May: gold shines, stocks wilt
"New gold peaks ahead" -75 experts ... "Buy gold dips" -Pat Boone
BY David Bradshaw ~ Editor, Real Money Perspectives
Global Currency Crisis ~ Special Report
features ~ links ~ wisdom ~ weekly email ~ daily email
May 28, 2010 ~ ((M-F podcast)) ~ gold fraud alert!

Friday gold prices rose firmly above $1,200/oz. in thin pre Memorial Day holiday trading. Gold last traded up $1.90 to $1,213.90/oz., silver fell $.11 to $18.40/oz.

* Bargain-hunting investors bought precious metals this week, sending gold prices up 3% and silver up over 4%, as they seized the opportunity last week's price dip provided. For the month gold rose 3%, silver slipped 1% and the Dow fell 7%. Given the rising level of stock market volatility, gold and silver have again shown to be trustworthy safe havens amid the ongoing financial storm.


Memorial Day 2010: Commemorating Our Heroes! -- Listen

Monday the financial markets are closed in observance of Memorial Day. Swiss America wants to help commemorate U.S. men and women who have died while in the military service. Here are a few ways we Americans commemorate our heroes: We fly our flags, the sacred emblem of our country. We honor our veterans who have sacrificed all they had for the freedom we treasure today. Tell every Vet you see how much you sincerely appreciate their service and sacrifice for all Americans - past, present and future.


* Money managers go for gold: "Gold is one of the more mysterious assets in the financial markets. It's also been one of the best investments of the last several years, outlasting the equity bull market and performing well when so many assets have succumbed to big declines. That's why it's become a key component among the strategies of the world's largest money managers. The outlook for gold is very, very strong," reports Mineweb.

* $36,000/oz. gold not ridiculous: "Gold should be viewed not as a commodity, but as a cash supplement. There's been such proliferation of currency that as a consequence, gold is very undervalued. $36, 000 an ounce gold is not as ridiculous as it might sound. If all the reported Fort Knox gold was re-valued at $36,000 per ounce, it would pay off all the debt in the US," said Ben Davies, CEO of Hinde Capital to CNBC.

* Easy Money, Hard Truths: "Easy money has negative consequences in addition to the risk of inflation and devaluing the dollar. It can also feed asset bubbles. In recent years, we have gone from one bubble and bailout to the next. Each bailout has rewarded those who acted imprudently. This has encouraged additional risky behavior, feeding the creation of new, larger bubbles. Government statistics are about the last place one should look to find inflation, as they are designed to not show much. The Fed hopes that by denying savers an adequate return in risk-free assets like savings deposits, it will force them to speculate in stocks and other risky assets," writes David Einhorn, president of Greenlight Capital in NyTimes.

* "Global conditions today could unleash another gold boom like the one in the 1970s. Then, as now, the world lost confidence in the U.S. dollar as a store of value. Back then, central banks started hoarding gold instead. Today they are net purchasers of gold for the first time since 1988," said Dylan Grice, strategist at SG Securities in London. And although gold has risen a long way, so has the U.S. money supply. How far would gold rise? To around $6,300 an ounce, Mr. Grice says," reports WSJ.

* "Speculators (and investors) are buying gold faster than the world's biggest producers can mine it as analysts forecast a 27% rally that may extend the longest run of annual gains since at least 1920. 'People are afraid of the debasement of all the currencies. What’s surprising is that gold is still as low as it is,' said Peter Schiff, president and chief global strategist for Euro Pacific Capital, predicting $5,000 to $10,000 an ounce in the next five to 10 years," reports Bloomberg.

* "Throughout history gold's value has stood tall when the schemes of greedy profiteers and politicians crumble, as they are now. Gold remains what it has been since biblical times: a reliable store of value that government cannot devalue by printing more or by manipulating paper investments," writes Swiss America Chairman Craig R. Smith.

* "World stock markets tumbled Tuesday, extending Wall Street's sell-off (the Dow tested 10,000 level) as the sliding euro fueled a new wave of pessimism about the global economy's health. Renewed worries about Europe's debt problems rattled already anxious investors, who grew more uncertain about the outlook for the U.S. and global economies," reports AP.

* "The fear trade was back on as the euro headed toward its four-year low and gold became more appealing as a form of money that keeps its value. Prices are expected to stay in a tight volatile trading range as metal contracts on the Comex are set to expire on Tuesday," reports TheStreet.

Europe could set off global chain reaction: * "The knife-edge psychology currently governing global markets has put the future of the U.S. economic recovery in the hands of politicians in an assortment of European capitals. If one or more fail to make the expected progress on cutting budgets, restructuring economies or boosting growth, it could drain confidence in a broad and unsettling way," reports WashPost.

* Double Dip Recession?: "Investors should be prepared for mid-June to August to be very volatile, as governments across the world attempt to raise money in a crowded market. Problems in the euro-zone debt market could spread to the US. With so much debt needing to be refinanced, US rates would have to rise to attract enough foreign buyers of Treasurys, which could then push the economy back into the dreaded double-dip recession," reports CNBC

* U.S. stocks enjoyed a last minute rally late Friday, though many remained cautious about the outlook for Europe's financial system in the weeks ahead. The DJIA is now down 9% from its 2010 high, just out of territory signaling a correction to the bull market dating back to March 2009," reports Marketwatch.

* 'Perfect storm' as market tremors hit China, Europe and the US: "Capitulation fever has swept global markets on triple fears of faltering recovery in the US, Chinese credit curbs and Europe's intractable escalating debt crisis. David Rosenberg from Gluskin Sheff said a fresh "train wreck" may be coming in the US mortgage market as rates on a wave of "option ARM" contracts reset upwards in September. Meanwhile, monetary tightening in China has begun to set off tremors. Shanghai's bourse has tumbled 20% since mid-April. Above all, nothing has been resolved in Europe," reports Telegraph.

* Senate approves financial overhaul: "The Senate approved sweeping legislation last night that would restructure the nation’s financial industry, adding new safeguards and consumer protections in an effort to prevent another economic catastrophe. Republicans expressed dismay at the bill’s passage. Senator Judd Gregg of New Hampshire, called the creation of a Consumer Financial Protection Bureau 'a massive expansion of the federal government that will do considerable damage to our competitiveness as a nation, not to mention harming job growth and our economic recovery.'" reports BosGlobe.

* "Stocks logged their biggest drop of the year Thursday as investors worried about two events coming Friday — a German vote on the EU bailout and options expiration. Plus, a vote in the Senate to end debate on financial reform cleared the path for a final vote tonight or tomorrow, which added another layer of selling pressure," reports CNBC.

* World stocks tumble as debt woes rumble: "Sentiment is awful and confidence has been trashed," said David Buik, markets analyst at BGC Partners. Further weighing on sentiment was the news that new claims for unemployment benefits in the U.S. rose by 25,000 to a three-month high of 471,000 — the consensus in the markets was for a modest fall to 440,000. The worry is that high unemployment in the U.S. will act as a drag on the recovery," reports AP.

* "Gold's recent rally prompted some investors to lock in gains and free cash to cover losses in other assets. 'The current uncertainty over the fiscal situation in Europe reinforces our medium-term view that gold could rise above $1,500 an ounce,' said Michael Widmer, London-based metals strategist with Bank of America Merrill Lynch," reports Bloomberg.

* "Calls for lower gold prices arrive like clockwork just after gold prices hit new nominal highs, such as at; $500, $750, $1,000 and now $1,200/oz. Gold bears have been proven wrong now for a decade. Gold is firmly holding on to its role as the 'ultimate currency' with investors worldwide. Most money managers say they would not short the gold market given the levels of debt and uncertainty that exist around the world today," writes Swiss America Chairman Craig R. Smith.

* Senate to Vote on Financial Reform Bill "The Senate cleared the way Thursday for a final vote on legislation that would constitute the biggest overhaul of U.S. financial-sector regulations since the 1930s, voting 60-40 to end more than three weeks of debate on the measure. If the Senate ultimately approves the bill, it must still be reconciled with a version passed by the House of Representatives. President Barack Obama hailed the vote at a White House Rose Garden appearance Thursday. "I will ensure that we arrive at a final product that is both effective and responsible," he said," reports WSJ.

* "Now that gold has established new historical highs, we are going to see more record highs for the yellow metal. Historically every major fiat currency has self-destructed in what is popularly called "hyperinflation" caused by either unlimited increases in the supply of that fiat money or accelerating loss of public confidence in the continued value of the money. When this happens and investors watch their currency become worthless, just like what happened in Zimbabwe, they wish they had something tangible and of value. This is why they turn to gold and silver," reports Mineweb.

* Gold: Speculation vs. Asset Protection "I see Dennis Gartmann, a noted hedge fund manager, is calling a major top in gold prices and telling investors to "rush" to the exits now at CNBC. That may be good advice for traders interested in making a quick buck, but surely not for investors focused on preserving and protecting wealth against the coming inflation Gartmann has warned about this year. Remember, the advice of a short-term speculative trader should not be viewed as good advice for the average long-term gold holder," writes Swiss America Chairman Craig R. Smith.

* Six Reasons to Buy Gold Right Now: "Buying gold is not only the best play on market negativity today, it is your insurance against economic chaos and inflation. Here are six reasons why you should buy gold right now: Dependability, Can’t Be Copied, Timeless, A Win-Win, Rarity, It’s Universal," reports CNBC.

* Gold ETF hits $50B: "Assets in the world's largest exchange-traded fund tracking gold prices are at record levels and poised to top $50 billion as investors seek the safety of the precious metal amid the uproar in global financial markets. 'Gold prices are soaring because of growing inflation fears -- both the European Central Bank and the Federal Reserve seem to be on the path to permanently easy money with the Greek bailout and huge U.S. budget deficits," wrote Peter Morici, an economics professor at the University of Maryland," reports Marketwatch.

* Last week gold prices rose nearly 2%, while silver rushed ahead almost 5%. The shiny yellow metal is certainly trying to tell us all something, but what? To rediscover gold in the 21st century, listen quietly and keeping reading.

* "Gold hit record highs near $1,250 an ounce in Europe last Friday as investors bought the metal to protect against sovereign risk in the euro zone and instability in the foreign exchange markets. Gold priced in euros, sterling and Swiss francs extended the record highs they have already set this month as investors concerned about the outlook for the European currencies chose gold as an alternative asset," reports FoxBus.

* Gold Could Now Face 'Unlimited' Demand: "A German banker once told us that gold normally trades like a commodity. However, when investors lose confidence in currencies, because the pool of gold is so much smaller than the pool of currencies, demand for gold can effectively become unlimited," reports BusInsider.

* "Analysts expect the precious metal to extend gains to new records over coming days as waves of investor money come flooding into the market looking for safety. Wednesday gold prices hit a record $1,248.15 on fears that a $1 trillion European rescue package will not solve the euro zone debt crisis. Risk aversion still dominates market psychology and the fact that gold has moved up alongside the dollar only reinforces investor bias toward the precious metal," reports Reuters.

* Investors worldwide are seeking safe havens from economic uncertainties. The commodity super-cycle has swept gold prices up fourfold since 2001 -- but that's just the kickoff phase according to over 75 gold analysts and experts.

* The World According to Gold: "Gold is speaking to us, in its gleaming, grinning, golden silence, from its distant historical perch in the affairs of commerce among humans. It's telling us what fools we are to believe in the fiat paper issued by governments. Gold is telling us that leverage is the avenue to self-destruction. Gold is also telling anyone who has the mental acuity to pay attention that it is the best option of wealth preservation now and forever," reports James West at SeekingAlpha.

* Gold reaches for the stars: "Gold is the tangible currency of last resort. It is not in a bubble as the fundamentals and market sentiment support the rise in prices. Gold is reflecting exactly what's going on," said trader and senior strategist Adam Klopfenstein of Lind-Waldock in Chicago to Marketwatch.

* "Alarmed at the plunging value of their currency, Europeans are leading an exodus out of the euro and into gold. The flight to gold is not a short-term trend. Sovereign debt problems are going to be with us for a longer term. Gold has been hitting records in euro terms since February. On Tuesday, it reached €960.41 in London, a rise of more than 26% this year, more than twice the gains of gold in dollar terms," reports WSJ.

* "With so much uncertainty out there gold has become a de-facto currency. Gold is currently benefiting from the belief that central banks cannot raise rates. Politically it would be very unpalatable to raise rates raising fears over inflation," said Monica Fan, senior currency product engineer at State Street Global Advisors," reports CNBC.

* Smiling CEO predicts Dow 5k by year end on CNBC Squawk on the Street: "This is depressing. I think he needs a therapist," said James Hardesty, president, market strategist and chief economist at Hardesty Capital Management on CNBC in response to a chilling prediction by David Hefty, CEO of Cornerstone Wealth Management that the Dow will rise to 11-12k by June then plunge over 50% by year end. As $17 trillion in hedge fund bets backfire, margin calls cascade, fragile confidence craters, pulling the entire market down.

* $1,225 gold: buy, sell or hold?: The chart below illustrates that $1,225/oz. gold is just over halfway to a new "inflation-adjusted" price peak of $2,358/oz. reached thirty years ago. (using official inflation stats, what cost $850 in 1980, today costs $2,350).

* "The sheer scale of fiscal deficits facing numerous countries is likely to prompt further diversification from fiat currencies and should ultimately propel gold to fresh highs," says James Moore, analyst at thebulliondesk.com. Many analysts are expecting a wide range for gold prices from $1,175 to $1,275 as the profit-takers battle with the momentum buyers and bargain hunters," reports TheStreet.

* Gold rally not going away until bailout money disappears: Gold has risen 40% since the beginning of 2009. Yet plenty of investors have looked at the rally with just one question: when is it all going to end? While there's plenty of reason to believe that gold's dramatic run can't go on forever, for now, it seems a bad time to bet that the rally will soon come to a screeching halt," reports Fortune.

* "Silver has been a side beneficiary of gold’s rally this week, moving to its highest price levels since March 2008 on Wednesday. 'People who are afraid they missed the move in gold are coming to silver,' said George Gero, VP of RBC Capital Markets Global Futures," reports Kitco.

* Gold prices surge to record levels on global currency fears: "While Europe's debt woes are the spark for gold prices, the precious metal is also getting a lift from: Questions about how nations are battling debt, diversification away from currencies and mainstream investments, greater accessibility to investors to trade gold and momentum. Individual investors are seeing gold as an asset worth holding in a diversified portfolio. It's like insurance. You want to know you have it," reports USAToday

* "Gold prices hit a record high on Tuesday as risk aversion returned on doubts over smaller euro zone countries' ability to cut their deficits despite a $1 trillion aid package. 'The euphoria we saw Monday has almost ended. Gold has remained well supported on safe-haven demand, and we think it will drive further from here,' said Commerzbank analyst Daniel Briesemann," reports Reuters.

* "Gold may soar to $1,800 an ounce within three years. A bubble is forming with sovereign debt. We want to hold gold as a reserve of wealth because there’s a big devaluation of G-7 currencies ahead," said Peter Sorrentino, who helps manage $13.8 billion at Huntington Asset Advisors to BusinessWeek.

"Placing assets in markets that can drop 900 points in a matter of seconds is not really an investment, it is a 'bet'. Last week the vulnerable world financial markets reminded investors that paper markets rely on confidence while gold creates confidence," writes Swiss America Chairman Craig R. Smith.

* U. S. gold coins sales soar on economic anxiety: "The U.S. Mint said sales of the most popular American Eagle one-ounce gold coins totaled 41,500 ounces in the first week of May, compared to 60,500 ounces in the entire month of April. Investors also piled into gold exchange traded funds. SPDR Gold Trust, the world's biggest gold ETF, said its holdings rose nearly 20 tons on Thursday, the biggest one-day gain since February 2009," reports Reuters.

* Global Markets Stage Huge Relief Rally: "Financial markets soared across the globe Monday after the European Union and International Monetary Fund agreed a bumper rescue package to prevent a sovereign debt crisis spreading. World stocks rose nearly 3%, the euro gained nearly 2% on the dollar and corporate and peripheral debt yields narrowed sharply against benchmarks. US stocks jumped at the open, with the Dow up over 400 points," reports CNBC.

* "European finance ministers agreed to an unprecedented loan package worth almost $1 trillion and a program of bond purchases to support debt-laden governments. In the loan package, euro-area governments pledged to make 440 billion euros ($570 billion) available, with 60 billion euros more from the European Union’s budget and as much as 250 billion euros from the International Monetary Fund," reports Bloomberg.

* "This gargantuan European- and American-taxpayer bailout of bank loans 'is nothing but 'morphine to stabilize the patient,' according to the International Monetary Fund's Director for Europe, Mark Belka. [T]he bailout resolves none of Europe's very serious underlying problems....[S]preading debt all around Europe, from prolifigate countries to less profligate ones, is not an exit strategy from rising debt and deficits," reports Stefan Theil of Newsweek.

* "Mr. Obama is giving Americans a choice of weapons with which to commit economic suicide: debt or taxes. Mr. Obama's next step is to commandeer the economy's capacity to pay taxes. Having proposed to run up the debt to irresponsibly high levels and already having built large spending increases into his budget, thereby giving them the appearance of reality, President Obama has scared the pants off everyone in what amounts to a political protection racket. Germany and other members of the European Union may rescue Greece from its own profligacy and fiscal self-destructiveness, but who, pray tell, is going to rescue America from President Obama? " asks Ernest S. Christian and Gary A. Robbins, former Treasury tax officials," reports WashTimes.

* U.S. Debt Shock May Hit In 2013-2018: "In the wake of the financial crisis and recession, Moody's Investors Service has brought new transparency to its sovereign ratings analysis — so much so that 2018 lights up as the year the U.S. could be in line for a downgrade if Congressional Budget Office projections hold. For the U.S., debt service of 18%-20% of federal revenue is the outer limit of AAA-territory," reports Investors.

* "U.S. stocks plunged again Friday, as spooked investors retreated from the market after a dizzying drop on Thursday, wiping out year-to-date gains for the three major large-cap indexes. Friday's monthly jobs report did little to encourage investors," reports Marketwatch.

* Stocks Plunge Most in Year on ’Panic Selling’: "U.S. stocks tumbled the most in a year Thursday on concern Europe’s debt crisis will halt the global recovery. The selloff briefly erased more than $1 trillion in market value as the Dow Jones Industrial Average fell almost 1,000 points, a 9.2 percent plunge that was its biggest intraday percentage loss since 1987 and largest point drop ever, before paring the drop. The Dow ended down 347.8 points, or 3.2 percent, at 10,520.32," reports Bloomberg.

* Employers stepped up job creation in April, expanding payrolls by 290,000, the most in four years. The jobless rate rose to 9.9% as people streamed back into the market looking for work. The hiring of 66,000 temporary government workers to conduct the census helped overall payroll growth last month. Many economists think it will take until at least the middle of the decade to lower the unemployment rate to a more normal 5.5% to 6%," reports AP.

* "Gold is an appealing investment during times of financial crisis and currency debasement as a form of money that doesn't lose value. Analysts expect gold's tug of war to continue amid gold's run to $1,200/oz.," reports TheStreet.

* European Union, Currency Are Headed for Collapse: "The European debt crisis likely will not end until the euro collapses as a currency and takes the entire European Union with it, said hedge fund manager Dennis Gartman. The debt problems continued to escalate Wednesday as Greek citizens rioted in the streets over proposed austerity measures. At the same time, Moody's warned that it might downgrade the debt for Portugal, accelerating worries that Greece's debt worries could spread across the continent," reports CNBC.

* Stocks Slide, Euro Weakens on Government Debt Concern: "Stocks sank around the globe, erasing the 2010 gain for the MSCI World Index, and the euro weakened to a 14-month low on concern Europe’s debt crisis is worsening as protests in Greece turned deadly. Nickel slumped 14% to lead losses in commodities," reports Bloomberg.

* "Gold ran into technical resistance at $1,192/oz. on Tuesday, prompting investors to take profits after a sharp rally," said COMEX floor trader Jonathan Jossen. Investors sold the metal for liquidity needs due to a Wall Street sell-off and commodities decline," reports Reuters.

* "Gold looks better today than it ever did before. The ongoing sovereign debt concerns in Greece and other "PIIGS" nations - Portugal, Italy, Ireland, Greece and Spain - as well as easy monetary policies across the globe are bullish for gold," said Sprott Asset Management CEO Eric Sprott. Gold prices set new record highs in euros, Swiss francs and British pounds as ratings downgrades of Portugal and Greece fanned sovereign risk and contagion fears reports Mineweb.com.

* Gold's future bright: "Eventually, all the currencies will go down relative to gold. The U.S. dollar will probably be the last one. Even though there are a lot of arguments about how weak it is on a fundamental basis, it could rise because it's the best of a bad bunch and also the most liquid. Gold is sort of the anti-currency. A lot of people think the gold price is rising, but you could argue that many of the currencies are just declining" said Nick Barisheff, president and CEO of Bullion Management Group reports FinPost.

* Goodbye Dow 11,000: "U.S. stocks thudded lower on Tuesday as worries over European national debts overrode another round of positive quarterly reports. The overseas markets weighed on sentiment and bond markets around the world are rallying. Economic reports that showed a 5.3% jump in pending home sales and a 1.3% climb in factory orders in March did little to curb bearish sentiment," reports Marketwatch.

* "U.S. energy and food costs rose 18.7% against March 2009. Americans saw prices rise 2% in the year to March according to the Commerce Department's personal consumption expenditures index published on Monday. The Federal Reserve last Wednesday vowed to keep historically low interest rates for an "extended period," amid "subdued" inflation trends. Pointing to a slightly quickening economic recovery, the Fed said labor and housing markets showed glimmers of improvement and spending had ticked up," reports AFP.

* Gold Hits 2010 High On Safety Buying: "A continued flight to safety amid European debt worries sent gold to its highest level of the year Friday, with some looking for the precious metal to eventually push to the record highs hit in early December. There is a feeling that although Greece is small in terms of GNP [gross national product], is it the canary in the coal mine?", reports WSJ.

* Gold: Ready to Explode: "It is by no means too late to get into this grand cycle bull market in gold. What always happens in long bull markets, such as the one now occurring in gold, is that people completely lose their perspective. He who hesitates will have smaller profits. The coming short term market period should be very exciting. Gold should now mount its assault on its Dec. high ($1,225/oz.). Once the Dec. high is reached, this will act as a minor resistance level which will hold up the advance (probably for several weeks but at most until late August). Then, as autumn approaches, the bull will resume and put on another leg up," reports Kitco.

* "Gold will hit its parabolic peak between $2,450 to $3,500 an ounce. We see the strong possibility of this event happening within the next 18 months. Our target price aligns very closely with the projections of others, i.e. Jim Rogers, Bob Hoye, David Nichols, Marc Faber and Pamela & Mary Anne Aden. When we start to see gold go parabolic, rising day after day and everyone in the world getting excited and joining the party, then we will know gold is in a bubble," writes Dudley Pierce Baker, editor of Precious Metals Warrants and Insiders Insights," reports Goldseek.

* "Analysts at Standard & Poor's on Friday downgraded shares of Goldman Sachs to 'sell' from hold and trimmed their price target for Wall Street's most profitable investment bank to $140 from $180. Goldman Sachs shares fell 6.8% in early trade," reports Marketwatch.

* Investing in the Age of Obamanomics: "You only need to know two things about investments: 1. Avoid Wall Street’s Recommendations and 2. Invest in Inflation. Not buying gold or silver is one of the dumbest money decisions you can make in 2010. Gold is headed towards at least $2,500 an ounce, and silver is headed for at least $100 an ounce. You will regret for the rest of your life ignoring this epic opportunity!" writes Howard Ruff of Ruff Times at Kitco.

* Gold: 'currency of fear' or reality?: "Gold futures added to their gains Wednesday as a debt ratings downgrade for Spain revved up fears of a spreading sovereign debt crisis in Europe. Gold for June delivery gained $11.30, or 1%, to $1,173.50 an ounce on the Comex, the highest since December. 'Gold is riding the coattails of its role as the currency of fear,' said Richard Ross, a technical analyst with Auerbach Grayson in New York," reports Marketwatch.

* Technicals suggest further gold rise: "If gold breaches the $1,162/oz. level, the technical analysts see the price continuing upwards to at least test the December high of $1,226/oz. and possibly beyond. The overall significance of the latest moves in gold despite dollar ‘strength' should not be overlooked," reports Mineweb.

* Euro debt crisis escalates: "World markets tumbled Wednesday amid acute fears that Greece's debt crisis would spread like wildfire through Europe after a leading credit ratings agency downgraded the country's debt to junk status and cut Portugal's rating as well. There is now a big chance of contagion with higher borrowing costs hitting other euro-using countries with weak finances. Contagion is the 'buzz' word and investors alike seem to be using it as a reason to take cash off the table," reports AP.

"The sovereign debt crisis will get worse and bond vigilantes could move on to even bigger economies like the U.S. and Japan when they are done sweeping through vulnerable European nations, economist Nouriel Roubini told CNBC.

* "A major change in gold psychology is apparent to the alert observers, and soon to the entire investor community. The gold price has begun to rise despite the dollar holding its ground against very weak alternative currencies. A perverse benefit given the dollar early in 2010 will be seen soon as a loan of goodwill to be paid back in full, amidst the backdrop of alleged Wall Street fraud," reports analyst Jim Willie at GoldIRAs.

* Gold rushes following dips: "Following each of the last six major corrections, gold prices have risen an average of 36%. While past price movements do not always foretell future movements, we could see prices above $1,400/oz. soon. Buying near market lows helps investors maximize growth," said Swiss America Chairman Craig R. Smith.

* "Gold has often been called the 'crisis commodity' because it tends to outperform other investments during periods of world tensions. The very same factors that cause other investments to suffer cause the price of gold to rise. A bad economy can sink poorly run banks. Bad banks can sink an entire economy. Gold's primary upward trend still remains firmly intact," reports Mineweb.

* "The rising price of gold is far from over. Paper money has already lost a lot of value and it will continue to lose value. The price of gold will adjust on the upside according to the loss of the purchasing power of money. At zero percent interest, I don’t see why someone would not have part of their money in gold and silver," said Marc Faber, editor and publisher of The Gloom, Boom & Doom Report to Kitco News.

* "As inflation rears its ugly head and future demand for gold promises to overwhelm mine supply, gold's price will launch a parabolic rise from current levels in the near future. Gold has much, much further to go. The monetization of government debt by the printing of large sums of money, disarmingly referred to as ‘quantitative easily,' is proving to be the catalyst for accelerated inflation," said John Embry, chief investment strategist at Sprott Asset Management to BNWNews.

* Political and economic instability as well as technical buying are propelling the precious metals, despite dollar strength. If gold closes above $1,162/oz. this week it could push right back to $1,225/oz. and beyond quickly.

* Fearing the U.S. dollar: "The big problem we face right now is the Treasury has moved more than half of our total debt into the very short end of the yield curve to minimize interest expense. But as a result, we'll have to "roll over" roughly $4 trillion in the next 30 months. That's in addition to funding another $3 trillion in additional annual deficits. We cannot do it if China stops buying massive quantities of Treasury bonds. As of March 29, China was a net seller of Treasury debt. If we can't fund our debts in the bond market, the Federal Reserve will be forced to monetize our deficits by buying Treasury bonds. If that happens, inflation will soar and the price of gold will double or triple almost overnight," reports WND

* Gold rebounds on bargain-hunting, rising inflation: "India, the world’s largest buyer of gold for jewelry, has inflation of almost 15%. India raised interest rates for the second time in a month to curb inflation and producer prices in Germany, the largest retail investment market for gold, accelerated last month. If inflation begins to creep back, that's a good environment for gold," reports Bloomberg.

Gov't vs. Wall St.~ MayDay Amnesty Marches

* GOP allows Wall Street debate to start: "Senate Republican leaders said Wednesday they will end their stall tactics and allow a full floor debate on bill that calls for massive regulatory overhaul of the financial services sector. Senate Minority Leader Mitch McConnell, Kentucky Republican, said it was apparent that the negotiations were going nowhere and that he was ready to debate and vote on the bill. The bill's outcome is still in doubt, as debate likely will continue for weeks," reports WashTimes.

* MayDay marches for immigration "reform" (read: amnesty): "Thousands of mostly Hispanic immigrants will march in 70 US cities Saturday to press for immigration reform and condemn Arizona's controversial new immigration law, organizers said. President Obama described the Arizona legislation as "polarizing." Senate Democrats unveiled Thursday a plan to give the nation's undocumented workers a long, winding path to citizenship. But few analysts predict Congress will pass an immigration overhaul ahead of November mid-term elections, with US unemployment near 10%, and anger at an estimated 10.8 million undocumented immigrants in a nation of 309 million people," reports AFP.

* Obama's new debt commission: "If marriage is the triumph of hope over experience, then Barack Obama’s bipartisan fiscal commission must be its political equivalent. On Tuesday, Mr Obama opened proceedings for an 18-member body on which the hopes of America’s fiscal reformers now rest. But economists worry that the political calendar is moving far too lackadaisically given the speed of America’s fiscal deterioration. US public debt is set to rise to more than 90% of gross domestic product by the end of the decade – more than double the level before the 2008 financial meltdown," reports FinTimes.

Debt Commission Will Consider a Value-Added Tax: "I think there are many good arguments that you can make for a value-added tax or consumption tax, as opposed to a tax on wages," said debt commission chairman Erskine Bowles reports CNSNews.

* "Goldman's connections to the White House and the Obama administration are raising eyebrows at a time when Washington and Wall Street are dueling over how to overhaul regulation of the financial world. Lawrence Jacobs, a University of Minnesota political scientist, said that "almost everything that the White House has done has been haunted by the personnel and the money of Goldman," reports McClatcheyNews.


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