Free Republic

A HIGH probability of a sharp slowdown in US economic growth and a slide in the dollar are likely to continue driving investment in gold this year, says precious metals consultancy GFMS in its Gold Survey 2006, launched yesterday. The main reason for gold’s current strength is investment demand rather than jewellery manufacturing, says GFMS chairman Philip Klapwijk. Inflationary pressure and political tension in the Middle East should also boost demand for gold. As the gold price performed well, it would attract new investors. “We’d only need to see a tiny slice of mainstream assets diverted into gold, which comparatively...

I'm very bearish on the U.S. dollar and have been for years. That's why I have so many of them. This sounds like a contradiction, but let me explain. The reason I have so many dollars, even though I think they're worth less and less, is because I don't hang on to them. In my mind, cash is trash. One of the reasons why we have this enormous gap between the world's haves and have-nots is because the have-nots value money -- they work for it, save it, cling to it, and lose it.A friend just bought a new SUV....

MASSIVE WORLD SPECULATION DOMINOS by Christopher Laird PrudentSquirrel.com http://www.prudentsquirrel.com/ March 20, 2006 Last year, many Asian and other foreign stock markets went up as much as 50%. There is a synchronized world housing bubble that is a very analogous follow on bubble from the Japan collapses in the early 90’s, and the Fed loosening following 9-11. We had the tech bubble crash in 2000/1, and a have now a general US stock bubble that is yet to really pop. Right now, we are about at the same DOW level before the market collapses in 2001/2. There is a massive US...

Federal Reserve officials felt a 14th straight increase in interest rates last month put borrowing costs near where they needed to be, but agreed they could not rule out more hikes, given inflation risks. "Although the stance of policy seemed close to where it needed to be given the current outlook, some further policy firming might be needed to keep inflation pressures contained and the risks to price stability and sustainable economic growth roughly in balance," minutes from the Fed's January 31 policy-setting meeting released on Tuesday said. The minutes said some officials believed "somewhat" higher than desired readings on...

How Economic News is Spun Paul Craig Roberts Friday, March 3, 2006 Readers ask me to reconcile the jobs and debt data that I report to them with the positive economic outlook and good news that comes to them from regular news sources. Some readers are being snide, but most are sincere. I am pleased to provide the explanation. First, let me give my reassurances that the numbers I report to you come straight from official U.S. government statistics. I do not massage the numbers or rework them in any way. I cannot assure you that the numbers are perfectly...

The Proposed Iranian Oil Bourse Krassimir Petrov, Ph.D.January 15, 2006 Abstract: the proposed Iranian Oil Bourse will accelerate the fall of the American Empire. I. Economics of Empires A nation-state taxes its own citizens, while an empire taxes other nation-states. The history of empires, from Greek and Roman, to Ottoman and British, teaches that the economic foundation of every single empire is the taxation of other nations. The imperial ability to tax has always rested on a better and stronger economy, and as a consequence, a better and stronger military. One part of the subject taxes went to improve the...

The prospect of further rises in interest rates in the eurozone unnerved both equity and bond markets on Thursday. ... The price of silver rose to a fresh 22-year high above $10 an ounce amid expectations that a silver exchange-traded fund would soon receive US regulatory approval.

In a shocking development, the Treasury Department website is openly stating that as of January 24, 2006 our national debt stood at $8,185.3 billion and on January 26th at $8,190.5 billion. http://www.publicdebt.treas.gov/opd/opdpenny.htm Yet the US national debt ‘ceiling’, the maximum amount of debt the US government may hold at any one time, stands at $8,184 billion – a full $5.5 billion less. Although called upon by John Snow, Congress has not yet passed an expansion of the debt ceiling and so the US government is now operating in technical default. You may recall that when last the debt ceiling was...

M-3 has been launched into outer space, up another $56.3 billion last week, up $92.4 billion over the past two. This is some real horsepower. Over six weeks, the meaningless figure, ahem, is up $177.8 billion. These annualized growth rates are 28.7 percent, 23.6 percent, and 15.3 percent respectively. Those are the seasonally adjusted figures. The raw, non-seasonally adjusted, figure is up $293.3 billion over the past 12 weeks, on a pace to add 1.2 trillion in money to the economy. Wow. There must be a need for this. Maybe the master Planners see a coming need to monetize our...

Part I of this series reviewed our stimulus driven, real estate-reliant, post-bubble economy. Part II looked at the cycles of bull and bear markets, and how history suggests trouble ahead for U.S. stocks -- despite the strong start to 2006. Today we focus on how it could all come together or, as the case may be, come apart. I'll detail how to get to my 2006 target of Dow 6800 -- the lowest (by far) in the Business Week survey -- and lay out a scenario for how the S&P 500 could take a 30% haircut this year. Before the...

These are good times for gold investors, according Frank Holmes, Chief Investment Officer for U.S. Global Investors. In a recent webcast, Holmes told listeners: “We have a unique situation where all critical drivers for gold are pointing in the same direction.” Holmes identified six key drivers and talked about why they are all pointing to higher gold prices. ”There are many components here that are driving gold, and they sort of rotate around,” says Holmes. “It’s not linear.” Currently, we are in a secular bull market in commodities because gold is the ultimate money, says Holmes, and because demand is...

The HeraldTribune is reporting the clock is winding down on the Hybrid Loan and Sub-Prime mortgage time bombs. Starting in 2006 and accelerating into 2007, as much as $2.5 trillion worth of the fancy mortgages called "hybrids" are coming to the end of the free-lunch part of the deal. Economists are still trying to put numbers on this reset factor, particularly when it comes to the riskiest home loans, referred to as "sub-prime." "We don't have enough data to know how big a problem this will be," said David Berson, chief economist at Fannie Mae, the nation's largest mortgage packager....

Australian gold stocks continued to rally today as the gold price raced back towards a 24-year high. At 1245 AEDT the spot price of gold in Sydney was US$533.20 per fine ounce, up US$13.20 on last night's close. This comes on the back of a US$6 rise yesterday, with gold moving back towards the 24 year record high of US$540.90 set in December. Australia's biggest gold producer Newcrest Mining Ltd (ASX:NCM) led the pack in early trade today, racing up A$1.45 or 5.88 per cent to A$26.13 by 1240 AEDT. Papua New Guinea miner Lihir Gold Ltd (ASX:LHG) also shot...

Over the past few days, December 21st — when our first Hindenburg Omen (of whatever cluster is coming) — and Thursday December 22nd, the Federal Reserve has conducted one of the largest two-day Repo injections of money into the system since back in September 2001. On Wednesday they added $18.0 billion in reserves and on Thursday they added another $20.0 billion. Is this a coincidence, coming right as we get another Hindenburg Omen? Probably not. Is something high-risk going on behind the scenes here? Let’s review some facts at the Fed. On November 10th, 2005, shortly after appointing Bernanke to...

Has anyone heard anything?

An article in yesterday’s Wall Street Journal discussed how self-proclaimed “Depression buff” Ben Bernanke claims understanding of how the Fed caused the Great Depression and precisely what he would do to prevent such a calamity from reoccurring under his tenure. Not only are his assertions naïve and egotistical, but flat-out absurd. Though he claims to have studied The Great Depression in depth, Bernanke is completely clueless as to its actual cause. However, he is partially right about one thing: the Fed did help create the Depression, but for the opposite reasons Bernanke believes. The Fed-induced credit boom of the roaring...

The price of gold has continued to rise in Asian trading, climbing to its highest level since 1981. Gains came despite concerns that the market may be set for a correction and some analysts are now predicting that prices have even higher to go. Precious metals have been given a boost as investors look to protect themselves against higher inflation and weakening currencies such as the Japanese yen. Gold climbed as high as $522.70 an ounce, before falling back. It was hovering around the $521 mark during afternoon trading in Asia. 'Dizzy high' "There's some profit-taking now, but look at...

The price of gold passed $500 an ounce last week, its highest level since the late 1980s. This is either an ominous development—or it isn't... If you'd lived a century ago, gold would have been the basis of your money. Great Britain dominated the global gold standard; its currency, the pound, was freely convertible into gold... On April 5, 1933, President Franklin D. Roosevelt ordered Americans to surrender their gold coin; the country effectively went on a paper-money standard... Higher demand collides with constricted supplies; wham, prices rise... Gold is an unending mystery, because its value lies less in what...

December 5, 2005 The market price for an ounce of gold rose to over $500 last week, a significant milestone for economists watching precious metals and commodities markets. The last time gold topped $500 was December 1987, in the wake of the “Black Monday” stock market collapse earlier that fall. Gold prices historically rise when faith in paper currencies erodes, as investors seek the intrinsic value of gold to protect themselves from inflation. It’s interesting to note that while the U.S. dollar has regained some of its value relative to other paper currencies like the Euro, it continues to lose...

As gold flirts with 20-year highs, we are hearing more from the "gold bugs" or, as they are sometimes appropriately called, the "doom-and-gloomers". Appropriately, because a gold bug's current outlook for the future of traditional financial assets such as stocks, bonds and currencies is not optimistic, particularly in the US. A gold bug traces today's financial problems back to the removal of gold backing from global currencies; without such backing, there is no limit to the amount of money that politicians and the banking system can create. Monetary inflation inevitably leads to price inflation, and creates asset bubbles and excess...

"All the perplexities, confusion and distresses in America arise not from defects in the Constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation." [1] Abstract Ignorantia juris non excusat (ignorance of the law does not excuse) is a well established principle dating back thousands of years. Roman and English law, precursors of the American system of jurisprudence, both recognized the maxim. Be it not forgotten – justice excuses not the law. The laws of the land are to be made in pursuance of the Constitution. The...

As the Fed continues its inflation campaign, most have yet to come to grips with the reality of America’s uniquely precarious situation. In an act of prestidigitation that would impress Harry Houdini, the Fed is now attempting to hide evidence of the most inflationary monetary policy in its history by no longer publishing data on the growth of M3, while mystifying the public with phony CPI statistics. However, the relentless rise in the price of gold is evidence that fewer people are being fooled by the Fed’s slight of hand. Gold’s recent rise to just under $500 per ounce, gaining...

On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release. Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).

The October Newsletter The Leaves Won't Be The Only Thing To Fall! Enrico Orlandini Lasco Report 17 Oct, 2005 We're heading into that time of year where the word "crash" tends to command a bit more respect among market specialists, i.e., the months of October and/or November. Maybe it's just a coincidence, but I see an ominous cloud on the horizon. Actually, I see a large mass of clouds and they're as black as night. Anyone who's invested in the stock market over the last three or four years has little or nothing to show for it and, if you're...

For over four decades, observant and open-minded individuals have become deeply concerned about the future of our great nation. They refused to accept the rosy official and media testimony regarding our nation's fiscal and monetary integrity. Similarly, they did not believe the negative rhetoric directed towards gold. Just as these independent thinking and far-sighted people recognized that one plus one would always equal two they also knew that no one, nor no nation, could create something from nothing. Throughout this period they witnessed the U.S. government and the Federal Reserve banking system work together to create U.S. dollars from thin...

America's coming economic crisis. A look back from the election of 2016 ***EXCERPT*** Or perhaps we should call it the first domino to fall, because what then happened had a kind of geometric inevitability. The next domino was a thousand miles across the Caribbean, in Venezuela. Hugo Chavez, originally elected as a crusading left-winger, was by then well into his role as an outright military dictator. For years our diplomats had grumbled that Chavez was "Castro with oil," but after the real Castro's death the comparison had new meaning. A right-wing militia of disgruntled Venezuelans, emboldened by the news that...

In a recent interview on CNBC with Ron Insana, one of the "old-timer" funds manager, Julian Robertson, predicted "utter global collapse" as a consequence of the bursting of the world-wide property bubble. Often called "Never Been Wrong Robertson", the former head of Tiger Management (once the largest hedge fund in the world), is extremely worried about the speculative bubble in real estate. Specifically, he is very worried about a world that is sustained by American consumer spending which is in turn 1/4 sustained by a property bubble. He predicts that 20 million people could lose their homes once the property...

Wednesday, June 15, 2005, 5:07:00 PM EST TIC - A Technical Review Author: Dan Norcini (For Charts click on the article link beneath the title of the post--HUAC) This presentation in chart form (see below) is the percentage increase or decrease in Treasury holdings of the big three Asian customers, Japan, China and S. Korea on a 12 month trailing basis, and a comparison of the Trade Balance vs. Net Capital Flows data. As you can see, since the beginning of 2003, Net flows have proved to be sufficient to cover the trade deficit on a month-by-month basis with the...

Gloom permeates the gold community these days. The bull is bucking its members off like they were toddlers trying to ride a brahma. This is why, I suppose, so few ever make any money in the great secular bull markets of history. Too many "experts" succumb to the overwhelming negativity that comes with the nasty corrections. And their skittish readers stampede after them. What follows is a short essay on the big picture of gold and silver shares. It has evolved out of readings from a wide array of prescient analysts such as Richard Russell, Jim Sinclair, Steven Saville, Robert...

The Federal Reserve raised its short-term interest rate target by a quarter of a percentage point for the sixth time, and signaled little change in its plan to continue raising rates gradually in the months ahead. The rate change, which was expected, brings the target for the federal-funds rate, charged on overnight loans between banks, to 2.5% from 2.25%. It was 1% last June. The statement accompanying the rate change was almost identical to that issued after its last meeting on Dec. 14. Economic growth is "moderate," the jobs market is improving "gradually," and inflation is "well contained." It said...

Economist: China Loses in Dollar Stability Wednesday January 26, 3:47 pm ET By Edith M. Lederer, Associated Press Writer China Has Lost Faith in Stability of U.S. Dollar, Top Chinese Economist Says at World Forum DAVOS, Switzerland (AP) -- China has lost faith in the stability of the U.S. dollar and its first priority is to broaden the exchange rate for its currency from the dollar to a more flexible basket of currencies, a top Chinese economist said Wednesday at the World Economic Forum. At a standing-room only session focusing on the world's fastest-growing economy, Fan Gang, director of the...

Excerpt:"January 4 – Dow Jones (John Conner):  “The Federal Housing Administration has increased its single-family home mortgage limits… Effective Jan. 1, 2005, FHA will insure single-family home mortgages up to $172,632 in low-cost areas and up to $312,895 in high-cost areas, HUD said. Last year, the FHA loan limits were $160,176 in low-cost areas and $290,319 in high-cost areas.  HUD said the loan limits for two-, three, and four-unit dwellings also increased.  ‘These higher loan limits will help the FHA mortgage insurance program keep pace with the strong housing market while contributing to the Bush Administration’s commitment to create 5.5...

I spent 3 days of R & R at the Las Vegas Mandalay Bay last week, and thought it would be fun to spend a day driving around town doing some on the ground reconnaissance of the most expansive real estate bubble in the US. Based on my 8 hour survey of the Summerlin and Anthem suburbs of LV, I can say with 90% certainty that the bubble has burst and prices may spiral down for years to come. The latest finished phase of a Dell Webb development had over a hundred homes that had been completed back in August...

OK. This time they mean it, really. Economists in San Diego and around the country are saying the biggest housing boom in the region's history is slowing and may be finished by the end of 2005. "The phenomenon of doubling your money in three years is over for this cycle," said Jim Teak, a San Diego-based economist with Prudential Realty of California. A lot of people agree with Teak. The influential UCLA Anderson Forecast says in a report out today that 2005 could be the year that "reality and reason" finally cool off the housing market. Higher interest rates will...

For education and discussion only. Not for commercial use. OK, let´s suspend the bashing of President Bush and his Democratic presidential opponent John Kerry for their stupefyingly awful records and platforms on trade policy. Let´s turn instead to how their utter inability to understand America´s globalization challenges will sandbag other major policies they´re pitching. To date, there´s no better example than Bush´s goal of turning America into an “opportunity society.” Anyone who likes free markets and capitalism, will rightly love the concept of an ownership society; and it´s no wonder that the Republicans are making it a centerpiece of their...

The U.S. government's fiscal ills have spun wildly out of control and no longer are containable within the existing system. As detailed in this article, the actual annual shortfall in U.S. government operations for fiscal year 2003 (September 30) was $3.7 trillion. Put in perspective, that means if the U.S. Treasury had seized all wages and salaries in 2003 with a 100% income tax, there still would have been a deficit! The outlook for fiscal 2004 numbers is even worse. Considering that the popularly reported 2003 budget deficit was $374 billion, one-tenth the number cited above, this installment on government...

WASHINGTON -(Dow Jones)- The U.S. Federal Reserve released a staff study Monday saying the federal subsidies bestowed on government-chartered companies Fannie Mae (NYSE:FNM - News) and Freddie Mac (NYSE:FRE - News) are far higher than any previous estimates and the two do little to increase homebuying, lowering mortgage costs by just a fraction of previous estimates. "Fannie Mae's and Freddie Mac's ambiguous relationship to the government imparts an implicit subsidy to GSE shareholders and homeowners," the study reads, placing a dollar value on that relationship at between $119 billion and $ 164 billion. The report, prepared by staff economist Wayne...

Last fall Paul O'Neill, then Secretary of the Treasury, wanted a simple answer to a thorny question: How prepared was the nation today to pay all its future bills? Two government experts worked for months to calculate the answer. Their findings, which shocked even them, were never published—the Bush administration made sure of that. The reason for the silence was that by the time the two researchers had completed their study, O'Neill had been thrown out of the Treasury and replaced by the more politically astute John Snow. No savvy administration power player would dare point out, right in the...

This is an abbreviated Bulletin. The liquidity and speculation-driven U.S. stock market came to life again. For the week, the Dow and S&P500 added about 2%. The Utilities and Morgan Stanley Consumer indices also gained about 2%. Economically sensitive issues outperformed, with the Transports gaining 3% and the Morgan Stanley Cyclical index increasing 4% (up 38% y-t-d). The S&P Homebuilding index jumped 5% this week, increasing y-t-d gains to 98%. The S&P Retail Stores index added 3% this week, with 2003 gains of 44%. The broader market caught fire. The small cap Russell 2000 jumped almost 4%, increasing year-to-date gains...

A big drop in bond yields offered little encouragement for a tired stock market. For the week, the Dow and S&P500 posted slight declines. The Utilities were about unchanged, while the “defensive” Morgan Stanley Consumer index added 1%. Economically sensitive issues gave up some ground, as the Transports dipped 2% and the Morgan Stanley Cyclical index declined 1%. The broader market reversed recent strong relative performance, with the small cap Russell 2000 declining 2%. The S&P400 Mid-cap index was unchanged. The technology sector suffered mild declines. The NASDAQ100, Morgan Stanley High Tech, and The Street.com Internet indices declined 2%....

Over-liquefied markets came flying back this week. For the week, the Dow and S&P500 gained about 2%. The Utilities were unchanged, while the Morgan Stanley Consumer index added 2%. Not surprisingly, economically sensitive issues and sectors continue to outperform. For the week, the Morgan Stanley Cyclical index jumped 5%, increasing y-t-d gains to 36.5%. The Transports added 3% (up 26.0% y-t-d). This week saw the S&P Homebuilding index added 4% (up 82% y-t-d), and the S&P Steel index surged 10% (up 34% y-t-d). The broader market performed well. The small cap Russell 2000 jumped 4% (up 38% y-t-d) and...

Rumors of the 2003 market rally's imminent death have been greatly exaggerated in recent months. But according to one analyst with an enviable track record, the end days are finally here, and it's time to prepare for a sickening plunge into December and beyond. The doomsayer is Michael Belkin, one of the few investment analysts who has emerged from the recent boom, bust and reboom with his reputation not just intact, but aglow. Most independent researchers build careers as all-bull or all-bear, but not this guy. Operating out of a home office on Bainbridge Island in the Puget Sound near...

My now habitual apology for an unedited Bulletin. It was another unsettled week for global equity, currency, Credit and commodity markets. For the week, the Dow, S&P500, Transports, Morgan Stanley Consumer and Morgan Stanley Cyclical indices all declined about 1%. The Utilities added 1%. The more speculative areas of the market performed the worst. The small cap Russell 2000 declined 3%, while the S&P400 Mid-cap index dipped 1%. The NASDAQ100 and Morgan Stanley High Tech indices declined 2%, while The Street.com Internet index shed 3%. The Semiconductors declined 2% and the NASDAQ Telecommunications index lost 1%. The Biotechs mustered...

October 19, 2003 Inventory Statistic May Hearken Economic Malaise Rather Than Rebound by Willett & Alway Understanding the implications that business inventories have on the broader U.S. economy is a game of context. If you focus on the statistic in abstraction from longer term trends in the economy you can build a coherent argument that escalating inventories are auspicious in the immediate term. Contrarily, the same statistic situated within the proper long-term context emerges as less immediately promising. Since the former opinion is being trumpeted by The Street, it may be of some service to elucidate the latter opinion...

My apologies, again, for an unedited Bulletin. For the week, the Dow was slightly positive and the S&P500 slightly negative. Economically sensitive issues outperformed, with the Transports and Morgan Stanley Cyclical indices adding 1%. The Utilities and Morgan Stanley Consumer indices were unchanged. The broader market was its usual volatile self, but ended the week about flat. The small cap Russell 2000’s slight advanced increased its year-to-date gain to 36%. The S&P400 Mid-cap index was unchanged. The highflying technology sector gave up a little air. For the week, the NASDAQ100 declined 1% and the Morgan Stanley High Tech index...

WASHINGTON, Sept 24 (Reuters) - A U.S. mortgage finance regulator has pushed back to October the release date of its investigation of accounting irregularities at Freddie Mac (NYSE:FRE - News), an official said on Wednesday. The Office of Federal Housing Enterprise Oversight was due to make public at the end of September the results of its inquiry into an accounting scandal at Freddie Mac, a spokeswoman said. The report will now be out in either early or mid-October, she said. "It's not a hold-up. It's just in doing a thorough examination, one winds up working on very complex transactions, and...

It was one more unsettled week for global financial markets, as equities, bonds, currencies, and commodities all seemingly traded with dizzying volatility. Our stock market was choppy, but ended the week little changed. The Dow, S&P500, Transports and Morgan Stanley Cyclical indices posted fractional declines. The Utilities added 1% and the Morgan Stanley Consumer index enjoyed a slight gain. The broader market was largely unchanged, with the small cap Russell 2000 slightly positive and the S&P400 Mid-cap index slightly negative. The NASDAQ100 was flat for the week. The highflying technology sector generally underperformed. The Morgan Stanley High Tech index...

International Perspective, by Marshall Auerback China Tightens - The Beginning Of The End Of Global Reflation? September 2, 2003 There is much anecdotal and statistical evidence to support the notion of an incipient global recovery now underway, in marked contrast to last spring's dire talk about deflation.  Germany's IFO index (a leading indicator of business confidence) has now exceeded expectations 4 months' running, Canadian home sales are booming, the UK is still in the midst of a mortgage refi boom, and the economies of emerging Asia continue to upgrade their respective GDP growth estimates.  With American economic growth recently revised...

Home  l  Broadcast  l  WrapUp  l  Storm Watch  l  Perspectives  l  Sitemap  l  About Us Apocalypse This Way Comesby Nelson HultbergSeptember 2, 2003 A smattering of today's mainstream pundits is beginning to understand that what economically plagues us today is something quite different from the standard inflationary-recessionary cycles that have prevailed since World War II. But the great majority of talking heads and financial columnists remain clueless -- dutifully accepting the establishment line that depicts the nature of recessions from past models. The error in this view is that all recessions since World War II have been the result...