Gold World News Flash |
- GoldSeek.com Radio Gold Nugget: Louis Navellier & Chris Waltzek
- Gold/Silver Ratio Reconsidered
- Gold targets 15 players
- ADV: Upgrade to weather.com Gold!
- Gold Price Breaks $1400, Hits New Euro & Sterling Highs, as Silver Price Gains Almost 6% in Thin Holiday Trade
- Front running the Chinese
- Gold Bears Predicting The Price Of Gold
- Investing in Gold Ahead of the Chinese
- Timely Silver Love from the WSJ
- Gold and Silver Lease Rates Jump at Year End
- Aussie Dollar, the Japanese Yen, Euro and Cable all have a different story to tell
- Crude Oil Inches Higher Shrugging off Consumer Confidence, Gold Spikes Over $1400
- In The News Today
- Hourly Action In Gold From Trader Dan
- 2011: China and Other Asian Central Banks Light The Way
- Jim's Mailbox
- Behind the Retail Cheer
- Breadth/Fed Stimulus Encouraging to Bulls
- Gold and Uranium, Rules Of The Range
- Three Things that Could Halt Gold’s Run
- 3 Things That Could Halt Gold's Run
- A New Lawsuit Against JPM and HSBC for Silver Manipulation With An Interesting ETF Twist
- The Amphora Report’s 2010 Topics in Review (1 of 4)
- Tuesday Morning Links
- 2011 - What's Coming
- All Bullish on the Silver Front
| GoldSeek.com Radio Gold Nugget: Louis Navellier & Chris Waltzek Posted: 29 Dec 2010 07:02 PM PST GoldSeek.com Radio Gold Nugget: Louis Navellier & Chris Waltzek
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| Gold/Silver Ratio Reconsidered Posted: 29 Dec 2010 06:05 PM PST It is a commonly held belief by many precious metal investors and even a good percentage of market pundits that silver always outperforms gold during the latter stages of a precious metals rally. When the chart action goes parabolic — such as in January 1980 or May 2006 — silver is at its most profitable, or so the thinking goes. The truth, however, is that silver outperforms gold only during orderly and strong price advances that remain trend-bound. Once gold and silver prices achieve the wildfire stage, the blond metal can outshine its albino sibling both on the way up and especially on the way down (by falling less, of course). With incorrect notions in hand about gold and silver price action, both pros and amateurs can make fundamentally-mistaken allocation decisions in their precious metals portfolios that can be painful in the short and long run.
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| Posted: 29 Dec 2010 06:00 AM PST West Ham co-owner David Gold has revealed the club are tracking 15 players in their bid to complete the great escape...
This posting includes an audio/video/photo media file: Download Now |
| ADV: Upgrade to weather.com Gold! Posted: 29 Dec 2010 04:38 PM PST Get advanced storm tracking maps and weather for 10 cities in one-click, all with no ads! Start your free trial now.
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| Posted: 28 Dec 2010 11:05 PM PST
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| Posted: 28 Dec 2010 10:05 PM PST Investing in Gold Ahead of the Chinese Share this:
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| Gold Bears Predicting The Price Of Gold Posted: 28 Dec 2010 07:15 PM PST Bears are by nature cautious and while caution can be an ally, it can also be fatal where bold action is required. It is understandable that investors who believe in paper money and paper-denominated assets do not understand gold. Gold, after all, is the natural refuge of disbelievers in the current financial paradigm; and, as today’s credit and debt-based paper markets come under increasing pressure and gold moves increasingly higher, most “paper bulls” remain increasingly perplexed.
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| Investing in Gold Ahead of the Chinese Posted: 28 Dec 2010 07:06 PM PST There are a lot of things in this world that I do not understand, and perhaps it is because of this persistent befuddlement that, for some mysterious reason, I think it is Highly, Highly Significant (HHS) that the Chinese Gold & Silver Exchange is planning "a first"; an international gold contract denominated in renminbi.
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| Timely Silver Love from the WSJ Posted: 28 Dec 2010 07:02 PM PST While it has become a bit of a meme that “the revolution (in currency) will not be televised,” at least one mainstream news outlet is starting to focus some attention on the improving metals market. All across the world, the headlines from the Wall Street Journal read “Price of Silver Soaring,” as two journalists document the explosion in investment interest in the metals markets.
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| Gold and Silver Lease Rates Jump at Year End Posted: 28 Dec 2010 07:00 PM PST Through the usually flat week between Christmas and New Year's celebrations, at least one (or perhaps a handful) investor is looking to borrow some gold and silver this year. Overnight, lease rates exploded by more than 500% on both gold and silver.
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| Aussie Dollar, the Japanese Yen, Euro and Cable all have a different story to tell Posted: 28 Dec 2010 06:54 PM PST First up we look at USD/JPY: The economic data out from Japan was encouraging today as Industrial production as well as retail sales both exceeded the streets guesstimates. This further put a bid on Japanese Yen and prices tumbled to just below 82. This is the region where Bank of Japan first started to tout that it would intervene in the market and as we have said before now that BoJ has made its mark on the market by actually intervening therefore it is high time that it should continue to weaken Yen. We went buyers of the pair at 82 flat and we intend on holding the position.
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| Crude Oil Inches Higher Shrugging off Consumer Confidence, Gold Spikes Over $1400 Posted: 28 Dec 2010 03:00 PM PST courtesy of DailyFX.com December 28, 2010 07:51 PM The DOE inventory report will be delayed one day due to the Christmas holiday last week. With New Year now approaching, volume will likely plummet. Commodities – Energy Crude Oil Inches Higher Shrugging off Consumer Confidence Crude Oil (WTI) - $91.36 // $0.13 // 0.14% Commentary: Crude reversed Monday’s minor decline to gain $0.49, or 0.54%, on Tuesday, settling at $91.49. Other than a release on U.S. Consumer Confidence, which fell to 52.5 from 54.3 versus the 56.3 that was expected, there was no notable news in the day. As we would expect, financial markets largely shrugged off the consumer confidence figure as it is not a reliable forward-looking indicator. The Department of Energy inventory report that is typically released on Wednesday will be released a day later on Thursday due to the Christmas holiday last week. Similarly, the API survey figures will be released tomorrow, a day later than usual. Remem...
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| Posted: 28 Dec 2010 02:30 PM PST View the original post at jsmineset.com... December 28, 2010 05:04 PM Dear CIGAs, Credit Suisse is forecasting the gold price of $1630 for 2011. Remember how dumb that sounded seven years ago? I was called every name in the book by the shorts in gold at the $300 and $400 level. The greatest compliment is imitation. It looks like the hoard of experts that were negative or nowhere to be found up to gold at $1000 are complimenting me like mad. The real price Angel is $1764. There is no solid analytical way to get to $1650 so those guys are definitely complimenting me. The Financial Gang is so full of rotten, selfish, amoral chumps. Jim Sinclair’s Commentary Remember when these guys were bearish as hell, holding the world’s largest short of gold OTC derivatives? This is what happens when a company is over populated by attorneys and accountants. "The CEO of Barrick Gold, the world’s biggest gold miner, says his company is expanding digging operations as centra...
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| Hourly Action In Gold From Trader Dan Posted: 28 Dec 2010 02:30 PM PST View the original post at jsmineset.com... December 28, 2010 11:20 AM Dear CIGAs, Click chart to enlarge today's hourly action in Gold in PDF format with commentary from Trader Dan Norcini ...
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| 2011: China and Other Asian Central Banks Light The Way Posted: 28 Dec 2010 12:15 PM PST  The most important news for currency and commodity markets in 2010 was, in our view, the June move by China to open its currency to a flexible regime. Over the course of the year, we have discussed the ripple effect this has had on currency markets, especially concerning its implication on the USD/Index. We believe that "flexibility" in China means it is actively reallocating reserves. By allowing its currency to strengthen and reallocating reserves, China must buy fewer U.S. dollars in the market, while selling currently owned U.S. dollars and purchasing non-U.S. dollar assets.
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| Posted: 28 Dec 2010 11:52 AM PST Jim, Some signs of coming trouble: -Reliance on stocks in retirement plans is greater than ever in the US; 42 percent of those workers now have 401(k). There are many more reasons why the US government cannot choose the austerity exit. QE and hyperinflation looks to be the only way to hide the awful truth. Best regards, Baby boomers near 65 with retirements in jeopardy CHICAGO – Through a combination of procrastination and bad timing, many baby boomers are facing a personal finance disaster just as they're hoping to retire. Starting in January, more than 10,000 baby boomers a day will turn 65, a pattern that will continue for the next 19 years. The boomers, who in their youth revolutionized everything from music to race relations, are set to redefine retirement. But a generation that made its mark in the tumultuous 1960s now faces a crisis as it hits its own mid-60s. "The situation is extremely serious because baby boomers have not saved very effectively for retirement and are still retiring too early," says Olivia Mitchell, director of the Boettner Center for Pensions and Retirement Research at the University of Pennsylvania. There are several reasons to be concerned: • The traditional pension plan is disappearing. In 1980, some 39 percent of private-sector workers had a pension that guaranteed a steady payout during retirement. Today that number stands closer to 15 percent, according to the Employee Benefit Research Institute in Washington, D.C.
Jim, "U.S. notes and bonds have handed investors a 2.1 percent loss in December, paring the annual return to 5.7 percent, according to figures compiled by Bloomberg and the European Federation of Financial Analysts Societies. That's the worst monthly performance among 26 sovereign indexes" The worst? CIGA BJS Treasuries Fall Before $35 Billion Government Auction of Five-Year Notes Treasuries dropped before the U.S. government sells $35 billion of five-year securities in the second of three note auctions this week totaling $99 billion. U.S. debt maturing in more than a year was headed for the biggest monthly loss in the global government bond market on signs of economic recovery. The 10-year note yield increased the most in almost two weeks as a boost in holiday retail sales overshadowed an unexpected drop in U.S. consumer confidence and a decrease in home prices. "The last auctions of the year face challenges with everyone on vacation and balance-sheet constraints," said Joseph Leary, an interest-rate strategist in New York at Citigroup Inc., one of the 18 primary dealers obligated to participate in U.S. debt sales. "People are less willing to take risk unless we see more concession." The yield on the current five-year note increased seven basis points, or 0.07 percentage point, to 2.09 percent at 12:04 p.m. in New York, according to BGCantor Market Data. The price of the 1.375 percent security maturing in November 2015 fell 10/32, or $3.13 per $1,000 face amount, to 96 21/32.
Jim Sinclair's Commentary A day ago the US threatened China with a complaint at the WTO if they did not export rare earths liberally. Note how afraid China is. China shrinks rare earths export quota What have you learned from China? They use the media to manipulate expectations to hide their true intentions. Gee, sounds like a familiar Western practice. China (unlike the West) is following a specific long-term plan. This makes them a respectable opponent in "the game". The talking heads that suggested that rare earth metals was not a short to intermediate supply problem for the West did an excellent job in misinforming the weak hands. The newswire is a tool. Those that cannot reason, or let others do their reasoning will be susceptible to the tools of the operators. China is scaling back its exports next year of rare earth minerals used in high tech products, which could be an unpopular move with countries such as the United States and Japan. Numbers released Tuesday by the Commerce Ministry show export quotas of the rare minerals will be down 11 percent next year as compared to the same period this year. Source: forbes.com
Herd Capitulation in Natural Gas? Could it be that the specs (hedge funds) and retail funds are being setup by the media tools of the operators? Those that recognize the tools play the game. Those that cannot recognize them also play but not very long. Connect money continues to increase their net long positions as the headlines provide the intended 'perspective' for the weak hands. Natural Gas ETF and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest: While retail money remains relative bullish, their recent selling represents what I characterize as herd capitulation. In other words, how can I remain bullish when the experts/pros/talking heads remain so bearish? Any retail capitulation on the long side as connected money quietly repositions only sweetens the pot. Natural Gas ETF and the Nonreportable Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest: If there's a technical trigger on this one, watch out. Headline: Hedge Funds Bet Gas Will Fall in Warm New Year: Energy Markets Hedge funds raised bearish natural gas bets by the most since October on forecasts that higher- than-normal temperatures in the first weeks of the New Year will reduce demand for the heating fuel. The funds and other large speculators cut net-long positions, or wagers on rising prices, by 35 percent in the seven days ended Dec. 21, according to the Commodity Futures Trading Commission's weekly Commitments of Traders report. It was the largest drop since Oct. 12. Source: businessweek.com
The Path of Least Resistance Is Complacency You know what is about to hit the FAN. Municipal bonds may not be worth the paper they are written on. Jim Jim, The public, when presented with options – see headlines below, tends to choose the path of least resistance. That is, the path of complacency. It is much easier assume that the world they know, understand, live, and most importantly denominates the value of their possessions is solid as rock. Local and State governments are facing deficits so large that few people realize how long it will take balance the economic and social equations. Are municipal bonds in trouble? Don't ask the politicians or experts. The message of the markets is the only opinion that matters. The suggestion that the iShares Muni Bond to Gold ratio is anything but a plunger's (short side) trend is opinion. Opinions are the kiss of death in this business. iShares Muni Bond (ETF) to Gold Ratio: Regards, Headline: Ind. bill would allow cities to declare bankruptcy INDIANAPOLIS — A plan backed by Gov. Mitch Daniels would allow local governments in Indiana to ask for a state takeover and declare bankruptcy if necessary. Daniels says he hopes there won't be many local governments that seek bankruptcy, but says the state needs to have the law clarified and on standby in case it happens. Headline: Despite Default Risk, Select Muni Bonds Strong Buy: Gross Regardless of the shabby state of government finances in the US, Pimco's Bill Gross says now is the time to be buying municipal bonds. California and New York City are among the governments Gross, speaking in a CNBC interview, says will treat investors the best. While he suggests avoiding entities with big budget shortfalls like Illinois, there are a number of other opportunities out there for investors trying to get better yields than the still-low returns that Treasurys provide.
Operation Bond Drive Were the 5-year auction results reflective of poor demand? I've seen 2.61 bid-to-cover ratios spun as bullish. The auction results showed increased and decreased participation from primary dealers and direct bidders, respectively. This is a mildly bullish short term observation. This piece of information was ignored because price action makes better commentary. 5-Year Auction Results What the incentive for negative price action? Negative price action provides churn (volume) or cover necessary to setup (control) the market. Operation bond drive represents accumulation by connected money in the bond market as specs and retail becomes increasing emboldened by the media-hyped price break. Price action is leading the herd into a narrow, controlled pass that hides cliff around the bend. Connected money is repositioning on the long side in 2-, 5-, 10-year, and long bond. This clustering of money movement, illustrated below, suggest accumulation within an operation of size and possibility of short-term price "teeth". COT Money Flow Table: Headline: Treasurys Sink After Poor 5-Year Auction The bond market extended its losses after the auction, pushing prices to fresh session lows, as the result raised concern about the outlook for Wednesday's scheduled sale of seven-year notes. Higher yields failed to lure enough buyers to underwrite the auction, a sharp contrast to the two-year notes sale Monday.
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| Posted: 28 Dec 2010 09:01 AM PST The 5 min. Forecast December 28, 2010 01:22 PM by Addison Wiggin - December 28, 2010 [LIST] [*]Retailers celebrate holiday blowout... Why consumers will play Scrooge come 2011, and how to profit [*]Next stage of the rare earth squeeze... How latest announcement from Beijing has manufacturers scrambling, shareholders profiting [*]One less bearish factor for gold... as the metal tops $1,400 again [*]World's toughest co-op board... Offer in "the high teens" may not be good enough for Brooke Astor duplex [*]"If You Don't Want to Lose Your Freaking Money People!" and other pithy suggestions for the name of our newest project [/LIST] We received the following description of economic activity, on yellowed paper, framed, as a gift this Christmas: Rags make paper Paper makes money Money makes banks Banks make loans Loans make poverty Poverty makes rags Fitting, eh? With such wisdom in mind, we delve into the holiday retail numbers that have much of the fin...
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| Breadth/Fed Stimulus Encouraging to Bulls Posted: 28 Dec 2010 05:36 AM PST The disappointing housing news of December 28, 2010 gives the Fed more cover to complete the full allotment of QE2 bond purchases, which in turn should help boost weak dollar assets like gold, silver, and copper. Read More...
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| Gold and Uranium, Rules Of The Range Posted: 28 Dec 2010 04:14 AM PST Gold is $1404! While you are not absolutely richer today than you were yesterday, you are relatively richer, and I have a suspicion that is AOK with you today! Read More...
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| Three Things that Could Halt Gold’s Run Posted: 28 Dec 2010 02:45 AM PST Normally we write about the things and conditions that cause precious metals to rise. While these things may be obvious, the corresponding rise in the bull market will not always be consistent and linear. Small and large corrections will occur along the way. Some will be purely technical while some have real drivers. There are three things that can precede a deep correction or consolidation in the precious metals complex.
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| 3 Things That Could Halt Gold's Run Posted: 28 Dec 2010 02:35 AM PST Wall Street Cheat Sheet submits: By Jordan Roy-Byrne Normally we write about the things and conditions that cause precious metals to rise. While these things may be obvious, the corresponding rise in the bull market will not always be consistent and linear. Small and large corrections will occur along the way. Some will be purely technical while some have real drivers. There are three things which can precede a deep correction or consolidation in the precious metals complex. Complete Story »
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| A New Lawsuit Against JPM and HSBC for Silver Manipulation With An Interesting ETF Twist Posted: 28 Dec 2010 02:22 AM PST
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| The Amphora Report’s 2010 Topics in Review (1 of 4) Posted: 28 Dec 2010 01:15 AM PST In 14 editions of the Amphora Report this year we have covered nearly 30 topics, many of which overlap in some way. What binds them all into a coherent set is our view that the economic policies being implemented in nearly all major countries are not just unsustainable but in some cases outright reckless. These countries include the US, the issuer of the world's reserve currency. By implication, the dollar is likely to lose its pre-eminent reserve currency status in the coming years. The result is bound to be a period of global economic and financial market turmoil and, for most if not all traditional financial assets, underperformance in real, purchasing-power adjusted terms. What follows below is a list of all topics, including both a brief summary and an update of our thinking for 2011. FROM "DARTH" TO "CZAR" VOLCKER? VOL 1/1 Imagine that, as in 1979, Paul Volcker is tasked with restoring global confidence in the US dollar and economy generally. We believe that, notwithstanding the best of intentions, it is unrealistic to expect that Mr Volcker, or anyone else for that matter, could possibly succeed at preventing a dramatic relative economic decline of the US in the coming years. To do so would require fundamental economic reform vast scope, far beyond what anyone in Washington, DC is willing to seriously consider or debate. Our thinking on this topic has not changed one bit. If anything, our conclusions seem largely vindicated by recent developments in Washington, including the growing lack of fiscal discipline demonstrated by the extension of tax cuts and unemployment benefits. There is no serious talk of fundamental economic reform, even following the elections, in which deficit reduction was an important topic. Meanwhile, the Fed has embarked on an increasingly radical monetary course which does nothing to restore confidence in the dollar. The outperformance this year of emerging market economies, many of which are investing heavily in infrastructure and other capital stock, is a clear demonstration of relative US decline. We would expect this outperformance to continue in 2011 although it might well be less pronounced. IS MONEY A STORE OF VALUE? VOL 1/2 We generally take it for granted that cash in a government-guaranteed bank deposit account is a risk-free store of value. But is it? The fact is that the dollar, and all fiat currencies for that matter, tend to lose purchasing power over time, occasionally abruptly in a sharp decline or, even worse, in a hyperinflation. Given current global economic conditions, we believe that investors should be particularly wary of currencies as stores of value and should seek ways to preserve wealth outside of cash. It is not surprising that, as policymakers have resorted to ever more desperate means to get their economies going, currencies in general have declined in value relative to commodities this year, including the historical cash substitutes, the precious metals. We are confident that this trend of rising commodities prices, not just in dollars but in most currencies, is going to continue in 2011, although quite possibly at a slower pace than in recent months, in the event that the global economy slows somewhat, as we expect. HOW MUCH FREE LUNCH WOULD YOU LIKE, SIR? VOL 1/2 As diversification is rightly considered to be the only "free-lunch" in economics, in this topic we explore how, in a world of both low interest rates and high uncertainty, investors should be inclined to seek rather more diversification than would ordinarily be the case. However, as financial assets are increasingly highly correlated with each other–a consequence of artificial monetary stimulus–diversification through financial assets alone is unusually limited. As such, investors should consider increasing their allocations to alternative investments, including liquid commodities. Commodities have outperformed this year, most probably for a variety of reasons. There were some supply issues at times, in particular with grains and certain other agricultural commodities, but the strength was in fact quite broad-based and demonstrates both good demand from the more dynamic emerging markets but also, importantly, that global inflationary pressures are rising. While 2011 may not be as good a year for commodities as 2010–in part because there are signs that emerging market demand is now cooling–we nevertheless expect investors to continue to seek diversification in alternative assets. THE REAL LESSON OF THE GREEK DEBT CRISIS | VOL 1/2 Greece now finds itself under attack from the financial markets and unable to refinance its debt. We believe that Germany and France will not come to Greece's rescue absent a dramatic fiscal consolidation. While Greece is certainly trying to reduce its deficit, success is far from assured and some sort of debt restructuring is probably inevitable. In any case, the Greek crisis has kicked off a round of general euro-area fiscal consolidation. This demonstrates that the euro-area can respond positively to market pressures. In time, this could be supportive of the euro. The sovereign debt crisis that began in Greece earlier this year has spread to Ireland, Portugal and Spain. In all four countries, governments are desperately trying to reduce deficits in return for financial assistance from France and Germany and also temporary funding support from the European Central Bank (ECB). Interestingly, however, notwithstanding the ongoing and widening crisis, the EUR/USD exchange rate, at 1.32 today, is essentially at the same level it was when the crisis broke in April this year. While we are not particularly optimistic for the economic future of the euro-area which, absent Germany and a few other pockets of regional strength, does not have a great deal going for it, we nevertheless think it is important to make a fair comparison between the euro-area and the US. This requires investors to look at the overall US fiscal situation, which continues to deteriorate amidst federal tax cut and unemployment benefit extensions. But don't forget the brewing debt crisis in state and local governments either. California, New York and Illinois are all at risk and collectively are of comparable economic size to the entire euro-area periphery. Indeed, the US economy in aggregate, when evaluated according to the size of the public sector, the overall tax base and fiscal and current account balances, bears a far greater similarity to the euro-area periphery than to the core. FINANCIAL CRISES AND NEWTON'S THIRD LAW | VOL 1/3 Policymakers tend to react to financial crises in ways that contribute to an even greater crisis down the road. Indeed, the reactions of policymakers and regulators are consistently disproportionate to the actions of financial markets. In sinister dialectical fashion, the powers assumed and mistakes made by policymakers tend to grow with each crisis, thereby ensuring that future crises become progressively more severe. If you are stuck in a hole, so the old saw goes, you had better first stop digging. Well try telling that to the US government, which has just decided to accelerate the ongoing deterioration in its finances with a broad tax cut extension as well as extended unemployment benefits. Meanwhile, the Fed has embarked on another round of monetary expansion. This is yet another example of policymakers contributing to an even greater crisis down the road. Rather than get out of the way and let the economy restructure and rebuild in a natural, undistorted fashion by allowing asset prices to adjust lower to more sustainable levels and banks and corporations to be sensibly downsized and, where necessary, restructured, policymakers continue to dig an ever deeper hole, the legacy of multiple asset bubbles and busts. WHY FINANCIAL GENIUS FAILS | VOL 1/3 Believe it or not, well prior to the great financial crisis of 2008, it was widely known among the educated financial elite that the standard risk management models and methods used by the major banks were woefully inadequate, with the consequence of systematically underestimating risk. But rather than take appropriate action to protect their firms with sensible risk management policies, senior executives chose instead to focus on short-term profitability: A healthy balance sheet became of secondary importance to a healthy income statement which, of course, justified healthy bonuses. Much has been written this year about how the risk management culture on Wall Street was a key ingredient to the crisis of 2008. It is increasingly clear that most if not all financial executives were aware of the risks they were taking but were unwilling to confront the short-term, bonus-driven culture which had come to dominate a once conservative, partnership-based industry. Now that the industry has been bailed out and has returned to profitability–at least for a brief time–another important lesson has been learned: The more risks you take, the better, as policymakers will see to it that in the event of yet another crisis, the taxpayer comes to the rescue. Events this year have done nothing in our opinion to change this. Those firms already too big to fail in 2008 are now even bigger. The moral hazard of the system has grown. The seeds of the next crisis have been sown. Recent developments in Ireland should serve as an example of what happens to a country that underwrites the risks of its financial sector. IS CHINA BEING TAKEN FOR A RIDE? VOL 1/4 Back in the spring we noticed that inflation rates were picking up just about everywhere, including in China. However, as China is a huge importer of raw materials, rising global commodities prices implied that Chinese inflation was likely to increase further. As much of China is still a subsistence economy, food price inflation would most likely turn into wage inflation, which in turn would push up prices for Chinese manufactured goods generally and possibly lead China to revalue its currency versus the dollar. Eventually, as the US imports a huge amount from China, this would also push up prices in the US. Chinese inflation has continued to rise all year. The spike in food prices over the summer has played a part, to be sure, but the underlying pressures were already in place. Additional fiscal and monetary stimulus in the US is most probably going to contribute to still more inflationary pressure in China and other more dynamic economies around the world. Indeed, China is just one of many countries which is now taking action to cool growth and keep prices under control. China and India have both recently raised interest rates. Brazil and South Korea are taxing foreign capital flows. These trends are likely to continue in 2011 and will contribute to "stagflationary" conditions in the US. To be continued… Regards, John Butler, [Editor's Note: The above essay is excerpted from The Amphora Report, which is dedicated to providing the defensive investor with practical ideas for protecting wealth and maintaining liquidity in a world in which currencies are no longer reliable stores of value.] The Amphora Report's 2010 Topics in Review (1 of 4) originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."
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| Posted: 28 Dec 2010 12:49 AM PST MUST READS MARKETS/INVESTING ECONOMY/WORLD/HOUSING/BANKING
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| Posted: 27 Dec 2010 11:44 PM PST Oh boy is 2011 going to be an exciting year! Some things that I think might happen: volatility is going up across the board, gold will be higher a year from now, copper will continue to rise, Spain will be the next sovereign debtor that falls prey...
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| All Bullish on the Silver Front Posted: 27 Dec 2010 11:00 PM PST Small but very telling structural changes continues in this week's Commitment of Traders report, once again highlighted by another drop in adjusted Net open interest. Another telling line item, is the net short position of the 4 largest commercial...
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