Filed under: austria, Bank of England, BOE, Britain, Central Banks, Credit Crisis, DEBT, Dollar, Economic Collapse, economic depression, Economy, Europe, european union, Germany, global economy, gold, gold shortage, Great Depression, Greenback, hyperinflation, Inflation, Lehman Brothers, london, manipulated economy, manipulated prices, market manipulation, mortgage, mortgage companies, mortgage lenders, nationalization, platinum, silver, silver shortage, south africa, Stock Market, switzerland, UBS, United Kingdom, US Economy, us mint, Wall Street | Tags: HBOS, Jurg Kiener, Krugerrand, run on banks
Gold Runs Out In Germany
Allan Hall
London Evening Standard
October 12, 2008
Risk-averse Germans are turning to gold in troubled times – but there’s none left.
German gold dealers say demand has skyrocketed this past week to 10 times normal so no more orders can be taken for the foreseeable future.
“The demand exceeds our capacities by a great deal,” said Heiko Ganss, head of precious metal company Pro Aurum.
“The requests cannot be satisfied right now,” a dealer from the Düsseldorf WGZ Bank confirmed.
“Demand for gold as a conservative investment has risen dramatically,” said stephan Henkel. “right now the demand is about 10 times as high as in normal times.”
Gold deliveries now take between four and six weeks.
The US mint said on Monday it had exhausted some of its supply of bullion coins and was struggling to meet demand for gold, silver and platinum.
South Africa’s Rand Refinery, producer of the world’s most popular gold bullion coin, the Krugerrand, temporarily ran out of the coins in August.
Londoners Queue-Up on Sidewalk to Buy Gold in Rush for Money Haven
Bloomberg
October 9, 2008
Londoners stood in line outside the largest gold coin and bar retailer in the city’s West End shopping district, clogging the lobby and trading among themselves as they sought a safe haven for their money.
“People want something tangible, something they can hold on to, something the banks can’t give them,” said Chris Burrow, the owner of ATS Bullion, the gold dealer in the Strand that traces its roots back to the 17th century. “There’s no time to breathe. We’re rushed off our feet. Staff are exhausted.”
As U.K. stocks tumbled to a five-year low, paced by financial-services companies, gold advanced. Since Lehman Brothers Holdings Inc.’s Sept. 15 filing for bankruptcy protection, exacerbating the worldwide credit crisis, gold for immediate delivery has jumped 19 percent.
“Investors are rushing to safe havens and physical gold seems to be the favorite one,” said Frederic Panizzutti, a senior vice president at MKS Finance, one of Switzerland’s four bullion refiners.
British government action to prop up the banking industry has failed to reassure investors. The U.K. on Oct. 8 promised 50 billion pounds ($86 billion) of capital to banks, the same day the Bank of England cut its benchmark interest rate by half a percentage point. Last month, the government brokered a takeover of HBOS Plc, Britain’s largest mortgage lender, and seized control of Bradford & Bingley’s mortgage division.
Austria Witnesses New Gold Rush
BBC
October 12, 2008
The financial crisis is prompting people to look for safer forms of investment than stocks and shares.
The interest in gold coins is so great that many of the world’s major mints are struggling to keep up with demand, including the Austrian Mint, which produces the Vienna Philharmonic – one of the best-selling bullion coins worldwide.
Sales of Vienna Philharmonic gold coins have gone up by more than 230% since last year.
Kerry Tattersall, the director of marketing at the mint, says production has gone into overdrive.
“We are running at present something like three shifts on all of the machines, on the presses, producing both gold and the silver bullion coins.
Read Full Article Here
Central banks all but stop lending gold
Javier Blas
Financial Times
October 8, 2008
Central banks have all but stopped lending gold to commercial and investment banks and other participants in the precious metals market, in a move that on Tuesday sent the cost of borrowing bullion for one-month to more than twenty times its usual level.
The one-month gold lease rate rocketed to 2.649 per cent, its highest level since May 2001 and significantly above its five-year average of 0.12 per cent, according to data from the London Bullion Market Association.
Gold lease rates for two, three, and six months and for a year also jumped to levels not seen in the last seven years.
Traders said the jump reflects the fact that central banks — mostly European — have almost completely stopped lending gold in the last few days and are not rolling forward old leases after maturity. This is because of fears that some borrowers might not repay their bullion loans if they are engulfed by the financial crisis.
“A number of central banks have been cutting back on their gold lending,” said Tom Kendall, a precious metals strategist at Mitsubishi in London.
John Reade, a commodities strategist at UBS, added that there had been a lot of talk about some central banks being unwilling to lend their gold because of a redoubled focus on the risk of borrowers not returning it.
http://seekingalpha.com/article/99680-..ces-tell-two-different-gold-stories
Blatant Banker Manipulation Of Gold Prices
http://www.prisonplanet.com/blatant-banker-manipulation-of-gold-prices.html
No Mass Mania for Gold Yet – Less than 1% of Public in Western World Have Invested in Gold
http://news.goldseek.com/GoldSeek/1224161100.php
Spot Gold Price Is Now Meaningless
http://www.istockanalyst.com/article/viewarticle%2Barticleid_2713209.html
Gold expected to rally above $1000 in Q1 2009
http://network.nationalpost.com/np/b..o-rally-above-1000-in-q1-2009.aspx
What the Pros Say: All that Glitters is Gold
http://www.cnbc.com/id/27095525
Kiener: Gold Prices To Double On Paper Market Default
http://www.prisonplanet.com/kiener-..o-double-on-paper-market-default.html
Filed under: Alan Greenspan, bailout, Bank of England, bernanke, Big Banks, BOE, Britain, central bank, CFR, China, CNBC, Communism, Credit Crisis, DEBT, Dow, Economic Collapse, economic depression, Economy, energy, Europe, european union, fannie mae, Fascism, Federal Reserve, freddie mac, George Bush, george soros, global economy, gold, Goldman Sachs, Great Depression, Greenback, henry paulson, housing market, hyperinflation, Inflation, interest rate cut, interest rate cuts, jim rogers, martgage companies, Media, Merrill Lynch, mortgage, mortgage companies, mortgage lenders, Oil, Paulson, rate cut, real estate, Russia, Stock Market, subprime, subprime lending, Taxpayers, United Kingdom, US Economy, US Treasury, Wamu, washington mutual, WW2 | Tags: run on banks
Fannie and Freddie Seized…Cost to Taxpayer: Over $1 Trillion
Contrarain Profits
September 8, 2008
Uncle Sam has finally taken over Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE). Yesterday, the Bush administration placed the mortgage giants under a conservatorship, putting billions of dollars of taxpeyers’ money at risk in the process.
The Treasury says it will stump up $200 billion to back the companies in exchange for a 79.9% stake in each. The government is now the biggest player in the US mortgage market.
Don Rich warns that the government’s bailout spells trouble for anyone holding US dollars. A major issue is that the Congressional Budget Office’s estimation of the costs of the bailout is far too conservative…
This from last Thursday’s Daily Reckoning:
A recent study from the Congressional Budget Office (CBO) has zero credibility. It pegged likely taxpayer losses in the Fannie Mae and Freddie Mac bailouts at $25 billion. For those with a sense of history, it is worth remembering that the S&L bailout had a $160 billion price tag. The numbers diverge so far from reality as to be laugh-out-loud funny. Funny, that is, except that the CBO estimate demonstrates a willful disconnect with the actual consequences of federal government actions.
As demonstrated below, the real cost of the bailouts will easily exceed $1.3 trillion. In fact, the real cost is likely to range between $1.3 trillion to $1.6 trillion, and is not unlikely to reach $2.5 trillion.
Between 2001 and 2007, Fannie and Freddie purchased or guaranteed $700 billion of Alt-A and subprime loans. Given the default rates on these loans – and the fact that the price of the housing that is the ultimate security of the loans will, for reasons demonstrated below, fall by at least thirty percent – this alone implies a loss for Fannie and Freddie on the order of $210 billion.
Fannie and Freddie acknowledge already-impaired loans on the balance sheet of $19 billion, which they have used creative accounting to avoid deleting from the shareholder equity account. This means that Fannie and Freddie have a maximum of $64 billion in capital remaining.
Given the inevitable losses on the Alt-A/subprime portion of their portfolio, it must be the case that if the federal government, as it is doing, guarantees Fannie and Freddie’s solvency, the difference between the loss and the capital to be made up by the government (i.e., the taxpayers) must equal, not $25 billion but $147 billion.
That alone would mean that the CBO is blowing smoke with their estimated cost figures, and if you think back to the S&L cost of $160 billion, this is not a surprising result. The real picture is so much worse that it is pretty obvious the CBO is flat out inventing figures just to get the politicians through November.
It doesn’t take a genius to work out how the government is going to get its hands on such money: the Federal printing press…
I don’t know what those people in Washington are taking to sleep at night after all their electorally driven accounting and finance exercises, but I can tell you what they will be doing to keep the government open for business: printing a whole lot of money.
Chairman Bernanke has the discount window open to any collateralization not worth the paper it is written on, so in effect he has the helicopters ready to drop hundred-dollar bills over Wall Street – as he once famously described the ultimate policy instrument of a fiat-money system.
Of course, if he does that, we will have to change his nickname from Helicopter Ben to Hyperinflation Ben, which answers the question of who picks up the tab of bailing out Fannie and Freddie: anyone owning dollars.
Produce a lot of something, and it becomes worth less. And given the losses at Fannie and Freddie, the taxpayer guarantee, and the ongoing initiation of Boomer retirement, only the inflation tax will work to pay for keeping Fannie and Freddie afloat.
Like it or not, we are about to enter interesting times, and it is too bad our supposed professional civil servants at the Congressional Budget Office have failed to tell the emperor the truth: that he is buck-naked bankrupt and getting ready to take a lot of people with him.
P.S Don Rich is an instructor of economics, finance, and political science at Montgomery County Community College in Blue Bell, PA. He also teaches economics, government, and history at Delaware County Community College in Exton, PA. You can leave comments for Don on the mises.org blog.
Greenspan: U.S Economy in ’once-in-a-century’ financial crisis
September 15, 2008
The nationalization of Fannie Mae and Freddie Mac shows that the U.S. is “more communist than China right now” but its brand of socialism is meant only for the rich, investor Jim Rogers, CEO of Rogers Holdings, told CNBC Europe on Monday.
“America is more communist than China is right now. You can see that this is welfare of the rich, it is socialism for the rich… it’s just bailing out financial institutions,” Rogers said.
Stock markets jumped after the U.S. government’s decision to launch what could be its biggest federal bailout ever, in a bid to support the housing market and ward off more global financial market turbulence.
But Rogers said in the long term the move spelled trouble.
“This is madness, this is insanity, they have more than doubled the American national debt in one weekend for a bunch of crooks and incompetents. I’m not quite sure why I or anybody else should be paying for this,” Rogers told “Squawk Box Europe.”
Soros Compares Mishandling Of Current Crisis To Great Depression
Paul Joseph Watson
Prison Planet
September 17, 2008
Billionaire investor George Soros has slammed US Treasury Secretary Hank Paulson for behaving in the same manner as bankers in the 1930’s and mishandling a financial crisis that threatens a repeat of the Great Depression.
Soros told BBC Newsnight that the world was merely at the beginning of a financial storm and warned, “We mustn’t allow the financial system to collapse as it did in the 1930s.”
Referring to Hank Paulson, the US Treasury Secretary, Soros stated, “The way Paulson is handling the situation is reminiscent of the way the bankers handled it in the 1930s.”
He added: “The financial system has gone overboard and the financial engineering has grown to big, it takes up too big a share in the world’s resources.”
“Now it is shrinking. When it becomes regulated it will be less profitable than the last 25 years.”
Soros, a former member of the Board of Directors of the Council on Foreign Relations, is ranked by Forbes as the 99th richest person in the world with a net worth of around $9 billion.
Ironically, Soros made his name by reaping the dividends of another financial meltdown when he “broke the Bank of England” by short-selling the pound sterling before the currency dropped out of the European Exchange Rate Mechanism in 1992, landing Soros a profit of around $1.1 billion.
In 2006, the highest court in France upheld a conviction that Soros had practiced insider trading when he bought shares in French bank Société Générale after discovering that the bank was on the verge of a takeover.
Soros has repeatedly predicted fiscal armageddon, writing three books about a “superbubble” that is on the verge of collapse.
In response to those accusing him of crying wolf in an effort to panic financial markets and benefit from the fallout, Soros stated, “I have a record of crying wolf…. I did it first in The Alchemy of Finance (in 1987), then in The Crisis of Global Capitalism (in 1998) and now in this book (2008’s The New Paradigm for Financial Markets). So it’s three books predicting disaster. (After) the boy cried wolf three times . . . the wolf really came.”
Respondents to a Daily Mail article about Soros’ comments accused the financier of engaging in wanton hypocrisy.
“I don’t know why on Earth they interview Soros since he has been proven again and again to deliberately spread financial rumour for his own exploitation and gain,” wrote one, “Soros became a multi multi billionaire precisely through manipulating markets like this – if this man says that we are heading for a 1930’s style crash you can guarantee he already has plans to profit from it.”
http://www.reuters.com/article/ousiv/idUSPEK4365020080917?sp=true
US authorities have now spent $900 billion to prop up the financial system
http://www.swissinfo.ch/eng/..d=9736054&cKey=1221686585000&ty=ti
Central banks pump £100bn into money markets
http://www.telegraph.co.uk/money/m..2008/09/17/cncentral117.xml
Treasury announces debt auctions for Fed
http://ap.google.com/article/ALeqM5jnS9Vm..m4iAD938I1A80
Fed Pumps $70B Into Financial System
http://news.yahoo.com/s/ap/20080916/ap_on_bi_ge/fed_credit_..E44U6Xfx.Fe7GUOQ.D1v24cA
Run On The Bank? Americans Could Lose Their Deposits
http://www.prisonplanet.com/run-on-the-bank-americans-could-lose-their-deposits.html
Merrill Lynch seals future with Bank of America deal
http://business.timesonline.co.uk/tol/bu.._finance/article4755438.ece
Rogers: Dollar To Lose World Reserve Status
http://www.prisonplanet.com/rogers-dollar-to-lose-world-reserve-status.html
Paulson: Congress Has No Authority Here
http://bigpicture.typepad.com/comments/2008/09/paulson-congres.html
Goldman profit plunges 70 pct amid market slump
http://news.yahoo.com/s/nm/20080916/bs_nm/goldmansachs_dc
August home starts seen at lowest level in 17 years
http://www.reuters.com/article/newsOne/idUSN1638353220080917
Russia halts trading after 17.5% share price fall
http://money.cnn.com/news/newsfeeds/articles..ORTUNE5.htm
Dow closed down 450
http://news.yahoo.com/s/ap/20..er=1;_ylt=Al5VvbZImvYKFj5hEtFaLktv24cA
Is Britain Heading For Worst Recession Since 1929?
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/15/bcnrecession115.xml
Washington Mutual Tumbles 30%
http://news.yaho..CZ6k2k2Rd38VKPgv6b.HQA
Now fear stalks British banks
Inflation rises to 4.7% and FTSE plunges ANOTHER 90 points as global markets tumble in wake of Meltdown Monday
Bush Claims Economy Can Weather Storm
Bailouts Will Push U.S. Into Depression
Filed under: Alan Greenspan, bernanke, Big Banks, BOE, carlyle group, central bank, Credit Crisis, DEBT, Economic Collapse, economic depression, Economy, Federal Reserve, Great Depression, Greenback, henry paulson, imf, Inflation, interest rate cut, interest rate cuts, job market, Karl Rove, Paulson, rate cut, Stock Market, Uncategorized, US Economy, Wall Street
Fed Pumps Another $50 billion Into Banking System
AP
April 8, 2008
The Federal Reserve, still working to combat the effects of a severe credit squeeze, said Tuesday that it had auctioned another $50 billion to cash-strapped banks.
Separately, some Fed officials said they were concerned about a “prolonged and severe” economic downturn when they cut interest rates last month.
The Fed auction marked the ninth in a series that began in December that so far have pumped $310 billion in short-term loans into the nation’s banking system.
Bernanke: “Recession Is Possible”
Reuters
April 4, 2008
For the second time this week, a senior Federal Reserve official conceded the United States economy could slip into recession, but suggested the central bank should wait to see if more rate cuts are needed.
“The economy has all but stalled and could contract over the first half of the year,” San Francisco Federal Reserve President Janet Yellen, who is not a voter on the policy-setting committee in 2008, said on Thursday.
“Current indicators suggest that, starting in the fourth quarter, the economy, at best, slowed to a crawl,” she said, adding later that the Fed is still battling a “negative feedback loop” of tight credit conditions, falling house prices and low consumer confidence.
Yellen’s remarks, in a speech to the Stanford Institute for Economic Policy Research, echoed those from Fed Chairman Ben Bernanke during testimony to a Congressional Joint Economic Committee on Wednesday.
“Recession is possible,” Bernanke said. “There’s a chance that for the first half as a whole, there might be a slight contraction.”
But, like Bernanke, Yellen declined to point the way toward additional interest rate cuts to pull the economy out of its malaise.
Instead, she forecast a minor pickup in growth in the second half on the back of rate cuts already in the pipeline, and “timely” fiscal stimulus checks — even though the drag from falling house prices will linger into 2009.
Fed rate cut plans up on weak jobs
Ros Krasny
Reuters
April 4, 2008
U.S. short-term interest rate futures rose on Friday on news that U.S. firms cut payrolls for a third consecutive month, as dealers raised bets that the Federal Reserve will make an aggressive interest rate cut this month and beyond.
The implied prospects for the Fed to cut its benchmark lending rate by 50 basis points at the April 29-30 policy meeting hit 40 percent against 20 percent late on Thursday.
A smaller, 25 basis point rate cut from the Federal Open Market Committee, which would take the fed funds rate to 2 percent, is fully priced.
More than 50 percent chance of U.S. recession: Greenspan
Sonya Dowsett
Reuters
April 6, 2008
There is more than a 50 percent chance the United States could go into recession, former Federal Reserve chairman Alan Greenspan told El Pais newspaper in an interview published on Sunday.
However, the U.S. has not yet entered recessionary state marked by sharp falls in orders, strong rises in unemployment and intensive weakening of the economy, he said.
“We would have to see signs of this intensification: there are some, but not many yet,” he said. “Therefore … I would not describe the situation we are in as a recession, although the chances that we’ll have one are more than 50 percent.”
Recent News:
http://www.reuters.com/articl..wsAndPR/idUSL0539983320080405
Paulson Unveils 218 Page Bank Regulation Plan
http://www.telegraph.co.uk/money/m..8/04/01/cnusbanks101.xml
Huge Job Losses Set Off Recession Alarms
http://news.yahoo.com/s/ap/20080405/ap_on_bi_go_ec_fi/economy
81 percent of Americans think country on “wrong track”
http://www.reuters.com/article/newsOne/idUSN0348141520080404
Karl Rove Claims The Economy Is Only ‘Apparently Struggling’
http://thinkprogress.org/2008/04/02/rove-economy-struggling/
IMF gives gloomy economic outlook
http://www.reuters.com/article/ousiv/idUSL0553300520080405
Fed’s interest rate games could destroy the dollar
http://www.detnews.com/apps/pb..PINION01/804040313/1008
Carlyle Group’s Plan to Takeover the Banking System
http://www.economicanalyticsgroup.co..oups-plan-to-take-over.html
Bankrupticies Up 27%
http://money.cnn.com/2008/04/02..dex.htm?postversion=2008040212
BOE’s King Might Be Sleepwalking Into Recession
http://www.bloomberg.com/apps/news?..mnist_lynn&sid=aD237XXZ.Hok
IMF Says U.S. In Worst Economic Crisis Since Great Depression
http://prisonplanet.com/articles/april2008/040208_great_depression.htm
Federal Reserve Staff Moves Into Monitor Banks
http://business.timesonline.co.uk/tol/business/industr..ce/article3678053.ece
The Federal Reserve is a Private Financial Institution
http://www.globalresearch.ca/index.php?context=va&aid=8518
Banks Swamped By Foreclosures
Senate Sets Urgent Push For Housing Compromise
Bernanke Meets With House GOP On Economy
Bernanke Faces Scrutiny in Congress Over Bear Stearns Buyout
Fed Official Urges Tighter Wall Street Regulation
Ron Paul On Money Inflation & Government
Radical action to fight credit crisis discussed
Filed under: Bank of England, Bear Stearns, bernanke, Big Banks, BOE, central bank, Congress, Credit Crisis, DEBT, Dick Cheney, Economic Collapse, economic depression, Economy, Euro, Federal Reserve, florida, George Bush, Germany, global economy, Globalism, Great Depression, Greenback, henry paulson, housing market, Inflation, JP Morgan, Northern Rock, Paulson, Police State, real estate, Stock Market, subprime, subprime lending, swat, US Economy, US Treasury | Tags: Don Kohn, nationalize banks, Nordic bank nationalisations
Federal Reserve Plans To Nationalize All US Banks
Telegraph
March 31, 2008
The US Federal Reserve is examining the Nordic bank nationalisations of the 1990s as a possible interim solution to the US financial crisis…
The Fed has been criticised for its rescue of Bear Stearns, which critics say has degenerated into a taxpayer gift to rich bankers…
A senior official at one of the Scandinavian central banks told The Daily Telegraph that Fed strategists had stepped up contacts to learn how Norway, Sweden and Finland managed their traumatic crisis from 1991 to 1993, which brought the region’s economy to its knees…
It is understood that Fed vice-chairman Don Kohn remains very concerned by the depth of the US crisis and is eyeing the Nordic approach for contingency options…
Scandinavia’s bank rescue proved successful and is now a model for central bankers, unlike Japan’s drawn-out response, where ailing banks were propped up in a half-public limbo for years…
While the responses varied in each Nordic country, there a was major effort to avoid the sort of “moral hazard” that has bedevilled efforts by the Fed and the Bank of England in trying to stabilise their banking systems…
Norway ensured that shareholders of insolvent lenders received nothing and the senior management was entirely purged. Two of the country’s top four banks – Christiania Bank and Fokus – were seized by force majeure…
“We were determined not to get caught in the game we’ve seen with Bear Stearns where shareholders make money out of the rescue,” said one Norwegian adviser…
“The law was amended so that we could take 100pc control of any bank where its equity had fallen below zero. Shareholders were left with nothing. It was very controversial,” he said…
Stefan Ingves, governor of Sweden’s Riksbank, said his country passed an act so it could seize banks where the capital adequacy ratio had fallen below 2pc. Efforts were also made to protect against “blackmail” by shareholders…
Mr Ingves said there were parallels with the US crisis, citing the use of off-balance sheet vehicles to speculate on property. All the Nordic banks were nursed back to health and refloated or merged…
The tough policies contrast with the Fed’s bail-out of Bear Stearns, where shareholders forced JP Morgan to increase its Fed-led rescue offer from $2 to $10 a share. Christopher Wood, chief strategist at brokers CLSA, says the Fed’s piecemeal approach has led to “appalling moral hazard”…
“Shareholders have been able to lobby for a higher share price only because the Fed took over the credit risk on $30bn of the investment bank’s dubious paper. The whole affair also amounts to a colossal subsidy for JP Morgan,” he said…
Federal Reserve SWAT Teams To Police The Economy?
NY Times
March 3, 2008
WASHINGTON — The Treasury Department will propose on Monday that Congress give the Federal Reserve broad new authority to oversee financial market stability, in effect allowing it to send SWAT teams into any corner of the industry or any institution that might pose a risk to the overall system.
[…]
Under the Treasury proposal, Fed officials would be allowed to examine the practices and even the internal bookkeeping of brokerage firms, hedge funds, commodity-trading exchanges and any other institution that might pose a risk to the overall financial system.
Real Estate Price Collapse, Paradise Lost in SW Florida
http://www.youtube.com/watch?v=VgTdxEGauok
Recession: The Movie – Now playing everywhere
http://www.youtube.com/watch?v=x4OOCReeLWo
http://www.ft.com/cms/s/0/991194..000077b07658.html?nclick_check=1
Fed Bailout Of Bear Streans Looks Like Investment
http://www.businessweek.com/..4/b4078000069548.htm
German watchdog eyes $600 bln global bank losses: report
http://biz.yahoo.com/rb/080329/germany_banks_losses.html?.v=1
Weak dollar not at odds with policy: ex-US official
http://www.reuters.com/article/ousiv/idUSHKG3018120080331
Dollar Falls to Near Record Low Against Euro on Inflation Data
http://www.bloomberg.com/apps/news?pi..4V7YusRk&refer=japan
Market Plunges, Fed Acts
http://norris.blogs.nytimes.com/2008/03/31/market-plunges-fed-acts/
Paulson Claims Stimulus To Create 600K Jobs
http://news.yahoo.com/s/nm/2008.._nNh3mLV3UPKb.HQA
Paulson warns US house prices must plunge; Orders for Durable Goods in U.S. Unexpectedly Fell
http://business.timesonline.co.uk/tol/b.._finance/article3627054.ece
Paulson Backs Regulatory Overhaul, Broader Fed Role
http://www.bloomberg.com/apps/new..sid=a9LEWNdBhrf8&refer=home
Is Cheney betting on Economic Collapse?
http://www.informationclearinghouse.info/article13851.htm
Fed Auctions Another $50 Billion To Banks
http://news.yahoo.com/s/ap/200..vxGaVFf7P_qKL62bAV9mpv24cA
Paulson To Visit China Next Week
One In Six West Virginians On Food Stamps
Bush: Rebate Checks Will Make Economy ‘Stronger Than Ever Before’
Eurozone Struggles With Inflation
USA 2008: The Great Depression
Fed Official: U.S. Slipping Into Recession
Investment Firms Tap Fed For Billions
Filed under: Bank of England, Bear Stearns, Big Banks, BOE, California, central bank, Credit Crisis, DEBT, Dow, Economic Collapse, economic depression, Economy, Euro, food prices, gas prices, George Bush, global economy, gold, Great Depression, Greenback, henry paulson, Inflation, interest rate cut, interest rate cuts, Iraq, nymex, Oil, Paulson, Petrol, rate cut, silver, Stock Market, US Economy, Wall Street, wheat
Update: Gold Regains $954, Oil $108, Euro $1.58
AP
March 27, 2008
Gold prices edged slightly lower Thursday after the dollar gained against the euro, leading investors to sell the precious metal traditionally viewed as a haven against inflation.Other commodities traded mixed, with crude oil briefly rising above $108 a barrel and wheat and soybean futures retreating.
The dollar strengthened against the euro after the U.S. Commerce Department reported that the economy grew slightly in the fourth quarter. The euro bought $1.5766 in Thursday trading, down from $1.5815 in New York late Wednesday.
A stronger greenback often encourages investors to sell hard assets like gold and silver, which are seen as hedge investments during times of economic uncertainty and rising inflation. A stronger dollar also makes dollar-denominated commodities seem more expensive to overseas buyers.
Gold for April delivery inched 40 cents lower to settle $944.20 an ounce on the New York Mercantile Exchange, after earlier trading as low as $940.
“Gold seems to be following the euro,” said Scott Meyers, analyst with Pioneer Futures in New York. “I think it’s a brief pause in the upward trend but we have to keep an eye on the dollar.”
Other precious metals traded higher. Silver for May delivery rose 16.7 cents to settle at $18.55 an ounce on the Nymex, while May copper added 14.80 cents to settle at $3.873 a pound.
Gold had moved higher in the previous two sessions, breaking out of last week’s commodities slump that saw big drops in everything from corn to copper. Gold has gained 12 percent this year, driven up by U.S. interest rate cuts, record-high crude prices and nervousness about the economy. The metal reached a record 1,033.90 this month, and analysts say it could go even higher.
“We’re going to see sustained acceleration in the (gold) market,” Meyers said. “There’s enough nervousness about the dollar and I don’t know if there’s enough bullets in (Federal Reserve Chairman Ben) Bernanke’s gun to keep lowering rates.”
In energy markets, oil futures briefly rose above $108 a barrel after the bombing of a major oil pipeline in Iraq. Dow Jones Newswires reported that the attack cut off exports from the southern city of Basra, although oil officials said exports weren’t affected.
Light, sweet crude for May delivery added $1.68 to settle at $107.58 a barrel on the Nymex after earlier rising as high as $108.22.
Other energy futures traded mixed. April gasoline futures fell 2.66 cents to settle at $2.7163 a gallon, while April heating oil futures rose by 10.45 cents to settle at $3.1483 a gallon.
In agriculture markets, wheat prices fell after the dollar rebounded.
Wheat for May delivery dropped 19 cents to settle at $10.14 a bushel on the Chicago Board of Trade, after earlier falling as low as $10 a bushel.
Other agriculture futures traded mixed. Corn for May delivery added 3.25 cents to settle at $5.55 a bushel on the CBOT, while May soybean futures declined 24.75 cents to settle at $13.2725.
BlackRock says gold record high may be challenged
Reuters
March 26, 2008
http://youtube.com/watch?v=OvCVEsahhZo
Investment manager BlackRock expects tight gold supply and a gradual rising trend in the price which could lift the metal to new highs above the record $1,030 per ounce hit last week.
“We expect a gradually rising trend in the gold price and if that happens we will get to a new high. We are expecting that positive trend to continue, with volatility over the short term,” said fund manager Evy Hambro, who runs BlackRock’s $17 billion (8.5 billion pound) World Mining Fund and co-manages the $8.9-billion World Gold Fund.
Gold traded at $931.60 an ounce on Tuesday, well off a high of $1,030.80 hit on March 17.
“We think the replacement cost of gold today is much higher than where the market is right now,” Hambro said, adding that even if the price reached the desired level it would have to be sustained for gold companies to invest.
“Just because it reaches that number doesn’t mean it’s going to change anything. We’re not going to see all gold mining CEOs building new projects. The price needs to average that over a decent period of time for them to start investing shareholder capital into new production assets,” he said.
The Gold fund’s top three holdings as at the end of last month were Australia’s Newcrest Mining (NCM.AX: Quote, Profile, Research), Canada’s Barrick Gold (ABX.TO: Quote, Profile, Research) and Kinross Gold (K.TO: Quote, Profile, Research), which together accounted for over 22 percent of the fund.
“In the gold space we are very much in a situation where production will continue to likely decline. There are not enough new gold discoveries to replace the gold being mined,” Hambro said.
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