By: Bill Bonner & The Daily Reckoning Crew - 6 July, 2007
-Shocking investors back to their senses…could the Chinese trigger a worldwide equity sell-off? -The world is drowning in liquidity…consumers continue to pay the price of easy credit policies… -A beautiful visit to Cambridge…stepping on the Prime Minister's shoes…and more! Full Story
Foiled terrorist plots in England this past week helped to rally gold and silver. Today gold and silver had to deal with the fact that no new terrorist activity occurred over the 4th of July Holiday in the USA. Any “terror premium” that was put into the markets on Monday and Tuesday, was quickly removed by market participants today. Full Story
Fear has certainly been the dominant themes of the financial markets this year. One proof of that is the record short interest across many different market sectors (including the leading indicator semiconductors). Another proof is found in the headlines of newspapers all over the country as one pessimistic and fearful headline follows another. Full Story
Gold also has a long history of storing wealth. Once more, that makes it as different from "toxic waste" as you can get. So shouldn't Western investment cash now be fleeing the debt markets for the security of this rare, indestructible, historically valuable asset? Full Story
By: Adam Hamilton, Zeal Intelligence LLC - 6 July, 2007
As American investors and speculators in precious metals and their miners, it is really easy to lapse into a provincial perspective. Although the American PM markets are certainly very important, there is a massive world out there beyond our country. The entire populace of the United States represents less than 5% of the world’s people, and a similar tiny fraction of potential investors. Full Story
Gold over $700 by year end seems assured, but one is hard pressed to exude confidence at this point. Take comfort in its resilience. And by the way, watch gold but ride the silver vehicle, which will outperform gold by a 2:1 ration, as usual. Central banks dump gold, but nobody dumps silver. The powers scramble to meet delivery in silver, in fact. Also the very large commercials are in deep trouble on their short silver positions, unable to cover at these lower silver prices. Full Story
By: Christopher Hancock & The Daily Reckoning Crew - 5 July, 2007
-Hard to be an American in London...greenback has the weight of the global financial system on its shoulders... -Counting swans on Wall Street...another item in the inventory of American dependence... -Repetitive old windbags? Us?!... your last chance for 2007's best deal...and more! Full Story
Under normal financial conditions i.e. where liquidity and carry trades don’t dominate, Oil stocks tend to benefit from strong economic growth and Gold Stocks tend to benefit from a weak economy. That is, Central banks pursue inflationary monetary policy in response to weak economic conditions which is positive for Gold. Therefore, an analysis of Gold Stocks vs. Oil Stocks should give us an indication as to whether economic growth is strong or weak. Full Story
The Bank of England is expected to raise UK interest rates tomorrow from 5.50% to 5.75%. This is inline with the Market Oracle two year forecast for UK interest rates to hit 5.75% by Sept 07. The Money Markets are pricing in a rise in UK interest rates, with the Pound hitting a new 26 year high against the US Dollar trading towards $2.02, and the 3 month Inter bank rate rallying to a near 6 year high of 5.96%. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 4 July, 2007
-Acting on behalf of liberty and independence…from one George to another - to another… -Waiting for the laws of economics to be enforced…a Himalayan mound of I.O.U.'s… -The near death of a tidewater way of life…a swelling of pride on the London stage…and more! Full Story
By: Richard Daughty, The MOGAMBO GURU - 4 July, 2007
This few-hundred-billion-dollar subprime mortgage stinker is just emblematic of the whole derivatives stinker, a similar convoluted global spider web of a leveraged-to-the-hilt financial mess… Full Story
ON THIS Fourth of July – and with the Dollar trading at a 26-year low against the British Pound – it's worth remembering that both Thomas Jefferson and George Washington implored the United States to avoid foreign entanglements. Back then, however, Great Britain still ruled the world (if no longer the Colonies) and the Founding Fathers never guessed the Republic would one day have to defend the Dollar's "reserve currency" status worldwide. Full Story
The U.S. has had no net growth in manufacturing employment since the 1950s. Fantasy aside, the principal export of the U.S. is green dollars. With green dollars being the major export, the value of those dollars can only go down. With no visible end to the exportation of green dollars, the price of Gold has little choice but to rise over time. Fantasies are the only arguments for allowing your wealth to wither in paper assets. Reality is real assets, like Gold. Full Story
This initiative will also improve the image of the entire mining sector. They are now working together as a force for world improvement by setting out to develop a focused, measurable, strategic plan. While overcoming global poverty seems a gargantuan task, the unified, sectoral approach proposed through this initiative offers a much-needed facelift to a much-maligned and wrongly tarnished industry. Full Story
Stocks marched patriotically higher on Tuesday as anticipated, but the rally was not quite strong enough to get us short intraday as we’d recommended. Our bullish targets for the Mini-S&P, August Crude and the QQQs will remain valid when the markets open and begin to feign activity Thursday and Friday, but we should be extra cautious about laying out shorts that we would not in any case be carrying over the weekend. Full Story
The remarkable saga of the raptors continues. I’m referring to the commercial traders on the COMEX, aside from the four and eight largest traders in the Commitment of Traders Report (COT). To summarize, over the past year or so, a pattern has developed where the smaller commercial traders in the large commercial category seem to be aggressively stepping in front of the dominant shorts in silver (and gold). Full Story
If you study silver like I do every day, the recent price drop affects you in different ways. It makes you afraid of losing money, or angry if you believe in manipulation. For some people, it makes them happy they are in a position to buy more. A sudden sell off like this last one also makes you think and re-evaluate. I wonder if the original reasons I bought silver are still okay. That is good because things can change. In fact, I think things have changed in silver. Believe it or not, I think the silver story has gotten better than before. Full Story
By: Chris Mayer & The Daily Reckoning Crew - 3 July, 2007
-The slow grinding wheels of Financial Fate…further down the subprime spiral… -The risk of letting Mr. Market do his work…anticipating the inevitable woes… -How the rich become "filthy"…is there any problem more money can't solve?…and more! Full Story
By: Gary Dorsch, Editor, Global Money Trends newsletter - 3 July, 2007
Trading in the arcane world of foreign exchange is often akin to judging a reverse beauty contest. The trick to profitable trading is to pick the least ugly currency. Nearly all fiat or paper currencies are ugly, because the 18 of the world’s top-20 central banks are inflating the money supply at double digit rates. At the moment, the world’s two ugliest currencies are the Japanese yen and the US dollar. Full Story
There now exist about $1.4 trillion in risky sub-prime mortgages that never should have been made. This of course is likely to lead to…more foreclosures and a drop in housing prices, cash-out refinancing, and housing market activity. All of which will likely lead to greatly curtailed consumer spending which, by some accounts, is 60% of the U.S. economy, which leads to…increased unemployment and underemployment and reduced U.S. worker earnings and therefore slower economic activity, leading to a greater economic slowdown than the U.S. is already experiencing. Full Story
America may be referred to as the “Home of the Brave” because when the bills arrive it takes a lot of courage to open them up, especially when you must turn around and face your wife and kids with a straight face. When it comes to paying bills these days, America just doesn’t feel like the land of the free any longer. To be truly free you must be debt-free; if you’re not, your creditors own you. Full Story
THIS IS NOT the idle chatter of permanent bears. The subprime mortgage collapse now hitting Bear Stearns may be just the start. Serious analysts from big investment firms are talking ominously about "the big one". It will make you angry to learn just how the investment industry has got you involved. If you can understand what's happening, you should have time to move. So let's get to the bottom of it now, and in plain English. Full Story
By: Steven Saville, Speculative Investor - 3 July, 2007
Most economists can readily explain why it would make no sense for a government committee to set the price of eggs. They will tell you, quite rightly, that no committee could ever gather sufficient information and react quickly enough to changing circumstances to ensure that the egg price set by the committee was consistently equivalent to the price that brought supply and demand into balance. They will also tell you, again quite rightly, that the price-setting errors that would inevitably be made by such a committee would create problems in the egg market. Full Story
Gold has breached its main up trend line in both the 1, 2 and 3 year charts and thus there is a good chance that it could test the 630 price point level. If it fails to hold at this point (there is pretty strong support here) then the next support level becomes the 600 price point level; a very extreme move would take it down to the 570-585 ranges, a zone that provides extreme support. We would also view this as an incredible buying opportunity if it were to happen, though we would not hold our breadths as it’s an extreme move. Full Story
Remember the joke about Russian workers and their Communist bosses? “We pretend we’re working and they pretend they’re paying us.”? Now it’s the American worker’s turn to play make-believe. With July 4th falling on a Wednesday, this week was over last Friday as far as U.S. productivity is concerned. Full Story
By: The Mogambo Guru & The Daily Reckoning Crew - 2 July, 2007
-The uncontainable subprime situation...the real problem with having no money... -A prodigious feat of borrowing...home and trailer owners suffer equally... -The Reserve is open - but only for a few more days...don't tempt the gods...and more! Full Story
Gold's divergence since April was and still is troubling. Despite that divergence, multiple different indicators are now signaling that the precious metal sector could be at or approaching a major bottom. Though gold did break its uptrend from October 2006, it has failed to breakdown in a manner that would deem significant its recent underperformance. Another term for a breakdown that doesn't follow through is "shakeout." The converse is when a breakout occurs but isn't sustained. Full Story
Wallace, Idaho – Silver Summit 2007. It's right on the horizon, and officially opens its doors Sept. 20 and closes on the 21st, but if you're paying attention, there's a one-day pre-function on Wednesday, the 19th and a weekend of Wallace-style revelry on the 22nd and 23rd. Full Story
If I lit your house on fire and showed up with the fire brigade, am I a “fire-fighter”? The answer is obviously not. I am an arsonist and should be prosecuted for my criminal activity. In a similar manner, in no imaginable way can the Central Bank ever be considered as an “inflation-fighter”. They are the very source of inflation when they create it out of thin air! Full Story
In any event, I think this is a very low risk buying opportunity for cash purchases of silver (and gold, for that matter) for long term holding. I would not be surprised to see a small rally in the next month or two, which I may miss in the next 30 day trek in the Ladakh/Zanskar wilderness. If we rally quickly to an RSI in the high 60’s you might take consider taking partial profits or hold for bigger gains in the fourth quarter of this year. It is possible to see again a great buying opportunity in silver and gold sometime between the end of Aug and the end of October. Full Story
By: David N. Vaughn, Gold Letter, Inc. - 2 July, 2007
It amazes me how depressed and skeptical everyone becomes when a target price objective is not met. I suppose it’s hard to remember what the original objective of the game is. And the objective is to make money in natural resource stocks. Is that objective being met? For those who had the good sense to listen to solid advice and purchase the best precious metals companies. Full Story
Gold lost $6.10 on the week, closing at $650.90 (-0.93%). It remains below its lower trend line, but is above its 65 ema and its 300 day moving average as well. Both have provided strong support all during the gold bull. Full Story
Looking at a long term P&F chart of gold one almost can see a direct upside down picture of the US$ Index chart. We have a double bottom. We have a long bull in step by step moves. We have an established resistance and a reaction. We are now in a new rally mode on the P&F but in a reaction mode on a shorter term basis. The only problem with this opposite chart pattern scenario is the TIME. Full Story
Mike Larson from Money & Markets. George Soros & Bill Gross from Pimco in: Housing Bubble - Mortgage Woes segment. (YouTube) 3 Spotlight Picks with big dividends! Full Story
Millions of Chinese small investors have been flooding into the Chinese stock market during the last 6 months in ever increasing numbers, as is normally the case they are likely to be the last to enter before the Chinese market enters a short but swift bear market. Full Story
If the inflationary pressures continue to build as the U.S. “dollar” continues to be printed to service the outstanding debt obligations, it is quite possible that the number of paper millionaires will increase over time. However, the ability to become a real millionaire—a “silver millionaire”—will become more and more difficult. Full Story
Central banks have traditionally kept their reserves in relatively low-yielding, highly liquid government securities, agency debt, money-market instruments and bank deposits. The most current official IMF figure for official worldwide foreign currency reserves is US$5.89 trillion. At US$1.35 trillion, China holds the world’s largest pool of official reserves, followed by Japan with US$911 billion and Russia with US$403 billion. Full Story
Everywhere we turn it seems we keep hearing of some bubble or another that threatens to engulf our country and hurl us headlong into a major financial catastrophe. Around every corner there lurks a bubble in the wings just waiting to be popped…and make no mistake about it, it *will* take you and your life savings with it! (At least that’s what the bubble-mongers in the financial media would have you believe.) Full Story
By: John Mauldin, Millenium Wave Advisors - 1 July, 2007
Is the subprime mortgage market collapsing before our eyes, or did we avoid a disaster as Bear Stearns stepped up to the plate with $3.2 billion to help its ailing funds? As we will see from the data, the problems in the subprime world are not over. The Fat Lady has not sung. But will the problems in this market contaminate the rest of the liquidity-driven markets? Is the party over? Not according to the high-yield markets. In this week's letter, we look at what could be the real problem in the next half of the year. Full Story
When the Mini-Dow futures broke above 13600 on Friday not long after the opening bell, we put out a bulletin in the chat room predicting they would reach a minimum 13680 shortly thereafter. The initial A-B thrust looked pretty powerful from a Hidden Pivot perspective, surpassing no fewer than three previous peaks that had been made earlier in the week. But no sooner had the futures broken through the clouds than they turned 180 degrees and plunged back to Earth. Full Story
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