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- A Return to the Gold Standard Has Major Shortcomings
- Buffett Says “Buy Stocks”: I Say Buy Agricultural Stocks!
- India Markets Thursday Wrap-Up: Profit Booking Takes a Toll
- The Three Gold Camps
- Asset Allocation With Broad Commodity ETFs
- Silver Stuffings
- Time to Go Long on Corn
- China and Russia dump dollar in mutual trade
- European Crisis = U.S. Crisis
- Holiday Squeeze on the Dollar, Gold & Stocks
- Whats Next for Silver
- Gold, Juniors, Gas: Technical Thumbs Up!
- Unlike Gold – Stimulus Is Effective Only Under Certain Circumstances
- Market Says Be Patient With Entry Points For Gold
- Holiday Squeeze on the Dollar, Gold and Stocks
- Central Banks are NOT ordinary Gold Investors
- Unsound Money in China
- Financial Problems – Thy Name is Debt!
- Profiting from Information Overload
- china/russia reject dollar
- Happy Thanksgiving! Are You Better Off Today Than You Were Four Years Ago?
- Dollar Going Down
- silver remains explosive..December open interest remains high
- Why gold is better than cash
- Gold Jumps as Euro Crisis Deepens, "Buy Now If Ever" Urges Fund Manager
- Gold Seeker Closing Report: Gold and Silver Fall Slightly
- There's a big breakout in this unusual sector
- U.S. jobless claims fall to lowest level since July 2008
- Gold up in Euros and Pounds as Eurozone and North Korea Concerns Continue
- BIS gold records may facilitate double counting, study concludes
| A Return to the Gold Standard Has Major Shortcomings Posted: 24 Nov 2010 09:38 PM PST World Bank president Robert Zoellick has stirred up a hornet's nest with his recent call for a return to a gold anchor in the global financial system. The usual suspects immediately denounced him - Keynesian Brad DeLong has [gone so far as to] anoint Zoellick the "Stupidest Man Alive" - [and I would like to add my voice to the chorus by explaining] the dangers of Zoellick's gold proposal, and why fans of the classical gold standard should be wary. Words: 1708 |
| Buffett Says “Buy Stocks”: I Say Buy Agricultural Stocks! Posted: 24 Nov 2010 09:38 PM PST If you think the dollar will decline further then it makes sense to buy commodity stocks and even if there is a global recovery that's faster than we expect many commoditiy stocks will still outperform because supply is simply unable to meet the increasing demand for some of the commodities. [Let me tell you] which one(s) to buy[- and why]? Words: 1475 |
| India Markets Thursday Wrap-Up: Profit Booking Takes a Toll Posted: 24 Nov 2010 09:25 PM PST Equitymaster submits: After staying above the dotted line for most part of the morning session, profit booking took a toll in the ensuing hours as the indices oscillated to either side of yesterday's close. However, selling pressure intensified in the final hour and the markets closed well into the red. While the BSE Sensex closed lower by around 142 points (down 1%), the NSE Nifty lost around 66 points (down 1%). The BSE Midcap and the BSE Smallcap were not spared either as they racked losses of 2% each. Barring IT stocks, selling was witnessed across sectors. Complete Story » |
| Posted: 24 Nov 2010 09:23 PM PST
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| Asset Allocation With Broad Commodity ETFs Posted: 24 Nov 2010 09:07 PM PST Morningstar submits: By Abraham Bailin As evidenced by the assets flowing into the commodities space, the idea that they are an asset class has taken root. Total net assets of commodities-focused exchange-traded and open-end funds have been growing rapidly since the market collapse, increasing from $38.5 billion in October 2008 to nearly $129.7 billion today. Complete Story » |
| Posted: 24 Nov 2010 08:50 PM PST
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| Posted: 24 Nov 2010 07:25 PM PST Money Morning submits: by Jack Barnes We've already seen the effects of the global currency wars - the so-called "race to the bottom" that's helped send gold to all-time-record highs. And we'll soon see the fallout from the worldwide skirmish over rare-earth supplies, which is certain to impact the high-tech sector. Complete Story » |
| China and Russia dump dollar in mutual trade Posted: 24 Nov 2010 05:33 PM PST Yesterday, another brick was taken out of the dollar's fundament. China and Russia announced they were quitting the dollar and instead going to trade in renmimbi and rubels from now on. The announcement couldn't be less pungent. |
| Posted: 24 Nov 2010 04:56 PM PST Economic data is coming in mixed today. While initials jobless claims dropped to the lowest level since July 2008, median home prices fell to a 7-year low. With such conflicting data, the question naturally arises: Will the U.S. economy recover, especially without real estate leading the way?
To get a glimpse of what awaits us, we should turn to Europe. Ireland continues to make headlines with its IMF-induced austerity measures, which I don't think will prevent Ireland from defaulting on their debts. Ireland basically has 2 choices: 1) outright default, and 2) attempted austerity followed by a severe Depression. Option 3, default via devaluation, is just not possible given the current Euro currency arrangement. The risk in Ireland is that confidence in the banking system collapses. If this occures, the economy will be further depressed, which will force even more layoffs in the public sector. The problems with having such a bloated public sector are coming to the fore. When you cut government spending to promote austerity, you are concurrently creating massive unemployment, which in turn depresses tax revenues. The non-stop talk about IMF-imposed austerity measures is cute, but it won't work because it's way too late. EU nations must devalue and restructure debts. Before then, we are likely to see a contagion spreading to peripheral Euro nations. What do you think gold is going to do when this happens? I'm patiently waiting for the inevitable defaults while our genius leaders run around like headless chickens. The U.S. is headed down a similar path, with the main difference being that the U.S. can devalue at will. This takes a deflationary Depression off the table. Rising debt service costs as a percent of revenue will create a flight out of U.S. bonds, like it always does in history, whether we are talking about Pre-Revolution France or Post-WWII Great Britain. In order to close the budget gap, I can virtually guarantee our leaders will propose higher taxes. Taxes are already rising, but very insidiously; after all, how many of you keep track of rises in State payroll taxes? Everyone is focused on Federal income taxes as if they were the be-all and end-all of taxes. What about effective property tax rates? What about the coming rise in health care costs for employers? The ironic thing is that higher taxes will make our budget problems worse! In a depressed economic environment, you need to promote investment. There needs to be some sort of mechanism by which debt can be converted to equity. Why is our government enacting programs that will undoubtedly lead to a capital flight out of America? It makes no sense. On the other end of the spectrum, cuts in government spending are going to create massive spikes in unemployment followed by further declines in real estate. What does this mean? It means the equity people were planning to use for retirement will disappear, which means they will be hesitant to spend. It means the economy will be caught in a self-reinforcing downward spiral. It means confidence will eventually collapse. Our leaders have taken us down a road to perdition that is irreversible. I can guarantee that most policy responses will be ill-conceived. Anyway on a brighter note, just wanted to wish everyone a Happy Thanksgiving! Even admist all this chaos, there is plenty to be thankful for. I'll be back on Friday. Source: European Crisis = U.S. Crisis
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| Holiday Squeeze on the Dollar, Gold & Stocks Posted: 24 Nov 2010 04:47 PM PST The past week and a half has been as choppy as it gets for the stocks market. Thankfully the herd mentality (fear & greed) stays the same. Understanding what others think and feel when involved in the market is one of the keys to making money consistently from the market. The crazy looking chart below I will admit is a little tough on the eyes, and I should have used red and green for holiday colors but green just was not going to work today so bear with me . Market Internal Indicators – 10 minute, 7 day chart It shows and explains how I get a read on the overbought/sold conditions in the market. There are several other criteria needed to pull this trade off but it is these charts which tell me to start getting ready to take partial profits, buy or take short positions. The top section shows the NYSE volume ratio line. When the green line spikes is means there are more sellers than buyers by a large amount and I call this fear. On the other hand when he red line spikes it shows everyone is chasing the price higher because they can't stand the thought of missing another rally. I call this greed or panic buying. You buy into fear, sell/short into greed. Important point to note though… We are getting another sell/short signal here (Wednesday) but knowing Friday will be light volume and knowing that light volume means higher prices, I think we should get a better opportunity to short this new down trend next week at possibly a higher level. The market may have a short squeeze in the next 2-3 days. Just so you know, a short squeeze is when the market breaks to the upside on light volume forcing the short positions to cover. This creates a pop in price, only for it to drop quickly after. But, if we get a pop with solid volume behind it, then we could just see the up trend start again and we would then look to play the long side. Only time will tell…
Rising Dollar & Gold – I Don't Get It? Generally when the dollar raises gold drops, but they are both moving up in sync, and really I don't see the problem with this as it has happened many times in the past. Currently I am neutral on gold and silver because of this situation though. I feel something is about to happen in a week or so that will change things in a big way.
Mid-Week Gold, Dollar & Stock Trading Conclusion: Recently members had a great short play locking in 2.2% gain on one of our positions this week as we shorted the market using the SDS inverse SP500 ETF. We also continue to hold two other positions with a 22 and 24% gain thus far and I think going into year end things are really going to heat up. Get My Free Trading Guide Book and My Free Trading Ideas Here:http://www.thegoldandoilguy.com/trade-money-emotions.php
Chris Vermeulen
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| Posted: 24 Nov 2010 04:45 PM PST David A. Banister- www.TheMarketTrendForecast.com In latter August I penned a forecast for my subscribers to TMTF on Silver, and below is a brief excerpt from August 31st: I believe Silver is about to stage a pretty large advance based loosely on the Elliott Wave pattern I see unfolding after a 9 odd month consolidation. (Obviously, there are also fundamental fiat currency/debt events worldwide that give it the underlying bull chart pattern). Since the average person can't run out and buy an ounce of Gold for $1,240 tomorrow, as the unfolding of the fiat crises continues to enter the public psyche, you will see a strong populace movement into buying silver, silver coins, etc. To wit, many silver stocks are moving up strongly of late, signally an imminent breakout of this precious and industrial metal. The triangle pattern has taken nearly 9 months so far, for starters before a broad pullback. I bring this up now, some 11 weeks later because Silver did in fact rally up from around $19 per ounce to $29 per ounce, and this was forecast well in advance using my crowd behavioral methodology and pattern recognition. The explosion in price I predicted happened much faster than even I expected, but does show the power of the crowds as they take hold of a new trend or a perceived trend and run with it. Part of the theory to be long silver also had to do with it being "poor man's Gold", which I indicated in my forecast. This is also crowd psychology in it's finest form. People perceive Gold to be "too expensive", but they can buy silver for only $29 an ounce. To wit, most investors do not really understand the difference between a stock that has 2 billion shares outstanding and one that has 20 million shares outstanding, they only care about price. They often think if a stock is $2 it's "cheaper" than the stock at $100, little do they realize that a $2 stock that goes to $1 is a 50% loss, but they perceive that as a small risk due to the price. With Silver, you have the mom and pops running out and buying it because it's "cheaper" than Gold. Now that Silver has run to $29, my target, and then dropped back, what should expect next? Well, we are in that "broad pullback" I mentioned back in late August that would occur once $29 was hit. Technically speaking and looking at typical crowd behavior, I am expecting consolidation to continue for awhile under $29 per ounce. I call this recent pattern an A B C rally, and once the C wave ends at $29 in this case, forecasting the next move is extremely difficult and can be exasperating. The C wave ran from $19 to $29, and at the tops of those moves everyone is bullish and breathless. Figuring out how the crowd behaves after those patterns is similar to pulling a rabbit out of a hat. With that said, I would expect a 38-50% retracement of the $10 move to about $24 an ounce worst case, and then we should re-attack the $29 highs and likely move into the $32-$34 per ounce range within the next 60 days or so. Silver will continue to out-perform Gold for the foreseeable future as well if I'm right. It appears by my chart below that we already had our initial corrective low, and now we will consolidate and break out.
Consider subscribing to our free reports today by going to www.MarketTrendForecast.com, and there you can take advantage of a one time coupon as well. I cover the SP 500, Gold, and Silver on a regular basis.
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| Gold, Juniors, Gas: Technical Thumbs Up! Posted: 24 Nov 2010 04:42 PM PST A substantial debate is emerging around the Gold $1315-1424 zone. Is Sir Gold overbought and due for a big fall? Or do you ride your holdings above 1424 on a new leg higher! 2. I guess if you used the marked to model numbers of the OTC derivatives (OTCDs) for your calculations, you could, maybe, make an argument that gold is overdone. 3. On the other hand, if you audited the Fed, marked the derivatives to market, and brought back the founding fathers to mark the current "we're here to help" congressional model penguins to a market pricing of…"into the clink you go for treason", maybe the "chart" says Sir Gold is actually… drastically undervalued. 4. The value of gold is in the range of $50,000 to $100,000 per ounce, if the OTCDs are marked to market, and arguably so even if they are not, by some calculations. It's unlikely (but it is possible) gold goes to atrading price of $50,000 or higher in this bull market, but that is, here and now, the actual mathematical value of your Mighty Metal. 5. The Gold Market is the ultimate market, so it makes sense you approach the ultimate market with the ultimate strategy. Gold and food do battle for title of the world's lowest risk investment, and in a page out of the bizarre and surreal handbook, Elmer Fudd Public Investor believes these two items are the most risky investments. 6. I absolutely believe with my heart that the world's most risky investment is: listening to anything Elmer Fudd Public Moron has to say about anything in the investment arena. Listening to Fudd, or worse, following him on his crazed multi-year price chases, is your ultimate investment risk. Not buying food or gold. Fudd is a pathetic failure in the markets, and the twisted banksters have maniacal plans, in play now, to send him to a real breadline, just as they did in the 1930s. 7. Gold is the ultimate investment for many reasons, one of those being that Gold is portable. If you are a farmer, you have to either fight or negotiate with despots (Govt Gman?) when under siege. With gold, you can run with what you have. It's a little more difficult to put a farm in your car and drive off. So while the door is open for food to claim the title of world's lowest risk investment, the world's ultimate investment is the one, the only: Gold! The runner ups are all way behind Gold, really out of sight. That's your golden reality. The list of reasons why gold is the ultimate investment is very long indeed. If you really feel you may have to run, diamonds are an absolute must-own, the ultimate in portable wealth with some liquidity, albeit less than gold. Silver is good for small amts of wealth transport. 8. Gold and diamond jewellery can be insured and jewellery is much more legally portable than a "loot sack" you forgot to declare when on the move. Many safe deposit boxes forbid storage of gold coins but allow gold jewellery. If you think the Gman might be moving in for the kill, Indian jewellery is at the top of your gold foundation shopping list, your gold and diamond shopping party list. 9. Fudd buys a new TV with a 500 button remote control and a high-depreciation mini-van, with a loan from the banksters at the end of the bond bull market. You buy some 10 ounce 22 carat gold necklaces, (with a few diamonds studded on there), call the insurance people, and store some in the safe deposit box, some with private storage, and bury some on a piece of property you have somewhere. Who comes out ahead at the financial grocery store this week? My bet is… you do, but it starts with action, not talk. The crisis is accelerating, not ending. Are you accelerating your protective actions, yes or no? Bond put options vs Gold Jewellery is the story of Good Drugs vs Good Concrete. Build your gold house foundation in the morning, then roll the bond dice in the casino at night. Play later, work first. 10. Gold Market Tactics: I believe we rise over $1424 rather than taking out 1315, but my buying into the $1315 lows is not based on that view. I don't care if we start a new leg over $1424, or drop into support at $1225, or (something few have thought of) just trade sideways in a 1320-1424 range trade for awhile. Of paramount importance is you want to be booking wins and be comfortable with your positions, in whichever of the 3 possible scenarios ultimately materializes. 11. Look in the financial mirror. Is that you? Are you standing there with a smile thinking about the 3 scenarios, or is perhaps a little sweat starting to drip on the bigger down days as you wonder what is taking so long for gold to make a move? Perhaps you see Dr. Greed standing there in the mirror, who "knows" the future so you are leveraged 20 times over to make all the "beeg mownee"? 12. You want to see "Sir Comfortable" in your current Gold price mirror. The tactics to maintain that solid image are these: lots of gold, lots of cash, you have been a buyer into 1320, and you are prepared to sell- a modest amount- into 1424. 13. You are prepared to buy down to 1225 with a block of risk capital. You are not afraid to do the occasional valuation of your net worth in ounces, and understand that a strong argument has been made by one of my subscribers (who has BOTH a Harvard MBA and a medical doctorate degree) that valuing your worth in ounces, not dollars, over your lifetime, is the better approach for you. Are you selling gold on strength, or actually buying cash? Be careful how much cash you really want to buy, here and now. 14. It could be argued that dollar-based accounting is really marking your assets to Govt model, whereas ounces based accounting is marking your net worth to market. Models work, yes. Until they don't. Until they blow up or turn into an endless wet noodle. 15. Even though gold stocks are my "super theme" now, that doesn't mean you should hold zero physical gold. The answer as to when you should hold zero physical gold is: Never in your life. 16. Here's a look at my "triple pgen play" on the GDXJ. Click here now to view: GDXJ Triple Winner Chart 17. Look at the move upside from the base of the middle pyramid formation. Price has moved from the $36 area to the $39 area. You are, or should be, already booking wins on what you bought into 36, while you are also comfortable holding a lot of cash for a move to GDXJ 32, if it happens. The sells into 39 have freed up some more cash, while the outer core (swing) positions and inner core buys are rising in value. You are, unquestionably, in a solid position. You are a market winner. 18. Here's a screenshot of the placement of $100,000 in cash into that middle range risk capital allocation pyramid: GDXJ $43-36 Risk Capital Allocation Map 19. I believe we blast thru the $43 upside ceiling, a Golden Apollo Rocket going thru Hot US Dollar Butter, but I don't know that for sure. Respect and accept the future as unknown. Here's a video look, providing more detail for you on how to play the GDXJ with the tactics asset allocation "map" above. Click here now to view: GDXJ Risk Capital Map Detail Video 20. I don't like losing, in case you didn't notice. So I don't. I don't book losses. I book wins, and when I get IN to something, I'm not there to take prisoners or play tiddly winks. I told you that the natgas asset would eventually outperform oil and the natgas glut is a bearish ant pipsqueaking on the ground, on the cusp of saying hello to a hyperinflationary steamroller. Price up 4 days in a row. Here's the daily chart. Click here now to view: Nat Gas New Highs for the Move Chart. 21. The weekly chart is what I would term dramatically bullish. I'm aware that my competitors are telling you to avoid this asset while Jim "Mighty Man" Rogers pours risk capital into it. You decide what you should be doing. A look at the weekly chart shows NG has now "sealed the deal", technically, on marking the recent lows I've denoted with a blue circle, as a legitimate chart line point. 22. Now we have a wedge formation on the chart that appearsexplosive to me. The monster short positions, particularly in UNG-nyse, like to talk about contango. Soon these bustouts are play my game. It's called: constrangle. As in: strangle the bears by the neck, say goodbye, and leave them blubbering for mommy. Click here now to view theawesome weekly chart for natgas: NatGas Weekly Upside EXPLOSION Chart 23. When you get into asset accumulation to build wealth, there is no backing out. The price goes down, the buys continue. Gas now, is gold at $400. End of story for the bears, beginning of the profits story for you. 24. Paid subscriber GoldLion calls the silver chart liquidity flows picture, right now, the most bullish he's seen since the exact low point of Oct 2008. The gold community knows both he and I called gold and particularly gold stock raving buys into the lows of the summer at 1156 while most doubted. Does anyone know how insanely bullish the liquidity flows picture on silver is? Special Offer For Website Readers: Send me an Email tofreereports4@gracelandupdates.com and I'll rush you my new Flying Five Silver Stocks report! Unknown to most in the gold community, it is the banks in control of the longs in silver now, and silver stocks look set to go ballistic! Silver is Gold's favourite toy, and silver stocks come with huge risks, which makes professional capital allocation critical! Thanks! st Thank-you
Email: stewart@gracelandupdates.com
Stewart Thomson / 1276 Lakeview Drive / Oakville, Ontario L6H 2M8 Canada Risks, Disclaimers, Legal Are You Prepared?
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| Unlike Gold – Stimulus Is Effective Only Under Certain Circumstances Posted: 24 Nov 2010 04:39 PM PST
This essay is based on the Premium Update posted on November 19th, 2010 A recently published paper that studied the stimulus efforts in 44 countries showed some interesting findings. Ethan Ilzetzki of the London School of Economics and Enrique G. Mendoza and Carlos A. Vegh of the University of Maryland argued in their National Bureau of Economic Research paper that fiscal stimulus can be quite effective in low-debt countries with fixed exchange rates and closed economies. But stimulus measures are generally not as effective in countries like the U.S. with high debt and floating exchange rates. The authors of the paper pointed to a series of specific circumstances that throw a wrench into the effectiveness of increasing public spending: How much of the stimulus money ends up flowing abroad? How do investors respond to fear of future interest rate increases? New York Times columnist David Brooks mentioned the study and wrote in a column this week: When you look around the world at the countries that have come through the recession best, it's not the countries with the brilliant and aggressive stimulus models. It's the ones like Germany that had the best economic fundamentals beforehand. It all makes one doubt the wizardry of the economic surgeons and appreciate the old wisdom of common sense: simple regulations, low debt, high savings, hard work, few distortions. You don't have to be a genius to come up with an economic policy like that. Our take is that the Fed knows that the stimulus is going to work as advertised, but they decided to go with it anyway, simply because they are desperate. Speaking of geniuses and economic surgeons, in an unusual move, top Fed officials came out this week to defend their recent move to inject $600 billion more into a sluggish economy. The Federal Reserve has come under attack both at home and abroad with a torrent of criticism from foreign leaders, Congressional officials, economists and Alan Greenspan, the former Fed chairman. Perhaps what unsettled the Fed officials most was an opinion piece by Greenspan in The Financial Times last Thursday. Greenspan said the United States was "pursuing a policy of currency weakening" and increasing the risks of trade protectionism. Another barrage of criticism came in the form of an open letter this week to Ben Bernanke, in which a group of conservative economists, writers and investors urged that the Fed's action "be reconsidered and discontinued," arguing that the bond purchases "risk currency debasement and inflation." The group included Michael J. Boskin, a former chairman of the White House Council of Economic Advisers; the historian Niall Ferguson; and the economist John B. Taylor, one of Bernanke's most prominent critics. In a rare on-the-record interview, William C. Dudley, president of the Federal Reserve Bank of New York said that the Fed's move was not intended to affect the value of the dollar, but rather to encourage a quicker, stronger recovery. He said: We have no goal in terms of pushing the dollar up or down. Our goal is to ease financial conditions and to stimulate a stronger economic expansion and more rapid employment growth. And in an interview with The Wall Street Journal, the Fed's new vice chairwoman, Janet L. Yellen, defended the decision in broadly similar terms. Dudley rejected the idea that the Fed might be setting the stage for uncontrollable inflation in the future. Dudley cautioned that: One shouldn't view this instrument (quantitative easing) as a panacea or a magic wand that's going to make the economy recover rapidly. It's going to be a long and bumpy road to a strong and vigorous expansion, but this will be helpful rather than hurtful. We say, that remains to be seen. Meanwhile, let's take a look how gold performed recently (charts courtesy of http://stockcharts.com.) In the very long-term chart this week, we see that gold has not moved above the upper border of the very long-term trading channel. As we have stated in previous essays, this is an important resistance level. It was likely that some consolidation will be seen in the near-term so this should not be of any great concern as it is quite a natural phenomenon. The important point is that our next target level, after moving above the trading channel will be close to $1,600. This target has been arrived at by utilizing two technical tools. One is the upper border of the accelerated trading channel and the second is extrapolation made my applying the 1.618 Phi (φ) number. Both tools indicate a likely move to the $1,600 level perhaps in the first quarter of 2011. Our second gold chart this week looks at gold vs. corporate bonds. Clear trends have been seen in the past and for this reason we are including this chart as yet another perspective in analyzing gold's current trends. Previous consolidation periods and breakouts have been followed by strong rallies with very sharp increases seen after the breakout occurs. This chart clearly allows you to separate the consolidation phase from the big rallies. Additionally, once the breakout is seen, the rally takes gold quickly higher. It seems that this may indeed be happening now. As we have previously stated, if this index level holds above 5.0, a major rally is quite likely. What we have seen in recent days is, even with slight corrections and taking intra-day highs into account, this level has indeed held. The small consolidation seen immediately after a breakout is quite normal, and should not be viewed as bearish. These are not the only bullish long-term charts that we have prepared for you this week. Let's take a look at the XAU Index below. This week's XAU Gold/Silver Index chart reveals that index levels have moved above previous highs and the breakout is presently being tested. Although not yet validated, this is a significant development, as the index values are here for couple of days. Therefore the situation appears to be bullish. It seems unlikely that this trend will reverse. Looking back to 2005, a very similar trend can be seen. At that time (in the final months of 2005), the index moved to the level of the previous highs, declined and then moved up significantly. It seems quite possible that today's trend will follow this very pattern. We will continue to monitor this situation closely and utilize our Market Alert capabilities when warranted. The HUI Index serves as a proxy for gold stocks, and on the above chart we have confirmation of points made earlier in this essay. The rally here is significant and the breakout is being verified. Two important resistance lines are being tested as support. So far the first support line was not decisively broken. We've seen intra-day moves below it, but finally the HUI index levels are now above it. This is a bullish indication for mining stocks going forward. Summing up, the long-term situation appears very bullish for gold, silver, and mining stocks. Both, gold and mining stocks appear to be gathering strength for the next big run up. Consequently, the long-term capital should be already invested in the precious metals market. To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, I urge you to sign up for my free e-mail list. Sign up today and you'll also get free, 7-day access to the Premium Sections on my website, including valuable tools and charts dedicated to serious PM Investors and Speculators. It's free and you may unsubscribe at any time. Thank you for reading. Have a happy Thanksgiving holiday weekend and a profitable week! P. Radomski * * * * * Interested in increasing your profits in the PM sector? Want to know which stocks to buy? Would you like to improve your risk/reward ratio? Sunshine Profits provides professional support for precious metals Investors and Traders. Apart from weekly Premium Updates and quick Market Alerts, members of the Sunshine Profits' Premium Service gain access to Charts, Tools and Key Principles sections. Click the following link to find out how many benefits this means to you. Naturally, you may browse the sample version and easily sing-up for a free weekly trial to see if the Premium Service meets your expectations. All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mr. Radomski and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above belong to Mr. Radomski or respective associates and are neither an offer nor a recommendation to purchase or sell securities. Mr. Radomski is not a Registered Securities Advisor. Mr. Radomski does not recommend services, products, business or investment in any company mentioned in any of his essays or reports. Materials published above have been prepared for your private use and their sole purpose is to educate readers about various investments. By reading Mr. Radomski's essays or reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these essays or reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise that you consult a certified investment advisor and we encourage you to do your own research before making any investment decision. Mr. Radomski, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
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| Market Says Be Patient With Entry Points For Gold Posted: 24 Nov 2010 04:36 PM PST We own gold, like gold, and plan to buy more gold, but the market is telling us to be patient for a while longer in terms of looking for a good risk-reward entry point for GLD (gold ETF). Numerous short-term indicators are still flashing some "be careful" signals.
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| Holiday Squeeze on the Dollar, Gold and Stocks Posted: 24 Nov 2010 04:30 PM PST GoldandOilGuy |
| Central Banks are NOT ordinary Gold Investors Posted: 24 Nov 2010 04:30 PM PST |
| Posted: 24 Nov 2010 01:39 PM PST The Aussie market is bouncing - rather mildly - off multi week lows today. Funnily enough, it's been all down hill for the ASX200 since Ben Bernanke announced part two of the Fed's large-scale money printing program in early November. Since that announcement, the index has fallen around 4.4%. So a bit of a rally is in order. But I don't think it will be anything to get too excited about. Over the past two-and-a-half months the ASX200 has range traded between 4,600 and 4,700 (except for a brief Bernanke induced pop to 4,800 in early November). There's nothing to suggest this trend, or rather lack of one, will change anytime soon. Central banks have created massive amounts of liquidity and this is keeping asset markets afloat despite the dubious underlying fundamentals. But sooner or later trading ranges break to the upside or the downside. With the RBA maintaining its tightening bias, and credit growth in Australia remaining very weak, it's hard to see how a move higher could be sustained in the short term. That's the bad news. The good news is that you won't be subjected to that inane cliché, the 'Santa Claus Rally'. Gerry Harvey certainly doesn't see one materialising. What about the arguments for a downside move? Well, the eurozone is an obvious example. At best the authorities will be able to contain the situation for another few months. But it looks like the markets are beginning to realise the peripheral countries are effectively insolvent, and that debt restructuring, not more debt, is the answer to their problems. Closer to home though, China is looming as a major threat to Australia's ongoing prosperity. The consensus view in this country is that China is going through a decades long boom and we'll continue to ride on their coat tails for years to come. I think that is a dangerously complacent viewpoint. Look, anyone with a minor understanding of history and economic development can see that the 21st century belongs to China. Just in the same way that the 20th century belonged to the US. But it wasn't smooth sailing for the US and it wont be for China either. One of the biggest myths about China is that its huge FX reserves (around US$2.65 trillion at last count) are a sign of strength. They are not. The reserves are a product of a mercantilist policy that is now starting to backfire. More to the point, these FX reserves are a product of unsound monetary policy from both the US and China. The US, as owner of the world's reserve currency, prints money at will. It avoids discipline because countries like China buy up these dollars to maintain export competitiveness. Ben Bernanke, of all people, highlighted the unsound nature of the global financial system in a speech last week in Frankfurt. In a moment of extraordinary hypocrisy, he pointed out the financial system was no longer working property. It's actually been working pretty much the same way for decades, but the US is no longer benefitting from it as they once were. The system has allowed the US to spend way beyond its means since 1971. Now, the spending spree is over and they want to change the system. China is not so keen. Which brings me back to why China's mercantilist policy of building FX reserves is a long-term weakness, not a strength. Here's how it works. China's reserve accumulation is a product of it buying US dollars in order to keep the yuan from appreciating. It buys US dollars with newly created yuan, which end up as reserves in the Chinese banking system. The US' ultra loose monetary policy over the past few years has seen China step up its efforts to stop the yuan from appreciating. The result has been an explosion in the money supply, credit growth, and now, predictably, inflation. Inflation in China is a big concern for the communists. As Keynes said, 'there is no subtler, no surer means of overturning the existing basis of society than to debauch the currency'. Currency debauchment = inflation. US monetary policy is fuelling inflation in China (probably deliberately so) but with all-up unemployment of nearly 17% in the States, they don't care. Bernanke said as much his Frankfurt speech last week. The US is becoming more aggressive towards China because it knows it's in a position of power. China may have a massive 'war-chest' of US treasuries but it's hardly a weapon or a threat to the US. The hoard is too big to sell. And if they did it would force a contraction in domestic credit. Not exactly what you want when trying to contain a massive property bubble. So China is stuck with the prospect of destabilising inflation unless something is done to reign it in, and quickly. They have two choices, none of which are good. One, let the yuan appreciate. This would be good for households (as it would improve their purchasing power) but bad for the all important export sector. Many of China's manufacturers operate on very thin margins. A stronger yuan would wipe out this thin profit layer. Two. Raise interest rates. This is the likely scenario but also probably the most dangerous. Raise rates too slowly or not enough and inflation continues to build. Increase rates too fast and its property bubble will collapse. Either way, China has little option but to take liquidity out of the market. The implications for Australia are huge. It means our terms of trade have probably peaked, that interest rates won't go as high as expected, and that unemployment could rise more than forecast. If you have faith in central planning and think the Chinese bureaucrats are smart enough to engineer a goldilocks slowdown, then you have nothing to worry about. This seems to be the consensus view. But if you think that central planning is a 'fatal conceit', which history has proven to be the case time and again, then you should be very worried indeed. By the way, the next instalment in my 'Sound Investing' series is out today. So if you want to sign up to receive this free report, click here. To give you some context, I am the editor of a report called Sound Money. Sound Investments. It's part macro stuff, like you have just read, and part stock recommendations. My view is that the world's monetary system is undergoing fundamental change and will move towards a 'sound money' footing in the years ahead. Understanding how this evolution will impact equity markets is crucial for you to preserve and build your wealth. It will lead to increased volatility. I believe that by following 'sound investing' principles, you will greatly enhance your chances of growing your wealth in what will be a very challenging decade. If this sort of thinking appeals to you, sign up for your free report today. Similar Posts: |
| Financial Problems – Thy Name is Debt! Posted: 24 Nov 2010 01:39 PM PST Is our "Crash Alert" flag still flying? It is? Good. Just checking. Don't breathe too hard. Don't touch anything. We're on tiptoes... So many things could bring this stock market crashing down. We can go around the world and point at them. China. Ireland. America itself... And, oh yes, North Korea is firing rockets at South Korea.... Yesterday, the Dow lost 142 points. Gold rose $19. Over time, the tensions, contradictions and pressures build up. You try to fix one thing with a little central planning...but the thing doesn't cooperate. So you try to fix something else. And then another thing goes phlooey and you have to fix that. One day you're trying to keep Ireland afloat in the North Atlantic. The next day you're worrying about an explosion in the Middle Kingdom. And then, wouldn't you know it, a problem flares up right at home. Financial problems - thy name is debt! What's the matter in China? Too much debt in the LGFVs - Local Government Funding Vehicles. A municipality thinks it will be a better place if it had a new mall. So it makes a deal. It helps borrow the money. It helps with the plans. The pols feel like big shots. Money changes hands...some of it legit, a lot of it under the table. What's not to like? Well, do that a few thousand times all over China and pretty soon you have a lot of debt based on projects that never really made any sense in the first place. And where is the debt? In the banks, probably. Who knows what's in the banks? But they're the same banks that are funding the most reckless, breakneck speed capital investment program of all time. Americans consume. The Chinese build. They're building roads, bridges, towns, railroads, rail links, railheads - everything you can think of. Of course, some of this is necessary. Some of it is productive. But how much? How many local governments are making wise, productive investment decisions? The Chinese are now spending almost half of their GDP on fixed investments - you know, the kind of stuff that has concrete and steel in it. One out of every two dollars goes to building something more or less permanent. But how many of those decisions are going to pay off? How much of that investment is going to pay for itself? How much of the debt is going bad? Darned if we know. No one knows. But Dear Readers are advised to be somewhere else when all this blows up. It will. We're sure of it. You can't make that many capital investment decisions without making a lot of bad ones. You can't grow that fast without some pretty severe growing pains. And that's just China. What about the Emerald Isle? Their problem is debt too. But it's not LGFV. It's MBL - mortgage backed lending. Europe's big banks lent to Irish banks so the Irish banks could lend to Irish homeowners. Trouble is, the Irish homes are now not worth what the Irish homeowners paid for them. So, the micks and paddies have a lot of debt that is never going to be repaid. Who will take the losses? Normally, it's a simple question with a simple answer: the people who made the bad investments. But not now. The news yesterday was that it would take $114 billion to keep Ireland open for business. And Spanish bond yields were hitting new records - investors are afraid they might be the next to go. European authorities - including the Irish themselves - are afraid that if they let the chips fall where they may...many of them will fall on their own heads. They're afraid of "contagion" - that is, they're afraid that if the Irish get sick, they might get sick too. If Irish debt is allowed to collapse, in other words, so will their own bad debt. And who knows where that will lead? We don't. But we want to find out. Because we don't see any better way to get rid of it than just letting it collapse. And so what? A few banks go bust. A few large investors jump off bridges. Heck, there are plenty of bridges in Europe. What's the trouble? And more thoughts... When we are in a thoughtful mood, we try to get out of it as soon as possible. Nothing like thoughts to trouble a man's sleep. But sometimes a thought gets a grip on us and we can't get rid of it until we've meditated, prayed, and drunk a whole bottle of Bordeaux. Thus it was that we were puzzling over the strange events of the last few years. Why was Ireland so desperate to save its banks? Why did the US rush to keep Fannie and Freddie out of juvenile detention? Why put at risk the entire world financial system in order to try to get US employment down from 9% to 6%? People have a deep-seated fear of capitalism, we conclude. They will do almost anything to avoid it. Capitalism works by "creative destruction." They're happy with the creative part. But they can't bear the destruction. Ireland's biggest banks go broke? No way! America's leading housing lender in Chapter 7? We can't let that happen! They imagine that the "destructive" part of capitalism is a kind of disease or mechanical breakdown. If must be something that can be fixed, they conclude. And so they look for the cure...the fix...the solution. They must realize that adding paper money to a society that is already saturated in debt is a rather far-fetched solution. But what else can they do? They tried the elixirs and the home cures. Monetary stimulus didn't work. They tried fiscal stimulus, too. And even after the biggest stimulus of all time what have they got? Nearly 10% unemployment, falling house prices, little or no real (non-government) growth, falling incomes, and consumer price increases that are the lowest ever (if you take the figures at face value). What do they have left but "unconventional" methods. And so what if they don't really make any sense. You gotta do something, right? The simple minded morons. *** "Corporate profits are the highest on record," says the latest news. Some investors take this as good news. But if profits are already the highest on record...how likely is it that they will go higher? The high margins probably result from the weakness in labor costs. Businesses were startled by the downturn of '07-'09. They cut costs (employees) quickly. So far, they've been reluctant to hire people back. That leaves the poor ex-employee without a job, but it also leaves the business with a decent bottom line. But after you've cut expenses, what do you do next? If you're going to add to your profits you have to count on growth in revenue. So, where are these extra sales coming from? Most likely, sales growth will be very slow...and profits will inevitably decline from these all-time highs. Falling profit margins will be another reason to get rid of stocks, so stock prices (and p/e ratios) will probably fall. *** The New York Times reports that "house sales fell sharply in October." We don't have additional information or insights. But what did you expect? It's a Great Correction, after all. Regards, Bill Bonner, |
| Profiting from Information Overload Posted: 24 Nov 2010 01:38 PM PST Throughout most of history, human beings could expect to grow old and die in a world very much like the one into which they were born. Change was slow, by modern standards. People lived as hunter-gatherers for hundreds of thousands of years, before agricultural technology took root and changed society about 10,000 years ago. Then, only 200 years ago, the industrial revolution radically remade society yet again. In the late 20th century, the electronic computer started a new revolution, which is still ongoing. Today, culture is still playing "catch up" with the radical democratization of information and opinion that new, computer-enabled media and ubiquitous network connectivity is creating. Yet modern nanotechnology, in its various forms, promises to usher in a new technological growth phase mere decades after the information technology revolution began. In each case, the amount of time between one fundamental technological shift and the next has grown shorter. The result, from an economic standpoint, is that each new "technology growth phase" accelerates wealth creation, and improves the quality of life for everyone by reducing costs and solving problems. To give an example of how technology keeps things cheap, the price of oil has been slowly rising over the last few months. However, what would the price of oil be today if we were still using the same technology that struck black gold at Spindletop in 1901? The short answer is that oil would be far more expensive, if any was available at all anymore. The story of the last 100 years would be very different without the inexpensive energy that fueled it. Another example: what would the price of food be today without the Green Revolution? At one time, more than 90% of the US population was involved in agriculture in one way or another. Today, it is around 2%. In past times, an extended economic downturn like the current one meant hunger for many. Today, the problem of the poor is too many calories. If it were not for transformational innovation in food production, many of us wouldn't be able to secure enough daily calories to survive. For many people, however, it starts to become difficult to process accelerating technological change. Even for those of us that track technology, it is impossible to monitor everything. Nanotech-enabled life extension technology, for example, is going to shape the future economy and culture in ways we cannot even begin to imagine. Since most people do not immediately recognize the importance or implications of transformational technologies, those that do gain an advantage. As investors, this creates unique opportunities for us to profit. It is for this reason that I like to update you periodically on the latest advances announced in science journals. I will mention a couple here... Stem Cells Will Pump You Up For an older person, it takes longer to recover from a strenuous workout or a muscle injury than for a younger one. Muscle mass declines with age as well. As our understanding of cellular biology improves, we anticipate new treatments targeting tissues like muscles to restore them to a more youthful state. Researchers at the University of Colorado at Boulder recently demonstrated that young stem cells transplanted into the leg muscles of mice prevented age-related atrophy and repaired injury. The stem cells not only repaired the injury, but doubled muscle mass as well. Even two years later, the now-old mice retained higher levels of muscle mass. According to Bradley Olwin, a co-author of the study, "the transplanted stem cells are permanently altered and reduce the aging of the transplanted muscle, maintaining strength and mass." When transplanted into healthy tissue, however, there was no measurable change in muscle growth. The stem cell grafts only appear to create new growth in muscles that are damaged by injury. The researchers are working to understand what mechanism signals the stem cells to grow in hopes of developing drugs to mimic their behavior. Such technology could be applied to degenerative muscle diseases. It could also find an application in halting or reversing the muscular atrophy that accompanies aging. Quantum Computing Leaping Forward Practical, commercialized quantum computers would represent a disruptive transformation of the computing industry. Instead of encoding information on relatively large blocks of material, quantum computers could store information on single electrons or atoms, called qubits. Such machines would be incredibly powerful and solve problems that are impossible for current computers. Manufacturing computers with individual parts made of such tiny bits of matter is difficult with current technology, though. Many qubits can be missing, or faulty. According to a study published in Physical Review Letters quantum computers can be made to function even if they have a large number of malfunctioning components. In this paper, the international scientists published a discovery of a way to correct for these errors by using an error correcting system that mimics how humans correct for faulty data. According to the lead author, Dr, Sean Barrett, "Just as you can often tell what a word says when there are a few missing letters, or you can get the gist of a conversation on a badly-connected phone line, we used this idea in our design for a quantum computer." This paper, however, is theoretical in nature, so engineers will need to build quantum computers with enough tiny particle-sized qubits to demonstrate this concept's utility. In the meantime, Burnaby, Canada- based D-Wave claims to have built large-scale supercooled quantum computers containing hundreds of qubits. D-Wave has worked with Google in the past to perform quantum-enabled pattern recognition. Google has demonstrated that this technology can spot individual objects, like cars, in tens of thousands of pictures. Recently, D-Wave submitted a proposal to Google and the Jet Propulsion Laboratory to develop a quantum computing facility based on its technology. Finally, IBM is jumping into the fray with renewed vigor. Recent quantum computing discoveries in academia suggest the possibility of building quantum computers using more conventional, common methods used in semiconductor manufacturing. This has piqued IBM's interest, and it has raised the stakes by enlarging its research in the field. It has put together a large group to embark on a five-year mission to explore the possibilities, seek out new technologies, and profit from going where no one has gone before. Ad lucrum per scientia (toward wealth through science). Ray Blanco, Editor's Notes: Ray has advanced in robotics and avionics... genomics and biotechnology... And now he's combined his passion for technology with financial and stock market expertise. Ray is the co-editor of Technology Profits Confidential. Similar Posts: |
| Posted: 24 Nov 2010 12:31 PM PST http://www.chinadaily.com.cn/china/2...t_11599087.htm St. Petersburg, Russia - China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday "About trade settlement, we have decided to use our own currencies," Putin said at a joint news conference with Wen in St. Petersburg. The two countries were accustomed to using other currencies, especially the dollar, for bilateral trade. Since the financial crisis, however, high-ranking officials on both sides began to explore other possibilities. The yuan has now started trading against the Russian rouble in the Chinese interbank market, while the renminbi will soon be allowed to trade against the rouble in Russia, Putin said. "That has forged an important step in bilateral trade and it is a result of the consolidated financial systems of world countries," he said. Putin made his remarks after a meeting with Wen. They also officiated at a signing ceremony for 12 documents, including energy cooperation. The documents covered cooperation on aviation, railroad construction, customs, protecting intellectual property, culture and a joint communiqu. Details of the documents have yet to be released. Putin said one of the pacts between the two countries is about the purchase of two nuclear reactors from Russia by China's Tianwan nuclear power plant, the most advanced nuclear power complex in China. Putin has called for boosting sales of natural resources - Russia's main export - to China, but price has proven to be a sticking point. Russian Deputy Prime Minister Igor Sechin, who holds sway over Russia's energy sector, said following a meeting with Chinese representatives that Moscow and Beijing are unlikely to agree on the price of Russian gas supplies to China before the middle of next year. Russia is looking for China to pay prices similar to those Russian gas giant Gazprom charges its European customers, but Beijing wants a discount. The two sides were about $100 per 1,000 cubic meters apart, according to Chinese officials last week. Wen's trip follows Russian President Dmitry Medvedev's three-day visit to China in September, during which he and President Hu Jintao launched a cross-border pipeline linking the world's biggest energy producer with the largest energy consumer. Wen said at the press conference that the partnership between Beijing and Moscow has "reached an unprecedented level" and pledged the two countries will "never become each other's enemy". Over the past year, "our strategic cooperative partnership endured strenuous tests and reached an unprecedented level," Wen said, adding the two nations are now more confident and determined to defend their mutual interests. "China will firmly follow the path of peaceful development and support the renaissance of Russia as a great power," he said. "The modernization of China will not affect other countries' interests, while a solid and strong Sino-Russian relationship is in line with the fundamental interests of both countries." Wen said Beijing is willing to boost cooperation with Moscow in Northeast Asia, Central Asia and the Asia-Pacific region, as well as in major international organizations and on mechanisms in pursuit of a "fair and reasonable new order" in international politics and the economy. Sun Zhuangzhi, a senior researcher in Central Asian studies at the Chinese Academy of Social Sciences, said the new mode of trade settlement between China and Russia follows a global trend after the financial crisis exposed the faults of a dollar-dominated world financial system. Pang Zhongying, who specializes in international politics at Renmin University of China, said the proposal is not challenging the dollar, but aimed at avoiding the risks the dollar represents. Wen arrived in the northern Russian city on Monday evening for a regular meeting between Chinese and Russian heads of government. He left St. Petersburg for Moscow late on Tuesday and is set to meet with Russian President Dmitry Medvedev on Wednesday. Agencies and Zhou Wa contributed to this story. |
| Happy Thanksgiving! Are You Better Off Today Than You Were Four Years Ago? Posted: 24 Nov 2010 12:25 PM PST 
If you watch the economic statistics from week to week and month to month, it will seem like sometimes they are getting worse and sometimes they are getting better. However, once you take a longer-term view of things, exactly what is happening to us starts to come clearly into focus. The truth is that the United States is in the midst of a long-term economic collapse, and many economic statistics just keep getting worse every single year. The following are 11 statistics that reveal just how far the U.S. economy has fallen over the past four years.... #1 In November 2006, the "official" U.S. unemployment rate was 4.5 percent. Today, the "official" U.S. unemployment rate has been at 9.5 percent or greater for more than a year. #2 At Thanksgiving back in 2006, 26 million Americans were on food stamps. Today, there are over 42 million Americans on food stamps and that number is climbing rapidly. #3 According to the U.S. Census Bureau, median household income in the United States fell from $51,726 in 2008 to $50,221 in 2009. Median household income declined the year before that too. Meanwhile, prices have continued to rise throughout that period. #4 At the end of the third quarter in 2006, 47 banks were on the FDIC "problem list". At the end of the third quarter in 2010, 860 banks were on the FDIC "problem list". #5 California home builders began construction on 1,811 homes during the month of August, which was down 77% from August 2006. #6 In 2006, new home sales in the United States were near record highs. In 2010, new home sales in the United States are at record lows as the following graph from Calculated Risk demonstrates....
#7 A recent survey of last year's college graduates found that 80 percent moved right back home with their parents after graduation. That was up substantially from 63 percent in 2006. #8 According to one analysis, the United States has lost a total of 10.5 million jobs since 2007. #9 In 2006, the Social Security program took in somewhere in the neighborhood of 100 billion more dollars than it paid out. Of course the U.S. government spent all that money instead of setting it aside. So now more U.S. retirees than ever are ready to start drawing on Social Security and a "tipping point" is rapidly coming. Social Security will pay out more in benefits in 2010 than it receives in payroll taxes. This was not supposed to happen until at least 2015, and the years ahead look very, very grim....
#11 In 2006, the U.S. national debt was getting close to 9 trillion dollars. Today, the U.S. national debt is well past 13 trillion dollars and is rapidly closing in on 14 trillion dollars. So is there much hope for an economic turnaround any time soon? No, not really. Even the Federal Reserve, usually one of the biggest cheerleaders for the U.S. economy, is not very optimistic right now. In fact, the Fed has just announced that they are projecting that unemployment will still be at about 8 percent when the next presidential election arrives in 2012. Actually, if the official unemployment rate was to get that low by then that would really be something to celebrate. Many economists fear that unemployment will be even higher than it is now by then. Several years ago, a very foolish politician (Dick Cheney) famously said that "deficits don't matter". That is kind of like saying that credit card balances don't matter. For decades, politicians from both political parties have been running up staggering amounts of government debt as if it would never catch up with us. For decades, Americans have been addicted to debt and have been buying more than they produce. We have enjoyed living beyond our means for so long that most of us simply have no idea that there are any consequences for doing so. Living on debt is fun on the way up, but on the way down the pain can be excruciating. We are about to experience that on a national level, and it is going to be an absolute nightmare. Did any of you actually believe that we were just going to go on living way, way, way beyond our means indefinitely? America has piled up the biggest mountain of debt in the history of the world, and unfortunately we are all going to pay the price for that. So enjoy your turkey while you can. In future years we may have a lot less to be thankful for. |
| Posted: 24 Nov 2010 11:10 AM PST In my next investing article, the continued weakness, if not the collapse of the dollar will be a crucial element. If you believe that is a likely outcome, then you should begin to think in terms of protecting yourself against it. Hat Tip to the Freeman for the following post: [...] |
| silver remains explosive..December open interest remains high Posted: 24 Nov 2010 10:33 AM PST |
| Posted: 24 Nov 2010 08:26 AM PST Why gold is better than cash The question most often asked of gold bulls is, "At what price will you take your profits?" It is a question that betrays a lack of understanding about why anyone should own gold. Nevertheless, the simple answer must be, "When paper money stops losing its value". This response should alert anyone who asks this question to the idea that owning fiat cash is the speculative position, not ownership of precious metals. This sums up the problem. Instead of gold, people commonly think of paper money as the only medium of exchange and as a store of value; cash is after all their unit of account. They see the gold price rising when they should be seeing the value of paper money falling. Because cash is everyone's unit of account it is wrongly seen as the ultimate risk-free asset. This is also the fund manager's approach to investment: his investment returns are calculated in paper money, so he cannot account for a superior class of asset. He is also taught to spread investment risk across a range of inferior asset classes to enhance returns. Therefore the investment manager wrongly assumes that precious metals is one of those inferior asset classes. All modern investment management works on these assumptions. full article here: http://www.financeandeconomics.org/A...and%20cash.htm |
| Gold Jumps as Euro Crisis Deepens, "Buy Now If Ever" Urges Fund Manager Posted: 24 Nov 2010 08:20 AM PST
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| Gold Seeker Closing Report: Gold and Silver Fall Slightly Posted: 24 Nov 2010 07:15 AM PST Gold rose $3.50 to as high as $1381.50 in Asia before it fell to see a loss of $8.66 at $1369.34 in midmorning New York trade, but it then bounced back higher into the close and ended with a loss of just 0.3%. Silver climbed to $27.673 and dropped to $27.145 before it also rallied back higher in late trade and ended with a loss of just 0.11%. |
| There's a big breakout in this unusual sector Posted: 24 Nov 2010 07:03 AM PST From Bespoke Investment Group: In case you haven't noticed, shoe retailers have been on a nice run lately. Below are the six-month trading range charts of eight shoe stocks. All of them are trading either in or above extreme overbought territory. Foot Locker (FL), Dick's (DKS)... Read full article... More on trading: Top research firm: Don't get too bearish now Top trader Gartman: The investing mistake you must never, ever make Trader alert: Little-known pattern suggests gold is starting a parabolic move to $1,600 |
| U.S. jobless claims fall to lowest level since July 2008 Posted: 24 Nov 2010 06:51 AM PST From Bloomberg: Applications for unemployment benefits in the U.S. fell more than forecast last week to the lowest level since July 2008, reinforcing evidence the labor market is healing. Jobless claims declined by 34,000 to 407,000 in the week ended Nov. 20, Labor Department figures showed today in Washington. The median projection of economists surveyed by Bloomberg News called for a drop to 435,000. The total number of people receiving unemployment insurance decreased to the lowest in two years, and those on extended payments also fell. Fewer firings lay the groundwork for a pickup in job creation that will generate incomes and spur consumer spending, which accounts for 70% of the economy. Even with companies firing fewer workers, unemployment will be slow to decline, according to the Federal Reserve's latest forecast in which policy makers also lowered their growth projections. "The labor market is clearly improving," said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina. "We're seeing consistent job gains in the private sector. This suggests we'll have a good holiday spending season." Consumer spending rose in October for a fifth month as a rebound in incomes lifted the biggest part of the U.S. economy at the start of the final quarter of 2010, Commerce Department figures showed today. Spending and Income Household purchases advanced 0.4% after a 0.3% gain in September that was larger than previously estimated. Incomes climbed 0.5 percent. Orders for U.S. goods meant to last several years unexpectedly decreased in October, the Commerce Department also said. Demand for so-called durable goods dropped 3.3 percent, the biggest plunge since January 2009, after a revised 5% jump in September that was larger than previously estimated. Stock-index futures rose and Treasury securities fell after the reports. Futures on the Standard & Poor's 500 Index maturing next month increased 0.7% to 1,186.8 at 8:48 a.m. in New York. The yield on the 10-year Treasury note, which moves inversely to prices, rose to 2.83% from 2.78% late yesterday. Jobless benefits applications were projected to fall to 435,000 from 439,000 initially reported for the prior week, according to the median forecast of 48 economists in a Bloomberg survey. Estimates ranged from 420,000 to 450,000. The Labor Department revised the prior week's figure up to 441,000. Effect of Holidays Claims typically increase during the period between the Veterans Day and Thanksgiving holidays, and the Labor Department's seasonal adjustment process takes that into account. During the latest week, fewer Americans than usual filed claims, a Labor Department spokesman said as the figures were released, allowing seasonally adjusted filings to decrease more than forecast. Fed policy makers, who began a second round of large-scale asset purchases to lift economic growth and reduce unemployment, disagreed over expanding record monetary stimulus this month, according to minutes of their Nov. 2-3 policy meeting released yesterday. They also projected a fourth-quarter 2011 unemployment rate of 8.9% to 9.1 percent, compared with 8.3% to 8.7% in their previous forecast, released in July. For 2012, the jobless rate will be 7.7% to 8.2 percent, up from prior projections of 7.1% to 7.5 percent. The rate was 9.6% in October, marking 18 months at 9.4% or higher. Four-Week Average The four-week moving average of jobless claims, a less volatile measure than the weekly figures, declined to 436,000 last week from 443,500, today's report showed. The number of people continuing to receive jobless benefits dropped by 142,000 in the week ended Nov. 13 to 4.18 million. They were forecast to fall to 4.28 million. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs. Those who've used up their traditional benefits and are now collecting emergency and extended payments decreased by about 262,000 to 4.66 million in the week ended Nov. 6. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 3.3% in the week ended Nov. 13, the lowest since Dec. 6, 2008, from 3.4% in the prior week. States, Territories Forty-seven states and territories reported a decline in claims, while six reported an increase. These data are reported with a one-week lag. Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates. That relationship has broken down in recent months as some companies continue to cut staff, while others expand, pointing to an uneven recovery. The economy grew more than previously calculated in the third quarter, led by stronger consumer spending and fueled by labor income gains that may stoke demand into 2011. The revised 2.5% increase in gross domestic product compares with a 2% estimate issued last month, data from the Commerce Department showed yesterday. Companies cutting jobs include Bethesda, Maryland-based Lockheed Martin Corp. The world's largest defense contractor said on Nov. 18 that it will close a plane components plant in Eagan, Minnesota, by 2013 and move work from its Middle River, Maryland, site next year, resulting in at least 400 job cuts. Government agencies are also paring workers. New York City, facing a $3.3 billion deficit in next year's budget, will cut its workforce by more than 10,000 over the next year-and-a-half, Mayor Michael Bloomberg's budget office reported last week. To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net. To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net. More on unemployment: Unemployment could surge after the November elections How to make the unemployment rate collapse immediately Banishing this rule could be the No. 1 way to fix unemployment |
| Gold up in Euros and Pounds as Eurozone and North Korea Concerns Continue Posted: 24 Nov 2010 01:22 AM PST
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| BIS gold records may facilitate double counting, study concludes Posted: 23 Nov 2010 11:00 PM PST |
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