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Poor Man’s Gold is Breaking Out — Sell Your House and Buy Silver?
Investors have pushed silver above the recent channel high at around $39 or so per ounce and I fully expect a retest of $50 if any more talk is given about QE3 — Silver rises because of the rising digital money supply, not from speculation. Owning cash is speculative whereas owning metals is conservative or a safe haven at current prices.
Many people will tell you that silver and gold are in a bubble but the fact is that commodities in general are one of the only asset classes that work here because the consolidated banking system is holding our economy hostage and Bernanke is solely focused on saving the banks. Right now, shorting European banks and going long silver and gold looks to be about as good of a “trade” as possible — investors are essentially betting that Europe will face massive credit problems because of the obvious insolvency of Greece, Italy, Portugal, Spain, and Ireland.
The next shoe to drop is the US… We are facing the exact same issues as Read more…
Quantitative Easing Rounds 1 and 2 Hurt the Economy … Bernanke Proposes Round 3
georgewashington2.blogspot.com
Federal Reserve chairman Ben Bernanke is hinting at a third round of quantitative easing.
But Dallas Federal Reserve Bank president Richard Fisher said today:
I firmly believe that the Federal Reserve has already pressed the limits of monetary policy. So-called QE2, to my way of thinking, was of doubtful efficacy, which is why I did not support it to begin with. But even if you believe the costs of QE2 were worth its purported benefits, you would be hard pressed to now say that still more liquidity, or more fuel, is called for given the more than $1.5 trillion in excess bank reserves and the Read more…
Why Are Food Prices Rising So Fast?
If you do much grocery shopping, you have probably noticed that the cost of food has been rising at a very brisk pace over the past year. So why are food prices rising so fast? According to Federal Reserve Chairman Ben Bernanke, inflation is still very low and the economy is improving. So what is going on here? When I go to the grocery store these days, there are very few things that I will buy unless they are on sale. In fact, I have noticed that many of the new “sale prices” are the old regular prices. Other items have had their packages reduced in size in order to hide the price increases. But with millions of American families just barely scraping by as it is, what is going to happen if food prices keep rising this rapidly?
The food prices are especially painful if you are trying to eat healthy. Most of the low price stuff in the grocery stores is garbage. Eating the “typical American diet” is a highway to cancer, heart disease and diabetes.
But if you try to stick to food that is “healthy” or “organic” you can blow through hundreds of dollars in a heartbeat. In fact, the reality is that tens of Read more…
World’s wealthiest people now richer than before the credit crunch
Click here to see a pdf of this graphic
We are not all in this together. The UK economy is flat, the US is weak and the Greek debt crisis, according to some commentators, is threatening another Lehman Brothers-style meltdown. But a new report shows the world’s wealthiest people are getting more prosperous – and more numerous – by the day.
The globe’s richest have now recouped the losses they suffered after the 2008 banking crisis. They are richer than ever, and there are more of them – nearly 11 million – than before the recession struck.
In the world of the well-heeled, the rich are referred to as “high net worth individuals” (HNWIs) and defined as people who have more than $1m (£620,000) of free cash.
According to the annual world wealth report by Merrill Lynch and Capgemini, the wealth of HNWIs around the world reached $42.7tn (£26.5tn) in Read more…
Gold Should Break $1,600, Silver Near $50 by Year End –GFMS’ Newman
Gold should trade to just over $1,600 an ounce by the end of 2011 and silver should be flirting with $50 an ounce as governments will need to maintain a loose monetary policy despite the phasing out of stimulus packages in the U.S., according to the director of a major research firm.
Philip Newman, research director of GFMS, said in an interview on the sidelines of the International Precious Metals Institute’s Precious Metals Conference here there may be too much focus in the markets on the second quantitative easing versus a possible third program.
“I think irrespective if there is no QE3 that comes into the market, the U.S. governments and all other governments frankly, in a sense, still have to maintain fairly loose monetary policy given how slow or how stubborn the rise in GDP growth has been and continues to be,” Newman said.
He said that even though at times there might be a healthy increase in GDP growth, the underlying economy still has unemployment rates that are still stubbornly high.
“So, if you have that background then, the outlook for inflation remains fairly Read more…
China ratings house says US defaulting: report
BEIJING — A Chinese ratings house has accused the United States of defaulting on its massive debt, state media said Friday, a day after Beijing urged Washington to put its fiscal house in order.
“In our opinion, the United States has already been defaulting,” Guan Jianzhong, president of Dagong Global Credit Rating Co. Ltd., the only Chinese agency that gives sovereign ratings, was quoted by the Global Times saying.
Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies — eroding the wealth of creditors including China, Guan said.
Guan did not immediately respond to AFP requests for comment.
The US government will run out of room to spend more on August 2 unless Read more…
Gold Price Nears $1,550, Time for a Gold Standard?
GOLD PRICE NEWS – The gold price, at $1,542.50 per ounce, traded near unchanged Monday morning despite modest strength in the U.S. dollar. While gold prices were flat, silver advanced higher by 1.5% to $36.79 per ounce. Global equity prices have been under pressure over the past month with the S&P 500 falling for five consecutive weeks. Weak data points in housing, manufacturing, and labor have all combined to heighten worries over the prospect of a double-dip recession. Precious metals, notably gold, have benefited from their safe haven qualities as investors seek to lower their risk profiles.
The strong performance of the gold price in recent years has led to a growing collection of calls for the United States to return to a gold standard. Steve Forbes, the billionaire CEO of Forbes Inc., wrote a piece in Forbes Magazine urging candidates for the 2012 U.S. presidential election to consider returning to some form of gold standard to support the value of the U.S. dollar.
Forbes began the article by stating that “Monetary policy is one of Read more…
New signs economy’s recovery faltering
Evan Solomon worked at the New York Stock Exchange Wednesday as fears that the economy was stalling rattled the markets.
The U.S. economic recovery is faltering, and Washington is running out of ways to get it back on track.
New reports Wednesday showed a steep slowdown in the manufacturing sector and weak private-sector job creation in May. The grim news comes on the heels of other recent indicators — falling home prices and consumer spending — that reflect an economy slowing to a limp this spring.
The data dash the sunnier expectations that many analysts had entering the year; many forecasters had expected economic growth of 3.5 to 4 percent in 2011.
Instead, the U.S. economy appears to be settling back into a pattern of Read more…
Hyperinflation Or Great Depression II?
Western Europe has invented two institutions that have taken over the world: the university and the central bank. Today, both are under fire as never before. At the same time, both are in their respective diver’s seats. The greater the criticism, the better they do for themselves.
We are finally seeing articles on the bubble in higher education. It isn’t a bubble. Government money still flows in by the hundreds of billions a year.
We hear that college isn’t worth the money. Well, if it isn’t, why are parents paying it? Because they are buying a consumer good: social acceptance. They are buying off peer pressure. They are unwilling to say to their friends, “Billy Bob is going to become a plumber.” Yes, Billy Bob will always have a good income, but Billy Bob’s parents are unwilling to accept this. Billy Bob will get his hands dirty . . . with “filthy” lucre. Oh, the horror! Better that he should be an unemployed B.A. in sociology with $23,000 of student debt, and his parents $50,000 to $150,000 poorer.
That is to say, people have priorities that are different from what the journalists (with B.A. degrees in a field with a dismal future) write about in their articles. The parents will not admit to Read more…
Fed Ready to Print More Funny Money on QE3 Rumors
Simon Maughn, co-head of European equities at MF Global, has told CNBC that a third round of so-called quantitative easing is in the works. The private Federal Reserve will again become the marginal buyer of bonds.
The latest effort by the Fed to finance the government’s staggering deficit will end in June.
If the private Federal Reserve owned by offshore banksters stops this lending scheme, interest rates will rise significantly which in turn will exert tremendous pressure on the American public. If interest rates surge anytime soon, millions of indebted Americans may default on their debt, thereby bankrupting the American financial institutions, as Puru Saxena, founder of Puru Saxena Wealth Management, notes.
“The bond market is going in one direction which is up-falling yields which is telling you quite clearly the direction of economic travel is downwards. Downgrades. QE3 (a third round of quantitative easing) is coming,” Read more…
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