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February 19th, 2009 | #301 |
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http://www.ft.com/cms/s/0/eff64394-f...077b07658.html
Insight: Gold primed to be ‘mania asset’ Steve Ellis February 18 2009 Gold is exhibiting all the classic signs of being in a structural bull market. On fears of inflation in early 2008, it rallied. Then, on fears of deflation in late 2008, it rallied again. So does gold perform better during inflation or deflation? In our view, that question is the wrong starting point. On the contrary, the rationale for owning gold, as it once again approaches the $1,000 an ounce level, is the prospect of mounting monetary disorder. The US Federal Reserve, having flooded the market with liquidity by more than doubling its balance sheet in less than six months, may be unable or unwilling to withdraw it in time for fear of precipitating a secondary relapse in economic activity. Other central bankers will also face intense pressures to “support” their domestic economy by weakening the currency, leading to competitive currency devaluations. The race to the bottom in fiat currencies has begun and hard assets, particularly gold and silver, should be the primary beneficiaries. Gold is a prime candidate to become a “mania asset” once its demand becomes chiefly financially driven as opposed to jewellery and/or industrial demand driven where its upside could be capped by “sticker shock”. In fact, gold is currently one of the few remaining major asset classes where a case could be made for it to rise in a parabolic fashion. Once the psychologically significant $1,000 an ounce is breached convincingly, the speed of the move beyond that level could accelerate sharply. One precondition for a mania is there must be uncertainty about how the asset is properly valued which allows “new era” thinking to take hold. This is very true for gold. Price explosion might not be imminent, however. Gold is experiencing unprecedented buying by exchange-traded funds, offset by substantially reduced jewellery demand. The fall in the Indian rupee has meant Indian gold prices have reached record levels. This is causing a slowdown in jewellery purchases (even though rupee expenditure levels are holding up, the tonnage of gold imports is suffering). The long-term story for gold, however, is as a remonetisation play as investors lose faith in fiat currencies. Keep an eye on gold lease rates; a spike would be a good lead indicator that gold is about to punch higher as this would reflect a shortage of lendable bullion. Rising lease rates will cause gold to go into backwardation as holders of gold may not want to sell their gold forward under any circumstances a trend currently evidenced by the high physical premium being paid for gold coins. Rising lease rates prefigured the last big move in gold back in the spring of 2007 just as the two Bear Stearns hedge funds were blowing up. Central Banks feared counterparty risk for the first time in 20 years and substantially curtailed gold lending and sales. This led to a 40 per cent rally in gold from $700 to over $1,000. How high can gold ultimately go? A Dow Jones Industrial Average/gold ratio of 2:1 would be a good sign the bull market in gold is getting well advanced. We saw this in 1932 and 1980. Only nine years ago in 2000, however, this ratio reached over 40:1. Arriving at 2:1 again does not necessarily mean the Dow must decline significantly from here; more likely gold prices surge and the Dow stays range-bound but volatile. Investors are looking for good risk/reward investments. I cannot say with any confidence that gold will not be without risk and volatility but at least it offers early participants plenty of upside reward to compensate them for the wild ride. Speaking to central bankers, this is the first time I can recall them actually favouring a high gold price. Normally they see high gold prices as a lack of trust in the financial system (not to mention their ability as central bankers). Alan Greenspan, the former Fed chairman, for example used to target a gold price of around $400 to $500 an ounce. Recently, the central bankers have become more enamoured of higher gold prices as it would suggest that their attempts to stave off deflation were starting to work. Central bankers in favour of higher gold prices? Things really have changed. The writer is manager of the RAB Gold Strategy
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_______ Political correctness is an intellectual gulag. Last edited by Hugo Böse; February 19th, 2009 at 08:24 AM. |
February 19th, 2009 | #302 |
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Not an exceptional day on the Street but a good number nonetheless.
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February 19th, 2009 | #303 |
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Indeed it is. We witness the unraveling of the jew in the Kwa.
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February 19th, 2009 | #304 |
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bailout backlash:
http://www.msnbc.msn.com/id/3032619/#29288463 http://www.msnbc.msn.com/id/3032619/#29286398
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The average kwan is of such low quality that he'd shoot himself if he had any self awareness. -Joe from Ohio Last edited by Joe_J.; February 19th, 2009 at 09:43 PM. |
February 20th, 2009 | #305 |
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U.S. Stocks Tumble, Sending Dow Below Lowest Close in 11 Years
Feb. 20 (Bloomberg) -- U.S. stocks tumbled, sending the Dow Jones Industrial Average below its lowest close since 1997, as concern deepened that the government will need to take over struggling banks. Treasuries rallied and gold climbed above $1,000 an ounce. Citigroup Inc. and Bank of America Corp., which combined have received more than $90 billion in federal aid, slid more than 32 percent on concern nationalization will wipe out shareholders. Europe’s benchmark index sank to a six-year low, and Japan’s Topix plunged to the lowest since 1984. The Standard & Poor’s 500 Index decreased 3 percent to 755.38 at 1:20 p.m. in New York and is down more than 8 percent on the week. The Dow fell 204.86 points, or 2.7 percent, to 7,261.09. “There’s so much uncertainty and a decent chance of the worst case, nationalization, that it’s complete speculation to mess with Citigroup and Bank of America,” said Edwin Walczak, head of U.S. equities at the American unit of Vontobel Holding AG of Switzerland. “The price is telling you that.” Vontobel’s U.S. unit manages $6 billion. Stocks dropped yesterday as Hewlett-Packard Co. cut its profit forecast and concern about rising credit-card defaults dragged financial shares to the lowest level since 1995. The S&P 500 has lost 15 percent in 2009 as companies from Microsoft Corp. to Procter & Gamble Co. reported disappointing earnings and Treasury Secretary Timothy Geithner failed to convince investors that his plan to rescue banks will work. http://www.bloomberg.com/apps/news?p...eCY&refer=home |
February 20th, 2009 | #308 |
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The economy will be well served indeed if the floor can hold to at least 6000.
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February 20th, 2009 | #309 | ||
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White House Response.
Quote:
Friday, Feb 20 White House Responds to Santelli's Outburst Quote:
Issue Volume Price Chg % Chg BankAm (BAC) 424,967,530 2.87 -1.06 -27.03 Citigroup (C) 358,408,264 1.76 -0.75 -29.88 WellsFargo (WFC) 199,882,668 9.01 -3.00 -24.98 GenElec (GE) 192,244,328 9.15 -0.91 -9.05 JPMorgChas (JPM) 67,163,121 19.04 -1.56 -7.57
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The average kwan is of such low quality that he'd shoot himself if he had any self awareness. -Joe from Ohio Last edited by Joe_J.; February 20th, 2009 at 03:18 PM. |
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February 20th, 2009 | #310 |
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This year, yes, as the economic stimuli will postporn the collapse of the financial system and the collapse of the real economy for one year and a half. Then the collapse of the financial system and the real economy will continue even stronger.
Last edited by fdtwainth; February 20th, 2009 at 03:28 PM. |
February 20th, 2009 | #311 |
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Oil at $38.94 at 3:42 EST. I couldn't have imagined even six months ago that oil would shake out so low.
Jews putting squeeze on arab oil nations? I wonder.
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The average kwan is of such low quality that he'd shoot himself if he had any self awareness. -Joe from Ohio |
February 20th, 2009 | #312 |
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February 20th, 2009 | #313 |
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We have a Disneyland, judeo economy here. We are used to thinking within that paradigm.
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The average kwan is of such low quality that he'd shoot himself if he had any self awareness. -Joe from Ohio |
February 20th, 2009 | #314 | ||
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Gone in 60 Days: Citi and Bank of America Won’t Live to See May
Quote:
Quote:
http://www.chartingstocks.net/2009/0...ve-to-see-may/
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The average kwan is of such low quality that he'd shoot himself if he had any self awareness. -Joe from Ohio |
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February 20th, 2009 | #315 | |||
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New Orleans Niggers Still Getting "Emergency" Rent Payments.
Quote:
Obama saves the day and rescues the chocolate city. LOL, pathetic niggers will never go off the rent subsidy: Quote:
Quote:
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The average kwan is of such low quality that he'd shoot himself if he had any self awareness. -Joe from Ohio |
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February 20th, 2009 | #316 |
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February 20th, 2009 | #317 | |
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Bank of America?
Quote:
About 2 years ago when doing offical paper work with my BAC branch manager I told her that we were going to have the biggest economic collapse since at least the Great Depression and the biggest political shake up since at least the civil war. Wonder if she's recruitable now for my local WN party cell? She's cute as well as educated. (not to mention probably desperate by now, heh heh heh) |
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February 20th, 2009 | #318 |
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Oil price drops have halted some big construction projects in arab nations.
The only stock market that has been consistently in the green over the past eight months or so has been in Tel Aviv.
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The average kwan is of such low quality that he'd shoot himself if he had any self awareness. -Joe from Ohio |
February 21st, 2009 | #319 |
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Ireland Puts 100K Protestors On The Streets...
About 100,000 people have taken part in protests in Dublin city centre to vent their anger at the Irish government's handling of the country's recession.
They oppose plans to impose a pension levy on 350,000 public sector workers. Trade union organisers of the march said workers did not cause the economic crisis but were having to pay for it. In a statement, the Irish government said it recognised that the measures it was taking were "difficult and in some cases painful". The pension levy was "reasonable", the government said. It reflected "the reality that we are not in a position to continue to meet the public service pay bill in the circumstances of declining revenue", it added. Reports say the plan could cost the 350,000 public sector workers between 1,500 euros and 2,800 euros (£2,500) a year. High unemployment There were conflicting estimates of the numbers of people at the march, which began on the north side of Dublin in the middle of the afternoon. Protesters march in Dublin Police said 100,000 people were on the streets, while organisers said they expected 200,000 to protest in total. The Irish Congress of Trade Unions (Ictu), which organised the march, said it was campaigning for "a fairer and better way" of dealing with the economic crisis. "Our priority is about ensuring that people are looked after, the interests of people are looked after, not the interests of big business or the wealthy," Sally-Anne Kinahan, Ictu's secretary general, told the BBC. I've a mortgage to pay, I've children to put through school, and now I'm being told I have to take cutback, after cutback, after cutback Irish protester One protester said he was "sick and tired of the way this government conducts itself and what it's doing to this country". "I've worked all my life, I've never broke the law, never walked out on strike. Instead I've went to work and done my job," he said. "I've a mortgage to pay, I've children to put through school, and now I'm being told I have to take cutback, after cutback, after cutback." Ireland, which was once one of Europe's fastest-growing economies, has fallen into recession faster than many other members of the European Union. The country officially fell into recession in September 2008, and unemployment has risen sharply in the following months. The numbers of people claiming unemployment benefit in the Irish Republic rose to 326,000 in January, the highest monthly level since records began in 1967. http://news.bbc.co.uk/2/hi/uk_news/n...nd/7903518.stm
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The average kwan is of such low quality that he'd shoot himself if he had any self awareness. -Joe from Ohio |
February 22nd, 2009 | #320 | |
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