Go GATA; Go Gold! My gut tells me that the gold price has a good chance to go up by more than $25 in one day on Friday, February 1st, and again, another $25 in one day on Monday, February 4th, because a certain ad will come out in a Washington paper on Thursday, this week. Why do I make such a bold statement? Because it's not that bold when you know what GATA knows. "For the next few weeks or months, analysts will likely refer to the latest rise in the gold price, which started today, as the GATA RALLY." GATA has good information about gold, that, when shared, makes the gold price move up! Back in 2005, after GATA's Gold Rush 21 conference informed some 100 key people about gold, the gold price was at about $430/oz. and moved up more than $10/day for the next two days, and then launched a nearly parabolic rally that only stopped at $720/oz. in May, 2006.
National Bank Economist Gives 5 Reasons Why Gold Will Continue Its Tear When you hear calls for US$1,500 gold within 12 to 18 months, you assume they're coming from the usual gold bugs. They do that kind of thing all the time. But in this case, it's coming from a much more objective source: National Bank Financial.Chief economist Clement Gignac, who has been bearish on the U.S. economy for ages, lays out five reasons why gold is making a comeback as an investment haven and why it should reach his lofty US$1,500 an ounce target: financial instability; massive injections of liquidity and a return to negative interest rates; the declining value and roll of the U.S. dollar; swelling U.S. budget deficits and inflation expectations; and increased financial demand for gold as a distinct asset class.
These days, nothing surprises me Who is the world's largest miner of gold? The answer is enough to make old-timers do a double-take. The answer is China. Why is China so interested in mining gold? Why has China encouraged its citizens to buy gold? Why has China made it increasingly easy for its citizens to buy gold and gold futures? Why has China hinted that sometime in the future, China - not London and not the US futures market - could set the price for gold? My own thinking runs along the following lines. As the US dollar slowly loses its treasured reserve status, the Chinese renminbi becomes stronger.
GDP slows to 0.6% in fourth quarter The U.S. economy slowed sharply in the fourth quarter, growing at the weakest pace since the economy was pulling out of recession in 2002, the Commerce Department reported Wednesday. The 0.6% annualized growth rate in gross domestic product was lower than the 1.1% expected by economists surveyed by MarketWatch. The drag from inventories was larger than expected. The economy grew at a 4.9% pace in the third quarter. "The GDP hit stall speed," wrote Joseph Brusuelas, chief U.S. economist at IDEAglobal. Consumer spending and business investments slowed slightly in the fourth quarter, while investments in houses fell at the fastest rate in 26 years. A reduction in inventories was also a major drag on growth in the quarter, with exports growing at a slower pace as well.
Strong dollar policy is useful fairy tale for U.S. Once upon a time, America had a strong dollar policy. In his 1976 book, "The Uses of Enchantment," the psychologist Bruno Bettelheim argued that fairy tales, because their fantasy is rooted in real human emotions, offer children lessons with meaning and purpose. Bettelheim might well have been addressing currency markets when he wrote that adults who believed fairy tales are "only a bunch of lies had better not try telling them." In a similar way, Treasury Department officials aren't lying whenever they earnestly recite the familiar strong dollar message. While their words no longer give investors directional clues on trading levels, they continue to offer real assurance that the U. S. government stands behind the greenback.
UBS plunges into the red on $14bn sub-prime hit UBS, the Swiss investment bank, announced its largest quarterly loss of SwFr 12.5 billion (£5.7 billion) today after a multibillion-dollar write-off on US sub-prime mortgage assets, as America's Federal Bureau of Investigation (FBI) opened an investigation into 14 companies, including banks, in connection with the US home loans debacle. In a statement released this morning, UBS said that its fourth-quarter figures would include a $12 billion (£6 billion) write-off of US sub-prime debt and a further $2 billion writedown of its US residential mortgage assets. The writedowns were 40 per cent higher than the $10 billion figure the bank highlighted at its profit warning in December.
Brace Yourselves Make no mistake about it: the central economic problem facing the United States is out-of-control federal spending and the massive federal debt that continues to pile up. As welfare-state spending and warfare-state spending have continued to soar for the past seven years, U.S. officials have gone on a massive borrowing spree to finance their massive spending spree. Since 2000, the national debt has almost doubled – from $5.67 trillion to $9 trillion. It is out-of-control federal spending – and the massive borrowing that has accompanied it – that is at the core of the mortgage crisis. How could sucking all that money out of the capital markets to finance federal expenditures not have an effect on the availability of private capital in the home-loan market?
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