The Goldbugg Report - July 21, 2009

tag:blogger.com,1999:blog-4583611395058666793.post-85913194884767182522009-07-21T16:41:00.001-07:002009-07-21T16:44:08.100-07:00The Goldbugg Report - July 21, 2009WORLD FINANCIAL REPORT ON RADIO JULY 17 2009 SHOW -10 compelling reasons why gold is going to do well this year. -Ted Butler silver commentary. -John Embry July commentary. GOLD -COMEX traders predict gold at $1,600 by December. Here are 10 compelling reasons why gold is going to do well this year. Read more here- <a href="http://www.commodityonline.com/news/COMEX-traders-predict-gold-at-$1600-by-December-19397-3-1.html">http://www.commodityonline.com/news/COMEX-traders-predict-gold-at-$1600-by-December-19397-3-1.html</a> 1) The Stimulus Effect: Including $1 trillion in cash infusions, the stimulus plan will pump $9.7 trillion into the economy, according to Bloomberg. As the Globe & Mail reports flatly, "Many believe that the monetary stimulus efforts will cause a spike in inflation," driving gold higher. 2) COMEX Traders Predict $1,600 Gold by December: If gold trades at or above $1,600 by December, some 100,000 call option contracts will be "in the money." Big-money players Goldman Sachs and JPMorgan are reportedly helping to drive the action, ahead of a huge purchase of gold futures contracts. 3) "Big Money" Inflows: In 2008, NYC-based hedge fund Paulson & Co's flagship fund returned 37%, as the world markets burned. Paulson's bullish on gold, big time, including the Mar. 17 purchase of 39.9 million shares of AngloGold, worth $1.28 billion. Other major hedge funds are piling into gold, too, including Eton Park Capital, Green light Capital and Hayman Advisors. 4) China's Doubling Down! China just revealed that it has doubled its gold holdings to 1,054 tons. Yet that still only equals 1.6% of its overall reserves. As China moves out of U.S. Treasuries and into gold, this will help fuel the next leg of the run-up. 5) Demand Building across the Board: Worldwide demand for gold jumped by $29.7 billion in the first quarter, a 36% bolt, according to the World Gold Council. Demand for gold ETFs (Exchange Traded Funds) rocketed 540% another trigger for the coming gold boom. 6) The Paper Dollar's 30% Drop: Since 2001, the U.S. Dollar Index has tanked 30% while gold has risen 300%. With all the downward pressure on the dollar, and inflation on the way, this trend is about to pick up steam. 7) Gold/Dow Ratio Signals $8,000 Gold: During major gold bull markets (and corresponding equity bears), gold and the Dow converge at a 1-to-1 ratio. During the last gold bull, the Dow sank to 850 and gold rose to $850. The Dow is now over 8,000. But even if it fell to 4,000, we could see $4,000 gold before this bull run is over! 8) U.S. Treasury Dept. Signals $5,468 Gold: Currently, the U.S. government holds about 286.9 million ounces of gold. It has printed about $1.569 trillion worth of paper dollars. If each dollar were backed by gold, that would put the price at $5,468.80 an ounce. 9) Riding the "Commodity Super Cycle": Jim Rogers expects the Commodity Super Cycle to drive commodity prices higher for another eight years including gold. And he's stockpiling the yellow metal by the day. Every pullback, says Rogers, is another buying opportunity. Considering he's been dead right on every major trend of the past 40 years, we wouldn't bet against him. 10) Historic Model Predicts $6,214 Gold: During the last gold bull, the yellow metal ran from $35 an ounce to $850, a 24-fold increase. This bull started with gold at $255.95, meaning that if historic trends hold, the price target would be $6,214 an ounce. -U.S. Mint again suspends gold coin production. Read more here- <a href="http://www.gata.org/node/7590">http://www.gata.org/node/7590</a> -MineWeb elaborates on U.S. Mint's latest coin suspension. U.S. Mint gold, silver coin sales 'temporarily suspended' again. Sales and suspension of gold and silver coin or bullion coin sales by the U.S. Mint are becoming a regular part of doing business as overloaded refiners and mint facilities struggle to meet continuing high demand. Unprecedented demand, a shortage of blanks, and restrictive policies and regulations continue to exacerbate what is almost becoming a chronic shortage of gold and silver coins authorized by the U.S. Mint. The U.S. Mint has again "temporarily" suspended sales of almost all of its gold uncirculated and proof coins, along with nearly all of silver uncirculated coins because of the limited availability of blanks. U.S. Mint spokesman Michael White told Mineweb refiners are running 24-hours a day, seven days a week trying to meet demand for blanks. Read more here- <a href="http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=86213&sn=Detail">http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=86213&sn=Detail</a> -Gold market update from Clive Maund. Read more here- <a href="http://news.goldseek.com/CliveMaund/1247503418.php">http://news.goldseek.com/CliveMaund/1247503418.php</a> -John Embry July commentary. Read more here- <a href="http://www.sprott.com/Docs/InvestorsDigest/2009/07_24_2009.pdf">http://www.sprott.com/Docs/InvestorsDigest/2009/07_24_2009.pdf</a> -Jay Taylor: "Gold is Where I Want to Be". No, other than just that I think people need to be cautious right now, and not be swayed by the mainstream media to get back into the equity markets. Be very, very careful because Wall Street and their propaganda tools like the major media networks are helping them sell increasingly worthless paper instruments. Wall Street can't create gold or silver, which are real money. They can create fake money paper money and they like to sell you products made from that. It's "buyer beware" and that is exactly what I try to do on my radio show. Make buyers beware of the horrendous downside to this market as well as ways to make a profit. But as I said, for the most part, gold is where I want to be. Read more here- <a href="http://news.goldseek.com/GoldSeek/1247256615.php">http://news.goldseek.com/GoldSeek/1247256615.php</a> -Two more gold myths on interest and volatility. Two more gold myths as seen by Ronald Stoeferle, continuing our series on based on his analyses in Erste Bank's Special Report on Gold. Myth # 3: Gold does not pay interest, Myth # 4: The gold price is volatile and speculative, and gold is bad in a deflationary environment. Read more here- <a href="http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=86041&sn=Detail">http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=86041&sn=Detail</a> and <a href="http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=86086&sn=Detail">http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=86086&sn=Detail</a> <img src="http://www.wwpmc.com/mailers/072109/01.gif"> <img src="http://www.wwpmc.com/mailers/072109/02.gif"> <img src="http://www.wwpmc.com/mailers/072109/03.gif"> <img src="http://www.wwpmc.com/mailers/072109/04.gif"> -This is a rare interview on South African television yesterday featuring the gold uber-guru Jim Sinclair who is offering a $1 million bet that gold will reach $1,650 by January 14th 2011. Watch more here- <a href="http://www.youtube.com/watch?v=1Cgnn72_v6s">http://www.youtube.com/watch?v=1Cgnn72_v6s</a> -Russian president muses favourably about gold as money. Russian President Dmitry Medvedev said on Friday he had been given an example coin of a possible global currency at the G8 summit in Italy, adding that all aspects of reserve currencies were under discussion. "We are discussing both the use of other national currencies, including the ruble, as a reserve currency, as well as supranational currencies," the Russian leader said at a news conference following the G8 summit. Medvedev showed reporters an example of a coin of a supranational currency, which he called a "united future world currency." "This is a symbol of our unity and our desire to settle such issues jointly," Medvedev said, adding that the coin had been made in Belgium. He also expressed the hope that a day would come when something of the kind would be used for payment. Read more here- <a href="http://www.gata.org/node/7591">http://www.gata.org/node/7591</a> or <a href="http://www.themoscowtimes.com/article/1010/42/379464.htm">http://www.themoscowtimes.com/article/1010/42/379464.htm</a> -Commodity exchanges can dump gold debts on ETFs. GATA board member Adrian Douglas discloses in the report below, titled "The Alchemists," that the New York and Tokyo commodity exchanges have been permitting their gold futures contracts to be settled not in real metal but in shares of gold exchange-traded funds (ETFs). This essentially allows the gold shorts (and the exchanges themselves, which guarantee futures contracts) to transfer their obligations to third parties that may not have the metal they claim to have and that, in any case, are operated by the investment banks running major short positions in gold. Read more here- <a href="http://www.gata.org/node/7586">http://www.gata.org/node/7586</a> -Gene Arensberg: U.S. banks still dominate gold, silver shorts. Read more here- <a href="http://www.gata.org/node/7588">http://www.gata.org/node/7588</a> -Missing Canadian gold could have left mint in liquid form. Experts speculate on how $15M in bullion slipped past elaborate security. Read more here- <a href="http://www.ottawacitizen.com/business/Missing+gold+could+have+left+mint+liquid+form/1784600/story.html">http://www.ottawacitizen.com/business/Missing+gold+could+have+left+mint+liquid+form/1784600/story.html</a> SILVER -Daily Bell interviews James Turk on gold and silver. Read more here- <a href="http://www.gata.org/node/7562">http://www.gata.org/node/7562</a> Daily Bell: Does gold remain undervalued? Turk: Yes, which is quite amazing considering that gold has risen eight years in a row against the US dollar and appreciated during this period at an average annual rate of 16.3 percent. In fact, gold has risen by double-digit annual rates this decade against all the world's major currencies. But 1 ounce of gold still buys approximately the same amount of crude oil it purchased when this decade began. This performance is a testament to how badly the purchasing power of the dollar is being destroyed, which is quite ironic given that real estate in the United States is getting cheaper by the month. What is clear is that we are measuring this decline in real estate prices with a currency that is inflating. That real estate is falling in price while the purchasing power of the dollar is eroded by inflation simply shows how overvalued real estate had become at the height of that bubble. Daily Bell: How about silver? Turk: The gold/silver ratio is still way above historical norms. As bullish as I am about gold, I remain more bullish about silver. However, silver is more volatile than gold, so it may not be for everyone. -Ted Butler silver commentary. Read more here- <a href="http://news.silverseek.com/TedButler/1247586939.php">http://news.silverseek.com/TedButler/1247586939.php</a> -Clive Maund silver market update. Read more here- <a href="http://news.silverseek.com/CliveMaund/1247503191.php">http://news.silverseek.com/CliveMaund/1247503191.php</a> -Despite some headwinds, ScotiaMocatta still bullish on gold and silver. Noting IMF gold sales are all but inevitable, ScotiaMocatta still remains bullish on gold over the medium to long term. Silver has been outperforming making it vulnerable short term, but again confidence expressed medium term. Read more here- <a href="http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=86089&sn=Detail">http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=86089&sn=Detail</a> PLATINUM-PALLADIUM -Fortis White Book Analysis of platinum and palladium fundamentals. Read more here- <a href="http://mineweb.net/mineweb/view/mineweb/en/page674?oid=86169&sn=Detail">http://mineweb.net/mineweb/view/mineweb/en/page674?oid=86169&sn=Detail</a> CHARTS OF THE WEEK-QUOTES-QUICK HITS -The Great Debt Mountain. Unless our economy goes through some major, structural changes, we'll need consumers to spend again for GDP to grow. And while consumers might be feeling good after today's rally, that doesn't help the monster overhang, which as today's chart shows remains near all-time highs. Read more here- <a href="http://www.businessinsider.com/chart-of-the-day-consumer-debt-2009-7">http://www.businessinsider.com/chart-of-the-day-consumer-debt-2009-7</a> <img src="http://www.wwpmc.com/mailers/072109/05.gif"> -Debt Still Swallowing Up Our Cash. Americans are finally feeling less stressed about their debt payments, but make no mistake, paying off debt will continue to be a major suck on finances for some time. As this data from the Fed shows, household debt service ratios have come of their peak, but are still well above historical levels for the last three decades. Until this gets in line, don't expect a rebound in spending. Read more here- <a href="http://www.businessinsider.com/chart-of-the-day-household-debt-service-ratio-2009-7">http://www.businessinsider.com/chart-of-the-day-household-debt-service-ratio-2009-7</a> <img src="http://www.wwpmc.com/mailers/072109/06.gif"> -"Where all think alike, no one thinks very much." Walter Lippmann-Bio here- <a href="http://en.wikipedia.org/wiki/Walter_Lippmann">http://en.wikipedia.org/wiki/Walter_Lippmann</a> -"Government big enough to supply everything you need is big enough to take everything you have. The course of history shows that as a government grows, liberty decreases. Gerald Ford the 38th President of the United States, Presidential address to a joint session of Congress August 12 1974-Bio here- <a href="http://en.wikipedia.org/wiki/Gerald_Ford">http://en.wikipedia.org/wiki/Gerald_Ford</a> -Last, but by no means least, courage moral courage, the courage of one's convictions, the courage to see things through. The world is in a constant conspiracy against the brave. It's the age-old struggle the roar of the crowd on one side and the voice of your conscience on the other. General Douglas MacArthur-<a href="http://en.wikipedia.org/wiki/Douglas_MacArthur">http://en.wikipedia.org/wiki/Douglas_MacArthur</a> -To the masses, the catchwords of Socialism sound enticing so they will continue to work for Socialism, helping thereby to bring about the inevitable decline of the civilization which the nations of the West have taken thousands of years to build up. Ludwig von Mises-Read more here- <a href="http://en.wikipedia.org/wiki/Ludwig_von_Mises">http://en.wikipedia.org/wiki/Ludwig_von_Mises</a> -Gold or silver? I'd rather buy silver today. I own both and I'm not selling either. Jim Rogers-Read more here- <a href="http://economictimes.indiatimes.com/Opinion/Interviews/Commodities-are-sizzling-says-Jim-Rogers/articleshow/4774115.cms">http://economictimes.indiatimes.com/Opinion/Interviews/Commodities-are-sizzling-says-Jim-Rogers/articleshow/4774115.cms</a> -Joe Biden: ‘We Have to Go Spend Money to Keep From Going Bankrupt.' Vice President Joe Biden told people attending an AARP town hall meeting that unless the Democrat-supported health care plan becomes law the nation will go bankrupt and that the only way to avoid that fate is for the government to spend more money. "And folks look, AARP knows and the people working here today know, the president knows, and I know, that the status quo is simply not acceptable," Biden said at the event on Thursday in Alexandria, Va. "It's totally unacceptable. And it's completely unsustainable. Even if we wanted to keep it the way we have it. It can't do it financially." "We're going to go bankrupt as a nation," Biden said. "Well, people when I say that look at me and say, ‘What are you talking about? You're telling me we have to go spend money to keep from going bankrupt?'" Biden said. "The answer is yes, I'm telling you." Read more here- <a href="http://www.cnsnews.com/public/content/article.aspx?RsrcID=51162">http://www.cnsnews.com/public/content/article.aspx?RsrcID=51162</a> -Greenlight Holds Bullion, Buys Reinsurance Stocks. Greenlight Capital Inc., the $5 billion hedge-fund firm run by David Einhorn, told investors it switched all of its holdings in a gold exchange-traded fund into bullion during the second quarter. "At a minimum this will provide some savings as the costs of storing gold are less than the fees" for the SPDR Gold Trust, the New York-based firm said yesterday in a letter to investors. Einhorn, 40, told clients in January he was buying gold for the first time amid the threat of inflation from higher government spending. The firm, started in 1996, held 4.2 million shares of SPDR Gold Trust in the first quarter, making the gold- backed ETF its biggest holding. Gold has climbed 5.8 percent this year. The firm's Greenlight Capital LP fund gained 16.3 percent in the second quarter, bringing its return this year to 21.5 percent boosted by investments in Ford Motor Co. debt, according to the letter, a copy of which was obtained by Bloomberg News. The fund lost 23 percent last year. Hedge funds returned an average 9.4 percent this year through June after losing 19 percent in 2008, according to Hedge Fund Research Inc. in Chicago. Read more here- <a href="http://www.bloombergnews.com/apps/news?pid=20601213&sid=arz6MqVbTVBs">http://www.bloombergnews.com/apps/news?pid=20601213&sid=arz6MqVbTVBs</a> or <a href="http://www.gata.org/node/7593">http://www.gata.org/node/7593</a> -John Rubino: A sudden worldwide currency revaluation is imminent. In his new essay, "A Tremendous Secret," financial writer John A. Rubino, co-author with GoldMoney's James Turk of "The Coming Collapse of the Dollar," foresees an imminent worldwide currency revaluation. This revaluation, Rubino thinks, will correct the biggest financial imbalance of all, the ratio between the value of the world gold supply and the supply of fiat money. Such revaluations, as Rubino notes, are not done gradually but overnight, so that no one can trade against them and so there is no chaotic escape from the new currency system after it is imposed. A clue in support of Rubino's speculation may be found in the communique issued last week by the G8 conference in Italy, which said: "We will refrain from competitive devaluations of our currencies." But of course the G8 pledge against "competitive devaluations" was not a pledge against coordinated and cooperative devaluations. Read more here- <a href="http://www.gata.org/node/7597">http://www.gata.org/node/7597</a> -"The money pumped into economies by governments around the world is likely to support various asset price bubbles across global markets in coming years," said Bill O'Neill, portfolio strategist at Merrill Lynch Global Wealth Management. "The fact is that gold is a good hedge against the legacy effects of governments throwing vast sums at the crisis issue," O'Neill added. Casey Daily Resource -"The next wave of gold investment, which will take the price well above $1,000, may follow a rise in Fed purchases of long-term government debt securities. Before the end of the year, we will see that type of evolution." Philip Klapwijk, the executive chairman of GFMS Ltd -The Commodity Futures Trading Commission looks eager to move quickly to implement trading limits on commodity and energy futures, leaving opponents little time to argue that the agency is going too far, too fast. In response to gyrating oil and commodity prices, the CFTC announced this week it was planning to clamp down on big market players by implementing position limits on all commodity futures contracts of limited supply, focusing especially on energy. The CFTC said it would hold hearings in the next few weeks to get broad public input before embarking on the reforms. Some analysts had suggested the process could be slow and it would be months before anything new was implemented. But Bart Chilton, a CFTC commissioner, signalled otherwise. "We're looking at a pretty fast timeline," Chilton told Reuters in an interview. "We're going to use our authority to the fullest extent possible. That doesn't mean we're going to be draconian or go too far," he vowed. Read more here- <a href="http://www.reuters.com/article/ousiv/idUSN1052575320090710?pageNumber=1&virtualBrandChannel=0">http://www.reuters.com/article/ousiv/idUSN1052575320090710?pageNumber=1&virtualBrandChannel=0</a> -Cash-strapped Spain has ordered its navy to look for huge gold reserves that were lost at sea in the 16th century. Gold bullion and silver treasure worth an estimated £85billion the size of the nation's current budget shortfall lies on the sea bed off the coast of southern Spain. The Inca and Aztec loot is believed to be in heavily laden vessels which hit the bottom of the sea in bad weather as they returned to Cadiz from South America. Naval mine sweepers are to begin radar and sonar surveys to try to locate the wrecks. Read more here- <a href="http://www.mirror.co.uk/news/top-stories/2009/07/13/spain-seeks-el-of-a-haul-115875-21515845/">http://www.mirror.co.uk/news/top-stories/2009/07/13/spain-seeks-el-of-a-haul-115875-21515845/</a> or <a href="http://www.commodityonline.com/news/Spain-hunts-for-gold-treasure-in-sea-19531-3-1.html">http://www.commodityonline.com/news/Spain-hunts-for-gold-treasure-in-sea-19531-3-1.html</a> -China's Foreign-Exchange Reserves Surge, Exceeding $2 Trillion. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=anqPFHKCq40s">http://www.bloomberg.com/apps/news?pid=20601087&sid=anqPFHKCq40s</a> -China criticises dollar. Dai Bingguo, who is standing in for the Chinese president Hu Jintao at the G8 meetings, raised questions over the dominant role of the dollar as the world's reserve currency. Read more here- <a href="http://www.telegraph.co.uk/news/worldnews/asia/china/5793308/China-criticises-dollar.html">http://www.telegraph.co.uk/news/worldnews/asia/china/5793308/China-criticises-dollar.html</a> -China Should Keep Buying U.S. Treasuries, PBOC Economist Says. China and other nations with large dollar reserves should hold negotiations with the U.S. government on how those funds can be injected into the world's largest economy, and those talks should include the possibility of shifting bond holdings into other assets such as stocks and gold, Wang wrote. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=awz3NJatMDzk">http://www.bloomberg.com/apps/news?pid=20601087&sid=awz3NJatMDzk</a> -Darling Says Global Bank Rules Needed to Cope With Bank Crisis. U.K. Chancellor of the Exchequer Alistair Darling, following a meeting with U.S. Treasury Secretary Timothy Geithner, said the world needs a global rulebook for banks to prevent future crises. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=aFWiOP33Hd6w">http://www.bloomberg.com/apps/news?pid=20601087&sid=aFWiOP33Hd6w</a> -Bank of Wyoming Seized; 53rd U.S. Failure This Year. Bank of Wyoming in Thermopolis was closed by regulators, the 53rd lender to fail this year, amid rising unemployment and home foreclosures in the deepest recession in a quarter century. Bank of Wyoming, with $70 million of assets and $67 million of deposits, was closed by the state's Department of Audit, Division of Banking and the Federal Deposit Insurance Corp. was named receiver, the FDIC said today in a statement. Central Bank & Trust in Lander, Wyoming, will assume the deposits and the failed bank's only office. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agpbmkGrsbu4">http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agpbmkGrsbu4</a> -Bunning Says FDIC Warned Lawmakers of Banks at Risk. Federal Deposit Insurance Corp. Chairman Sheila Bair told lawmakers that 500 more banks are at risk of failure "unless something dramatic" happens, Senator Jim Bunning said. Bunning, a Kentucky Republican, said at a Senate Banking Committee hearing today that he had "just" left a meeting with Bair in which she made the statement. An FDIC spokesman, Andrew Gray, disputed Bunning's recollection of the meeting. "In both public and private settings, the chairman and the FDIC is always careful to not make predictions on the number of upcoming bank failures," Gray said in an e-mail. "No estimate" was given during the meeting, which took place last week, Gray said. "We would regret any miscommunication, but she did not say that," Gray added. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601110&sid=a8SeuFzxr6I8">http://www.bloomberg.com/apps/news?pid=20601110&sid=a8SeuFzxr6I8</a> -Investors Say ‘Tarnished' Fed Shouldn't Oversee Risk. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601110&sid=ahejSLs7kIMM">http://www.bloomberg.com/apps/news?pid=20601110&sid=ahejSLs7kIMM</a> -Eliot Spitzer, the former New York governor and attorney general, said U.S. banks made a "bloody fortune" while receiving taxpayer money without a proven benefit to the wider economy. Politicians understand the "populist rage" with excesses in the financial industry and in this case the "public is right," Spitzer said in a Bloomberg Television interview today. "We have saved financial services, we have not created a single job. We are still bleeding jobs." As New York attorney general, Spitzer was known as "the sheriff of Wall Street." He changed business practices and collected billions of dollars in settlements from financial corporations such as Merrill Lynch & Co., American International Group Inc. and Marsh & McLennan Cos. He later became governor, resigning in March 2008 after he was identified as a client of the Emperors Club VIP, a high-priced prostitution ring. Spitzer said rules proposed by President Barack Obama's administration are irrelevant because agencies failed to enforce existing regulations. "Regulatory agencies already had the power to do everything they needed to do," he said. "They just affirmatively chose not to do it." "You don't need new regs to do it, you just need the will to do what they were supposed to do," he said. Former Federal Reserve Chairman Alan Greenspan had "avowed a theory of hands off" and didn't consider himself a regulator, Spitzer said. "What we're seeing now is a new regulatory spirit," he said. Spitzer said the lessons of the financial crisis will only be remembered over a short period of time. "Over and over we fall into the same trap," he said. "Ten years from now we will have forgotten." Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601110&sid=a.H0jl05On0A">http://www.bloomberg.com/apps/news?pid=20601110&sid=a.H0jl05On0A</a> -Credit Swaps Investigated by U.S. Justice Department. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=aTIJ1GZBX_m4">http://www.bloomberg.com/apps/news?pid=20601087&sid=aTIJ1GZBX_m4</a> -Fed's Hoenig says U.S. recovery to be very slow. Read more here- <a href="http://www.reuters.com/article/ousiv/idUSTRE56D6CK20090714">http://www.reuters.com/article/ousiv/idUSTRE56D6CK20090714</a> -Fed economist says U.S. recovery to be "painfully gradual". Read more here- <a href="http://www.reuters.com/article/ousiv/idUSTRE56D3Y420090714">http://www.reuters.com/article/ousiv/idUSTRE56D3Y420090714</a> -Fed Saw Economy as ‘Vulnerable' at June FOMC Meeting. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=aXtRjUz2MSXY">http://www.bloomberg.com/apps/news?pid=20601087&sid=aXtRjUz2MSXY</a> -The U.S. economy may pull out of a recession by the end of the year and a second stimulus package would help broaden the recovery, said Nouriel Roubini, the New York University professor who predicted the financial crisis. "The free fall of the economy has stopped," Roubini said at a Chilean investors' conference in New York. "The economy is still contracting but slowly." To help shore up growth, a second spending package may be needed by late 2009 or early 2010 totaling between $200 billion and $250 billion, Roubini said. "We should continue with fiscal stimulus and we might need a second one," Roubini said. While the worst of the crisis is over, there's still a "meaningful amount of weakness" in labor markets, industrial production and housing, he said. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601110&sid=aSQQBfqRSYco">http://www.bloomberg.com/apps/news?pid=20601110&sid=aSQQBfqRSYco</a> -Tab hits $95.7 billion so far for bailout of General Motors, Chrysler and auto parts suppliers. Read more here- <a href="http://content.usatoday.com/communities/driveon/post/2009/07/68494276/1">http://content.usatoday.com/communities/driveon/post/2009/07/68494276/1</a> -The Economy Is Even Worse Than You Think. The average length of unemployment is higher than it's been since government began tracking the data in 1948. Read more here- <a href="http://online.wsj.com/article/SB124753066246235811.html">http://online.wsj.com/article/SB124753066246235811.html</a> <img src="http://www.wwpmc.com/mailers/072109/07.gif"> -Sears Starts Christmas Sales in July. Read more here- <a href="http://www.myfoxny.com/dpp/your_money/consumer/090710_Sears_Christmas_Sales">http://www.myfoxny.com/dpp/your_money/consumer/090710_Sears_Christmas_Sales</a> -Mexico Faces ‘Unsustainable Deficits,' Analysts Say. Mexico's fiscal accounts may be heading toward "unsustainable deficits" as a decline in oil production cuts government revenue, according to Morgan Stanley. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601110&sid=a05nw0vjJA3c">http://www.bloomberg.com/apps/news?pid=20601110&sid=a05nw0vjJA3c</a> -UK can't afford another fiscal rescue, warns IMF. Britain is the world's only leading economy unable to budget for any kind of economic rescue package next year, the International Monetary Fund has warned. Read more here- <a href="http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5804507/UK-cant-afford-another-fiscal-rescue-warns-IMF.html">http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5804507/UK-cant-afford-another-fiscal-rescue-warns-IMF.html</a> -Kim Jong Il's Health Is Deteriorating, Reports Say. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=aOhfErNzjXLU">http://www.bloomberg.com/apps/news?pid=20601087&sid=aOhfErNzjXLU</a> -Five North Korean officials have been barred by the United Nations Security Council from leaving their country and are to have their foreign assets frozen as punishment for working on nuclear weapons and missiles. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=aaWL1nGtzNUQ">http://www.bloomberg.com/apps/news?pid=20601087&sid=aaWL1nGtzNUQ</a> -Ahmadinejad: Iran will "bring down" Western foes. Newly re-elected President Mahmoud Ahmadinejad said on Thursday his next government "would bring down the global arrogance," signalling a tougher approach by Tehran toward the West after last month's disputed election. Ahmadinejad, in his first provincial trip after the June 12 presidential vote, said Iran's enemies had tried to interfere and foment aggression in the country, referring to mass opposition protests against the official election result. The hardline president, who often rails against the West, said the Islamic Republic wanted "logic and negotiations" but that Western powers had insulted the Iranian nation and should apologize. Iranian leaders often refer to the United States and its allies as the "global arrogance." Read more here- <a href="http://www.reuters.com/article/newsOne/idUSDAH65258120090716">http://www.reuters.com/article/newsOne/idUSDAH65258120090716</a> -Israeli warships rehearse for Iran attack in Red Sea. Israeli warships have deployed to the Red Sea for what has been described as a rehearsal for a possible attack on Iran. Read more here- <a href="http://www.telegraph.co.uk/news/worldnews/middleeast/israel/5842963/Israeli-warships-rehearse-for-Iran-attack-in-Red-Sea.html">http://www.telegraph.co.uk/news/worldnews/middleeast/israel/5842963/Israeli-warships-rehearse-for-Iran-attack-in-Red-Sea.html</a> -U.K. Considers Abolishing Mandatory Retirement Age of 65. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601110&sid=a2NbFkFZCAQM">http://www.bloomberg.com/apps/news?pid=20601110&sid=a2NbFkFZCAQM</a> -Gulf Hurricane Chances Low for Next Two Weeks, Forecasters Say. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601110&sid=a.fP0sJhMYj0">http://www.bloomberg.com/apps/news?pid=20601110&sid=a.fP0sJhMYj0</a> -WHO says new flu "unstoppable" calls for vaccine. Read more here- <a href="http://www.reuters.com/article/newsOne/idUSTRE56C60820090714">http://www.reuters.com/article/newsOne/idUSTRE56C60820090714</a> -New flu resembles feared 1918 virus: study. Read more here- <a href="http://www.reuters.com/article/newsOne/idUSTRE56C3K120090713">http://www.reuters.com/article/newsOne/idUSTRE56C3K120090713</a> -Swine flu 'will keep one in eight workers at home'. Businesses will be crippled within two months as swine flu forces one in eight workers to stay at home, according to official figures. Prof Sir Liam Donaldson, the chief medical officer, will say that up to 12 per cent of the workforce will be sick by September, in addition to the nine per cent of workers predicted to contract the virus in August. Across the first wave of the pandemic this summer up to 30 per cent of population may catch swine flu, the figures suggest. Read more here- <a href="http://www.telegraph.co.uk/health/swine-flu/5838326/Swine-flu-will-keep-one-in-eight-workers-at-home.html">http://www.telegraph.co.uk/health/swine-flu/5838326/Swine-flu-will-keep-one-in-eight-workers-at-home.html</a> -11-bedroom Aspen home sells for $43 million. Read more here- <a href="http://www.denverpost.com/ci_12830008">http://www.denverpost.com/ci_12830008</a> -Violin Fund Seeks $100 Million for Stradivari Strings. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601213&sid=a1O.bRn0HuGs">http://www.bloomberg.com/apps/news?pid=20601213&sid=a1O.bRn0HuGs</a> <a href="http://www.rarecoloreddiamonds.com/">WWW.RARECOLOREDDIAMONDS.COM</a> -The Rare Colored Diamonds Historical Value Tracker system is the perfect tool for investors to view the potential future value of a rare colored diamond based on the current market trend of a particular type of diamond. Track the potential future value of colored diamonds here- <a href="http://www.rarecoloreddiamonds.com/HistoricalPriceTrackingsystem.html">http://www.rarecoloreddiamonds.com/HistoricalPriceTrackingsystem.html</a> -Watch BTV interview of Harold Seigel on colored diamonds and his website <a href="http://www.rarecoloreddiamonds.com/">http://www.rarecoloreddiamonds.com/</a>. Watch video here- <a href="http://www.rarecoloreddiamonds.com/watchnow.html">http://www.rarecoloreddiamonds.com/watchnow.html</a> -Rio Tinto 2Q Diamond Production -72%. Rio Tinto reported Wednesday that its diamond production fell 72 percent to 1.281 million carats in the second quarter of 2009. The company explained that the global economic downturn had severely impacted prices and sales volumes of diamonds. "The effect on the rough diamonds market has been exacerbated by the lowering of inventory levels in the diamond pipeline, resulting from reduced global liquidity," Rio Tinto explained in its quarterly operations review. Production at the company's fully-owned flagship Argyle mine decreased 86 percent to 408,000 carats, after Rio Tinto reduced production at the mine in March due to the decline in diamond demand. The company slowed the mine's underground development project to critical activities and placed its diamond-processing facilities on a three-month extended maintenance shutdown. Rio Tinto's 60 percent production share of the Diavik mine dropped 44 percent to 853,000 carats. The company also owns 78 percent of the Murowa mine in Zimbabwe, where its share of production sank 62 percent to 20,000 carats. During the first half of 2009, Rio Tinto's diamond production fell 14 percent to 6.787 million carats. Production at Argyle decreased 7 percent to 4.812 million carats, while the company's share of Diavik's output declined 26 percent to 1.924 million carats and its stake in production at Murowa dropped 51 percent to 51,000 carats. Read more here- <a href="http://www.diamonds.net/news/NewsItem.aspx?ArticleID=27096">http://www.diamonds.net/news/NewsItem.aspx?ArticleID=27096</a> or <a href="http://www.idexonline.com/portal_FullNews.asp?id=32631">http://www.idexonline.com/portal_FullNews.asp?id=32631</a> -Diamond production dips by 62.4% for South Africa. Diamond production has decreased by 62.4 percent at South Africa, during May 2009, when compared to the same month last year. But in comparison to diamond production in April 2009, the May figures indicate only a 1 percent drop. Diamond production showed an increase of 1.9 percent in the quarter ending May 31, when compared to the previous quarter. Production of gold also showed a decline of 10.5 percent in May 2009 as compared to the same month last year, while the entire mineral production was lower by 14.5 percent. Read more here- <a href="http://diamondworld.net/contentview.aspx?item=3989">http://diamondworld.net/contentview.aspx?item=3989</a> OIL CRUNCH COMING -Oil crunch likely after fall in oil, gas exploration. A sharp decline in oil and gas exploration because of the global credit crunch will lead to another spike in prices, probably within the next four years, a leading energy finance consultancy said on Tuesday. Christopher Moyes, president of Dallas-based Moyes & Co. Inc, which manages acquisitions and investments for dozens of medium-sized oil and gas companies, said the spiralling cost of capital over the last year has slashed the number of exploration projects and hit the value of potential oilfields. As the cost of financing all projects has escalated, oil companies are turning their backs on risky exploration and are instead under pressure to obtain hydrocarbon resources through the easier route of mergers and acquisitions. "It is bound to lead to a supply crunch," Moyes told Reuters in an interview. "Sometime between 2013 and 2016 we will have another price crunch." "The last three price spikes have had a lead time of about 1,500 to 2,500 days. The bottom of the price trough was January. It is about 1,500 days until where we run into the supply crunch again, when demand rises and we can't supply." "The problem will be a demand issue out of China and India, putting pressure on the market, causing prices to go up and we won't be able to turn the taps on fast enough." Oil prices peaked a year ago at over $147 per barrel for benchmark U.S. light crude oil futures but then collapsed to under $40 in December before recovering to over $70 in June and falling to just below $60 by (11 a.m. EDT) on Tuesday. The International Energy Agency, the Organization of the Petroleum Exporting Countries and other agencies have warned that an oil supply crunch is possible if exploration does not begin to pick up fast. Read more here- <a href="http://www.reuters.com/article/hotStocksNews/idUSTRE56D45G20090714">http://www.reuters.com/article/hotStocksNews/idUSTRE56D45G20090714</a> U.S. BUDGET GAP EXCEEDS 1 TRILLION FOR FISCAL YEAR The U.S. budget deficit topped $1 trillion for the first nine months of the fiscal year and broke a monthly record for June as the recession subtracted from revenue and the government spent to rejuvenate the economy. The shortfall for the fiscal year that began Oct. 1 totaled $1.1 trillion, the first time that the gap for the period surpassed $1 trillion, Treasury figures showed today in Washington. The excess of spending over revenue for June was $94.3 billion, the first deficit for that month since 1991, according to data compiled by Bloomberg. Individual and corporate tax receipts are sliding even as the worst recession in five decades shows signs of easing because the jobless rate continues to rise reaching a 26-year high in June -- and companies have yet to see a sustained increase in demand. The shortfall is also widening as the government ramps up spending from the $787 billion stimulus program President Barack Obama signed into law in February. "This is a difficult pill to have to swallow," said Richard Yamarone, director of economic research at Argus Research Corp. in New York. "The economy and banking system need these funds to recover, yet it will ultimately hit Americans' wallets hard. It's a necessary evil." Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601110&sid=aiaDbSX1Ziwg">http://www.bloomberg.com/apps/news?pid=20601110&sid=aiaDbSX1Ziwg</a> -June budget gap $94.32 billion, record for June. The U.S. government rang up a $94.32 billion budget deficit in June, a record for the month, as the price tag for efforts to prop up the economy, banks and automakers mounted while revenues weakened. The Treasury Department said on Monday that June marked the ninth straight month in which the government had run a deficit. In June 2008, the budget enjoyed a $33.55 billion surplus. Through the first nine months of fiscal 2009, the government has racked up a $1.086 trillion deficit. That compares with a shortfall of only $285.85 billion in the comparable year-ago period, underscoring the sharp deterioration in the U.S. fiscal picture. "The Federal deficit is now at a post-World War II high and is likely to continue to rise in the near term as deficits rise and the economy remains weak," said John Silvia, chief economist for Wells Fargo Securities. "These deficits will influence the allocation of global savings for the foreseeable future. No doubt where this train is going," Silvia said. The record budget deficit for June was not an all time high. that was February when it was $194 billion, a department official said. The recession and related government rescue efforts have put the budget on track for its longest-ever stretch of consecutive monthly deficits. The current record is 11 straight months, which has been reached three times. Some Wall Street economists see the deficit heading higher, some suggesting a $1.5 trillion deficit for fiscal 2009 as the ranks of the jobless grow and hiring remains stubbornly weak as the economy struggles to emerge from recession. Read more here- <a href="http://www.reuters.com/article/domesticNews/idUSTRE56C5BA20090714?feedType=RSS&feedName=domesticNews&rpc=22&sp=true">http://www.reuters.com/article/domesticNews/idUSTRE56C5BA20090714?feedType=RSS&feedName=domesticNews&rpc=22&sp=true</a> MOBIUS-DERIVATIVES STIMULUS TO SPARK NEW CRISIS -A new financial crisis will develop from the failure to effectively regulate derivatives and the extra global liquidity from stimulus spending, Templeton Asset Management Ltd.'s Mark Mobius said. "Political pressure from investment banks and all the people that make money in derivatives" will prevent adequate regulation, said Mobius, who oversees $25 billion as executive chairman of Templeton in Singapore. "Definitely we're going to have another crisis coming down," he said in a phone interview from Istanbul on July 13. Derivatives contributed to almost $1.5 trillion in writedowns and losses at the world's biggest banks, brokers and insurers since the start of 2007, according to data compiled by Bloomberg. Global share markets lost almost half their value last year, shedding $28.7 trillion as investors became risk averse amid a global recession. The U.S. Justice Department is investigating the market for credit-default swaps, Markit Group Ltd., the data provider majority-owned by Wall Street's largest banks, said July 13. Mobius didn't explain what he thought was needed for effective regulation of derivatives, which are contracts used to hedge against changes in stocks, bonds, currencies, commodities, interest rates and weather. The Bank for International Settlements estimates outstanding derivatives total $592 trillion, about 10 times global gross domestic product. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601109&sid=ajsCDAWaoANg">http://www.bloomberg.com/apps/news?pid=20601109&sid=ajsCDAWaoANg</a> REAL ESTATE-MORTGAGES-FORECLOSURES -U.S. home sellers cut the prices of their properties by a total of $27.1 billion as the recession and rising foreclosures curtailed demand, Trulia Inc. said. One quarter of sellers with homes on the market as of July 1 reduced their price by an average of 10 percent, the San Francisco-based real estate data provider said today. Properties listed for more than $1 million had the biggest cuts, with owners taking about 13 percent off the asking price. Prices of existing U.S. homes dropped 17 percent in May from a year earlier, according to the most recent data from the Chicago-based National Association of Realtors. The decline helped boost purchases 2.4 percent to an annual rate of 4.77 million sales, NAR said. "Sellers just have to discount their prices to reflect what's going on," Pete Flint, chief executive officer of Trulia, said in an interview. "Price reductions will stabilize the market, but I think we're still some way off." The average discount on homes priced for less than $1 million was 9 percent, Trulia said. In 2007 and 2008, "the lower end of the market was clearly cratering with subprime," Flint said. "Now you're seeing the top end of the market with price reductions." Among the 50 largest U.S. cities, Jacksonville, Florida, had the biggest percentage of discounts, according to Trulia. Sellers there slashed prices on 39 percent of homes for sale. Boston was second at 35 percent, followed by Minneapolis at 33 percent. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601213&sid=agq0NRuqLW38">http://www.bloomberg.com/apps/news?pid=20601213&sid=agq0NRuqLW38</a> -Rich Russians Returning to U.S. Property Lured by Lower Prices. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601110&sid=adx4qqDiCti4">http://www.bloomberg.com/apps/news?pid=20601110&sid=adx4qqDiCti4</a> -Insight: US property market central to economy. Read more here- <a href="http://www.ft.com/cms/s/0/c5b86f86-6cad-11de-af56-00144feabdc0.html?nclick_check=1">http://www.ft.com/cms/s/0/c5b86f86-6cad-11de-af56-00144feabdc0.html?nclick_check=1</a> -Hamptons Home Sales Plunge as Wall Street Cuts Jobs. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601213&sid=aXEt83qIc23w">http://www.bloomberg.com/apps/news?pid=20601213&sid=aXEt83qIc23w</a> -U.K. Housing Market Improves as London Index Rises. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601110&sid=aAopr2RVKiSk">http://www.bloomberg.com/apps/news?pid=20601110&sid=aAopr2RVKiSk</a> -U.S. mulling mortgage aid for unemployed. President Barack Obama is mulling new ways to delay foreclosure for jobless homeowners who are unable to keep up with monthly payments, an administration official said on Monday. The official told Reuters it was reasonable for policymakers to consider options for loan forbearance allowing borrowers to delay, defer or skip payments that are more effective than those currently available in the private sector. Read more here- <a href="http://www.reuters.com/article/newsOne/idUSTRE56D04920090714">http://www.reuters.com/article/newsOne/idUSTRE56D04920090714</a> -Foreclosure Filings in U.S. Reach Record 1.5 Million. U.S. foreclosure filings hit a record in the first half, a sign that job losses and falling property prices deepened the housing recession, according to RealtyTrac Inc. More than 1.5 million properties received a default or auction notice or were seized by banks in the six months through June, the Irvine, California-based seller of default data said today in a statement. That's a 15 percent increase from the year earlier. One in 84 U.S. households received a filing. "People are losing their jobs, seeing their income go down and are underwater on their mortgage," Richard Green, director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles, said in an interview. "It's a toxic combination." Home prices in 20 major U.S. metropolitan areas dropped 18.1 percent in April from a year earlier, according to the S&P/Case-Shiller index. The unemployment rate rose to 9.5 percent in June, the highest since 1983, bringing the total number of lost jobs to about 6.5 million since the recession started in December 2007, the Labor Department said. Defaults by subprime borrowers with poor credit histories spurred the housing recession and spread to prime borrowers as home prices and sales declined. The Mortgage Bankers Association said May 28 that prime fixed-rate home loans to the most creditworthy borrowers accounted for 29 percent of new foreclosures in the first quarter, the biggest share of any type of loan. One in eight Americans is now late on a payment or already in foreclosure, the Washington-based mortgage group said. Read more here- <a href="http://www.bloomberg.com/apps/news?pid=20601213&sid=aGKKaIPgvnDk">http://www.bloomberg.com/apps/news?pid=20601213&sid=aGKKaIPgvnDk</a> or <a href="http://www.reuters.com/article/newsOne/idUSTRE56F0XK20090716">http://www.reuters.com/article/newsOne/idUSTRE56F0XK20090716</a> -Hotel foreclosures spread throughout California. Read more here- <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/07/12/BUIJ18LU5J.DTL&type=printable">http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/07/12/BUIJ18LU5J.DTL&type=printable</a> -Many underwater homeowners are deliberately walking away from mortgages. A study finds that 26% of the defaults across the country are calculated economic decisions to bail out of loans by borrowers who could afford to make the monthly payments. Read more here- <a href="http://www.latimes.com/classified/realestate/news/la-fi-harney12-2009jul12,0,3674775.story">http://www.latimes.com/classified/realestate/news/la-fi-harney12-2009jul12,0,3674775.story</a> HEALTHCARE COSTS SOAR FOR PETS -Do you think that soaring healthcare costs are just due to the fact that people don't pay out of pocket? Sorry, that can't be it. As this chart from the American Enterprise Institute shows, veterinary services spending is soaring at a similar pace to healthcare for humans. And yes, most people pay for pet care out of pocket and no, there's not much government intervention. How about them apples? Read more here- <a href="http://www.businessinsider.com/chart-of-the-day-healthcare-pets-vs-humans-2009-7">http://www.businessinsider.com/chart-of-the-day-healthcare-pets-vs-humans-2009-7</a> <img src="http://www.wwpmc.com/mailers/072109/08.gif"><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/4583611395058666793-8591319488476718252?l=www.wwpmc.com/newsroom' alt='' /></div>Worldwide Precious Metalshttp://www.blogger.com/profile/10197663156799614574noreply@blogger.com