Gold Futures Rebound on Interest-Rate Outlook; Silver Advances Gold rebounded on speculation the Federal Reserve is unlikely to raise U.S. borrowing costs anytime soon, weakening the dollar and boosting the appeal of the metal as an alternative investment. Silver also gained. The dollar fell against the euro before the Fed's meeting on interest rates today and tomorrow. Gold reached a record $1,033.90 an ounce on March 17 after the Fed slashed rates over six months, sending the dollar to an all-time low against the euro. "There's some buying ahead of the Fed meeting,'' said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. "A lot of people don't think the Fed can raise rates in this environment. They're stuck between fighting inflation and the need to shore up the economy. The dollar is in a range, and that keeps gold trading in a range.''
A Plan to Grant the Fed Additional Powers Will Only Exacerbate Current U.S. Woes Throughout history, governments have always used crises to justify blatant power grabs. All too often, the "expanded government powers" that resulted from the moves remain in place - even after the crisis subsides. . . . . . .Since the Fed has demonstrated complete incompetence at setting interest rates, why not return that function to the market? Instead of allowing the Fed to inflict unbridled havoc on our economy, why not re-impose some discipline? Instead of looking for new ways to regulate Wall Street, why not find an old way to regulate the Fed? Actually there is a simple answer to all of these questions; it’s called the gold standard.
Bernanke Plays 'Dangerous Game' Balancing Rate Talk With Action Federal Reserve Chairman Ben S. Bernanke, by voicing concern about inflation and the slumping dollar, has fanned investor expectations for an interest-rate increase as soon as August. He may regret it. Raising rates may exacerbate the economic slowdown and roil banks whose losses sent their stocks down the most in a decade this month. Forgoing a rate boost next quarter risks damaging the Fed's credibility and deepening its divisions. Already this year, three officials have dissented on rate decisions.
Greenspan Says Market 'Crisis' May Extend Into 2009 Former Federal Reserve Chairman Alan Greenspan said financial market turmoil may continue into next year, though Fed efforts in March to revive credit have reduced the instability. "Things do at this particular stage look a little better. But I would caution that we have seen false starts before,'' Greenspan said via satellite today to a conference sponsored by 702 Talk Radio in Johannesburg. Still, "this crisis I fear is going to be with us for a Greenspan's successor, Chairman Ben S. Bernanke, today convenes a two-day meeting of the Federal Open Market Committee, which economists expect will leave the benchmark interest rate unchanged at 2 percent after seven cuts since September. Fed officials are trying to revive economic growth as inflationary pressure rises because of surging commodity prices.
Economy on brink of recession, Greenspan says Former Federal Reserve Chairman Alan Greenspan warned on Tuesday the U.S. economy was on the brink of a recession, with the chances of that happening at more than 50 percent. The U.S. economy has been hit by a credit crisis which began in the sub-prime mortgage market, prompting a series of interest rate cuts to help boost the economy. But price pressures are growing, making more rate cuts unlikely. A quick recovery was unlikely, he said via video link to a conference in Johannesburg. "A rebound at this stage is not something I think is in the immediate outlook," he said.
GMAC's $60 Billion Deal Loses Confidence as Mortgages Burn Cash The 300 bankers gathered at New York's Waldorf-Astoria Hotel last month faced a stark choice: Accept Sam Ramsey's plea to restructure $60 billion of GMAC LLC's debt or risk pushing the lending arm of General Motors Corp., the largest U.S. automaker, to the brink of insolvency.
Home prices extend record slide in April Home prices extended their record slide in April, with every top metropolitan area now posting annual losses and many showing double-digit declines, according to the Standard & Poor's/Case Shiller home price index report on Tuesday. However, the monthly pace of the decline showed some moderation. The S&P/Case Shiller composite index of 20 metro areas fell 1.4 percent in April from March and slumped by a record 15.3 percent over the year.
Consumer confidence tumbles to a 16-year low Consumer confidence fell in June to its lowest in 16 years as high inflation continued to sap confidence and pushed expectations for the future to a record low, the Conference Board said on Tuesday. The Conference Board, an industry group, said its inflation expectations gauge matched the record-high 7.7 percent it hit in May, which will keep Federal Reserve policy makers concerned over price growth as they meet to decide rates on Tuesday and Wednesday.
Paulson, Bernanke Face Cleveland's Golden Rebuke American leaders tell themselves that citizens aren't interested in the nuances of the dollar's value. The yuan exchange rate? That is something Treasury Secretary Henry Paulson deals with at summits like the one this week with Chinese Vice Premier Wang Qishan at Annapolis, Maryland. The inflation rate? Federal Reserve Chairman Ben Bernanke grapples with it. The rest just live with the results. The politicians deceive themselves. Each American brain is constantly updating and editing its own personal dollar index. Americans also try out their theories about their greenbacks in all fields, including mundane thickets of contract law cases.
A New Wave of Congressionally Mandated Energy Profits Is Just Around the Corner Congress is talking about going after oil speculators in an effort to lower prices by limiting the amount of money flowing into oil contracts. We realize that they’re upset, but they’re going about this the wrong way. What’s more, they’re demonstrating a near complete ignorance as to how financial markets actually work.
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