By: Congressmen Larry McDonald (D-GA) and Ron Paul (R-TX) - 22 June, 2007
Mr. Speaker, the United States of America is at a point of decision in its history today. Either we step into the open grave of economic collapse caused by 50 years of criminal economic policy, or start a third century of liberty and prosperity based upon the revitalizing truths of constitutional law and free enterprise. Full Story
So let us make a prediction that should be documented for future reference. In the next twelve to twenty four months, we believe interest rates will continue to trend higher. We think this will continue to cause capital to flow out of stocks, bonds and real-estate and into commodities such as gold and silver. We also think the increasing wave of inflation and rise in commodity prices will result in the media, analysts and public pointing their fingers to some unknowable fundamental cause. Full Story
By: Peter Schiff, Euro Pacific Capital, Inc. - 22 June, 2007
Now that yields on ten-year Treasuries have cracked through 5%, on their way to infinity and beyond, many on Wall Street are wondering how high rates must go before bonds begin to draw investors away from stocks. Full Story
BIG PICTURE – Cash is trash! Today, currencies continue to perform their function as a medium of exchange, but they certainly aren’t a genuine store of value; or a guardian of purchasing power. Thanks to the ongoing unprecedented money-supply and credit growth (inflation) on a global scale, currencies have stopped fulfilling this crucial function; thereby robbing the masses of their hard-earned savings. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 22 June, 2007
-When the last bear throws in the towel…floating high on the giant swells of liquidity… -Too many clowns on stage…market risks are only worth it if you're already rich… - Moments of beauty don't make a city beautiful…a report on sorely missed fanfare…and more! Full Story
By: Adam Hamilton, Zeal Intelligence LLC - 22 June, 2007
The phenomenal performance of this year’s red-hot Chinese stock markets has led them to become the most-eagerly-watched financial markets on the planet. While even just a couple years ago few outside of China cared about its indigenous markets, today countless speculators around the globe carefully monitor stock-trading action in China. Full Story
MOST SIGNIFICANT MARKET EVENTS cause an immediate and substantial price reaction, which makes it hard to profit from them. But sometimes there's a sort of slumber, when the market gazes sleepily about itself not quite sure what to do.nWe may be experiencing one of them now. Full Story
In his February, 2007 Letter, Deepcaster indicated that there is “One Bull Run That Is Not Done.” That “Bull Market ” for Uranium continues today. The question for investors, and the one which Deepcaster addresses here, is how to profitably participate in this Bull Market. But before we examine the “how” to profitably participate question, it is important to examine “why” it appears very likely to continue for the next few years. Full Story
The cancer that is mortgage bonds does not linger in isolation. Everything in the bond world is connected to almost everything in the bond world, at least within the US sphere of speculative madness. The financial credit market is a confusing jumble of speculation, risk reducing hedges, and leveraged insanity found mainly in the hedge fund arena. Mortgages are causing problems from their bond hedge schemes, both on the loan portfolio side and the bond security side. Always one should consider both, and never are they inseparable. Full Story
August Gold slid nearly $10 lower yesterday before gaining traction two ticks above our minimum downside target, 650.30. Had the carnage continued even $1.00 further it would have signaled a possible fall to a Hidden Pivot support well beneath these levels. Full Story
-A remarkable market event…Masters of the Universe see themselves as overpriced… -Just another pin in a world of bubbles…guillotines get sharpened for financial head-loppings… -Raising the banners of fairness and equality…grandmothers in Guantanamo…and more! Full Story
All global markets including the metals/mining stocks are experiencing unusual volatility. This may continue for awhile longer. The mining stocks are currently oversold and undervalued versus the current price of gold and should have a strong 3rd and 4th quarter. There are just too many factors that are on the horizon for precious metals not to respond to higher levels. Full Story
I just got back from the gold show in Vancouver. The movers and shakers and market making newsletter writers in the industry gathered together with over 200 companies to share thoughts on where our market is headed, and why, and I've summarized what I could learn from everyone there. Full Story
By: Bob Chapman, The International Forecaster - 21 June, 2007
One of the fallacies of the gold market is that gold goes down when interest rates go up. We heard the same gobbliegook in the late 1970s. As interest rates rose so did gold and do not forget that. The recent strong gold selling and leasing by central banks had nothing to do with interest rates. The rate climb was aided and abetted by the Chinese who were demonstrating what China could do with hundreds of billions of dollars in Treasury paper they’d be willing to sell if the US congress changes the rules of access to the American economy. Full Story
We’ve been monitoring the T-bonds’ vital signs closely lately, looking for evidence that yields may have peaked, at least for the time being. Unfortunately, it looks as though any respite for borrowers, particularly mortgage borrowers, will be short-lived. Full Story
There were a couple of interesting pieces yesterday on TheStreet.com about the possibility of a return to the gold standard. The article: Ditch the Fed, Go Back to Gold made the front page, and embedded within the article was a link to a video interview with the author, Simon Constable. Gold has obviously come a long way in the last decade in terms of public awareness. Rising inflation has generated considerable interest in the so-called “barbaric metal.” Full Story
By: David N. Vaughn, Gold Letter, Inc. - 20 June, 2007
Gold does continue to strengthen regardless of what you think. Below is the action in gold this past Tuesday. Is gold on the verge of crashing? Gold will crash the day the United States pays off all its debts to China and Asia. Will that day come any time soon? Don’t think so. Full Story
By: Randal Strauss and Jonathan Kosares - 20 June, 2007
One of the more intriguing curiosities of the current bull market in gold has to do with the annual buying opportunity which seems to crop up in the depths of the summer doldrums. Full Story
IF YOU WORRY that the US Fed might be caught between a rock and a hard place – squeezed between inflation on one side and plunging house prices on the other – then pity the poor central bankers in London and Auckland. Every time they raise their interest rates, house prices increase! Full Story
By: Nassim Nicholas Taleb & The Daily Reckoning Crew - 20 June, 2007
-Figuring out the financial market seasons...out with the old, in with the new... -Endless toil for an intangible product...the U.S. can't afford an expensive city... -Hacks rush in where pros fear to tread...the lamentable tragedy of self-imposed exile...and more! Full Story
By: Richard Daughty, The Mogambo Guru - 20 June, 2007
You and your money, and the money of your little goon squad storm troopers here, is what is dying, and is going to die! And you will follow it into the grave as inflation kills you all! Full Story
Can double digit inflation exist in the headline number and “core” inflation remain muted? Does the cost of energy and food influence the cost structure of the world? Will China suddenly quit importing oil and food, causing prices to fall? Will the real world ever become known to the statistically challenged individuals creating government estimates of inflation? Those are questions that investors need to answer. Full Story
There are a few economists (very few) and a small percentage of voters (very small) worldwide who are convinced that central banks inflate their domestic currencies as a deliberate policy. We skeptics monitor the various money supply statistics and find that there is rarely a period longer than a few months in which any nation’s money supply is either stable or falling. We also monitor various price index statistics and find the same thing, with the exception of Japan. Japan did have a few years – 1995 and 2001–3 – in which its official price level fell for over a year by about one or two percent. Full Story
Remember my 'Crazy Like A Fox' subscriber? (See my previous articles entitled, “A Crazy Man’s Rant or Right On” and “Crazy Man’s Rant – He’s Crazy Life A Fox”). He continues (like many of us) to be a proponent of investing in commodities and gold, silver, uranium, oil and gas in particular and he continues to prosper. Many people have wondered how he has been so successful so I asked him recently. Below are a few comments regarding his approach to investing both in the past, now and the foreseeable future. Full Story
Less than one month ago, I started writing about the Raptors, which I defined as those smaller silver (and gold) traders in the large reporting commercial category of the Commitments of Traders Report (COT), other than the 8 largest traders. I advanced a theory that suggested these smaller commercial traders were now calling the shots in the COMEX gold and silver markets and were, quite literally, eating the big traders’ lunch. Subsequent COT reports have confirmed this theory. Full Story
For lurkers who are curious about what goes on inside Rick’s Picks, I’ve reprinted yesterday’s actual Touts below, along with all of the intraday updates and charts. Surely you didn’t think the service was all about Brainy Babes of Hollywood and other cheesecake we’ve featured here from time to time – all gratuitously and at no extra charge. Full Story
By: James Howard Kunstler & The Daily Reckoning Crew - 19 June, 2007
-Every day is the same, but different…investing around the fringe of the great bubble… -Detecting the pungent credit meltdown…a more lucrative use for crane cabs… -When it rains credit, it pours cheap dollars…the fastest capitalism you've ever seen…and more! Full Story
JUST HOW POWERFUL are the world's central bankers? As comic-book super heroes go, these mild-mannered scholars would no doubt confess that they look a bit weedy. The massed talents of the Federal Reserve or Bank of England, for instance, hardly ever leap over tall buildings in a single bound. Ben Bernanke and Mervyn King don't own a flowing cape between them, not judging by the multi-year wait for long-dated bond yields to catch up with their gently rising overnight base rates. Full Story
By: Steven Saville, Speculative Investor - 19 June, 2007
Equities are claims on real assets and the cash flows that these assets generate. As a result, the nominal prices of equities can be, and often are, boosted when excessive growth in the supply of money (inflation) causes the currency to lose purchasing power. To avoid being hoodwinked by the effects of inflation we therefore need to find ways to monitor the stock market's REAL trend (the trend after the effects of inflation are properly accounted for). Full Story
Yesterday’s brain-congealing tedium held the S&Ps within a three-point range for more than five hours, daring traders to take their eye off the ball for even a moment. But if past is precedent, we have to assume the whole boring day will turn out to have been a consolidation and that stocks will be pounding higher as usual when trading resumes this morning. Or is that scenario beginning to sound a little too pat? Full Story
As for the normal indicators, gold closed above its still slightly positive sloping moving average line. Price momentum (strength) is still in its positive zone but with a negative trigger line indicating the pressure is towards the down side. The long term volume indicator is below its trigger line and the line has turned down. Putting it all together the indicators remain just slightly better than last week so I will remain with last week’s BULLISH view of the long term gold position. Full Story
Commodity prices have begun to back up, including the grains, industrial metals, precious metals, and energy. Will the long term bullish trend grow stronger or will it top out? Either way bears careful watching. Higher food prices may be in the offing. Full Story
By: The Mogambo Guru & The Daily Reckoning Crew - 18 June, 2007
-Twice as much for dinner at the same price…expectations fall with the numbers… -Not much for an English million…I.O.U. one dollar…the sinking house of credit… -Slumping toward U.S. Treasury Bonds…an alternative to the Inland Empire…and more! Full Story
Is a credit cycle crunch about to befall global finance? There are those who would argue that although mature Western economies could certainly feel the pinch if credit trends begin to reverse, Eastern economies are immune from such considerations with growth prospects for the area still so robust. And you need to realize a great many investors have their portfolios aggressively positioned with this belief in mind, having thrown all sense of caution to the wind. Full Story
If the “Cash is Trash” and “Fiat currencies are headed for oblivion” arguments for holding gold and other tangible assets are correct, the least desirable asset category that one would wish to own would be long term bonds. On the other hand, if the deflationists who argue that the world is on the verge of a debt implosion leading to a deflationary depression are correct, “Cash will be King” and long term US Government bonds will be the most desirable form of investment. Full Story
Two developments in the platinum market have prices jumping this morning. One of the largest platinum mines based in South Africa has gone offline for a week due to some safety concerns and mining union, NUM, and Implats continue to head towards a stalemate in negotiations as Implats has not offered a new wage increase. NUM filed for a grievance with the government, the next move in beginning an official strike. Full Story
THE SPOT GOLD MARKET rose in the Asian and early European sessions on Monday, gaining nearly $3 from Friday's US close to open the week in New York above $658.75 per ounce. That 0.5% move versus the Dollar was outstripped by gold priced in Yen as the Japanese currency dropped to ¥123.42 per Dollar, a fresh four-and-a-half year low. Full Story
A common question of late is "Why, with a rising yield curve and rising long term interest rates - which usually go hand in hand with inflation fears - is gold relatively weak compared to stocks and some commodities?" I believe that secular changes occurred in 2001 (bull market in gold, a bear market in USD, a bear market in bonds and a bear market in stocks when measured in gold as opposed to funny munny) but over the last year we have witnessed a challenge to that idea; a challenge that comes in the form of various assets and markets outperforming the yellow metal. To that I say all things must have their day and I have little doubt that the day will soon return when this adjustment in the fabric of reality has run its course. Full Story
By: Julian D. W. Phillips, Gold/Silver Forecaster – Global Watch - 18 June, 2007
Since our inception we have run this table on Central Bank gold sales under the Central Bank Gold Agreement. We have always differentiated between the sales decided upon earlier and sales about which no announcement was made. We have done this for a reason, despite the fact that while the first “Washington Agreement” stated from the outset, that they would only sell gold from sales “already decided”, the second Central Bank Gold Agreement stated differently, that gold would be sold from “sales already decided and to be decided”. Full Story
By: Bob Chapman, The International Forecaster - 18 June, 2007
Regarding fundamentally misaligned currencies headlines state that the Bill does not specifically name China or any other country. In addition, headlines state that the Bill would require the US Treasury to develop a new biannual report identifying 2 categories of foreign exchange misalignment, and that currencies misaligned due to “clear” foreign policy action should be targeted for “priority” action. Full Story
John Perkins, The Economic Hit Man discusses his latest book. A visit from Arkad, The Richest man in Babylon. Free eBook! Maxed Out director James Scurlock talks about personal debt and the housing crash. (YouTube) 3 Spotlight Picks with big dividends! Full Story
Our last buy signals in the gold ETFs failed and we took a small loss on a conservative allocation. Both gold and silver have now fallen back to the 200ema support, where in the past six years, have acted as a springboard for all rallies, and three times as a launching pad for an impulsive phase to new highs. A special tutorial with a buying strategy for the gold sector in anticipation of the next impulsive phase has been posted for subscribers. Full Story
The prospect of higher interest rates looms large. New Zealand increased short-term interest rates to 8%. South Africa will follow soon and a string of other countries has threatened to follow suit. The cover story is that the economies of the world are so strong that Central Banks have to raise interest rates in order to cool down inflationary pressures. We find the prospect of higher rates (in light of Central Bank printing) akin to Dracula running a blood drive because supplies are low! Full Story
By: John Mauldin, Millenium Wave Advisors - 17 June, 2007
Be careful for what you wish, because you may get it, and sometimes as H. L. Mencken wrote, you get it good and hard. The collective brain deficit trust, otherwise known as the US Congress, wish for the Chinese to revalue their currency upwards. Today we look at why they may indeed get their wish and why it is not going to produce their desired results. Full Story
In each case the forecast was quite accurate but the stop-loss too tight. Could you have done better than I with these numbers? I expect so. Like many of my subscribers, however, I am constantly learning, and adjusting my trading style as the markets themselves change. Although I have come to expect the Hidden Pivot system to yield targets that are extremely accurate and reliable, days like Friday suggest that no system can achieve perfection all the time. Full Story
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