Monday, September 24, 2012

Gold Should Be Part Investor's Portfolio - Raymond Dalio

Raymond Dalio, Bridgewater Associates founder, & CIO, discusses his biggest concerns about the global economy, and why he thinks gold is 'like cash' and should be part of every investor's portfolio in a monetary crisis scenario and why he thinks Warren Buffet is making a big mistake for not touching gold.

Sunday, September 23, 2012

Gold Prices Could Reach $5,000 says Bank of America


Bank of America Merrill Lynch analysts said gold could soar to $3,000 or even $5,000 over the longer-term. “We will be focusing in on gold. Ultimately we think gold can trade between $3,000 and $5,000 an ounce going forward,” MacNeil Curry, head of foreign-exchange and rates technical strategy at BAML...

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Saturday, September 15, 2012

What Will Happen to all the New QE3 Money?

... So what will happen to all of this new money?
If banks and financial institutions use that money to make loans then it could have somewhat of a positive impact on the economy in the short-term. However, the truth is that it isn't as if banks are hurting for cash to loan out. In fact, right now banks are already sitting on $1.6 trillion in excess reserves. Just like with the first two rounds of quantitative easing, a lot of the money from QE3 will likely end up being put on the shelf...

And without a doubt the mainstream media will be proclaiming this to be "good news" for the economy in the short-term. But is QE3 really going to help the average person on the street? Well, first let's take a look at employment. We are told that one of the primary reasons for QE3 is jobs...

But did QE1 and QE2 create jobs? The answer is clearly no...

But what more quantitative easing is likely to do is to pump up stock market values because a lot of the money from QE3 is going to end up being put into stocks and other investments. This is going to help the wealthy get even wealthier, and it is going to make the "wealth gap" between the rich and the poor even larger in America. QE3 is also probably going to cause commodity prices to rise just like QE1 and QE2 did. That means that you will be paying more for gasoline, food and other basic necessities. So there may not be more jobs, but at least you will get the privilege of paying more for things. The inflation that QE3 will cause will be particularly cruel for those on fixed incomes such as retirees.

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Nouriel Roubini on ECB Decision & Fed's QE3

In the eurozone, euphoria followed the ECB’s decision to provide support with potentially unlimited purchases of distressed countries’ bonds. But the move is not a game changer; it only buys time for policymakers to implement the tough measures needed to resolve the crisis. And the policy challenges are daunting: the eurozone’s recession is deepening as front-loaded fiscal consolidation and severe credit rationing continues...

In the United States, the latest economic data – including a weak labour market – confirm that growth is anemic, with output in the second half of 2012 unlikely to be significantly stronger than the 1.6 percent annual gain recorded in January-June.

And, given America’s political polarization and policy gridlock, we can expect more fights on the budget and the debt ceiling, another rating downgrade, and no agreement on a path toward medium-term fiscal consolidation and sustainability – regardless of whether President Barack Obama is re-elected in November.
...
Ineffective governments with weak leadership are at the root of the problem. In democracies, repeated elections lead to short-term policy choices...

But, as everyone kicks the can down the road, the can is getting heavier and, in the major emerging markets and advanced economies alike, is approaching a brick wall. Policymakers can either crash into that wall, or they can show the leadership and vision needed to dismantle it safely.

Excerpts from Original Source

Egan Jones Downgrades US debt rating to AA-

NEW YORK — Egan-Jones, an independent credit-research firm, downgraded its rating on U.S. government debt to AA- from AA on Friday, citing the Federal Reserve’s plans to try to stimulate the economy.
The credit rating agency said the Fed’s plans to buy mortgage bonds will likely hurt the economy more than help it. The plan will weaken the value of the dollar and push up prices for oil and other commodities, Egan-Jones said. That would leave less for consumers to spend on other things....

Saturday, September 8, 2012

Debt forecast - U.S. will look like Greece by 2021

The federal debt crossed the $16 trillion mark this week. What’s more remarkable than the number of zeros in that figure is that Washington somehow didn’t see this coming...

Currently, the CBO estimates that the federal debt will hit $25 trillion by 2021. But if that forecast is also off by 40%, we’ll actually be facing a federal debt of $35 trillion by then.

What will our country look like with a $35 trillion debt? The CBO has a good track record of predicting gross domestic product, and it predicts 2021’s economy will exceed $24 trillion. That will put our debt at almost 150% of GDP, or about where Greece is today...

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Tuesday, September 4, 2012

Fed First Audit Reveals Startling Results

What was revealed in the audit was startling:

$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious – the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.
...

The list of institutions that received the most money from the Federal Reserve can be found on page 131of the GAO Audit and are as follows..
  • Citigroup: $2.5 trillion ($2,500,000,000,000)
  • Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
  • Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
  • Bank of America: $1.344 trillion ($1,344,000,000,000)
  • Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
  • Bear Sterns: $853 billion ($853,000,000,000)
  • Goldman Sachs: $814 billion ($814,000,000,000)
  • Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
  • JP Morgan Chase: $391 billion ($391,000,000,000)

Monday, September 3, 2012

Billionaire Believes Gold Is Going Higher

Watch this excellent interview video where Billionaire Frank Giustra shares his views on the macro economics and policies.  He believes that the world is moving towards inflation and that it is bullish for gold and hard assets whereas those who believes in deflation will see their cash savings wiped out.  In the video he also shared how he picked up the 'body language' of the politicians to arrive at his conclusion.  Terms that have slowly become common language today like "Trillion", "Too Big to Fail", "Quantative Easing" all points towards an inflationary policies that the governments of the world are moving towards.