Time to Buy Gold Last week I wrote an article titled: "The Fuse Has Been Lit!" Because of the article, I received a number of E-mails from nonbelievers. It’s amazing how many people out there still do not understand the basic bullish fundamentals of the gold market. Even a large number of analysts are providing their clients with erroneous advice, by telling them to ‘wait for a bottom.’ Many of these clients could well be facing the problem of looking back ruefully at the bottom, long after it is in place. In order for gold to drop, here are some of the things that need to happen:
Dollar Bind: Gulf Rethinks Currency Ties If there's one message the Bush administration has been trying to hammer home to Chinese leaders, it is this: A major country with a huge trade surplus and rising prices should let its currency strengthen with market forces.So why is the administration nearly silent about the fixed exchange rates of Saudi Arabia and other Persian Gulf oil fiefdoms? After all, like China, the big powers in the Gulf -- Saudi Arabia and the United Arab Emirates -- link their currencies to the U.S. dollar, export far more than they buy abroad, and now face inflation imported from overseas. "Given the huge current-account surpluses and reserve accumulation in the Gulf states, it's getting harder and harder for the U.S. Treasury to justify putting pressure on China
Gloom & Doom Economist: Credit Crunch Will Spread The credit crunch is far from over and is likely to hit sectors other than housing, Marc Faber, Editor and Publisher of "The Gloom, Boom & Doom Report", told "Squawk Box Europe."Consumers will cut spending because of the high oil and energy prices, and all that the recent rally in stocks has shown is that investors think shares offer a better cushion against inflation than bonds, Faber added. "I personally think we are just starting the credit crunch and it is going to be worse," he said. "I think the economy really stinks and the next sector to be hit, in America and elsewhere, is retail." The strength of oil and energy stocks has offset some of the current market weakness, and many people believe we are moving into an environment like the one in the 1970s, with high inflation, Faber added.
$4 a gallon not the end of rising gas prices Drivers will likely need to become comfortable with gas at $4 a gallon, as oil experts say an era of historic pain at the pump will endure well beyond the Memorial Day weekend, when prices traditionally peak. You might trade in that GMC Yukon for a Honda Civic, skip the highway for the bike lane and redefine that time-honored tradition of the road trip. Americans are already reordering their Memorial Day weekends, with AAA predicting a decrease in travel for the first time since 2002. But those changes might not be enough to immediately pull down a gasoline market that follows the whims of the world economy. Newfound wealth fills pockets of the globe once known for overwhelming poverty, and for the first time prices are responding to their thirst for fuel as much as demand in America.
Banks Keep $35 Billion Markdown Off Income Statements Banks and securities firms, reeling from record losses resulting from the collapse of the mortgage securities market, are failing to acknowledge in their income statements at least $35 billion of additional writedowns included in their balance sheets, regulatory filings show. Citigroup Inc. subtracted $2 billion from equity for the declining value of home-loan bonds in its quarterly report to the Securities and Exchange Commission on May 2 without mentioning the deduction in the earnings statement or conference call with investors that followed. ING Groep NV placed 3.6 billion euros ($5.6 billion) of negative valuations in its capital account, while disclosing only an 80 million-euro depletion to income. The balance-sheet adjustments are in addition to $344 billion of writedowns and credit losses already reported on the income statements of more than 100 banks.
Credit crunch fallout not over yet: Buffett The fallout from the global credit crisis is not over yet, U.S. investor Warren Buffett said on Monday. "I'll talk about the United States. I don't think the effects of the credit crunch are far from over at all," he told a news conference in response to a question. "I think there will be rippling secondary, tertiary effects...It is really more an effect of the residential real estate bubble which led to the credit crunch in some degree," he said.
Continued weakness in housing seen in data U.S. consumers won't really feel comfortable until home values stop falling. They could be in for a rough year because there's no sign that home-price declines are letting up. And with home prices falling, fewer buyers are willing to take the plunge. Fresh data on housing to be released in the coming week should show further declines in both sales and prices, economists said. None of the top-tier economic indicators are on the calendar, so investors will turn their attention away from the economy and back toward markets, especially commodities, currencies and interest rates. We'll also get a better idea of what the Federal Reserve's policy committee is thinking. On Wednesday, the Federal Open Market Committee will release the truncated minutes of its April 30 meeting.
- - - - - - - - - - - - - - - - Archived Page Link
- - - - - - - - - - - - - - - -
RSS![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/quotes_7a.gif)