By: Bill Bonner & The Daily Reckoning Crew - 25 May, 2007
-Trusting the untrustworthy house-price data…naïfs in the Chinese stock market… -Corrections are no laughing matter in any language…the ebb and flow of political sewage… -A small world, with lots of money…a public market in private equity?…and more! Full Story
By: Peter Schiff, Euro Pacific Capital, Inc. - 25 May, 2007
Ultimately, rising interest rates will eventually exact a toll on stocks, especially here in the United States. As the world’s largest debtor nation, America will suffer disproportionately from rising interest rates, as we are on the paying end of the transactions. Also, given the proliferation of short-term debt and adjustable-rate mortgages, this burden will become increasingly difficult to bear. As the U.S. economy falls into recession, with interest rates and consumer prices continuing their ascents, corporate earnings will suffer, causing stock market investors to seek out other inflation hedge alternatives, particularly gold. Full Story
All reasoned investment and trading decisions are premised upon some sort of Forecast, whether explicit or implicit. Thus it is essential when making such Forecasts to have a view about what the biggest players in the markets - - the U.S. Federal Reserve and the other Central Bankers’ - - short, medium and long-term goals are. Full Story
BUY LOW, SELL HIGH – it sounds simple enough. Yet the strategy eludes most people. Drowning in newsprint, they like to buy what's hot instead – like Tech Stocks in late 1999, oil futures in summer 2005, subprime mortgage-backed bonds in 2006, tulip bulbs in Amsterdam, 1624. Full Story
In featuring the outlandishly bullish thoughts of Nobel laureate Vernon Smith here yesterday, I said that it would be churlish of me to take issue with the economist, given that a rampaging stock market has placed the burden of proof squarely on the bears for the moment. Yesterday, however, stocks reversed 200 points to the negative, so it’s probably as good a time as any to say a few churlish words concerning the implausible notions of an ivory-tower egghead evidently encouraged by a Journal reporter to go off his rocker. Full Story
By: Christopher Westley & The Daily Reckoning Crew - 24 May, 2007
-In perfect harmony with the ex-Fed chief…no sucker gets an even break… -Hot-off-the-press dollars have no time to cool…conversations on a walk through London… -Iran's dirty little secret…and more! Full Story
Our elected officials and Wall Street executives all have a vested interest in keeping the perception of a robust economy alive. The employment data announced each month is critical to this perception, but a thorough analysis of the data suggests something quite different that wheat we are told. Full Story
The durable goods figures and jobless claims data already released this morning were a mixed bag of ups and downs and aren't giving markets any sort of direction. New home sales figures just released are showing a significant surprise to the upside which could put dollar correlated assets (read: precious metals) under some pressure the rest of the day until our next housing data point tomorrow. Full Story
Uranium has so far stayed out of the political mainstream so there has not been a coordinated drive to suppress its price. Uranium continues to be influenced by the simple powers of supply and demand. And the demand for uranium is definitely there. Just in the United States alone a new renaissance in nuclear power is dawning. This fact is probably one of the strongest and most powerful of trends as we move deeper into the 21st century. Full Story
With S&P 500 bank/financial stocks the worst performing sectors so far in 2007, it is becoming clear that the inverted yield curve has damaged investor confidence in the group. Conversely, with utility stocks the best performing sector this year, it is obvious that investors have continued their defensive hunt for yield. Suffice to say, given that financial stocks typically outperform early in the cycle and utilities tend to beat other sectors late (or in the down cycle), the action in 2007 would seem to suggest that the bear is growling. Full Story
By: Richard Daughty, The MOGAMBO GURU - 24 May, 2007
"My thankless job, being sent here from a planet far, far away in another galaxy, is to deliver the message to humankind that…inflation in prices destroys economies as it makes prices too high for people to pay." Full Story
The Wall Street Journal pulled out all the stops yesterday, hard-selling a bull market that we continue to view as an episode of mass hysteria. In the lead story, the Journal trotted out a Nobel laureate, no less, to say in so many words that this time it really is different. Could this renowned egghead be onto something? Quite possibly. We’re not inclined to argue the point right now, since, whatever the cause, stocks are undeniably moving higher, and dramatically so. Full Story
By: Chris Mayer & The Daily Reckoning Crew - 23 May, 2007
-The red hot lava of cash and credit…Mauritania up there with Shenzhen and Shanghai… -Emerging market investors having the time of their lives…the petrified money of the proletariat… -A quick rebuttal…the press and the lonely candidate…and more! Full Story
The Bretton Woods II principal propaganda plank has been buried, with no fanfare, no eulogy on a moronic indefensible myth chapter. Asia no longer supplies credit to the United States debt monster. That mantle has been accepted by a combination of the Persian Gulf oil producers and the counterfeit press, each showing strain. The transition is truly deadly. Increasingly feisty, if not hostile, sheiks in the hotbed of the Middle East have become the last remaining pillar of USDollar support. Full Story
Lost Wages, Nevada – We took another swing at Nevada this past week and came up 5 aces – that being the number, times 100, of folks who turned out for a little pre-Money Show “mini Silver Summit” at the Mandalay Bay that David Morgan and I conducted with the Silver Valley Mining Association and several of its members to showcase opportunities that abound in the silver investing sector – whether you are talking physical metal or equities. Full Story
If the wider public became aware of the silver fundamentals, net silver investment would be much higher, and so would silver prices. With a market this tight, and the world this unaware, the silver price will probably rise much higher than anyone can predict. Full Story
By: Bob Chapman, The International Forecaster - 23 May, 2007
If mining costs continue to escalate production could be affected or come to a halt. That would mean 2,400 tons of gold would not reach the market each year. If that happened the central bank market manipulators would soon be out of gold for sale and the price would catapult to higher levels. Full Story
Of course, the Uranium Symposium is really about the future. And that's why the entire day was filled with fascinating presentations on my favorite white-hot metal. Heck, after the tour of the Lexington, we ate dinner on the ship and listened to another talk on uranium. Today, I want to tell you what I learned at this buffet of information. Full Story
The precious metals complex began turning around this morning as a sell off began in the dollar in Asia and has continued in the US and European markets today. The market should move around a fair bit today as US energy inventory numbers hit the tape at 10:30 AM EST, potentially roiling what has already been a volatile energy market in the last week. Full Story
I’d like to report on a profound new development in the silver market. It’s a development that has been over a year in the making, but I wanted to be sure I wasn’t jumping the gun in writing about it. Let me give you the conclusion upfront. It’s a new and powerful reason for making a long-term investment in silver. Full Story
With a U.S. recession just a statistical heartbeat away, any sane observer might conclude that the stock market is staging for a spectacular plunge. In fact, it is within mere hundreds of a point of opening up a lush new pasture for bulls. The chart below shows why this is so according to the Hidden Pivot system, the analytical method I use to avoid letting my innate bearishness blind me to the obvious. Full Story
By: Christopher Hancock & The Daily Reckoning Crew - 22 May, 2007
-Seeing Mao on all sides of us…running out of whisky before learning the truth… -Cheap money makes things more aesthetically valuable…shocking electricity bills… -Getting duped by an overzealous architect…putting up with a little corruption…and more! Full Story
So we know last week that 16 tonnes of gold came tumbling out of the GLD ETF…and we now know that ECB banks sold nearly 18 tonnes of gold the same week. The ECB updated this morning that two captive banks in the system sold 17.7 tonnes of gold last week (or $280 million euros). Full Story
By: Gary Dorsch, Editor, Global Money Trends newsletter - 22 May, 2007
Higher prices for commodities from coffee to soybeans and iron ore to crude oil, have brought new found wealth to Brazil. Since the election of President Lula de Silva in 2003, Brazil has emerged as a major player in global trade, and its currency - the real, has climbed by 70% against the US dollar, with a trade deficit shifting into a massive surplus. The Bovespa index on the Sao Paulo Stock Exchange reached a record high of 52,750 this week, and is up 18.2% so far in 2007. Full Story
Government agencies, in other words, now control liquid assets – held as investment funds – worth China's entire annual GDP. But if that didn't signal loudly enough that the bubble in cheap money has brought the world to a pretty pass, there's more mischief ahead. "OECD says monetary policy to blame for buy-outs," announces Yahoo, after the Organization for Economic Co-Operation & Development said today that "private equity plays a valuable role in helping to transform under-performing companies [but it could create] adverse consequences for investors." Full Story
By: Steven Saville, Speculative Investor - 22 May, 2007
This currency market view does not, however, automatically mean that we expect the US$ to move higher relative to gold. While a multi-month advance in the US$ relative to the euro would normally translate into a lower US$ gold price, we are anticipating an up-move in USD/EUR driven more by euro weakness rather than by genuine US$ strength. Such an outcome could coincide with gold rising in terms of all currencies, but rising less in US$ terms than in euro terms. Full Story
To hear the talk from the mainstream press you’d think the dollar’s demise was imminent. Everyday is becoming a repetition of a theme that we’ve actually been hearing off and on since 2004, namely, the collapse of the U.S. dollar. But as we’ve chronicled here many times in the past, whenever the bearish factor gets a little too loud on the dollar’s weakness, a period of stability and/or strength begins. That’s exactly the point along the cycle the dollar is in now. Full Story
Gold has chastised and disappointed bulls so many times since last May that we want to be quite certain of our indicators before sounding the all-clear. Unfortunately, the coldly mechanical Hidden Pivot method that we use to forecast price trends has mostly glum things to say about bullion at the moment. Full Story
By: The Mogambo Guru & The Daily Reckoning Crew - 21 May, 2007
-China starts spending…simpletons in a crazy financial system… -High value, or just a high price tag?…emerging market buyout fervor… -A good time to be a dead artist…gas prices starting to lick the lumpen…and more! Full Story
By: Bob Chapman, The International Forecaster - 20 May, 2007
The elitists desperately want to keep the dollar from testing 80 on the USDX and in that process gold and silver had to be attacked. All sense of propriety has been thrown out since last May. Stagflation is well upon us and it’s progressively getting worse. The numbers being released in every quarter are dreadful, but due to a sea of liquidity, the stock market hits new highs. The economy disparately needs lower interest rates and this is what the elitists could well be shooting for. Push the dollar up to 86 to give it a cushion and push gold back to $650, so that when the cut is announced the dollar fall won’t go down thru 80 and gold will have to start upward again from a lower unnatural base. Full Story
By: Roland Watson, The Silver Analyst - 20 May, 2007
One could easily argue silver has been in a bear market since Friday the 12th May 2006 as prices have drifted below the $15 high of that time. On the other hand, silver has not looked back since March 2003 when it traded for less than $4.50 giving us a full-blooded bull market whose demise is not on the cards quite yet. It depends on your timeframe, but nothing in the recent price action suggests the end of the silver bull market. Full Story
By: John Mauldin, Millenium Wave Advisors - 20 May, 2007
I have been suggesting since last fall that the potential for a recession/serious slowdown was quite high, brought on primarily by weakness in the housing market. Today we look at why I still hold that view, as the data shows a slow leak of the housing bubble and consumer spending starting to slow as inflation eats into buying power, even though some data shows that some parts of the economy are still strong. Unlike Bernanke, who this week said that the problems in the subprime markets will not spill over into the economy, I expect the subprime mortgage predicament to infect the whole housing market and create a drag on the whole economy. Full Story
Like all rally targets before it, our DJIA objective at 13587 gave way on Friday, inundated by a flood tide of buying that lifted the Indoos to yet one more all-time high. Paradoxically, and despite the market’s strength, the short I’d advised from 13587 would have been an easy winner, if only for little while, since our target came within a single tick of anticipating an intraday high that endured for more than five hours and which gave way to a correction of nearly 40 points. Full Story
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