By: Bill Bonner, The Daily Reckoning - 12 June, 2009
Reading the obituaries is such a delight. First, it is a relief when you find your name not mentioned. Then, it is a joy when you find those that are. Not that we wish to see any man’s name on the roll of the dead; still, the final audits are always the most revealing. Here on the back page, we admire honest scalawags…and learn from them. Thus was our attention drawn to Mr. Omar Bongo’s exit from the mortal stage on June 8th. Full Story
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - 12 June, 2009
Here we are with the gold price pulling back towards $900 after threatening $1,000. It hit $985 then pulled back into the $930’s. Traders did not want to be in the lead in taking it over $1,000. Now it needs time to re-group and build up the strength and the reason why it should go through $1,000. Full Story
By: The Gold Report and John Embry - 12 June, 2009
Back for another thought-provoking conversation with The Gold Report, John Embry sees both good and bad news in the weeks, months and years ahead. For example, John— Sprott Asset Management's chief investment strategist—is braced for "an ugly summer," with "another significant test in the equity market." Before year-end, he anticipates $1,500 gold—but also the beginning of worldwide hyperinflation that may take many Americans by surprise. Full Story
By: Peter Schiff, Euro Pacific Capital, Inc. - 12 June, 2009
“Crony capitalism” is a term often applied to foreign nations where government interference circumvents market forces. The practice is widely associated with tin-pot dictators and second-rate economies. In such a system, support for the ruling regime is the best and only path to economic success. Who you know supersedes what you know, and favoritism trumps the rule of law. Unfortunately, this week's events demonstrate that the phrase now more aptly describes our own country. Full Story
With the U.S. Dollar still being the world’s reserve currency – and in light of the money printing spendthrifts that manage it, it is a constant up-hill battle [or psychological warfare, take your pick?] for integrated elites to make believers in their Public Theater of Operation [that would be all of us]. This has been achieved by “engineering” - through Fed appointed proxies or agents, like J.P. Morgan-Chase and others, shorting gold futures [derivatives] to suppress the price of gold and other strategic, inflation-bell-weather commodity prices. Full Story
By: Daniel Aaronson and Lee Markowitz - 12 June, 2009
In an effort to replace the foreign capital flows that once supported long-term government bond markets, the Federal Reserve is printing money to buy long-term Treasuries. In essence, the Federal Reserve is attempting to recreate the conundrum. Ironically, when the Federal Reserve wanted higher long-term interest rates, it could not achieve its goal. Now that it needs lower long-term interest rates it is also failing. Full Story
According to the Economist, Saudi Arabia, Kuwait, and China have been “quietly” buying up more than $20 billion of this asset. It’s not oil or natural gas assets though. And it’s not the molybdenum they need to build thousands of miles of new pipelines. They’re buying up one of my favorite long-term investments, farmland. Full Story
WANT TO KNOW WHERE the price of gold, oil, the S&P, Euro or overseas stock markets are heading? Pick a number, any number. Go on, choose whatever number you like! Because that's how policy-makers and their advisors would like to set the common denominator of asset prices – the value of money. Full Story
Healthcare is the biggest segment of our economy. In the debate over who should pay for what or, increasingly, for whom, most people don't stop to understand just how large a portion of our society's money is dedicated to healthcare. Full Story
By: Adam Hamilton, Zeal Intelligence LLC - 12 June, 2009
Earlier this week, a friend asked me if I thought this stock bear was over. My first thought was “which bear?”, for there isn’t just one. The stock-market action over the last couple years has been a tale of two bears. Investors who’ve failed to understand this critical truth are very confused on what to expect from stocks going forward. Full Story
Though the Equities Markets have been rallying throughout the Spring, 2009, there are not many analysts who think the Economic Fundamentals provide a healthy basis for a sustainable Market Rally. Deepcaster agrees that the Fundamentals are lousy. And we have laid out in recent articles a whole panoply of reasons that the economy is not likely to return to health for many months. Full Story
I put the title of this post in quotes because as blog readers know, I (and my newsletter) have been highlighting these words for several weeks now... 'risk is high', 'risk is rising', 'code yellow', 'code red', etc. Full Story
I just returned from the Cambridge House Investment Conference in Vancouver, BC, and found this to be one of the best precious metals gatherings ever, not so much from the perspective of a number of attendees, but from the quality of the people who did attend. Full Story
While many people following the precious metals markets have known for ages that there is a unique correlation between the price moves of gold vis-à-vis silver, not many persons are aware that such a linkage could change. It seems like as one of them goes up or down, the other quickly follows suit. The purpose of this Goldsmiths is not to review history and show the parallel moves since almost all of us are already aware of this phenomenon and need no proof or encouragement to accept that thesis. Full Story
By: Richard Daughty, The Mogambo Guru - 12 June, 2009
The column I wrote last week about the gold content of the Krugerrand versus the Austrian Philharmonic was, it seems, a mistake, and I am really embarrassed. For some reason, I always remember that the Krugerrand (a coin that is 91% gold) always sold for less money than pure-gold coins like the Austrian Philharmonic, and so I was surprised to see that they are now selling at the same price, leading to an incorrect conclusion and a stupid column. Full Story
We’ve never been gung-ho about head-and-shoulder patterns, mainly because they seem to pop up everywhere you look for them. Even so, there’s something to be said for the elegant simplicity of the two head-and-shoulder formations show in the charts below. The top chart is a bearish pattern in Comex August Gold that has been gestating for nearly a month. Full Story
Gold likes to tie itself to outside themes. It appears that the US Dollar is gold’s “theme of the day”. Gold doesn’t seem to have tied itself to crude oil or stock prices, as both have rallied sharply. In fact crude oil is making yearly highs and stock indices are very close to doing so. Full Story
I wouldn’t believe it unless I saw it myself. After seeing it though, I’ve felt more confident than ever that the markets will be able to hang onto recent gains and add more over the next few months. Let me explain. Full Story
By: Bill Bonner, The Daily Reckoning - 11 June, 2009
It’s the Ultimate Fighting Event – Worldwide Economic Mud Wrestling! See it now! First, the Honey Hun…German Chancellor Angela Merkel… took on a whole pack of central bankers and economists, charging that they were going to make the situation worse – by spending money they didn’t have…and causing inflation. Full Story
The rising long-term USTreasury Bond yield continues to capture attention. The breakout chart for the 10-year Treasury shot up to 3.75% last week, but zoomed to touch 4.0% this week. Less attention has been directed at the short-term USTreasury Bill yields. What was a reasonably steady 2-year TBill yield in the 0.80% to 1.0% range has made a big move to 1.35% suddenly. Few have noticed, since mortgage rates are tied to the 10-year USTreasury. Full Story
By: The Energy Report, Marin Katusa, and Dr. Marc Bustin - 11 June, 2009
Last week, The Energy Report brought you Casey Research Investment Analyst Marin Katusa's outlook for uranium and nuclear energy. In today's edition, Casey Research colleague Dr. Marc Bustin joins Marin to talk about major forces driving prospects for other segments within the energy sector—solar, hydro and geothermal, as well as coal, oil and natural gas. Full Story
This February, Congressman Ron Paul (R-TX) introduced HR 1207, the Federal Reserve Transparency Act of 2009 to audit the FED. When I first reported on it in March, privately I was quite ecstatic that there were 11 co-sponsors, and three were Democrats. Why? Full Story
Gold is making another run at $1,000, silver is up even more in percentage terms, and the financial markets are showering the established miners with cash: In February Newmont raised $1.7 billion, while Yamana, Agnico-Eagle, and Kinross Gold have between them raised over $800 million. And last week Goldcorp offered to sell $750 million of convertible bonds, but ended up with $860 million because the offering was oversubscribed. Full Story
Global markets are overbought and due for either a correction or consolidation. We're now in the seasonally bad time of the year and the best outcome here would be a mild correction. From a sentiment perspective, most investors have factored in the 'green shoots' and they've positioned themselves for a near-term economic recovery. Full Story
Gold is currently pulling back from resistance and in my opinion forming the right shoulder which will complete this reverse head and shoulder pattern. Last week I took some profit on my gold position and currently hold a core position hoping prices will hold at my next support trend line. If prices breach that level ($91) then I will exit the balance of my position and wait for the next low risk setup. Full Story
By: Richard Daughty, The Mogambo Guru - 11 June, 2009
Since being recently stung by my own poor research, bad work habits, a faltering memory and a complete lack of concern, I feebly try to make amends by precisely looking at a $2.7 trillion contraction in available credit, and then mentally comparing that to the $14 trillion in total GDP of the Whole Freaking Country (WFC) and saying, with Typical Mogambo Inexactitude (TMI), “That’s a lot!” Full Story
We side with the rabble rousers – Chris Dodd, Barney Frank, and all the other hard-core lefties in Congress -- on the corporate pay issue. For every CEO who got an eight-figure bonus in recent years, we knew a dozen guys personally who could have gotten the job done for $250k and a health plan. Dick Grasso, the former head of the NYSE, was the last straw. Full Story
By: Bob Chapman, The International Forecaster - 10 June, 2009
On Friday, we had the latest edition of the FDIC “Friday Night Financial Follies” as regulators on Friday shut down Bank of Lincolnwood, a small bank in Illinois, marking the 37th failure this year of a federally insured bank. More are expected to succumb amid the pressures of the weak economy and mounting loan defaults. Full Story
By: Gary Dorsch, Editor, Global Money Trends - 10 June, 2009
Everything depends upon proper judgment. Of ten people who examine the same chart, or listen to the same speech, each person may well understand it differently - perhaps only one of them will understand it correctly. How then should traders interpret the shape of the US Treasury yield curve, which has gone parabolic in recent weeks, steepening to its highest level since 2004? Similarly, in Australia, the Treasury yield curve is at its steepest in history. Full Story
Every investor has a wide array of asset classes and investment vehicles to consider – stocks; bonds; commodities; funds; options; LEAPS; etc. and the relatively unknown and misunderstood category called ‘warrants’. This article discusses the reasons behind the performance to date of commodity related company stocks (i.e. gold, silver and other metal miners and oil and gas operators) and their associated warrants vis-à-vis the aforementioned categories. Full Story
We often hear and read about the government “printing money” like there’s no tomorrow. Our federal government has certainly passed out enough money to the people who got us into this mess that it seems as though hyperinflation is theoretically possible. But every US Dollar printed in our current fiat monetary system is actually a debt. Full Story
National fiat currencies represent the common stock of nations. Because of the large amounts of capital involved they usually move slowly according to trend. As their share price sinks despots implement doomed currency controls enforced by violence in a vain attempt to artificially increase price. Full Story
The FED is on the back of the tiger. Hoenig sees this. He knows the financial system remains fragile. I presume that he knows that the only way to keep it solvent is for the FED to refuse to sell its assets to the general investment community. Bernanke knows this, too. Full Story
Last month the Dubai Shariah Asset Management Kauthar hedge funds experienced their best returns since inception. The result was industry-leading performance for 2009, with gold ahead of the pack: Full Story
By: Richard Daughty, The Mogambo Guru - 10 June, 2009
And since inflation is the thing I most fear, I knew that I needed money, and fast. So I spent most of the week setting up Step One of my plan, which involved setting up a fall-guy using the DaVinci Code method to find the words “Danny in accounting will loot the employee pension fund” somewhere in the Bible, but it was pretty much a bust. Full Story
The jury is still out on our favorite stock market bellwether, Goldman Sachs, since the shares of the well-connected banking firm failed yesterday to push above an important Hidden Pivot resistance at 151.24. Although the stock popped just high enough to stop us out of a profitable short position held from within a penny of the recent top, the rally fizzled after a head-fake on the opening. Full Story
By: The Gold Report and Mike Kachanovsky - 9 June, 2009
'Silver and gold, silver and gold'. . .what to invest in—silver or gold? Investors on either side of this long-running debate are passionate about their precious metal of choice. But are they looking—or listening—to the right indicators? In this exclusive interview with The Gold Report, Mike Kachanovsky, aka 'Mexico Mike' from his Investor's Digest of Canada column, discusses historical changes in the gold-to-silver price ratio, shrinking supply. . .and what to buy. Full Story
Are we there yet? Are we there yet? We gold bugs are like little kids on a trip to the zoo; we just can’t wait to get there. “There” being the elusive point in time when the gold mania (no, make that Gold Mania) hits and everyone and their cat will want to invest in the yellow metal. Which of course will propel its price to dizzying heights. $1,500… $2,000… $5,000 an ounce – the sky’s the limit. At least that’s how the theory goes.
But it’s not just a theory anymore: in the past year, we’ve been seeing unmistakable signs that gold indeed may be going mainstream. Full Story
The most recent Commitment of Traders Report (COT) was almost a replay of the prior week’s report. Very little net new speculative buying/dealer selling in silver, massive net speculative buying/dealer selling in gold. As of the close of business June 2, both COMEX gold and silver futures are at the largest total commercial net short position levels since last summer. While the silver concentrated short position is still at world record levels, the concentrated gold short position is more than notable. Full Story
By: Bill Bonner, The Daily Reckoning - 9 June, 2009
The dumb money is fairly easy to spot. It’s the money that always shows up late to the party, wearing yesterday’s fashions. It watches TV and thinks the reality shows show reality…it thinks Ben Bernanke is a great economist…that the SEC protects investors from fraud and misrepresentation…and that Tim Geithner makes sure the economy keeps running smoothly. Full Story
Since early May, the most dramatic events have occurred not in the stock market but in the bond market. Yields for the 5-year T-notes surged by almost 40% while the yields for the 10-year T-Bonds rose by almost 30% in the past 5 weeks. Both benchmarks have broken their multi-year downtrends in the past week. Full Story
As the investment community celebrates the first bankruptcy of General Motors, a look around the world reveals the vast financial acumen of governments. We do not have to stop with the financial irresponsibility of the Obama Regime, evident by the two trillion dollar plus deficit. We could just as well turn to the expense account scandal that may bring down the UK government. Full Story
By: Richard Daughty, The Mogambo Guru - 9 June, 2009
Oil has, finally, started to rise again, having been down below the breakeven point of pumping it, as they, too, have all kinds of rising costs like everybody else, as well as pension programs and myriad, large governmental entitlement programs to pay for. Full Story
The dollar extended its winning streak yesterday, rallying overnight to narrowly exceed the bullish benchmark we’d set for it just a day earlier. If the dollar is indeed reversing direction after three months of steady weakness, it could darken the economic picture. The reason is that it would put pressure on all who owe dollars, intensifying the effects of a global debt deflation that has been tightening its grip for nearly two years. Full Story
By: Bill Bonner, The Daily Reckoning - 8 June, 2009
Stocks and oil both held steady on Friday. Gold, however, took a big hit – minus $26. There are three kinds of money in the marketplace. There’s the smart money that goes with the trend. There’s the dumb money that bets against the trend. And there’s the money that doesn’t know whether it is coming or going. Full Story
By: Frank Holmes, U.S. Global Investors Inc. - 8 June, 2009
Conditions have improved for gold equities, and economic policy decisions being made in Washington could further increase the investment appeal of these mining stocks. The charts below clearly illustrate the relationship between gold-mining stocks and the federal budget. Full Story
This week we have seen precious metals and mining stocks peak, just as I’ve indicated in the previous Premium Update. In the summary of last week’s update I wrote that “Although prices of gold, silver and mining stocks are reaching their own resistance levels, such a correction will most likely be caused by some kind of catalyst, probably a strong move in the U.S. Dollar, or in the general stock market”. It turned out that the catalyst was in fact the U.S. Dollar, however I will get back to this issue later in this update. Full Story
Comingling public control of private business is known as fascism. While today’s politicians may feel emboldened with all their new power, history will only repeat itself as all this collapses on itself. It is the height of hubris for bureaucrats and politicians to attempt to control the market and the freewill of the American people. In the end, the market always wins out. Maybe one day future generations will wise up and allow free markets to function and thrive without the albatross of government around its neck. For now, it looks like those in charge have not learned the lessons of the past, and have doomed us to repeat those mistakes once again. Full Story
Well, fellow gold bugs, the third time is the charm. This is the third time that gold has made an attempt to (permanently) breach the $1000 level., and this time it looks like it is going to make it. Full Story
The following study comparing the pattern in today’s Dow to the post crash Nikki, similar to our own findings, does a good job of talking about both near term and extended possibilities within a predominantly deflationary environment that would sponsor such an outcome. Within the context of this discussion, and again, a topic we have been focusing on in attempting to identify the eventual turn back down in the broad markets, in the above Sarel Oberholster correctly points out that although the Dow has almost achieved the same percentage gain witnessed in the Nikki’s post crash bounce (31% compared to 34%), timing wise, if the patterning is to be a closer match, stocks could remain buoyant for up to another four months. Full Story
This is how a recovery begins. A few months ago it seemed like there was no end to the downward spiral. More than 20,000 people were losing their jobs every day. The stock market was steadily falling. Panicked consumers were cutting back aggressively. The government pushed through $787 billion in emergency stimulus spending under the guise of getting the economy going again. Full Story
There are a lot of myths and “old wives’ tales” out there about Gold and the frequently accompanying topics of inflation and deflation. In no particular order, I’d like to debunk three big ones with facts rather than universally accepted catch-phrases that prey on lazy investors and speculators. Full Story
I’m coming to the end of the third year of my journey into Austrian economics. At times it has become almost obsessive as so much of what I believed before has been turned on its head. Its been a bit like playing a new golf course – one which has been cunningly designed with all sorts of traps and hazards – to play this course properly a new approach is needed. Full Story
Gold and silver are starting to move lower. This week will be interesting, as prices unfold. Because gold stocks are underperforming the price of gold bullion, I am leaning towards lower prices in the near term. Full Story
Some attributed the selloff to disappointment over gold’s inability to push above $1000 last week after hovering briefly above $990. In that regard, we must confess to have been somewhat disappointed ourselves, since we had predicted a surge to at least $1008, followed by a quick consolidation, then a follow-through to $1066. Now it looks like we’ll have to wait. But for how long? Full Story
1st Hour: Headline news & Market Weatherman Forecast. Spotlight Stock Picks with big dividends. The International Forecaster and Host Chris Waltzek answer listeners' questions. 2nd Hour: -Harry S. Dent Jr. Full Story
Gold and silver are made for each other like peanut butter and jelly or milk and cookies. The ’sweat of the sun’ and ‘tears of the moon’ have served as money and currency for millennia. At all times and in all circumstances they remain money. Full Story
Gold did embark on a new intermediate uptrend as predicted in the last Gold Market update posted towards the end of April, however, the uptrend was not as strong as expected and it failed to break out to new dollar highs and is now starting to weaken again without mounting a serious challenge of the highs first. This is bearish for the short to medium-term. Full Story
By: Bob Chapman, The International Forecaster - 7 June, 2009
A recovery is supposed to be in the works in the midst of increased savings, declining debt balances on credit cards, more bankruptcies, higher unemployment and new wave of foreclosures. Consumer participation in GDP is down from 72% to 70.4%. Bank and other financial firms’ balance sheets are what they say they are and we have a stock market bear rally built on sand just as we had in 1931. And, lest we forget, bogus government statistics calculated to confuse professionals and investors alike. What an upside down world. Full Story
The following quotations from Ben Bernanke, Chairman of the Federal Reserve are taken from the transcript of his June 3 speech to Congress. All emphasis marks are mine. The reader should be aware that I have very short fuse when dealing with Mr. Bernanke. Full Story
Gold is a safety net where the government cannot provide one. Gold is money and is the strongest currency now in existence. The U.S. Dollar, Euro or Yuan are no match for a currency that cannot be created out of thin air. Gold is not an industrial commodity and does not require significant economic activity to maintain its value. Full Story
By: The Gold Report and Mike Starogiannis - 7 June, 2009
With generous enough cash flows to fund expansion and fuel organic growth without going to the market for capital expenditures, the companies that Mike Starogiannis follows should be in a position to drive stock valuations up. According to Mike, Wolverton Securities' Mining Research Analyst, as long as they enhance their production profiles, they are in good shape—unless the price of gold drops considerably. Full Story
The Dow rose 3.09% over the week while the S&P 500 lagged only rising 2.28% but the Nasdaq rose 4.23%. Up in Canada the TSX rose only 1.92% and the Venture was up 1.24%. It still baffles me why the US markets are rising while the news just can’t get much worse, but it is going to soon get much worse. The PE ratio of the S&P is now at an all time high. A chart as this is never justified even in the best of times, which we are far from. Full Story
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