By: Bill Bonner & The Daily Reckoning Crew - 21 September, 2007
-Misguided investors following shifty paper…U.S. dollar blown down by a gust of wind…aloof in the face of freefall… -Public schoolchildren find Dubai on a map…no longer content to sit atop mountains of money…driving at night with no lights… -No such think as safe housing prices…Magoo speaks, too little too late…a happy hour in Hong Kong…and more! Full Story
Gold was near a 27 year high, oil was at a record high, stocks in the U.S. and globally remained bullish, the currencies were strong and the U.S. dollar was near a record low. The Fed then lowered the Fed Funds and Discount rates by a half percent on Tuesday, which triggered or reinforced strong breakouts in these markets, leaving no question that the major market trends are solid and strong. Full Story
By: Adam Hamilton, Zeal Intelligence LLC - 21 September, 2007
Holy cow! How about that gold price this week? With the Ancient Metal of Kings powering to awesome new bull-to-date highs, gold traders are rejoicing. The Bernanke Fed’s reckless decision on Tuesday to shove the ailing US dollar off a cliff has really ignited a fire under international gold investment demand. Full Story
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - 21 September, 2007
Liquidity relief coming from the U.S, the U.K and European Central Banks to the banking system, is still struggling to unfreeze the system, simply because it is cash and not an underwriting of dubious investments. Some read the drop in interest rates in the U.S. will bring instant relief to the driver of the U.S. economy, the besieged U.S. consumer, but no such thing will happen until rates are much lower still and confidence restored. Why? Full Story
By: Peter Schiff, Euro Pacific Capital, Inc. - 21 September, 2007
Coming at a time when rate increases were needed to combat the sinking dollar and surging gold, oil and other commodity prices, Ben Bernanke’s 50 basis point cuts in the Fed funds and discount rates this week may go down as the most irresponsible move in Fed history. Full Story
By: David N. Vaughn, Gold Letter, Inc. - 21 September, 2007
Well, what do the doom sayers say now? Any idiot, yes idiot, can recognize gold is settling above 700 an ounce. I have no idea in the short term where gold is headed, but I do feel that 700 is becoming the established floor price for gold. Full Story
In case you missed it, gold and its shares are on the fly in a sense we haven't witnessed for a long time. Yes, gold is showing its muscles and demands to be recognized as a true safe haven again, a role which it has fulfilled for thousands of years. Full Story
The Fed’s September 18, 2007 rates cuts temporarily bailed out their buddies on Wall Street, while simultaneously inviting hyperinflation, and sacrificing the U.S. Dollar, the long-term health of the U.S. economy, and the best interests of taxpaying middle-class American citizens* and future generations of Americans. Full Story
Buying gold is as far as you can get from today's complex and exotic debt markets. They're making headlines for all the worst reasons today, as banking stocks plunge, mortgage-bonds slip into default, and losses pile up at hedge funds. Gold, on the other hand, is recording near three-decade highs, and it still doesn't owe anything to anyone. In our current financial marketplace, that makes gold rarer still. Full Story
Alan Greenspan's autobiography was released on September 17. He was interviewed by Leslie Stahl on September 16 on CBS's "60 Minutes," for what has to be the most successful book promotional appearance I can remember. Full Story
Bernanke to the rescue? I doubt it. This chart is profound in its implications. To be specific, the Fed is easing just as the short end of the bond market told them to. But on the long end, secular changes may be at hand. Full Story
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness…..” Charles Dickens 1867 (A tale of two cities). Gold and silver bulls finally have something to be REALLY excited about, - for the first time since 2005, when gold broke out at 450.00 Full Story
WOW! What an interesting couple weeks. A lousy August Jobs Report, even though it exaggerated job growth the upside! The Birth-Death Modlel actually added 120 thousand mythical jobs, including construction jobs and financial sector jobs, both clearly in retreat, a blatant deception. The US Federal Reserve finally was given the smoking gun they needed on a platter to cut interest rates. Full Story
The recent surge in the price of gold has renewed the interest in it as an investment, while creating a deluge of commentary within the gold bug community. I have read many new articles that tout $3000 gold, while others speak of $400.00 gold. Neither view is wrong in my opinion – nor is either view correct in my opinion. I will explain. Full Story
By: Richard Daughty, The MOGAMBO GURU - 21 September, 2007
Naturally, I am confused, and my mind is whirling at the concept of 'the one-way bet', because I have never actually seen any real 'one-way bets', and so this sounds suspiciously like the old Zen classic, 'What is the sound of one hand clapping? Full Story
By: Rick Ackerman, Rick's Picks - 21 September, 2007
We’d raised the prospect here the other day of a DJIA rally to 15,000, but our heart was not in it, as you may have surmised. In any case, we remain duty bound to look for even the subtlest sign that the bullish outlook has come a cropper. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 20 September, 2007
-A frightening sense of 'ground rush'…credit flowing like a jet stream…what is versus what used to be… -A time when 'de' is worse than 'in'…integrity in a central banker is like chastity in a prostitute… -Words of wisdom from Gilda Radner…the "Twilight Zone" of the economic cycle…graining momentum…and more! Full Story
What concerns me most today is not the mortgage meltdown in the U.S. That's because it's not the cause of our country's economic problems. Rather, the mortgage meltdown and credit market panic are just symptoms of a much deeper, underlying disease. Full Story
Remember Future Shock, the book by Alvin Toffler? It was published in 1984, which was ironic since George Orwell’s 1984 had been the classic vision of a scary future. In the rosy glow of the 1980s, the term “future shock” seemed like it must be referring to something in a distant future. Today, after years of global and domestic crisis, “future shock” is something that many people feel has already arrived. Full Story
By: Bob Chapman, The International Forecaster - 20 September, 2007
Gold is in the process of backing and filling in a consolidation pattern, which we don’t believe will last too long. The next effort will be to breakout over $730 and up to the $760-$780 level, and then on to $850. When $850 is reached we will have completed phase one of the long-term gold bull market. The next phase will be to the $1,700 to $2,500 level. Full Story
As for gold, my guess is that it will move higher in brackets of say $15-25 increments. Silver should follow gold’s lead for the time being, unless it becomes in vogue to look at 25-year highs in gold and question why silver is only $13 an ounce. What I don’t see is silver leading gold in an inflationary environment. Full Story
It is entirely possible that we are witnessing danse macabre, the last contango for Barrick. Backwardation of gold remains an enormous threat to Barrick’s survival. After all, Messrs. Wilkins and Sokalsky should know best. They don’t want to own Barrick shares. They have voted. With their feet. Full Story
By: Richard Daughty, The MOGAMBO GURU - 20 September, 2007
'Even kids playing a simple game can show us the ways of inflation. Monetary inflation begets price inflation. Pinecones or your favorite paper currency, the fate will be the same. Full Story
By: Rick Ackerman, Rick's Picks - 20 September, 2007
Is the Dow on its way to new all-time highs? We wouldn’t bet against it at the moment, having exited a short position in Citigroup the other day just before it and a whole bunch of other stocks took off. A global leader in the smoke-and-mirrors business, Citi seemed like a perfect proxy for a stock market that continues to waft skyward on a turbocharged mixture of hot air and short-covering. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 19 September, 2007
-Headlines report on FOMC sanctioned 'Party Time'…bankers fear the 'rich man's spoiled teenager'… -Bailout buckets as effective as the pumps on the Titanic…the rich buy watches for charity… -1998's doppelganger…yesterday's rate cut - a desperate act of a desperate man?…the newest innovation in the hybrid electric vehicles…and more! Full Story
By: Gary Dorsch, Editor, Global Money Trends - 19 September, 2007
Nowadays, there are numerous signposts indicating that inflation in the United States is getting out of control. The US M3 money supply is 14% higher than a year ago, its fastest growth rate in 35-years, the US Dollar Index is plunging to 15-year lows, gold is surging toward $725 /oz, a 28-year high, crude oil is cruising above $80 /barrel, wheat prices have doubled to $8.75 /bushel, an all-time high, and the Baltic Dry Freight Index has zoomed 300% higher to stratospheric levels. Full Story
Ben Bernanke always said he would slash interest rates to forestall recession. He's not known as Helicopter Ben without good reason! Now Dr.Ben has made good on his promise, and set about destroying the Dollar to try and prolong the Great Greenspan Inflation. Mervyn King, on the other hand, forgot what central bankers are for. Full Story
In this article, we will precisely demonstrate the way this deeply unfair wealth seizure strategy works, and the multiple levels of challenges it presents. We will review the particularly severe potential implications for conventional investors, and illustrate by example how the one-two combination of inflation and the inflation tax could mean that a DJIA of 75,000 by 2027 could translate into a 73% reduction in real investor net worth. Full Story
By: David Coffin and Eric Coffin - 19 September, 2007
We noted on the front page sidebar in this month’s Journal that the major markets have to be considered to be in full correction mode. The activity this week has done nothing to dispel that feeling, bi-polar though the market has been. After rising 4.5% in the first three trading sessions this week the S&P got clobbered today to the tune of 3%, along with everything else that moved. Full Story
Rising U.S. equities markets from the October, 2002 lows (or, for that matter, the 2005 lows) through the July, 2007 highs have lulled some investors and several commentators into believing that they had gains as of July, 2007. Unfortunately, when properly measured, many of these ostensible gains actually are not. Full Story
The most recently released inflation data shows UK CPI Inflation falling to 1.8% and RPI rising to 4.1% for August. Even though the picture is mixed, the slowing UK housing market and economy is expected to result in further moderating of the inflation picture over the next 12 months, which is to result in a fall in UK interest rates to a target of 5% by late 2008. Full Story
The method by which the price of gold is held back is through unlimited short selling in the futures market by parties acting for the governments interested in keeping the price down or under control, and by feeding into the market such amounts of gold as may be required by the market for physical gold. Full Story
By: Richard Daughty, The MOGAMBO GURU - 19 September, 2007
Higher prices in winter?…'Sounds miserable,' I think to myself, 'but not the end of the world!' This was…contradicted by Doug Casey… He writes, 'Let me cover the big picture. I do think we're approaching the end of the world as we know it.' Haha! Full Story
By: Rick Ackerman, Rick's Picks - 19 September, 2007
Although it was no trick to see yesterday’s Fed-induced short-squeeze coming, it took imagination to anticipate its animal ferocity. We had advised shorting into any buying panic because it was bound to end with the question “Okay, what now?” hanging over Wall Street. Full Story
Gold has risen due to safe haven status. If the equity markets continue to rise, safe haven demand may come down, which should result in a short term correction in prices while maintaining the bullish direction intact. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 18 September, 2007
-Some good news about Mobs…the ingenious 25-cent cufflinks…Greenspan 'turbulent' relationships… -Deficits harden into iron-cold debt…factoring in the great credit zeppelin…the guesses of Team Bernanke… -Edge of your seat decision time…Some data for you to chew on…rebounding housing market pessimism…and more! Full Story
This is in answer to Mike Mish Shedlock’s rejoinder Double Standard in Gold Hedging? http://globaleconomicanalysis.blogspot.com (September 11, 2007) to my Peak Gold! — Part Two (September 10, 2007). Mr. Shedlock challenges my claim that unilateral hedging by a gold mine, in particular, the practice of selling forward longer than one year, or quantities in excess of one year’s mine output is, in effect, a naked short sale, involving unlimited risk. Full Story
Manipulation has created what I believe is the investment opportunity of a lifetime. If it were not for the fact that the price of silver has been manipulated, given the powerful supply/demand fundamentals, there is no way that it could, or would, be priced as cheaply as it is today, Simply put, the manipulation has caused the price of silver to be so low that it has created a rare gift. Full Story
While the past is not always a reliable guide as to what the future may bring, it can give us a prescience of what may lie ahead. The chart below reveals one thing for sure: the US-Dollar has lost more than 50% against a basket of foreign currencies over twenty-five years, but not in an uninterrupted line of course. Full Story
The issue will be of utmost important to U.S. investors because putting U.S. Dollars under your mattress will surely have a disastrous effect. With the U.S. Dollar on the verge of a total collapse investors will awaken one day to discover their ‘nest egg’ has disappeared. Full Story
By: David N. Vaughn, Gold Letter, Inc. - 18 September, 2007
I am sitting at a coffee shop and I look at the counter and notice all the pasties and bread. I think…hmm…the bread of life. And guess what came to my mind. Yes, you guessed it. Gold is the bread and life of the financial world. Gotta have it! Full Story
Between a rock and a hard place – how does such a catchphrase fit into this picture then? In a nutshell, and in relation to the above, this is where Bernanke’s Fed currently resides, stuck between a rock, which is the monetary discipline a rising gold price demands, and a hard place, which is deflation. Full Story
By: Steven Saville, Speculative Investor - 18 September, 2007
The weekly comments of Dr. John Hussman regularly contain great insights into the world of stock market investing and should, in our opinion, be read by anyone wanting to improve his/her understanding of what drives the stock market. However, almost everything Dr. Hussman writes on the topic of inflation is flawed. Full Story
Without doubt the lead story of the past two weeks has been the surge in the gold price as it broke upside out of the large triangular patterns that had confined it for the past 18 months. I have continuously detailed these triangular formations that have been in progress on the gold price in every leading global currency. Full Story
Last week I showed the long term P&F chart. During this past week one additional X appears on the chart above the last X shown last week. With that new X we now have a very good picture of a price trend at a crucial position. This new X is at the same level as the X’s from the 2006 top. This is a resistance level that now has to be overcome or else there may be some serious down side ahead. We are at a potential double top or at a potential new bull market break-away point. Full Story
By: Rick Ackerman, Rick's Picks - 18 September, 2007
Place your bets, folks! We’ve heard good arguments both for and against a Fed easing today but think the odds favor the doves. One of our regular correspondents, Erich Simon, actually expect the Fed to tighten – a very distant longshot, in our view – and we have reprinted his comments at bottom. Full Story
By: Bob Chapman, The International Forecaster - 17 September, 2007
A sinking dollar, soaring commodities, and several diverse technical conditions on the charts, show the dynamics coming together to make the end of the gold carry trade a lot closer to reality than ever before. Central banks loan their gold to bullion banks such as JP Morgan Chase or Goldman for 1% or less. The banks sell the gold and invest the proceeds in higher yielding assets, such as US Treasuries that pay 4.6% thereby making 3.6%. Full Story
Professor Fekete’s criticisms of the global economy are especially compelling because they are grounded in academic discipline and tradition. A mathematician by training (professor emeritus University of Newfoundland), Professor Fekete possesses that unique attribute of those whose interests spill over into adjacent areas and bring with them a fresh perspective to their new field. Full Story
1st Hour: Headline news & market forecast. Spotlight Picks with big dividends. The International Forecaster and Chris Waltzek answer listener questions. 2nd Hour: Jim Sinclair Full Story
Other big UK banks at risk both with large UK subprime mortgage books and reliant upon money market financing to a significant degree are Bradford and Bingley, Alliance & Leicester and to a much lesser extent HBOS. So be prepared for many more financial sector shocks as the crash in the financial sector continues. Full Story
By: John Mauldin, Millenium Wave Advisors - 16 September, 2007
How predictable was the current turmoil in the market one year ago? Six months ago? On one level, it was not all that hard to see that that there were going to be problems in the subprime mortgage market, especially in the BBB tranches (or portions) of Mortgage Backed Securities which were rolled up together into Collateralized Debt Obligations and given AAA ratings. Full Story
But just as the ‘blame Greenspan’ theme threatens to get rolling next week everyone will pause, abandon their senses, and beg the Fed for help. After all, while Greenspan’s book will be released on Monday, Bernanke’s first kick at the rate-cut-can is scheduled for Tuesday. Full Story
If the need to refinance the loan book by appealing to the money markets has undone Northern Rock in the UK, what havoc might the ongoing liquidity crunch be causing in the US banking sector? Full Story
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