Gold Investments Market Update – Massive Government Bailouts and Stimulus Packages to Be Confronted by Hostile Bond Markets?
Gold rose 2.1% last week and is up another 2% in Asian and early European trading.
Gold rose 2.1% last week and is up another 2% in Asian and early European trading.
Gold continues to consolidate between $700/oz and $760/oz and looks set to rechallenge $800/oz in the coming days as safe haven buying reemerges on continuing concerns regarding the global financial system and economy.
Gold was down marginally yesterday (some 1%).
Gold gave up some of the Election Day gains yesterday on profit taking due to sharply lower oil (WTI $Dec down $5.23 to $65.30) and commodity prices (the CRB Commodities Index fell 10.25 to 267.97) on fears of significant demand destruction due to a protracted global recession.
Gold and silver both surged some 4% yesterday from oversold levels as the dollar weakened and oil surged. We said some weeks ago that the recent sell off in precious metals was likely to end around election day and believe that this has indeed happened and that gold will resume its secular bull market in the coming weeks.
Gold was up marginally yesterday despite further strength in the dollar and a further sharp fall in the oil price.
ARROYO GRANDE, Calif. (via MarketWatch) — A record 130 million voters are predicted to head to the polls Tuesday. The bad news: 65 million, roughly 50% of all voters, will be miffed, mad at, angry with, even hate the new president … no matter who wins! Half against Obama, half against McCain. Either way, half of America will be angry, for at least four years. And that 50% will get even angrier as the recession deepens, sweeping aside all the grand upbeat promises of the campaign. Think things are bad now? Just wait, they’ll get far worse before a recovery.
Washington’s in hock $11 trillion. Next, pile on all the gluttonous bailout billions and lost revenues and soon we’ll be pushing $15 trillion even $20 trillion as this global meltdown spreads. Worse yet: All that debt’s guaranteed to force new taxes and huge cutbacks, no matter what the winner promised.
Last week I predicted this dark future, a “Great Global Depression” by 2011. Fortunately, there are still optimists out there. See previous Paul B. Farrell.
For example: In a story in the latest Newsweek, “Nightmare on Pennsylvania Avenue: The Scary Challenges Facing the Next President on Day One,” Richard Haass, president of the Council on Foreign Relations and author of “Opportunity: America’s Moment to Alter History’s Course,” had this warning for the next president: “This is not the world you’ve been discussing on the campaign trail,” that was a “caricature.” But he added, the “American people are ready to be leveled with” — even ready for the pain of moving in a bold new direction.
After warning of domestic dangers in his Newsweek “Memorandum to the President Elect,” New York’s Mayor Michael Bloomberg hit a high note about the future: “This is a competition we should relish, because we continue to enjoy all sorts of advantages: the best universities, the most advanced factories and health care, the most entrepreneurial workers and the best quality of life. But like a champion who has gotten complacent and sloughed off on workouts, the federal government — paralyzed by partisan gridlock and special-interest pandering — has let America slip out of top fighting form.”
McCain? Obama? The 535 members of Congress? Plus 42,000 special-interest lobbyists? Maybe they’ll “level with” you. Don’t count it. Besides, it doesn’t matter. Campaign’s over. “They” got the power. For the next four years the only person you can control is you.
Try shifting into survival mode. What if you’re stranded on a mountain climb in a storm? Marooned on a desert island? Lost in a jungle? Shipwrecked, drifting in the Pacific? For the next four years! It’s not “you versus them.” Not “you versus nature.” Surviving is “you versus you.” Laurence Gonzales has been researching how people behave in accidents for 35 years, and he tells us in “Deep Survival: Who Lives, Who Dies, and Why.”
He discovered “an eerie uniformity in the way people survive seemingly impossible circumstances. Decades and sometimes centuries apart, separated by culture, geography, race, language, and tradition, the most successful survivors — those who practice what I call ‘deep survival’ — go through the same patterns of thought and behavior, the same transformation and spiritual discovery, in the course of keeping themselves alive. Not only that but it doesn’t seem to matter whether they are surviving being lost in the wilderness or battling cancer, whether they’re struggling through divorce or facing a business catastrophe — the strategies remain the same.”
And we are clearly facing a historic political and economic catastrophe today, so listen closely: We can adapt Gonzales’ incredible “12 Rules of Adventure” as a road map for Americans, especially investors, in the uncharted waters ahead for four years with the new president.
Yes, he calls it an adventure: “Survival should be thought of as a journey, a vision quest of the sort that Native Americans have had as a rite of passage for thousands of years. Once you’re past the precipitating event — you’re cast away at sea or told you have cancer — you have been enrolled in one of the oldest schools in history. Here are a few things I’ve learned that can help you pass the final exam.”
The 12 tips that will work if you want to avoid a deep depression, both personally and as a nation:
1. Attitude: ‘perceive and believe’
Economist Nouriel Roubini predicts “the worst is yet to come,” with stocks going over a cliff, along with currencies, next year.
Gold and silver have risen in Asian and early trading in Europe today. Last week saw gold fall some 1.4% while silver rose 4.9%. The performance of the precious metal mining shares may be an indication that we are at or near a low in this sell off as the HUI and XAU mining indices were up sharply last week – up 14.4% and 14.95% respectively. They tend to be a leading indicator of a trend reversal in the precious metals.
Similarly the reversal in the dollar’s recent strength and stabilisation of oil in the mid to high $60s could also signify that we are close to lows.
Rollover is the story of faded Hollywood siren Jane Fonda who inherits a multi-million dollar company after her powerful bank president husband is murdered. While trying to find her dead love’s killer, she runs his corporation with the help of charming banker Kris Kristofferson in the weeks before a worldwide currency and financial collapse.
It was the 1981 movie Jane Fonda "got made" after her exploration of the dangers of nuclear power in the "China Syndrome" back in 1979. She was driving to tell the story of real money – gold and how people throughout the world value gold as real money while most Americans and people in western societies don’t understand gold and have forgotten its importance and value.
The plot line is about wealthy Arab investors not rolling over their certificates of deposits (CDs) in American banks and buying gold in order to hedge themselves against a fall in the dollar and paper currencies … and what the loss of those foreign investments means to the financial establishment in New York and the international financial and monetary system.
Rollover: Financial Apocalypse
This movie was a "financial thriller" and there are not many of these movies made. Movies need bank financing, and banks usually won’t finance anything that makes them look bad or stupid. They show "It’s a Wonderful Life" with Jimmy Stewart on TV only once a year now because it shows "run on the bank" at the Bailey Savings and Loan – not something the financial establishment wants Americans to even think about.
Gold continues to surprise to the downside on the COMEX and the futures markets in spite of huge physical demand, increasing supply issues and surging premiums on bullion products.
Speculative paper players using huge leverage continue to exit positions for the relative safety of cash due to margin calls on other bets and some investment banks continue to short gold despite the incredibly strong fundamentals for bullion itself.