Gold Hits Record on Oil Rally Gold surged to a record in aftermarket trading Wednesday after oil rallied above $100 a barrel and investors bet the Federal Reserve will again slash interest rates — boosting the metal's appeal as a hedge against inflation. Other precious metals traded mixed, with silver also touching a record-high and platinum retreating from historic levels. Gold has risen more than 12 percent this year, driven mainly by oil's ascent to $100 and steep declines in the U.S. dollar. Gold for April delivery jumped as high as $949.20 an ounce in electronic trading on the New York Mercantile Exchange — the highest ever and within striking distance of the psychologically important $1,000 barrier. Earlier Wednesday, gold settled $8 higher at $937.80. "I would point to oil as the primary driver. Oil and gold seem to be in lockstep right now," said Jon Nadler, senior analyst of Kitco Bullion Dealers Montreal.
Ron Paul Introduces ‘Tax-Free Gold Act of 2008′ While Congressman Ron Paul [R-TX] is running for President, he is also attempting to create new law. On February 13, 2008, Mr. Paul introduced a bill titled, the Tax-Free Gold Act of 2008. Should the bill become law, it would eliminate taxes and fees on certain coins and bullion. Although coin collectors and bullion investors would certainly relish the bill’s passage and subsequent signing into law, it would not be a good idea for anyone to hold their breadth on the matter. The odds of the bill moving forward would appear to be as likely as Mr. Paul’s current chances of becoming the Republican Presidential nominee.
World Poised to Hit Gold Panic Button Whenever bullion swoons $20 or more, as it did yesterday for the umpteenth time, we need to remind ourselves that it’s only a game, one who’s sole purpose is to keep gold bulls from making easy money on the most one-sided bet since Secratariat all but lapped the field in the ’73 Derby. Who on earth could possibly think gold is a sale here? (other than Kudlow, of course. Some may recall that, years ago, he went on record in the Wall Street Journal with an op-ed piece purporting to explain why $300 was the "correct" equilibrium price for bullion.) Anyone eager to unload gold at these levels -- or even more stupidly, to short it -- must necessarily believe that currencies are about to strengthen.
Bottomless Financial Pits With gold again having a try at $1000, speculators aside, one wonders how far that has to go? Well, for one thing, Central Banks have posted about only $2trillion worth of financial injections and bailouts since only August 07 to combat the credit collapse. In recent weeks, the German banking crisis had its latest manifestation. German banks are again in crisis mode, and needing more bailouts. When the credit crisis exploded last year, German bankers stated that it was the worst crisis since the 1930’s, when German banks collapsed headlong and caused a European banking crisis amidst the Great Depression. The German government has had to bail out state-owned banks with taxpayers' money after their managements recklessly gambled away billions on subprime investments. But if a state-owned bank were to go under, the consequences could be disastrous for the whole economy.
Credit crisis turmoil claims new victims Losses resulting from the credit market turmoil – until now largely limited to the world's biggest investment banks – are starting to be felt much more widely, by wealthy individuals, local government and even sports teams, presaging a new and potentially litigious phase in the crisis. Regulators in at least two US states are investigating whether there were any abuses in the auction-rate securities market, it emerged yesterday, while rumours of a wave of selling in complex credit derivatives sent the cost of protection against bond defaults soaring to a record level. The auction-rate securities market has been the latest domino to fall as fears have spread about the creditworthiness of all kinds of complicated fixed-income investments. Such securities are long-term debt whose interest rates are reset at a weekly or monthly auction, typically earning them a higher value and a lower interest rate.
U.S. Jan. leading economic indicators index falls 0.1% The index of leading U.S. economic indicators dropped by 0.1% in January, the Conference Board reported Thursday, as weaker stock prices and housing data drove the index's fourth consecutive decline. At the same time, the coincident economic indicator index rose 0.1% in January, the business research organization said. That index measures where the economy is now. The group's labor economist said the rise in the coincident index shows that the economy wasn't in recession in January but that weak growth can be expected in the future.
The coming student loan crunch If you're counting on borrowing money for college next semester, get your paperwork going now. Lenders are backing away fast. College students heading off to campus in the fall will face a radically different student loan situation than they did just a year ago.The credit crunch that rattled mortgage lenders has spread to the education lending market, with dramatic results. If the situation doesn't ease in coming months, student lending experts say, borrowers can expect: Higher loan costs. Fewer lenders, which could mean tens of thousands of college students scrambling at the last minute to find money. Tougher standards that could prevent some students from borrowing at all. "It's a very different situation from last year," when lenders were falling over each other to compete for students' business, said Kevin Walker
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