As the world's major central banks acted jointly to ease the storm hitting the global economy and banking sector, Europe's finance ministers also gathered in Brussels.
Wednesday, November 30, 2011
More rounds of ammunition were fired off in the global currency wars today, as six of the world's central banks including the Federal Reserve, Bank of England, and the European Central Bank coordinate to get cheap dollars to starving European banks. Meanwhile, across the pacific, China is cutting its reserve requirements by 50 basis points for the first time in nearly 3 years, a sign that the world's second largest economy and biggest exporter is now reversing its policy of trying to curb inflation and loan growth
Tuesday, November 29, 2011
China-based solar-panel manufacturers have held a press conference regarding the ongoing anti-dumping and anti-subsidy investigation launched by the United States. Leading Chinese solar panel makers held a joint press conference in Beijing Tuesday, together with China Chamber of Commerce for Import and Export of Machinery and Electronic Products, or CCCME.
In this episode of Capital Account, we speak with author and former Goldman Sachs managing director Nomi Prins about revelations from the bank of international settlements that notional OTC derivatives have now reached all-time highs of 708 trillion dollars. This is over 100 trillion dollars more than the notional amount 6 months ago.
In this video Chris Martenson, economic analyst at http://chrismartenson.com and author of 'The Crash Course', explains why he thinks that the coming 20 years are going to look completely unlike the last 20 years. In his presentation he focuses on the so-called three "Es": Economy, Energy and Environment. He argues that at this point in time it is no longer possible to view either one of those topics separately from one another.
This week Max Keiser and co-host, Stacy Herbert, discuss lunatics for Italian gold and another failed debt auction in Germany. In the second half of the show, Max talks to Mark O'Byrne of Goldcore.com about the European debt crisis and Ireland's gold.
The Eurozone crisis seems to be spiraling out of control. In an attempt to try to control the downward spiral in the Eurozone, President Obama met with the members of the EU to try to come up with a solution to the failing Euro. Three counties have already been bailed out and now Italy and Spain may be next in line. Will the Eurozone's collapse affect the global economy? Lauren Lyster, host of Capital Account, joins us to analayze the situation.
Monday, November 28, 2011
Many investment professionals, including the legendary investors Jim Rogers and George Soros, believe agriculture commodities are only in the early-to-middle innings of a major "super cycle" of increasing prices.
Both Rogers and Soros are billionaire investors who have had tremendous success over the years in up-markets as well as down markets, so when they speak it is well worth listening to both of them.
Currently, both Soros and Rogers are extremely bullish on farmland investments. In our view, the arguments for farmland investment as an asset class is extremely compelling. First, he number of people in the world just passed seven billion, and the United Nations projects that the population will reach nine billion by 2050.
Meanwhile, emerging markets nations such as China and India are becoming richer, and their citizens are increasingly demanding a more varied diet. Meanwhile, the amount of arable farmland globally has been decreasing due to development as farmland is wiped out by new property and industrial developments. Global warming is expected to hasten this trend over the following decades.
The second reason why farmland is a compelling investment is that as a “hard asset” it offers an excellent hedge against inflation. Poor economic conditions in western countries continue to drag-on, whilst the ongoing crisis in the Eurozone greatly increases the risk of a Lehman-style meltdown.
Central banks in the West – particularly in the UK and the US – have already printed huge amounts of money in a process called “Quantitative Easing” (or QE as it is commonly referred to) attempts to inject money into flailing economies, and it is highly likely that more easing by central banks could be on the way. This process of QE greatly raises the risk of inflation down the road, and farmland investments can offer a strong hedge against this possibility.
Finally, farmland investments are uncorrelated to either global stock markets or bond markets. The returns from farmland investments are affected by completely different factors than those that influence the performance of stocks and bonds.
The lack of young people often leaves a vacuum in the labour force, which makes it even harder for remote regions to prosper. Local opera to perk up the workers - They share the same reason for staying in the village.
Sunday, November 27, 2011
Sarah Montague talks to Steve Keen, one of the few economists to have predicted the global financial crisis, about the possibility of another Great Depression, and how to avoid it. 'Another Great Depression is all but inevitable' - that's the view of Steve Keen. He's been called the 'Merchant of Gloom', but he's one of the few economists to have predicted the global financial crisis.
While he used to be a lone voice in challenging the economic consensus, more and more people are now listening to him. His way of avoiding depression? Write off the debt, bankrupt the banks, nationalise the financial system, and start all over again. He talks to Sarah Montague.
Saturday, November 26, 2011
It has been a year since Ireland called for international support to bail out its banks. Since then, statistics appear to show the economy has stabilised, but the economic situation for people on the ground is very different.
This week Max Keiser and co-host, Stacy Herbert, discuss unemployed Wall Streeters looking for financial firms that practice 'integrity and honesty' and hedge fund managers crying 'boohoo' that JP Morgan has seized their MF Global funds. In the second half of the show, Max talks to Danny Schechter about plunder, the crime of our time, inspiring an economic justice movement.
Friday, November 25, 2011
China will launch the trading of the Australian dollar and the Canadian dollar against the yuan on the interbank foreign exchange market from next Monday. Analysts say the move is part of the government's efforts to transform the yuan into an international currency.
What's the biggest impediment to Western economies, is it debt? Growth? Political leadership? We see the leaders of Germany, France and Italy pushing for a fiscal crackdown to solve the Eurozone crisis.
As they push for fiscal union, is more Europe the problem or the solution? And in the US we see GOP hopefuls taking the stage in debate after debate to vie for the top spot in this country against current President Barack Obama. Could any of them steer the US economy in right the direction? Former Reagan assistant secretary of the Treasury, Paul Craig Roberts, says not a chance.
The Dow and S&P log their worst Thanksgiving week since 1932. Historically stocks have done well this time of year. Is the US stock market a turkey? For shoppers it's Black Friday. For those boycotting and protesting it, it's Occupy Black Friday. From pepper spray to staying in tents, the two movements have brought about some strikingly similar images.
As for Black Friday, does it fuel corporate power and exploitation or fuel a sputtering economy driven by consumer spending? And looking beyond Black Friday, big picture can anything save US and Western economies from leadership failures? As European leaders race to save the eurozone and US presidential candidates campaign for a chance to steer the economy, is everyone headed in the wrong direction?
The Occupy Wall Street movement continues, and it's no secret they are protesting the widening of the income gap and the middle class disappearing. One restaurant in Washington DC jokes about the 99 percent of Americans by making a $9.99 burger on wonder bread and American cheese, while on the other hand the one percent option is a $58 Kobe burger.
Thursday, November 24, 2011
The debt crisis that is sapping confidence and growth all over the eurozone is also squeezing the exports that make up a quarter of China's output, threatening to undercut the global economy's strongest engine at a crucial time. Overseas sales by Chinese exporters grew at the slowest rate in almost two years last month, as shipments to Europe slowed. Exports to Italy plunged 18 percent from a year earlier.
Portugal has been hit by its first general strike in twelve months. Many Portuguese workers oppose austerity measures imposed by the country's new centre-right government under the terms of an international bailout.
European Commission president Jose Manuel Barroso and German Chancellor Angela Merkel look set for a bust up. The unelected Brussels bureaucrat wants to issue bonds to pull his single currency project out of the debt hole it's in.
Barroso has also warned the euro could collapse unless governments are more economically integrated. But Merkel absolutely opposes the proposal of collective borrowing - saying Eurobonds are the last thing anyone needs right now. Patrick Young, Executive Director of the investment advisory firm DV Advisors says that Germany is just fed up of paying for other countries mistakes.
Wednesday, November 23, 2011
Oil, Cheap Oil has defined us, our economy, our nations, and our way of life. Everything centers around Oil! Oil is even required to manufacture and install alternative energy. The U.S. alone has a fleet of about 210 million automobiles and light trucks. Because of cheap oil, more than half of the American population lives in the suburbs.
The sick man of Europe: yesterday Greece, today Italy, tomorrow any number of possibilities. Meanwhile, we see more comparisons of the US economy to Japan's Lost Decade. We speak to Steve Keen, economics professor and author of Debunking Economics, who saw these events all coming years in advance.
Why did so many other economists miss them and why might their training mean they'll continue to? And as we see Occupy Wall Street protests continue, should people be occupying economics departments at universities, too?
Alarms over the Euro's future are sounding in the heart of Europe. European Commission President Jose Manuel Barroso warned the single currency could collapse unless governments are more economically integrated. Eurocrats are currently pitted against Germany, as Chancellor Angela Merkel has once again rejected the idea of collective borrowing for the region.
Tuesday, November 22, 2011
"I'll say this plainly, I've said it before - Taxation is theft. It presumes the government has a higher claim on our property than we do," says Judge Andrew Napolitano, the host of Fox Business' Freedom Watch and the author of the new book, It Is Dangerous to Be Right When the Government Is Wrong: The Case for Personal Freedom.
Monday, November 21, 2011
In the first part of our interview with John Perkins on Capital Account, Lauren Lyster speaks with the former Economic Hitman about what he calls is a "mutant form" of capitalism or corporatism that encourages corporations to scour the globe in search of resources and cheap labor irrespective of the ill effects that their actions cause. John Perkins argues that this is a failed system, and that our economy has been stolen from us by modern day Robber Barons.
Moody's has put France in the economic firing line. The credit rating agency has warned a rise on government debt and weaker growth prospects could be negative for the outlook on the country's credit rating.
Saturday, November 19, 2011
In this edition of the show Max interviews Dan Collins from thechinamoneyreport.com. He talks about the big news coming from China in the past few weeks, which is that the investment demand for gold and silver is going up.
Every week Max Keiser looks at all the scandal behind the financial news headlines. This week Max Keiser and co-host Stacy Herbert discuss the tiny rule changes and the Zombies behind the collapse of MF Global. Meanwhile, in Pennsylvania, a Keiser-Celente 2012 bumper sticker spotted! In the second half of the show, Max Keiser interviews Barry Ritholtz about the big lie that bankers did not cause the crisis and what MF Global means to the markets.
Friday, November 18, 2011
Cocaine farmers in Colombia are leaving the drug business and moving into illegal gold-mining. Authorities have shut down scores of mines in the northwestern province of Cordoba in a crackdown on illegal mining that started in September. About 400 police took part in the sweep.
The technocratic government of Italian Prime Minister Mario Monti has won a vote of confidence in parliament. Meanwhile, on the streets of Rome and Athens, people have protested their new technocratic leaders, opposing what they call banker governments. And in the United States Occupy Wall Street saw a day of action with protests across the country in New York, LA, and Washington DC. Is this about more than protests on the streets?
This podcast was presented on November 18, 2011
The global dominant narrative about China is wrong, claims Gordon Chang. Don't expect it to be the 'pocketbook of last resort' that will rescue world markets from their current malaise. And don't expect its remarkable economic growth to continue.
In fact, expect a "hard landing" for China - and soon. Forbes.com columnist and international lawyer Gordon Chang has spent much of his time since the early 1980s working and living in China. His primary knowledge of the country and his relationships there give him a superior understanding to how its economy is actually faring. And what he sees today doesn't inspire confidence.
Thursday, November 17, 2011
This week Max Keiser and co-host, Stacy Herbert, discuss simple thieves and honest graft. In the second half of the show, Max Keiser interviews Mike 'Mish' Shedlock about the European debt crisis and the MF Global missing funds crisis.
United States President Barack Obama is in the middle of nine-day trip in the Asia-Pacific. According to reports, really this is all about China, with the Administration focused on the Asian country's expanding influence. High on the list is reportedly getting commitments from China to enact a more flexible currency rate. We've seen this song and dance before.
Meanwhile, US Congress has issued a report saying the Chinese currency, the yuan, could threaten the dominance of the US dollar within a decade. But are we already in the midst of a currency war?
Wednesday, November 16, 2011
Every week Max Keiser looks at all the scandal behind the financial news headlines. This week, Max Keiser and co-host, Stacy Herbert, discuss the Good, The Bad and the Schwing Schwing of making companies scared by putting risk back onto their balance sheet. They also discuss clients getting smoked through massive ploys in the commodity markets.
In the second half of the show, Max Keiser interviews Mike Maloney of GoldSilver.com about the latest in the precious metals market and about a $15 trillion Dow.
Tuesday, November 15, 2011
The eurozone is still a danger zone. Italian bond yields reach seven percent. Remember that's the threshold that broke the bank for Greece and Ireland last year. Italy's largest bank by assets and one of the more weakly capitalized in Europe, Unicredit, announced it's going to try to raise $10 billion in capital and cut thousands of jobs. The European Union is going after credit ratings agencies to allow investors to sue them and to warn bond issuers of a change in rating ahead of publishing it
Monday, November 14, 2011
US President Barack Obama is pushing a trade agreement with nine other Asia Pacific countries. He wants to sign it by the end of next year. This came out of the Asia Pacific Economic Cooperation forum in Hawaii. At the same time, he took public jabs at China seemingly over its currency, swiping at china as "gaming the system." This reminds us...just last month the US senate was voting to open a debate on a bill aimed on imposing tariffs on countries with undervalued currencies
Italy's new prime minister, Mario Monti, has began work on forming a new 'technocrat' government to tackle the country's towering debt. An economist and former EU-commissioner, he now has to implement structural economic reforms to pull Italy out of its financial chaos. For more on this, RT talks to Max Keiser, financial analyst and host of the Keiser Report.
Sunday, November 13, 2011
COMMODITIES trader Jim Rogers is forecasting the beginning of a soft commodities and rural land boom and says it will start in Australia.
Mr Rogers, known for his investment prowess alongside George Soros, is in Australia to launch a new rural land fund which is seeking to raise up to $350 million to buy farms in northern NSW, according to The Australian Financial Review.
Mr Rogers said the growing risk of inflation as well as growing demand for soft commodities from Asia would fuel the demand for agricultural land.
"It's the farmers, the producers who are going to be in the captain's seat when the prices go through the roof," Mr Rogers said.
Well-known for predicting the start of the commodities rally in 1999, Mr Rogers said soft commodities were about to rise.
"The shortages are going to get worse and the prices for land will go higher."
The new unlisted closed end fund Mr Rogers is advising, called the Laguna Bay Pastoral Company, is testing the domestic investor market first before opening the opportunity to offshore groups.
It will partner with farmers who have been earning yields that the top 10 per cent of Australia's farmers are now earning.
The farmers will manage the properties and suggest what surrounding properties would be wise for the fund to purchase. So far there are 16 properties identified for acquisition covering 80,000 hectares.
"We have shortages of everything from oil to food and on top of that we have governments printing more money. Put the two together and you have some serious inflation coming down the road," he said.
"Governments will eventually put in place price controls but if you tell someone they can only make so much money he is going to stop producing. The Chinese are seeing this and that's why they are out looking to buy assets. They are down here [in Australia] trying to buy up more.
"I applaud them," Mr Rogers said of the sovereign wealth funds that have been buying farms. "We don't have enough farmers or enough capital so if somebody doesn't buy those farms then we are not going to have any food.
His comments come as Australia, New Zealand and Brazil review their foreign investment rules in relation to agriculture.
Australia holds its first senate hearing into foreign investment rules into farms on Tuesday week.Source
Saturday, November 12, 2011
November 12, 2011 -- In this week's Currency Countdown Report, Tracy Weslosky CEO of Pro-edge interviews David Morgan from Silver-Investor.com on the inevitable collapse of the Euro.
David starts with: "It's a systemic risk... everything affects everything else...it's a game of dominos where they're all lined up and which one goes first, we don't know...is it going to be Greece, is it going to be Italy, will it be something else?
President Hu Jintao has met with US business leaders from a broad section of industries. The main theme of Thursday's meeting was expanding China-US trade ties. Topics included intellectual property protection and high-tech export restrictions to China.
This week Max Keiser and co-host, Stacy Herbert, discuss George Osborne's admission that he has no power over bankers and that the population will always have to pay for their crimes. Max and Stacy also discuss the 'slow motion train robbery' of low interest rates and the use of trending topics on Twitter as price propaganda.
In the second half of the show, Max Keiser interviews Senator Mike Gravel and his direct democracy initiative and how it could empower the Occupy Wall Street movement.
Friday, November 11, 2011
Thursday, November 10, 2011
In 1965, French President DeGaulle called for a return to the Gold Standard-- in his speech, he announced that the US plan enabled them to have enormous debts, and would lead to a collapse of the worldwide currency and a second Great Depression.
Many modern economists missed the financial crisis and the economic problems we've seen since then, such as the eurozone debt crisis. Why? Well according to economics professor and author of Debunking Economics Steve Keen, they're not really experts on the economy but experts on a model of the economy.
The great tragedy according to Keen is that the model is almost completely irrelevant to the system we actually live in. And despite the learnings of the financial crisis, not much has changed. Keen says the problem is Neoclassical economics, which economists are traditionally trained in. As for the solution? Well we may just have to wait for the economists in charge to die off.
In the meantime, should people be occupying the economics departments of universities along with Wall Street? Keen says absolutely.
November 4, 2011
Back in 2006, specifically in November of 2006, I wrote an article that was published by Kitco entitled "Gold is in the Perfect Storm." I have to tell you, if gold was in the perfect storm in November of 2006 when it was trading for $600 an ounce, today, in November of 2011, gold is in even a stronger perfect storm.
Why do I say that? People use two different types of reasoning for purchasing gold. One of them is technical analysis. The second one is fundamental analysis. I know a fair amount about fundamental analysis, and I believe that the fundamental reasons that existed in November of 2006 for purchasing gold are even stronger today.
Why do I say that? First of all, we have an economic situation in the world that is unparalleled. I have never seen an economic environment such as the one we are in today. The situation in Europe is abysmal. No one knows whether or not Greece will ever become solvent again. And that's weighing down heavily on the markets. Secondly, no one knows what the future of Italy, Spain and Portugal are. That's next to weigh down the markets.
Let's switch over to the United States. The situation here is equally abysmal. Just announced by the US Agriculture Department, the number of food stamp recipients went up in the United States during the month of August by 8 1/2 % as compared to last year. Very, very big number.
Let's look at the US budget deficit. Unparalleled in size. Who can disagree with that? Let's look at the Middle East. As of today, Nov. 2, Israel is threatening to attack Iran. Iran is retaliating by saying that, if Israel dares to attack them, the consequences for both Israel and the United States will be devastating.
Let's look at the initial reaction of our administration in the United States. Quote from the Associated Press: "The Obama Administration on Wednesday sharply criticized Israel's decision to accelerate settlement construction in East Jerusalem and the West Bank in retaliation for the Palestinians winning membership from the United Nations cultural organization."
What do we have here? We have situations globally that are absolutely terrifying because we're in uncharted waters. No one is sure what to do.
Based on my fundamental analysis, I would have to say that Big Al is definitely going to be purchasing more precious metals because I don't know where else to put my capital in this time, which I, again, call a perfect storm for gold. And today I would have to add also for silver.
Tuesday, November 8, 2011
Silvio Berlusconi, the Italian prime minister, has told the country's president that he will resign after the new budget law currently making its way through parliament is approved.
Though Berlusconi's controversial political career was fraught with allegations of fraud and accusations he paid for sex with an underage teenager, it was his handling of the economy that has ended his 17-year political career.
Monday, November 7, 2011
Gold climbed more than 1% on Monday in Europe as investors piled into the traditional safe haven asset as Europe's debt crisis intensified on worries about political instability in Italy and Greece.
November 7, 2011
Gold rose more than 1 percent on Monday as investors piled into the traditional safe haven asset as Europe's debt crisis intensified on concerns about political instability in Italy and Greece.
Worries about Italy, where Prime Minister Silvio Berlusconi is battling party rebels threatening to bring down his government, have overshadowed a coalition deal in Greece to help secure its latest bailout package.
With Italy's debt levels at 120 percent of GDP, the debt problems of the euro zone's third-largest economy would pose a much bigger risk to the financial markets than Greece.
Spot gold touched an intraday high of $1,775.04, its highest since Sept. 22, before easing to $1,772.29 by 1207 GMT, according to Thomson Reuters data.
U.S. gold GCcv1 rose to $1,777.20, also its highest in six and a half weeks, before giving up some gains to trade at $1,775.60.
"The European issue is still very prominently there. So as long as that remains the case gold is going to remain firm," said Ross Norman of Sharps Pixley.
"But even aside from that, there is a general fear factor at the moment. Clearly there is a lot of fear in the system and gold is doing what it should do."
The CBOE Volatility Index, sometimes known as the fear index, fell 1.1 percent to close at 30.16 on Friday, although it is still up from near 20 in early August.
Investors fear that a disorderly default of an EU sovereign would trigger losses in creditor banks that could ricochet around the global financial system much in the same way the bankruptcy of Lehman brothers hit markets in 2008.
Italy's borrowing costs have been rising sharply over the past several weeks.
Italian 10-year government bond yields hit 14-year highs of around 6.59 percent on Monday, lifting their yield premium over benchmark German Bunds to their highest since 1995.
"The issue, which people are very focused on at the moment are the Italian senior bond rates," said Norman. "When the Greeks got to 7 percent they ran up the (white) flag. With Italy at 6.6, we're getting very close to the line."
The MF Global bankruptcy and its aftermath also depressed activity in markets, traders said.
Money managers, including hedge funds and other large speculators, raised their bullish bets in gold futures and options in the week to Nov. 1 as the price of bullion surged to its highest in five weeks, above $1,750 an ounce, data on Friday showed.
A surprise interest rate cut by the European Central Bank last Thursday also helped gold to post its second consecutive weekly gain last week.
"We still believe that precious metals are currently the commodity sector with the best prospects," Credit Suisse said in a note. "Precious metals tend to perform best when interest rates are low and falling. As a result, the ECB rate cut should help the sector."
Investors will watch this week for China's inflation numbers, due on Wednesday. Annual inflation is expected to ease to 5.5 percent in October.
"Somewhat counter-intuitively we think that lower inflation numbers would be supportive for gold, as lower inflation would give the Chinese central bank more room to maneuver and fine tune monetary policy as announced previously," Credit Suisse said.
Holdings of the SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, gained 1.513 tonnes on the day to 1,245.064 tonnes by Nov. 4, the highest in more than a month.
Gold prices have found good support on the downside from physical demand with interest emerging from the festival season in India as well as China, though volumes have slowed, Barclays Capital said in a research note.
Silver was up 1.1 percent at $34.48 from $34.10, platinum was $1,634.74 from $1,630.16, and palladium was $655.47 from $651.28.
Occupy Wall Street fights back against Fox News' hippy-stereotypes with commercials. As Americans fight back against the banks with Bank Transfer Day, we look at the most bizarre tactics banks and people have used to wage war, including urinating in ATM tubes! And future British MP (possibly!) Max Keiser appears in UK Parliament, telling Prime Minister David Cameron to STFU!!!
As more and more countries are turning to the International Monetary Fund for help, it in turn is reaching out for support from some of the world's emerging financial power players.
IMF chief Christine Lagarde's preparing to head off to China on Tuesday, and is currently in Moscow for talks with the Kremlin. 'Asia Times' correspondent Pepe Escobar thinks it's a sign of the IMF's growing desperation that its head is asking emerging economic powers for help, but he says the countries will want something in return for their cash.
Sunday, November 6, 2011
Iceland was one of the hardest hit nations in the immediate aftermath of the September 2008 economic meltdown. Asked by their own government to pay Britain and Holland for bailing out their Icesave-exposed banks, the people overwhelmingly said "no."
Do the actions of the Icelandic people present an example for the rest of the world as we see the global economy teetering on the edge of collapse? Find out on this week's GRTV Feature Interview with Michael Hudson.
Saturday, November 5, 2011
Every week Max Keiser looks at all the scandal behind the financial news headlines. This week Max Keiser and co-host, Stacy Herbert, discuss error accounts and accounting 'errors,' like misplacing $700 million or finding $78 billion. Only GIABOzilla can save the day!
In the second half of the show, Max Keiser interviews James Howard Kunstler about political awakening that an absence of justice could turn into a new Jacobin style uprising.
Friday, November 4, 2011
In a single gold mine in South Africa, an expected $2.2 billion worth of gold can still be extracted from just one dump site's waste material. Using water cannons and chemical treatements, a single mine can hope to extract about 3 grams in every tonne.
It may not sound like much but if there is 140 million tonnes of waste lying around - the numbers start adding up. High prices means all the effort that goes into sourcing the precious metal may well be worth it.
It may not sound like much but if there is 140 million tonnes of waste lying around - the numbers start adding up. High prices means all the effort that goes into sourcing the precious metal may well be worth it.
George Papandreou, Greece's prime minister, has survived a confidence vote, calming a revolt in his ruling Socialist party with an emotional pledge to step aside if need be and seek a cross-party government lasting four months to safeguard Europe's new debt agreement.
In Greece, there is still deep uncertainty about the shape of the government as the government prepares for a late night vote of confidence.
Joblessness is growing, and many Greeks say that they simply can't afford life as they are used to living it.
The political and financial turbulence in Greece has shaped discussion at the G20 summit, which has just wrapped up in Cannes. EU leaders voiced strong determination to defend the euro and agreed on bolstering the International Monetary Fund's resources. RT's Anissa Naouai reports
Thursday, November 3, 2011
Steve Stroth and Daniel Enoch
November 2, 2011
Nov. 2 (Bloomberg) -- The most accurate forecasters say gold will rebound from its biggest monthly plunge since 2008 and reach a record by March because economic growth is stagnating and Europe's debt crisis is unresolved.
Futures traded in New York may rise 13 percent to $1,950 an ounce by the end of the first quarter, according to the median of estimates compiled by Bloomberg. The predictions are from eight of the top 10 analysts tracked by Bloomberg over the past eight quarters. Two declined to give forecasts.
Holdings in exchange-traded products backed by bullion rose the most in three months in October, and the most-widely held option gives owners the right to buy gold at $2,000 by Nov. 22. Demand for the metal accelerated since May as slowing growth and mounting concern that European leaders will fail to contain the region's debt crisis caused $7.5 trillion to be erased from the value of global equities.
"There is a loss of trust in the entire financial system and urgent need for safe-haven investment," said Ronald Steele at Erste Group Bank AG in Vienna, the second most- accurate forecaster in the past three months. "The environment for gold is just perfect."
ETP holdings expanded 1 percent to 2,271.2 metric tons last month, a pile valued at $124.1 billion and greater than the reserves of all but four central banks, data compiled by Bloomberg show. Bullion bought for investment accounted for 38 percent of total demand in 2010, compared with about 4 percent a decade earlier, the London-based World Gold Council estimates.
Paulson Buys Gold
Paulson & Co., founded by John Paulson, remains the largest shareholder in the SPDR Gold Trust, the biggest ETP backed by gold, according to an Aug. 15 filing with the U.S. Securities and Exchange Commission. Paulson, who made $15 billion betting against subprime mortgages, bought the 31.5 million shares in the first three months of 2009. Their value increased to $5.3 billion from $2.84 billion since then.
Gold has risen 21 percent this year, beating the 1.5 percent advance in the Standard & Poor's GSCI gauge of 24 commodities, the 9.4 percent decline in the MSCI All-Country World Index of equities and the 8.8 percent return on Treasuries calculated by Bank of America Corp. indexes. The metal has appreciated more than sixfold in its 11-year run of annual gains.
Prices climbed 6.3 percent in October, rebounding from the bear market in September after dropping more than 20 percent from the record $1,923.70 reached Sept. 6. Bullion for December delivery traded at $1,724 today.
Hedge funds and other speculators increased their bets on higher prices by 8.7 percent to 138,846 futures and options in the week ended Oct. 25, Commodity Futures Trading Commission data show. It was the biggest gain in almost three months.
The rally may fade because the swings in prices undermined the perception of gold as a haven, said Dean Junkans, an analyst at Wells Fargo & Co. in Minneapolis. In an Aug. 16 report, three weeks before the plunge began, he characterized the market as a "bubble that is poised to burst."
"It's not risk free and is not a currency, even though too many people think of it that way," Junkans said in an interview. "It can go down to $1,300, and could also rise to $2,000, but there is definitely a downside potential."
Gold also retreated in September as the Dollar Index, a measure against the currencies of six trading partners, jumped 6 percent, the most in almost three years. The 30-day correlation coefficient between gold and the index is now at -0.45, compared with 0.23 in March, data compiled by Bloomberg show. A figure of -1 means the two move in opposite directions, and 1 means they move in lockstep.
The Dollar Index rose 3.3 percent in the past three sessions on mounting concern that European leaders will fail to contain the debt crisis, spurring demand for what are perceived to be the safest assets, including the dollar and Treasuries.
Some forecasters expect the dollar's rally to fade because of concern that a slowing global economy may force the Federal Reserve to pump more money into the financial system. The U.S. currency will end next year at $1.40 a euro, compared with $1.3703 now, according to the median of 30 economists surveyed by Bloomberg.
Fed Vice Chairman Janet Yellen said on Oct. 21 that a third round of large-scale securities purchases may become warranted to boost the economy. The central bank bought $2.3 trillion of housing and government debt during two rounds of so-called quantitative easing from December 2008 to June 2011, spurring a 70 percent jump in the price of gold.
The metal's plunge in September may signal it is poised to keep rising. The last time bullion had a bigger drop was in October 2008, when prices tumbled 18 percent as the worst global recession since World War II drove equities and commodities into bear markets. The metal rose 23 percent in the next two months.
Investors aren't the only ones buying bullion. Thailand, Bolivia, Kazakhstan and Tajikistan were among nations adding gold to their reserves in September, International Monetary Fund data show. Central banks are expanding reserves for the first time in a generation. Switzerland's central bank said Oct. 31 it returned to a profit in the first nine months as gold holdings helped counter losses on currency reserves.
"There's huge potential for gold in the coming years," said Jochen Hitzfeld, the analyst at UniCredit SpA in Munich who was the most accurate tracked by Bloomberg in the past two years. "Investors are buying gold. That's reinforced by buying from central banks. Prices did run up a little bit too fast, but the drop was just a breather."
Hitzfeld forecast on Oct. 12 that gold would average a record $1,900 in the fourth quarter of next year.
A measure of the combined earnings of the 16-member Philadelphia Stock Exchange Gold and Silver Index will rise 8.3 percent this year and almost 27 percent in 2012, according to analyst estimates compiled by Bloomberg.
Barrick Gold Corp., the world's biggest producer and the largest member of the index, will report net income of almost $4.8 billion this year, compared with $3.27 billion in 2010, the mean of 12 estimates shows. Shares of the Toronto-based company declined 5.3 percent this year.
"When we look at gold five years from now, we will say gold was wildly cheap," said Jason Schenker, the president of Prestige Economics LLC in Austin, Texas, and the fifth-best forecaster tracked by Bloomberg. "What happens to gold is going to hinge on what happens to the dollar, and that is going to be influenced by what happens in Europe and monetary policy."
They talk about the role of fiat money in creating our economic problems. Gerald Celente explains that he has been looking at gold since the beginning of the bull market, he missed the low of 250$ per ounce by only 25$. They talk about 1987, the bubble of the 1990s and the money printing that caused it. They talk about the lowering of interest rates after 2001.
This interview was recorded on October 20th 2011 in New York.
Gerald calls it cheap money: 'the more you print the cheaper it gets'. He says that digital dollars are not worth the paper that they are not printed on. They talk about the panic of 2008 and how every central bank started printing massively to "keep the Ponzi scheme going".
This interview was recorded on October 20th 2011 in New York.
This week Max Keiser and co-host, Stacy Herbert, discuss the new world order in which we're all Greeks because we didn't see the signs in 1969 - "Make Love, Not Debt." In the second half of the show, Max Keiser interviews Birgitta Jonsdottir, about the true state of transparency, banking and economy in the latest IMF poster child, Iceland.
The Greece drama continues. The Greek bailout proposed by the Eurozone has the possibility to bring the world economy to its knees. It has been proposed by to have Greece removed from the Eurozone. This many say is a frantic attempt to help save the drowning currency.
Many believe Greece is the scapegoat for a much larger problem. Gerald Celente, publisher at The Trends Journal, gives us his take on the messy situation.
Americans who are fed up over economic conditions continue to protest. Last night Occupy Oakland saw thousands of demonstrators protest and shut down the sea port, showing the continuing Occupy Wall Street movement.
They are the so-called "99 percent." We talk to a member of the one percent who thinks he has some solutions and caused quite a stir at Occupy Wall Street when he went out with a camera to debate them with protesters: Peter Schiff, CEO of Euro Pacific Capital. He believes ending the Federal Reserve, and more capitalism not less is the solution.
Tuesday, November 1, 2011
Greece's cabinet has decided to back Prime Minister George Papandreou's proposal for a referendum on a European Union aid deal, a government spokesman said. "The cabinet expressed its support," said government spokesman Elias Mossialos early on Wednesday.
"The referendum will take place as soon as possible, right after the basics of the bailout deal are formulated."
This week Max Keiser and co-host, Stacy Herbert, look at bank stocks ablaze and a Grecian vortex. They also discuss speculators responding to falling prices by smashing showrooms in Shanghai and holding Congress hostage in America.
In the second half of the show, Max Keiser interviews Leah McGrath Goodman about Occupy Wall Street, the Koch Brothers and oil derivatives and the new market in water derivatives.
Thousands of anti-capitalists are marching in the French Riviera ahead of the G-20 summit in Cannes. Groups of international activists are urging the leaders of the world's top economies to focus on people, not finance. James Meadway from the New Economics Foundation shares his view on the crisis that's strengthening its grip on Europe.
As US alternative energy firms go belly up and a $10 billion dollar oil refinery deal goes to China after a US company pulls out, whose faring better in the global commodities grab? As the US fights physical wars Dr. Stephen Leeb, investment advisor and author of The Oil Factor and Red Alert, says a resource war is going on and the US is losing out to China.
He predicts Saudi Arabia could price oil in the Chinese yuan and gold as the US loses out on key commodities it needs to sustain the American way of life.
On Fox Business Network's After the Bell, Peter Schiff challenges recent economic growth saying it's based on how "spending money we don't have" instead on actual savings and investment. Schiff also discusses his time talking with the Occupiers on Wall Street. Air Date: October 28, 2011.