Gold futures edge up as dollar falls sharply Gold futures edged higher to trade near $964 an ounce Thursday, getting a boost from weakness in the U.S. dollar and surging crude-oil futures. Gold for April delivery gained $2.30 at $963.30 an ounce on the New York Mercantile Exchange. "The recent string of U.S. data has been appalling and this is putting significant pressure on the dollar and supporting gold," said Mark O'Byrne, executive director at Gold and Silver Investments Ltd., in a note. Weakness in the U.S. dollar boosted gold's investment appeal. Gold, like many commodities, is denominated in dollars, and a lower U.S. currency makes it more affordable in other currencies.
Silver Now Outperforming Gold As readers may know, silver has put in a sterling performance this week and has outperformed gold into the bargain. The prediction that silver will eventually outperform gold as the precious metal bull market reaches a new zenith point is being fulfilled before our very eyes. In my last article, I pointed out that the net short commercials may well begin to feel the heat and begin their third capitulation of this 5 year old silver bull market. Indeed, if they haven't began to cover at cents below $20 an ounce, the sense of urgency brought on by mounting financial losses must be as loud as a roaring silver bull bellowing right into their ear holes.
GDP's unrevised at 0.6% growth for fourth quarter The U.S. economy slowed sharply in the fourth quarter, growing at a 0.6% annual rate, unrevised from last month's estimate, the Commerce Department reported Thursday. For all of 2007, the economy grew at the weakest pace in five years, rising at an inflation-adjusted 2.2% after a 2.9% gain in 2006. Many -- but not all -- economists believe a recession has now begun, based on data showing declining employment, incomes and industrial production. For the current quarter, economists are predicting no growth. Gross domestic purchases -- the total value of goods and services bought by U.S. residents -- fell 0.3% in the fourth quarter, the first decline since the last recession quarter in 2001. The revision to fourth-quarter gross domestic product was a tick lower than the 0.7% growth expected by economists surveyed by MarketWatch.
Initial jobless claims rise 19,000 to 373,000 First-time claims for state unemployment benefits rose 19,000 last week, reaching the highest level since late January, the government reported Thursday. The number of initial claims in the week ended Feb. 23 gained 19,000 to 373,000, according to the Labor Department. The four-week average of initial claims fell 1,250 to 360,500. "The level of claims this week now matches the four-week average recorded at the end of February 2001, immediately before the recession began in March," wrote Ian Shepherdson, chief U.S. economist with High Frequency Economics. Recipients of state jobless benefits rose 21,000 to 2.81 million in the week ended Feb. 16, reaching the highest level since October 2005. The four-week moving average of continuing claims rose 24,250 to 2.78 million, also reaching the highest level since October 2005, when Hurricane Katrina flooded the jobless rolls.
Stop Fed Intervention Price controls are almost universally reviled by economists. The negative economic consequences of price floors or price ceilings are numerous and well-documented. Our current series of hearings have been called to discuss the most important, but least understood, price manipulation in the world today: the manipulation of the interest rate. By setting the federal funds rate, the rate at which banks in the Federal Reserve System loan funds to each other, the Federal Reserve inhibits the actions of market participants coming together to determine a market interest rate. The Federal Reserve and the federal government do not deign to interfere in setting the price of houses, the interest rate on mortgages, or the prices of wood and steel. The Fed’s actions in setting the federal funds rate however, because it reflects the price of money to a borrower and thus affects demand for money, affects prices throughout the economy in a manner less pervasive but just as damaging as direct price controls.
As economy struggles, ‘stagflation’ threat looms It's a toxic economic mix the nation hasn't seen in three decades: Prices are speeding upward at the fastest pace in a quarter century, even as the economy loses steam. Economists call the disease "stagflation," and they're worried it might be coming back. Already, paychecks aren't stretching as far, and jobs are harder to find, threatening to set off a vicious cycle that could make things even worse. The economy nearly stalled in the final three months of last year and probably is barely growing or even shrinking now. That's the "stagnation" part of the ailment. Typically, that slowdown should slow inflation as well — the second part of the diagnosis — but prices are still marching higher.
FDIC to Add Staff as Bank Failures Loom The Federal Deposit Insurance Corp. is taking steps to brace for an increase in failed financial institutions as the nation's housing and credit markets continue to worsen. The FDIC is looking to bring back 25 retirees from its division of resolutions and receiverships. Many of these agency veterans likely worked for the FDIC during the late 1980s and early 1990s, when more than 1,000 financial institutions failed amid the savings-and-loan crisis. FDIC spokesman Andrew Gray said the agency was looking to bulk up "for preparedness purposes." The division now has 223 employees, mostly based in Dallas. The agency, which insures accounts at more than 8,000 financial institutions, is also seeking to hire an outside firm that would help manage mortgages and other assets at insolvent banks, according to a newspaper advertisement.
- - - - - - - - - - - - - - - - Archived Page Link
- - - - - - - - - - - - - - - -
RSS
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/quotes_7a.gif)