The global money supply has come to have little to do with interest rates, or so it would seem. Some three-quarters of all liquidity comes in the form of derivatives and securitized debt, as the analysts at Independent Strategy have observed. And if raising rates did nothing to slow it, the bubble in money might just start to deflate even if short-term rates now get clipped back towards zero. Full Story
So far in this series, we've heard from Michael Panzner via his book Financial Armageddon, and Peter Schiff via Crash Proof. But perhaps you're still not convinced of how bad things might get. I realize that it is difficult to even begin to even imagine what life would be like after a complete financial collapse and everything that would entail. But there is no need to imagine it: You can see it with your own eyes in Spike Lee's incredible documentary on Hurricane Katrina, When the Levees Broke, A Requiem in Four Acts. Full Story
Deepcaster recently issued a Forecast that there is a high probability of Major Moves in several Key Markets in the next few days. In Deepcaster’s view these impending Moves provide an opportunity to profit from a position in Gold. But it is essential to Forecast the direction of the prospective moves correctly, of course, in order to know WHAT position to take, whether short or long. Indeed, Gold may provide a profit opportunity whether the specific markets, which we are about to address, turn up or turn down. But it must be used very differently in each case. So let us consider WHY and HOW. Full Story
We’ve watched the shares of homebuilders unravel for more than a year, but what if I were to tell you there’s a side to the construction business that’s still going gangbusters? Well there is, evidently, and my source, a subscriber whose company achieved 25% growth in the last fiscal year, says he’s intent on extracting all of the lucre he can while the good times last. Full Story
By: Dan Amoss & The Daily Reckoning Crew - 15 March, 2007
-What’s on the menu in Squanderville?...heaving ribs and just deserts... -Fuddy-duddy literary economists...burned by the reality of bubbles... -A Sunny Japanese horizon...et tu, South Africa?...and more! Full Story
Wow! This mortgage meltdown you're seeing in the stock market is exactly what Martin and Mike have been warning you about all along. Boy, am I glad they're on our team! Meanwhile, the uranium market is booming regardless of the stock market. Just last week, an Australian uranium mine got clobbered by a powerful cyclone. And the damage to just that one mine could result in losses exceeding all the new uranium production coming online this year! Full Story
By: David N. Vaughn, Gold Letter, Inc. - 15 March, 2007
China bores me. Ten years ago no one gave China a second thought. Five years ago interest in China was growing. As early as 1999 China relevance was ignored and analysts thought of the region as a back water banana republic. Today, when China sneezes the entire world pulls out its handkerchief and cringes. China today just can no longer be ignored period. It has the world’s largest population and that population base is growing out and becoming middle class with all the demands that middle class demands. Full Story
By: Peter Schiff, Euro Pacific Capital, Inc. - 15 March, 2007
With the meltdown in the sub-prime mortgage sector now laid bare, many on Wall Street desperately cling to the notion that the pain will be localized. The prevalent delusion is that the overall mortgage, housing and stock markets will be little impacted by the carnage ravaging the sub-prime sector. As such, renewed stock market weakness is seen as an over-reaction and a great buying opportunity. These assumptions represent wishful thinking in the extreme. Full Story
My assertion is that all investment manias have the common characteristics of the perception of easy profits with little or no risk, loose lending standards, and outright fraud and deceit. This housing boom has been fueled by a mortgage finance bubble on an unprecedented scale that will have enormous economic implications as it unwinds. With Federal Reserve Chairman Ben Bernanke acknowledging the risk of an economic slowdown due to a deflating housing market, long-term interest rates have very little risk of moving much higher. Full Story
A sharp plunge yesterday might have brought emetic relief to a stock market bloated with indigestion, but it was not to be. Instead, shares teeter-tottered most of the day, eventually ending up on the plus side, with the Dow Industrials registering an unpersuasive gain of 57 points. The reason the market was unable to do what might otherwise have come naturally is that European and Asian markets had remained relatively placid Tuesday night, alleviating such feelings of panic and disquiet as must have permeated Wall Street at the close of business on Tuesday. Full Story
By: Congressman Ron Paul & The Daily Reckoning Crew - 14 March, 2007
-No ‘liquidity crisis’ in the desert...disappearing in a trice... -Soggy financial cereal...easily spreadable risk... -An answer we actually know...laughing without jail time...and more! Full Story
For investors, however, uranium has been hot for a very good reason indeed: prices are up sevenfold over the last five years. Spot uranium hit $85 per pound recently, having doubled in the past year, and you’d be hard pressed to find a market analyst who doesn’t see the price hitting $100 by December. It's quite a reversal of fortunes for a once out-of-fashion metal that was trading in single digits at the turn of the century. Full Story
The Game has two halves: going long the real, and short the symbol. That is, going long real assets by owning them, and going short the dollar and the financial system by selective and advantageous borrowing. That way if you are a hedge fund manager, CEO or “private equity” investor who has essentially gambled the world monetary system on your speculations, and you collapse the financial markets and the value of the dollar when you guess wrong – you don’t jump out the office window. Instead, you enjoy an extraordinarily lucrative early retirement. Full Story
By: Richard Daughty, The MOGAMBO GURU - 14 March, 2007
While Total Fed Credit was down by a miniscule $1.7 billion last week, the Federal Reserve managed to buy up, for themselves and their Treasury co-conspirators, $1.3 billion of U.S. government securities. Not much, to be sure, but this slimy tactic is called "monetizing the debt"; the government wants to spend money, but doesn't have any, so it creates and sells some bonds, and the Federal Reserve (to its everlasting shame) dutifully creates the money to buy them, and then actually buys the bonds with the money! Full Story
Gold is a unique investment. It has no balance sheet. It has no earnings estimates. It is the only investment that is a true asset, neither a debt nor residual ownership. Such is the reason that central banks around the world, from beginning of time, have held Gold. Know any central banks that prefer to hold sub prime mortgages rather than Gold? Know any Roman mortgage broker stocks? Full Story
My name is Edgar J. Steele. Why do gold and silver usually decline along with the stock market these days when it should work the other way around? Write down the following on a sheet of paper in big block letters with a felt-tip marker and pin it on the wall above your desk where you can see it every day: It's the dollar, stupid! Full Story
Mortgage Bankers Association Chief Economist, Douglas Duncan, believes that mortgage activity is set to dip and that “there's no question that the decline in [mortgage] volume will reveal excess capacity”. Although Mr. Duncan isn’t painting on overly grim picture, it is worth pointing out that he offered this negative outlook more than 3-years ago… Full Story
What I'm trying to get across to you as one "Everyman" to another, is that The die is cast. In spite of all efforts to the contrary, the precious metals complex is not going to be stopped from moving substantially higher en masse. It may be somewhat delayed by the PPT (plunge protection team) much as it has been for the past seven to ten years, but this market is not to be denied. Full Story
Whoooosh! What will Wednesday bring? Lower prices, most likely, if Microsoft is any kind of bellwether. We were waiting for the stock to dive yesterday to a Hidden Pivot support at 26.84 that had been flagged in the intraday notes section of Rick’s Picks. For a while, as someone in the chat room observed, Microsoft looked like the turd that wouldn’t flush. It finally did, though, and by day’s end the company’s shares had traded as low as 26.71. Full Story
By: Kevin Kerr & The Daily Reckoning Crew - 13 March, 2007
-Teetering on the edge of disaster...get out your popcorn... -A disappointing spring...a ‘not-so-magic’ bus tour... -Believing without question...grades go up, learning goes down...and more! Full Story
Simply put, the run up in real estate prices has resulted in a glut of vacant and other inventory for sale, while the run up in silver prices has created no obvious unwanted inventory. It follows, almost without saying that unwanted inventory creates downward price pressure. No unwanted and excess inventory, no downward price pressure. That is not to say that silver will not, and cannot, go down in price, just that it won’t be from real inventory liquidation. Paper inventory liquidation on the futures market is a separate and temporary issue. Full Story
In today's real-estate market, just the same problem's at work. For each individual mortgage lender, the need to cover their ass will mean recovering their assets. But for the industry as a whole, it would be better off leaving late-paying home-owners right where they are. Foreclosing and selling en masse will only push real-estate prices lower, faster. Full Story
By: The Mogambo Guru & The Daily Reckoning Crew - 12 March, 2007
-Going back into dreamland…the biggest pile of money ever put together… -Subprime bumpers crunching up against the foreclosure concrete… -Early spring weather…autumn in America…and more! Full Story
By: Bob Chapman, The International Forecaster - 12 March, 2007
Goldbugs have long had to endure the fact that gold and silver are now manipulated near 24/7 and especially during speeches by the leaders of our fascist government or Federal Reserve, during "access market" periods and, prior to and immediately after any negative report where gold and silver have been pushed in the opposite directions they should be going. This also applies to any crisis situation where gold's role as a safe haven is brutally attacked by the cartel. Full Story
How anyone could fail to understand that the by-now inevitable implosion of a $400 trillion global debt bubble must end in ruinous deflation is beyond me. Full Story
You are, therefore, left with a relatively simple choice. Do nothing and hope that all the world’s troubles just drift away—and risk personal financial disaster if they don’t. Or take action, if even with a modest share of your portfolio, and position yourself for extreme profits. Full Story
By: John Mauldin, Millennium Wave Advisors - 11 March, 2007
China and the Hedge Fund Dragon The Need for More Derivatives Cockroach Theory and the Subprime Mortgage Market Scotland, London, Malta, and Geneva Full Story
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