Monday, September 23, 2013

Billionaire Predicts End of US Dollar as World's Reserve Currency


Canadian billionaire businessman Ned Goodman predicts the end of the U.S. Dollar as the world's reserve currency. He says the transition out of the U.S. Dollar will become, "...quite ugly."

- Source, Cambridge House:

Thursday, September 19, 2013

A Taper in a Teapot


This week’s meeting of the Federal Open Market Committee (FOMC) had traders, market commentators and investors almost in a frenzy as they tried to predict the outcome. This was the meeting where economists expected the Fed to announce the ‘tapering’ of its monthly purchases of $85 billion of Treasury securities and mortgage-backed bonds. According to a Bloomberg News survey of 34 economists last week, they expected the Federal Reserve to taper its monthly bond buying by $10 billion, to $75 billion.1 But they were wrong.

Market reaction was harsh when Mr. Bernanke suggested in June that it would be “appropriate to moderate the monthly pace of purchases later this year [and] continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year”. The real damage was felt by the bond market with the yield on the 10-year note increasing from 2.16% to as high as 3%. This 39% increase in yield had bond investors facing an annual loss for only the third time in 33 years.2 However, after guiding towards a reduction in stimulus for the last four months ‘tapering’ was not to be – at least not yet.

The FOMC “decided to await more evidence that progress will be sustained before adjusting the pace of its purchases”.3 They concluded that “downside risks” to the outlook have diminished, the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement.”4 Gold and silver rocketed upwards and the Dow Jones Industrial Average and the S&P 500 were both pushed to new all-time nominal highs. In fact, monetary accommodation in 2013 is much larger than the headlines would suggest.

According to data compiled by Bloomberg, the Fed’s balance sheet has been increasing at an average rate of $91.9 billion each month during 2013 – yes, more than the $85 billion headline number. While the Fed has been buying assets at a rate of $85 billion per month, they have also been further adding to their purchases by investing earned interest and proceeds from maturing bonds. The largest single monthly addition to their balance sheet in 2013 was during the month of April when the Federal Reserve added $114.7 billion of assets, almost $30 billion more than the stated purchases of $85 billion. These monthly additions vary given the timing of maturing bonds but the accommodation provided by the Fed is much larger than the headlines suggest.

For weeks now, gold bears have been out in force believing that ‘tapering’ would mark another leg down for gold. Given the drop in the gold price each time tapering is even hinted at, one might not be surprised at this prediction. But with tapering delayed, gold and the other precious metals appear to have found a bottom and now have limited downside.

While much ink has been spilled about ‘tapering’ of assets purchases, it now seems that this extended discussion of reducing monetary accommodation was nothing more than a ‘taper in a teapot’.

- Source, David Franklin via Sprott's Thoughts:

Tuesday, September 17, 2013

Chris Duane - Gold and Silver Manipulation Will End With a BANG


In Chris Duane's latest video he discusses how the gold and silver manipulation that has been plaguing us for years will not end with a whimper, but with a bang. Will the system have to collapse before gold and silver are set free?

Friday, September 13, 2013

Lehman Five Years On - Gold Is Still a Safe Haven

Little has changed in the financial world and on Wall Street since the collapse. Vital lessons have not been learned. The financial system remains vulnerable to excessive risk taking, unforeseen shocks and systemic risk.

It is important to note how the Lehman bankruptcy and subsequent systemic, financial and economic crises showed gold’s importance as a safe haven asset and as financial insurance in a portfolio.

Gold in dollar terms has risen 73% and silver by exactly 100% since the Lehman bankruptcy and collapse. Both have risen by similar amounts in other major currencies.

Gold rose in the years preceding the crisis when more prudent observers were warning about risks emanating from cheap money policies, overheating stock and property markets, an out of control derivatives market and the shadow banking system. A Lehman Brothers style crisis was obvious to many analysts who warned of systemic risk.

- Source, Goldcore:

Wednesday, September 4, 2013

Gerald Celente - A Golden Forecast


"Summer Trends Journal forecasts becoming a reality, currency debasements & US weighing policy options against Assad for alleged chemical weapons. Huh, doesn't that sound familiar? Just like how Saddam Hussein had weapons of mass destruction right!?"

- Source, The Trends Journal:

www.TrendsJournal.com

Monday, September 2, 2013

Citigroup See's $3500 Gold and $100 Silver

Respected Citigroup strategist Tom Fitzpatrick said in a telephone interview from New York with Bloomberg that gold and silver should surge in the coming years as the precious metals continue to benefit from the easy monetary policies adopted by central banks.

Fitzpatrick, who has a good track record, said that gold has put in a low for the year and will rise to about $1,500-$1,525/oz this year. A gain of over 6.3% from today’s prices.

He said that silver is in a strong up-trend and will likely outperform gold as the gold silver ratio will drop from its current level at 58.1.

- Source, Goldcore: