A quick stop-press to say whatever you do in the next few weeks (or, preferably, days), make sure you read the Bank for International Settlements’ Annual Report, which has just touched down in the last couple of hours. The BIS were the one major financial institution (it is a kind of central bankers’ club) which warned repeatedly about the kind of risks which later contributed to the financial crisis.
06/24/09 Bedford, Massachusetts Already lost is the fact that by the time Obama took office in early 2009, the Fed had already fired every monetary bullet fighting the early stages of the FIRE economy depression. Only fiscal stimulus remained to pull the nation out of a spin dive.
But can we afford it? Buried far deeper in the bottomless abyss of America’s forgotten past are the darkest days of the Carter administration when US deficits spiraled out of control. Gold prices doubled and doubled again as one hundred articles pronounced the dollar doomed.
The rise in global stock prices from early March to mid-June is arguably the primary cause of the surprising positive turn in the economic environment. The $12,000bn of newly created corporate equity value has added significantly to the capital buffer that supports the debt issued by financial and non-financial companies. Corporate debt, as a consequence, has been upgraded and yields have fallen. Previously capital-strapped companies have been able to raise considerable debt and equity in recent months. Market fears of bank insolvency, particularly, have been assuaged.
Is this the beginning of a prolonged economic recovery or a false dawn? There are credible arguments on both sides of the issue. I conjectured over a year ago on these pages that the crisis will end when home pr
It's indicative of the severity of a bear market when some of the very newsletters that predicted its onset still failed to capitalize on their prescience. This week, Peter Brimelow checks in on the Harry Schultz Letter, whose eponymous editor correctly predicted the "financial tsunami" that eventually unfolded. Though Schultz was right about the big picture, his newsletter turned in an even more dismal performance than the market itself.
Brimelow reports that Schultz is now predicting an "FDR-style 'bank holiday' of indefinite length," so that banks can continue sorting through all the problems that may have been cloaked by "rosy propaganda." Despite such a gloomy outlook, Schultz says that his technical analysis leads him to believe that there may not be the near-term decline in the m
A failure of IFA's to effectively diversify their client's portfolios, combined with a slow or inappropriate response to the financial crisis and recession, has led to a significant deterioration in wealth amongst private investors, according to research released today.
The Comex is the name for the largest gold futures market in the world, traditionally centered in New York City. Although the market recently became part of the Chicago Mercantile Exchange, it has retained its old nickname. Also, the depositories which hold the actual bars of gold used to settle the futures contracts remain in New York City.
A gold depository must be the most boring business on earth. They charge a small monthly fee to store 100oz. standardized bars of gold in an insured vault. It is an industrial-sized version of a safe deposit box.
The owner of a 100oz. bar owns a specific chunk of gold. It has a manufacturer, a serial number, and an exact weight measured to the 1/100th of an ounce. A written depository receipt -- simila
I am here as part of an IMF technical assistance team to the Finance Ministry and central bank specifically authorized by the IMF’s Executive Board to begin the IMF’s reengagement with Zimbabwe . Zimbabwe is a resource rich country and Harare is a beautiful city. I am impressed with the intelligence and skills of its professional class. What has happened in this country in recent years is a huge and shocking tragedy.
Our first day here. The Harald’s front page headline in big letters read: “IMF technical team expected today.” On our second day, the front page of the business sect
One of the hardest things to do as an analyst is to keep an open mind. The S&P 500 topped out in October 2007 at about 1565. Since then it has had a series of five dramatic bear market declines and also five quite impressive bear market rallies. It is very easy to develop Pavlov dog response. Over 20 months we have seen the market fall and rise, fall and rise, fall and rise, fall and rise, fall and rise…so what will it do next? If you answered “fall” you are probably wrong! Until recently I was thinking that the economy is bad and getting so much worse that the stock market MUST continue to fall. It would defy logic for it to do anything else….or would it? Imagine if the US Government were to announce tomorrow that
In the late 1930s, advertisers and diamond executives began one of the most successful marketing campaigns in history… the marketing of diamond engagement rings.
In just a few decades, the "A Diamond is Forever" campaign convinced America that a marriage isn't really a marriage unless a De Beers diamond is involved. De Beers launched a similar campaign in Japan that changed centuries of tradition.
De Beers also managed the production and distribution of diamonds to create one of the great cartels in modern history.
The diamond invention—the creation of the idea that diamonds are rare and valuable, and are essential signs of esteem—is a relatively recent development in the history of the diamond trade. Until the late nineteenth century, diamonds were found only in a few riverbeds in India and in the jungles of Brazil, and the entire world production of gem diamonds amounted to a few pounds a year. In 1870, however, huge diamond mines were discovered near the Orange River, in South Africa, where diamonds were soon being scooped out by the ton. Suddenly, the market was deluged with diamonds. The British financiers who had organized the South African mines quickly realized that their investment was endangered; diamonds had littl
A German company wants to sell gold from vending machines at airports and the like.
At first sight, that seems odd. After all, if the worst happened at 30,000 feet, why would anyone want to take it with them? But the general buzz around the yellow metal makes sense. With both deflation and inflation causing concern, its perceived attributes can seem alluring.
At least among its fans, gold is coveted as an inflation hedge. They see the metal as being in finite supply and having intrinsic worth, stemming variously from demand, whether industrial or jewellery-related, or from its historical role as an explicit or implicit store of financial value. For some of the same reasons, there are those who like gold as a deflation hed
For anyone who has to explain to his broker, spouse, or friends why he's been hoarding gold or buying gold stocks, the chart below may help you...
This chart accompanied a recent article written by economist Art Laffer. Please make sure you read it. The article is the best analysis of our money supply problem I've seen anywhere. And this amazing chart shows just how much money the government created in the past year... it's a visual everyone can understand.
News of Goldman’s Sachs’ triumph arrived when Reuter’s newswire reported on June 22, 2009: “Goldman Sachs on pace for record bonuses”. At a time when the US is struggling with the greatest financial crisis since the 1930s, Goldman Sachs has triumphantly weathered the crisis. That should be no surprise for Goldman Sachs created the crisis in the first place.
As capitalism collapses, its very foundation—the centuries old alliance between private bankers and public government—is feeling the pressure; and without the direct and indirect aid of billions of dollars in public dollars, the private bankers at Goldman Sachs would now be facing record layoffs instead of a record year of profits and b
There have been stirrings of excitement in the property market recently. Data on activity, such as home loan approvals, has been picking up ever so slightly. And I've seen it at first hand too.
I was a member of the panel at an investors' seminar hosted by PFP Group in Harrogate last week. Two investors came up to me at separate times and said they were trying to buy properties but the market had got very tight and the estate agents they were talking to had never been busier. Did I think we'd already seen the bottom?
I had to disappoint them. I don't think we've seen the bottom – in fact, I don't think we're anywhere close. Here's why.
Most of you know something that has hardly had any mention in the mainstream press at all, and this is the valiant effort of Hugo Salinas Price to work for the reinstitution of silver into the monetary system of Mexico. Mr. Price is trying to bring silver back into circulation, in parallel with paper and digital money, in Mexico.
...
It is our view that 2009 marks a watershed year for the precious metals, because the mainstream propaganda that gold and silver are archaic relics is giving way to the reality that both gold and silver are the new wealth for the new standard of living. In other words the general population will begin to wake up, and once a larger money flow starts into this market it will cause some problems for the l
With a subtitle like "From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression - and they're about to do it again" run, don't walk, to your nearest kiosk and buy Matt Taibbi's latest piece in Rolling Stone magazine. One of the best comprehensive profiles of Government Sachs done to date. Speaking of GS, they sure must be busy today, now that Bernanke is about to be impeached and take the fall for all their machinations.
David Morgan, whose interest in silver dates to the tender age of 11, returns to The Gold Report today to discuss the latest buzz about his favorite subject. One of the world's leading authorities on silver as a commodity, an investment, a safe haven and an increasingly important manufacturing metal, he expects this year's stronger-than-anticipated late spring climb to lose momentum before the end of the month. Longer term, though, the founder of the respected monthly, The Morgan Report, sees silver appreciating at a faster pace than gold. And while he also likes the idea of monetizing silver—rather than gold, because silver is far more liquid—that's one wish he does not expect to see granted.
The days of calling the dollar almighty may be numbered.
Since World War II, when the dollar eclipsed the British pound as the king of world currencies, the United States has reaped the rewards of its monetary strength. The greenback's sense of indestructibility allowed the U.S. government to borrow cheaply and gave rise to an era of rich American globetrotters toting the world's most easily convertible form of cash.
But the financial crisis that started in the United States is dramatically intensifying the debate over the future of the dollar, and whether it can, or should, remain at the top of the financial food chain. Although a meaningful shift away from the dollar is likely to take years or more, some analysts believe that
The International Monetary Fund (IMF) says its research shows that US households have been more vulnerable to equity price shocks and UK and Eurozone households to house price shocks.
The IMF says the financial crisis has erased a considerable amount of household wealth in many advanced economies. The precipitous fall in asset prices - - across equity, bond, and housing markets - - has eroded the value of financial and housing assets and the net worth of households, according to the Fund's research.
During the first three quarters of 2008 alone, the value of household financial assets decreased by about 8 percent in the United States and the UK, by close to 6 percent in the Eurozone, and by 5 percent in Japan. As global equity markets plunged in the last quarter of 2008,
June
30
June
Your must-read for the day
Jun 30 2009 The Telegraph
A quick stop-press to say whatever you do in the next few weeks (or, preferably, days), make sure you read the Bank for International Settlements’ Annual Report, which has just touched down in the last couple of hours. The BIS were the one major financial institution (it is a kind of central bankers’ club) which warned repeatedly about the kind of risks which later contributed to the financial crisis.
Continue Reading
30
June
Defusing the Dollar Bomb
Jun 30 2009 The Daily Reckoning
06/24/09 Bedford, Massachusetts Already lost is the fact that by the time Obama took office in early 2009, the Fed had already fired every monetary bullet fighting the early stages of the FIRE economy depression. Only fiscal stimulus remained to pull the nation out of a spin dive.
But can we afford it? Buried far deeper in the bottomless abyss of America’s forgotten past are the darkest days of the Carter administration when US deficits spiraled out of control. Gold prices doubled and doubled again as one hundred articles pronounced the dollar doomed.
Continue Reading
30
June
Greenspan: Inflation – the real threat to sustained recovery
Jun 30 2009 The Financial Times
The rise in global stock prices from early March to mid-June is arguably the primary cause of the surprising positive turn in the economic environment. The $12,000bn of newly created corporate equity value has added significantly to the capital buffer that supports the debt issued by financial and non-financial companies. Corporate debt, as a consequence, has been upgraded and yields have fallen. Previously capital-strapped companies have been able to raise considerable debt and equity in recent months. Market fears of bank insolvency, particularly, have been assuaged.
Is this the beginning of a prolonged economic recovery or a false dawn? There are credible arguments on both sides of the issue. I conjectured over a year ago on these pages that the crisis will end when home pr
Continue Reading
30
June
Popular stocks and a Schultz shock: “Bank Holidays”
Jun 30 2009 MarketWatch
It's indicative of the severity of a bear market when some of the very newsletters that predicted its onset still failed to capitalize on their prescience. This week, Peter Brimelow checks in on the Harry Schultz Letter, whose eponymous editor correctly predicted the "financial tsunami" that eventually unfolded. Though Schultz was right about the big picture, his newsletter turned in an even more dismal performance than the market itself. Brimelow reports that Schultz is now predicting an "FDR-style 'bank holiday' of indefinite length," so that banks can continue sorting through all the problems that may have been cloaked by "rosy propaganda." Despite such a gloomy outlook, Schultz says that his technical analysis leads him to believe that there may not be the near-term decline in the m
Continue Reading
30
June
CNBC Interview: "Washington is the new Wall Street."
Jun 30 2009 CNBC
Continue Reading
30
June
Investors left unprotected and out of pocket from failing IFA advice
Jun 30 2009 World Gold Council
A failure of IFA's to effectively diversify their client's portfolios, combined with a slow or inappropriate response to the financial crisis and recession, has led to a significant deterioration in wealth amongst private investors, according to research released today.
Continue Reading
29
June
Where's The Gold?
Jun 29 2009 Huffington Post
Article by Nathan Lewis
The Comex is the name for the largest gold futures market in the world, traditionally centered in New York City. Although the market recently became part of the Chicago Mercantile Exchange, it has retained its old nickname. Also, the depositories which hold the actual bars of gold used to settle the futures contracts remain in New York City.
A gold depository must be the most boring business on earth. They charge a small monthly fee to store 100oz. standardized bars of gold in an insured vault. It is an industrial-sized version of a safe deposit box.
The owner of a 100oz. bar owns a specific chunk of gold. It has a manufacturer, a serial number, and an exact weight measured to the 1/100th of an ounce. A written depository receipt -- simila
Continue Reading
29
June
Hyperinflation: Notes from Harare
Jun 29 2009 The African Executive
Article by Warren Coat
I am here as part of an IMF technical assistance team to the Finance Ministry and central bank specifically authorized by the IMF’s Executive Board to begin the IMF’s reengagement with Zimbabwe . Zimbabwe is a resource rich country and Harare is a beautiful city. I am impressed with the intelligence and skills of its professional class. What has happened in this country in recent years is a huge and shocking tragedy.
Our first day here. The Harald’s front page headline in big letters read: “IMF technical team expected today.” On our second day, the front page of the business sect
Continue Reading
29
June
The green shoots of hyperinflation
Jun 29 2009 Al Walsh's Business Articles
Article by Adrian Douglas
One of the hardest things to do as an analyst is to keep an open mind. The S&P 500 topped out in October 2007 at about 1565. Since then it has had a series of five dramatic bear market declines and also five quite impressive bear market rallies. It is very easy to develop Pavlov dog response. Over 20 months we have seen the market fall and rise, fall and rise, fall and rise, fall and rise, fall and rise…so what will it do next? If you answered “fall” you are probably wrong! Until recently I was thinking that the economy is bad and getting so much worse that the stock market MUST continue to fall. It would defy logic for it to do anything else….or would it? Imagine if the US Government were to announce tomorrow that
Continue Reading
29
June
Diamonds are one of the great scams in modern history
Jun 29 2009 The Daily Crux
Article by Brian Hunt
In the late 1930s, advertisers and diamond executives began one of the most successful marketing campaigns in history… the marketing of diamond engagement rings. In just a few decades, the "A Diamond is Forever" campaign convinced America that a marriage isn't really a marriage unless a De Beers diamond is involved. De Beers launched a similar campaign in Japan that changed centuries of tradition. De Beers also managed the production and distribution of diamonds to create one of the great cartels in modern history.
Continue Reading
29
June
Have You Ever Tried to Sell a Diamond?
Jun 29 2009 The Atlantic
Article by Edward Jay Epstein, February 1982
The diamond invention—the creation of the idea that diamonds are rare and valuable, and are essential signs of esteem—is a relatively recent development in the history of the diamond trade. Until the late nineteenth century, diamonds were found only in a few riverbeds in India and in the jungles of Brazil, and the entire world production of gem diamonds amounted to a few pounds a year. In 1870, however, huge diamond mines were discovered near the Orange River, in South Africa, where diamonds were soon being scooped out by the ton. Suddenly, the market was deluged with diamonds. The British financiers who had organized the South African mines quickly realized that their investment was endangered; diamonds had littl
Continue Reading
26
June
Gold: Can It Breach $1,000/oz?
Jun 26 2009 The Telegraph
Article by Richard Beales
A German company wants to sell gold from vending machines at airports and the like.
At first sight, that seems odd. After all, if the worst happened at 30,000 feet, why would anyone want to take it with them? But the general buzz around the yellow metal makes sense. With both deflation and inflation causing concern, its perceived attributes can seem alluring. At least among its fans, gold is coveted as an inflation hedge. They see the metal as being in finite supply and having intrinsic worth, stemming variously from demand, whether industrial or jewellery-related, or from its historical role as an explicit or implicit store of financial value. For some of the same reasons, there are those who like gold as a deflation hed
Continue Reading
26
June
This Chart Is the Simplest, Best Reason to Own Gold
Jun 26 2009 Daily Wealth
Article by Porter Stansberry
For anyone who has to explain to his broker, spouse, or friends why he's been hoarding gold or buying gold stocks, the chart below may help you...
This chart accompanied a recent article written by economist Art Laffer. Please make sure you read it. The article is the best analysis of our money supply problem I've seen anywhere. And this amazing chart shows just how much money the government created in the past year... it's a visual everyone can understand.
Continue Reading
26
June
And The Winner Is... Goldman Sachs
Jun 26 2009 GoldSeek
Article by Darryl Robert Schoon
News of Goldman’s Sachs’ triumph arrived when Reuter’s newswire reported on June 22, 2009: “Goldman Sachs on pace for record bonuses”. At a time when the US is struggling with the greatest financial crisis since the 1930s, Goldman Sachs has triumphantly weathered the crisis. That should be no surprise for Goldman Sachs created the crisis in the first place.
As capitalism collapses, its very foundation—the centuries old alliance between private bankers and public government—is feeling the pressure; and without the direct and indirect aid of billions of dollars in public dollars, the private bankers at Goldman Sachs would now be facing record layoffs instead of a record year of profits and b
Continue Reading
26
June
MoneyWeek: House prices could fall another 40% from here
Jun 26 2009 MoneyWeek
Article by James Ferguson
There have been stirrings of excitement in the property market recently. Data on activity, such as home loan approvals, has been picking up ever so slightly. And I've seen it at first hand too. I was a member of the panel at an investors' seminar hosted by PFP Group in Harrogate last week. Two investors came up to me at separate times and said they were trying to buy properties but the market had got very tight and the estate agents they were talking to had never been busier. Did I think we'd already seen the bottom? I had to disappoint them. I don't think we've seen the bottom – in fact, I don't think we're anywhere close. Here's why.
Continue Reading
26
June
Silver Market Update
Jun 26 2009 SilverSeek
Article by David Morgan
Most of you know something that has hardly had any mention in the mainstream press at all, and this is the valiant effort of Hugo Salinas Price to work for the reinstitution of silver into the monetary system of Mexico. Mr. Price is trying to bring silver back into circulation, in parallel with paper and digital money, in Mexico.
...
It is our view that 2009 marks a watershed year for the precious metals, because the mainstream propaganda that gold and silver are archaic relics is giving way to the reality that both gold and silver are the new wealth for the new standard of living. In other words the general population will begin to wake up, and once a larger money flow starts into this market it will cause some problems for the l
Continue Reading
26
June
The Great American Bubble Machine
Jun 26 2009 Zero Hedge
With a subtitle like "From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression - and they're about to do it again" run, don't walk, to your nearest kiosk and buy Matt Taibbi's latest piece in Rolling Stone magazine. One of the best comprehensive profiles of Government Sachs done to date. Speaking of GS, they sure must be busy today, now that Bernanke is about to be impeached and take the fall for all their machinations.
Continue Reading
25
June
We Could See Silver Outperform Gold 2:1
Jun 25 2009 SilverSeek
Article by The Gold Report and David Morgan
David Morgan, whose interest in silver dates to the tender age of 11, returns to The Gold Report today to discuss the latest buzz about his favorite subject. One of the world's leading authorities on silver as a commodity, an investment, a safe haven and an increasingly important manufacturing metal, he expects this year's stronger-than-anticipated late spring climb to lose momentum before the end of the month. Longer term, though, the founder of the respected monthly, The Morgan Report, sees silver appreciating at a faster pace than gold. And while he also likes the idea of monetizing silver—rather than gold, because silver is far more liquid—that's one wish he does not expect to see granted.
Continue Reading
25
June
Fading of the Dollar's Dominance
Jun 25 2009 The Washington Post
Article by Anthony Faiola
The days of calling the dollar almighty may be numbered.
Since World War II, when the dollar eclipsed the British pound as the king of world currencies, the United States has reaped the rewards of its monetary strength. The greenback's sense of indestructibility allowed the U.S. government to borrow cheaply and gave rise to an era of rich American globetrotters toting the world's most easily convertible form of cash.
But the financial crisis that started in the United States is dramatically intensifying the debate over the future of the dollar, and whether it can, or should, remain at the top of the financial food chain. Although a meaningful shift away from the dollar is likely to take years or more, some analysts believe that
Continue Reading
25
June
Financial Crisis: IMF says US households more vulnerable to equity price shocks - UK and Eurozone households to house price shocks
Jun 25 2009 Finfacts
The International Monetary Fund (IMF) says its research shows that US households have been more vulnerable to equity price shocks and UK and Eurozone households to house price shocks.
The IMF says the financial crisis has erased a considerable amount of household wealth in many advanced economies. The precipitous fall in asset prices - - across equity, bond, and housing markets - - has eroded the value of financial and housing assets and the net worth of households, according to the Fund's research.
During the first three quarters of 2008 alone, the value of household financial assets decreased by about 8 percent in the United States and the UK, by close to 6 percent in the Eurozone, and by 5 percent in Japan. As global equity markets plunged in the last quarter of 2008,
Continue Reading