Archive for the ‘Gold’ Category
LOUIS WOODHILL-FORBES: In 1973, the Nixon administration eliminated the last vestiges of the Bretton Woods gold standard and transitioned the U.S. to a fiat dollar. Given the mind-boggling cost of this economic error, it is tragic (although not surprising) that Keynesians are currently recommending higher inflation as a solution to the economic woes of both the U.S. and Europe.
The latest detailed numbers from the Bureau of Economic Analysis (BEA) cover the years 1951 – 2010, so let’s use these to examine the economic cost of fiat money.
During the 22 years from 1952 through 1973, our economy grew at a real average rate of 3.81%. Over the subsequent 37 years, U.S. real GDP growth averaged 2.68%. If our economy had grown at the same rate 1974 – 2010 that it did 1952 – 1973, America’s real GDP ($2011) would have been $22.2 trillion in 2010, a full 50% higher than the actual result of $14.8 trillion. Federal revenues in 2010 would have come in at about $4.1 trillion, and the federal budget would have shown a $0.6 trillion surplus instead of a $1.5 trillion deficit, despite our current excessive level of federal spending.
This video explains all this in layman’s terms . . .
MICHAEL BRUSH-MSN MONEY: Is the next stop for gold $3,000 — or $1,000?
With the precious metal seeing some weakness since posting an all-time high of more than $1,900 an ounce — though it rebounded Tuesday to about $1,800 — that’s the critical question for anyone who caught gold’s big run or who is wondering if it’s too late to get in.
Few investments bring out more passion than gold does. The folks known as gold bugs never seem to think the price is high enough, while their critics have been waiting since $1,000 for the bugs to get their comeuppance.
But for the rest of us, the challenge is figuring out whether gold’s move can go on. Analyzing that involves looking at the reasons gold has been on a tear, and whether they’ll continue to be in play.
A careful look tells me $3,000 could indeed be in gold’s future, making upcoming dips buying opportunities. Here’s why I think gold is headed higher after a correction that could send gold down to $1,600 or lower — and the best ways to buy in if you agree.
CNBC: Gold climbed to a third record in a row over $1,800 an ounce Wednesday, extending its biggest rally since 2008 as a dive in French bank stocks sent new shudders through anxious financial markets.
Although it pared gains late in the day as equity markets pulled up from initial deep losses, gold’s long rally showed few signs of letting up as the locus of traders’ euro zone debt fears shifted from Spain and Italy to France, which traders fretted could be next in line for a debt crisis.
CNBC: Gold prices rallied to record highs above $1,600 an ounce on Monday, as investors spooked by the euro zone debt crisis and the threat of a U.S. default bought into the metal as a haven from risk.
Spot gold [XAU= 1599.29 5.99 (+0.38%) ] rose as high as $1,601.80 an ounce and was last bid near $1,601 an ounce. Gold climbed more than 3 percent for a second straight week, a feat it has not achieved since February 2009.
U.S. gold futures [GCCV1 1599.00 8.90 (+0.56%) ] for August delivery were last quoted near $1,602 an ounce.
Data from U.S. futures regulator the Commodity Futures Trading Commission showed on Friday that managed money sharply raised bullish bets in U.S. gold futures and gold options in the week ended July 12 as bullion prices rallied.
QE3: Ben Bernanke tells Congress he’s going to devalue the dollar some more by printing a lot more money
Get set for Carter-style inflation
Hey, isn’t Bernanke flipping us the bird in this photo?
CNBC: Federal Reserve Chairman Ben Bernanke told Congress Wednesday that a new stimulus program is in the works that will entail additional asset purchases, the clearest indication yet that the central bank is contemplating another round of monetary easing.
Bernanke said in prepared remarks that the economy is growing more slowly than expected, and should that continue the central bank stands at the ready with more accommodative measures.
“Once the temporary shocks that have been holding down economic activity pass, we expect to again see the effects of policy accommodation reflected in stronger economic activity and job creation,” he said
“However, given the range of uncertainties about the strength of the recovery and prospects for inflation over the medium term, the Federal Reserve remains prepared to respond should economic developments indicate that an adjustment in the stance of monetary policy would be appropriate.”
Gold surges to record highs on news Bernanke plans to print more money
REUTERS: Gold futures rose to a record settlement above $1,585 on Wednesday, as the possibility of more Federal Reserve stimulus coupled with Europe’s deepening debt crisis fueled bullion’s longest winning streak in five years.
Spot gold [XAU= 1579.11 13.86 (+0.89%) ] last rose 1.2 percent to $1,584.39 an ounce.
U.S. gold futures [GCCV1 1585.40 23.10 (+1.48%) ] for August delivery rose $23.30 to settle at $1,585.50 an ounce .
Bullion prices added to early gains after Federal Reserve Chairman Ben Bernanke said the central bank is ready to ease monetary policy further if the economy weakens and inflation moves lower. Silver rallied nearly 6 percent, moving in tandem with commodities, U.S. stock markets and risk assets.
Is Bernanke a lunatic, or just completely incompetent?
THE ECONOMIC COLLAPSE: Did you see Ben Bernanke’s testimony before the House Budget Committee on Wednesday?
It was quite a show. Bernanke seems to believe that if he just keeps on repeating the same mantras over and over that somehow they will become true.
Bernanke insists that the economy is getting much better, that quantitative easing will lower long-term interest rates, that all of this money printing by the Federal Reserve is not causing inflation and that the Fed knows exactly what needs to be done to dramatically reduce unemployment inside the United States.
So is anyone out there still actually buying what Bernanke is selling? Sure, a handful of people in the mainstream media still have complete faith in Bernanke. But for the rest of us, it is becoming increasingly clear that there is something really “off” about Bernanke. So just what is going on with him? Is he lying to all of us on purpose? Could he be insane? Is he just completely and totally incompetent?
Video That Explains What Ben Bernanke and President Obama Are Doing To You in Layman’s Terms
CNBC: An exhaustive report by Standard Chartered predicts that gold will more than triple to $5,000 an ounce because of a lack of supply, not just because of a surge in demand that most bullion bugs cite in their bullish calls.
“There are very few large gold mines set to commence operation in the next five years,” said Standard’s analyst Yan Chen in a report Monday. “The limited new supply comes at a time when central banks have turned from being net sellers to significant net buyers of gold. The result, in our view, will be a gold market in deficit, even assuming flat growth in demand. With the supply-demand balance so out of kilter, we see the gold price potentially going to US$5,000/oz.”
CNBC: Gold hit record highs a second straight day Wednesday and oil soared to fresh 2-1/2 year highs, sparking fears of inflation that could hurt some of the world’s most dependable economies.
Price pressures were rising in Asia’s emerging economies — which had been the catalyst for the world’s recovery from the financial crisis — and were unlikely to subside soon, the Asian Development Bank cautioned.
“High and volatile oil and food prices will, in particular, reverberate through the world economy, and they are likely to stay that way in 2011-2012,” the ADB said. “They will thus be a significant source of global inflation, especially in developing countries where recovery is firmly under way,” the Manila-based agency said in a report.
THE MOTLEY FOOL: Let the word go forth: On Friday, March 25, 2011, Warren Buffett predicted the decline of the U.S. dollar.
In a speech given in New Delhi (where he’s hunting up some cheap Indian stocks), the chairman of Berkshire Hathaway (NYSE: BRK-A ) (NYSE: BRK-B ) warned investors to avoid “long-term fixed-dollar investments” such as 10-year U.S. Treasury bonds. Buffett worries that the $2.3 trillion in new money our government has pumped into the economy, when combined with interest rates so low they’re practically giving money away, are combining to dilute the value of the dollar.
As a result, Buffett warns: “If you ask me if the U.S. Dollar is going to hold its purchasing power fully at the level of 2011, 5 years, 10 years or 20 years from now, I would tell you it will not.”
What’s more, he’s matching actions to words. Over the last couple of years, Buffett has been selling off longer-dated bond holdings, shifting assets into cash and shorter-dated paper. Berkshire’s holdings of debt dated longer than 10 years dropped 31% over the past 18 months, while Berkshire’s cash holdings leapt 56%.
MARKET WATCH: Gold futures closed at a record high and silver futures advanced to a fresh three-decade high on Tuesday as simmering tensions in the Middle East and North Africa, along with fears of inflation, drew investors to the metals.
Gold for April delivery (GCJ11 1,434, +23.90, +1.70%) added $21.30, or 1.5%, to $1,431.20 an ounce on the Comex division of the New York Mercantile Exchange.