Last week, America's currency fell to a 15-month low against the euro, cutting through $1.5050. Against a trade-weighted currency basket, the dollar was also at its weakest since July 2008. The greenback plunged to parity with the rock-solid Swiss franc, then hit a 14-year low against the yen.
The dollar's weakness is based on fundamentals – not least America's jaw-dropping debt. It's a long-term trend. From the start of 2002 until the middle of last year, the dollar lost 30pc on a trade-weighted basis.
It was during the summer and autumn of 2008, though, that the sub-prime debacle entered its most vicious phase (so far). The rescue of Fannie Mae and Freddie Mac, America's quasi-state mortgage-lenders, followed by the Lehman collapse, sent sh
Ted’s work is followed by many institutions, such as Sprott Asset Management and PFS Group. He has researched the commodity markets actively for 3 decades. Internationally well known for his writings on silver, gold, commodities and the COT (commitment of traders) report. In this interview Ted discusses the gold and silver markets and the underlying commitment of traders report.
Fresh fears over the size of Dubai's debt have sent shock waves through international markets, with major stocks and oil prices falling sharply. Dubai World, the country's largest conglomerate, wants to suspend payment on its sixty billion dollar debts until next May at the earliest. RT's financial contributor Max Keiser says the World is entering the Phase Two of the global economic crisis.
Stephen Jen from the hedge fund Blue Gold Capital has a warning for those who think that gold has risen far too high, is necessarily in a speculative bubble, and must soon come clattering back down.
Mr Jen is an expert on sovereign wealth funds from his days at Morgan Stanley. The gold story — essentially — is that the rising economic powers of Asia, the Middle East, and the commodity bloc are rejecting Western fiat currencies. China, India, and Russia have all been buying gold on a large scale over recent months.
Why should that stop when the AAA club of sovereign debtors is pushing towards the danger threshold of 100pc of GDP?
A watershed in the derivatives world could be reached this week: the cost of insuring against a bond default by Greece, using credit derivatives, may rise above the comparable metric for Turkey for the first time.
Just two short years ago, that would have seemed almost inconceivable to most credit default swaps traders, never mind proud Greek politicians. After all, in 2007, the Turkish CDS spread – like that of many “emerging markets” – was trading at about 500 basis points on perceived fiscal risks.
What do you call a financier in search of the iron laws of human behaviour? Answer: someone with a bad case of “physics envy”.
That is the peculiar psychological disorder diagnosed by Andrew Lo, a professor of financial engineering, as afflicting bankers and economists. Symptoms include a desperate search for the predictive certainty that comes from the hard sciences.
Congressman Ron Paul’s quest to bring down the Federal Reserve continues. In a CNBC interview this morning he reiterated again his firm position against the activities of the Federal Reserve being conducted in secret. Paul believes there are many questions which Fed legitimately needs to answer on its activities. He thinks the public should have the right to know how, when, and to whom the nation’s central bank lends its money.
According to Paul, whose basic premise in his fight against the Fed is Einstein’s “Don’t expect the people who caused a problem to solve it,” 75% of people want to see the
Gold has recently broken out to new highs, topping $1150/ounce. The financial media doesn’t trust this move. Widespread commentary has it that gold is in a bubble. Google reports numerous hits for a search on "gold bubble nov 2009." Financial writer and frequent television guest Dennis Gartman agrees:
"It is a gold bubble and to say otherwise it’d be naïve," Gartman said. He called the trade on the precious metal: "mind boggling and unbelievably crowded," but also said he is currently long – or betting gold will go higher.
Volume in the credit default swap market for rich countries has soared and so have credit spreads, according to a recent Financial Times story, while volume in emerging markets CDS has stagnated. In other words, traders are betting against the governments with high budget deficits, like Britain and the United States, as well as against those with high debt levels, like Japan and Italy.
So is there really a substantial chance of a big rich-country default, and what would it look like if it happened?
It’s not obvious which of the “Rich Four” countries would go first.
As the world begins to recover from the worst downturn since the Great Depression, the conventional wisdom is that we have employed lessons of the past effectively: a flood of money; a dose of fiscal stimulus; and an avoidance of the worst trade protectionism. We even have Ben Bernanke, a scholar of the Depression, at the helm of the US Federal Reserve. So what could we be missing?
The old playbook may have new, unintended consequences. Last year, when governments faced financial markets paralysed by possible failure of counterparties, they used the tools they had, even if an imperfect fit. To keep credit flowing, central banks opened the money spigots. When traditional monetary tools were insufficient, they invented new ones to buy or lend against assets. And it worked.
Central banks of emerging markets have substantial scope to expand their gold reserves given their underweight position in the metal relative to developed market central banks, Stephen Jen, managing director of macroeconomics and forex at BlueGold Capital Management, said in a report dated Monday.
According to the report, the average gold holding ratio, or gold holdings as a percentage of total foreign exchange and gold reserves, of the U.S., Japan, ECB, UK, Germany, Italy, France and Switzerland is 37.9% on average.
NIA: "Our new must see documentary on the collapse of the U.S. dollar! Become educated so that you can survive and prosper while many Americans enter poverty!"
"The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled."
John Kenneth Galbraith (1908- ), former professor of economics at Harvard, writing in Money: Whence it came, where it went (1975).
JK Galbraith’s statement that complexity is used by modern economics to confuse the truth about money is a fact. Simply put, bankers replaced money with credit and debt in order to profit by the indebting of others. It’s why bankers are now so rich. It is also why others are now so poor.
Today, I want to take a look at the bigger picture for gold.
As you'll probably know by now, I believe we are in a long-term bull market for gold and silver, so I hold a core position in these metals at all times. Of course I have my short-term trading money as well, to play any opportunities I see along the way. Sometimes I get these calls right and I make money, sometimes I don't.
Looking at the shorter-term picture for gold, I think sentiment is a little too euphoric, that there is too much hot money in the sector and so we are due some kind of shake-out. But I won't be selling any of my core holding. Because in the long-term I think we are going a lot higher. And, short-term, it is too easy to get the call wrong.
Gold has long been favored by a fringe of the investment world, but this year some of the world's leading hedge-fund managers have loaded up on the precious metal amid concern government efforts to avoid another Great Depression that could undermine major currencies and fuel rampant inflation.
"I have never been a gold bug," Paul Tudor Jones, chairman of hedge-fund giant Tudor Investment Corp., wrote in an Oct. 15 letter to investors. "It is just an asset that, like everything else in life, has its time and place. And now is that time."
November
30
November
Neuflize's Moute Sees Gold at $1,600 Within 'Months': Video
Nov 30 2009 Bloomberg.com
Francois Moute, chairman of Neuflize Private Assets, talks with Bloomberg's Haslinda Amin about his forecast for the price of gold.
Moute, speaking in Singapore, also discusses Dubai’s attempt to reschedule its debt, and the outlook for the yuan, oil markets and global economy.
Please click on the link below to watch the video.
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30
November
World Gold Council's new Chairman sees $2,000 gold price next year
Nov 30 2009 Youtube
Fox Business News - The future of Gold hosted by Liz Claman
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30
November
Liam Halligan: Benign neglect may transform dollar from safe to danger
Nov 30 2009 The Telegraph
Last week, America's currency fell to a 15-month low against the euro, cutting through $1.5050. Against a trade-weighted currency basket, the dollar was also at its weakest since July 2008. The greenback plunged to parity with the rock-solid Swiss franc, then hit a 14-year low against the yen.
The dollar's weakness is based on fundamentals – not least America's jaw-dropping debt. It's a long-term trend. From the start of 2002 until the middle of last year, the dollar lost 30pc on a trade-weighted basis.
It was during the summer and autumn of 2008, though, that the sub-prime debacle entered its most vicious phase (so far). The rescue of Fannie Mae and Freddie Mac, America's quasi-state mortgage-lenders, followed by the Lehman collapse, sent sh
Continue Reading
30
November
Silver market analyst Ted Butler interviewed by King World News
Nov 30 2009 King World News
Ted’s work is followed by many institutions, such as Sprott Asset Management and PFS Group. He has researched the commodity markets actively for 3 decades. Internationally well known for his writings on silver, gold, commodities and the COT (commitment of traders) report. In this interview Ted discusses the gold and silver markets and the underlying commitment of traders report.
Continue Reading
30
November
Max Keiser: Germany will buy gold soon
Nov 30 2009 Youtube
Fresh fears over the size of Dubai's debt have sent shock waves through international markets, with major stocks and oil prices falling sharply. Dubai World, the country's largest conglomerate, wants to suspend payment on its sixty billion dollar debts until next May at the earliest. RT's financial contributor Max Keiser says the World is entering the Phase Two of the global economic crisis.
Continue Reading
27
November
China, gold, and the civilization shift
Nov 27 2009 The Telegraph
Stephen Jen from the hedge fund Blue Gold Capital has a warning for those who think that gold has risen far too high, is necessarily in a speculative bubble, and must soon come clattering back down.
Mr Jen is an expert on sovereign wealth funds from his days at Morgan Stanley. The gold story — essentially — is that the rising economic powers of Asia, the Middle East, and the commodity bloc are rejecting Western fiat currencies. China, India, and Russia have all been buying gold on a large scale over recent months.
Why should that stop when the AAA club of sovereign debtors is pushing towards the danger threshold of 100pc of GDP?
Continue Reading
27
November
Greece and Dubai show system remains unstable
Nov 27 2009 The Financial Times
A watershed in the derivatives world could be reached this week: the cost of insuring against a bond default by Greece, using credit derivatives, may rise above the comparable metric for Turkey for the first time.
Just two short years ago, that would have seemed almost inconceivable to most credit default swaps traders, never mind proud Greek politicians. After all, in 2007, the Turkish CDS spread – like that of many “emerging markets” – was trading at about 500 basis points on perceived fiscal risks.
Continue Reading
27
November
Video: Largest Anglo-Saxon hoard ever found valued
Nov 27 2009 Daily Express
The Staffordshire Hoard, the largest collection of Anglo-Saxon treasure ever found, has been valued at £3.28 million.
Please click on the link below to watch the video.
Continue Reading
27
November
Organic Mechanics
Nov 27 2009 The Financial Times
What do you call a financier in search of the iron laws of human behaviour? Answer: someone with a bad case of “physics envy”.
That is the peculiar psychological disorder diagnosed by Andrew Lo, a professor of financial engineering, as afflicting bankers and economists. Symptoms include a desperate search for the predictive certainty that comes from the hard sciences.
Continue Reading
26
November
Fed will destroy itself, and gold price is rigged, Paul tells CNBC
Nov 26 2009 Lew Rockwell
Congressman Ron Paul’s quest to bring down the Federal Reserve continues. In a CNBC interview this morning he reiterated again his firm position against the activities of the Federal Reserve being conducted in secret. Paul believes there are many questions which Fed legitimately needs to answer on its activities. He thinks the public should have the right to know how, when, and to whom the nation’s central bank lends its money.
According to Paul, whose basic premise in his fight against the Fed is Einstein’s “Don’t expect the people who caused a problem to solve it,” 75% of people want to see the
Continue Reading
26
November
Is Gold in a Bubble? by Robert Blumen
Nov 26 2009 Lew Rockwell
Gold has recently broken out to new highs, topping $1150/ounce. The financial media doesn’t trust this move. Widespread commentary has it that gold is in a bubble. Google reports numerous hits for a search on "gold bubble nov 2009." Financial writer and frequent television guest Dennis Gartman agrees:
"It is a gold bubble and to say otherwise it’d be naïve," Gartman said. He called the trade on the precious metal: "mind boggling and unbelievably crowded," but also said he is currently long – or betting gold will go higher.
Continue Reading
26
November
Which of the “Rich Four” Countries Will Default First?
Nov 26 2009 Money Morning
Volume in the credit default swap market for rich countries has soared and so have credit spreads, according to a recent Financial Times story, while volume in emerging markets CDS has stagnated. In other words, traders are betting against the governments with high budget deficits, like Britain and the United States, as well as against those with high debt levels, like Japan and Italy.
So is there really a substantial chance of a big rich-country default, and what would it look like if it happened?
It’s not obvious which of the “Rich Four” countries would go first.
Continue Reading
26
November
President of the World Bank Group: Heed the danger of asset bubbles
Nov 26 2009 The Financial Times
As the world begins to recover from the worst downturn since the Great Depression, the conventional wisdom is that we have employed lessons of the past effectively: a flood of money; a dose of fiscal stimulus; and an avoidance of the worst trade protectionism. We even have Ben Bernanke, a scholar of the Depression, at the helm of the US Federal Reserve. So what could we be missing?
The old playbook may have new, unintended consequences. Last year, when governments faced financial markets paralysed by possible failure of counterparties, they used the tools they had, even if an imperfect fit. To keep credit flowing, central banks opened the money spigots. When traditional monetary tools were insufficient, they invented new ones to buy or lend against assets. And it worked.
Continue Reading
25
November
Emerging Market Central Banks Have Scope To Buy More Gold
Nov 25 2009 FX Street
Central banks of emerging markets have substantial scope to expand their gold reserves given their underweight position in the metal relative to developed market central banks, Stephen Jen, managing director of macroeconomics and forex at BlueGold Capital Management, said in a report dated Monday. According to the report, the average gold holding ratio, or gold holdings as a percentage of total foreign exchange and gold reserves, of the U.S., Japan, ECB, UK, Germany, Italy, France and Switzerland is 37.9% on average.
Continue Reading
25
November
The Dollar Bubble
Nov 25 2009 National Inflation Association
NIA: "Our new must see documentary on the collapse of the U.S. dollar! Become educated so that you can survive and prosper while many Americans enter poverty!"
Continue Reading
25
November
Cold Turkey Thanksgiving 2009
Nov 25 2009 GoldSeek
"The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled."
John Kenneth Galbraith (1908- ), former professor of economics at Harvard, writing in Money: Whence it came, where it went (1975).
JK Galbraith’s statement that complexity is used by modern economics to confuse the truth about money is a fact. Simply put, bankers replaced money with credit and debt in order to profit by the indebting of others. It’s why bankers are now so rich. It is also why others are now so poor.
Continue Reading
25
November
Gold as a tactical inflation hedge
Nov 25 2009 World Gold Council
A presentation by Natalie Dempster of World Gold Council. Please click on the link below to watch the video.
Continue Reading
25
November
CNBC's Santelli blurts it out: Central banks suppress gold
Nov 25 2009 CNBC
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24
November
Three ways to tell when gold's bull market is over
Nov 24 2009 MoneyWeek
Today, I want to take a look at the bigger picture for gold.
As you'll probably know by now, I believe we are in a long-term bull market for gold and silver, so I hold a core position in these metals at all times. Of course I have my short-term trading money as well, to play any opportunities I see along the way. Sometimes I get these calls right and I make money, sometimes I don't.
Looking at the shorter-term picture for gold, I think sentiment is a little too euphoric, that there is too much hot money in the sector and so we are due some kind of shake-out. But I won't be selling any of my core holding. Because in the long-term I think we are going a lot higher. And, short-term, it is too easy to get the call wrong.
Continue Reading
24
November
New gold bugs making gold investments mainstream
Nov 24 2009 MarketWatch
Gold has long been favored by a fringe of the investment world, but this year some of the world's leading hedge-fund managers have loaded up on the precious metal amid concern government efforts to avoid another Great Depression that could undermine major currencies and fuel rampant inflation.
"I have never been a gold bug," Paul Tudor Jones, chairman of hedge-fund giant Tudor Investment Corp., wrote in an Oct. 15 letter to investors. "It is just an asset that, like everything else in life, has its time and place. And now is that time."
Continue Reading