By: Bill Bonner & The Daily Reckoning Crew - 4 May, 2007
-Financial Opposite Land...hedge funds that wear belts of dynamite...content with comfy poverty... -It takes a village, of morons...freshly-minted democracy on a platter...parking tickets for getaway cars... -If only...for the good of Venezuela...dumb is the new smart...and more! Full Story
All the conditions were there, a euro currency breakout, a British sterling currency breakout, and pronounced USDollar weakness. The sterling exchange rate even hit $2.00 to capture a tremendous amount of attention. The denials streamed in on how the weaker USDollar is not such a big deal, which always serves as a confirmation of a dire situation. Full Story
America is aging. Recently, considerable analysis has been devoted to the financial impact that retiring Baby Boomers will have on the American economy. Books such as Financial Armageddon, The Great Bust Ahead, and The Coming Generational Storm ponder such questions as: Have Boomers saved enough to retire on? Will there be a tremendous stock (housing) market crash as Boomers liquidate their assets in preparation for retirement? How will the government manage to make good on their implicit promises to pay Social Security and Medicare benefits to a growing elderly population? Who will take care of the aging population? Full Story
Harmony, Gold Fields, AngloGold, Barrick and Newmont have all now reported and shown that costs are rising while production, quarter-over-quarter, is continuing to drop. The key for production forecasts will be the senior companies ability to bring new projects online and under budget over the coming year while continuing to prudently manage their flagship, but rapidly ageing, producing properties. It's our belief that mining doesn't operate in a vacuum and we just don't see new projects being brought online in a timely manner while production holds steady. Full Story
By: Peter Schiff, Euro Pacific Capital, Inc. - 4 May, 2007
It may come as a shock to many of you, but I too believe that we are experiencing a "Goldilocks" economy. However, unlike most on Wall Street I do not define this as economic growth that is neither too hot nor too cold. I believe the analogy is apt simply because U.S. economic growth is a fairy tale! Full Story
In general, hedge funds are not good investments. Combine the steep fees with the fact that the overwhelming majority of fund managers underperform the market, and the odds are stacked against the investor right from the start. Unless you think you’ve found the next Warren Buffett, you would most likely be better off investing on your own through index or exchange traded funds. Full Story
This short video is designed to explain a complex investing subject to the average person. Learn how inflation is affecting your investments. The video starts very slowly, builds on basic concepts and then pulls it all together for a clear perspective at the end. From the intermediate investor to the average person, we believe anyone watching can relate to the important message within. Full Story
For die-hard bears like ourselves, one of the most useful features of the Hidden Pivot system is that it is incapable of predicting when the Mother of All Tops is going to occur. That an important top is likely or perhaps even very likely to form is about as much as we can foresee, and even then, as you all know, there are no guarantees. Recall that, since 2004, and until recently, we’d been using a 13045 target for the Dow Industrial Average. Full Story
Everything is in bubble territory. Everything. From Indian antiquities to modern Chinese art; from land in Panama to Mayfair; from forestry, infrastructure and the junkiest bonds to mundane blue chips; it's bubble time! The bursting of this bubble will be across all countries and all assets. Full Story
Last year marked the first time ever that U.S. imports of African crude oil surpassed shipments of oil from the Middle East. The trend is continuing in 2007; so far, three African countries (Nigeria, Angola, Algeria) account for 26% of crude oil imports, while three Middle Eastern countries (Saudi Arabia, Iraq, Kuwait) account for just 23%. Full Story
By: Marc Faber & The Daily Reckoning Crew - 3 May, 2007
-Rotating economy resembles a flat tire…Miss Eternal Sunshine of the Stock-tout Mind… -A nice gig at Goldman…the Dow goes up, up, and away…a lot of risk for a measly 2% return… -A gigantic dollop of whip cream-like humbug…not enough difference in bipeds…the not-so federal Fed…and more! Full Story
Most market commentators who are not ideologically impaired know that the U.S. economy and the U.S. equities markets are on increasingly shaky ground. The U.S. markets are, in a word, Goldilocks Markets. Indeed, were it not for Intervention (see below) the major equities markets would likely be much lower than they are now. Full Story
By: David N. Vaughn, Gold Letter, Inc. - 3 May, 2007
Is gold showing signs of volatility right now? You bet it is. And the closer and the longer gold is over 650 and climbing you will continue to see volatility. Often times extreme up and down swings. Does this signal the end of the gold bull market? No. Full Story
By: Richard Daughty, The MOGAMBO GURU - 3 May, 2007
"How stupid do you have to be to not immediately see that American government bonds yields are such crap that they pay less than the rate of inflation? You're losing money the whole time!" Full Story
Gold and silver look to be holding steady this morning after a bruising last week in the market. While we failed to jump over the $700 level and maintain it, we've made another "higher low" on this pullback and appear ready to resume trading higher. The important point to note is that unlike other periods of trading weakness recently that have been blamed on numerous dubious and minor factors affecting the market, it's become obvious that the increased supply into the market has caused the price weakness. Full Story
TAX PAYERS in Britain were invited to vote early and often in today's local council elections. The French will get to choose between one bone-head and another this weekend, too. But amid the door-stepping and live TV wrangling in Europe right now, it's a poor central bank drudge who seems to want victory most. Full Story
By: Byron W. King & The Daily Reckoning Crew - 2 May, 2007
-The two-headed financial market…bound for glory, or doomed to failure?… -Lending standards for commercial deals and trailer homes…no default on 'toggle payments'… -The Internet with ready access to bad ideas…unusual global warmth…homeless in London…and more! Full Story
Comprising nearly 13% of global supply via their annual sales and even the lowest of analyst estimates suggesting that their loan and swap activity is greater than annual mine supply, central bank gold activity is the largest supply side component of the market that is under the direct control of a handful of entities. Full Story
During the 2001 recession U.S. consumers never stopped spending and the U.S. housing market did not correct. As unprecedented as these events were, nothing is more unthinkable than a U.S. recession combining with a bull market in stocks (unless brought about by hyperinflation). In short, ‘liquidity’ doesn’t explain why a slumping U.S. economy is being met with record highs in stocks, delusion does. Full Story
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - 2 May, 2007
When coming off the Gold Standard it was found that Britain could not cover its gold obligations, despite its own major source of new gold in South Africa. The paper it issued was far in excess of its gold’s ability to cover its promises. This was made so clear, simply by the amount of gold it held. Britain’s behavior in those days set the trend for subsequent monetary duplicity until now. Full Story
By: Chris Mayer & The Daily Reckoning Crew - 1 May, 2007
-How DO you say 'bubble' in Mandarin?…dream or prophecy - you be the judge… -Saved by a steel-plant casino…helpings of money like McDonald's cheeseburgers… -Children of the corn are still unhappy…a penchant for pensions won't be enough…and more! Full Story
By: Gary Dorsch, Editor, Global Money Trends newsletter - 1 May, 2007
Were it not for its “reserve currency” status, slowly turning into a post-World War II relic, the US dollar would have already collapsed by now. A string of $4.4 trillion of US trade deficits since 1996, and a heavy reliance on foreign money to fund its external imbalance, has severely weakened America’s global economic leadership over the past five years. The US dollar survives, due to America’s political stability, its military might in the Persian Gulf, its large $12.5 trillion economy (28% of global GDP), and deep and liquid financial markets for bonds and stocks. Full Story
The important point is that big institutional money is flowing into silver on a disproportionate basis, as the statistics indicate. It is only a matter of time before this buying causes a disproportionate impact on the price of silver. For me, it’s never been a case of gold not being a good investment, but a case of silver being far superior. If you fit the profile of someone who can take advantage of this opportunity, please don’t let it pass by. Don’t wait for the mo-mo guys to buy first. Full Story
By: Steven Saville, Speculative Investor - 1 May, 2007
Most people involved in the gold sector would realise that over the past few years gold stocks, as a group, have failed to live-up to their reputation as leveraged plays on the gold price. They provided substantial leverage to gains in the gold price during 2001-2003, but during the most recent 3.5 years of the gold bull market an investment in gold bullion has out-performed an investment in the AMEX Gold BUGS Index (HUI). Given that gold stocks are much riskier than gold bullion, this begs the question: why invest in gold stocks? Full Story
By: Andrew Mickey, BreakAway Investor - 1 May, 2007
The results are in. After months of waiting, uranium investors can finally breathe a sigh of relief. On Saturday, Australia’s Labor party held its annual meeting and took a vote that would determine the fate of the country’s burgeoning uranium industry. Full Story
We’d been looking to short Goldman Sachs (GS) and the Mini-S&P futures, among others, but both plummeted yesterday from highs just a tad shy of our respective rally targets. In Goldman, our price objective was 228.40, a Hidden Pivot where a potentially important top seemed like an enticing prospect. However, as you can see in the chart below, the stock never got any higher than 226.61, and the May 220 GS puts we’d been bidding 1.60 for traded no lower than 2.25. Full Story
By: The Mogambo Guru & The Daily Reckoning Crew - 30 April, 2007
-The dollar melts like Rome…empty theories are sometimes necessary… -The worldwide $30 steak…theories competing for dominance…disconnect in the energy markets… -Agenda chasing fortune seekers…Two thousand years later, the west still depends on Asia…and more! Full Story
Peru's national labor unions in the mining sector began walking off the job yesterday. Peru is the 5th largest producer of gold and one of the largest copper mining regions in the world. Workers have not yet walked off at the larger gold mine operations, but this strike appears to have some legs to it and might drag on for quite a while. If that happens, some of the largest gold mines in the world will go offline. Full Story
Many investors have been taken by surprise by the sudden strength in the broad US stockmarkets, especially given the severe structural problems of the US economy. The breakout to new highs by the Dow Jones Industrials was predicted in a Marketwatch article on 13th April, based on volume studies. The S&P500 index has not as yet broken out to new highs, but is close to doing so and is expected to shortly. What are the reasons for this sudden strength and to what extent is it an illusion? Full Story
Private equity deals have replaced the consumer in continuance of expanding the macro-credit cycle, where the deals just keep getting bigger and bigger in the race to become more efficient operationally. This is how bankers are currently managing growth in the credit cycle, but with deflationary forces now bearing down on macro credit growth trends on the commercial side of the equation too, to go along with an exhausted consumer, it must be recognized the larger cycle is set to wind down in coming days. This of course would not be good for inflation bulls if not replaced with something else to keep the larger monetary base growing. Full Story
By: Bob Chapman, The International Forecaster - 29 April, 2007
Secretary of the Treasury Hank Paulson says, “All the signs I look at show the housing market is at or near the bottom.” The question is what is our Mr. Paulson smoking or is he just a plain liar? He believes the meltdown in subprime mortgages is not a serious problem and he thinks it is largely going to be contained. We are talking Mr. Paulson of $1.4 trillion in mortgages that should have never been made going upside down. There is no question Mr. Paulson, the Fed, Wall Street, CNBC and our government all know we face a collapse in the housing market. That is why we see Fannie and Freddie and various contributions by lenders and lender bailouts, which amount to a Band-Aid on a gapping gash. What is $35 billion when you have a $1.3 trillion overhang? Full Story
By: John Mauldin, Millenium Wave Advisors - 29 April, 2007
This week we look at the growing disconnect between the US economy and the stock markets. One is slowing and the other is exploding to the upside. One of my mentors once said that it is the duty of the markets to prove the most-possible people wrong. So far, I am clearly in the wrong category. We will look at some explanations as to why, ponder if this can continue, and more. (I will conclude the letter I promised last week in next week's letter. There were still a few details I needed to get it ready.) Full Story
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