't expect the economy to get back on track until 2015 or 2016." Yow!

Five or six more years of this no jobs, higher consumer prices, falling asset prices, higher taxes, lower income, and ruinous economic malaise crap before it gets better? Yikes!

And that's, of course, assuming it doesn't get worse and collapse in the meantime, which is exactly what I think will happen, mostly because I am a paranoid, cynical little pipsqueak who doesn't believe that the horrifying problems caused by the long-term creation of too much money and too much government spending will be "fixed" by creating more money and more government spending.

But maybe "that's just me," ya know what I mean?

And it turns out that it might be just a matter of definition! I define "fixing the economy" as "People not living on the streets or in their cars or surviving by eating garbage, rodents, weeds and government handouts to keep from starving to death because there are no jobs, and won't be for a long time until after they are all dead."

On the other hand, the Federal Reserve defines it with the incomprehensible and preposterous phrase "to converge fully to its longer-run path as characterized by sustainable rates of output growth, unemployment, and inflation consistent with participants' interpretation of the Federal Reserve's dual objectives" of low inflation and low unemployment, which means, with fuzzy criteria like these, "Inflation in the money supply until we die from inflation in prices, or until more people have jobs, whichever comes first, although it won't be more people having jobs."

Mr. Galland is apparently not impressed with my gloomy interpretation, and notes that the "simple reality," as scary as it is, is that the Federal Reserve "is waking up" to, as I put it, the ugly fact that their ridiculous neo-Keynesian econometric idiocy coupled with a fiat currency has allowed disastrous booms to go to extremes so that the entire structure of the economy is so distorted and bloated with cancerous expansions of the money supply and size of government that, as he says, the "structural underpinnings of the economy are damaged beyond any quick or easy fix."

I admire his optimism, but after a little judicious Mogambo Editing Magic (MEM), I instantly remove all sense of optimism, yielding the sad truth that "the structural underpinnings of the economy are damaged beyond any fix."

The good news, in the face of all of this terrible calamity, is that you can still buy gold, silver and oil at bargain-basement prices, because at the rate that the terrifying Obama administration and the profoundly incompetent and corrupt Congress are spending money, and at the rate the Federal Reserve is creating the money to finance the spending, inflation in consumer prices is on its way, and these low prices won't last long!

And then, because you bought at these low prices, it's, "Whee! That investing stuff was easy!"

The Mogambo Guru
for The Daily Reckoning

US Government Redefines "Fixing the Economy" 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."


Gold Daily and Weekly, Miners, and Silver Charts at Week's End

Posted: 06 Aug 2010 09:56 AM PDT


This posting includes an audio/video/photo media file: Download Now

Forget wheat... buy gold

Posted: 06 Aug 2010 09:48 AM PDT

From Hard Assets Investor:

Adrian Day is one of the true pioneers of global investing. For years, the London native has run a boutique global investing firm (Adrian Day Asset Management) that combines complete independence, a global purview and a long-term value philosophy to bear on the markets. HardAssetsInvestor.com's editor in chief Matt Hougan caught up with Adrian recently to discuss his view on gold, platinum, wheat and the broader commodities landscape.

HardAssetsInvestor.com (HAI): We've recently had a significant pullback in gold, and there are concerns about a gold bubble. What's your short-term outlook for the metal?

Adrian Day, CEO, Adrian Day Asset Management (Day): I tend to be more focused on the long term, generally. I'm a long-term value investor who doesn't mind grinding out the volatility to realize the potential of an investment. But there is...

Read full article...

More on commodities:

This could be the perfect time to buy gold and silver

Tsunami of cash could send gold to unbelievable highs

The huge source of power China has over America that no one talks about

Economy Heading for a Systemic Collapse into Hyperinflationary Great Depression

Posted: 06 Aug 2010 09:47 AM PDT

(snippet)
A contraction greater than 25% peak-to-trough puts you in a great depression. That is what I envision, but we'll be taken there by hyperinflation and a resultant cessation of normal commerce.

TER: Hyperinflation means different things to different people. How do you define it?

JW: My definition has been and will remain very simple. When the largest-denomination note in circulation—the $100 bill in the case of the U.S. dollar—has the same value as toilet paper, you have a hyperinflation. You saw that in the Weimar Republic. People papered their walls with money.

TER: I think you've said that the only reason that Zimbabwe's economy survived is because they started using dollars as black market currency.

JW: But you don't have anything like that in the United States as a backup. We're going to have a much rougher time in the U.S., of all places, than they had in Zimbabwe. Zimbabwe was able to function because people could exchange the local currency into dollars, and then buy things with the dollars, so the economy continued to function. Without some kind of a backup system, as the currency becomes worthless you'll see disruptions to key supply chains. When people don't have food, you end up in very dangerous circumstances.

TER: Do you see any real potential for precious metals or another currency as a backup?

JW: Well, yes. I think they will become a backup fairly quickly, but we don't have any widely developed black market for another currency at this point because the dollar remains the world's reserve currency. All sorts of things may develop that we don't anticipate. What will be used to cover for the dollar? Gold and silver? The precious metals are limited in supply and not widely held by the population in general. Hard currency from Canada or Australia? That wouldn't be in wide circulation, at least not early on. I think a barter system is where it will go until the currency system is stabilized, but the currency system can't stabilize until the government's fiscal house is in order.

There's no sense in setting up a currency on a gold standard if you can't live within your means, because you'd just end up going through successive devaluations against gold. So whatever's done to set up a new currency system will have to be in general conjunction with the overhaul of the government's fiscal condition. But in the interim, something of a barter system would evolve. Even that, though, is something that may take six months to get stabilized.

TER: It's hard to imagine.

JW: In the Weimar Republic, you could go into a fine restaurant one evening and enjoy its most expensive bottle of wine with a nice dinner. You'd probably negotiate the price before you sat down, because the price would be higher by the time you finished dinner. By the next morning the empty wine bottle would be worth more as scrap glass than it had been worth as an expensive bottle of wine the night before. That's how rapidly things change in a hyperinflation.

But we have a circumstance that did not exist in the Weimar Republic. Our society is heavily dependent on electronic cash. Say you have a credit card with a $10,000 limit. In hyperinflation, that $10,000 might be enough to buy you a loaf of bread.

TER: There's not even enough physical cash running around anywhere in the United States that actually represents what goes back and forth electronically. If you can't use your debit card, how do you pay for your coffee at Starbucks? And how will companies and banks adjust?

JW: You're not going to have electronic payments that are in-barter equivalent that I can foresee. That would be a fairly sophisticated system and the needs are going to be immediate. When hyperinflation starts to break, it can unfold in a matter of weeks, months. You'll need to be able to handle things rapidly. Frankly I think the system will tend to break down. It's not a happy circumstance. How will a small company get its goods to people? There might be blackouts. Who's going to get the fuel to the power plants?

TER: And to the gas stations for the cars for people who still have jobs?

Con-Way Inc. (NYSE:CNW) — Falls Short of Earnings Estimates

Posted: 06 Aug 2010 09:45 AM PDT

Con-way Inc. (NYSE:CNW), the San Mateo, California-based provider of transportation, logistics, and supply-chain management services, recently missed consensus earnings estimates. Dan Amoss, Agora Financial's editor of the Strategic Short Report, shows how the small miss could still be an important chink in the armor of CNW investor confidence.

From Amoss' most recent reader update:

"Con-way Inc. (NYSE:CNW) missed earnings estimates by a few pennies. More importantly, management's dour outlook finally spooked shareholders. 'Yield each month in the quarter improved sequentially,' says CEO Doug Stotlar. 'However, managing the balance between price and volume while bringing costs into alignment will take time, which restrains our expectations for near-term improvement.' Here is a chart of CNW since March 2010:

"On the conference call, a few analysts asked how the broad economy affects pricing and volumes. While management said pricing is a very company-specific issue, it admitted trucking demand might very well be slowing. Tonnage was down 3.3% sequentially from June to July. This compares to a 1%-3% sequential June/July decline in a typical year.

"Based on management's views, it's likely that 2010 earnings estimates will come down substantially. Our thesis — that management is stuck with too much unprofitable freight, and customers will defect if prices are hiked too much — is playing out. CNW stock can go much lower from here in the coming months.

"CNW shareholders are finally questioning why they own this stock at 30 times 2010 earnings, especially when odds of accelerating earnings growth are eroding.

"Capacity in LTL trucking remains too loose to allow Con-way respectable profit margins. And now that the economy is off its April/May peak, pricing and volumes could keep softening."

Dan Amoss sees the broader stock market as overbought, especially given today's rapidly slowing economy and the recent ugly initial jobless claims. If these data points manage to restore more rational expectations about future corporate earnings, then Amoss expects analysts to bring consensus numbers for CNW down from $1.10 for 2010 and $2.11 for 2011.

To receive Amoss' specific trading recommendations for Con-way, you'll have to subscribe to the Strategic Short Report. It's available through the Agora Financial reports page, found here.

Best,

Rocky Vega,
The Daily Reckoning

[Nothing in this post should be considered personalized investment advice. Agora Financial employees do not receive any type of compensation from companies covered. Investment decisions should be made in consultation with a financial advisor and only after reviewing relevant financial statements.]

Con-Way Inc. (NYSE:CNW) — Falls Short of Earnings Estimates 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."


Stop Waiting to Buy Gold - The Lows Have Been Posted

Posted: 06 Aug 2010 09:44 AM PDT

Gold Price Close Today : 1,203.30Gold Price Close 30-Jul : 1,181.70Change : 21.60 or 1.8%Silver Price Close Today : 1845.9Silver Price Close 30-Jul : 1798.7Change : 47.20 or 2.6%Platinum Price Close...

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!


Central bank gold sales minimal as IMF sales continue

Posted: 06 Aug 2010 09:36 AM PDT

5:30p ET Friday, August 6, 2010

Dear Friend of GATA and Gold:

MineWeb's Rhona O'Connell reports today that European central bank gold sales have declined to almost nothing, that the International Monetary Fund has been selling 14 to 19 tonnes per month since March, and that at its current rate the IMF could be done with its planned quota of dishoarding by the end of the year. Since nobody is allowed to see the central bank gold involved, it's not audited in any public sense, and financial journalists never ask any critical questions about it, it may be a little silly to pay much attention to these figures. But right or wrong what passes for the gold "market" still does, so you can find O'Connell's commentary, headlined "CBGA Gold Sales Minimal as IMF Sales Continue," at MineWeb here:

http://www.mineweb.net/mineweb/view/mineweb/en/page33?oid=109370&sn=Deta...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


ADVERTISEMENT

Sona Resources Expects Positive Cash Flow from Blackdome,
Plans Aggressive Exploration of Elizabeth Gold Property

On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia.

Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013."

For complete information on Sona Resources Corp. please visit: www.SonaResources.com

A Canadian gold opportunity ready for growth


Join GATA here:

New Orleans Investment Conference
Wednesday-Saturday, October 27-30, 2010
Hilton New Orleans Riverside Hotel
http://www.neworleansconference.com/redirect.php?page=index.html&source_...

* * *

Support GATA by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

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:

http://www.goldrush21.com/

* * *

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:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16


ADVERTISEMENT

Prophecy to Become Coal Producer This Year
with 1.5 Billion Tonnes of Resource

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

Federal Reserve could enact $1 trillion "rescue" as soon as next week

Posted: 06 Aug 2010 09:33 AM PDT

From Bloomberg:

A report U.S. companies hired fewer workers than forecast last month intensified a debate among economists over whether Federal Reserve policy makers will take an incremental step next week toward providing more stimulus.

U.S. central bankers said in June that more monetary stimulus "might become appropriate" if the economic outlook "were to worsen appreciably." Chairman Ben S. Bernanke said last month the Fed may at some point maintain stimulus by investing the proceeds from maturing bonds into U.S. Treasuries.

"I lean toward a result where the Fed talks about reinvesting mortgage-backed securities runoff at next week's meeting but decides to wait six weeks and see what the economic data bring," said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. "The economic recovery downshifted in May but activity is absolutely not hurtling toward a double dip."

Government figures showed today that private payrolls increased by 71,000 jobs last month, less than the 90,000 economists had forecast. While the data may not alone force the Fed's hand, other indicators including a slump in housing point to a slowing recovery and greater odds policy makers will move toward more easing at an Aug. 10 meeting, some economists said.

Retailers in the U.S. reported July sales gains that missed analysts' estimates as consumers reduced spending before the back-to-school season. A manufacturing gauge tracked by the Institute for Supply Management fell, while a similar index tracking service industries rose.

Reinvest Proceeds

"The labor report increases the chance that they make the decision to reinvest the proceeds of maturing mortgage-backed securities in short-term U.S. Treasuries at this meeting," said Ward McCarthy, chief financial economist at Jefferies & Co. Inc. in New York. "They were heading in that direction anyway."

Bernanke outlined three options for additional ease in response last month to questions from Senator Richard Shelby, an Alabama Republican. The Fed chairman said in semi-annual testimony to Congress that the central bank could strengthen its commitment to keep interest rates low, or lower the rate it pays on bank reserves.

"The third class of things, though, has to do with changes in our balance sheet, and that would involve either not letting securities runoff as they are currently running off, or even making additional purchases," Bernanke said.

The Standard and Poor's 500 Stock Index fell 0.8 percent to 1,116.71 at 2:53 p.m. in New York. Yields on U.S. 2-year notes fell below 0.5 percent for the first time as Treasuries rallied.

'Slow Drip'

"It's a slow drip of quantitative easing medicine rather than a big shot," said Robert Dye, senior economist at PNC Financial Services Group Inc. in Pittsburgh. "That’s going to be a mostly symbolic move telling the public that the Fed remains watchful."

Policy makers will probably "return to unconventional monetary easing by" late this year or early in 2011, Jan Hatzius, chief U.S. economist for Goldman Sachs Group Inc. in New York, said in a note to clients. Such steps may include "a more iron-clad commitment to low short-term policy rates" and more purchases of assets, probably Treasuries.

The Fed would purchase at least $1 trillion in additional assets, he said.

With 30-year mortgage rates trending around 4.5 percent to 4.75 percent, the Fed will have about $275 billion of its $1.1 trillion portfolio of mortgage-backed securities pay off over the course of this year, according to estimates by Barclays Capital Inc. That leaves about $23 billion a month for reinvestment if Fed officials choose that option.

$1 Trillion

Joseph Abate, Barclays' money market strategist in New York, said if the Fed chose to reinvest, that would signify they have a target for the level of excess bank reserves, currently at $1 trillion.

"Is the Fed trying to target a specific level of bank reserves?" he said. "I don’t think they are."

Barclays' economists don't expect the Fed to take more monetary policy steps at next week's meeting and for the remainder of 2010.

The Fed may communicate next week more attentiveness to downside risks to growth, said Laurence Meyer, senior managing director of Macroeconomic Advisers LLC and a former Fed governor. "We expect the committee to offer a more pessimistic assessment of the outlook in its statement," he said.

Meyer also said he hopes the Federal Open Market Committee will give consideration to the "risk management" strategy employed during the last deflation scare.

"The risk management approach calls for an easier policy today," Meyer said. "It is better to err on the side of being too easy when the risks to growth are decidedly to the downside and the costs of slower growth are high and the risks of higher inflation are low."

Still, Meyer said that, given the absence of any focus on the risk management approach so far, the threshold for taking action at the August meeting is high.

"It is a big deal to take a step toward easing after you have spent a year talking about the exit strategy," he said.

To contact the reporter on this story: Craig Torres in Washington at ctorres3@bloomberg.net. 

More on the Fed:

Federal Reserve president begs Bernanke to raise rates to 1%

The Fed's greatest nightmare: France calls for new reserve currency

Ex-Federal Reserve governor: Fed's balance sheet is dangerously large

Humiliation: Bank Of America Plunges From Trading Perfection To Just 81% Profitable Trading Days

Posted: 06 Aug 2010 09:28 AM PDT


In an advance look at how the Q2 trading season turned out for Bank Holding Hedge Funds, some of which even accept your deposits to fund their 100x leveraged steepener trades, we have the first detailed 10-Q report out of Bank of America. Granted, the bank has a bunch of chimps running its trading operation and is thus not nearly indicative of the crack prop trading gurus at firms like Goldman and MS, due to not quite streamlining the whole prop-flow synergy bit while it had time (incidentally BofA is now looking for a seller for its prop operation) but the Fed and the government (or the Goved JV as it is known by those who suckle on its discount window teat) have made it so even a room full of chimps with Bloomberg terminals will pretty much generate trading perfection no matter what they do. So it comes as a shock that in the quarter following BofA's trading perfection days (which would be completely normal from a statistical point of view in a hyperbolic Universe, where superstrings don't need 10 dimensions, and where particle physicists are actually not superfluous), the bank has reported just 81% profitable trading days. Even scarier, the bank actually reported a day in which it lost $102 million, an event that has not occurred in over 60 days.

Here is how the bank explains it:

During the three months ended June 30, 2010, positive trading-related revenue was recorded for 81 percent of the trading days of which 59 percent were daily trading gains of over $25 million, eight percent of the trading days had losses greater than $25 million and the largest loss was $102 million. This compares to the three months ended March 31, 2010, where positive trading-related revenue was recorded for 100 percent of the trading days of which 95 percent were daily trading gains of over $25 million. The decrease in daily trading gains of over $25 million during the three months ended June 30, 2010 compared to the three months ended March 31, 2010 was driven by less favorable market conditions.

So reality, an HFT-sponsored market collapse, a massive curve flattening, and the Fed's less than constant market intervention now has a name: "less favorable market conditions." We'll be sure to remember that for the quarter in which it reports first 19% winning trading days, then zero.


The Golden Decade

Posted: 06 Aug 2010 09:09 AM PDT

Guest Post: Who's Scoffing Now

Posted: 06 Aug 2010 09:07 AM PDT


Submitted by David Galland of Casey's Report

Who's Scoffing Now

A couple weeks ago, the family and I watched Dirty Jobs, an altogether entertaining show from the Discovery Channel. In the episode we watched the host, Mike Rowe, serve as a mechanic in the military. There were a couple of things that caught my eye.


The first was that, using nothing more than a cleverly arranged array of blocks and tackle, five members of the mechanics group were able to easily muscle a well-stuck 5-ton Humvee from deep sand. We humans are, indeed, a creative and intelligent species.


The second thing was the strict adherence to protocol, with everyone acting almost robotic in their issuance of commands and responses, and surgical in their use of equipment. Even so, this slavish adherence to “the book” is understandable, given that the soldiers operate in extremely difficult, dangerous, and often chaotic circumstances.


Therefore, I had to raise an eyebrow the next day. when BBC reported that of $9 billion allocated to the U.S. military to be used in Iraq reconstruction projects, fully $8.7 billion has gone missing. Proving, once again, that no matter how well plans are laid or how tightly “management” might think they are controlling things, gaps in process can open up that are wide enough to drive a Humvee through – a Humvee full of cash, in this particular case.  


Similarly, we are led to believe that the Treasury and the Fed, having applied the right combination of monetary and fiscal blocks and tackles on the well-stuck economy, have freed the economy from its quagmire. In this case, the biggest sovereign debt crisis in history.


In support of that contention, the following appeared in Bloomberg, a steady cheerleader for the administration and its friends on Wall Street.

    For all the criticism of record budget deficits, President Barack Obama can take comfort knowing that for the first time in half a century, government bond yields are declining during an economic expansion and Treasury Secretary Timothy F. Geithner is selling two-year notes with the lowest interest rates ever.


    The combination of record-low yields on two-year notes, 10-year rates below 3 percent and a deficit projected to surpass $1.4 trillion for a second consecutive year is a signal that the bond market is less concerned with government spending than with getting the economy back on track.


It’s kind of ironic, I find, that the very same people who are quickest to scoff when hearing the phrase “This time it’s different” – namely the professional investing class – apparently see nothing to worry about in the idea that the world’s largest debtor can run the world’s largest deficits… and do so at historically low interest rates.


To which I would comment, “Trust your eyes.” If it seems as though the situation is untenable, it very likely is. The only real question in my mind is, how long can this fiction persist? To that I don’t have an answer, but I suspect that when the truth of the situation is revealed – possibly by the roundabout path of seeing one or more of the large Asian economies come unglued – things will get far uglier, far faster, than most people suspect.


After all, for things not to “be different this time around,” the mountain of unpayable sovereign debt must be resolved in a currency crisis. To believe otherwise is to believe in Easter Bunnies and in the proposition that, like the military, the U.S. government can meet every challenge – the former through a concentration of force, the latter by bankrupting future generations.


I can’t speak for what you’re seeing in your neighborhood or hearing from your customers or friends, but everyone I talk to says that, at best, things are holding the line at “bad,” but, for the most part, are not getting significantly worse. No one has told me that things are actually improving.


That my ground level perception may be the correct one seems to be confirmed by the latest consumer confidence readings – which just fell to a 5-month low, the wrong direction for a recovering economy.


Yet, in stark contrast to what my eyes and ears are telling me, the cheerleading for a robust recovery in the mainstream media is becoming almost deafening… just as you would expect in the months leading up to an important U.S. election.


While it may just be inherent stubbornness, we here at Casey Research remain steadfastly bearish, for no other reason than that none of the big-picture economic challenges have actually been solved.


Which is to say that we are the ones scoffing at the idea that this time is different – it’s not. In support of that contention, look no further than Bud Conrad’s chart below, from the March edition of The Casey Report. As you can see, the world’s two largest economies, the U.S. and Japan, are solidly in the danger zone and likely past the point of no return.


Depending on your ability and willingness to take risks, you may wish to stay especially liquid – or trade the volatility that is inevitable as the train periodically looks like it’s about to leave the tracks (in time, it will). You can do that by buying the VIX index (there are ETFs for that) or by buying good assets (gold, gold stocks, deep-value stocks) on the dips and selling on the rallies.


Of course, some people will buy into the idea that the crisis really is behind us, deficits and debt be damned. Others, including yours truly, believe the markets are being played like marionettes by the administration and its allies ahead of the November election.


In time, I strongly suspect, we the people are going to wake up and find that our government has spent trillions of dollars in its attempt to put in the fix and, as has been the case with the military’s Iraq reconstruction efforts, 96% of the money will have simply vanished.

Weekly Bull/Bear Recap

Posted: 06 Aug 2010 09:00 AM PDT


Courtesy of RCS Investments

 Bullish

+ Manufacturing ISM shows a less than expected slowdown and refutes recent bear claims that manufacturing activity is falling off a cliff.  The manufacturing recovery is also seen in the latest AAR weekly report.  Meanwhile, the service sector is beginning to flex its muscle as the ISM Non-Manufacturing gauge rose to 54.3 which was better than expected (New Orders rose to 56.7 from 54.4).  Let’s not forget that the service sector accounts for roughly 90% of the economy.

+ More signs that the labor market is improving as the job sub index of the Manufacturing ISM improves to +58.6%, ADP shows a better than expected gain of 42,000, and Non-Manufacturing ISM employment sub-index rose to expansion territory, @ 50.9.  American Staffing Association continues to show growing demand. 

+ Eurozone continues to print strong manufacturing and retail PMIs, pointing to growth in the region and offsetting fears of a sovereign debt crisis.  The Euro continues to rally.  This region is strengthening and is doing its part in the global recovery.  (Links Courtesy of News-to Use)

+We have a record 10-30 yield spread in Treasuries, which points to a steeper yield curve and is not signaling deflation.  Inflation will win out at the end and this is a positive for risk assets, equities, commodities. (Link Courtesy of Calafia Beach Pundit) 

+ Mortgage applications for purchase rose for a 3rd straight week, coming in at +1.5%.  Demand has stabilized and now can begin building on this as jobs creation continues.

+The Savings Rate has increased more than expected and shows that households have been deleveraging while consumption has been on a steady climb upward.  At the same time, it also proves that the deleveraging cycle is further than most people think and balance sheets are being repaired quicker than expected. 

 

Bearish 

-  The recovery talk is a bunch of baloney.  Gallup poll points to another month of weakening in consumer spending and declining confidence (confidence has plunged to the lowest this year).  Other surveys point to the same thing.  The reason for the decline in confidence?  Firing continues in earnest and hiring remains tepid.  Wake up people! (Link courtesy of Pragmatic Capitalism)

- Manufacturing in China, the country to anchor the global economic recovery, is showing signs of a slowdown as PMI  gauges come in weaker than expected.  Meanwhile, just a test, but the parameters seem scary and if there really isn’t a bubble, why are they so severe?. 

-  Small businesses, which account for most of the nations job creation, just voiced their verdict over the sustainability of the recovery.  The Wells Fargo/Gallup Small business index hits a record low in July.  Discover Small Business Watch falls for the 2nd month in a row.  No jobs recovery if this sector can’t get off the ground. 

- Personal Consumption and Expenditures report shows a stalling in personal income and spending while previous month readings were weaker than previously thought.  High joblessness will ensure that wages do not grow strong enough to support consumption growth penciled in by analysts. Meanwhile, the savings rate continues to rise as the deleveraging process continues, despite desperate attempts by the Fed to reverse the cycle.  Structural challenges remain in the US economy, particularly the problem of debt.  

- Factory orders disappoint and points to a slowing in the sector that has carried the economy for the past 6+ months.

- The housing debacle continues in earnest.  Pending home sales fall to a record low down 2.6% after a 29.9% drop the month prior.  A double dip in housing is all but certain. Banks will feel renewed pain and another liquidity crisis may ensue as trust evaporates along with any legitimacy offered by FASB 157.     

 

Observations/Thoughts  

>Here’s pretty much the main reason why I went Neutral on the US dollar in early July.  Maybe that’s why it’s been going down since late June.  People are anticipating the QE2 announcement soon. 

> A great synopsis of the baby boomers; stats, etc. 

>Equities have come a long way from just 1 month ago, however many red flags continue to wave. Treasury Bond yields not confirming the rise (see Bull/Bear Recap from two weeks ago in “Observations”).  ISM Manufacturing report showed weakness developing in New Orders, and while we saw a higher Non-ISM Manufacturing report, breadth in the number of industries reporting expansion is deteriorating.  Small business is not participating in the euphoria (see 3rd Bearish point) and job creation continues to be anemic.  

> Things are heating up in the Middle East once again.  These “War Games” are what keep this issue on “The Market Radar”.

VIPS Memo (Link Courtesy of Zero Hedge)

http://www.msnbc.msn.com/id/37950730/ns/world_news-mideastn_africa/

http://noir.bloomberg.com/apps/news?pid=20601087&sid=a6D4GBFqhXRo&os=9 

>This has to be the most ridiculous idea I’ve read in a long long time and ties into how a bigger trend of shafting the financially prudent/savers/renters and favoring risk takers/homeowners and morons who overspent and took on bigger debts that they could handle; Moral Hazard and socialism at the national level folks.  I know I’m being general in the last statement as job losses turn an affordable mortgage into an unaffordable one; however, my point is that this sort of policy unequivocally shafts the taxpayer (to cover costs associated with the program, not to mention expose us to risk from covering a person with a lower credit score ` there’s a reason they have lower credit scores).  Next on the docket QE2 is being discussed.  “Savers, retirees, you are getting shafted as well.  The Fed is trying to turn your cash into trash".  Fed officials are trying everything in their power to debase our currency.  …sure, go ahead, screw the savers even more; make it harder for the retirees to save.  Get’em to spend; that’s gotta be the right prescription right?  Spend Spend Spend!!  Don’t save!  Don’t mind oil and commodity prices going higher either…just keep spending.  Finally, the final point in my rant, why do we need stimulus if we are in a “recovery”?  (Link Courtesy of Zero Hedge)

> So why has the market held up so well in the face of increasing bad news?  We are seeing the good side of moral hazard now.  Investors are expecting more funny money coming from the Fed and/or more stimulus goodies to keep fueling earnings growth, “the government’s got our back” is what they think.  Growth need not be organic to investors, as long as it’s coming.  I say that this is the good side of moral hazard because we aren't seeing a substantial crash on bad news at this point.  So things remain mostly stabilized.  As I stated in my Q2 outlook (See Gov’t Policy section), I think there’s enough political gas (fear) in the tank for another decent sized stimulus then that’ll be it.  As far as the Fed goes, it gets a little trickier, but having such an anemic recovery and oil being above $80 dollars seems like a strong argument against QE.  While not continuing QE would increase the chances of a deflationary outcome, initiating QE2 won’t have much of a positive effect either.  Eventually we would head right into stagflation as commodity prices would skyrocket at any sign of growth and treasury yields would become VERY sensitive.  If markets begin to sense that the Fed or the administration are beginning to waver in their support for the economy (due to excessive deficits or a scare on Treasury yields) then we may see the “moral hazard bubble” pop.  

Please visit RCS Investments for my expanded and detailed Outlooks (thesis), and my “Market Radar”, what I believe are the main factors affecting the economy and the financial markets.

Incredible Threat

Posted: 06 Aug 2010 09:00 AM PDT

Last week, Mr. James Bullard was being both cagey and clairvoyant. The president of the St. Louis Federal Reserve Bank noticed what everyone else has seen for months; the US economic recovery is a flop. GDP growth was last measured pottering along at a 2.4% rate in the second quarter, less than half the speed of the last quarter of '09. At this stage in the typical post-war recovery, GDP growth should be over 5% with strong employment. Instead, the "Help Wanted" pages are largely empty. Homeowners are still underwater. And shoppers are still largely missing from the malls that once knew them. Whatever is going on, it is not the "V" shaped recovery that economists had expected. Many now worry that the recovery might have a "W" shape – a "double dip recession" form, with GDP growth dropping down below zero in this quarter or the next.

Mr. Bullard told a telephone press conference he worries that the US economy may become "enmeshed in a Japanese-style deflationary outcome within the next several years." That is exactly what is likely to happen.

But it is a little early for the Fed economists to throw in the towel. They still have some fight left in them. If they were really on the ropes, for example, they could throw their "widow maker" punch – dropping dollar bills from helicopters. This would make sure that the money supply increases, even if the normal distribution channel – bank lending – is broken.

In a celebrated speech on Nov. 21, 202, Mr. Ben Bernanke, then a recent addition to the Federal Reserve Bank's board of governors, explained why deflation was not a problem:

Like gold, US dollars have value only to the extent that they are strictly limited in supply. But the US government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many US dollars as it wishes at essentially no cost.

It was that technology to which Mr. Bullard referred when he ceased being prescient and began being cagey. He was not advocating dropping money from helicopters, not just yet. He was hoping he wouldn't have to. Instead, he was raising the menace of inflation, in the hopes that that would be enough.

"By increasing the number of US dollars in circulation, or even by credibly threatening to do so," Mr. Bernanke had continued, "the US government can also reduce the value of a US dollar in terms of goods and services, which is equivalent to raising prices in dollars of those goods and services… We conclude that under a paper money system, a determined government can always generate higher spending and hence positive inflation."

There's the problem right there. The threat must be credible. Ben Bernanke's speech title left no doubt about his intentions: "Deflation: Making sure it doesn't happen here." Back then, the reported consumer price measure stood at 1.7% – slightly below the 2% target. Perhaps it was that 0.3% undershoot that set Ben Bernanke to thinking about it. If so, we wonder what he must think now. Today, the Fed is off-target by 75%, which is to say, the measured inflation rate is just 0.5%. It is beginning to look as though Ben Bernanke's reputation as a deflation fighter is more boast than reality.

The Fed's Open Market Committee meets on August 10th. On the agenda will be more direct purchases of US Treasury debt – bought with money that didn't exist previously. This is what economists call "quantitative easing." It is a way of increasing the money supply. But quantitative easing is not the same as dropping money from helicopters. If you drop money from helicopters there is no room for ambiguity, and no doubt about what happens next. In a matter of seconds, your currency will be sold off, your loans called, and your credibility ruined for at least a generation. Quantitative easing, on the other hand, is a much more subtle proposition. It allows the central banker to maintain his credibility, at least for a while, because it doesn't necessarily or immediately work. When the private sector is hunkering down, the money doesn't go far. Prices don't rise. Japan has done plenty of quantitative easing, with no loss to the value of the yen or to the credibility of its central bank. Europe has done it too. And so has America. The US Fed bought $1.25 trillion worth of Wall Street's castaway credits in the '08-'09 rescue effort. But instead of losing faith in America's central bank, investors bend their knees and bow their heads. Incredibly, the US now announces the heaviest borrowing in history while it enjoys some of the lowest interest rates in 55 years.

A threat to undermine the currency, we conclude, is only credible when it is made by someone who has already lost his credibility. That is, someone with nothing more to lose. Bernanke, Bullard, et al, are not there yet.

Regards,

Bill Bonner
for The Daily Reckoning

Incredible Threat 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."


Gold Permabears Never Learn, Nearing Extinction

Posted: 06 Aug 2010 08:59 AM PDT

Source: Gold Permabears Never Learn, Nearing Extinction

It appears the gold rocket launch is underway, which of course means that gold permabears will soon go into hiding. Was it really only 10 days ago that weak hands were panicking; Dennis Gartman was saying he was no longer a gold bull; and deflationists took center stage?

Intermediate term bottoms in gold always "feel" the same. Not only do you need a sleep-inducing period of consolidation followed by a steep sell-off, but you need sentiment to turn decidedly sour. You can always spot bearish sentiment through certain key words. These key words are: gold bubble; Robert Prechter; CNBC; gold bubble; deflation; gold bubble; shorting gold; gold bubble; "stupid" gold bugs; and of course, gold bubble. Come across these words enough times and you know a bottom is at hand. Get ready to back up the truck like I did when I said to embrace the sell-off in gold. At the time I said:

To me, the current sell-off in gold is reminiscent of the sell-off in stocks 3 weeks ago. While bears were blindly and recklessly going short, the smart money was sitting patiently with their fingers hovering over the "buy" button.

Based on the aforementioned, is it time to buy?



Shorting a bull market is the stupidest thing you can do as an investor. You are swimming against the tide and making investing a lot harder than it needs to be. The second stupidest thing you can do is lose your long positions in a bull market because you panicked.

At the end of the day there are really only two kinds of investors: the smart money and the dumb money. The dumb money always hands over ownership of shares to the smart money at major bottoms. The dumb money is scared of adding in a correction. The dumb money always chases tops.

The smart money understands the relationship between price and value. The smart money is patient. The smart money understands that the biggest profits in bull markets go to those who wait.

This bull market has years to run. Skeptics will be shorting this market and losing money for the next 5 years just as they have the past 10 years. Don't complain, just thank them for giving you the opportunity to accumulate. These same investors will be buying from you at much higher levels. Eventually I will join the bears and short the gold market with conviction, but it is not time yet.

Huh? No Inflation?

Posted: 06 Aug 2010 08:54 AM PDT


Does anyone really believe that?  Does Banana (Republic) Ben Bernanke really believe that?  If Bernanke truly believes that there is no inflation in the system, then he is a complete idiot.  If he understands the truth but continues to pontificate about no inflation, then he is a psychopathic serial liar.  In either instance he should be removed from the Fed.

But I digress.  I think by now most people understand that the Government-reported Consumer Price Index is not only a complete farce, but is a complete insult to the intelligence of anyone paying attention or not on entitlement program payments.  The most rediculous measure of price inflation, and the one that Bernanke insists on shoving up our ass, is the "core" CPI reading, which excludes food and energy.  Ummm, let's see.  If I don't eat and I don't heat my home or drive my car, then I don't have to worry about inflation.

Let's take a look at some charts and you can decide if you think price inflation is building in the system:

Heres' the CRB Commodity Channel Index, and index of 28 global commodities – it happens to be up 58% since its December 2008 low (please click on the charts to enlarge):

Feeder Cattle – Up 25% since December
Hogs - up 95% in the last year
Oil – up 37% in the last year
Orange Juice – up 93% in the last year
Wheat – up 57% since July 2010!
Anyone NOT see price inflation?  I was having a conversation with someone who has been a long-time goldbug the other night.  He mentioned that he was worried about deflation.  I asked him to explain to me where he was seeing deflation, other than in the price of housing.  He could not point out any examples.
What's more baffling to me is that those who are making the deflation argument point to debt destruction and the money supply.  Can someone explain to me where there is ANY debt destruction occurring?  Yes, the financial sector has experienced a big decline in debt outstanding, but that's STRICTLY because the Fed, aka Banana (Republic) Ben Bernanke, has monetized over $1 trillion of bad assets from the banks and banks have shifted $100's of billions of debt to the Treasury via TARP (yes Virginia, most of the TARP money has not been repaid).
We know that the U.S. Government debt outstanding is going to approach $14 trillion by the end of the year.  It began 2010 just below $12 trillion.  And here's the household mortgage debt, once again:


I'd love for a deflationist to explain to me where there is bona fide debt "destruction" occurring in the system…As for the money supply, my colleague and friend, "Jesse," wrote a blog a few weeks ago in which he presented the money supply as determined by the Austrian School of Economics.  Here's the link to his essay, which contains the definition of the Austrian's "True Money Supply," TMS.  And here's the chart:


Well, there you have it.  The two pillars beneath the deflation argument turn out to be pillars of sand.  Overall the level of debt in the system is not being "destroyed," and the money supply is not contracting in the way the Orwellian metrics are presented by the Fed.  Yes, the value of your home is crashing, but that may be the only real asset falling in price.  Well, golf course green fees and country club memberships are dropping in price too.


I know that based on my personal experience with the overall cost of living of my life, it seems to get more expensive every month.  But just wait until the price of the commodities above begin to work their way through the producer channels and into the grocery store, gas station, utility bills etc.  And soon we will feel the effects of the healthcare legislation (unless of course you are one of Obama's chosen category to receive healthcare which is paid for by the rest of us).   Oh ya, and then there's this:
That shows those nefarious excess bank reserves.  The Fed has been paying the banks interest on those reserves as a means of keeping QE1 from flooding the system and unleashing another source of price inflation:  more dollar devaluation.  That money shown above is printed money that has not hit the economy yet. However, in a futile attempt to pull the economy out of its current cliff-dive, the Fed has indicated it may stop paying interest on this money.  I suspect the money will be put to use financing Treausury issuance and into the stock market.  But since Government deficit spending is inflationary, this money will contribute to what I believe will be an acceleration in price inflation.  Rest assurred, however, that the Government reported measure of inflation will not show much, if any price increases.
And one more point I'd like to make.  There's a reason gold keeps moving higher.  It is the ultimate barometer of currency devaluation, which is the tautological twin of price inflation.  Gold has increased nearly 450% since its $250 bottom at the start of the decade.  If you don't think that's a measurement of the devaluation of the U.S. dollar, that's fine – but you are wrong.  But here's an article of interest from the world's second largest – formerly largest until China took over – buyer of gold.  It turns out that India is experiencing double-digit price inflation:  Rampant Inflation In India.  I got news for you in case you haven't figured this out:  expect that the demand for gold from India will accelerate this year.  I would surmise that is why the nearly 100,000 gold contract COT liquidation has produced only an 8% price correction.  Historically a massive COT liquidation produced 20-40% price corrections.  Got gold?

White Swans into Black: Golden Antidotes

Posted: 06 Aug 2010 08:45 AM PDT

Why Today's Deflation Won't Kill Gold

Posted: 06 Aug 2010 08:33 AM PDT

Aigail Doolittle submits:
With all of the attention given to deflation recently, I thought it would be interesting to think about how this scenario might affect gold. After all, gold is thought to be the ultimate investment in a time of inflation. Does this mean that deflation could destroy the value of gold?
More interesting than the question, in my view, is the road to the potential answer because there simply isn’t a clear one. However, based on everything I’ve read and researched, the outcome is closer to no: today’s deflation will not topple gold.
1. Gold’s Primary Trend Is Up – Gold’s decade-long chart tells us that if deflation is taking hold, it will not destroy the value of gold. We know this because this chart captures every fundamental possibility including that of deflation and in the face of this possibility, gold’s long-term and primary trend remains very clearly up.
However, we must define the word “destroy” because gold will not be immune to deflation or a general decline in prices. In fact, just as the chart above tells us that the primary trend is up, it suggests that gold may decline in value from current levels to about $900 per ounce or even lower. While this may seem like destroyed value to many, it will not be in relation to any other asset class in this period of deflation. It will be a good store of value in relative terms.
2. Today’s Deflation Will Bleed Into Hyperinflation – I believe the chart above is telling us the story of today’s variety of deflation or the sort that will twist into hyperinflation due to the world’s unsustainable 30-year borrowing binge that’s been transferred to the public sector, and thus sovereign debt and the underlying currencies, from the private sector. Under these circumstances, gold will be subject to the general decline in prices that will take hold under deflation as discussed above, but on a relative basis, gold will hold value due to the collective desire to hoard one of the oldest and most accepted transferrable stores of value.
3. Ultimate Hoarding Vehicle – Sam Hewitt of Sun Valley Gold Company makes the very strong point that in past U.S. deflations, individuals had the choice to hoard either in paper currencies or in gold. “The historical record,” according to Mr. Hewitt, “Demonstrates that loss of confidence in the issuer of paper currency is often a sufficient reason for individuals to choose gold over paper currency.”
While the conversation about the coming collapse of fiat currencies has become rather popular in many circles more recently, the chart above is telling us that many more people have been having this conversation for at least ten years. It is not a coincidence that that the run-up in gold occurred as the world’s debt storm was completing its final phases.
I also believe that the chart above is telling us that there have been many individuals who have been choosing to hoard gold due to a collective lack of confidence in a paper currency that may be pulverized by the U.S. deficit.
4. Untarnished Credit Quality – Another excellent point made by Mr. Hewitt is that when gold is compared to “widely available cash-substitutes, gold’s relative attractiveness boils down to relative credit quality.”
Specifically, “Whenever deteriorating credit conditions negatively impact the issuers of paper currency, investors turn toward gold as the preferred hoarding vehicle. To predict the future behavior of gold under deflation, one must include the impact of deteriorating credit conditions on the issuers of competing cash-substitutes in today’s markets.”
In the case of the current credit situation, the tremendous run-up in financial sector borrowing, and GSE borrowing in particular, that could not be sustained by the private sector, is now very squarely on the public shoulders of Uncle Sam. If this borrowing load proves to be unsustainable for the public sector as well, it will produce weakened Treasurys and a devalued dollar.
Gold, however, is a store of intrinsic value that will not be tarnished by such a crisis.
While such a possibility may render gold less valuable during the time of the crisis than it is today, it will retain value since it is independent of credit quality.
I would like to point out that all of this is different than seeing gold as a currency which many consider to be the food of traders looking to profit on what had been gold’s run up. Rather, this is viewing gold as a store of value.
This being said, I’ve read reports of areas in mid-Michigan which accept competing currencies including gold.
Being a chartist first and foremost, however, I think the most compelling reason to believe that gold will hold value rather well under deflation is the chart above. Gold’s long-term and primary trend is up and strongly so.
While it’s likely to decline from today’s levels, gold will not be toppled relative to where it was just 10 years ago as will most other asset classes and it may come out of this particular deflation (hyperinflation) dynamic as the one and only king.

Disclosure: No positions

Complete Story »


Democratic Stocks (And Bonds) Surge On Confirmation Central Planning Works

Posted: 06 Aug 2010 08:16 AM PDT


No longer in the twilight zone, the market is now democratic beyond reproach: of the idiots, for the idiots, by the idiots. The 10 Year is at 2.81% and refuses to budge as stocks explode. The catalyst - consumer credit, which came in slightly better than the expected trouncing even as the key source is revealed to be... entirely the Federal Government! In other words, forget Kremlin Joe: central planning works. Oh, and the Double DIP-ression is once again fully priced in.

Note the 10 year-ES divergence. At this point this is a given.

And below is the main change in consumer credit holders in Q2. The main one has been highlighted. (source: the Cave Of Ali Bernbaba and the 40 Wall Street Thieves)

Australian Dollar’s Run May Hit a Short-Term Snag

Posted: 06 Aug 2010 08:15 AM PDT

$3.2 billion. That's the record trade surplus Australia's Bureau of Statistics announced on August 3, thanks in part to Chinese demand for the country's rich iron ore and coal exports. And that's just the latest good news from the island continent that has speculators feeling bullish about the Australian dollar (AUD).

But a closer look at the underlying fundamentals, including central banking mentality, reveals ample evidence that the currency may be in for a brief and wayward turn lower.

Don't get me wrong – there are a lot of good things happening in Australia. Its annualized GDP is expected to grow at a 3.5-4% pace in 2010, led by strong manufacturing sector activity. And the Australian Industry Group and PriceWaterhouseCoopers recently released a joint survey that showed continued improvement in the sector. Its index rose by 1.5 points to 54.4 in July, up from 52.9 in June. (Anything above 50 indicates expansion.) The report's sub group assessments were also optimistic, with both production activity and order flow jumping higher as a result of increased business spending and demand.

The rise in production and manufacturing activity has been a boon for the labor market. Australians are finding employment in every corner of the country, which is driving the national unemployment rate down. As of the latest release, unemployment in the "land down under" was a paltry 5.1%. Comparatively, US unemployment currently stands at double the rate.

So, growth and employment prospects have added to bullish Australian dollar sentiment. Higher rates of economic expansion are expected to fuel consumption and more interest rate hikes by the nation's central bank.

But not everything is as rosy as it seems. Yes, people are making money. However, with the fears of a global recession and higher interest rates at home, Australians aren't spending as much as they should. This is showing up in the bottom-line sales numbers for many of Australia's retailers. Retail consumption has been appalling in the last couple of months, rising only minimally since the beginning of the year.

Even more disappointing is the fact that Aussie consumption has now dipped below the levels in the United States – where spending is about 2% and the savings rate has now crossed the 6% line. Granted, retail sales don't contribute a whole lot to the gross domestic product of the region – constituting about 23% of overall productivity. But it's never good when consumers aren't willing to spend in good economic times.

Lower spending and consumption breeds lower prices as retailers discount merchandise to compensate for the drop in sales volume. The competition for consumer market share will bring prices down across the board – fostering lower inflationary pressures. And that puts Australia's central bank into standby.

Governor Alan Bollard and members of the Reserve Bank of Australia rely on an inflationary target of 2-3%. The Bank began raising rates last year when it looked like the inflation rate would breach 3%.

But consumer prices are now expected to trail off from their recent 2.7% reading – well below the 3% target. So the central bankers will contend that inflationary pressures remain contained, and the economy is growing at a moderate and controlled pace. The pause in rate hikes will leave some high-rate seekers in the Australian money markets disappointed, sparking a short-term exodus as investors prefer to take profits while they can.

So while the Australian dollar is approaching four-month highs, the short-term sentiment is bearish.

Australian assets are overbought. Stifled consumer spending threatens further Aussie economic expansion. And expectations are for no further moves in monetary policy until next year.

Taken together, it leaves little impetus for another leg higher in the Australian dollar in the meantime.

Richard Lee
for The Daily Reckoning

Australian Dollar's Run May Hit a Short-Term Snag 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."


Consumers Confident… of US Debt Legacy

Posted: 06 Aug 2010 08:00 AM PDT

This US shopper is confident, well, at least that the "recovery" Treasury Secretary Tim Geithner recently "welcomed" the nation to, via his New York Times op-ed, isn't real. Instead, he's preparing for the worst.

To the extent the economy hasn't completely collapsed, as part of a needed a correction, it's "thanks" to taxpayer-funded bailouts and loans taken out against the nation's future fiscal integrity. Like this consumer's grandkids, generations of Americans will be on the hook for the accumulated debt.

Consumers Confident… of US Debt Legacy 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."


Gold Rises for 7th Straight day

Posted: 06 Aug 2010 07:49 AM PDT
at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)