By: Bill Bonner & The Daily Reckoning Crew - 26 September, 2008
-Leave it to Congress to use "Christmas tree" as a verb…everyone is getting in on the act on the Hill… -Why is everyone so sure that the people who made this mess will be able to clean it up… -One person had something smart to say this week - and who it is may surprise you…and more! Full Story
By: The Gold Report and Joe McAlinden - 26 September, 2008
What’s happening now is panic, says Joseph McAlinden, who thinks that the financial system will survive it and that a year from now the Dow will be dramatically higher. Chairman and CEO of Catalpa Capital LLC, and former managing director and global chief investment officer for Morgan Stanley Investment Management, McAlinden tells The Gold Report that he believes gold continues to be an asset class of choice, despite the decline during the late summer sell-off. Full Story
Here and now, the market – right or wrong – is pricing toxic debt and derivatives at zero or worse. US subprime mortgage bonds, if marked-to-market – rather than against the apparent "final redemption value" used to help pay $66 billion to Wall Street staff in 2007 – are also worth zilch. That's why there's no danger of anyone buying them, no one outside Washington, that is. And there's the true danger today. Full Story
By: Peter Schiff, Euro Pacific Capital, Inc. - 26 September, 2008
Just yesterday, Henry Paulson's "bailout" bill, with only a few anti-Wall Street, pro-Main Street fig leaves slapped on by Democrats, appeared ready to sail through Congress on a bi-partisan tide. But something funny happened on the way to the printing press. It appears as if some conservative House Republicans are reluctant to sell their souls and ditch any remaining pretense towards American-style capitalism. Full Story
By: Adam Hamilton, Zeal Intelligence LLC - 26 September, 2008
Overshadowed by the pathetic drama gushing forth from the ailing financial stocks these days, other markets have slipped out of the limelight. In particular commodities, a market-darling sector not too many months ago, have been all but forgotten. This lack of attention is masking great opportunities. Full Story
The Starting Point for Protection and Profit is to determine how much of one’s investable assets one wishes to have in a Core Position of Gold, Silver and other Tangible Assets and then, importantly, to determine which investment vehicles in which to hold them. This Core Position is truly a long-term position and should represent a significant portion of one’s investable assets. Full Story
By: Ned W. Schmidt, CFA, CEBS - 26 September, 2008
Our graph this week is of the Dollar Death Ray, which is aimed directly at the value of the U.S. dollar. This plot is an extension of that which was introduced in last week's Gold Thoughts. In the graph is plotted the year-to-year change in Federal Reserve bank credit. In simplest terms, it is the rate of expansion of the asset side of Federal Reserve's balance sheet. Full Story
By: Joseph Brusuelas, Merk Investments - 26 September, 2008
The consequences of the troubled asset relief program (TARP) will be felt for a number of years. The death of the investment-banking model, the transformation of the domestic system of finance and the coming wave of regulation of what is left of Wall Street will have far-reaching consequences. This, however, will take much time to absorb and assess. What is of immediate concern, is how the proposed $700 billion TARP will impact the budget outlook for fiscal year 2009. Full Story
Not since the Hunt Brothers tried to corner the silver market in the late 1970s has there been more dramatic news for silver prices than last week’s confirmation from the Commodity Futures Trading Commission enforcement division is investigating the silver market. Full Story
By: Richard Daughty, The MOGAMBO GURU - 26 September, 2008
My God! This is beyond belief! The Secretary of the Treasury will be above the law! My God! I was going to wax loudly indignant, as should all thinking people, when Mr. Sorkin eclipsed me… Full Story
By: Rick Ackerman, Rick's Picks - 26 September, 2008
Deal or no deal? We’re keeping our fingers crossed that Congress will stumble its way to a dead end. However, rarely has the World’s Greatest Deliberative Body, even at its most constipated, do-nothing best, failed to inflict damage on the Republic when the opportunity arose. Full Story
By: Dr. Ron Paul, U.S. Congressman - 25 September, 2008
We are in this crisis because of an excess of artificially created credit at the hands of the Federal Reserve System. The solution being proposed? More artificial credit by the Federal Reserve. No liquidation of bad debt and malinvestment is to be allowed. By doing more of the same, we will only continue and intensify the distortions in our economy - all the capital misallocation, all the malinvestment - and prevent the market's attempt to re-establish rational pricing of houses and other assets. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 25 September, 2008
-Avoiding the costs of big trouble…parasites and chiselers who benefit from the bailout… -One thing the president of Iran is right about…deflation is acting like the hair dryer from Hell… -The jury is still out on who will prevail in this financial war…a few reader comments about our upcoming gift to Congress…and more! Full Story
That’s right folks, the Federal Reserve, the deceitful private bank that was chartered in 1913 under the most dubious and connived circumstances - to protect the integrity of the U.S. Dollar and U.S. financial system has seemingly, finally achieved it’s true but never publicly declared goal of “the complete economic surrender of the Republic.” Full Story
Outrage, Is the word that springs to mind. The Wall Street parasites, criminals and sharks are trying to get away with it yet again. Obviously the early 90’s Savings & Loans fiasco was not enough? NO LESSONS WERE LEARNED. Late 90’s Dot Com implosion was again not enough? STILL NO LESSONS WERE LEARNED. So we now have the mother of all bubbles the 00’s Housing crash THE LESSON LEARNED? = THEY HAVE ALL GONE BANKRUPT, THEY HAVE IMPLODED. Full Story
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - 25 September, 2008
A recession is here, and the possibility of yet another financial disaster remains a present danger, this time on a global scale. The ability of the global economy to absorb another crisis is growing thin. Each time a crisis occurs, gold looks to be a safer place. Each time investment managers are disappointed with the solutions to the problem of the U.S. its role as global economic leader wanes. Each time this happens, the $ looks more vulnerable. So what’s next? Full Story
With the BRIC (Brazil, Russia, India, China) economies in much stronger shape domestically compared to the sickly U.S. and their respective markets already pricing in much of the coming collapse yet to really hit the U.S. stocks I wonder when these countries will band together to form a new currency of their own? They may as well, since many global financial instruments already treat them as an economic unit. Full Story
Buying gold and silver on margin in a volatile market is a very quick way to get your position wiped out. The first erratic price movement might destroy your position. But there are other methods of leveraging the rising price of gold without having to borrow money. Full Story
By: Gary Dorsch, Editor, Global Money Trends - 25 September, 2008
About $3.6 trillion of market value was wiped-out from global stock markets in the three-days between Sept 15-17th, triggered by the bankruptcy filing by Lehman Brothers, and fireworks in the $62 trillion credit default swap market. The collapse of Bear Stearns, Merrill Lynch’s eleventh-hour flight for safety into the arms of Bank of America, and the meltdown at American International Group, were all linked to credit default swaps on mortgages that led to the fall of these titans. Full Story
By: Bob Chapman, The International Forecaster - 25 September, 2008
After over 40 years of financial reporting and analysis, we can say, without hesitation, that the 700 billion bailout plan proposed by Fed Chairman Buck-Busting Ben Bernanke and Treasury Secretary Hanky Panky Paulson, on behalf of the Caligula Administration, is the most abusive and piggish fascist scheme we have ever heard proposed. Full Story
IT'S REALLY NOT their fault. With the best will in the world, things just kind of...you know...went awry. "Problems that originated in the credit markets and first showed up in the area of subprime mortgages have spread throughout our financial system," said President Bush last Friday, like he was talking about dry rot. Full Story
Numerous articles and reports from GATA, Silverseek.com and this series on the Goldsmiths adequately establish the reality that powerful people are manipulating the futures markets. Therefore, it almost seems redundant to write anything further on this theme. Yet, since there remain some doubters and opponents of the idea out there, this article will highlight one more great proof that indeed the markets are manipulated and controlled by very powerful people. Full Story
By: Richard Daughty, The MOGAMBO GURU - 25 September, 2008
Instantly, I was out the door, into the car, careening crazily down the streets on my way to the bank! Bursting into the loan officer's office, I said, 'How much money you got? I'll borrow it all!' Full Story
By: Rick Ackerman, Rick's Picks - 25 September, 2008
We didn’t think we knew anyone affected by the bankruptcy filing of Lehman Bros. last week, but it turns out that it’s likely to be felt by everyone in our neighborhood in some small way. That’s because Boulder County, where I live, had $36.5 million parked in a state-regulated fund called Colorado Diversified Trust, $601,000 of which was in Lehman commercial paper. Full Story
The United States has transformed itself, the most radical degraded aspects having occurred in the last eight years. Many might object or cringe at repeated mention of the Fascist Business Model implemented by the Clinton Administration, and carried to extreme by the Bush II Administration. It is a harsh departure from Beacon of Freedom. Too bad, fact of life! Full Story
By: Bill Bonner & The Daily Reckoning Crew - 24 September, 2008
-Nightmare on Wall Street…a snapshot of what the future could bring if the war on bear markets goes sour… -Another dark period for human history…the bailout debate rages on… -What does $700 billion mean to you?…I.O.U.S.A. takes on Congress…and more! Full Story
By: Dr. Ron Paul, U.S. Congressman - 24 September, 2008
Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike. Full Story
By: John Browne, senior market advisor for Euro Pacific Capital - 24 September, 2008
Last week, Treasury Secretary Paulson and Fed Chairman Ben Bernanke faced Congressional leaders with a reported forecast that we are “literally days away from a complete meltdown of our financial system.” Apparently, the politicians were stunned into a long silence. Full Story
The present credit crisis is the greatest ever in history. It burst upon the world in February, 2007, when insurance premiums on bonds in the banks’ portfolio shot up. However, the roots of the crisis go much farther back. They go back all the way to the ousting of gold from the monetary system 36 years earlier. Gold is an indispensable tool for the banks to manage risk. The Federal Reserve can print its notes ad nauseam, and Helicopter Ben can air-drop them to the banks and bond insurers. It will not address the risks of declining or evaporating bond values. To do that you need something more substantial than irredeemable promises to pay. Full Story
The Treasury Secretary Paulson and Fed Chairman Bernanke bailout plan calls for $700 billion in taxpayer funds to be used to purchase assets that will in all likelihood be worth considerably less in the future. As for the contention that the assets to be purchased could be worth more in the future than prices paid today, if there was any validity to this speculation the bailout plan in question would not be required as the assets in question would have already found a buyer. Full Story
The powerful break above the $850 previous high is a clear trigger that signals a significant rally that initially targets the next high of $989. However despite the increase in volatility, gold's most recent action has seen gold retrace to back below $900 in recent hours with last price at $880, which suggests a correction against the powerful rally is underway targeting a retracement to $850 breakout point. Full Story
How much confidence do you have in this bail out package? I don’t like the look of it - an open ended commitment to buy up rubbish assets with public money. It stinks. It certainly looks bad for the US dollar and treasuries and highly inflationary. Full Story
It's important to realize that this bailout plan adds nothing to economic growth and was necessary to prevent a worldwide global collapse of the financial system. The proposal will shift hundreds of billions of taxpayer dollars to purchase rotten financial assets from Wall Street institutions and banks for more than they are worth. Full Story
Despite the problems which market advisory services have had the past four months, the big banks and participating brokerage houses have made absolute fortunes. How? Obviously, they have had prior knowledge of which way the dice would roll and used that knowledge to work the markets (again, some would foolishly call this luck, but I would suggest that there was no luck involved; it’s all about pre-knowledge). Full Story
By: Richard Daughty, The MOGAMBO GURU - 24 September, 2008
A genuine gold bug is a person who is emboldened by knowing that 4,000 years of continuous economic history proves that EVERY fiat currency has failed, as they will always fail, and that gold will rise, just like it always has… Full Story
By: Rick Ackerman, Rick's Picks - 24 September, 2008
Just when we thought Hank Paulson had run out of tricks, he and his merry band of pranksters have orchestrated an after-hours public relations coup that has caused the S&P futures to recoup nearly two thirds of yesterday’s substantial losses in mere minutes. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 23 September, 2008
-Another exciting day in the world of money…gold ETFs aren't looking as good as they used to… -The Feds are trying to serve Mr. Market a gag order…the gold price continues to go up, up, up… -He's baaaaaack…Friedman mistakes wishes for thoughts…and more! Full Story
The unprecedented financial crises have given way to extraordinary proposed solutions. Some leave me skeptical, such as the government throwing unimaginable sums of money at problems, including the new $700 billion mortgage purchase scheme. Other emergency solutions seem more straight-forward and reasonable, like the money market guarantee edict to stem a run in that important sector. Full Story
By: David N. Vaughn, Gold Letter, Inc. - 23 September, 2008
It is a historical fact that the few years following 1929 witnessed the addition of 10,000 or so new millionaires in the US. I suppose these were those out of debt and who had prepared for the events of those days. Those days are now repeating themselves once again in our humble generation. Our nation today is definitely hurtin’ for certain. And the blood is running in the streets! Full Story
Ben Bernanke, Alan Greenspan’s surrogate successor at the Federal Reserve is using Greenspan’s discredited playbook to hopefully resuscitate America’s economy. But pouring more credit into America’s stalled economy will not restart the US economy anymore than pouring gasoline into a flooded engine will restart an engine. Full Story
By: Gary North, Mises on Money - 23 September, 2008
Investors last week began to figure it out. A lot more investors are going to figure it out. They are going to have two years to figure it out. This is if things go well. They may have three years to figure it out. Whoever is elected President in November is going to preside over the worst financial disaster in American history in the postwar era. Some lucky soul is going to lose this election. You had better batten down the hatches. Full Story
The Federal Reserve System's bailout of American International Group will cost $85 billion. After the expense is apportioned among three hundred million American citizens, your personal bill for AIG's bailout will be $280. If you have a family of four, their share is $1100. Full Story
Quality gold companies in Australia will have the opportunity to lock in some prices that many would not have thought possible. $1000AUD plus with some upside targets to $1500 and beyond. If only there were more meaningful discoveries where the CEO’s are confident of delivering into the hedges! Full Story
By: Steven Saville, Speculative Investor - 23 September, 2008
The US economy has not been remotely close to a "free market" for a long time. Up until recently freedom was eroding at a gradual pace, but the pace of erosion has just accelerated in dramatic fashion. Full Story
On Wednesday, Sept. 17, 2008, the price of gold rose by $70. W will look back on this day as an important signal for the big move in gold (and other commodities) to come over the fall and winter. Full Story
By: Richard Daughty, The MOGAMBO GURU - 23 September, 2008
So, for the Congressional Budget Office to bring up the totally irrelevant 2007 fiscal budget deficit of $161 billion makes me yell, 'Off with his head! Off with his head!' with every bit of imperious Red Queen arrogance I can muster. Full Story
By: Rick Ackerman, Rick's Picks - 23 September, 2008
If Gold had been up another $100, yesterday’s dramatic price action on U.S. and global markets would have felt right as rain. As it stands, Gold rose a relatively modest $50 on subdued speculation that Paulson is actually serious about bailing out every institutional lender on Earth who holds bad U.S. mortgage paper. Under the circumstances, which verge on hyperinflationary, we attribute bullion’s relative reticence not only to the usual ignorance, but also to the false optimism fomented by such high-profile demagogues as Kudlow and Suze Orman. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 22 September, 2008
-Seeing the trillion-dollar figure pop up all over…the War on Bear Markets not much different than the War on Terror… -Dems and reps warm up to battle free markets… Principles are fine - until they get in the way of house prices… -Forced to decide between Roosevelts…keeping an eye on Central and South America…and more! Full Story
By: John Rubino & Michael Maloney - 22 September, 2008
Here we go. America's options have finally dwindled to just two: Accept a 1930s-style deflationary crash or embark on a Weimar Republic-style hyperinflation. There was never much doubt about which course our leaders would choose, but today they made it official. Treasury will assume essentially dictatorial powers to buy up pretty much the entire U.S. financial system, and the Fed will print the required trillions. Full Story
In arriving at the appropriate title for this analysis then, I finally came up with ‘Deleveraging Delusions, Denial, and Disorder’ in an effort to capture why in my opinion, the delusions (think misplaced optimism discussed above) and denial associated with the massive deleveraging in the financial / credit markets currently underway has increased investing risk considerably moving forward, potentially putting in place the underpinnings for a ‘disorderly unwinding’ or ‘event’ in the not too distant future, possibly in the historic season of discontent the Fall has been in the past. Full Story
The financial markets aptly ended a tumultuous week with record busting rallies as Hank Paulson at the US Treasury suspended's the FREE MARKET so as to prevent a collapse of the financial system. Full Story
When criticizing the recent bailouts on Wall Street, it’s easy to get distracted by the numbers. The wiseguy Glenn Beck actually made a really great point on this: He reminded us of how "costly" we were warned that the rebate stimulus plan was, and it was less than $170 billion. Well that’s chump change now. Last week alone the government made promises that will cost over $1 trillion (with a T) if things don’t turn around in the real estate market. Full Story
The last two junior gold and silver explorer bulls capitulated last week. But at that very moment we saw the best rally in the spot gold price in decades, and the US banned shorting of financial stocks while deciding on a massively inflationary bail-out of its financial sector which also leaves the dollar open to a sharp devaluation this week. Full Story
By: David Chapman, Union Securities - 22 September, 2008
The events of the past couple of weeks or so are piling up so quickly, our head is spinning. The daily gyrations of the market has everyone running for the Maalox, we are sure. Occasionally we have had to grip our desk. Maybe it is a good thing that unlike 1929, windows in office towers do not open. So is this it – financial Armageddon, a true nightmare on Wall Street? Full Story
September of 2008 will go down in financial history as the most dramatic moment since 1929 and 1987. Unprecedented recent actions by the government and monetary authorities will be studied for years to come. Full Story
Although gold staged an amazingly powerful rally last Wednesday and Thursday, some are worried that the reaction on Friday, seemingly in response to the newly hatched "bailout plan" by the government and the Fed, marks the start of a slump back into obscurity as the bailout plan "works", so that last week's sharp rally turns out to have been nothing but a temporary spike. So let's make several things clear. Full Story
This article is intended as a primer for the many people who were either too busy or too well-adjusted :-) to be watching the ongoing macro-financial mess unfold over the last several years. It is the first of several articles that will attempt to deal in reality amid the hyperbole and mania of the major media that has an interest in scaring the bejeezus out of people. Full Story
By: Ned W. Schmidt, CFA, CEBS - 22 September, 2008
U.S. Secretary of the Treasury & Free Lunches has done Gold investors an incredible favor. While not benefiting immediately as did those owning bank stocks, we will over time. With the U.S. government now assuming responsibility for financial assets of dubious value, it has committed itself to nearly unlimited funding of U.S. housing market, and every other industry with political clout. One consequence may be that the Federal Reserve loses control of monetary policy. Will the Federal Reserve now need to monetize U.S. government debt in unlimited fashion? Full Story
The price to pay for this intervention - apart from a longer recession - will be the inevitably higher rates of inflation and dollar devaluation that will follow the printing of a lot of money. That should sustain commodity prices at elevated levels, and precious metals are the most probable asset class to gain in such a market of limited alternative opportunities for investors. Full Story
All in all it was a spectacularly bad week for the free markets as we know them. They don’t seem to be free as they plunged justifiably, only to be propped up by central banks to actually, in most cases, post a gain on this historic week. I feel very privileged to be witnessing this crisis unfold in real time. This period will be studied for many years to come. Full Story
1st Hour: Headline news & Market Weatherman Forecast. Spotlight Stock Picks with big dividends. The International Forecaster and Host Chris Waltzek answer listener questions. 2nd Hour: Mike Maloney Full Story
Many investors in the Precious Metals sector are worried that the "bailout plan" announced yesterday will resolve the crisis with the effect that things will return to normal and gold and silver will as a result go into retreat once more. Nothing could be further than the truth. There are several important observations to make regarding the "bailout plan". Full Story
Gold going up almost $90 on September 17th is not to be taken lightly. This is extremely unusual and bullish. The global financial system led by the United States investment banks, insurance companies and commercial banks are now in a precarious and dangerous situation with asset values and balance sheets suspect. Full Story
I’m lowering my original target for the DJIA from 10,000 (it still will be a support level for a while before it breaks) and believe sometime in the next 12-24 months the DJIA can fall to 7,500-8,000. I now believe we will have one of the worst recessions in U.S. history in this time frame as well. I see the U.S. Dollar Index hitting 60 and gold $1,300-$2,000 (depending how bad things get). Full Story
By: Bob Chapman, The International Forecaster - 21 September, 2008
Gold and silver went on a moon shot this week, with gold setting a new all-time record for a one-day increase in value. That is what happens when you keep pressing on the lid of a pressure cooker, trying to keep boiling, molten precious metals from escaping. Aiding gold and silver was the unraveling of longs in the USDX futures market, who were forced to cover because they had pushed the dollar up as far as it could go. Full Story
By: John Mauldin, Millennium Wave Advisors - 21 September, 2008
My Dad used to tell me there is no accounting for standards when looking at something that seemed odd. Today, we have faulty standards for accounting that are ripping apart the fabric of the world's economy. How can a security that has a high probability of full repayment be downgraded from AA to junk levels? What we will explore today tell us a lot about why we are in the crisis state of affairs. Full Story
AIG is thus not merely a tent-pole of the world financial system; it's an important pillar of the corporatist Warfare State. All the more reason, then, why it should be permitted to collapse immediately. But that's just not how things are done, of course. Nationalizing AIG was an immediate priority for the FED, but now the precedent has been set, there's no reason for the banksters to quit until they own everything or the dollar sloughs off its remaining value, whichever comes first. Full Story
Rense.com on the net just had a provocative story from the Chicago Tribune which was labeled “We have lost control.” In view of the explosion up in gold and silver this past week, one must indeed ask if the Fed has really lost control or was this move just more of its manipulating ups and downs to allow the big banks to steal more money from us. Full Story
By: Richard Daughty, The MOGAMBO GURU - 21 September, 2008
I can see that this is drifting too far to the "theoretical" side of things for my tastes, and my impatience flared, as all I want is a way to make a lot of money by betting on gold and silver soaring in price… Full Story
By: Rick Ackerman, Rick's Picks - 21 September, 2008
Resolution Trust Corp II will buy the government some time – if only to pray – but there are some powerful reasons why the plan is likely to fail. For one, American investors are not know for their patience, to put it mildly, and they are going to want to see a payoff right away. This is simply not going to happen. For two, investors outside of the U.S. are not nearly as gullible as the dingalings who drove up the Dow Industrials by more than 1000 points on Thursday and Friday. Full Story
Boy! What a week. Nobody seems to have a handle on what the heck is really going on. After a sharp day and a half of upside moves gold seems to have stabilized but with an upward bias. To try and guess what’s to come would be foolish in this market so let’s just see where we are and not worry too much about which way gold will go. It will get there, wherever there is. Full Story
Another fascinating week in paper fiat land: humpty dumpty had a great fall, and all the king’s men came running – one and all. Unfortunately, however, as the rhyme continues: they couldn’t put humpty together again. Full Story
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