By: Peter Schiff, Euro Pacific Capital, Inc. - 16 January, 2009
In truth, not all economies run on credit. But over the last decade, the United States became a bubble economy that needed unlimited credit to keep from collapsing. In a legitimate economy, it is not credit that fuels spending and investment, but simply income and savings. It's too bad our Fed chairman does not understand the difference. Full Story
Gold was one of the very few assets to hold up last year, fulfilling its role as a preserver of capital. In U.S. dollar terms, of course, it has been essentially flat, given the recent strength in the dollar on safe haven grounds. That will change, as we discussed in a previous letter; when investors start selling dollars, gold will move sharply up in terms of that currency… as indeed it has been doing against most other currencies this year. Full Story
By: The Gold Report and David Mason - 16 January, 2009
Mix one part mining analysis with one part corporate finance, then add 25 years of investing experience to get executive chairman and founder of Augen Capital Corp., David Mason. In its first 10 years, Mason's merchant bank completed 250 investments and financings and emerged as an industry leader in tax-advantaged flow-through investments in Canada's resource sectors. In this exclusive interview with The Gold Report, Mason discusses market fears, a weakening U.S. dollar and "the most important factor" that will drive gold ahead of the commodities pack in 1Q09. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 16 January, 2009
-Christmas may be over, but Obama is keeping the 'season of giving' going on the Hill…the next bubble will be in public debt… -Stock prices are more 'normal' than they were a year ago…how many chickens can get in a plane engine? -What is bad for GM is bad for America…just when you think you have things figured out, the facts change…and more! Full Story
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - 16 January, 2009
Analysts always trust figures and rely on them completely. Next they support forecasts backed by numbers too. All of us are vulnerable to reports backed by figures from reputable firms or forecasters. But a glance back over the last 18 months shows just how far off the mark such reports were. Full Story
Recently Zimbabwe announced that it will issue a new set of notes which will include a 10 trillion, 20 trillion, 50 trillion and 100 trillion denomination. One commentator stated that these notes will be introduced to "keep pace with the hyperinflation that has caused many to abandon the country's currency." Full Story
By: Adam Hamilton, Zeal Intelligence LLC - 16 January, 2009
2008, of course, was the worst year for the stock markets in memory. We’ve never seen anything like it in our lifetimes. The Great Depression of the 1930s was worse, but in order to have been old enough to care about the stock markets back then a trader would have to be around 95 years old today. For all but that elderly infinitesimal fraction of today’s traders, 2008 was utterly unprecedented. Full Story
WHATEVER THE RIGHTS and wrongs of trying to fix the blow-up in credit with fresh money and debt, it's time to spend! Spend! SPEND! regardless. "I'll bring paper!" cry the laureates, and "I'll bring ink!" cheer the columnists, now rocking the boat in place of Percy Bysshe Shelley's poor rain-lashed poets, those unacknowledged legislators of the world. Full Story
Recent past and prospective Financial and Economic Crises present unparalleled challenges to Investors and Traders. Fortunately, one Key Tool has come into increasing use in recent years and is an immense help in coping with and, indeed, profiting from these challenges. And we’d wager The Cartel* is displeased. Full Story
A Federal Reserve balance sheet that has grown from 900 billion to well over 2 trillion since last fall may be on its way to 10 trillion according to some observers. There is no denying it’s been pedal to the floor in money-printing efforts to restore the credit markets back to health. Full Story
By: David Morgan, Silver Investor - 16 January, 2009
Many of us who write about the precious metals field have put out their 2009 forecasts and predictions for the New Year. This writer is no exception, but it seemed to me that it might be nice to look at my mission statement and determine if I could compose a simple story that might engage the reader to think about the current dire state of affairs in the economy and how an honest “money” system might help on an individual basis. Full Story
By: Andrew Mickey, Q1 Publishing - 16 January, 2009
I’m not a doom and gloomer by any stretch, but we can’t avoid reality. We’ve got about a 1 in 5 shot of hitting a full-blown panic and we should be prepared. There’s a lot of money on the sidelines, so a panic is definitely not a 100% sure thing. But if it happens, it will be a truly great buying opportunity. One, I’m not willing (or going) to miss. Full Story
By: Richard Daughty, The MOGAMBO GURU - 16 January, 2009
The biggest banknote in Zimbabwe is worth only enough to buy two lousy, stinking loaves of bread! Fifty billion Zimbabwe dollars for two loaves of bread! Full Story
By: Rick Ackerman, Rick's Picks - 16 January, 2009
Yesterday’s news seemed oddly becalmed, as though world events were in a holding pattern. Until a U.S. Airways jet crashed into the Hudson River in the middle of New York’s afternoon, it was the kind of day, news-wise, when the seasonal debut of American Idol could claim headline status on Google News, at least for a short while. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 15 January, 2009
-A look at Bernanke-ese…still no sign of the long-awaited Obama-bounce… -Banks need even more bailout money…the world economy is entering a 'lost decade' of recession, deflation and bear market… -A temporary stock boomlet…who knows the code words for 'fire up the printing presses'?…and more! Full Story
Yes, Gold turned out to be one of the few markets that held value year on year in 2008. Were the results spectacular? In comparing gold versus the results of the stock indices and practically every commodity market, yes. Gold did what it is suppose to do. It held value. Full Story
In short, what U.S. policy makers should hope and pray for is that when the bond bubble end game does arrive it will be because central bankers (plural) printed too much money, and not because a viable alternative to USD hegemony has emerged. Supporting the great U.S. Treasury bubble is in everyone’s best interests, until it is not. Full Story
The fallacy behind the call for economic stimulus is that declining aggregate demand is the mother and not the daughter of economic contraction. When left to its own devices, the market will return back to prosperity (consumer demand and all). Government intervention oftentimes has the effect of actually prolonging the crisis. The new administration would be wise to let the market adjust on its own and spare us the additional debt and debased currency that an active fiscal and monetary policy will yield. Full Story
By: David N. Vaughn, Gold Letter, Inc. - 15 January, 2009
Actually, all the booms of the past 20 years have in a sense been nothing more than complicated giant Ponzi schemes. It seems though that Bernie Madoff is going to become the ultimate poster child. Full Story
I’m sure many of our readers remember the 5¢ and 10¢ stores of the past. What a treat as a kid to browse through the merchandise looking for the chance to purchase some of our favorite items literally for pennies. Well, guess what? The 5¢ and 10¢ store is back and this time it is packed with many incredible values for us big boys and girls. Full Story
Gold stocks have been showing great strength relative to the general markets. Notice the HUI bottomed out much earlier than the general markets, October versus November, a bullish indication. Furthermore, it is evident that the HUI will be nowhere near its lows as the DOW gears up to challenge the 7500 lows. It is an extremely positive indication going forward. Anyone looking to take positions in gold stocks should be prepared to do so in the coming days as it heads toward the 50-day MVA and support line. Full Story
The charts below show how gold stocks became bearish much quicker than the price of gold indicating we should see lower gold prices soon. This time the HUI index gave us 5 days advance warning that gold will eventually drop quickly to catch up and the chart below show this. Full Story
My field is money and the economy, and it is my goal to expose lies and share the truths regarding this field. We also have non-real money that seems just like real in that it is used as a medium of exchange, a unit of account and a store of wealth. Just like chlorinated water, instead of providing confidence to economic transactions or decisions, it destabilizes the level of confidence. Full Story
By: John Browne, Senior Market Strategist, Euro Pacific Capital - 15 January, 2009
Most consider the New York market ‘spot’ price for an accurate indication of the true price. However, investors now buying buy physical or ‘fabricated’ gold, are paying a premium of between $20 and $30 per ounce. When these gaps existed in the past, major increases in the price of gold were imminent. Full Story
By: Richard Daughty, The MOGAMBO GURU - 15 January, 2009
In the meantime, if you are like me - who is like Peter Finch's character in the movie Network - then you are either at, or near the point where you are standing in the street, screaming, 'I am as mad as hell and I'm not going to take this anymore!' Full Story
By: Rick Ackerman, Rick's Picks - 15 January, 2009
Stocks showed remarkable pluck on Wednesday, buttressed by a Dow average that fell “only” 248 points on a day when the news could not have been much worse. Retail sales figures released by the Commerce Department had been expected to show a paltry gain of 2.2% over the holiday shopping season, but the actual number came in at minus 2.8%. This was not merely the worst number in decades, it was the worst number ever. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 14 January, 2009
-The world economy is dangerously ill - we must try some experimental drugs…Bernanke wants to create a "bad bank"… -America needs Bernie Madoff…Social Security: the ultimate Ponzi scheme? -The Indian Enron…how can the U.S. pay back money it has borrowed?…and more! Full Story
YOU MAY HAVE SEEN some rather wild commentary of late concerning gold and silver prices. I can't vouch for the silver market – small, tight and still dependent on fast-falling industrial demand though it is. But as regards Gold Bullion, this sensational "analysis" mistakes the key basics of how the gold market actually works. Full Story
By: Bob Chapman, The International Forecaster - 14 January, 2009
The concept of decoupling is dead on arrival. The financial crisis is affecting every country throughout the world. It is seeping into the real economy in every nation. Export orders have fallen off a cliff just as consumer buying has. In every nation the crisis has spread into the real economy via both unemployment and inflation. The economists and analysts who scoffed at us almost two years ago when we announced that the recession, are all stumbling over themselves in announcing we may have a depression. Already there is talk that exporters like Japan and China may not recover for years. Full Story
While the forces building behind the catastrophic U.S. economic policy of the last administration and the new one may lack the same single day impact, the destruction of livelihood and property that is just over the horizon will dwarf that of the 1980 eruption of Mount. St. Helens. Full Story
The phrase, "blood in the streets," refers to economic panic. Wise investors say they will buy stocks when there is blood in the streets. This means panic. It refers to a final sell-off, when fear trumps greed. We are nowhere near that stage today. Full Story
By: The Gold Report and James Passin - 14 January, 2009
I love gold right now. There are some very interesting ways to bet on the gold price. I think that gold is going to be well north of $1,000 an ounce over the next several years if not significantly higher than that. There’s incredible value in the gold sector from my perspective. Gold’s actually a fantastic bet right now. Full Story
By: Jason Hommel, Silver Stock Report - 14 January, 2009
To continue to offer silver at a free market price, I must have a minimum price. My minimum price is based on covering my cost, plus tomorrows silver price, which is the time i receive the money from the prior day's auction's highest bidders. To get as close as I can to tomorrow's price, I have to set my "reserve" price within the last hour or two before the auction. Full Story
By: Richard Daughty, The MOGAMBO GURU - 14 January, 2009
I know there is opportunity, just like I know you ruined my life! That is why I am buying gold, silver and oil at these ridiculously low prices, so that when they soar…I will be rich, rich, rich! Full Story
By: Rick Ackerman, Rick's Picks - 14 January, 2009
Just when we’d written the dollar off as brain-dead, it comes roaring back for no good reason! Does this mean that Treasury paper, too, will soon be bounding to new record highs, also for no good reason? We’ll know soon enough. In the meantime, how do we account for the dollar’s resurgence over the last month, following its horrific collapse after Thanksgiving? Full Story
By: Bill Bonner & The Daily Reckoning Crew - 13 January, 2009
-Put Bernie Madoff on the public payroll…we offer the Feds some advice - whether they want it or not… -The link between violence and poverty is becoming more apparent…world trade is shrinking… -The 3D's of the economic situation…the cure for a slump is a slump…and more! Full Story
Everybody wants predictions. The following article does a little better than that, in that I wrote it back in November of 1997, outlining several theories of history, and pointing to a logical way of anticipating what will likely happen to the world at large over the next generation... The article is unaltered in its text from the original, though I have added some current commentary in bold italics. Full Story
Well here we all are in 2009 in the midst of the worst financial crisis investors have ever seen in our respective lifetimes. So is the blood letting over yet? My answer is yes & no. I personally see it as a yes for certain Junior exploration players in PM’s, Base Metals & Energy, but for a few others it’s a death knell in the making. We all know the old adage of how ‘Losers Average Down on Losers’, ‘but’ - is it different at this historic point in time? Full Story
By: Axel Merk, Merk Hard Currency Fund - 13 January, 2009
The Federal Reserve (Fed) has gone beyond playing with fire, and may have indeed set the house on fire. It’s one thing to push interest rates to near zero to stimulate the economy; it’s another to “monetize the debt” by printing money to buy government debt. In recent weeks, the Fed has broken outside even those boundaries and become actively engaged in managing the private sector beyond the core banking system. Full Story
Prevailing and commonly-held beliefs do not have to be right. They merely have to prevail and to be common; and in the 1990s, the prevailing and common belief was that gold as an investment was dead. But as in the Bible where Jesus and Lazarus arose from the dead, so, too, in this new millennium, has gold. Full Story
If only the futures price would catch on to what has been happening over the last year or so at the world's largest silver ETF, the iShares Silver Trust (NYSEArca:SLV). With a massive addition of 218 tonnes on Friday, inventory reached a new all-time high of 7,063 tonnes. Full Story
Certainly if you have a large cash position you should consider holding up to half of it in gold and silver and related assets as a hedge against currency devaluation which looks inevitable, and why not protect against an enemy you know is coming? Full Story
By: Steven Saville, Speculative Investor - 13 January, 2009
A scenario favoured by many analysts is that a new bull market commenced last November. This view will undoubtedly gain traction if the stock market continues to strengthen over the next few months (as we currently expect), but it has almost zero chance of being proven right. Full Story
By: Andrew Mickey, Q1 Publishing - 13 January, 2009
All sectors reach that point when it’s “get in now, or you’ll never get in,” which never lasts. For now, remember it’s a buyer’s market. For stocks you’re looking at, set a price and wait for it to come to you. If these tables show us anything, it’s that the market is cyclical and these sectors take years to play out. With that in mind, I still foresee the medical sector being one of the best places to have your money for the next ten years. Full Story
By: Richard Daughty, The MOGAMBO GURU - 13 January, 2009
I hastily scrapped all the other 'it ain't my fault' defenses…and now…I immediately declared my little department to be a bank, and plowed all of the employee pension fund money into it as shareholders of the bank. Full Story
By: Rick Ackerman, Rick's Picks - 13 January, 2009
A couple more years of deflation, then a hyperinflationary tsunami? That’s the scenario envisioned by a reader from South Africa, Eelco Lodewijks, in response to yesterday’s commentary, “Calling All Inflationists.” We asked readers to explain how inflation could occur with asset values, credit and business collapsing around the world. Hundred of you wrote back, and we are still sorting the replies. Lodewijks’ e-mail was among the first to arrive, and it contains some interesting ideas that seem quite plausible to us. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 12 January, 2009
-The economy is in the worst shape since WWII…you can't cure a bubble in five or six months - try five or six years… -Losing the world's consumers…the Fed's new super drug: "quantitative easing"… -Things went downhill quickly in Ireland…the Bonner family is getting into the spirit of the Worldwide Financial Meltdown…and more! Full Story
Never before in the financial history of the US has the reasons to own gold and silver bullion been as obvious as they are today. Only a fool, a paid flunky or some poor soul believing what a paid flunky says can believe gold to be a “barbarous relic” with no useful purpose. Those who have taken the time to educate themselves understand that the financial system of the world came very close to total collapse back in September. Full Story
Most factors that appear to influence gold (and silver) prices seem to be favorably aligned, particularly physical investment demand. However, there has been notable deterioration in one previously important pricing force - the market structure of the COMEX gold futures market, as defined by the Commitment of Traders Report (COT). I am not making any short term price predictions, I am just analyzing the data. Full Story
Today’s topic at this 15th Annual Investment Outlook is “Making Money in Troubled Times”. This may be quite a challenge in 2009 if investors continue to do what they’ve always done. However, there is always a bull market somewhere and making money in troubled times is possible if you correctly identify the dominant trends and adjust your portfolios accordingly. Full Story
Well, Santa has come and gone and provided those who bet on a Christmas time rally a nice return, the best ever in fact with respect to the broads. After such an outcome, it’s traditional to see a pullback to work-off an overbought condition when the majority of traders return from holidays, so don’t be surprised if the broad markets fall early this week. Full Story
This essay analyzes the growth of the money supply for 73 selected currencies from 90 countries. Nineteen of these countries belong to two monetary unions - the European Union and the East Caribbean Union. Together, these countries make up 96.7% of the world's Gross Domestic Product (GDP) and 84.1% of the world's population. Full Story
The current issue of the One-handed Economist features some very bearish patterns in the U.S. dollar. This is the moment of truth for the establishment. They are about to be destroyed, and they do not have a clue. Full Story
Yes we have had stocks rally by 20 per cent since the collapse of last autumn but where are the next lot of buyers going to come from? Anybody who wanted to buy on the dip will now have done so. The next move is therefore down. Full Story
By: David Chapman, Union Securities - 12 January, 2009
We keep reading all these articles about how bonds are in a bubble and that any day now the bubble will burst. Naturally when you see something going straight up, the contrarian in each one of us wants to say “Hey, that’s not right”. Many felt that way in the late 1990s when the NASDAQ was in its bubble with price earnings ratios over 100 and even as high as 200. So out came the short sellers, convinced that they would make a bundle when the bubble burst. Full Story
Last week gold and silver remained in a trading range moving sideways, while crude oil had a large pullback on very heavy volume. Below are charts which will show where these commodities stand in relation to support and resistance as well as where we may be looking to go long in the near future. Full Story
1st Hour: Headline news & Market Weatherman Forecast. Spotlight Stock Picks with big dividends. The International Forecaster and Host Chris Waltzek answer listeners' questions. 2nd Hour: -Dr. Leo Kim, Healing The Rift Full Story
People ask: “Isn’t the Mint already open to gold, producing Gold Eagles and Buffaloes?” Opening the Mint to gold has a technical meaning, namely, opening it to the free and unlimited coinage of gold on private account. The Gold Eagles and Buffaloes are produced on Treasury account in limited quantities and sold at a premium as souvenir coins. It is a ploy to show that gold coins would just not circulate as money. Well, they would if there was no premium and the market was saturated. Full Story
By: Jason Hommel, Silver Stock Report - 11 January, 2009
Over 100 years ago, in the late 1880's, Germany stopped using silver as money, going to a pure gold standard. This started an 80 year long trend of silver no longer being used as money. India abandoned silver in the Great Depression, flooding the world with silver that was no longer being used in their coinage. This pushed silver prices down to that 25 cents per ounce level. It had nothing to do with deflation or the depression, it was demonetization. Reduced demand results in lower prices. Full Story
By: Bob Chapman, The International Forecaster - 11 January, 2009
As this TARP fraud transpired, the Federal Reserve shelled out over 9 trillion in liquidity to their cronies, thus rapidly debasing our currency with total impunity, and the Fed may even be floating unauthorized treasury bonds to absorb toxic waste and to fund bailouts. The Fed's Board of Governors are now the gods of high finance, deciding which companies will survive and which will get vaporized. (Hint: Survivors are Illuminist owned or controlled companies). Full Story
Our federal officials have passed laws that guarantee an incredible variety of debt and debt-like obligations. The amounts run to 50–100 trillion dollars or so. If events occur such that they have to pay off a cluster of these guarantees, they cannot do so. They can pay off in paper but they can’t pay off in terms of real assets. Full Story
By: John Mauldin, Millennium Wave Advisors - 11 January, 2009
Where are we headed in 2009? We will explore that in detail over the next few issues of Thoughts from the Frontline, but today we will start with some of the larger forces which will have a major impact on the economies of the world, and I will end with my usual attempt to forecast the various markets. We will look at deflation, deleveraging, the fallout from the stimulus plans (note plural), housing, consumer spending, unemployment, and a lot more. Full Story
By: Andrew Mickey and Harry S. Dent - 11 January, 2009
We’ve entered an unprecedented period of uncertainty. The markets have collapsed and $30 trillion of stock market “wealth” has evaporated. The future could be filled with even more. There are a lot of unanswered questions. Real estate, gold, stocks...what’s a safe haven? Is this a correction which will get sorted out soon or will it take much longer? Any life in China and India? Inflation or deflation? Is this the end of the financial world as we know it? Full Story
Americans hoping to protect their wealth from a soon to be bankrupt and panicked government are finding that their options are few, and growing fewer by the day. The following article is reproduced in its entirety and without comment, because it speaks for itself. Full Story
By: Richard Daughty, The MOGAMBO GURU - 11 January, 2009
But this new spending is, of course, entirely predictable, as this is what has always been done by all other bankrupt, brain-dead corrupt governments on this planet in the past 4,500 years that had racked up so much debt that they collapsed. Full Story
By: Rick Ackerman, Rick's Picks - 11 January, 2009
We challenged readers to tell us how inflation could possibly occur with asset values, credit and business collapsing around the world. The response has been overwhelming and hugely insightful, and we promise to air your comments in the days and weeks ahead. One submission in particular, however, warrants the urgent attention of all: a recent essay by Peter Schiff, The Fed’s Bubble Trouble. Full Story
It was a rather slow week in the gold company news sector but the mine closures and spending cuts continued. Lower prices are the major factor in this trend and are reducing supply to levels I never thought we would be seeing at this stage in the bull market. This ensures the next leg up and ultimately the final price peak will be higher than I expected and it should also extend the length of this precious metals bull market. Full Story
Back after three weeks and it looks as if nothing has happened in the precious metals. Lots has, however, happened in the stocks and especially the “cats and dogs” variety. Many, many 100% plus moves in only one or two weeks. Are we back into a real honest to goodness bull market? Let’s go through our normal exercise. Full Story
The gold rally may be fizzling out short term. GLD ran into its upper trend line and bounced back down, closing below its 200 dma as well. Last week’s report mentioned that this was likely to occur, as negative divergences were present and still are. Full Story
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