So I was pleased last week when I heard that, after four successive quarters of contraction, America's economy grew by an impressive 3.5pc between July and September, compared to the quarter before. "The US is out of recession" numerous newspaper headlines screamed. No wonder share prices surged.
As ever, the numbers warrant a closer look. For one thing, this is annualised data. So the US economy actually expanded by only 0.9pc during the third quarter – a fact most newspaper reports ignored. What growth we did see resulted from a 3.4pc annualised rise in US consumption between July and September, which was in turn caused by a 22.3pc spike in spending on consumer durables.
This analysis seeks to update the trend prospects for all three major markets into at least the end of this year by taking into account their inter-market relationships which should resolve in a more accurate projection for each individual market.
Shares in mining companies look more attractive than gold for investors aiming to hedge their portfolios against inflation, according to analysts’ forecasts.
Barrick Gold, IAM Gold and other miners may rise by as much as 20 to 30 per cent in the next year if equity markets manage to stay on course, analysts say. By contrast, the upside in the price of the yellow metal, which hit $1,043 a troy ounce yesterday, is a further 10 per cent, according to their models.
In November 2007 we wrote an article entitled “Surreality Check… Dead Men Walking”, in which we discussed the early warning signs of the impending credit crisis and highlighted companies that were looking particularly troubled to us at the time.
We identified General Motors with a book value of negative $74 per share that boasted a market cap of $15 billion. (Ask your friendly neighborhood Chartered Financial Analyst to explain that one to you). Two years later? Following a $50 billion government injection, GM declared bankruptcy on June 1, 2009 and reemerged on July 10, 2009 with new owners consisting of: the US Treasury (60.8%), the Crown in Right of Canada (11.7%), previous GM bondholders (10%) and the UAW Health Care Trust (17.5%). GM stock went to zero.
The National Inflation Association today released the following statement to its http://inflation.us members:
"While most mainstream economists such as Nouriel Roubini are warning of deflationary threats to the U.S. economy, it is our belief that massive price inflation has already begun. The Federal Reserve's policy of massive monetary inflation in 2009 has caused the Dow Jones to bounce over 50% from its low, oil to rise 100% from its low, and gold to surge to a new all time nominal high. One NIA co-founder just saw his health insurance premium rise 16% over a year ago; and the average tuition for a four-year public college increased this year by 6.5%.
For Saudi Arabia, it is a philosophical issue that the black gold pouring out of its deserts should be treated as a tangible, physical commodity – not the paper plaything of traders on Wall Street hedging against the weak dollar. This thinking is at the heart of the Middle Eastern country's decision last week to abandon its long alliance with West Texas Intermediate crude – the famous oil used by most global producers to price their exports to the US.
It is both a technical issue and a symbolic shift that strikes a blow to the domin-ance of the New York Mercan-tile Exchange, the world's biggest centre of oil trading where the most popular products relate to WTI crude.
There has been plenty of speculation about the dollar and poor old sterling recently – but how has the euro fared in its first big test?
Two years after the onset of the credit crunch, and a decade on from its establishment as a single (though not universal) currency for the European Union, it has survived in better shape than most of its critics predicted.
Its biggest economies – Germany and France – are already out of recession. It is humiliating the dollar. It covers the biggest economic zone in the world. Yet, when it started out it was labelled, by some typically indelicate London forex traders, as a "toilet currency", compromised by fundamental weaknesses in the sc
November
3
November
The grim reality is that America is not out of recession
Nov 03 2009 The Telegraph
So I was pleased last week when I heard that, after four successive quarters of contraction, America's economy grew by an impressive 3.5pc between July and September, compared to the quarter before. "The US is out of recession" numerous newspaper headlines screamed. No wonder share prices surged.
As ever, the numbers warrant a closer look. For one thing, this is annualised data. So the US economy actually expanded by only 0.9pc during the third quarter – a fact most newspaper reports ignored. What growth we did see resulted from a 3.4pc annualised rise in US consumption between July and September, which was in turn caused by a 22.3pc spike in spending on consumer durables.
Continue Reading
3
November
Stocks, Dollar and Gold Bull Markets Inter-market Analysis
Nov 03 2009 Market Oracle
This analysis seeks to update the trend prospects for all three major markets into at least the end of this year by taking into account their inter-market relationships which should resolve in a more accurate projection for each individual market.
Continue Reading
2
November
Gold: From Metals to Miners
Nov 02 2009 The Financial Times
Shares in mining companies look more attractive than gold for investors aiming to hedge their portfolios against inflation, according to analysts’ forecasts.
Barrick Gold, IAM Gold and other miners may rise by as much as 20 to 30 per cent in the next year if equity markets manage to stay on course, analysts say. By contrast, the upside in the price of the yellow metal, which hit $1,043 a troy ounce yesterday, is a further 10 per cent, according to their models.
Continue Reading
2
November
Dead Government Walking
Nov 02 2009 Sprott Asset Management
In November 2007 we wrote an article entitled “Surreality Check… Dead Men Walking”, in which we discussed the early warning signs of the impending credit crisis and highlighted companies that were looking particularly troubled to us at the time.
We identified General Motors with a book value of negative $74 per share that boasted a market cap of $15 billion. (Ask your friendly neighborhood Chartered Financial Analyst to explain that one to you). Two years later? Following a $50 billion government injection, GM declared bankruptcy on June 1, 2009 and reemerged on July 10, 2009 with new owners consisting of: the US Treasury (60.8%), the Crown in Right of Canada (11.7%), previous GM bondholders (10%) and the UAW Health Care Trust (17.5%). GM stock went to zero.
Continue Reading
2
November
U.S. Inflation to Appear Next in Food and Agriculture
Nov 02 2009 Reuters
The National Inflation Association today released the following statement to its http://inflation.us members:
"While most mainstream economists such as Nouriel Roubini are warning of deflationary threats to the U.S. economy, it is our belief that massive price inflation has already begun. The Federal Reserve's policy of massive monetary inflation in 2009 has caused the Dow Jones to bounce over 50% from its low, oil to rise 100% from its low, and gold to surge to a new all time nominal high. One NIA co-founder just saw his health insurance premium rise 16% over a year ago; and the average tuition for a four-year public college increased this year by 6.5%.
Continue Reading
2
November
Do Saudis have the clout to destroy NYMEX?
Nov 02 2009 The Telegraph
For Saudi Arabia, it is a philosophical issue that the black gold pouring out of its deserts should be treated as a tangible, physical commodity – not the paper plaything of traders on Wall Street hedging against the weak dollar. This thinking is at the heart of the Middle Eastern country's decision last week to abandon its long alliance with West Texas Intermediate crude – the famous oil used by most global producers to price their exports to the US.
It is both a technical issue and a symbolic shift that strikes a blow to the domin-ance of the New York Mercan-tile Exchange, the world's biggest centre of oil trading where the most popular products relate to WTI crude.
Continue Reading
2
November
Sean O'Grady: Will the euroland centre hold?
Nov 02 2009 Irish Independent
There has been plenty of speculation about the dollar and poor old sterling recently – but how has the euro fared in its first big test?
Two years after the onset of the credit crunch, and a decade on from its establishment as a single (though not universal) currency for the European Union, it has survived in better shape than most of its critics predicted.
Its biggest economies – Germany and France – are already out of recession. It is humiliating the dollar. It covers the biggest economic zone in the world. Yet, when it started out it was labelled, by some typically indelicate London forex traders, as a "toilet currency", compromised by fundamental weaknesses in the sc
Continue Reading