By: John Browne, Euro Pacific Capital - 2 July, 2010
Meanwhile, Russia has been making bolder statements against dollar hegemony. Russian President Dmitry Medvedev has called on central banks to reduce their dollar holdings and for the IMF to create a supranational reserve currency based on a basket of national currencies. Despite China's silence on the issue, central banks appear to be taking Medvedev's cue. Full Story
By: Bob Moriarty and The Gold Report - 2 July, 2010
Economic rebound? Not with 22% unemployment. Banking reform legislation? Loaded with pork. Bankrupt nations? Rock-solid, lead-pipe cinch. "We need to start all over," says the inimitable Bob Moriarty in this exclusive Gold Report interview. "And in the end, we will." Meanwhile, he's keeping an eye out for the few-and-far-between juniors that manage to get things exactly right. Full Story
In a hyperinflationary state, it looks like there should be a flood of money chasing too few goods. But I don’t see it in the presently coming state of hyperinflation. I predict that by the time hyperinflation hits us there will be a pronounced shortage of money. Most people will simply not have money to buy things at the coming hyperinflationary blow off. Though inflation is continuing and running strongly right now, most people simply don’t have money to buy much in the way of consumer goods. Full Story
However, when you consider that Italian government debt alone comes to $1.91 trillion and is closing in on $8 trillion for all the eurozone, it becomes clear that selling their gold would have little real effect. And, of course, selling off their gold reserves would announce for all to see that the sovereigns were nothing more than hollowed-out shells, their currencies dried husks ready to be blown away by the next puff of wind. Full Story
Right now investors are clinging to the sidelines. Money market fund assets are at $2.8 trillion. The 10-Year U.S. Treasury Bond has become so popular it now yields a mere 2.94%.
Even private equity firms, which are notoriously aggressive with massive financial leverage (a.k.a. borrowed money) and other people’s money, are sitting on $500 billion cash according to the New York Times. Full Story
By: Julian Phillips, The Gold Forecaster - 1 July, 2010
At this stage, after the world saw the market shrink, primarily through investor de-leveraging and investor implosion, so is better prepared for anything like that now. De-leveraging will be less, as will investor implosions. But the effect on global confidence will be much harder than in 2007 as people realize that they have to pay the costs of government failures and thus will protect themselves more solidly now. Trust in governments to resolve such problems, has been damaged badly. Businesses will be much more cautious about exposing themselves to similar dangers in the future and banks will make sure they are not hurt, even if it means curtailing loans and profits in favor of a sound balance sheet. Full Story
By: Bob Chapman, The International Forecaster - 1 July, 2010
The Fed Chairman Ben Bernanke tells us the American recovery is struggling because of European austerity. Does he really expect us to believe that? There is no question austerity in Europe will lead to a deflationary depression. Unemployment will rise quickly, which means major cuts in government spending and lessened revenues. Beside the public those affected the most will be towns, cities and states, many of which are on the edge of insolvency surprisingly even in Germany. Full Story
One month after Austria lost its heir presumptive to an anarchist's bullet, its bonds finally got round to dumping almost 10% of their value, says Ferguson's data. The guns of August were already being loaded, in other words, by the time the sovereign bond market took fright. Austrian debt would stand more than 23% lower by Christmas, and the Hapsburg Empire wouldn't exist five years from there.
Still, US Treasury buyers have nothing to fear today, of course. Just look how low yields are. Full Story
By: David Galland, The Casey Report - 30 June, 2010
The world is only going to get more competitive – witness Russia’s decision to eliminate capital gains taxes on foreign investment in that country – and an America dominated by a government lacking all fiscal restraint, urged on by a populace without even a basic understanding of economics, has little chance at remaining in contention. The situation is only made worse by a weakening of the rule of law, concurrent with a regulatory jungle that is only growing more tangled by the day. Full Story
By: Chris Temple, The National Investor - 30 June, 2010
We've already had an obscene hyperinflation. Years from now, we might have another one. But the last hyperinflation needs to be "worked off" first. The debacle of late 2008-early 2009 was a dramatic harbinger of what will be a years-long process of unwinding debts, a scarcity of credit, and a generational change of attitudes among consumers who are learning quickly to distinguish between needs and wants. In short, it was a harbinger of an on-again, off-again DEFLATION; and one that will bedevil economies, markets and policymakers for a long time to come. Full Story
By: David Coffin & Eric Coffin, HRA Advisories - 30 June, 2010
The gold price has certainly been signaling that concern is still a growth area. This past week’s new highs were preceded by some long anticipated gains to the yellow metal’s senior producers. That means a firm move into the sector is taking place. There has been a trickle down into the sector’s smaller stocks, but since this move is fear based it has been and will continue to be selective. There is still little reason to expect a broader summer rally, and diversification is still best focused on the other precious metals as far as we are concerned. Full Story
It is clear after decades of failure the correct way to cure the malaise is not government amputation, monetary chemo or fiscal radiation, but letting free, natural markets do their healthy work to clear bad assets with creative destruction.
What the Wall Street Journal failed to report is the possibility that many gold investors may not, in fact, actually have the gold or silver they purchased and believe to be safely stored in a bank vault.
Gold and silver investors are discovering that banks possess only a small fraction of the gold and silver allegedly bought by banks for customers. Full Story
Russian spies in the United States whose arrest was announced Monday last year conveyed information about the gold market that the Russian security service considered "very valuable" and forwarded to the Russian finance ministry and ministry of economic development, according to the criminal complaint filed by the FBI with U.S. District Court in New York. Full Story
One thing is absolutely certain: Given that Americans are collectively on the hook for hundreds of trillions of dollars worth of obligations of all kinds, those who are owed are never going to be paid off in hard dollars anyway. Full Story
Geologist Brent Cook, of Exploration Insights, in this exclusive article for The Gold Report, takes a look at the major gold mining companies' dilemma—declining production as the gold price is hitting record levels. He also explains how the junior gold explorers are confronting a similar dilemma—fewer legitimate exploration properties with the real potential to host a major economic deposit. The rare micro-cap company that discovers a meaningful gold deposit is immediately in the sights of the cash-rich gold mining companies in need of new reserves. More importantly, anyone owning these junior companies, a few of whom are mentioned later, stands to make a substantial profit. Full Story
By: Steve Saville, Speculative Investor - 29 June, 2010
Many libertarians assert that the government is morally bound to pay its debts, and that therefore default or repudiation must be avoided. The problem here is that these libertarians are analogizing from the perfectly proper thesis that private persons or institutions should keep their contracts and pay their debts. But government has no money of its own, and payment of its debt means that the taxpayers are further coerced into paying bondholders. Such coercion can never be licit from the libertarian point of view. For not only does increased taxation mean increased coercion and aggression against private property, but the seemingly innocent bondholder appears in a very different light when we consider that the purchase of a government bond is simply making an investment in the future loot from the robbery of taxation. As an eager investor in future robbery, then, the bondholder appears in a very different moral light from what is usually assumed. Full Story
Gold is at an all time record high right now. I remember last time we chatted on the podcast, we were talking about how housing was going to be going down in terms of gold, and it has. So, what gold price represents is the common stock of nations evaporating, just like how BP has lost a tremendous amount of shareholder value as its threatened with potentially even becoming insolvent and bankrupt. Full Story
For lack of a better word, my wife and I were “lucky” to have survived the turmoil of our generation. As my wife politely reminds me from time to time, “it’s nice to live in heaven before you die”, but the joke is if we had upsized in the ‘90s like most Boomers, today we would be having a hell of a time. Full Story
If you want to be a successful speculator, you must make a commitment to see reality as it is, not reality as seen by other people, not reality as you want it to be. If you develop a theory about the market, you must test that theory against the facts. If it doesn’t work, then it isn’t true. (By their fruits ye shall know them.) Full Story
While it is commonly accepted that increased borrowing helps an economy grow during an expansion and stabilize during a recession, the U.S. debt/GDP has become so high that citizens, investors and politicians around the globe are becoming resistant to its potential expansion. Furthermore, with the economy facing the threat of a retrenchment, the Government’s debt predicament will become more severe than even Alan Greenspan is projecting. Full Story
It’s been touted as of late that central banks don’t care about gold. Well they do. Gold has been, is and always will be money. Nothing else. Full Story
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