Gold rush makes U.S. history! ... Stocks fall on mixed economic data
Dollar’s Reckoning Day ... "Metals: Trade of the decade!" -mp3
BY DAVID BRADSHAW ~ Editor, Real Money Perspectives
Gold's Future Bright! -Experts ~ Gold IRAs +20%/year!
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Sep 30, 2009 ~ ((M-F podcast)) ~ gold fraud alert!
Wednesday gold prices shot back above four-digits on a weaker dollar, confidence and manufacturing data. Gold last traded up $15.80 to $1,007.50/oz., silver rose $.50 to $16.63/oz.
* In September gold prices rose 5.4%, to the highest monthly close in U.S. history. Silver jumped 11.5%. Year -to- date gold prices are up 12% and silver is up a sterling 50%. Precious metals are again demonstrating how a healthy bull market works: Two steps forward, one step back. A "buy- the- dip" strategy is recommended.
* "Today's closing price on gold confirms a breakout of a reverse head and shoulders pattern that should propel gold to between $1,250 and $1,300 in fairly short order," reports broker and financial technician Jim Carrillo at GoldIRAs.
* "The dollar's going to go down further and that's going to help gold," David Thurtell, an analyst at Citi, said. Gold is on track to close its best quarterly performance since the first quarter of last year, rising 8% in the past three months while the dollar has shed more than 4% over the same period," reports Globe&Mail.
* Too late to join the gold rush?: "All the ingredients are in place for a sustained bull market in gold. Falling mine supply, robust jewelery demand and the potential for a reduction in net central bank sales will all be supportive of prices," said Evy Hambro, manager of Black-Rock Gold & General to DailyMail.
* "I think that gold could be $2,000 an ounce and I'm not alone. We're looking at the long-term loss of value in the dollar, what with the tremendous levels of government expenditure-this so-called stimulus. It's wrecking the dollar. All around the world people are looking for alternatives. We're in a world that appears to have encountered peak gold... If you look at historical production, worldwide gold output reached a top right around the year 2000-2001," reports The Gold Report.
* U.S. stocks ended mildly lower on Wednesday after seesawing on mixed economic data. Equities finished the month and quarter higher. The DJIA fell 29.92 points to 9,776.82, leaving the blue chips up 2.3% for the month and ahead 15% for the quarter," reports Marketwatch.
* Less-bad Q2 GDP data: "The U.S. economy contracted at .3% slower pace than previously thought in the second quarter as improved consumer and business spending cushioned the impact of a record decline in inventories, according to government data on Wednesday," reports CNBC.
* "The dollar should be devalued because the U.S. economy is less competitive than other economies and has higher debt, and some form of SDR should become the world’s reserve currency," said Wilbur Ross, of WL Ross & Co to CNBC.
* Ed. Note: Wilbur Ross may be right about the dollar, but he's clueless on gold. When asked about the value of owning gold to hedge a falling dollar Mr. Ross said he views gold as nothing more than a "psychological commodity". Perhaps, but so is the dollar, yen, euro and SDRs. The big difference is that gold insures a stable quality of life in the future, paper promises do not. Gold alone creates economic confidence, government-created currencies all depend upon confidence.
* The Next Culture War: "If there is to be a movement to restore economic values, it will have to cut across the current taxonomies. Its goal will be to make the U.S. again a producer economy, not a consumer economy. It will champion a return to financial self-restraint, large and small. A crusade for economic self-restraint would have to rearrange the current alliances and embrace policies like energy taxes and spending cuts that are now deemed politically impossible. But this sort of moral revival is what the country actually needs," reports NYTimes.
* "A weak reading of consumer confidence cooled stocks on Tuesday, though the housing market offered some rays of hope. The Conference Board said its monthly index of consumer confidence fell to 53.1 in September from 54.5 in August. Analysts had been hoping to see the measure rise to 57," reports WSJ.
* Fed Continues to Operate Blindly: "What the economy needs right now isn't artificial rates or money creation or economic weakness to keep inflation in check. Instead, the economy needs one thing to heal, and that's a stable dollar. And as long as Treasury and Fed officials don't understand this, they'll be operating blindly to the very real inflation that is crushing us," reports RCMarkets.
* "The market value of U.S. homes in 20 major cities rose by 1.6% in July compared with June, the third monthly increase in a row, according to the Case-Shiller home price index. In the past year, prices are down 13.3% in the 20 cities. The figures indicate a "stabilization in national real estate values," said David Blitzer of S&P, who cautioned that the expiration of the first-time home buyer tax credit and increased foreclosures could put more downward pressure on prices," reports Marketwatch.
* "World Bank President Robert Zoellick said the United States should not take the dollar's status as the world's key reserve currency for granted because other options are emerging," reports AP.
* "Top investors in precious metals are waiting for a pullback to buy, but they say gold looks like a promising inflation hedge well into the future. China is hungry for it, too. Hedge fund luminary John Paulson is convinced that gold will be a very good way to protect himself from the eventuality of currency debasement (i.e., inflation). He observed that if one thinks about gold in a three- or five-year time horizon (instead of hour to hour, day to day or week to week), the probability increases of gold being higher over time -- and, most likely, much higher," reports MSN.
* Dollar is the 'New Peso' — Will Keep Falling: "The dollar isn’t the new yen, it's unfortunately the new peso," said Peter Schiff, president of Euro Pacific Capital. The Federal Reserve will soon run into the dilemma of either having to supply the carry traders with an endless amount of cheap dollars or put a halt to the carry trade and aggressively raise interest rates. Schiff added that we're still early in this bull market on gold," reports CNBC.
* "World Bank President Robert Zoellick questioned the wisdom of giving the Federal Reserve more power over banks, as the Obama administration has proposed. Mr. Zoellick says central banks around the world fell down as regulators -- and that the Treasury should be given the authority to regulate big financial institutions, not the Fed," reports WSJ.
* Money figures show trouble ahead: "Private credit is contracting on both sides of the Atlantic. The M3 money data is flashing early warning signals of a deflation crisis next year in nearly half the world economy. Emergency schemes that have propped up spending are being withdrawn. Western central banks will have to "monetize" deficits on a huge scale to stave off debt deflation," reports LonTelegraph.
* New world economic order takes shape at G20: "The Group of 20 is set to become the premier coordinating body on global economic issues, reflecting a new world economic order in which emerging market countries like China are much more relevant, reports Reuters.
* Iran's Second Uranium Enrichment Plant: "President Obama and the leaders of France and Britain blasted Iran's construction of a previously unacknowledged uranium enrichment facility and demanded Friday that Tehran immediately fulfill its obligations under international law or risk the imposition of harsh new sanctions," reports WashPost.
* "Stocks struggled Friday as disappointing news on new-home sales and durable-goods orders offset and uptick in consumer sentiment. Economists expected an increase in existing home sales yesterday, and instead saw a decline. That was considered the most important factor in turning the stock market's gains into losses," reports CNBC.
* What exactly is the "new normal"?: "Two opposing theories are emerging. One group of prognosticators claims the markets are in the throes of a "new normal," a long period of slow growth during which old investing rules will give way to new ones. The other group says the epic abnormality of the past few years will soon be swept away by a massive reversion to historical patterns. Depending on whom you believe, today's stock market is either a trap door or a coiled spring," reports BusWeek.
* "If the Chinese and Japanese stop buying our bonds, we could easily see inflation go to 15 to 20%. It's not a question of the economy. It's a question of who will lend us the money if they don't," Tiger Management founder and chairman Julian Robertson told CNBC.
* Farewell to dollar supremacy "The sun is setting on the US dollar as the ultra-loose monetary policy of the Federal Reserve forces China and the vibrant economies of the emerging world to forge a new global currency order, according to a new report by HSBC," reports LonTelegraph.
* "The dollar is getting ready to get hammered, and there is no way for the Fed to stop it," said Craig R. Smith, author of "Rediscovering Gold in the 21st Century." The simplest solution for Americans looking to protect their wealth is to convert it from unstable dollars into gold, the most stable currency in the world," reports WND.
* "Weaker-than-expected U.S. housing data sparked a flight to safety, boosting the dollar Tuesday and U.S. treasury bonds and weighing down on gold. The dollar fell against most major currencies early Thursday as investors shifted funds from the greenback after the Fed strengthened expectations interest rates will stay very low for a long time," reports Reuters.
* "The embattled US dollar is expected to come under scrutiny at the G20 summit of developing and industrialized nations following China-led calls to review its role as a reserve currency," reports AFP.
* "Our government has decided to sacrifice the buying power of the US dollar to pay for their trillions in spending. The only way to come back from the brink is inflation. It is the only alternative that is politically expedient. Inflation translates into a shrinking of the value of our time, labor and lifestyle. Bottom line: Americans must work harder and longer just to maintain a fraction of their buying power," writes Swiss America Chairman Craig R. Smith.
* "Stocks retreated Thursday after the Federal Reserve announced plans to start unwinding some stimulus measures and a report showed existing-home sales fell last month. The Fed said it was scaling back two emergency-lending programs: It's paring its 28-day term-auction facility to $25 billion from $75 billion," reports CNBC.
* U.S. to push for new economic world order at G20: "The United States will urge world leaders this week to launch a new push in November to rebalance the world economy, but there are doubts national governments will bow to external advice. Exporters, which include China, Germany and Japan, should consume more, while debtors like the United States ought to boost savings," reports Reuters.
* "The G20 are unlikely to issue an explicit call for the dollar to fall. In fact, the U.S. Treasury may continue proclaiming its "strong dollar policy" in an attempt to keep the markets calm. No one in the G20 wants to risk a freefall of the dollar that could disrupt global trade as it recovers from recession. The Plaza Accord of 1985 called for "orderly appreciation of the main non-dollar currencies against the dollar". In contrast, developing nations such as China are now challenging the dollar's role as the world's reserve currency," reports Reuters.
* "Economists expected the Fed to maintain its key interest rate close to zero and repeat that they 'anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.' On the Fed's quantitative easing front, many believe the Fed will decide to lengthen and smooth out its program to purchase mortgage-backed securities," reports Marketwatch. [Fed statement]
* "Federal Reserve officials are considering using reverse repurchase agreements in order to withdraw a part of the $1 trillion the Fed pumped into the economy. 'I don’t think it’s going to happen. Markets could be dramatically affected for the worse if there were to be a change in policy,' said Art Cashin, UBS Financial Services floor director to CNBC.
* "The Federal Reserve has disclosed to GATA.org that it has gold swap arrangements with foreign banks that it does not want public. The disclosure, GATA says, contradicts denials provided by the Fed to GATA in 2001 and suggests that the Fed is indeed very much involved in the surreptitious international central bank manipulation of the gold price and the currency markets," reports BusWire.
* "How can we think that setting up the Fed as monitor of systemic risk in the financial sector will result in meaningful reform. The words ‘fox’ and ‘henhouse’ come to mind," said former Republican vice-presidential candidate Sarah Palin in Hong Kong today. Palin used her first trip to Asia to attack the Federal Reserve for creating asset bubbles and encouraging excessive risk-taking that hurt working-class Americans," reports Bloomberg.
* "No world order that elevates one nation or group of people over another will succeed. The time has come for the world to move in a new direction. In an era where our destiny is shared, power is no longer a zero-sum game," said President Barack Obama on Wednesday to the UN," reports AP.
* "Gold's No Bubble" reports Forbes. "It's at an all-time high, but diminishing supply, higher demand and inflation fears keep it precious. It's tempting to consider gold overbought. It's survived two asset bubbles with flying colors. That investors are piling into gold despite low inflation should bolster the gold case, not weaken it."
* "The stock market seems to be taking its cues from commodities, not the other way around. There aren't a lot of catalysts out there except for what's happening with the dollar and commodities,' said Art Hogan, chief market analyst at Jefferies & Co.," reports WSJ.
* The dollar's in the dumpster, and nobody's worried: "The dollar has taken a renewed pounding over the last two weeks. The big question is how low the dollar will go. For now, it's still above the worst levels of 2008. But it's getting closer to those depths. If it breaks through, there will be a new torrent of speculation about the dollar losing its status as the world's primary currency, and about the risk for an economy so dependent on foreign creditors," reports LATimes.
* "Record high gold prices are here to stay, according to several of the world's most prominent gold mining industry executives at the Denver Gold Group's annual conference. 'By the end of 2010, we will see $2,000 an ounce gold. And by the time that the gold cycle is over we'll see $5,000 an ounce,' said former Goldcorp CEO Rob McEwen," reports Mineweb.
* "As long as the global economy is transmitting mixed signals, gold stands to benefit as an uncertainty hedge and a store of value. How long the price is in the $1,000 range or higher remains to be seen, but this unusual convergence of factors creates favorable conditions for gold investors," reports USFunds.
* Taxes, Depression, and Our Current Troubles: "Tariffs, rising state and federal taxes, and currency devaluation ruined the 1930s, and they could do the same today. The damage caused by high taxation during the Great Depression is the real lesson we should learn. A government simply cannot tax a country into prosperity. The 1933-34 devaluation of the dollar, in terms of gold, caused the money supply to grow by over 60% from April 1933 to March 1937," reports WSJ.
* "China could consider the IMF's sale of 403 tons of gold with a present market value of $13 billion. China is looking to diversify into gold and has 1,054 tons already. There was a small reaction to the news that China may discuss its gold plans at the G20," reports Reuters.
* "Commodity-related stocks declined as raw-materials prices slumped Monday, hurt by a rally in the dollar. Some participants are also placing bets ahead of key meetings that may affect economic policies aimed at reviving the world economy. Governments around the world have effectively been printing more money over the past year to stave off crisis, a trend that may soon give way to a more measured approach. G20 leaders are due to meet in Pittsburgh this week," reports WSJ.
* "For a lot of fundamental reasons gold is going higher, but this is the first time in a long time that technically the idea of gold going higher also makes a lot of sense. I think $1,200 is a very good initial target for gold," John Carter, president of Trade the Markets, told CNBC.
* "We will look back on $1,000 an ounce gold as cheap, just as we did a decade ago when gold traded for $258 an ounce. In reality, gold prices are not even half way to their inflation-adjust 1980 peak of $2,200. Next stop is $1,200 an ounce by year's end on the road to $2,000 an ounce," said Swiss America Chairman Craig R. Smith.
* "Commercial real estate prices in the U.S. resumed a steep decline in July, Moody’s Investors Service said, as credit restrictions curtail lending and push landlords toward default. The portion of sales classified as 'troubled' -- those properties in or close to default -- almost doubled to 23 percent in July from March," reports Bloomberg.
* Facing the next real-estate collapse: "THE next wave of the credit crisis is about to hit -- a collapse in commercial real estate and potential explosion of bank failures. With its resources tapped out by the first wave, what should Washington do? Already, commercial-real-estate prices nationwide are 39% off their peak of two years ago, reports the MIT Center for Real Estate. The 18% price decline in this year's second quarter was the largest quarterly drop in 25 years," reports NYPost. [More on the looming CMBS crisis read What would you do?]
* "Stocks capped off their best week since late July with another steady rally last Friday as the bulls’ continue their relentless advance towards Dow 10,000. Led by the rallying consumer staples sector, the markets ended at their highest levels since last fall," reports FoxBus.
* The gold/dollar tsunami: "The last 'rich man' on the planet, China, is moving its wealth to the traditional storehouse of wealth, gold. It has been more than 40 years since governments and individuals were concerned about physically holding gold. Today China, the largest producer of gold in the world, and largest foreign holder of physical dollars, wants its gold within arms reach. The price of gold is virtually unstoppable as it moves to $1,110 and then to $1,250 as the dollar index moves first to 72 and then to 67," reports BusMirror.
* "The dollar fell broadly on Thursday, hitting a one-year low against the euro, as equities and commodities advanced on expectations of economic recovery. The market trend is to sell dollars on optimism about the global economy and over diversification concerns, and analysts said such selling was likely continue in the near term," reports Reuters.
* "The dollar may extend its decline after sliding to the weakest level versus the euro in almost a year as an increase in America’s industrial output encouraged investors to shift funds to higher-yielding assets," reports Bloomberg.
* "The dollar has continued to be the best indicator of where the stock market is headed. Short-term traders betting against the stock market rally will continue to get slaughtered if large global institutions are forced to buy stocks (and other assets) in an effort to escape US dollar deflation," reports WStCheatsheet.
* "Stocks had started the day out weak, then got a pop from an encouraging Fed report, before giving up gains at the close. Regional manufacturing registered its first back-to-back monthly gain since last October. Initial jobless claims fell by 5,000 last week, but benefit payrolls continued to rise. Housing starts and permits rose in August to their highest level since November amid an increase in multifamily homes," reports CNBC.
* The Stimulus Didn't Work: "The data available so far tell us that the government transfers and rebates have not stimulated consumption at all, and that the resilience of the private sector following the fall 2008 panic--not the fiscal stimulus program--deserves the lion's share of the credit for the impressive growth improvement from the first to the second quarter," reports WSJ.
* "U.S. consumer prices increased 0.4% in August, pushed higher by a 9.1% increase in gasoline prices, the Labor Department reported Wednesday. Both the CPI and the core CPI came in a tenth of a percentage point higher than estimated by economists," reports Marketwatch.
* "The inflation story has got people very concerned. People are trying to move dollars into commodities, especially gold. The market is really concerned about the behavior of the dollar," said Bernard Sin, the head of currency and metals trading at MKS Finance SA in Geneva reports Bloomberg.
* Inflation's Early Indicator? Gold: "Gold's rally to $1,000 an ounce is an indication of a very early stage of an endeavor to move away from paper currencies, said former Fed chairman Alan Greenspan in a speech last week. Another way of saying the same thing is: inflation. When investors "move away" from currencies, it's because they fear those currencies will lose their purchasing power," reports SmartMoney.
* Fed audit has majority support: "U.S. House hearings are scheduled to start a week from now on a proposal from U.S. Rep. Ron Paul, R-Texas, to audit the Federal Reserve, which oversees U.S. monetary policy, and the congressman believes the plan actually could become law this time," reports WND.
* Growing evidence suggests that Americans must now brace for double-digit inflation as a result of Obamanomics spending and trillions in Fed bailouts. Inflation Solution, a new 16-page Special Report, exposes the true rate of inflation rate and offers simple steps to preserve wealth.
* Gold Soars on Weak Dollar: "It appears the weakened dollar will cause gold to remain at elevated levels. Gold is traded in the world markets using a dollar-denominated currency, so as the dollar remains weak, gold will remain attractive to foreign investors, who will continue to gobble it up," reports TheStreet.
* What Price Suits Gold?: "The most bullish news for gold is that the public hasn't gone crazy for it yet. Demand for gold coins and gold funds is certainly higher than it was a few years ago, but we're a long way from speculative mania," reports WSJ. [see 80 experts see $2,200 gold ahead].
* "Stockpiling coins is no longer just for the collector, nowadays even the average investor can find profits. With bullion prices soaring in recent years, gold and silver coins have become a hot-ticket item among investors seeking to diversify their portfolio," reports CNBC.
* Gold: nowhere to go but up!: "Regardless of your outlook for the economy, gold is a great each-way bet. It is an investment that works as well in an inflationary environment as a deflationary one - with bullion, it's "heads you win, tails you win," reports Mineweb.
* 4 Major Developments All Gold Investors Should Watch: "I anticipate that $1,000/oz. gold will turn from resistance into support as gold makes new highs towards the end of 2009. 1) China Encouraging Citizens to Buy Gold and Repatriating Gold Holdings from London, 2) The World’s Largest Gold Producer, Barrick Gold Corp, Announced a Decision to Close Its Massive Hedge Book, 3) COMEX Commercial Traders Have Taken the Largest Net Short Position Against Gold & Silver Ever on Record, 4) Gold and Silver Slipped into 'Backwardation' Last Week (when the price of a commodity for immediate delivery is higher than its price for delivery in the future). If I am correct, right now is the last chance investors will have to purchase gold for under $1,000/ounce," reports GoldStockBull.
* China's immense, and growing, impact on the global gold market: "There seems little doubt that China's economic strength can lead to it dominating gold price movement for the foreseeable future. Should China wish to de-stabilize the dollar by announcing big gold purchases into its reserves to replace a good proportion of its trillions of dollars, there is also little doubt that it could do so," reports Mineweb.
* "Fed Chairman Ben Bernanke said Tuesday that the recession has ended -- at least based on the numbers. "From a technical perspective, the recession is very likely over at this point, but it's still going to feel like a very weak economy for some time," reports Marketwatch.
* "Stocks pushed to the highest levels of the year on Tuesday after Fed Chairman Ben Bernanke's declaration the recession is likely over. But wholesale-level inflation was surprisingly strong in August rising 1.7%, suggesting the possibility of higher prices down the road," reports WSJ.
* Banking Problems Now Bigger Than Pre-Lehman: "The U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers, said Nobel Prize- winning economist Joseph Stiglitz. In the U.S. and many other countries, the too-big-to-fail banks have become even bigger. The problems are worse than they were in 2007 before the crisis," reports Bloomberg.
* Last Friday gold prices closed at $1005/oz., the highest level in modern history. Global investment demand, strong fundamentals, technical and safe haven buying propelled precious metals as the dollar fell to a fresh 1-year low.Analysts expect this multi-decade bull market to push metal prices to new historic peaks.
* Fed will do anything to keep gold down: "The Fed does not want to see the following headline in the newspapers: "Gold closes above $1,000." Whatever it takes, it seems, will be utilized to hold the only constitutional money down. What the Fed really wants is asset inflation in housing. The one signal for rising inflation that the world understands is rising gold. The primary trend of gold is up. We're riding the bull. The bull will try to shake us off his back. We'll hang on," writes Richard Russell at GATA.org.
* "A solid close above $1,000 may be all it takes to spur a new round of solid buying, and this could be the start of gold going to $1,100 and beyond -- possibly as high as $1,250," reports Marketwatch.
* "The traditional inverse relationship between gold and the dollar appears to have been re-established during the current gold rally. The potential for U.S. dollar weakness is among the most compelling factors supporting the rally," said HSBC analyst James Steel reports Globe&Mail.
* "One year after the collapse of Lehman Brothers, the surprise is not how much has changed in the financial industry, but how little. Backstopped by huge federal guarantees, the biggest banks have restructured only around the edges. Employment in the industry has fallen just 8 percent since last September," reports NYTimes.
* "Wall Street struggled to rally last Friday amid a better-than-expected earnings forecast from shipping giant FedEx and a surprisingly positive new report on September consumer sentiment. The markets have extended their summer surge, closing at fresh 2009 highs, despite concerns stocks have gotten ahead of the economy," reports FoxBus.
* The nation marked eight years since the Sept. 11 terror attacks last Friday, with volunteers reading the names of the World Trade Center lost. President Barack Obama, observing his first Sept. 11 as president, had signed an order declaring it a day of service," reports AP. [Do any of your investments aid terrorists?]
* "China and Russia have been vocal this year about the need to diversify reserves away from the dollar as its value has dropped. Chinese officials have called for the creation of a new global reserve currency by the IMF," reports AP.
* Holler if you like the dollar. Anyone?: "The dollar is going down because of Economics 101. We keep printing more and more dollars and taking on more debt. There's more supply than demand," said Anthony Welch, co-manager of The Currency Fund. A weak dollar could hit you hard if it leads to higher energy prices this fall and winter," reports CNNMoney.
* "Half of the Federal Reserve's 12 districts saw evidence the U.S. economy had improved by the end of August, although labor markets remained weak and retail sales were flat, a Fed report said Wednesday. Fed officials have said recently they expect a sluggish recovery with persistently high unemployment. The U.S. jobless rate hit a 26-year high of 9.7% in August," reports CNBC.
* "President Barack Obama in a high-stakes speech Wednesday will press for a government-run insurance option in a proposed overhaul of the U.S. health-care system that has divided lawmakers and voters for months. Democratic plans call for requiring most Americans to carry health insurance. Failure to comply could cost families as much as $3,800 a year, according to a new Senate proposal," reports WSJ.
* "Consumers slashed their borrowing in July by $21 billion, the largest amount on record, as job losses and uncertainty about the economic recovery prompted Americans to rein in their debt. Economists expect consumers will continue to spend less, save more and trim debt to get household finances decimated by the recession into better shape," reports AP.
* UN wants new global currency to replace dollar: "The US dollar should be replaced with a global currency, the United Nations has said, proposing the biggest overhaul of the world's monetary system since the Second World War. The system of currencies and capital rules which binds the world economy is not working properly," reports Telegraph.
* China alarmed by US money printing: "The US Federal Reserve's policy of printing money to buy Treasury debt threatens to set off a serious decline of the dollar and compel China to redesign its foreign reserve policy, according to a top member of the Communist hierarchy," reports Telegraph.
* "The dollar’s role in international trade should be reduced by establishing a new currency to protect emerging markets from the 'confidence game' of financial speculation, the United Nations said," reports Bloomberg.
* "Gold is rapidly coming back on to the global currency stage, because it is rising against all of the major currencies. The historic role of gold as money, and the only monetary asset with no counterparty risk has been steadily gaining ground over the last few years," said Ian McAvity, editor of the Deliberations on World Markets newsletter to Barrons.
* "America began with a solid, moral foundation for our money system but over time due to ignorance, delusion and smoke and mirror economics (aka Keynesian economics) our financial world has become warped. Today we call debt "money." We exchange IOUs as if they were the asset itself"... Morally-Correct Money
* "Switzerland knocked the United States off the position as the world's most competitive economy as the crash of the U.S. banking system left it more exposed to some long-standing weaknesses," reports Reuters.
* "Stocks closed solidly higher last Friday afternoon as the markets rallied in the face of the government's newest jobs report, which showed the unemployment rate climbed in August to 9.7%, territory unseen since the Reagan administration," reports FoxBus.
* US Equity Returns - Worst Decade on Record: "Investors should take note of the stock market’s history. Secular (long term) bull markets are followed by secular bear markets. This is no great revelation – despite many investors being surprised by the performance of the stock market over the last decade. The best 10-year performance for US equities ended in 1998 with a 19.2% return. The worst 10-year period in history is now a tie between between 2000-2009 and 1929-1938, both with a -1.9% annually compounded rate of return," reports National Post. [Chart]
* "This Labor Day more people will opt for so-called staycations. AAA, the largest U.S. motoring organization, predicts weekend travel will tumble 13% from last year. The U.S. has lost 6.9 million jobs since the recession began in December 2007, the most of any economic slump since the Great Depression," reports Bloomberg.
* "Gold jumped to a six-month high Thursday, while silver climbed to a 13-month high. Gold has gained 4.6% this month in the biggest three-day rally since March. The ability of gold to continue to rise perhaps tells us that investors are far from calm about the longer-term global economic outlook and the policy response to it," reports Bloomberg.
* "Investors wary of other investment choices are taking physical possession of gold in a move that could drive the metal to historic heights. Gold prices could make a run at $1,200 and beyond this year as investors look for safe places to put their money amid continued turmoil," reports CNBC.
* "You have a lot of investors starting to pull some of their investments out of the equity market (and buy) gold, because they may think stock markets have run their course, they're starting to lose momentum," said Dax Wedemeyer of US Commodities to NewsAsia.
* "The dollar will weaken and the U.S. risks seeing a crash of the currency unless it does more to control the deficit and reduce debt. Foreign creditors might get more concerned about the sustainability of the U.S. fiscal deficit and about the U.S. being tempted to use the inflation tax as a way of resolving its private and public debt problems," said New York University Professor Nouriel Roubini, who predicted the financial crisis," reports Bloomberg.
* Warren Buffett offers good news on gold: "Inflation is coming back and the US Dollar is headed lower, were the two key messages he delivered to 35,000 shareholders at Berkshire Hathaway's AGM in Omaha over the weekend. Both predictions, if fulfilled, are powerfully positive for gold," reports Mineweb.
* "Participants are buying gold as a safe haven against economic uncertainty after weaker-than-expected private payrolls data on Wednesday. 'Technically the market's breaking out. You've got guys doing momentum buys," says Frank Lesh, broker and futures analyst with FuturePath trading, reports WSJ.
* "Investors should go for physical forms of gold and other precious metals rather than "paper gold investment schemes where there isn't full backing, where the metal might be leased out or used for derivatives. That's crucial because there is 80 times more paper gold in the market than actual physical metal in existence in the planet," said Martin Hennecke, associate director at Tyche to CNBC.
* Going for the gold: "You should put your money where it traditionally does well in September ... and October, November and December. And that's in gold. From 2001 to 2008, gold has had an average gain of 27% in September, 9% in October, 31% in November and 28% in December. If consumers are feeling better about their finances and the economy, combined with a release of pent-up demand, then this seasonal surge in gold could be very big indeed," reports Marketwatch.
* "Gold may advance to a record $1,325 an ounce if it first breaks out of a triangular pattern to close above $980/oz., a move that may occur in the next one or two weeks, Standard Bank Group Ltd. said to Bloomberg.
* $1,200 gold this year: "Investment strategist John Licata reckons gold remains one of the best asset plays in the world. With recovery on the horizon, silver is also seen as a good investment - in part because a pickup in manufacturing will drive up demand. Licata expects the king of metals to ring in the New Year with a $1,200-per-ounce crown," reports The Gold Report.
* "Over the past four decades, September has been the best time for gold in terms of its month-over-month price appreciation. In a typical year, the price of gold in September rises 2.5% above its August price. The gold price has risen in 16 of the 20 Septembers since 1989, by far the best success ratio of any month of the year," reports Kitco.
* "Holding physical gold has both maintained and increased buying power over the last half century. Therefore, the simplest solution to protecting your time, labor and your family's nest egg is by converting a portion (10%-25%) of your wealth, which is being held in unstable dollars, into the most stable currency in the world: gold," said Craig R. Smith Swiss America Chairman.
* "With the monetary importance of gold rising, and the role of the US Dollar diminishing, we see a global paradigm shift occurring. Recently several Asian nations have added gold tonnage to their Foreign exchange holdings, while the BRIC Nations (Brazil, Russia, India, China) have decided to trade among themselves in their own currencies instead of US Dollars," reports GoldWealthGroup. [Ed. Note. This is a new site launched by two Sr. Swiss America brokers.]
* Will Gold reach $5,000 plus?: "GOLD is a vital indicator of the future. It is only the true indicator of the Confidence in government. The technical analysis on Gold, based on a monthly chart, indicates the first real resistance is formed by the Primary Channel at $1,350 - $1,750 between 2010 and 2012. This level is the "danger zone" of a true meltdown in Public Confidence. If gold exceeds this level and it too forms the subsequent support, now we are looking at the $3,500 to $5,000 target zone. This is where we see the potential for Gold is a true economic meltdown of Confidence," reports MoneyTalks.
* Turning point for gold as Central Banks become buyers: "Gold has reached a turning point with purchases from official sources - Central Banks and sovereign wealth funds - perhaps outweighing sales as attitudes to the metal as a reserve asset become much more positive. China and Russia are two key nations with relatively low proportions of gold in their reserves as likely to be net buyers in the future," according to Specialist gold analyst Jeff Nichols reports Mineweb.
* China pushes silver and gold investment to the masses: "A report suggests that the Chinese government is pushing the general public into buying gold and silver bullion, which could have a dramatic effect on the markets. Maybe it's not in China's interests to drive the dollar down too much until it has managed to divest itself of the huge dollar overhang (see the article on Chinese Sovereign Wealth Funds, 'Chinese sovereign wealth fund dumping dollars for strategic investments like gold') reports Mineweb.
* "The stock market rally we have experienced since hitting the lows in March is over and stocks could retest those lows in the future as further problems loom for the financial sector, Chris Locke, managing director at Oystertrade.com Management said Wednesday to CNBC.
* "Stocks opened what has traditionally been a bleak month for the markets with a financials-led selloff on Tuesday, as analysts and investors voiced increasing concerns the summer rally could be facing a correction. The Financials led stocks' August rally as investors grew increasingly confident the economy had moved past the worst. But fears are rising that the rally may have gotten ahead of fundamentals," reports WSJ.
* "The dollar lost steam then rebounded against major counterparts on Tuesday, after a report that showed conditions for the nation's manufacturers expanded for the first time in 19 months in August. Separately, the National Association of Realtors said that pending sales of existing homes rose in July for the sixth straight month," reports Marketwatch.
* Dollar Is Funny Money in Push for World Currency: "The U.S. dollar is rapidly transforming into a Mickey Mouse currency. This has led to a rising call for the creation of an alternative to the dollar in the form of a new world currency. It would be an enormous mistake to discount these calls as a sideshow. The odds of a world currency emerging have never been higher," reports Bloomberg.
* "A $1,000 - $1,500 gold price, which does seem to be a not unreasonable possibility over the next year or so would largely represent a serious decline in the value of the U.S. dollar against many other major currencies, and while this would be uncomfortable for many in dollar areas, although not for exporters, it might not prove to be quite so socially disastrous," reports Mineweb.
* "Wall Street’s best August in nearly a decade came to a disappointing end on Monday as plunging Chinese stocks and tumbling oil prices sent the Dow to a rare two-day losing streak. Monday’s selling began overseas as China’s Shanghai Composite plunged 6.7% overnight to a three-month low. The index, which had led the world higher earlier this year, has plummeted 21% this month, its steepest monthly tumble in 15 years," reports FoxBus.
* "It's too early to put all this behind us. There was more breadth to the global downturn than we've ever seen, so it's going to be very difficult to re-start the broader global economy," said Stephen Roach, chairman of Morgan Stanley Asia Ltd., said in an interview on Bloomberg. "China’s economy isn’t sustainable and the Shanghai Composite should be 2,000 or less," said former Morgan Stanley Asian economist Andy Xie.
* Our quarter-century penance is just starting: "Never in modern times has there been such a flat contradiction between the euphoria of markets and the stern warnings of officialdom at central banks and financial watchdogs. An army of baby-boomers have seen their old age plans shattered by the housing bust. Their nightmare is here. They will have to spend less, and save more," reports Telegraph.
* "Last Friday, the dollar again fell against major currencies. The effect of the weak dollar is again pushing oil prices higher in the face of little demand for energy and huge surpluses of crude. Since March, the dollar index has fallen nearly 12% while crude prices jumped 81%," reports AP.
* Fed Seeks Delay Emergency Lending Disclosure: "The Fed and U.S. banks would suffer irreparable harm if details of the loan programs were made public, according to the central bank’s senior counsel," reports Bloomberg.
* "Gold's 'breaking out' to a higher level as imminent. We will see the market move through the bull market highs of $1,040 very, very quickly," Chris Locke, managing director at Oystertrade.com Management, told CNBC Wednesday. Other analysts have said the precious metal could shine again as inflation fears resurface.
* "Gold's broader appeal certainly stems from its spectacular price climb. Prices in the spot market are roughly 270% higher than a decade ago. Contrast that with an equal investment in the Dow back in August 1999. Without dividends from their 30 blue-chip stocks, Dow investors would have lost money. Even with dividends, something gold doesn't pay, the Dow has returned only a 9.3% gain, which amounts to less than 1% per year over a decade," reports ChicagoTrib
* "Debt undermines faith in the dollar": "Economists, worried about the effects of growing U.S. debt, say the huge liabilities the U.S. is taking on to dig its way out of the crisis could ultimately undermine faith in the dollar. That, in turn, could erode its privileged role as the main currency in which the world's central banks hold their reserves," reports WSJ.
* "The international exodus of the dollar has begun. I suggest savvy investors do the same," commented Swiss America Chairman Craig R. Smith regarding China's growing fear about U.S. debt, the dollar and the inflation outlook.
Disclaimer: All of the facts and information is believed to be true, however errors are possible. All investments have risk and past performance is no guarantee of future performance.