Anticipated Fed interest rate cut could help gold price If the Fed decides to lower interest rates again, as one of its top officials signaled Wednesday, the action could be part of a catalyst that helps gold prices maintain their strong position until yearend. National Bank Financial recently suggested that lower U.S. interest rates will "continue to weigh the greenback down and that in conjunction with the high oil price will continue to keep the gold price elevated."In addition, metals analyst Tanya Jakucsonek and associates Farooq Hamed and Joanne van Ballegooie assert that continued investment demand through gold ETFs and speculative positions will also drive demand for gold. With the gold price hovering near the $800/oz mark, NBF expects to see gold ETF holdings continue to grow as the fourth quarter closes out.
Richard Russell On Gold This most interesting chart below is from BullandBearWise. The black line follows gold from 1975 through 1980 and a few years beyond. Note that gold accelerated upwards starting in late-1978, and by 1979 gold was rising almost vertically in a parabolic pattern. In other words, during 1979 gold was literally "blowing its top" in a vertical rise. The red line tracks gold during a comparable period during the present gold bull market. Note that unlike 1979, gold has been rising gradually and systematically. There are no signs yet of acceleration or a parabolic (vertical) rise. Ultimately, I believe there is a chance that gold will go into a parabolic rise, but that may take place a year or many years into the future.
Continuing jobless claims rise to two-year high In a possible sign of a weakening labor market, the number of Americans receiving state jobless benefits rose to a nearly two-year high in the latest week, the government said Thursday. Continuing jobless claims rose by 112,000 in the week ending Nov. 17, to 2.66 million, the highest mark since Dec. 24, 2005, the Labor Department said. Initial jobless claims also shot up in the latest week, the data show. Those claims rose by 23,000 to 352,000 during the week ending Nov. 24, their highest level since Feb. 10. The four-week moving averages for both initial claims and continuing claims also edged up in the latest surveys. Initial claims represent job destruction, while the level of continuing claims show how hard or easy it is for displaced workers to find new jobs.
The slowdown has arrived, Beige Book finds The economic slowdown has begun, according to the Federal Reserve's latest report on conditions across the country released Wednesday. The economy continued to grow, but at a reduced pace, according to the report, known informally as the Beige Book for the color of its cover. The report is a collection of anecdotal reports from the 12 Fed Bank districts. It is designed to give Fed officials a flavor of economic conditions on the ground as they prepare for their next interest-rate setting meeting on Dec. 11. Seven of the 12 districts reported a slower pace of growth, with the remainder describing conditions as moderate or mixed. Conditions in the real estate sector continued to deteriorate, with only a few signs of stabilization amid the gloom.
Lower rates could hurt dollar, fuel inflation The Federal Reserve needs to be careful about lowering interest rates too much, Dallas Federal Reserve President Richard Fisher said Wednesday, according to media reports. Fisher, who is not a voting member of the Federal Open Market Committee this year but will be next year, told a community group in Amarillo, Texas, that a recession is unlikely and that inflationary pressures remain. Lower rates could further erode the value of the dollar, he said. Fisher's comments show resistance to a rate cut on Dec. 11. Earlier, Fed Vice Chairman Donald Kohn boosted the markets' hopes of a cut by saying the Fed must be "nimble" in a time of uncertainty.
USFED Behind the Curve The US Federal Reserve is behind the curve. Great consequences have resulted and are likely to continue to result. Many words can be used to describe this group. What come to mind are inept, compromised, corrupted, distracted, ill-trained, but also clueless, deceptive, myopic, overly cautious, and off the market in their focus. When they remain transfixed on economic growth versus price inflation, they are stuck in the past, in a world that no longer exists. The corrupt spew of fraudulent mortgage bonds disseminated throughout the investment community has both crippled the banking system from profound distrust, and inhibited the USEconomy from credit supply fraught with obstacles.
As credit dries up in U.S., concerns mount about recession Credit flowing to American companies is drying up at a pace not seen in decades, threatening the creation of new jobs and the expansion of businesses, while intensifying worries that the economy may be headed for recession.The combined value of two major sources of credit - outstanding commercial and industrial bank loans, and short-term loans known as commercial paper - peaked at about $3.3 trillion in August, according to data from the Federal Reserve. By mid-November, such credit was down to $3 trillion, a drop of nearly 9 percent. Not once in the years since the Fed began tracking such numbers in 1973 have these arteries of finance constricted so rapidly. Smaller declines preceded three recessions going back to 1975.
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