Wednesday, December 24, 2008
Tuesday, December 16, 2008
Death of Deflation and US Dollar. Fed has cut to Zero. GDX, SSRI, SLW, AUY, MGN, SST.v OK.v, BVG.v, MAI.to, TNR.v CZX.v, SBB.v
Dec. 16 (Bloomberg) -- The Federal Reserve cut the main U.S. interest rate to “a target range” of between zero and 0.25 percent and said it will do whatever is needed to end the longest recession in a quarter-century and revive credit.
The Fed “will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability,” the Federal Open Market Committee said today in a statement in Washington. “Weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.”
Monday, December 15, 2008
“The dollar will go to new lows as the U.S. attacks its currency,” said John Taylor, chairman of New York-based FX Concepts Inc., which manages about $14.5 billion of currencies. ..
Speculation that the dollar has peaked gained steam last week as the currency plunged 4.9 percent against the euro to $1.3369, its biggest drop since Europe’s common currency was created in 1999. It weakened 1.75 percent versus the yen.
“We’re at a turning point in terms of dollar dynamics,” said Jens Nordvig, a New York-based strategist at Goldman Sachs, the biggest U.S. securities firm to convert to a bank. “The dollar shortage has been addressed and we’ll see people start to focus on other things and those are all dollar negative.” ...
Spending to shore up the financial system caused the U.S. government’s budget deficit for the first two months of fiscal 2009 that started in October to balloon to $401.6 billion, the Treasury Department said Dec. 10.
“It’s absolutely going to get worse before it gets better,” said Michael Englund, chief economist at Action Economics LLC in Boulder, Colorado. “We’re looking at a $1 trillion deficit, and that’s before the next stimulus package. If Treasury spends all of TARP, it could be $1.2 trillion to $1.3 trillion.” ...
Sunday, December 14, 2008
Gold Cup and Handle Bullish formation indicates potential short squeeze. GDL, AUY, ABX, GDX, BVG.v, RMK.v
US Dollar collapse is back into waterfall mode with 8.5 trillion liquidity commitments. GDX, HUI, XAU, SLW, SSRI, AUY, ABX, SST.v, OK.v, TNR.v, BVG.v
Submitted by cpowell on Sat, 2008-12-13 04:11. Section: Daily Dispatches
From "Midas" Commentaryby Bill MurphyLeMetropoleCafe.comFriday, December 12, 2008
I received a call this morning from a commodities broker who told me that the Comex is alerting various futures firms about the potential of a squeeze on the December contract and is advising the $840 December shorts to exit their positions. That is the remaining open position.
There have been 12,636 notices of delivery. The shorts have until December 31 to make delivery. Normally they deliver early to take in cash and earn the interest. They must be delaying. As I understand the situation, that represents about 40 percent of the gold available at the Comex, and of course someone could enter the scene late, buy February gold, and then spread into December, which would stun the shorts.
My broker friend said his back office said this sort of alert is highly unusual and that the concern is real, not only for gold, but for other commodities too, like copper and palladium, as there is a good deal of talk of taking deliveries there too. But gold is the one for which the advice to cover went out.
This is an extremely productive development and could spur the price of gold up quickly as word spreads. As we all know, buying Comex gold and silver (the cheapest way to buy precious metals) makes all the sense in the world in this financial environment."
US Dollar - Jim Rogers using rally to exit dollar assets GDX, HUI, XAU, GDL, SVL, SSRI, AUY, SLW, MGN
NEW YORK (Reuters) - Investor Jim Rogers said on Thursday he has been using the sharp rally in the U.S. dollar as an opportunity to exit assets denominated in the U.S. currency.
Rogers told the Reuters Investment Outlook Summit 2009 in New York that the rally -- which has pushed the greenback up about 20 percent since July -- is a reversal of a "gigantic short position" accumulated over several years and not a result of a fundamental bet. He added the U.S. currency is likely to weaken sharply again.
"I plan to get out of all of my U.S. dollars at some time throughout this rally," he said. "The dollar is a terribly flawed currency, and perhaps a doomed currency."
Saturday, December 13, 2008
US Dollar and Gold: Goldman raises gold and silver forecasts on anticipated dollar weakening GS, TLT, GDX, AUY, SSRI, SLW
Goldman raises gold and silver forecasts on anticipated dollar weakening
Goldman Sachs is raising its gold and silver price forecasts in line with its economists' expectations on weaker dollar outlook and as havens from risk.Posted: Friday , 12 Dec 2008
LONDON (Reuters) -
Goldman Sachs (GS.N) said it is raising its near-term gold and silver forecasts on expectations for a weaker dollar, and as interest in the precious metal as a haven from risk continues to underpin prices.
The bank said it has raised its three-month gold forecast to $700 an ounce from $690, its six-month price view to $785 from $730 and its 12-month forecast to $795 from $710.
It sees silver at $10.04 an ounce in three months, up from a previous forecast of $9.90, at $11.08 an ounce in six months, against $10.30, and at $10.30 in 12 months, against $9.20.
"We are raising our gold price forecasts in line with Goldman Sachs economists' currency revisions toward a weaker U.S. dollar outlook," the bank said in a research note.
"We have long held that gold trades inversely with the U.S. dollar, which historically has explained over 90 percent of gold price movements," it said.
Gold, which is often bought as a currency hedge, often benefits from weakness in the dollar.
The current turmoil in the financial markets and worries over the outlook for the global economy are also likely to boost the precious metals' appeal as a haven from risk, Goldmans added.
"We believe that the pervasive negative sentiment surrounding most financial assets may continue to support gold prices at the margin," it said.
Wednesday, December 10, 2008
Treasury Bubble Monitor - Pimco’s Bill Gross Says Treasury Market Is Overvalued TLT, TYX, TNX, FVX, GDX,
Dec. 10 (Bloomberg) -- Bill Gross, manager of the world’s biggest bond fund, says he regrets not buying Treasuries in what is shaping up to be the best year for U.S. government debt since 2000.
“If we had our druthers, if we went back 12 months and we had known then what we know now, it would have been all invested in Treasuries,” Pacific Investment Management Co.’s Gross said in a Bloomberg Television interview from Newport Beach, California. “The question going forward is ‘Is it the winner over the next 12 to 24 months?’ We don’t think so.”
Gross’ $129.5 billion Total Return Fund lost 2.1 percent in the three months through Sept. 30, compared with a 0.49 percent slump by the benchmark it uses to measure performance, according to Pimco’s Web site. Mortgage securities and investment-grade corporate debt accounted for 93 percent of its holdings. The Total Return Fund has not held Treasuries since last December.
Treasuries of all maturities have returned 11.9 percent this year, according to Merrill Lynch & Co.’s U.S. Treasury Master Index, the best performance since the securities gained 13 percent in 2000.
Gross said he continues to invest in corporate debt that is backed by the U.S. government, including the debt of American Express Co. and Sallie Mae Inc. The 64-year-old money manager also said Treasury Inflation Protected Securities represent “one of the best values” for investors seeking high-quality debt “once this delevering process winds down.”
“Treasuries have some bubble characteristics, certainly the Treasury bill does,” Gross said. “A Treasury bill at zero percent is overvalued. Who could argue with that in terms of the return relative to the risk? There is no return.”
The Treasury sold $30 billion of four-week bills yesterday through an auction at zero percent, while three-month bill rates turned negative for the first time since the U.S. began selling the debt in 1929.
Gross expects the Federal Reserve to cut its target rate to 0.5 percent when policy makers meet next week and will likely signal that interest rates will remain low for a “considerable” period of time.
“There’s some risk” for the dollar to weaken, said Gross. “Certainly the government and the Fed cannot continue to talk about trillions of dollars of expansion of the Fed’s balance sheet without the risk of the dollar going south. It is fair to say other economies are doing much the same thing. The dollar doesn’t have to go south if all the economies reflate at the same time.”
Pimco, a unit of Munich-based Allianz SE, has about $790 billion in assets under management. The Total Return fund has gained 4.63 percent over the last five years, ranking it among the top one percent of all comparable funds, according to Bloomberg data.
To contact the reporters on this story: Kathleen Hays in New York at firstname.lastname@example.org; Michael J. Moore in New York at email@example.com. Last Updated: December 10, 2008 15:50 EST"
Sunday, December 07, 2008
"By Daniel Dombey in Washington
Published: December 7 2008 15:54 Last updated: December 7 2008 18:47
Barack Obama on Sunday spelled out his plans for the biggest infrastructure investment in the US for half a century. The president-elect argued that with the economy reeling, his incoming administration could not afford to worry about a spiralling budget deficit.
Mr Obama’s proposals for government works on roads, bridges, internet broadband and school buildings, together with energy efficiency measures and health spending, are far more detailed than the normal announcements during a time of transition."
Have you noticed recently that all news are awful, but market is turning around on the worst news and closing Up? Shorts are afraid to keep positions over the weekend. Before they waited for a bad news, now another QE programme could blow them up in a new found Bull in worthless currency in the end. Rally is in the making for a short term in markets.
Wednesday, December 03, 2008
Previously Wen had told Reuters that China could buy up stocks of aluminium to help struggling smelters. But the central government may cast the net much wider.
"All base metals are being considered," he told reporters on the sidelines of a conference in Sanya on China's Hainan Island.
China's metals sector has been hit hard by a slump in demand, which has caused stocks to build up and prices to plummet, forcing many to suspend part of their production.
The government, keen to offset the impact of a residential housing crisis and the global financial turmoil, has announced a $586-billion stimulus package to revive the economy.
Officials have said they plan to buy up stocks of resources and materials to shore up prices and the government has already begun buying up grains and soybean to support farmers, but it has yet to reveal its ambitions to build state metals reserves.
Earlier this week, Yunnan province, a major base metals production region in southwestern China, broke ranks by saying it planned to buy up 1 million tonnes of metals, ores and semi-finished products to support local industry.
Neighbouring Guangxi may follow suit.
But one China economist sounded a sceptical note about the idea of the government hoovering up metals stocks.
"It's hard to believe why the government would want to buy up all that stock. The question I have to ask is for what purposes? To help enterprises?" said Wensheng Peng, economist at Barclays Capital in Hong Kong.
"There are better ways to do that, by giving those firms money for example. Given the current low prices, it makes sense to build strategic stocks. There is a lot of confusion about the potential stockpile builds. More clarity and details are needed."
'IF I WAS A BANKER...'
Zhang Liqun, director of Financial Research Institute of the Development Research Center at the State Council, the cabinet, said buying metals reserves would ease pressure on smelters that were struggling with weak domestic demand and low prices.
"Considering its impact on jobs, buying reserves can be considered," Zhang told the conference in Sanya.
Weak demand has driven up aluminium stocks in China. About 1,1-million tons of aluminium are estimated to be sitting at warehouses and smelters' yards versus about 1-million tons in late November, industry sources at the conference said.
The key Shanghai aluminium futures contract hit a new 15-year low on Wednesday, after state-owned research group Antaike predicted domestic demand growth for aluminium would slow to 3% next year from 8,5% this year.
Wen said Chinese banks should buy aluminium as an investment due to the low price, adding that he believed production costs would be higher than current metal prices within three to five years.
"If I was a banker and I had money, I would buy aluminium now," Wen said."
The Standard & Poor’s 500 Index, which tumbled 42 percent to 848.81 this year, may rally 53 percent to 1,300 by the end of 2009, David Bianco wrote in a note dated yesterday. The New York-based strategist, who a year ago predicted a 2008 advance of 16 percent for the S&P 500, is now forecasting a gain that would exceed the index’s best annual performance on record.
The U.K.’s FTSE 100 Index may increase 41 percent from yesterday’s close to 5,800 in 2009, while the FTSEurofirst 300 Index may climb 25 percent from current levels, Zurich-based UBS said in separate notes.
“The consensus outlook for 2009 is a full year of gloom,” Bianco, 33, wrote in his 2009 market outlook. “We believe 2009 will bring signs of a dawn in confidence with the first faint light appearing earlier than most investors expect.”
The S&P 500 climbed 13 percent from an 11-year low on Nov. 20 as the government agreed to protect New York-based Citigroup Inc. from further losses and the Federal Reserve stepped up efforts to unfreeze credit markets. This year’s slump gives investors a chance to buy the biggest “growth” stocks in the S&P 500 at “deep discounts to intrinsic value,” according to Bianco, who recommends energy, technology and industrial shares.
The benchmark for U.S. equities is valued at 11.3 times the estimated earnings of its 500 companies, data compiled by Bloomberg show. The S&P 500 on average over the past five years has traded at 19.5 times the reported profit of its companies.
The U.K.’s FTSE 100, which is currently valued at 7.4 times profit, may climb to 5,800 next year, based on a price-earnings multiple of 13, strategist Gareth Evans wrote in a separate note. Price-earnings valuations may climb to lift the FTSEurofirst 300 Index 25 percent from current levels, a team of London-based strategists led by Nick Nelson forecast.
European per-share earnings will still tumble 25 percent as the euro-zone economy contracts 0.9 percent, they said.
“The macroeconomic and corporate profit outlook for 2009 is horrible,” Nelson’s team wrote. “But share prices have moved well ahead of this and are now pricing in a multi-year recession/depression.”
The brokerage also forecast gains for Latin American markets and recommended Brazilian equities.
To contact the reporter on this story: Alexis Xydias in London at firstname.lastname@example.org.
Monday, December 01, 2008
Extreme risk aversion, a tumble in oil and other commodity prices, combined with the spread of the financial crisis caused a "massive" move of financial assets worldwide into U.S. Treasury bills, driving yields closer to zero and pushing the dollar sharply higher, the U.N. said in its World Economic Situation and Prospects 2009 report.
An advance copy of the report was released at a development conference in Doha on Monday.
U.N. economists warned, however, that the current situation is pushing the external indebtedness of the United States to new heights, which could precipitate a renewed slide of the dollar once the deceleration process ends.
"Consequently, the disorderly adjustment of the global imbalances and a hard landing of the dollar remain major downside risks to the global economy, as an accelerated fall of the dollar could cause renewed turmoil in financial markets," the report said.
"Investors might renew their flight to safety, though this time away from dollar-denominated assets, thereby forcing the United States economy into a hard landing and pulling the global economy into a deeper recession," the report added.
Since the deepening of the financial crisis in mid-September, the U.S. dollar rose more than 12 percent against a basket of six major currencies .DXY. At the same time, the euro weakened about 14 percent to trade around $1.26
In the report, U.N. economists also said world economic growth will slow to 1 percent in 2009 from 2.5 percent this year. Global economy may even contract if stimulus packages prove too little too late, the report said. (Reporting by Vivianne Rodrigues; Editing by Leslie Adler)
The National Bureau of Economic Research declares what most Americans already knew: the downturn has been going on for some time.
The NBER is a private group of leading economists charged with dating the start and end of economic downturns. It typically takes a long time after the start of a recession to declare its start because of the need to look at final readings of various economic measures.
The NBER said that the deterioration in the labor market throughout 2008 was one key reason why it decided to state that the recession began last year."
Conundrum of Rising US Dollar, Falling Treasury Yields and rising Prise for protection from US Default. GDX, HUI, XAU
Credit default swaps on 10-year Treasury debt expanded to 29.2 basis points -- its widest ever -- from 26.5 basis points on Tuesday, according to CMA, a specialised data provider.
CMA said CDS on five-year widened to 22.0 basis points from 20.5 basis points. (Reporting by Emelia Sithole-Matarise"
Sunday, November 30, 2008
General Bernanke, Deflation, Choppers and US Dollar Falling from the sky. GDX, GDL, SVL, AUY, SSRI, ABX, SLW, MGN
Deflation: Making Sure "It" Doesn't Happen Here
Since World War II, inflation--the apparently inexorable rise in the prices of goods and services--has been the bane of central bankers. Economists of various stripes have argued that inflation is the inevitable result of (pick your favorite) the abandonment of metallic monetary standards, a lack of fiscal discipline, shocks to the price of oil and other commodities, struggles over the distribution of income, excessive money creation, self-confirming inflation expectations, an "inflation bias" in the policies of central banks, and still others. Despite widespread "inflation pessimism," however, during the 1980s and 1990s most industrial-country central banks were able to cage, if not entirely tame, the inflation dragon. Although a number of factors converged to make this happy outcome possible, an essential element was the heightened understanding by central bankers and, equally as important, by political leaders and the public at large of the very high costs of allowing the economy to stray too far from price stability...
As I have mentioned, some observers have concluded that when the central bank's policy rate falls to zero--its practical minimum--monetary policy loses its ability to further stimulate aggregate demand and the economy. At a broad conceptual level, and in my view in practice as well, this conclusion is clearly mistaken. Indeed, under a fiat (that is, paper) money system, a government (in practice, the central bank in cooperation with other agencies) should always be able to generate increased nominal spending and inflation, even when the short-term nominal interest rate is at zero.
The conclusion that deflation is always reversible under a fiat money system follows from basic economic reasoning. A little parable may prove useful: Today an ounce of gold sells for $300, more or less. Now suppose that a modern alchemist solves his subject's oldest problem by finding a way to produce unlimited amounts of new gold at essentially no cost. Moreover, his invention is widely publicized and scientifically verified, and he announces his intention to begin massive production of gold within days. What would happen to the price of gold? Presumably, the potentially unlimited supply of cheap gold would cause the market price of gold to plummet. Indeed, if the market for gold is to any degree efficient, the price of gold would collapse immediately after the announcement of the invention, before the alchemist had produced and marketed a single ounce of yellow metal.
What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation...
Russia and Venezuela ditch US Dollar, is it The Begining of the End of Reserve currency of choice.? GDX, ABX, AUY, SSRI, SLW, MGN
China is all Doom and Gloom, decoupling is dead, time is to Buy! CZX.v, TNR.v, GDX, AUY, SSRI, SLW, MGN
The “vast development potential” of the world’s most- populous nation will ensure a fast rate of expansion in 2009, said Zhang Liqun, a researcher with the Cabinet’s Development Research Center, according to the official Xinhua News Agency. “Domestic enterprises need to accelerate the pace in upgrading their business structures to better cope with a severe world economic situation.”
Saturday, November 29, 2008
$8.5 trillion is unthinkable in terms of paying back the depreciated value of financial and non financial business entity portfolios. Assume someone came to your door and asked you how your investments were going. When you explain to that person that a bad man in Toronto organized a group of really nasty people named hedge funds to naked short your shares and as a result you have lost 90% of your retirement fund, that person hands you a check to cover your loss.
Would you then characterize the money from that check as neutralized funds only filling a black hole in your balance sheet having no real economic impact on you?
That opinion, held by many, is so academic. The idea that $8.5 means nothing because it fills some black hole of losses is "form" over "substance" and simply too academic to believe. This is $8.5 trillion!
Now with that thought in mind contemplate $8.5 trillion dollars (for starters) before President Elect Obama’s fiscal stimulation for the creation of 2.5 million jobs, then a condition called, "Out of Control."
Silver is following Gold into Break out to the upside. SSRI, SLW, MGN, SST.v, OK.v, SBB.v, RVM.v, FVI.v
Friday, November 28, 2008
NEW YORK (MarketWatch) -- Gold futures edged higher Friday in light trading following the Thanksgiving Day holiday, rising for a fourth straight week and ending the month with their biggest monthly gain in nine years.
Gold for December delivery rose $7.70, or 1%, to close at $816.20 an ounce on the Comex division of the New York Mercantile Exchange. It rose 3.1% this week. In the month, gold advanced 14%, the biggest percentage gain since September 1999.
November's gain followed gold's slump in the previous month. The metal fell 18% in October, the biggest monthly loss since February, 1983.
Gold rose "on safe-haven demand and on the likelihood of further dollar declines with further reductions in U.S. and international interest rates," said Mark O'Byrne, executive director at Gold and Silver Investments.
In gold spot trading, the London gold-fixing price -- used as a benchmark for gold for immediate delivery -- stood at $814.50 an ounce Friday afternoon, up 50 cents from Thursday afternoon.
Holdings in the SPDR Gold Trust, the largest gold exchange-traded fund, stood at 755.06 tons on Tuesday, unchanged for a third day, according to the latest data from the fund. The SPDR Gold GLD 80.31, -0.07, -0.1%) rose 0.3% to $80.61."
Thursday, November 27, 2008
"U.S. Details $800 Billion Loan Plans
"WASHINGTON — The Federal Reserve and the Treasury announced $800 billion in new lending programs on Tuesday, sending a message that they would print as much money as needed to revive the nation’s crippled banking system...
...In the last year, the government has assumed about $7.8 trillion in direct and indirect financial obligations. That is equal to about half the size of the nation’s entire economy and far eclipses the $700 billion that Congress authorized for the Treasury’s financial rescue plan. ...
...The long-term risks are enormous but difficult to estimate. They begin with the danger of a new surge of inflation, at least after the economy comes out of its current downturn. Beyond that, taxpayers will have to pick up the losses from loans that default or guarantees that have to be made good.
But the most troublesome unknowns are how the maze of protections for investors and consumers will change economic and political behavior in the future...
...The new actions are unlikely to be the last. Until the economy begins to turn around, Fed officials have made it clear they are prepared to print as much money as needed to jump-start lending, consumer spending, home buying and investment...
...To bolster the general economy, it relied on its traditional tool: reducing the overnight Federal funds rate, the interest rate that banks charge for lending their reserves to one another. Normally, a lower Federal funds rates leads to lower long-term rates, like those for mortgages.
But the central bank has already lowered the rate to 1 percent, and it cannot reduce it below zero. Instead, policy makers are buying up other kinds of debt securities, which has the effect of driving down the rates in those parts of the market.
The move amounts to what economists refer to as “quantitative easing,” which means having the Fed pump staggering amounts of money into the economy by buying up a wide range of debt instruments..."
Wednesday, November 26, 2008
Citigroup says gold could rise above $2,000 next year as world unravels. GDX, SSRI, SLW, AUY, TNR.v, OK.v, BVG.v, SST.v
This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.
"They are throwing the kitchen sink at this," said Tom Fitzpatrick, the bank's chief technical strategist.
"The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock...
Tuesday, November 25, 2008
``They think that if you drive down the value of your money, it makes you more competitive, now that has never worked in history in the long term,'' said Rogers. The ICE's Dollar Index has gained 19 percent since Rogers said in an interview on April 27 he expected a dollar rally ``about now.''
The dollar advanced against 15 of the 16 most-traded currencies since the end of June, losing out only to the yen, as a global financial crisis drove investors to the perceived safety of Treasuries. U.S. politicians want to reverse those gains to revive growth, Rogers said.
The dollar is ``going to lose its status as the world's reserve currency,'' Rogers said yesterday in a televised interview with Bloomberg News. ``It will be devalued and it will go down a lot. These guys in Washington, they want to debase the currency.''
Rogers said that he is buying the Japanese yen. All of the 16 most-active currencies have weakened against the yen since June, led by a 39 percent drop in the Australian dollar.
The ICE's Dollar Index, which tracks the greenback against the currencies of six major trading partners, traded at 86.147 as of 7:30 a.m. in London from 86.081 late in New York yesterday. It reached 88.463 on Nov. 21, the highest level since April 2006.
Plan to Exit Dollars
Rogers predicts the U.S. currency's rally ``will probably go into next year'' and said he plans to cut the remainder of his dollar holdings during this period.
``If I were doing it today, and what I have done today, is buy the yen,'' Rogers said. ``But, it is also an artificial move that's going on. It's a difficult problem to find out what is a sound currency.''
Democratic lawmakers including Senator Charles Schumer of New York said this weekend they plan to put an economic stimulus package as large as $700 billion before President-elect Barack Obama on his first day in office. Obama has called for a sizeable enough plan to jolt the economy, saying the U.S. faces the loss of ``millions of jobs'' unless immediate steps are taken to stimulate growth and rescue the nation's automakers.
Rogers also is buying commodities, saying their ``fundamentals have not been impaired and, in fact, are improved.'' He correctly forecast in April 2006 that the oil price would reach $100 a barrel and gold $1,000 an ounce.
``In mid-October, I started buying commodities, I started buying China and I started buying Taiwan,'' he said. ``I bought them all, but I've been focusing more on agriculture. I mean sugar is 80 percent below its all-time high. It's astonishing how low some of these prices are.''
The Rogers International Commodity Index Total Return has plummeted 52 percent from a record in July, including an 11 percent slide this month. The index has risen 124 percent over the past seven years.
Sugar surged the most in two weeks yesterday amid speculation that higher crude-oil prices will boost demand for alternative fuels, including ethanol made from cane.
Raw-sugar futures for March delivery rose 0.44 cent, or 3.9 percent, to 11.72 cents a pound on ICE Futures U.S. in New York yesterday. The gain was the biggest for a most-active contract since Nov. 4. Sugar has declined in each of the past three weeks.
To contact the reporters on this story: Ron Harui in Singapore at email@example.comMike Schneider in New York at firstname.lastname@example.org Last Updated: November 25, 2008 02:59 EST
Monday, November 24, 2008
TNR Gold Corp ("TNR") is pleased to provide assay results from 7 diamond drill holes of the 2008 exploration program on its 100% owned El Salto project in Argentina. TNR drilled 12 exploratory drill holes, totalling 6446.45 metres, to evaluate a copper-molybdenum-gold porphyry system on this underexplored property.Of the 12 drill holes (ES07-01 and ES08-02 to ES-08-12), 8 holes were drilled in the north-western (ES07-01, ES08-02, 03, 04, 07, 10, 11 and 12), and two holes each in the central (ES08-05 and 06) and south-eastern (ES08-08 and 09) parts of the property. These holes targeted a large (4.8 km long and up to 1.3 km wide) IP chargeability anomaly extending from the northwest to southeast end of the property. This anomaly corresponds very well with a distinctive alteration system (largely phyllic with local potassic and silica alteration), and is also partially coincident with geochemical anomalies (copper and molybdenum) delineated during the reconnaissance program in the 2006 and 2007 field season.Of the 8 drill holes (3,690.55m) that tested the north-western property, 6 holes were located in a stockwork-breccia area. Assay results currently available show copper values exceeding 500ppm (0.05%) in samples from all 6 holes, anomalous molybdenum and, in some instances, gold associated with copper mineralization.The two drill holes (ES08-08 and 09) in the south-eastern part of the property intersected anomalous copper and molybdenum throughout but yielded no intercepts of economic significance."
“There is going to be a need for copper as China, the rest of Asia, Eastern Europe and Latin America’s standard of living rises,” Adkerson said Nov. 21 while attending the 21-member Asia-Pacific Economic Cooperation forum in Lima. “Mines are aging, so the industry is challenged from a supply standpoint.”
The unprecedented pledge of funds includes $2.8 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the only plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.
Sunday, November 23, 2008
Economic Deflation in Gold Terms and the U.S. Dollar Collapse
INTERNATIONAL. Speaking on CNBC Squawk Box Europe, Marc Faber the Swiss fund manager and Gloom Boom & Doom editor and publisher said on Fiday that asset markets are "terribly oversold" now, while investors are going overboard into the US dollar and US Treasuries.
"What you could see in the next three months is a very strong rebound in asset markets, in equities, followed by a selloff in bonds and eventually a selloff in the dollar," he said.
"I still like gold," Faber said, because it is cash and not the liability of someone else.
He however warned the assets that held up very well in the current crisis may not perform well near term. "If we get a rebound in equities, it is conceivable that people will sell assets that held up well and try to put their money in distressed assets,' he said.
“Gold price could easily drop to US$700 per ounce before it enters into a rise but one will see much higher gold prices eventually because paper money is over time losing its purchasing powers in the world. It’s very clear that every currency is losing its purchasing power in the world", Faber told India's CNBC-TV18 last month.
Faber also believes that the gold mining exploration sector is extremely at depressed levels and even if gold falls, gold mining exploration companies will go up.
Governments and central banks around the world are providing liquidity and that will eventually have an impact, Faber said.
And once the buying starts the rally is likely to be "stronger than people expect" given that financial institutions are sitting on so much cash, he added.
"I think the intervention by the government in the past and at the present time has created more volatility, not less, and so right now we have deflation, we have colossal deflation in asset prices," he told , noting that equities alone have lost US$30 trillion globally.
The Gloom Boom & Doom editor warned that if markets remained down for a longer perid, the current crisis may end up being worst than the 1929 depression.
Statistically a rebound should happen, but if it doesn't "the air is out" and the world faces an economy "worse than the depression of '29 to '32," he said.