Gold prices dipped below $1,625/oz. Tuesday on profit-taking and volatile dollar, stocks slip ahead of Fed-speak. Gold last traded at $1,614 an ounce, silver traded at $28.00 an ounce.
"US Consumer Confidence Rises Unexpectedly in July," reports CNBC, so why are fewer Americans starting new businesses? The non-profit New America Foundation argues the U.S. is seriously in danger of losing its entrepreneurial spirit because the number of small businesses created has been declining since the 1970s.
Wednesday the U.S. Federal Reserve Board will likely decide to do nothing for now, content to watch the buying power of paper currencies worldwide go up in smoke.
GOLD FORECASTERS SPLIT - Bloomberg
The only three analysts that correctly predicted gold's biggest quarterly slump in four year are now currently split. Their views represent the diverging views on whether or not the central banks will do more to to promote growth in the economy.
“We will see strong hands entering the market via more central-bank buying, physically-backed exchange-traded products and purchases of bars” of bullion, said Eugen Weinberg, the head of commodity research at Commerzbank in Frankfurt.
Central banks and the IMF are the largest bullion owners with 29,500 tons at the end of last year, or 17 percent of all mined metal, World Gold Council data show. Central banks have been net buyers for two straight years. Purchases this year will probably exceed the 456 tons added in 2011, the WGC estimates.
BILL GROSS: EQUITY IS DYING - Minyanville
Pimco founder and market expert Bill Gross, says that the long-term history of inflation adjusted returns have shown a recently fading 6.6% real return since 1912. He compares this to a Ponzi scheme and like all Ponzi schemes, it too will eventually come to an ugly end.
The 6.6% real return [for the S&P over the last century] belied a commonsensical flaw much like that of a chain letter or yes – a Ponzi scheme. If wealth or real GDP was only being created at an annual rate of 3.5% over the same period of time, then somehow stockholders must be skimming 3% off the top each and every year. If an economy’s GDP could only provide 3.5% more goods and services per year, then how could one segment (stockholders) so consistently profit at the expense of the others (lenders, laborers and government)?
COIN FOUND NEAR JERUSALEM MAY PROVE SAMSON LIVED - DailyMail
A tiny seal has been uncovered that could be the first archaeological evidence of Samson, the slayer of Philistines. Archaeologists discovered the ancient artifact while excavating the tell of Beit Shemesh in the Judaean Hills near Jerusalem, Israel.
It appears to depict the Old Testament story of Samson, whose might was undone by his lust for the temptress Delilah, and his fight with a lion. The seal, which measures less than an inch in diameter, shows a large animal with a feline tail attacking a human figure.
Gold prices consolidated recent gains near $1,625/oz. Monday despite a firmer dollar, stocks flat ahead of Fed-speak. Gold last traded at $1,622 an ounce, silver traded at $28.18 an ounce.
While most investors are running into perceived "safe havens" such as cash and T-Bills, gold is quietly mounting an early August rally, as it so often does. With negative returns on cash, sooner or later investors will awaken to discover principle is eroding much faster than the official 1.7% CPI. Meanwhile, Wall Street is waiting for more Fed accommodation to goose the markets, perhaps this month, perhaps next.
BERNANKE’S PLAN: SIT, WAIT AND THEN DO SOMETHING - Bloomberg
Reporters whose job it is to tell us what the Federal Reserve tells them didn't have much to go on last week. So they told us what we already knew.
Bernanke's not-enough-progress on growth and employment appear to have been met, all in the context of price stability. Therefore, one can conclude that the Fed probably will do something because even if the forces restraining the economy aren't monetary in nature, doing something looks better than doing nothing. Yet with questions about how unseasonal weather patterns this year may have boosted the first quarter at the expense of the second, my guess is that the Fed waits until the Sept. 12-13 meeting -- if for no other reason than to accumulate more information.
IS EASY MONEY ERODING YOUR WEALTH? PARK 30% IN GOLD - CNBC
Investors would need to keep at least 10 to 30 percent of their portfolio in physical gold to preserve their wealth when money starts losing value amid expectations of further stimulus measures from major central banks, according to Juerg Kiener, Managing Director and Chief Investment Officer of Swiss Asia Capital.
“Because the purchasing power of money is being totally destroyed during the monetization period, and if you look at the last few monetization periods, the purchasing power of the dollar lost about 30 percent,” Kiener told CNBC Asia’s Squawk Box on Monday. “So if you lose 30 percent within a short period, a 30 percent of something which preserves your purchasing power is actually equalizing your losses on the rest of your portfolio."
The Federal Reserve, on the other hand, may not embark on new quantitative easing this week, even if the U.S. economy is showing signs of slowing down. It is focusing on domestic problems now and wants to keep ammunition to battle looming tax and spending issues, according to Tony Farnham, Economist and Analyst with Patersons Securities in Sydney.
CHALLENGING THE PARADIGMS OF INVESTING - GoldSeek
"It was an exciting and educational week," writes Frank Holmes of U.S. Global Investors. "I was in Vancouver at the Agora Financial Investment Symposium speaking to hundreds of investors who are eager to learn how to grow and protect their wealth. This year’s theme, 'Innovate or Die', fit well with my presentation, as the conference challenged attendees to adapt their investment strategies just as empires and enterprises adjust to changing circumstances."
"In today’s low yield environment, did you know that inflation causes investors of Treasuries to lose money? Treasuries are seen as a “safe haven” investment, but as of the middle of July, the 10-Year Treasury had fallen to less than 1.5 percent. Yet inflation burns off at a rate of 1.7 percent. This leaves investors with a loss of about 0.2 percent. I believe better opportunities exist."
HSBC TAKES $2 BILLION HIT FOR US, UK SCANDALS - Reuters
Revelations of lax anti-money laundering controls at HSBC are "shameful and embarrassing" for Europe's biggest bank, its boss said on Monday, and it may have to pay out well over $2 billion for the scandal and in compensation for UK mis-selling.
HSBC is in talks to settle the investigation into its U.S. anti-money laundering compliance with the U.S. Department of Justice and other regulators. "It may take several more months to come to fruition."
Gold prices moved toward $1,625/oz. Friday on bargain hunting and a weaker dollar, stocks cheer EU solidarity pledge. Gold last traded at $1,623 an ounce, up over 2% this week, silver traded at $27.79 an ounce, up 1.5% for the week.
"U.S. growth slows to 1.5% in second quarter," according to government data. "Consumers pare spending, and business investment slows," says MarketWatch. Meanwhile, the DJIA managed to rally to 13,000 level today, but WSJ warns "Stagflation Looms" in Argentina and Asia.
Could the U.S. be next? Stagflation is when an economy stagnates and also has high inflation, which hurts the lower and middle class most.
"$7,000 GOLD IN THE NEXT SEVERAL YEARS" - FormatTrend
Jim Rickards, a US investors and gold expert, believes that the price of gold won't fall below $1,500 per ounce and that a loss in confidence in paper currencies will lead to a new gold standard. Rickards believes that if we do go back to a gold standard, the value of gold would jump to between $5,000 and $7,000 per ounce.
GOLD JUST BROKE OUT & IS NOW OFF TO THE RACES - KingWorldNews
Thursday Peter Schiff told King World News that, “Gold has now broken out of a channel. There was a very nice trendline and we just broke out of that today.” He also said, “Now that we have broken out of that channel, there is a lot of room to the upside.”
IT'S GOD VS. THE FEDERAL RESERVE - MSNMoney
With the economy in need of all the stimulus it can get, the central bank is being thwarted by acts of God and wars over religion, which threaten to revive inflation. Will the worst drought in nearly 60 years abate? Or will it send food prices soaring? Will power plays in the Middle East, fueled by religious hatred and regional ambition, send energy prices higher?
If something nasty happens soon, it will keep the Fed on hold and leave the economy listless. If prices start rising after the Fed announces another round of stimulus, not only would such increases cancel the benefit of more cheap money, but they could also fuel speculators and make everything much worse, as rising prices did in 2011.
IS AUDITING THE FED POSITIVE FOR GOLD? - TDVGoldenTrader
In a world where bank’s losses are socialized, the Federal Reserve (the banker for banks) misconducts have always been socialized on the people. Of course, this socialization of losses by the Fed has been taking place ever since its illegal inception. In 1913, the Federal Reserve stole the power to issue and control money by introducing the Federal Reserve note, something we call the US dollar. Since then, it is estimated that the dollar has lost 95% of its purchasing power by way of inflation (the increase of the money supply), so it really has only 5% left to go. As the value of the US dollar moves towards its intrinsic value of zero, gold and silver as true money has only one way to go and that is up.
ARE FIAT CURRENCIES HEADED FOR A COLLAPSE? - CNBC
As the investment world eagerly awaits more stimulus, a debate on a previously unthinkable topic has started to emerge – can fiat currencies survive round after round of debasement? Some heavy hitters say the answer is no.
With major central banks all desperate to stimulate their economies, some say currencies have entered a dangerous new phase often described as a race to the bottom. Mark Mobius, Executive Chairman of Templeton Emerging Markets Group, says investors will soon start to demand fiat currencies be backed by gold or other hard assets.
Gold prices move toward $1,625/oz. Thursday on bargain hunting and a sharply weaker dollar, stocks bounce on EU solidarity pledge. Gold last traded at $1,616 an ounce, silver traded at $27.54 an ounce.
GOLD SHINES ON NEW STIMULUS HOPES - MSNMoney
The fog is lifting. For months, stocks and precious metals have been mired in a highly volatile sideways trading range. Investors, based on sentiment surveys, just can't decide what comes next.
Yes, the global economy is clearly slowing... and big-time problems loom, such as a possible eurozone breakup and the fiscal cliff of U.S. tax hikes and spending cuts due in early 2013. Yet there's hope that central bankers around the world will swoop in with a globally synchronized stimulus push.
HUGE PHYSICAL GOLD SHORTAGE LOOMS - CoinWeek
Market activity signals that demand for physical gold is draining available supplies. In the first five months of 2012, at least 315 tons (10.1 million ounces) of gold had been imported into China. This quantity exceeds one-third of all global newly mined supplies during that time. The actual quantity is almost certainly higher as the Chinese government has a habit of not reporting all of the gold it adds to its reserves until several years later.
Demand in China is so strong that its government is trying to establish new venues through which people can acquire gold. By the end of August, at least one new exchange is expected to open in that nation to allow citizens greater access.
OLYMPIC MEDALS THE MOST EXPENSIVE IN HISTORY - CNBC
This year’s gold medals are some of the most expensive Olympic medals ever produced.
Despite its name, today’s Olympic gold medal is composed of significantly more silver than gold. The medal must contain at least 6 grams of gold and typically has a silver content of 92.5 percent. In fact, the silver in this year’s gold medal is worth more than the gold that plates the medal. Olympic medals have not been made out of solid gold for 100 years — the last ones cast using pure gold were awarded at the 1912 Stockholm Olympics.
This year’s gold medals are worth about $640, based on the value of their gold and silver bullion content.
CURRENCIES: FROM NULLIFYING TO NEGATIVE - MerkFunds
The once unthinkable might become policy: negative nominal interest rates. Investors should care as they may be increasingly punished for not taking risks. Yet masochistic investors believe they may be the prudent ones given the risks lurking in the markets. What are investors to do, and what are the implications for the U.S. dollar and currencies?
There has been what is often referred to as a flight to “safety,” government securities. To the dismay of central bankers that like to kick start economic growth, this flight is taking on pandemic proportions. Germany was in the news recently for having sold 2-year notes with a negative yield.
SEVERE DROUGHT SEEN AS DRIVING COST OF FOOD UP - NYTimes
Scorching heat and the worst drought in nearly a half-century are threatening to send food prices up, spooking consumers and leading to worries about global food costs.
On Wednesday, the government said it expected the record-breaking weather to drive up the price for groceries next year, including milk, beef, chicken and pork. The drought is now affecting 88 percent of the corn crop, a staple of processed foods and animal feed as well as the nation’s leading farm export.
The government’s forecast, based on a consumer price index for food, estimated that prices would rise 4 to 5 percent for beef next year with slightly lower increases for pork, eggs and dairy products.
Gold prices shot above $1,600/oz. Wednesday on bargain hunting and dollar weakness, stocks overlook weak housing data. Gold last traded at $1,603 an ounce, silver traded at $27.37 an ounce.
Kitco reports, " ...increased optimism about more potential monetary easing in the U.S. and news that a ECB member may be granted a banking license."
“Both of those two news items are supporting the euro, pressuring the dollar and supporting the metals,” said Dave Meger, director of metals trading with Vision Financial Markets.
LAST CHANCE FOR 2012 GOLD SUMMER SALE - TheBiggerPicture
Every summer for a decade we have told our readers that June/July is the perfect time to convert paper assets into real assets - gold and silver - because this is the season when prices typically bottom.
As we reported last summer... The summer months of June and July often offer seasonal lows for precious metals. For example, gold rose 22% from July 2010 to December 2010 and 18% from July 2011 to September 2011. As the Erste Group chart shows, the strongest months for gold are August, September, November, December and January.
Today we are not only facing the worst economic crisis in half a century, but now the worst drought - which could push food prices and inflation up dramatically.
Call Swiss America at 800-289-2646 or click here for a free "FUTURE OF MONEY" CD. Get protected now, before the next stage of this historic gold rush propels prices over $2,000/oz.
HOUSE PASSES RON PAUL'S AUDIT-THE-FED BILL - MarketWatch
It has been reported that the House has passed Ron Paul's audit-the-Fed bill which would open up previously secret Federal Reserve deliberations to the scrutiny of members of Congress. The bill was approved by a vote of 327 to 98. The bill is opposed by the Fed because it allows audits of their monetary policy operations.
THE ONE PERSONALITY TRAIT THAT ALL GOLD AND SILVER INVESTORS NEED TO BE PROFITABLE - ZeroHedge
The number one characteristic that precious metals investors need to cultivate when buying gold and silver as a means to preserve and build wealth is patience.
Many people commit the same mistake in buying gold and silver they commit when buying into the stock market - they don’t buy assets when asset prices are low, and only buy them after prices have soared and news of a steep short-term climb in price has been reported by the mainstream media.
IS THE 50-YEAR FINANCIAL STORM ON THE HORIZON? - MarketWatch
Minyanville's Todd Harrsion says "Capital preservation is the first step toward wealth accumulation". These are historic times, and that may lead to historic moves in the market.
I’m getting that old familiar feeling: that a downside ride lies in wait for our financial fate. Perhaps it’s the headlines — the worse drought in 50 years; the highest poverty level in 50 years — or maybe it’s our solemn social structure, as evidenced by the Dark Knight massacre and the Black Sea bombing.
THE NEVER-ENDING CRISIS - TheEconomist
> "...those in charge [of European fiscal policy] don't know what they are doing. To quote Churchill, Europe's leaders seem 'decided only to be undecided, resolved to be irresolute, adamant for drift, solid for fluidity, all-powerful to be impotent'".
It has been tempting, on many occasions, to feel that the end game must be in sight - say, around the time of the proposed Greek referendum or the second Greek election. The temptation is strong now with the Der Spiegel report that the IMF will no longer finance Greece. One possibility is that the Greek exit will act as the Lehman moment, causing such chaos in the markets that the Germans will be forced to rescue Spain, as Hank Paulson was forced to rescue AIG.
Perhaps it will take a really bad day - a 10% fall in the Dax not a 2% one - to force action, just as Congress was frightened into approving the Tarp in 2008 by the market collapse after its initial rejection.
THE IDEA THAT INFLATION MIGHT BE OUR FRIEND IS GAINING TRACTION - LATimes
Sooner or later, American politicians may discover, as have some of their European colleagues, that imposing austerity on one segment of the population (the working class), while exempting another (the debt-holding class), is a good way to lose your job.
The question boils down to whether U.S. economic policy will be slanted to favor mortgage payers or mortgage bankers. So far the debate favors the bankers. But in an era when the middle class and working class have no ability to keep their wages from being unrelentingly forced lower, who's to say that employers will respond to rising prices by paying employees more?
The bond-holding class doesn't have to sacrifice a penny of its wealth as long as the mantra of "shared sacrifice" applies solely to Americans who earn wages and pay mortgages. For the latter, a little taste of inflation may mean a lot. Without it, the whole economy may continue to just stagger along.
Gold prices rose above $1,575/oz. Tuesday on bargain hunting despite a firmer dollar, stocks fall on Eurozone gloom. Gold last traded at $1,581 an ounce, silver traded at $26.96 an ounce.
We're "On the brink of depression" reports Marketwatch. The euro-zone crisis has gone beyond the prospect of breaking up the euro to the threat of an economic collapse that could plunge the world into a second Great Depression.
Vanguard Fund founder Jack Bogle asks, "Has Capitalism Lost Its Soul?" in Fortune magazine. "We need a federal statute of fiduciary duty, which would require that fiduciaries place the interest of clients ahead of their own." Sounds like new laws to enforce the golden rule.
GOLD LOWS IN THE MAKING - AdenSisters
Gold prices have been holding above their December lows as well as not breaking down while the dollar strengthens, which are bullish signs for the precious metal. This also tells us that more stimulus is likely to come. According to this article, the likely bottom for gold will be in the summer months and then we will continue to see a renewed rise.
EMBRY - EXPECT SHORTAGES OF GOLD AS SOON AS NEXT MONTH - KingWorldNews
John Emery warned that we will soon be seeing shortages of gold and it may start as soon as next month. This will be a result of a contracting global economy at a time when debt levels are extremely high. According to Emery, all the current action in gold is just building a massive base for the metal.
GOLD CONTINUES TO MOVE TOWARDS THE FINANCIAL SYSTEM - GoldSeek
According to the article, it is estimated that the largest 100 central banks have 16% of their reserves in gold. Central bank purchases have grown over the last few years showing clear evidence that the highest levels of bankers and regulators are proposing that gold become a Tier 1 asset class with zero risk.
MOODY'S DOWNGRADES GERMAN OUTLOOK TO 'NEGATIVE' - France24
Moody's has downgraded the economic outlook for Germany from "stable" to "negative" citing risks from a possible Greek exit from the euro zone and potential bailouts from Spain and Italy. With this downgrade, Moody's warned that no one is immune from the euro zone's rolling crisis.
Gold prices eased back near $1,575/oz. Monday on profit taking and a firmer dollar, stocks fall on EU-inspired gloom. Gold last traded at $1,575 an ounce, silver traded at $27.05 an ounce.
Marketwatch reports, "Worries about the ability of Spain and Greece to keep current on their debt sent investors looking for safety. U.S. Treasury yields plumbed new lows and the dollar jumped."
London Financial Times reports, "The recent slowdown in US economic growth is forcing the Federal Reserve to consider something for which it has always set the bar very high: a third round of quantitative easing."
MARKETS STILL WAITING TO EXHALE - Craig Smith on Fox News VIDEO
Today stocks tumbled on fears that Spain will also need a bailout and that Greece may leave the EU, but Swiss America Chairman Craig R. Smith told Fox News, "this is no time for more bailouts, but rather to allow creative destruction to occur to flush out the excesses."
Smith told Neil Cavuto the reason Wall Street has come to expect more and more stimulus is because Fed Chairman Bernanke has promised to help boost stock and real estate values.
"What we need to do," says Smith, "is to make some hard political choices like president Reagan did, to raise interest rates and cut taxes and spending, which set the stage for two decades of unprecedented growth. The last thing we need is to inject more economic morphine into the patient instead of doing the surgery needed."
Prior to his appearance on Fox today, Smith held his weekly economic briefing discussing the fact that the Keynesian economic model favors creating more inflation because big debtors will benefit.
Smith pointed out that the five strongest currencies currently are; Japanese Yen, Swedish Kroner, Australian dollar, Korean Yuan and Singapore dollar. Notice the U.S. dollar is not on the list.
He believes that Americans know what to do and are doing it, by tightening their belts, reducing debt, selling excess assets and de-leveraging. Meanwhile, the U.S. government is doing just the opposite by re-leveraging with more planned stimulus.
According to Smith, now is the time to hedge the growing risks of both inflation and depression. Ever since the 1970s we have had no real deflation. You could say we have allowed the economy to perpetually inhale and have been waiting to exhale for 40+ years! The best way to maintain buying power no matter what happens is to diversify into real assets, like gold and oil.
MONEY, WHERE’S THE MONEY? - RealClearMarkets
According to Steve Hanke, governments have been focusing on whether fiscal authority or more fiscal stimulus is the right strategy to contain the crisis. However, Hanke believes government leaders should be focusing on the money supply.
"When the monetary and fiscal policies move in opposite directions, the economy will follow the direction taken by monetary (not fiscal) policy. For doubters, just consider Japan and the United States in the 1990s. The Japanese government engaged in a massive fiscal stimulus program, while the Bank of Japan embraced a super-tight monetary policy. In consequence, Japan suffered under deflationary pressures and experienced a lost decade of economic growth."
INDIA'S LOVE AFFAIR WITH GOLD - CBS 60 Minutes VIDEO
"No gold, no wedding," is a saying in India, indicating the importance of gold to Indian culture and tradition. Byron Pitts reports on India's obsession with gold and why they continue to support higher prices.
Gold prices rebounded toward $1,600/oz. Friday on safe haven buying despite a firmer dollar, stocks fall on EU worries. Gold last traded at $1,584 an ounce, silver traded at $27.33 an ounce.
WORLD BRACED FOR NEW FOOD CRISIS - FinTimes
The world is facing a new food crisis as the worst US drought in more than 50 years pushes agricultural commodity prices to record highs. Corn and soybean prices surged to record highs on Thursday, surpassing the peaks of the 2007-08 crisis that sparked food riots in more than 30 countries. Wheat prices are not yet at record levels but have rallied more than 50 percent in five weeks.
A TIME OF PRAYER AND REFLECTION - Editor
"I think this is a day for prayer and reflection," said president Obama this morning in a scheduled campaign speech, referring to the Aurora, Colorado movie theater massacre which left 12 dead and scores more injured at a midnight screening of the new Batman movie “The Dark Knight Rises” leaving Americans shocked and outraged.
'Prayer and reflection' is precisely what we need at moments like this which leave us speechless and asking ourselves who, what, why, how? Neither the media nor politicians can answer these questions to our full satisfaction, only our loving Creator can (and will) do that if we ask.
Our human mind has very finite limits in comprehending tragedy. Some people will blame guns, some Hollywood violence, others theater security, and a few God Himself. The truth is, it is our faith alone which has the power to transform our worst tragedy into triumph, both in life and in death.
May we indeed 'reflect and pray' to our God today and everyday! May we grasp that His ways are far beyond even the wisest among us, and whose grace and love embraces both shooters ... and their victims.
THE RETURN TO FREE-MARKET PRINCIPLES - WeeklyStandard
"The protection of big business remains a common thread in Mr Obama’s policies, which have come at the expense of the consumer, the taxpayer and the entrepreneur. A growing coalition of reformers – rooted in citizen movements across the political spectrum – reject this pernicious crony capitalism."
"In November’s election I believe the US will renew its dedication to economic freedom and reach a proper understanding of the role of government. In doing so, we will not just promote our prosperity, we will ignite an economic boom to spread opportunity around the world."
THE FALLING FORTUNES OF THE ONE PERCENT - CNBC
The presidential election has given us two myths about the rich. First, that their incomes, and income inequality, are at all-time highs. Second, that the wealthy pay less in taxes than ever, and lower taxes than the rest of us.
A recent report from the Congressional Budget Office, however, suggests that both may be false. Between 2007 and 2009, after-tax earnings by Americans in the top one percent for income fell 37 percent. On a pre-tax basis they fell 36 percent in the same period.
UNEARNED SUCCESS CENTRAL THEME OF OBAMA'S LIFE STORY - WSJ
The Romney campaign is out with a very effective new ad illuminating and responding to President Obama's disparagement of individual achievement. The ad constructs a dialogue between Obama and Jack Gilchrist, a political independent who is President of Gilchrist Metal Fabricating Co., a small industrial company conveniently located in the swing state of New Hampshire.
What is the root of Barack Obama's resentment? Why does he insist that men like Jack Gilchrist don't deserve their success? Not because they are successful. Even if Obama loses in a landslide, he will have enjoyed more success than most people can dream of in a lifetime. No, Obama resents their modest success precisely because they did earn it.
Gold prices rebounded toward $1,600/oz. Thursday on bargain hunting and a flat dollar, stocks and oil rise despite downbeat data. Gold last traded at $1,581 an ounce, silver traded at $27.28 an ounce.
JOBS, FACTORIES AND ECONOMIC CONFIDENCE FALLING - Editor
U.S. jobless claims jumped 34,000 to 386,000 last week, the government reported Thursday. Fed data indicates regional factory activity remains fragile as existing-home sales fell. Meanwhile, Gallup reports U.S. Economic Confidence Falls to Lowest Since January.
MARKET-RIGGING AND PRICE-FIXING - DailyReckoning
“Markets are so rigged by policymakers that I have no meaningful insights to offer.”
That’s what Nomura International’s Investment Strategist, Bob Janjuah, griped five months ago. Since then, policymakers have stepped up their market-rigging, while new revelations of past market-rigging have also come to light. It’s starting to feel like the financial markets are all rigging and no ship.
After the 2008 crisis, the game changed. The Fed aggressively ramped up its purchases of Treasurys — initially in an effort to provide liquidity to the financial sector and later to suppress interest rates [i.e. fix prices].
The Fed conducted purchases of Treasurys via its infamous “Quantitative Easing” initiatives, followed up by “Operation Twist.” At the end of all this easing and twisting, the Fed became the largest single holder of Treasury Securities — even larger than China, the former #1.
Clearly, the Fed is not buying Treasurys as a mere participant in the free market; it is buying Treasurys to rig the cost of credit on the “free” markets.
“In this current cycle, where central bank balance sheets are at the core, the bubble is everywhere — in stocks, in bonds, in growth expectation, in credit spreads, in currencies, in commodity prices, in most real asset prices — you name it! This is why I think that this current bubble will have such widespread consequences when it bursts that it will make 2008 feel, relatively speaking, like a bull market... When this bubble bursts, I don’t think there is an easy way out. Who will be the bailout provider?”
LOAN DEFAULTS DRAIN $37 BILLION FROM 401(k)S EACH YEAR - CNNMoney
A large number of Americans are borrowing against their 401(k)s and having a hard time paying the loans back.
Defaults on 401(k) loans are draining retirement savings by as much as $37 billion a year, according to a study conducted by Robert Litan, a researcher at the Brookings Institution and Hal Singer.
If you default on a 401(k) loan, the amount of the loan is deducted from the account, and you are charged income tax on the amount withdrawn. An additional penalty of 10% of the total loan amount is typically charged if the default occurs due to job loss. All of this money would otherwise be tucked away for retirement.
CHINA PROPOSES INTERBANK TRADING FOR PRECIOUS METALS - FoxBusiness
Already the world's largest gold consumer and producer, China has long been hoping to become the next major gold trading center after London and New York, but Beijing's tight grip on commodities trading and rigid capital controls are among the obstacles in the way.
The Shanghai Gold Exchange has released draft rules for such interbank precious metals trading, which will include spot, forward and swap contracts for the commodities.
'GAME CHANGER' FOR GOLD -GoldIRAs
Citi, Bank Of America, and JPMorgan appear set to be dragged into ‘Lieborgate’ as Congress is expanding the Libor probe to the big three U.S. domestic banks.
Also extremely bullish for gold was Bernanke’s admission that Libor is “structurally flawed” and an international effort would be needed to restore the rate’s credibility as the leading benchmark for mortgages, derivatives and corporate lending around the world.
The Libor scandal is further eroding confidence in the global financial system and will lead to safe haven gold demand. While official inflation statistics continue to show inflation as benign, inflationary pressures continue to build – especially with regard to the essential that is food.
QES ‘ARE LIKE MORPHINE’ - CNBC
A third round of quantitative easing from the Federal Reserve would be good for stocks but not real growth, former Assistant Treasury Secretary Neel Kashkari told CNBC on Wednesday.
“We think QE3 would be good for the stock market, not necessarily for real economic growth. QEs are like morphine. It makes you feel better, makes the headlines look better, pushes up risk asset prices but doesn’t translate into real economic growth,” he said on The Kudlow Report.
EXCHANGES COULD SINK OBAMACARE - CATO
An essential part of ObamaCare's regulatory scheme relies on state governments to voluntarily create health insurance exchanges. Michael F. Cannon and Jonathan H. Adler argue in a new study that the wording of the law may be a significant legal obstacle to the creation of those exchanges and might doom the program completely.
IMF LOSES ALL FAITH IN THE EURO PROJECT - Telegraph
The IMF’s latest report on the eurozone is an astonishing document. The euro area crisis has reached a new and critical stage. Despite major policy actions, financial markets in parts of the region remain under acute stress, raising questions about the viability of the monetary union itself.
Gold prices eased back near $1,575/oz. Wednesday on a firmer dollar and profit taking, stocks and oil rebound. Gold last traded at $1,574 an ounce, silver traded at $27.19 an ounce.
Today Fed chief Ben Bernanke says he doesn’t expect the economy to slide back into recession, but he did leave the door open for more easing, but no commitments in congressional testimony.
Meanwhile, a "new major credit-card pact is no deal for consumers," reports Marketwatch. "For the first time since credit-card use has been in place, retailers can slap a surcharge on consumers who pull out plastic rather than cash for their purchases."
THE NOT-SO-GREAT AND POWERFUL BEN BERNANKE - CNNMoney
For the past few weeks, the market has been off to see the wizard, the wonderful wizard of the Fed. But traders who've been following the yellow brick road in the hopes of more stimulus came away disappointed Tuesday. (Watch "The Wizards of OZ" :60 TV spot)
Click your heels three times and repeat after me: "There's no need for QE3. There's no need for QE3. There's no need for QE3."
Fed chairman Ben Bernanke, aka the man behind the monetary policy curtain, conceded in semi-annual testimony before the Senate Banking Committee that he's not really all that great and powerful. Bernanke did not give any overt clues in his testimony, or in response to questions from lawmakers, that the Fed was looking to make a significant move anytime soon.
The economy is not likely to start recovering until politicians show some leadership and put the good of the country ahead of their re-election campaigns. If Bernanke is really now just a powerless wizard, Congress is the Wicked Witch of the West.
RON PAUL BILL TO AUDIT FED COMING UP - U.S. GOLD RESERVE AUDIT TOO? - Mineweb
According to U.S. Rep Ron Paul, his bill to audit the U.S. Fed will come before Congress this month raising yet again underlying concerns about U.S. Fed policies and the status of the country's massive gold reserves.
According to Paul, "For decades the Fed has operated without any meaningful oversight whatsoever, resulting in the loss of savings, loss of purchasing power, and loss of quality of life for all Americans. It causes individuals and businesses to make bad decisions, misallocating their capital because market signals have been distorted."
CRAIG SMITH EXPLAINS WHY AMERICA IS STILL #1 - Watch Fox Business
Over half the country thinks America is in decline as the top economic power in the world, according to a recent poll featured on Fox Business.
Mr. Smith disagrees. He thinks our nation is still a shining example of American exceptionalism, despite massive efforts by the current administration to lower our status by "redistributing the wealth".
"I really believe that, with the world in recession, we in America could have another 'Morning in America' like we witnessed under president Reagan. All we need is a president who highlights how great we are, who honors and respects business, instead of vilifying it, and who hold wealth creation out as something to be achieved, not punished."
"If the U.S can still grow at 2% under today's clearly hostile environment, just imagine what we could do with someone in the White House cheering the nation on! We could move from a corrosive business environment to cordial. Money is not patriotic," Smith told Cavuto. "Capital seeks the best environment in which to grow."
With a change in leadership this November, Smith believes we can restore public confidence and America can remain the #1 economic power in the world.
THE FED IS NOT GOING TO SAVE US FROM THE GREAT DEPRESSION -ActivistPost
In his recent speech given to Congress, Ben Bernanke expressed little confidence about the direction the economy is heading. He continued to say that data showed further weakness ahead and that growth is "frustratingly slow." He finished by saying that there really isn't much the Fed can do.
Bernanke says that the federal government is on an "unsustainable path" and must reduce debt, but he also says that the economy cannot afford tax increases and spending cuts right now. In fact, Bernanke is warning that "a shallow recession would occur early next year" if something is not done about the looming "fiscal cliff" that so many people are talking about.
ROMNEYCONOMICS - WeeklyStandard
In private and public comments, Romney and (economic advisor) Hubbard have suggested that hyper-expansive Fed policy and quantitative easing—repressing interest rates to zero—is a reckless monetary approach that in the past has led to bouts of inflation, followed by deflation and recession. His program is necessary, but it may not be sufficient.
In 1987, Romney’s economic adviser Glenn Hubbard, in a scholarly analysis of the classical gold standard (1879-1914), reviewed the performance of a period when the dollar was defined as a weight unit of gold; a period when the paper dollar was by law convertible to gold; a period when the dollar was neither an official reserve currency nor a floating monetary token in a turbulent sea of floating exchange rates. That period achieved an economic growth record the equal of any in American history. In stark contrast to the period 1971-2012, the purchasing power of the gold-backed dollar was almost exactly the same in 1914 as it was in 1879...the dollar defined in law as a weight of gold—performed its constitutional role as a stable means of exchange, a stable unit of account, and a stable store of value.
Gold prices dipped below $1,600/oz. Tuesday after Fed head Ben Bernanke admitted the sad state of the U.S. economy and explained "Libor flaws" to Congress. Gold last traded at $1,583 an ounce, silver traded at $27.29 an ounce.
BERNANKE GLOOMY ON ECONOMIC OUTLOOK - LonFinTimes
Ben Bernanke offered a gloomy outlook for the US economy but the Federal Reserve chairman offered no hint of further monetary easing in testimony to Congress. The testimony disappointed markets – which are on tenterhooks for a signal of further monetary easing from the Fed – with stocks falling and the dollar rising before turning around by midday in New York.
Mr Bernanke chided Congress for its failure to act on fiscal policy, citing it as one of two main risks to the economy alongside the eurozone crisis, and warning against a repeat of the market volatility and loss of economic confidence caused by last summer’s debacle over raising the debt ceiling.
The Fed chairman has ramped up his rhetoric on fiscal policy with each successive visit to Capitol Hill, but there is little sign that Congress is willing to compromise before the November election, even in order to boost growth.
THE SCANDAL BEHIND THE FINANCIAL SCANDALS - WSJ
Two of the world's financial capitals are hurting. London, Europe's trading hub, and Chicago, America's bridge between the farm and the global commodity markets, have been rocked by scandals.
The controversy over the London interbank offered rate, or Libor, and the unraveling of the brokerage Peregrine Financial Group Inc. share only their timing. But their collision in the headlines is deepening investors' antipathy toward the financial industry, capital markets and regulators.
"It's very bad. [Peregrine Financial's collapse] undermines the cornerstone of any market: trust between buyers and sellers. The trading community here is in state of shock."
With news like this, it is no wonder that ordinary savers have been deserting the stock market, yanking hundreds of billions of dollars from equity mutual funds (see table). Many bank stocks trade at a fraction of their liquidation value.
LIBOR SCANDAL: WHY THE N.Y. FED MUST BE INVESTIGATED - Slate
The New York Federal Reserve knew about Libor games being played by the banks years ago and seems to have done precious little about it...No prosecutions, no inquiries of the banks to see if the illegal behavior had stopped—just a live-and-let-live attitude.
Of course, this was the New York Fed led by Tim Geithner—who testified at his confirmation hearings to be treasury secretary that he had never been a regulator. Huh? As president of the N.Y. Fed, he was the most important regulator out there, and he didn't even know it? Simply amazing.
But at least he was consistent — because he certainly didn't act like a regulator. He led a New York Fed that paid back Goldman Sachs 100 cents on the dollar in the middle of the crash — with your money — when Goldman was doing business with AIG. Then they bailed out AIG—with hundreds of billions of our dollars. This decision has never been explained.
So what to do? We need an investigation of the New York Fed and its board by someone we can trust. And so far that doesn't seem to be any of the existing government agencies. And maybe the prosecutor can find out one other thing: If Tim Geithner wasn't a regulator, what was he?
TRUMP TO FED: NO MORE EASING BECAUSE DOLLAR IS ‘GOING TO HELL’ - MoneyNews
"The Fed has intervened twice in the past, pumping $2.3 trillion into the economy, but enough is enough," Trump told CNBC. "The dollar is going to go to hell, we're no longer the great source and lots of bad things are happening with the country."
HOW BERNANKE WILL CAUSE THE NEXT CRASH BEFORE 2014 - Marketwatch
“Massive wealth destruction coming,” warns Hong Kong economist Marc Faber, one of many 'Dr. Dooms' we’ve featured over the years. The Super-Rich “may lose up to 50 percent of their total wealth....either through very high inflation or through social unrest or through war or credit-market collapse.”
“It is safest to buy U.S. Treasurys because the U.S. can print money” and “pay the interest. But you are earning only 1.6%, and the cost of living is increasing by about 5% a year around the world. You are getting a negative real return.” The next “collapse will come on Bernanke’s watch.” Warning to investors: Bernanke’s second four-year term as chairman of the Fed ends Jan. 31, 2014.
Gold prices steadied below $1,600/oz. Monday on bargain hunting and a weaker dollar, stocks slip on weak gloomy outlook. Gold last traded at $1,589 an ounce, silver traded at $27.35 an ounce.
GREYERZ - GOLD TO HIT $3,500 - $5,000 IN 12 TO 18 MONTHS - KingWorldNews
Today Egon von Greyerz told King World News, “The credit bubble we’ve had, for at least 40 years, is going to accelerate dramatically, and the failures in the system will continue.” Egon von Greyerz, who is founder and managing partner at Matterhorn Asset Management out of Switzerland, also said, “I see gold reaching $3,500 to $5,000 in the next 12 to 18 months. There is a fire in almost every country in Europe. The US is going to catch fire also. There will be a catalyst coming soon, probably some concerted action of QE or money printing between the Fed, IMF and the ECB. That will happen as a result of the economies, worldwide, collapsing.”
OBAMA - 'IF YOU’VE GOT A BUSINESS - SOMEBODY ELSE MADE THAT HAPPEN' - WashTimes
President Barack Obama addressed supporters in Roanoke, Virginia on Friday afternoon and took a shot at the business community. President Obama dismissed any credit business owners give themselves for their success: "If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business -- you didn’t build that. Somebody else made that happen...."
OBAMA DOCUMENTARY OPENS BIG AT BOX OFFICE - HollywoodReporter
"2016: Obama's America" features an interview with the president’s half brother and opened in a single theater in Houston, Texas over the weekend, where it grossed an impressive $31,750. For any documentary to pass the $25,000-per-theater mark on its opening weekend represents an unusually strong showing. 2016 had been scheduled to expand to 120 theaters on July 27, but Rocky Mountain Pictures can bump it to about 400 theaters given the initial popularity of the film.
BERNANKE HEADS TO THE HILL: 'ONLY ONE BULLET LEFT' - CNBC
With the U.S. economy languishing and job creation anemic, Fed watchers and investors alike will be keen to hear what it will take for the central bank to ease monetary policy further in an effort to spur economic growth. “Investors will be looking for signs that (Bernanke) is considering more QE,” Lawrence Creatura, portfolio manager at Federated Investors said. "The Fed only has one bullet left in the gun and incremental rounds of QE are less effective..."
FED FIDDLES AS AMERICA SLIDES BACK INTO RECESSION - Telegraph
The Economic Cycle Research Institute in America has doubled down on its recession call. A fresh US slump is not just a risk any longer. It has already begun. Output slowed to stall speed over the winter. The US economy tipped into outright contraction in the second quarter, even before facing the "fiscal cliff" later this year – tightening of $600 billion or 4% of GDP unless action is taken to stop it. Nothing serious is yet being done to head off the downward slide, the implications for the global system are ugly.
Gold prices rebounded toward $1,600/oz. Friday on bargain hunting and a weaker dollar, stocks rebound. Gold last traded at $1,589 an ounce, silver traded at $27.31 an ounce.
U.S. producer prices unexpectedly rose .1% in June despite big drops in energy prices, a sign that inflation pressures are alive and growing.
FED'S WEAK DOLLAR POLICY BOOSTS STOCKS AND GOLD - Craig R. Smith
Over the last several years there has been a very strong correlation between dollar weakness and stock rallies. Because a weaker dollar is good for exports the market translates a weak buck into higher profits and ultimately higher stock prices. While huge amounts of easy money from the FED have distorted stock prices; a weaker dollar, while hurting savers, benefits borrowers, fund managers and 401k holders.
Gold has also been a beneficiary of dollar weakness. So Dow rallies have many times produced increases in gold prices and today's price rise is a perfect example.
Because 2012 is an election year, you can expect the Fed to be very accommodating to a weaker dollar and future QEs to keep the stock market levels conducive to the current administration's re-election.
Don't think for a moment the FED is politically neutral. It is not and never has been. The economic performance of the Obama administration has be dismal, especially in the GDP and unemployment numbers.
However, the administration can point to higher stock prices as one of their "accomplishments" or "contributions" to the economy. You and I know better, but the spin doctors will use this distortion of truth in the campaign. "Obama saved GM and the stock market," we will be told. What a joke.
This all bodes well for Gold. I now understand the thinking behind Merrill Lynch's recent prediction for $2,000 an ounce gold by year end. I think $2,000 may be conservative.
OBAMANOMICS: THE FINAL NAIL IN THE DISCREDITED KEYNESIAN COFFIN - Forbes
Keynesian economics is the false vision of human action which says the way to promote economic recovery and renewed growth is through increased government spending, deficits and debt. If that sounds nuts, that’s because it is.
Ronald Reagan explicitly scrapped Keynesian economics for the more modern supply side economics, which holds that economic growth results from incentives meant to boost production.
This historical experience was reflected by the surging Reagan recovery boom. And it is why Obama was confident enough to tell Matt Lauer and the nation in February, 2009 regarding economic recovery: “If I don’t have that done in three years, then this is going to be a one-term proposition.” We are now well past Obama’s own self-imposed deadline, and still no real recovery.
For President Obama, the payback will come due on Election Day, when the American people can and should send him to the back of the unemployment lines.
27 THINGS EVERY AMERICAN SHOULD KNOW ABOUT THE NATIONAL DEBT - Activist Post
The U.S. government has stolen $15,876,457,645,132.66 from future generations of Americans, and we continue to add well over a hundred million dollars to that total every single day.
The 15 trillion dollar binge we have been on over the past 30 years has fueled the greatest standard of living the world has ever seen, but this wonderful prosperity we have been enjoying has been a lie.
What we have done to our children and our grandchildren is beyond criminal.
The truth is we should have listened to the warnings of our founding fathers about government debt. For example, Thomas Jefferson once said that if he could add just one more amendment to the U.S. Constitution it would be a complete ban on all borrowing by the federal government...
"I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing."
Where would we be today if we had taken the advice of Thomas Jefferson?
WHAT I MISS ABOUT AMERICA - AmericanThinker
Here are just a few of the things I miss since America entered the golden age of Hope and Change in January 2009.
- Going for minutes, hours, even days, without worrying about what weird insanity the government is dreaming up next
- Having money
- The Border Patrol
- Looking up at the moon and thinking, "America - we own space!"
- Having a president whose background isn't more closely guarded than the formula for Coke
- Going on vacation without the TSA auditioning me for "Stella Does Dallas"
Gold prices eased back near $1,575/oz. Thursday on profit taking and a firmer dollar, stock markets drift downward. Gold last traded at $1,571 an ounce, silver traded at $27.18 an ounce.
GOLD 22% RALLY TO RECORD SEEN BY ERIC SPROTT - Bloomberg
Gold will climb to a record by year-end as the global economy slows from the weight of too much debt, says Eric Sprott, the founder and chairman of Canadian fund manager Sprott Inc. The debt crisis “should be incredible for gold...the world may eventually return to the gold standard."
“Ultimately, if there’s a currency crisis, which one could argue we are in the throes of it right now, how do sovereigns and banks back things up? What do you back it up with?” he said. “I can imagine that the most logical thing is gold.”
'GOLD STANDARD NEWS MAGAZINE' LAUNCHED ON CRNTALK.COM - Listen
A new 5-minute weekly radio program debuted today on CRNTalk.com reporting the latest precious metals and investment news.
Hosted by Real Money Perspectives Editor, David Bradshaw this new report features interviews with authors, analysts and senior brokers discussing the future of gold, the best performing asset of the 21st century.
FED OFFICIALS WARN OF LOOMING PROBLEMS - USAToday
The Federal Reserve is open to taking further action to support the struggling U.S. economy. But minutes of the Fed's June meeting show policymakers at odds over whether the economy needs more help now. The Fed downgraded its economic outlook. It now expects growth of just 1.9% to 2.4% in 2012, half a percentage point lower than its April forecast.
GOLD BACK IN FASHION, NEXT STOP $2,300 - Mineweb
In his latest edition of the annual In Gold We Trust report, Erste Group's Ronald Stoeferle explains why he sees the gold market entering a new phase and prices heading beyond $2,000. Stoeferle says, "Due to its high liquidity and unique characteristics, gold is becoming ever more prominent as collateral. Therefore, we are currently seeing the renaissance of gold in international finance. The foundation for a return to "sound money" has been laid."
THE PRICE OF GOLD HAS BEEN MANIPULATED - Telegraph
The ball of half-truths and downright lies which have surrounded the [manipulation of the gold market] issue for a long time is beginning to unspool. It is an issue internet activists kept alive long before it was acknowledged by the mainstream media. Gold price manipulation may well be the next big scandal to break – if it does, this time nobody can say that they were not warned.
Duck and Cover, Your Cash Is NOT Safe; Buy Physical Gold & Silver - ETFDailyNews
According to legendary investor Jim Rodgers, what was once considered safe, risk-free, cash balances held as brokerage firms or other institutions are no long safe. A distinct trend has emerged that will most likely reveal that the entire financial system is full of fraud and nothing but metals will be safe.
Though Rogers wears a reputation as a mild-mannered straight-talking billionaire, appealing to a more-general audience of investors, another Jim, investment newsletter writer Jim Willie, in contrast, ‘gives it’ to his readers hard, fast and dirty.
“The entire financial system of the Western world is imploding,” Willie, the publisher of the famed Hat Trick Letter, said in an interview with Bull Market Think,Dec. 5, 2011. “There is exponentially rising risks for individuals and their money…the risk right now–is people losing their entire life savings. I cannot seem to get people to understand this.”
GOLD FOR OIL - FreeBeacon
Turkey has exchanged nearly 60 tons of gold for several million tons of Iranian crude oil, despite its promises to uphold Western sanctions on Iran’s energy sector, according to recent Turkish reports. By using gold instead of money, Turkey is able to skirt Western sanctions on Iran’s oil trade.
Gold prices rose near $1,575/oz. Wednesday following uninspiring Fed policy meeting notes, stock markets drift downward. Gold last traded at $1,576 an ounce, silver traded at $27.14 an ounce.
GOLD TO OUTSHINE DOLLAR? - AxelMerk
As the price of gold has gone up fivefold over the past 10 years, why would one buy it at today’s prices? For the same reason an investor would buy any other asset: if one believed it would be a good investment now, that is if one believed it may appreciate in value and add portfolio diversification benefits. I started investing in gold back in 2002 and made it part of my family’s “golden college savings plan” (discussed in the book) in 2003:
-“Back in 2003, we contemplated the hypothetical question: If you had to choose one asset class over the next 10 or 20 years, which one do you think would perform better than many others? We picked gold. The trends that we see unfolding these days were already in the making years ago. It was our view that in the absence of some miraculous reform of entitlement programs such as Social Security, odds would be high that policymakers would nominally keep their promises, but erode the purchasing power of the dollar.” (Sustainable Wealth page 217ff)
It’s the discipline in pursuing a plan, any plan, that is key to success. It helps that the price of tuition has been going down every year since we started the plan – that is, when college tuition is priced in gold.
CONGRESS FIDDLES AS U.S. ECONOMY BURNS - Fox News - Video
Swiss America Chairman Craig R. Smith was a guest today on Your World with Neil Cavuto discussing the economy and Congressional vote to repeal ObamaCare. According to Smith, businesses are not hiring because they are frozen in fear over the political and economic uncertainties ahead.
"This is moving from embarrassing to nauseating watching and waiting for some real leadership to deal with 8.2% unemployment, anemic 2% GDP. The Chamber of Commerce poll found that 70% of businesses in the U.S. feel ObamaCare is preventing creation of new jobs," said Smith.
Mr. Smith told Fox News it is time for the political nonsense to stop and for our elected leaders to do what Ronald Reagan did in 1981: replace uncertainty with a new sense of confidence in the future.
THE FED: BIGGEST SYSTEMIC RISK OF ALL - RealClearMarkets
Regulators in the wake of the 21st century crisis are busy designating large financial firms as "SIFIs"-Systemically Important Financial Institutions-ones which can create systemic risk. The history of interest rates shows us the vast power of the central bank to create systemic risk.
Neither the Fed nor any other central bank is in a godlike position above the system of financial interactions, looking down, and able to understand and decree accurately from on high. No one is outside the complex, recursive system. Rather, they are all enmeshed within it, like Keynes' photo pickers. This makes the Fed's mistakes easier to understand. As then-Senator Bunning is said to have asked Fed Chairman Bernanke, "How can you regulate systemic risk when you are the systemic risk?"--an excellent and unanswered question. The Fed is the biggest SIFI of them all.
Gold prices fell below $1,575/oz. Tuesday on profit taking and a firmer dollar amid EU jitters and recession fears, stocks slip. Gold last traded at $1,567 an ounce, silver traded at $26.81 an ounce.
The dollar rose against other global currencies after a German court and Italy’s prime minister added to financial and political uncertainty about the euro zone’s bailout fund. Stocks and commodities fell.
GOLD SECURES CAPITAL & PROTECTS INVESTORS - ProfessionalJeweller
According to a report recently released by the World Gold Council, investing in gold can offer equal or better than average returns with less volatility than typical investment methods. During these turbulent times, investors are looking for a trusted source of security for their holdings and gold provides just that.
FOUR FISCAL CLIFFS AHEAD, AND A JOBS WAR - Marketwatch
Election wars are masking the fiscal cliff that America is destined to drop off in early 2013, warns the Congressional Budget Office. History tells us our politicians will slowly drive America off the fiscal cliff and into a mid-1930s-style sinkhole. Why? Because no matter who’s elected, our dysfunctional government will continue to be driven by secretive super-PAC billionaires obsessed about either holding on to or regaining the presidency in 2016.
America’s fiscal cliff is actually four cliffs. And any one can easily trigger the other three. 1) The health-care cliff, 2) The taxes/spending cliff, 3) The military budget cliff and 4) The social programs cliff.
OBAMA’S AMERICA 2016 - NEW DOCUMENTARY FILM RELEASE - Watch Trailer, CPAC, Dinesh D’Souza
Immersed in exotic locales across four continents, best selling author Dinesh D’Souza takes audiences on a gripping visual journey into the heart of the world’s most powerful office to reveal the struggle of whether one man’s past will redefine America over the next four years. The film examines the question, “If Obama wins a second term, where will we be in 2016?”
Across the globe and in America, people in 2008 hungered for a leader who would unite and lift us from economic turmoil and war. True to America’s ideals, they invested their hope in a new kind of president, Barack Obama. What they didn’t know is that Obama is a man with a past, and in powerful ways that past defines him--who he is, how he thinks, and where he intends to take America and the world.
BARACK OBAMA'S BROTHER TO MAKE FILM DEBUT IN ANTI-OBAMA DOCUMENTARY - HollywoodReporter
An interview with George Obama, who lives in a hut in Kenya "like something out of 'Slumdog Millionaire'" is featured in the upcoming movie "2016: Obama's America." Barack Obama’s half-brother, George Obama, is about to make his film debut, and in a feature-length documentary that is critical of the president, no less.
Gold prices rebounded toward $1,600/oz. Monday on bargain hunting and a flat dollar, EU jitters and recession fears drag stocks lower. Gold last traded at $1,587 an ounce, silver traded at $27.34 an ounce.
FISCAL CLIFF-HANGER: CUTS OR HIKES? - Politico
"President Obama on Monday called for a one-year extension of the Bush-era tax cuts for people making less than $250,000," The New York Times reports. “By calling for an extension for just a year, Mr. Obama hopes to make Republicans look obstructionist and unreasonable...he also hopes to deepen the contrast with his challenger, Mitt Romney."
Rory Cooper, Director of communications, Heritage Foundation writes, "At what point do they cease being the 'Bush tax cuts' and instead be called what they are, the potential 'Obama tax hikes?' Current tax rates have been in place for a decade, reauthorized by President Obama and a Democratic Senate and House, yet we still act like keeping current tax rates in place is a gift to the masses."
ANXIOUS INVESTORS DAY TRADING WITH RETIREMENT ACCOUNTS - LA Times
Americans worried about running out of money in their golden years are trying a new investment strategy: day trading their retirement funds.
Disillusioned with the conventional buy-and-hold approach, baby boomers are anxious to improve their retirement prospects after two punishing bear markets in the last decade. Some people are trading the mutual funds in their 401(k) plans more frequently.
WHY U.S. ECONOMIC POLICY IS PARALYZED - WashPost
Since 1800, major countries have experienced 26 episodes when government debt has reached 90 percent of GDP for at least five years, they find in a study done with Vincent Reinhart of Morgan Stanley. Periods of slower economic growth typically lasted two decades.
Economic policy is trapped between weak demand and the fears of too much debt. Yesterday's Keynesians undercut today's Keynesians. "In the long run we are all dead," Keynes said. But others are alive - and suffer from bad decisions made decades ago.
10 WAYS HONESTY MAKES YOU MORE MONEY -JamesAtturcher.com
Dishonesty works…until it doesn’t. Everyone messes up. And when you are dishonest you are given only one chance and then it’s over. You’re out of the game, at least until you get your act straight and you have to start from scratch with your tail between your legs.
Honesty compounds. It compounds exponentially. No matter what happens in your bank account, in your career, in your promotions, in your startups. Honesty compounds exponentially over not days or weeks but years and decades.
ROUBINI: MY 'PERFECT STORM' SCENARIO IS UNFOLDING - CNBC
"Dr. Doom" Nouriel Roubini says the "perfect storm" scenario he forecast for the global economy earlier this year is unfolding right now as growth slows in the U.S., Europe as well as China.
Roubini said that unlike in 2008 when central banks had “policy bullets” to stimulate the global economy, this time around policymakers are “running out of rabbits to pull out of the hat."
Last week, he told CNBC that there is “virtually zero chance” that pump-priming by central banks will succeed, suggesting that policymakers should instead let the economic bust work itself through the system.
Gold prices eased below $1,600/oz. Friday as downbeat U.S. jobs data sparked fresh recession fears and sent stock and commodity prices lower. Gold last traded at $1,582 an ounce, down about 1% for the week, silver traded at $27.10 an ounce.
JOBS DISAPPOINTMENT KNOCKS WALL STREET LOWER - YahooFinance
Stocks fell sharply Friday after a dismal job report came out. This report showed that the economy is still stuck in a slow-growth rut showing no signs of improving. This reinforced the fact that the European debt crisis is having an impact on global growth.
MORE SIGNS WE ARE CLOSE TO A ZOMBIE ECONOMY - CNBC
Uncertainty about U.S. fiscal policy, Europe’s crisis and slower global growth have turned the U.S. economy into what feels like the walking dead.
The term "zombie" is frequently used by Bill Bonner of The Daily Reckoning to describe non-thinking investors as well as anti-free market governments. He wrote last month, "Like a zombie in a horror movie, the Eurozone crisis just won’t die. Instead, it keeps lurching at investors from different shadows on the European continent."
OBAMA'S 'MUDDLE-THROUGH' ECONOMY -Editor
"Anxiety mounts as economy limps into second half," reports Reuters.
"O NO: 8.2% Unemployment", says DrudgeReport. Just 80,000 jobs added in June...One-third at temp agencies... 85,000 WENT ON DISABILITY IN JUNE! ... Broader Jobless Rate At 14.9%... Team Obama predicted 5.6% today with stimulus... IMF to cut global growth forecast...
Marketwatch reports, "The dollar extended gains on Friday, pushing the euro to its lowest level in about two years, after a disappointing U.S. jobs report for June sent investors seeking safe havens, including the greenback."
But seeking safety in symbolic money is dangerous at best, foolish at worst. The world is waking up to discover substance is on the verge of triumphing over symbolism and debt - true in currencies, families and governments.
U.S. DOLLAR MAY BE WORST PLACE TO SEEK SAFETY - NewsRelease
“Many are jumping from the frying pan into the fire by converting all their assets into U.S. Dollars,” say Lowell Ponte and Craig R. Smith, co-authors of the widely-praised recent books The Inflation Deception: Six Ways Government Tricks Us...And Seven Ways to Stop It! and Crashing the Dollar: How to Survive a Global Currency Collapse.
“This is a huge mistake because the once-solid U.S. Dollar has become a flimsy shelter made only of paper,” says Ponte. “It's no longer the 'flight-to-safety' asset it used to be. The Dollar is being manipulated, losing value and at risk of crashing.”
“The U.S. Government printed more than $5 Trillion dollars out of thin air to paper over reckless political spending during the past three years,” says Smith, a 30-year monetary expert.
Gold prices held above $1,600/oz. Thursday despite profit taking and a firmer dollar, stocks mixed on global financial repression. Gold last traded at $1,604 an ounce, silver traded at $27.69 an ounce.
THE RIG IS UP - JSMineset
According to Jim Sinclair, the battle to stop gold has been lost. The Bank of England turning their backs on Barclays, the company who did their bidding, will be the event in time marking the trend change.
The paper trail is there. The worm has turned. This fight in the $1,540 gold price area was not for regaining the old high in gold. The six attempts to kill gold, supported by some gold writers looking for favors from the riggers was a now failed attempt to keep gold from trading above $3500.
The start, like all starts towards the old high and well above, should be slow with more unfolding drama. It will build on itself but gold will trade at and above $3500. I am now as certain of this as I was over ten years ago when I told you gold was headed for $1650.
[Ed. Note: We have great respect for Jim Sinclair. Five years ago Jim said, "Gold has no agenda, no allegiance and functions as honest money in a world of lies, corruption, overstatement and spin. $700 might well be a place certain interests will try and block gold, but their only hope is for momentary success. $761 is yanking at gold from the front with great power. $887.50, a break above $1,000 and $1,650 are putting their grip on the royal metal as well." 2.25.07.]
WHY GOLD COULD HIT $6,000 - Bloomberg Video
Hinde Capital's Ben Davies talks about the price of gold. He says it could hit $6000 an ounce. He speaks on Bloomberg Television's "Street Smart". According to Davies, "As a fund manager it is about protecting purchasing power. If we look at credit aggregate we come up with astronomical numbers for gold near $6,000/oz. Huge deleveraging is trying to take place. At a certain point central banks will become the only buyers of bonds... in that environment we are going to see a wholesale exit out of bonds into gold and cash over the next 2-3 years."
EMPEROR BEN HAS NO CLOTHES - Steve Forbes
The Federal Reserve’s announcement last month that it would continue Operation Twist--selling short-term Treasury securities and using the money to buy longer-term bonds--vividly demonstrates the intellectual bankruptcy of Ben Bernanke.
The stresses of the current economic troubles threaten all that’s been achieved [in Europe] since the early 1950s. The current crisis is not a result of a lack of fiscal union or deeper political integration. Major fiscal and monetary errors based on bad economic ideas are to blame.
CONGRESS TO BLAME FOR 'FISCAL CLIFF' - CSM
Evidence is mounting that the economy is taking a hit because Congress can't – or won't – deal with the 'fiscal cliff' looming at year's end. The fight on Capitol Hill last summer over the national debt limit also took an economic toll.
A rising chorus of voices, inside and outside Washington, is warning that political gridlock in Congress is now so severe that it has actually done damage to the economy – and threatens to do a lot more.
"Uncertainty" is causing small businesses to refrain from hiring and investing. "Most of this uncertainty ... is coming out of Washington," concludes a June 14 report from the National Federation of Independent Business.
"Never before in the history of the [monthly] surveys have so many consumers spontaneously mentioned negative aspects of the government's role in the economy, and never before have consumers rated economic policy so unfavorably," the Reuters/Michigan Survey said in releasing its August 2011 data.
GOVERNMENT MOTORS: TAXPAYER LOSS RISES TO $35 BILLION - Bloomberg
General Motors shares fell to a fresh 2012 closing low of $19.57 on Monday. Normally you might say, tough luck investors. But this is Government Motors. The Treasury still owns 26.5% of GM, or 500 million shares. Taxpayers are still out $26.4 billion in direct aid.
Shares would have to hit $53 for the government to break even. Those shares were worth about $9.8 billion as of Monday. Include that $18 billion gift, and taxpayers' true loss climbs to nearly $35 billion.
The Volt hybrid was supposed to provide a green veneer to GM's entire lineup, like the Prius has done for Toyota. Instead, the Volt has been a public relations disaster following fires and anemic sales that led to a temporary production halt earlier this year.
Gold prices rose above $1,600/oz. Tuesday on bargain hunting despite a firmer dollar, stocks up despite Iran oil jitters. Gold last traded at $1,617 an ounce, silver traded at $28.32 an ounce.
Swiss America will be closed Wednesday, July 4th in observance of on our nation's 236th Independence Day celebration. The offices will reopen on Thursday, July 5th. (image shown of Swiss America Phoenix, AZ headquarters proudly displaying a giant American flag)
COLLEGE ASKS 'MILLIONS' TO READ U.S. 'BIRTH CERTIFICATE' - WND
Hillsdale College is promoting “Read the Declaration” this July 4. To facilitate the reading, Hillsdale is offering free copies of the Declaration of Independence to those who sign up to read it.
In a statement about the event, Hillsdale said, “This can be the largest-ever public reading of the Declaration in American history! We want hundreds of thousands, even millions, of Americans setting aside a few minutes to remember the legacy of liberty our Founders entrusted to us.”
The college adds that the reason it is encouraging the public reading this year is because the 2012 election is a pivotal one for America. (Note: here is a link to read U.S. Declaration online, or to request a free Pocket Constitution and Declaration)
JULY 4TH: A GREAT DAY TO WRITE YOUR VISION DOWN- Editor
Writing down your personal, family and/or business vision, goals, dreams and mission is a great starting point to help clear our minds of the pressing cares and troubles we all face in this high-speed world.
Why? Because it help us to slow down, to focus our thoughts and get our priorities outside our own heads and onto a written list. Like the old saying, "If is isn't in writing...it does not exist!"
So that's what I'm doing on July 4th, writing down my vision again, in addition to celebrating our national vision by re-reading our Declaration of Independence and enjoying a local fireworks display.
Last time I wrote my vision down was nearly a decade ago, far too long. Your vision statement need not be public or you may decide to share with family and friends. Months or years later, I have discovered it is a great joy to look back over the vision and recount what has come to pass. Then it is time to re-envision again!
FISCAL CLIFF WOULD TAKE U.S. GDP BELOW 1% - Marketwatch
A failure to avoid the “fiscal cliff” could slash the U.S. growth rate to under a 1% annual rate and risk harming the global economy, the International Monetary Fund said in a report released Tuesday. The fiscal cliff is Washington shorthand for current tax and spending plans, enacted in law when the debt ceiling was narrowly passed last summer, that would shrink the deficit by around 4% of gross domestic product in 2013.
FINANCIAL ‘ARMAGEDDON’ WILL HAPPEN DESPITE EU DEAL: ROGERS - CNBC
According to well-known investor Jim Rogers, the European agreement to fund struggling banks will do nothing to help solve their problems. According to Rogers, not only does this not help the crisis, it makes the problem worse because they are building even more debt.
Gold prices held near $1,600/oz. Monday on safe haven buying despite a firmer dollar, stocks mixed on weak economic data. Gold last traded at $1,597 an ounce, silver traded at $27.52 an ounce.
THE TIME IS NOW! - James M. Carrillo, SATC
The Gold bull market has been sleeping for ten months now. It was in ridiculously overbought territory when it hit $1,900.00 an ounce, nearly every media outlet was saying it will break $2,000.00, even the long term gold bears were convinced. Markets however, do need a breather to digest such large gains, and here we are! What now?! Ten short months and nearly every gold bull and every media outlet has now either either given up it or is now saying it will drop significantly to extremes in some cases, "Is Gold on the Edge of a Violent Downturn?" -CNBC.
The key to the future of Gold is in the fundamentals of rapidly expanding money creation (as can be seen on the graph below) by the Federal Reserve. It fully supports gold moving much, much higher, as does the zero Interest rate policy they have put in place until at least the end of 2014. There is NO yield to be had folks, our cost of living is sure to rise because they are trying to inflate their way out. But when is the best time to buy? It is never wise to buy or wait until the market is screaming upwards and the news media is all aboard. It is time when the fundamentals are intact and the media begins to jump on the negativity bandwagon.
Remember that Gold has averaged gains of better than 20% per year for over a decade, that growth has been better than 35% if you buy on a correction like this. The growth of money indicates that this growth will accelerate in the coming years. Don't wait to any longer to buy gold, the time is NOW.
THE PATH TO $10,000-AN-OUNCE GOLD - Daily Reckoning
Is there a “reset button” that central bankers can push (with the approval of political leaders) that would restore balance to the system?
We know central bankers would never want to deflate the economy or crash the value of debt, which would destroy the banking system. So how about inflating the money supply to dilute the value of debt? All in one fell swoop?
Right now, central bankers are diluting the value of debt very slowly by pushing interest rates below the rate of inflation. Some call this “financial repression.” It’s an unspoken policy that has many negative consequences. What is an alternative, since all attempts to “fix” the current system with more borrowing and printing are failing?
How about the classical gold standard, which stands out as the least flawed of all the systems we’ve tried. Each nation could choose to peg its local currency to gold at a price that allows for enough growth in bank reserves to greatly reduce the burden of public- and private-sector debts.
The chart above is what the remonetization of gold would look like in chart form. The yellow line would rapidly approach the blue line. And the blue line will keep rising as we see further growth in the money supply. QB’s “Shadow Gold Price” divides the US monetary base by official US gold holdings.
OBAMACARE: SEVEN NEW TAXES ON CITIZENS EARNING LESS THAN $250,000 - Breitbart
According to this article there are twenty hidden new taxes in the Patient Protection and Affordable Care Act otherwise known as Obamacare. Seven of these taxes are imposed on all citizens, which goes against President Obama's promise to not raise taxes on anyone earning less than $250,000.