Bad credit-card debt could be next shot to economy, researcher says
By Jennifer Waters, MarketWatch
Last update: 7:42 p.m. EDT Sept. 30, 2008
CHICAGO (MarketWatch) -- Credit-card debt is on the brink of imploding and will be the next storm to hit the fragile finance industry, an investment research firm predicted this week.
According to Innovest StrategicValue Advisors, banks will charge off $18.6 billion in delinquent credit-card accounts in the first quarter of 2009 and $96 billion in all of 2009, more than double the research firm's forecast for all of this year.
Innovest projects that amount would be high enough to damage some of the biggest card issuers.
Credit-card charge-offs are "defying gravity" when compared with the problems in the mortgage market, according to Gregory Larkin, senior banking analyst for Innovest. But that will change as they catch up with mortgage charge-offs, which have spiked eightfold since the third quarter of 2007.
Full Story
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Buy Precious Metals
Tuesday, September 30, 2008
Hard Assets for Hard Times
Commentary: Pendulum is about to swing back to commodities
By Michael Kahn
Last update: 12:01 a.m. EDT Oct. 1, 2008
NEW YORK (MarketWatch) -- Last month, I wrote about the energy sector and that being a contrarian looked to be a good play. Well, I was a about a week early and as every chart watcher knows, timing is everything. But after the drawdown, the outlook is a lot better now.
The tumbling dollar last month and the mammoth short squeeze in the oil market as the front futures contract was expiring bring the revival of energy and all commodities back to the fore. That the financial crisis became Main Street news only fans the flames of a hard asset revival.
Full Article
--------------------
Buy Precious Metals
By Michael Kahn
Last update: 12:01 a.m. EDT Oct. 1, 2008
NEW YORK (MarketWatch) -- Last month, I wrote about the energy sector and that being a contrarian looked to be a good play. Well, I was a about a week early and as every chart watcher knows, timing is everything. But after the drawdown, the outlook is a lot better now.
The tumbling dollar last month and the mammoth short squeeze in the oil market as the front futures contract was expiring bring the revival of energy and all commodities back to the fore. That the financial crisis became Main Street news only fans the flames of a hard asset revival.
Full Article
--------------------
Buy Precious Metals
Banking crash hits Europe as ECB loses traction
Source: Telegraph
By Ambrose Evans-Pritchard
Last Updated: 10:37AM BST 30 Sep 2008
The Dutch-Belgian bank Fortis, Britain's Bradford and Bingley, and Iceland's Glitnir, were all partially or fully nationalized after failing to roll-over debts in the short-term money markets, while the French state pledged support for the Franco-Belgian lender Dexia after the share price collapsed on reports of a capital shortage.
"The European financial sector is on trial: we have to support our banks." said French President Nicolas Sarkozy. He has reportedly ordered the state investment arm Caisse Des Depots to shore up Dexia, even though the bank is based in Belgium.
Germany's Hypo Real Estate, a commercial property lender, was rescued with a €35bn lifeline from a consortium of local banks. The lender has $560bn in liabilities, almost as much as Lehman Brothers.
Hypo Real's share price crashed 74pc, setting off a masse exodus from financial stocks in Frankfurt. Commerzbank fell 23pc and Aareal Bank was off 43pc.
Anglo Irish Bank was down 44pc in Dublin on wholesale funding fears.
Europe's credit markets have come close to seizing up as three-month Euribor jumped to a record 5.22pc and OIS spreads rocketed to 113 basis points.
"The interbank market has collapsed," said Hans Redeker, currency chief at BNP Paribas.
"We're now seeing a domino effect as the credit multiplier goes into reverse and forces banks to cut back lending to clients," he said.
Mr Redeker said the latest alarming twist is a move by banks to deposit €28bn in funds at the European Central Bank in a panic flight to safety. This has jammed the mechanism used by the authorities to shore up the financial system in a crisis.
"The ECB is no longer able to inject liquidity because the money is just coming back to them again. This is extremely serious. If monetary policy is no longer working, there is a risk that the whole system will blow up in days," he said.
The euro plunged on Monday as the wave of bank failures hit the newswires, dropping 2pc to $1.43 against the dollar. It recovered slightly as the US Federal Reserve flooded the markets with $630bn of dollar funding with fellow central banks in the biggest liquidity blitz in history.
Analysts say German finance minister Peer Steinbrueck may have spoken too soon when he crowed last week that the US would lose its status as a superpower as a result of this crisis. He told Der Spiegel yesterday that we are "all staring into the abyss".
Germany - over-leveraged to Asian demand for machine tools, and Mid-East and Russian demand for luxury cars - is perhaps in equally deep trouble, though of a different kind.
The combined crises at both Fortis and Dexia have sent tremors through Belgium, which is already traumatized by political civil war between the Flemings and Walloons. Fortis is Belgium's the biggest private employer.
It is unclear whether the country has the resources to bail out two banks with liabilities that dwarf the economy if the crisis deepens, although a joint intervention by The Netherlands and Luxembourg to rescue Fortis has helped Belgium share the risk. Together the three states put €11.2bn to buy Fortis stock.
This tripartite model is unlikely to work so well in others parts of Europe, since Benelux already operates as a closely linked team. The EU lacks a single treasury to take charge in a fast-moving crisis, leaving a patchwork of regulators and conflicting agendas.
Carsten Brzenski, chief economist at ING in Brussels, said the global crisis was now engulfing Europe with devastating speed.
"We are at imminent risk of a credit crunch. Key markets are not functioning properly. The Europeans thought the sub-prime crisis was just American rubbish that the US should clean up itself, but now they are finding out that it is their rubbish too," he said.
Data from the IMF shows that European banks hold 75pc as much exposure to toxic US housing debt as US banks themselves. Moreover they have mounting bad debts from the British, Spanish, French, Dutch, Scandinavian, and East European housing markets, where property bubbles reached even more extreme levels that in the US.
The interest spread between Italian 10-year bonds and German Bunds have ballooned to 92 basis points, the highest since the launch of the euro. Bond traders warn that the spreads are starting to reflect a serious risk of EMU break-up and could spiral out of control in a self-feeding effect.
As the eurozone slides into recession, the ECB is coming under intense criticism for keeping monetary policy too tight. The decision to raise rates into the teeth of the crisis in July has been slammed as overkill by the political leaders in France, Spain, and Italy.
Mr Sarkozy has called an emergency meeting of the EU's big five powers next week to fashion a response to the crisis.
Half of the ECB's shadow council have called for a rate cut this week, insisting that the German-led bloc of ECB governors have overstated the inflation risk caused by the oil spike earlier this year.
Jacques Cailloux, Europe economist at RBS, said the hawks had won a Pyrrhic victory by imposing their hardline monetary edicts on Europe. "They have won a battle but lost the war. The July decision will hardly go down in history books as a great policy decision," he said.
----------------------
Buy Precious Metals
By Ambrose Evans-Pritchard
Last Updated: 10:37AM BST 30 Sep 2008
The Dutch-Belgian bank Fortis, Britain's Bradford and Bingley, and Iceland's Glitnir, were all partially or fully nationalized after failing to roll-over debts in the short-term money markets, while the French state pledged support for the Franco-Belgian lender Dexia after the share price collapsed on reports of a capital shortage.
"The European financial sector is on trial: we have to support our banks." said French President Nicolas Sarkozy. He has reportedly ordered the state investment arm Caisse Des Depots to shore up Dexia, even though the bank is based in Belgium.
Germany's Hypo Real Estate, a commercial property lender, was rescued with a €35bn lifeline from a consortium of local banks. The lender has $560bn in liabilities, almost as much as Lehman Brothers.
Hypo Real's share price crashed 74pc, setting off a masse exodus from financial stocks in Frankfurt. Commerzbank fell 23pc and Aareal Bank was off 43pc.
Anglo Irish Bank was down 44pc in Dublin on wholesale funding fears.
Europe's credit markets have come close to seizing up as three-month Euribor jumped to a record 5.22pc and OIS spreads rocketed to 113 basis points.
"The interbank market has collapsed," said Hans Redeker, currency chief at BNP Paribas.
"We're now seeing a domino effect as the credit multiplier goes into reverse and forces banks to cut back lending to clients," he said.
Mr Redeker said the latest alarming twist is a move by banks to deposit €28bn in funds at the European Central Bank in a panic flight to safety. This has jammed the mechanism used by the authorities to shore up the financial system in a crisis.
"The ECB is no longer able to inject liquidity because the money is just coming back to them again. This is extremely serious. If monetary policy is no longer working, there is a risk that the whole system will blow up in days," he said.
The euro plunged on Monday as the wave of bank failures hit the newswires, dropping 2pc to $1.43 against the dollar. It recovered slightly as the US Federal Reserve flooded the markets with $630bn of dollar funding with fellow central banks in the biggest liquidity blitz in history.
Analysts say German finance minister Peer Steinbrueck may have spoken too soon when he crowed last week that the US would lose its status as a superpower as a result of this crisis. He told Der Spiegel yesterday that we are "all staring into the abyss".
Germany - over-leveraged to Asian demand for machine tools, and Mid-East and Russian demand for luxury cars - is perhaps in equally deep trouble, though of a different kind.
The combined crises at both Fortis and Dexia have sent tremors through Belgium, which is already traumatized by political civil war between the Flemings and Walloons. Fortis is Belgium's the biggest private employer.
It is unclear whether the country has the resources to bail out two banks with liabilities that dwarf the economy if the crisis deepens, although a joint intervention by The Netherlands and Luxembourg to rescue Fortis has helped Belgium share the risk. Together the three states put €11.2bn to buy Fortis stock.
This tripartite model is unlikely to work so well in others parts of Europe, since Benelux already operates as a closely linked team. The EU lacks a single treasury to take charge in a fast-moving crisis, leaving a patchwork of regulators and conflicting agendas.
Carsten Brzenski, chief economist at ING in Brussels, said the global crisis was now engulfing Europe with devastating speed.
"We are at imminent risk of a credit crunch. Key markets are not functioning properly. The Europeans thought the sub-prime crisis was just American rubbish that the US should clean up itself, but now they are finding out that it is their rubbish too," he said.
Data from the IMF shows that European banks hold 75pc as much exposure to toxic US housing debt as US banks themselves. Moreover they have mounting bad debts from the British, Spanish, French, Dutch, Scandinavian, and East European housing markets, where property bubbles reached even more extreme levels that in the US.
The interest spread between Italian 10-year bonds and German Bunds have ballooned to 92 basis points, the highest since the launch of the euro. Bond traders warn that the spreads are starting to reflect a serious risk of EMU break-up and could spiral out of control in a self-feeding effect.
As the eurozone slides into recession, the ECB is coming under intense criticism for keeping monetary policy too tight. The decision to raise rates into the teeth of the crisis in July has been slammed as overkill by the political leaders in France, Spain, and Italy.
Mr Sarkozy has called an emergency meeting of the EU's big five powers next week to fashion a response to the crisis.
Half of the ECB's shadow council have called for a rate cut this week, insisting that the German-led bloc of ECB governors have overstated the inflation risk caused by the oil spike earlier this year.
Jacques Cailloux, Europe economist at RBS, said the hawks had won a Pyrrhic victory by imposing their hardline monetary edicts on Europe. "They have won a battle but lost the war. The July decision will hardly go down in history books as a great policy decision," he said.
----------------------
Buy Precious Metals
Monday, September 29, 2008
Citigroup Agrees to Buy Wachovia's Banking Business
Sept. 29 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank by assets, will acquire the banking operations of Wachovia Corp., rescuing the Charlotte, North Carolina-based lender beset by mortgage losses for more than $2 billion in stock.
The accord may have averted a collapse at Wachovia, ranked sixth by assets, whose stock fell below $1 a share today. All depositors will be protected, according to the Federal Deposit Insurance Corp., which helped broker the takeover by New York- based Citigroup. The bank assumes senior and subordinated debt of Wachovia, the FDIC said, and Citigroup said it will cut its dividend in half and raise $10 billion in new capital.
``For Wachovia's customers, today's action will ensure seamless continuity of service from their bank and full protection for all of their deposits,'' FDIC Chairman Sheila C. Bair said in a statement. ``There will be no interruption in services and bank customers should expect business as usual.''
Wachovia is the latest casualty of a financial crisis that drove Lehman Brothers Holdings Inc. and Washington Mutual Inc. into bankruptcy and led to the hastily arranged rescues of Merrill Lynch & Co. and Bear Stearns Cos. The purchase gives Citigroup about 3,300 branches and offices in 21 states. Wachovia will continue to own the A.G. Edwards Inc. brokerage and the Evergreen mutual-fund family.
Wachovia's stock, which finished last week at $10 on the New York Stock Exchange, traded for 95 cents at 9 a.m. in early transactions. It sold for more than $48 in February 2007. Citigroup traded at $19.09 in early trading, compared with $20.15 at last week's close.
Citigroup's Role
Citigroup will absorb as much as $42 billion of losses on Wachovia's $312 billion pool of loans, the FDIC said in the statement. The regulator will take on losses beyond that amount in exchange for $12 billion in preferred stock and warrants.
``Of course they are going to raise capital,'' Oppenheimer & Co. analyst Meredith Whitney said in an interview on CNBC. ``I don't know how they absorb $42 billion on the income basis they have,'' Whitney said.
Wells Fargo & Co. had also bid for Wachovia, according to the Wall Street Journal.
``Citi needed it more than anybody,'' said Nancy Bush, an independent bank analyst. ``It would have been nice for Wells, but I couldn't see them taking on that chunk of bad debt.''
Christy Phillips-Brown, a Wachovia spokeswoman, said she had no comment and that the company's release will be issued later. The FDIC release didn't say what will happen to Wachovia's investment bank. Citigroup's Shannon Bell didn't immediately respond to a message seeking comment.
Loan Defaults
Wachovia reported $9.7 billion of losses in the first half of 2008. The slide toward collapse began when the bank paid more than $24 billion in October 2006 for Golden West Financial Corp., the California lender that specialized in option-ARM home mortgages. The bank holds about $122 billion of the adjustable- rate home loans. Kennedy Thompson, the chief executive officer at the time, later admitted that the purchase at the height of the real estate boom was ill-timed.
Wachovia is the largest holder of option ARMs, ahead of Washington Mutual, the Seattle-based lender that collapsed last week. The loans are prone to default because they allow borrowers to skip some interest payments and add them to the principal. The terms backfired when housing markets weakened, leaving borrowers with loans bigger than the value of their home. Prices in California during August fell 41 percent from year-earlier levels.
Pressure on the bank to make a deal grew last week when JPMorgan CEO Jamie Dimon bought WaMu and then announced writedowns on loans similar to those held by Wachovia.
``Jamie Dimon threw gas on the fire when JPMorgan built in losses of 25 percent on the Washington Mutual option ARMs,'' Bush said yesterday. Wachovia CEO Robert Steel ``has put his losses at 12 percent, but that was a couple weeks ago and the situation has gotten more dire since then.''
Analysts at Fitch Ratings predict default rates on such loans packaged as securities may reach 45 percent.
To contact the reporter on this story: Steve Dickson in New York at sdickson1@bloomberg.net.
Last Updated: September 29, 2008 09:27 EDT
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Buy Precious Metals
The accord may have averted a collapse at Wachovia, ranked sixth by assets, whose stock fell below $1 a share today. All depositors will be protected, according to the Federal Deposit Insurance Corp., which helped broker the takeover by New York- based Citigroup. The bank assumes senior and subordinated debt of Wachovia, the FDIC said, and Citigroup said it will cut its dividend in half and raise $10 billion in new capital.
``For Wachovia's customers, today's action will ensure seamless continuity of service from their bank and full protection for all of their deposits,'' FDIC Chairman Sheila C. Bair said in a statement. ``There will be no interruption in services and bank customers should expect business as usual.''
Wachovia is the latest casualty of a financial crisis that drove Lehman Brothers Holdings Inc. and Washington Mutual Inc. into bankruptcy and led to the hastily arranged rescues of Merrill Lynch & Co. and Bear Stearns Cos. The purchase gives Citigroup about 3,300 branches and offices in 21 states. Wachovia will continue to own the A.G. Edwards Inc. brokerage and the Evergreen mutual-fund family.
Wachovia's stock, which finished last week at $10 on the New York Stock Exchange, traded for 95 cents at 9 a.m. in early transactions. It sold for more than $48 in February 2007. Citigroup traded at $19.09 in early trading, compared with $20.15 at last week's close.
Citigroup's Role
Citigroup will absorb as much as $42 billion of losses on Wachovia's $312 billion pool of loans, the FDIC said in the statement. The regulator will take on losses beyond that amount in exchange for $12 billion in preferred stock and warrants.
``Of course they are going to raise capital,'' Oppenheimer & Co. analyst Meredith Whitney said in an interview on CNBC. ``I don't know how they absorb $42 billion on the income basis they have,'' Whitney said.
Wells Fargo & Co. had also bid for Wachovia, according to the Wall Street Journal.
``Citi needed it more than anybody,'' said Nancy Bush, an independent bank analyst. ``It would have been nice for Wells, but I couldn't see them taking on that chunk of bad debt.''
Christy Phillips-Brown, a Wachovia spokeswoman, said she had no comment and that the company's release will be issued later. The FDIC release didn't say what will happen to Wachovia's investment bank. Citigroup's Shannon Bell didn't immediately respond to a message seeking comment.
Loan Defaults
Wachovia reported $9.7 billion of losses in the first half of 2008. The slide toward collapse began when the bank paid more than $24 billion in October 2006 for Golden West Financial Corp., the California lender that specialized in option-ARM home mortgages. The bank holds about $122 billion of the adjustable- rate home loans. Kennedy Thompson, the chief executive officer at the time, later admitted that the purchase at the height of the real estate boom was ill-timed.
Wachovia is the largest holder of option ARMs, ahead of Washington Mutual, the Seattle-based lender that collapsed last week. The loans are prone to default because they allow borrowers to skip some interest payments and add them to the principal. The terms backfired when housing markets weakened, leaving borrowers with loans bigger than the value of their home. Prices in California during August fell 41 percent from year-earlier levels.
Pressure on the bank to make a deal grew last week when JPMorgan CEO Jamie Dimon bought WaMu and then announced writedowns on loans similar to those held by Wachovia.
``Jamie Dimon threw gas on the fire when JPMorgan built in losses of 25 percent on the Washington Mutual option ARMs,'' Bush said yesterday. Wachovia CEO Robert Steel ``has put his losses at 12 percent, but that was a couple weeks ago and the situation has gotten more dire since then.''
Analysts at Fitch Ratings predict default rates on such loans packaged as securities may reach 45 percent.
To contact the reporter on this story: Steve Dickson in New York at sdickson1@bloomberg.net.
Last Updated: September 29, 2008 09:27 EDT
----------------------
Buy Precious Metals
Sunday, September 28, 2008
More reports of physical shortages in the precious metals
Editor's Note: Yes, there are shortages around the world but here at Pacific Bullion, LLC, we can still get you physical bullion with a 2 to 3 week back order on most products.
Gold and silver dealer reports an ‘unprecedented’ shortage of metals
Sunday Business Post - Ireland
Sunday, September 28, 2008 By David Clerkin, Markets Correspondent
A surge for demand in gold and silver has resulted in an unprecedented shortage of the metals for retail investors in recent days, according to Gold and Silver Investments, a Dublin-based firm that allows retail investors to speculate on movements in the value of precious metals.
Gold and Silver Investments director Mark O’Byrne said the supply of gold and silver available for small retail investors suffered a dramatic deterioration within hours on Friday, as wholesalers reported that government mints and refiners, the primary suppliers of the metals, had stopped offering new supplies.
‘‘It’s absolutely unprecedented,” said O’Byrne, who said the shortages were likely to drive up the costs of gold and silver in the secondary market.
‘‘This did not happen even in the 1930s and the 1970s, and will result in markedly higher prices in the coming months.”
According to O’Byrne, gold and silver were now only easily accessible in the primary market, which consisted of central banks and other major traders of the precious metals.
However, he said that minimum transaction sizes in this market were out of reach for most retail investors - at approximately $350,000 for gold and $135,000 for silver.
--------------------------
Buy Precious Metals
Gold and silver dealer reports an ‘unprecedented’ shortage of metals
Sunday Business Post - Ireland
Sunday, September 28, 2008 By David Clerkin, Markets Correspondent
A surge for demand in gold and silver has resulted in an unprecedented shortage of the metals for retail investors in recent days, according to Gold and Silver Investments, a Dublin-based firm that allows retail investors to speculate on movements in the value of precious metals.
Gold and Silver Investments director Mark O’Byrne said the supply of gold and silver available for small retail investors suffered a dramatic deterioration within hours on Friday, as wholesalers reported that government mints and refiners, the primary suppliers of the metals, had stopped offering new supplies.
‘‘It’s absolutely unprecedented,” said O’Byrne, who said the shortages were likely to drive up the costs of gold and silver in the secondary market.
‘‘This did not happen even in the 1930s and the 1970s, and will result in markedly higher prices in the coming months.”
According to O’Byrne, gold and silver were now only easily accessible in the primary market, which consisted of central banks and other major traders of the precious metals.
However, he said that minimum transaction sizes in this market were out of reach for most retail investors - at approximately $350,000 for gold and $135,000 for silver.
--------------------------
Buy Precious Metals
Friday, September 26, 2008
New Poll: Which bank do you think will fail next?
We have started a new poll (on the right). Select the bank that you think will fail next. Here is a news story that will give you a little background:
Wachovia Slumps After WaMu's Seizure, Bailout Impasse
-----------------------------------------------
Buy Precious Metals
Wachovia Slumps After WaMu's Seizure, Bailout Impasse
By David Mildenberg and Linda Shen
Sept. 26 (Bloomberg) -- Wachovia Corp. slumped, leading other banks stocks lower, after negotiations on the government's financial bailout stalled and Washington Mutual Inc. was seized by regulators and sold to JPMorgan Chase & Co.
Wachovia, which the New York Times said today is in early merger talks with Citigroup Inc., dropped $3.70, or 27 percent, to $10 at 4 p.m. in New York Stock Exchange composite trading. Wells Fargo & Co. and Banco Santander SA are also suitors, the Wall Street Journal said. Cleveland-based National City Corp. fell 27 percent and Downey Financial Corp. slipped 48 percent. All three lenders plunged more than 80 percent in the past 12 months.
``Washington Mutual showed that one of the big ones can go down, and if you are looking at who else in the top 10 is facing the most pressure, Wachovia is right there,'' said Stan Smith, a banking professor at the University of Central Florida in Orlando.
WaMu was taken over by regulators yesterday in the biggest U.S. bank failure after customers of the Seattle-based lender withdrew $16.7 billion from accounts since Sept. 16. The savings and loan was ``unsound,'' the Office of Thrift Supervision said. The collapse came as lawmakers planned to meet again after talks on Treasury Secretary Henry Paulson's bailout reached an impasse.
The Times said there's no guarantee the talks between Citigroup and Wachovia will result in a deal, citing people briefed on the matter. Citigroup spokeswoman Christina Pretto declined to comment on the Times report. Santander spokesman Peter Greiff declined to comment on the Journal's report, as did Wells Fargo's Julia Tunis Bernard.
Steel's E-Mail
Fears of mounting losses on Wachovia's $122 billion in option adjustable-rate mortgages helped push the Charlotte, North Carolina-based company's shares down by 64 percent this year before today's trading. Chief Executive Officer Robert Steel is treating the loans as distressed debt and named a senior bank official, David Carroll, to lead an effort to minimize losses on option ARMs that the bank expects to total about $14 billion.
Steel sent an e-mail to employees today saying he's ``optimistic'' about the government rescue package.
``The Treasury plan under consideration by Congress and the fact that the WaMu situation was smoothly resolved for its customers are two constructive and important steps toward restoring confidence in the financial system,'' Steel wrote in the e-mail, which was confirmed by the bank. ``We are aggressively addressing our challenges and are working to strategically strengthen and manage capital and liquidity in this challenging environment.''
`Silent' Run
Still, customers may not be assuaged. Louise Pitt, a credit analyst at Goldman Sachs Group Inc., wrote in a report today that Wachovia may face the possibility of a ``silent'' run on desposits similar to that confronted by WaMu.
Outflows could come because of ``negative industry headlines and fear among retail customers,'' Pitt wrote in a report today. The bank has about $391 billion in core deposits out of a total of $436 billion, said Pitt, who cut her rating on Wachovia to ``trading sell'' from ``outperform.''
Christy Phillips-Brown, a spokeswoman for the bank, said the company doesn't comment on analyst reports. She noted that the bank has opened 745,000 retail deposit accounts since June, a 6 percent increase from the average daily sales rate in the first half of the year. Customers have also reinvested their certificates of deposits with Wachovia at a faster clip than during the first half of the year, she said.
CD Rates
The lender is paying among the highest CD rates among U.S. banks, which is typically seen as a signal that is struggling to win investor confidence, analyst Sean Ryan of Sterne Agee & Leach Inc. said today in an interview.
National City is well capitalized, has strong deposit inflows and has a fundamentally different business model than WaMu, said spokeswoman Kristen Baird Adams in an interview today.
``National City is a diversified commercial bank'' with no option ARMs, Adams said. ``WaMu was a thrift whose primary business was mortgage related.''
Wachovia had a total of $167 billion in mortgages as of June 30, ranking second among U.S. lenders behind Bank of America Corp.'s $239 billion, and followed by Citigroup Inc.'s $145 billion, according to an Oppenheimer & Co. report.
``All eyes are now on Wachovia,'' said Anton Schutz, president of Mendon Capital Advisors Corp. in Rochester, New York.
Option-ARM Mortgages
Wachovia became the largest option-ARM seller through its $24 billion acquisition in 2006 of Golden West Financial Corp., the Oakland, California-based lender that popularized the product over the previous 30 years. Wachovia expects cumulative losses of about 11 percent to 12 percent on its option-ARM loans.
``We feel it is likely that Wachovia will need to issue equity to provide greater reassurance about its liquidity and solvency,'' Mike Mayo, an analyst at Deutsche Bank AG, wrote in a note today. He reduced his target price to $11 from $16 a share.
Mayo expects the firm will need an additional $11 billion in capital, assuming a 20 percent discount on its ARM portfolio, he wrote. If common shares were issued at yesterday's closing price, it would dilute current shareholders by about one third.
California Slump
Merrill Lynch & Co. analyst Edward Najarian expects the losses to be in the 15 percent to 17 percent range, according to a Sept. 9 report. Housing prices in California declined by a record 41 percent in August from a year earlier, the California Association of Realtors said yesterday. Almost half of Wachovia's option ARMs are in California.
Option ARMs allow borrowers to skip part of their payment and add that sum to their principal. Monthly costs eventually increase after introductory interest rates as low as 1 percent.
Because typical option ARM borrowers make less than the full payment each month, according to Fitch Ratings, they don't build equity in their homes. When house prices fall, borrowers often owe more than their homes are worth. That leaves lenders facing losses if the borrower defaults.
Downey, based in Newport Beach, California, ranked fourth among option ARM lenders behind Wachovia, WaMu and Bank of America's Countrywide Financial Corp. Downey said it held $6.9 billion in option ARMs at the end of the second quarter.
Downey Financial
Downey now has less than a month to submit a long-term business plan to its chief regulator, the Office of Thrift supervision. The agency ordered the bank on Sept. 5 to raise cash by the end of the year and halt dividend payments.
Downey spokeswoman Elizabeth Stover declined to comment.
``A bailout plan needs to be approved as credit markets have frozen, credit spreads have widened and it's getting more difficult for businesses and consumers to get access to credit,'' said BMO Capital Markets analyst Peter Winter in a note to investors today.
Wachovia's shares advanced last week on speculation it would be a beneficiary of the Treasury's rescue plan. The company's option ARMs may be simpler to sell to the government than securitized pools of loans, said Kevin Stein, associate director of the California Reinvestment Coalition, a San Francisco-based nonprofit.
Wachovia holds the loans on its balance sheet, while WaMu and other big option-ARM lenders pooled the loans into securities that were sold to investors, he said.
`A Major Hit'
``If Wachovia could unload a third or a half of its option-ARM portfolio without taking a major hit to earnings, that would be a very positive development,'' said Gerard Cassidy, an analyst at RBC Capital Management in Portland, Maine. ``Whole loans are a lot easier for the government to buy than CDOs or CDO squared,'' he said, referring to collateralized debt obligations.
At the time of its failure, WaMu had $28.4 billion in outstanding bonds, with Capital Research and Management the largest debt-holder, Bloomberg data show. All three major credit agencies rate WaMu junk, the only company in the 24-member KBW Bank Index that's below investment grade.
Wachovia, which has $125.9 billion of outstanding bonds, has investment-grade ratings from Moody's Investors Service, Standard & Poor's Corp. and Fitch. Moody's and Fitch have a negative outlook on the lender, indicating a possible downgrade.
The cost to protect against a default by Wachovia soared to distressed levels today. Credit-default swap sellers demanded 25 percentage points upfront and 5 percentage points a year to protect Wachovia bonds from default for five years, according to broker Phoenix Partners Group. That means it would cost $2.5 million initially and $500,000 a year to protect $10 million in Wachovia bonds, compared with $670,000 a year and no upfront payment yesterday.
During the past three quarters, WaMu lost $6.3 billion. It kept skidding even after joining a list of financial companies the U.S. Securities and Exchange Commission protected from short selling in an effort to stabilize stock markets.
To contact the reporters on this story: Linda Shen in New York at lshen21@bloomberg.net; David Mildenberg in Charlotte at dmildenberg@bloomberg.net
Last Updated: September 26, 2008 17:27 EDT-----------------------------------------------
Buy Precious Metals
Thursday, September 25, 2008
U.S Mint Suspends Buffalo gold coins after depletion
Comment & Opinion by The Bullion Insider: It is virtually impossible to find bullion dealers with any kind of ready inventory. Because the manipulators in the futures markets have hammered down the bullion prices, physical inventories have dried up. Only fools are selling their metals in this environment. The smart ones are buying up all that they can get their hands on at these prices - even with the significant premiums that are being commanded. Generic silver is commanding 15% premiums over the spot price. Silver American Eagles are commanding 35% premiums above the spot price.
U.S. Mint suspends Buffalo gold coins after depletionReuters (reported by Canada.com)
Thursday, September 25, 2008
NEW YORK - The U.S Mint said Thursday it was temporarily suspending sales of American Buffalo 24-karat gold one-ounce bullion coins because strong demand depleted its inventory.
"Demand has exceeded supply for American Buffalo 24-karat gold one-ounce bullion coins, and our inventories have been depleted. We are, therefore, temporarily suspending sales of these coins," the Mint said in a memorandum to authorized American Buffalo dealers.
The Mint also told dealers that it would work to build up its inventory to resume sales shortly.
In mid-August, a shortage of American Eagle one-ounce gold coins due to "unprecedented" demand had also forced the U.S. Mint to temporarily suspend sales of the popular coins.
The Mint said Thursday it would continue to supply the American Eagle 22-karat gold one-ounce and American Eagle silver bullion coins on an allocation basis to coin dealers.
In addition, the half-ounce, quarter-ounce, and 1-10th ounce American Eagle gold coins and American Eagle platinum were also available, the Mint said.
Coin dealers from the United States to Canada have recently reported a surge in buying of bullion coins and other gold products as troubles in the financial markets prompted people to seek a safe haven in precious metals.
On Thursday, the U.S. gold contract for December delivery ended down $13 or 1.5 percent at $882 an ounce on the COMEX division of the NYMEX, while spot gold traded at $873 an ounce.
Bullion hit an all-time high of $1,030.80 an ounce on March 17.
With files from Frank Tang
© Reuters 2008
Breaking News: Looks like the WaMu "milk" has officially expired!
J.P. Morgan to Take Over Faltering WaMu
U.S. Government Helps Broker a Deal to Dispose of Huge Thrift; Banking Giant Expected to Get Deposits, Branches
By ROBIN SIDEL, DAVID ENRICH and DAMIAN PALETTA
Source: Wall Street Journal
![[JP Morgan to take over Wamu]](http://s.wsj.net/public/resources/images/OB-CK345_0925wa_D_20080925195701.jpg)
Associated Press
U.S. Government Helps Broker a Deal to Dispose of Huge Thrift; Banking Giant Expected to Get Deposits, Branches
By ROBIN SIDEL, DAVID ENRICH and DAMIAN PALETTA
Source: Wall Street Journal
J.P. Morgan Chase & Co. was expected to announce as early as Thursday night a deal to acquire the bulk of Washington Mutual Inc.'s operations in a deal that would mark the end of independence for what once was the largest U.S. thrift.
Associated PressPedestrians walk past a Washington Mutual branch in downtown Seattle.
Federal regulators have been heavily involved in orchestrating the transaction, which comes as WaMu was besieged by a mountain of bad mortgage loans. Seattle-based WaMu has been scrambling to find a solution and put itself on the auction block last week. A number of interested parties have been poring over WaMu's books, but the bank didn't receive any offers.
While the exact structure of the transaction wasn't immediately known, J.P. Morgan is expected to acquire Washington Mutual's deposits and branches, as well as other operations. The deal isn't expected to result in any hit to the bank-insurance fund, according to a person familiar with the arrangement. But it's likely that another arm of government would have to pick up the tab. Some analysts have worried that a WaMu failure could cost more than $20 billion.
Federal regulators have been heavily involved in orchestrating the transaction, which comes as WaMu grapples with its bad mortgage loans. Regulators were hoping to fend off a collapse of WaMu, which, with more than $300 billion in assets, would mark by far the largest banking failure in U.S. history.
The exact structure of J.P. Morgan's acquisition of WaMu's deposits wasn't immediately known, except that the New York bank, which has long coveted WaMu as a way to secure a footprint on the West Coast, will assume most of the thrift's deposits and branches, as well as some other operations.
Unlike many of the 12 bank failures that the Federal Deposit Insurance Corp. has overseen this year, the J.P. Morgan-WaMu transaction isn't expected to impact the agency's national deposit-insurance fund. It wasn't immediately clear how the transaction would be structured to avoid the insurance fund taking a hit.
With mortgage losses mounting, and its stock price plunging, WaMu has been scrambling over the past month to find a solution; last week it put itself on the auction block. A number of banks -- including Citigroup Inc., Wells Fargo & Co. and Banco Santander SA -- pored over WaMu's books, but the bank didn't receive any offers. This week, WaMu's outside bankers approached a group of private-equity funds to gauge their interest in a deal.
Also this week, the FDIC took the step of reaching out to banks, asking them to express interest in taking over some or all of WaMu, according to people familiar with the matter. Those bids were due at 6 p.m. Wednesday. J.P. Morgan's takeover of WaMu's deposits represents a huge blow for private-equity firm TPG, which injected $7 billion into the thrift this spring. The transaction is expected to wipe out WaMu stockholders and holders of the company's senior debt, one person said. A key unknown: the fate of WaMu's bad assets, which include mortgage loans that have soured as housing markets tanked.
Arranging the deal in a way that doesn't cost the FDIC's deposit insurance fund any money would be an achievement for Chairman Sheila Bair, who has had a hawkish view about the state of many financial institutions. Federal regulators faced criticism from many after the July failure of IndyMac Bank, which the FDIC estimated might have cost the deposit insurance fund close to $9 billion.
This is the second time the government has gone to J.P. Morgan as a buyer of last resort. In March, the government agreed to backstop J.P. Morgan's takeover of Bear Stearns. This will likely prompt criticism from rivals about preferential treatment. BofA, for instance, didn't receive government assistance in its recently announced purchase of Merrill Lynch. Of course, in the case of WaMu, there were presumably other bidders who simply wouldn't offer that much for the deposits and branches. Before the deal, J.P. Morgan ranked as the fourth-largest bank as measured by branches, ranking below Bank of America Corp., Wachovia Corp. and Wells Fargo & Co. Its network of more than 3,100 branches stretches across 17 states with deep penetration in New York, Illinois, Texas, Michigan and Ohio.
---------------------
Washington Mutual passed expiration date?
WaMu is past its expiration date
Commentary: Seattle-based thrift is headed for a steep discount
By MarketWatch
Last update: 11:44 a.m. EDT Sept. 25, 2008
NEW YORK (MarketWatch) -- Washington Mutual Inc. is kind of like that milk in the refrigerator that's a couple of days past its expiration date.
It may be fine or have gone past the point of no return. Either way, it's not long before it will be gone.
Only the bankers who have been able to dig through WaMu's (WM Washington Mutual Inc portfolio can say with much certainty how long WaMu will last and judging by their reaction, they don't like what they smell.
J.P. Morgan Chase & Co., Toronto-Dominion and Citigroup Inc. all have reportedly passed on the auction of the bank. They dropped out after conducting an inspection of WaMu's mortgage portfolio -- assets that Standard & Poor's seemed convinced Wednesday could not be sold to raise capital.
Now, under pressure from the Office of Thrift Supervision, WaMu is looking for a private equity investor and has opened talks with the Carlyle Group and Blackstone Group LP about a capital infusion.
Should that fail, WaMu issued a statement Wednesday reminding its customers that their $143 billion in deposits are insured up to $100,000. WaMu is also getting desperate, offering 4% interest -- more than twice the national average -- on deposits made online.
If any deal occurs, expect buyers to take on a small part of WaMu - its branches, mortgage offices and deposits -- the rest of the bank is going bad and investors run the risk of getting sick.
- David Weidner
-------------------------
Buy Precious Metals
Commentary: Seattle-based thrift is headed for a steep discount
By MarketWatch
Last update: 11:44 a.m. EDT Sept. 25, 2008
NEW YORK (MarketWatch) -- Washington Mutual Inc. is kind of like that milk in the refrigerator that's a couple of days past its expiration date.
It may be fine or have gone past the point of no return. Either way, it's not long before it will be gone.
Only the bankers who have been able to dig through WaMu's (WM Washington Mutual Inc portfolio can say with much certainty how long WaMu will last and judging by their reaction, they don't like what they smell.
J.P. Morgan Chase & Co., Toronto-Dominion and Citigroup Inc. all have reportedly passed on the auction of the bank. They dropped out after conducting an inspection of WaMu's mortgage portfolio -- assets that Standard & Poor's seemed convinced Wednesday could not be sold to raise capital.
Now, under pressure from the Office of Thrift Supervision, WaMu is looking for a private equity investor and has opened talks with the Carlyle Group and Blackstone Group LP about a capital infusion.
Should that fail, WaMu issued a statement Wednesday reminding its customers that their $143 billion in deposits are insured up to $100,000. WaMu is also getting desperate, offering 4% interest -- more than twice the national average -- on deposits made online.
If any deal occurs, expect buyers to take on a small part of WaMu - its branches, mortgage offices and deposits -- the rest of the bank is going bad and investors run the risk of getting sick.
- David Weidner
-------------------------
Buy Precious Metals
More excellent commentary on why the $700 billion bailout is a sham
Read the following commentary that explains how only the top 5% will benefit from this $700 bailout and you'll get stuck with the bill:
Dear America, If This Bailout Fails, you will Fail. 2008 Financial Fear Mongering Tour.
Dear America, If This Bailout Fails, you will Fail. 2008 Financial Fear Mongering Tour.
Wednesday, September 24, 2008
Sage advice from Mr. Gold
In case you didn't know it, Jim Sinclair is THE AUTHORITY on Gold (read about Mr. Sinclair here). The following is important advice that you should consider carefully. His words carry much weight:
Keep Your Guard Up
Author: Jim Sinclair
Posted On: Wednesday, September 24, 2008, 5:28:00 PM EST
Keep Your Guard Up
Author: Jim Sinclair
Posted On: Wednesday, September 24, 2008, 5:28:00 PM EST
Dear Friends,
There is no hope for the future as long as we have to listen to what we have experienced in the last two days. If the Fed pays “Hold to Maturity” prices in the bailout they are accepting onto their balance sheet all the lies that existed and still exists on and off the balance sheets of the banking and investment industry.
Fabrication has taken the US financial system over the cliff. The bailout of the near and dear fabricated to a spiritual level sets in cement the generational nature of this breakdown, the coming dollar collapse, and the reign of gold.
To categorize this bailout of OTC derivative manufacturers as an asset purchase is so wrong it strains the limits of criminality.
DO NOT LET YOUR GUARD DOWN.
THE BAILOUT ONLY BUYS YOU A LITTLE MORE TIME TO PROTECT YOURSELVES.
You need to distance yourself from your financial agents by:
- Certificating your gold and silver shares.
- Opting for direct registration book entry at the transfer agent for your gold and silver shares.
- For your retirement plan, certificate the shares in the name of your trustee and the retirement plan. The alternative is direct registration book entry at the transfer agent in the name of the trustee and the retirement account.
- Be sure your account at your bank is a true custodial account which is defined as an account segregated to you, away from the assets of the bank and therefore not on the balance sheet of the financial institution.
I am told where the retirement shares are concerned that Charles Schwab performs this service. Many others likely do as well.
The only way to be sure you really have a true custodial account is to have your attorney review the agreement between you and the institution.
I have personally used the services of Jay Marcus for this of:
Marcus Law Offices
2094 185th Street
Suite 15
Fairfield, Iowa 52556
641-472-5945
Gold is the ultimate answer as to what currency to own. The only way gold functions as insurance is if you hold it in your own hands. ETFs do not do it. Gold shares with the real stuff properly priced will do part, but not all of it. Gold at some coin dealers, segregated or as a certificate, does not do it.
If you have gold at any coin dealer or non-government mint and you want to remain that way please request their certified balance sheet. If a guarantee by some other party is there then get a copy of that guarantee for your attorney to read. The only business, as I have told you often, you should do with any coin dealer is to buy coins.
Do not use margin on anything GOLD. That totally defeats the insurance principle.
Respectfully yours,
Jim
--------------------------------------------
Could this be in preparation for civil unrest as a result of economic collapse?
The following news item is being reported by DemocracyNow.org (update: Here is the original source from the Army Times). Could this be in preparation for civil unrest as a result of economic collapse? What do they know that we don't?:
Army Unit to Deploy in October for Domestic Operations
Beginning in October, the Army plans to station an active unit inside the United States for the first time to serve as an on-call federal response in times of emergency. The 3rd Infantry Division’s 1st Brigade Combat Team has spent thirty-five of the last sixty months in Iraq, but now the unit is training for domestic operations. The unit will soon be under the day-to-day control of US Army North, the Army service component of Northern Command. The Army Times reports this new mission marks the first time an active unit has been given a dedicated assignment to Northern Command. The paper says the Army unit may be called upon to help with civil unrest and crowd control. The soldiers are learning to use so-called nonlethal weapons designed to subdue unruly or dangerous individuals and crowds.
-----------------------
Tuesday, September 23, 2008
Take a look at Platinum
Take a look at the following charts and you will see a potential opportunity in Platinum. The first point I would like to make is that Platinum has tended to follow Gold & Silver over the last year. You will notice that Platinum hit a high of over $2,250/oz in March and has since corrected down to $1,161/oz at the time of this post.
You will also notice that Gold is now leading the pack on the next move up followed by Silver and then Platinum. If Gold and Silver hit their previous highs it will represent a 33% gain over the current prices. Here's where it gets interesting...if Platinum rises to its previous high it will represent a gain of over 94% from its current price!
If you do not own Platinum consider adding some to your portfolio. It could turn out to be an incredible opportunity.
------------------------
Buy Platinum
You will also notice that Gold is now leading the pack on the next move up followed by Silver and then Platinum. If Gold and Silver hit their previous highs it will represent a 33% gain over the current prices. Here's where it gets interesting...if Platinum rises to its previous high it will represent a gain of over 94% from its current price!
If you do not own Platinum consider adding some to your portfolio. It could turn out to be an incredible opportunity.
------------------------
Buy Platinum
Sunday, September 21, 2008
Indian Brides Given Gold as Security
21 Sep, 2008, 1018 hrs IST,
NEW DELHI: Pushpa Bhatia is in a dilemma as she scans the glittering gold offerings laid out on a showcase at a fancy jewellery store in the Delhi.
With the precious metal's price on a roller-coaster ride, she's wondering whether she should buy now or wait.
"Will the price go up or down -- you tell me," the sari-clad Bhatia says to the salesman, who responds with a shrug.
Last week, gold posted its biggest weekly gain in a decade, climbing by 13 per cent to $864.70 an ounce, as mounting credit turmoil pushed investors into safe haven assets.
But Bhatia can't wait too long, country's marriage and festival seasons are approaching and she needs gold for both.
She has a 23-year-old daughter getting married in November and she likes to give small "auspicious" golden gifts for Diwali in October.
India is the world's biggest gold consumer, importing 700 tonnes to 800 tonnes a year on average -- around 30 percent of global demand.
And higher prices won't stop Indians buying, said Suresh Hundia, head of the Bombay Bullion Association.
"Those who have marriage commitments will buy -- no matter what the rates," said Hundia.
Indian brides are traditionally bedecked in heavy gold jewellery seen as a family heirloom and also security.
With around 10 million marriages a year in the country of 1.1 billion people, wedding-related demand is huge, especially during the nuptial season between October and January and April and May.
"The idea of giving gold to the bride is it will bail her and her family out in times of crisis," said Ajay Mitra, managing director of the World Gold Council in India.
The gold given to a bride is known as "streedhan," or "woman's wealth."
In fact, said jewellery store salesman Devender Kumar, "most of the time the customers don't even look at the design they just look at the weight."
However, lifestyles are changing in urban areas.
Bhatia's daughter, Supriya, a newly minted accountant in tight trousers and an applique T-shirt, says she's bored with the metal.
"It's too heavy to put on," she says, screwing her face in disgust at an elaborate gold chain the salesman is looping around her mother's neck.
The vast array of consumer goods and trendy accessory jewellery to be found in cities have made gold a less sought after item for many.
"For thousands of years women had very little personal wealth other than their jewellery, they didn't have bank accounts," said Arvind Singhal, head of retail consulting firm Technopak.
"But now with the empowerment of women in urban areas, they want to spend their disposable income on cars, TVs, holidays, a new handbag," said Singhal.
Still, bride-to-be Supriya Bhatia knows she won't win the battle over her gold wedding jewellery as her mother orders her to sit and pay attention.
"It's a necessity to own gold if you're a woman," said her mother firmly.
With the precious metal's price on a roller-coaster ride, she's wondering whether she should buy now or wait.
"Will the price go up or down -- you tell me," the sari-clad Bhatia says to the salesman, who responds with a shrug.
Last week, gold posted its biggest weekly gain in a decade, climbing by 13 per cent to $864.70 an ounce, as mounting credit turmoil pushed investors into safe haven assets.
But Bhatia can't wait too long, country's marriage and festival seasons are approaching and she needs gold for both.
She has a 23-year-old daughter getting married in November and she likes to give small "auspicious" golden gifts for Diwali in October.
India is the world's biggest gold consumer, importing 700 tonnes to 800 tonnes a year on average -- around 30 percent of global demand.
And higher prices won't stop Indians buying, said Suresh Hundia, head of the Bombay Bullion Association.
"Those who have marriage commitments will buy -- no matter what the rates," said Hundia.
Indian brides are traditionally bedecked in heavy gold jewellery seen as a family heirloom and also security.
With around 10 million marriages a year in the country of 1.1 billion people, wedding-related demand is huge, especially during the nuptial season between October and January and April and May.
"The idea of giving gold to the bride is it will bail her and her family out in times of crisis," said Ajay Mitra, managing director of the World Gold Council in India.
The gold given to a bride is known as "streedhan," or "woman's wealth."
In fact, said jewellery store salesman Devender Kumar, "most of the time the customers don't even look at the design they just look at the weight."
However, lifestyles are changing in urban areas.
Bhatia's daughter, Supriya, a newly minted accountant in tight trousers and an applique T-shirt, says she's bored with the metal.
"It's too heavy to put on," she says, screwing her face in disgust at an elaborate gold chain the salesman is looping around her mother's neck.
The vast array of consumer goods and trendy accessory jewellery to be found in cities have made gold a less sought after item for many.
"For thousands of years women had very little personal wealth other than their jewellery, they didn't have bank accounts," said Arvind Singhal, head of retail consulting firm Technopak.
"But now with the empowerment of women in urban areas, they want to spend their disposable income on cars, TVs, holidays, a new handbag," said Singhal.
Still, bride-to-be Supriya Bhatia knows she won't win the battle over her gold wedding jewellery as her mother orders her to sit and pay attention.
"It's a necessity to own gold if you're a woman," said her mother firmly.
And even though urban tastes are changing, country's overall gold consumption is unlikely to alter much in the foreseeable future, analysts say.
There is "a growing trend toward luxury goods rather than wanting to buy gold in urban areas," noted Suki Cooper, analyst at London's Barclays Capital.
But she said "the majority of gold consumption is in rural areas," where "that level of consumerism doesn't exist so India is likely to stay a very important gold consuming nation."
In the countryside, where the banking system is still poorly developed, gold rules as a medium of financial exchange and secure savings vehicle.
"Beyond the big cities, gold is something which has intrinsic value for consumers," said the Gold Council's Mitra.
"They know they will never get cheated. It's an insurance."
-------------------------
Buy Gold & Silver here.
Saturday, September 20, 2008
Would you own this stock?
Would you invest in a company that loses over $400 billion dollars a year? That is exactly what you are doing when you own U.S. dollars. The dollar is the "common stock" of the good old U.S.A. (read this article)
With those types of losses adding up year after year, and growing with each and every new bailout, it's only a matter of time before the federal government goes belly up or they "print" their way out of debt by devaluing the currency. Either way, that is bad news for those who hold their wealth in dollars and good news for those who own precious metals.
Are you protected?
--------------------------
Buy Gold & Silver
With those types of losses adding up year after year, and growing with each and every new bailout, it's only a matter of time before the federal government goes belly up or they "print" their way out of debt by devaluing the currency. Either way, that is bad news for those who hold their wealth in dollars and good news for those who own precious metals.
Are you protected?
--------------------------
Buy Gold & Silver
Friday, September 19, 2008
Ameribank folds, 12th bank closure this year
By John Letzing, MarketWatch
Last update: 8:19 p.m. EDT Sept. 19, 2008
SAN FRANCISCO (MarketWatch) -- A tumultuous week for financial markets was capped Friday with the closure of Northfork, W.Va.-based Ameribank Inc., the 12th U.S. bank closure so far this year.
The Federal Deposit Insurance Corporation said in a statement late in the day that deposits at Ameribank's Ohio branches have been transferred to the Citizens Savings Bank, and Ameribank's three Ohio branches will reopen Saturday as Citizens Savings Bank branches.
Ameribank's West Virginia deposits have been transferred to Pioneer Community Bank, and Ameribank's five West Virginia branches will reopen Monday as Pioneer branches, according to the FDIC.
As of June 30, Ameribank had $115 million in total assets and total deposits of $102 million, the regulator said.
The bank's closure marks the end of an extraordinary week that saw venerated Wall Street brokerage Lehman Brothers Holdings Inc. file for bankruptcy, while Merrill Lynch & Co. agreed to sell itself off to Bank of America Corp. In addition, the federal government swooped in to seize troubled insurance giant American International Group Inc., and regulators began forming a rescue plan to help sustain U.S. markets.
---------------------------
Protect yourself, buy Gold & Silver
Last update: 8:19 p.m. EDT Sept. 19, 2008
SAN FRANCISCO (MarketWatch) -- A tumultuous week for financial markets was capped Friday with the closure of Northfork, W.Va.-based Ameribank Inc., the 12th U.S. bank closure so far this year.
The Federal Deposit Insurance Corporation said in a statement late in the day that deposits at Ameribank's Ohio branches have been transferred to the Citizens Savings Bank, and Ameribank's three Ohio branches will reopen Saturday as Citizens Savings Bank branches.
Ameribank's West Virginia deposits have been transferred to Pioneer Community Bank, and Ameribank's five West Virginia branches will reopen Monday as Pioneer branches, according to the FDIC.
As of June 30, Ameribank had $115 million in total assets and total deposits of $102 million, the regulator said.
The bank's closure marks the end of an extraordinary week that saw venerated Wall Street brokerage Lehman Brothers Holdings Inc. file for bankruptcy, while Merrill Lynch & Co. agreed to sell itself off to Bank of America Corp. In addition, the federal government swooped in to seize troubled insurance giant American International Group Inc., and regulators began forming a rescue plan to help sustain U.S. markets.
---------------------------
Protect yourself, buy Gold & Silver
Potential Infinite Bailouts To Explode Money Supply
By Jim Sinclair
Dear Friends,
1. Today's reported potential infinite bailout of all and any portends, if adopted, is the largest increase in dollars outstanding since the Jurassic Age.
2. It closely models actions undertaken regarding the production of currency liquidity seen in the "Weimar Republic."
3. It is reported now that more than 1000 hedge funds are on the rocks. This has the potential for a significant financial impact.
4. The only way to hide the numbers from the statistics produced by the suspected actions of the Fed is to value the indebtedness purchased at 100%, claiming a wash transaction.
5. The only conclusion is that when the smoke clears and the advertised actions have been adopted, nothing more dollar negative than this has ever occurred due to the potential expansion of T bills and therefore dollar supply explosion.
6. Gold is the only currency with no liability attached to it which, as you have seen recently, will be selected as the currency of the people.
Respectfully yours,
Jim
----------------------
Buy Gold & Silver
Dear Friends,
1. Today's reported potential infinite bailout of all and any portends, if adopted, is the largest increase in dollars outstanding since the Jurassic Age.
2. It closely models actions undertaken regarding the production of currency liquidity seen in the "Weimar Republic."
3. It is reported now that more than 1000 hedge funds are on the rocks. This has the potential for a significant financial impact.
4. The only way to hide the numbers from the statistics produced by the suspected actions of the Fed is to value the indebtedness purchased at 100%, claiming a wash transaction.
5. The only conclusion is that when the smoke clears and the advertised actions have been adopted, nothing more dollar negative than this has ever occurred due to the potential expansion of T bills and therefore dollar supply explosion.
6. Gold is the only currency with no liability attached to it which, as you have seen recently, will be selected as the currency of the people.
Respectfully yours,
Jim
----------------------
Buy Gold & Silver
Thursday, September 18, 2008
Putnam Investments Closes $12B Money-Market Fund
Putnam Investments has closed a $12.3 billion money-market fund.
The Prime Money Market Fund was open only to institutional investors. Putnam said in a statement that its board decided to close the fund last night after receiving a large number of redemption requests. The company said it could honor those requests only by selling assets at a loss, reducing the value of the remaining shares.
Putnam said it decided instead to liquidate the fund and spread any losses evenly among all the investors. "We wanted to treat all shareholders equally," said spokeswoman Laura McNamara. She said it was "premature" to discuss how much of a loss, if any, shareholders will incur.
Source: Washington Post
----------------------
Gold tops $900 an ounce in market trading
For a second day, gold spiked to recent highs as investors flocked to safety. Natalie Dempster of the World Gold Council says the current market environment will be good for gold prices going forward. Stacey Delo reports. (Sept. 18)
------------------------
Buy Gold & Silver
------------------------
Buy Gold & Silver
Wednesday, September 17, 2008
Gold Gains $100 in 24 Hours - Silver up 17%
In the last 24 hours the spot price of Gold has shot up over $100. This is a gain of over 12.82% in just 24 hours! Silver is also up an astonishing 17% in the same 24 hour period! Many investors are fleeing the carnage of other investments and seeking the safety of Gold and Silver. Have you got some yet?
Look at the following 24 hour charts for Gold & Silver:
Gold and Silver, in your physical possession, are some of the very few assets that have no corresponding liability.
Here's what this means:
Money in your checking account or brokerage account is an asset to you but it is also a liability to the bank or brokerage that owes you the money. When someone owes you money, there is always the very real risk that they will default on their obligation to you. This is what is currently happening in the financial markets as we speak.
When you own physical gold and silver in your possession nobody can go bankrupt on you. Read that last sentence again in light of current market developments.
The current financial system is cracking and there is a very real possibility of a full-blown financial meltdown. If this happens, you will be glad you protected yourself with physical gold and silver.
To consider what can happen to the money in your bank account you only need to look at what happened just seven short years ago in Argentina. The government froze bank deposits and people could only pull out $1,000 per month! Here is a direct quote from the news story:
"Because of the run on cash, former President Fernando de la Rua and his economy minister Domingo Cavallo on Nov. 31 made a controversial decision; for a 90-day period, individuals could withdraw only U.S. $1,000 per month in cash."
Here is a link to the full story:
http://www.atmmarketplace.com/article.php?id=2381
While people could not access their cash it dropped 60% in value over a 90 day period.
If you do not currently have some of your liquid assets in Gold & Silver, consider yourself warned and do what you can to change it.
Of course, we can get you some of the best deals on physical Gold & Silver shipped right to your door. Contact us at 866-575-5020 for details.
-----------------------------------
Buy Gold & Silver
Look at the following 24 hour charts for Gold & Silver:
Gold and Silver, in your physical possession, are some of the very few assets that have no corresponding liability.
Here's what this means:
Money in your checking account or brokerage account is an asset to you but it is also a liability to the bank or brokerage that owes you the money. When someone owes you money, there is always the very real risk that they will default on their obligation to you. This is what is currently happening in the financial markets as we speak.
When you own physical gold and silver in your possession nobody can go bankrupt on you. Read that last sentence again in light of current market developments.
The current financial system is cracking and there is a very real possibility of a full-blown financial meltdown. If this happens, you will be glad you protected yourself with physical gold and silver.
To consider what can happen to the money in your bank account you only need to look at what happened just seven short years ago in Argentina. The government froze bank deposits and people could only pull out $1,000 per month! Here is a direct quote from the news story:
"Because of the run on cash, former President Fernando de la Rua and his economy minister Domingo Cavallo on Nov. 31 made a controversial decision; for a 90-day period, individuals could withdraw only U.S. $1,000 per month in cash."
Here is a link to the full story:
http://www.atmmarketplace.com/article.php?id=2381
While people could not access their cash it dropped 60% in value over a 90 day period.
If you do not currently have some of your liquid assets in Gold & Silver, consider yourself warned and do what you can to change it.
Of course, we can get you some of the best deals on physical Gold & Silver shipped right to your door. Contact us at 866-575-5020 for details.
-----------------------------------
Buy Gold & Silver
Tuesday, September 16, 2008
Major Money Market Fund Freezes Redemptions
[Editor's Comment: This is a huge story. Money Market funds are traditionally considered "low risk" but it turns out that many of them are holding toxic Mortgage-Backed Securities. Consider protecting yourself by buying some gold & silver.]
Full Story
NEW YORK (MarketWatch) -- One of the first and largest money market funds has put a seven-day freeze on investor redemptions after the net asset value of its shares fell below $1, in a rare instance in the fund industry of what is called "breaking the buck."
Primary Fund 
RFIXX , a $64 billion fund managed by money market fund inventor The Reserve, said late Tuesday that its $785 million holding of Lehman Brothers Holdings debt has been valued at zero.
As of 4 p.m., the value of the fund's share was 97 cents. The Reserve said that redemption requests received before 3 p.m. will be paid out at $1 a share.Full Story
Sunday, September 14, 2008
A Key Missing Fact of the Crash of 1907
By James Sinclair
JP Morgan is credited with the bank rescues of 1907 by the power of his person, position and capital. He demanded that banks reinstate their willingness to lend to each other.
Mind you, this is not the whole story. As always, the historian creates history. Had the markets continued lower, Morgan would not have been able, by any means, to reinstate financial confidence.
JP Morgan issued an invitation to Jesse Livermore to visit with him in his Ivory Tower office. It was at this meeting that JP Morgan asked Jesse Livermore, the largest short seller of 1907, to cease short selling. Jesse Livermore came from humble beginnings as compared to JP Morgan. Jesse was complimented that Morgan approached him making such a request, PRIOR to taking any of the reported action he planned to take. It was critical to his plans that the then ILLEGAL short selling ceased. Without Livermore’s cooperation all other plans he had would have failed.
Short selling in 1907, although commonly done, was illegal. JP Morgan knew that unless the major short sellers could be neutralized the crash of 1907 would have broken the nation - if not the world. The key difference between the crash of 1907 and the collapse of 2007– 2011 is that for some reason the opposite has occurred.If Jesse Livermore were the top gun of all hedge fund managers on the planet today his meeting with today’s JP Morgan would give him a free pass to wreak hell and mayhem.
Because the key criterion in the comparison of 1907 to 2007– 2011 has been missing, this nation if not the world haven’t a snowball’s chance in hell.
Gold is going to $1,200 and then to $1,650. The USDX is going to .72 -.62 -.52 regardless of all the BS spin and for hire butt kissing pundits.
-------------------------------------------
Buy Gold & Silver
JP Morgan is credited with the bank rescues of 1907 by the power of his person, position and capital. He demanded that banks reinstate their willingness to lend to each other.
Mind you, this is not the whole story. As always, the historian creates history. Had the markets continued lower, Morgan would not have been able, by any means, to reinstate financial confidence.
JP Morgan issued an invitation to Jesse Livermore to visit with him in his Ivory Tower office. It was at this meeting that JP Morgan asked Jesse Livermore, the largest short seller of 1907, to cease short selling. Jesse Livermore came from humble beginnings as compared to JP Morgan. Jesse was complimented that Morgan approached him making such a request, PRIOR to taking any of the reported action he planned to take. It was critical to his plans that the then ILLEGAL short selling ceased. Without Livermore’s cooperation all other plans he had would have failed.
Short selling in 1907, although commonly done, was illegal. JP Morgan knew that unless the major short sellers could be neutralized the crash of 1907 would have broken the nation - if not the world. The key difference between the crash of 1907 and the collapse of 2007– 2011 is that for some reason the opposite has occurred.If Jesse Livermore were the top gun of all hedge fund managers on the planet today his meeting with today’s JP Morgan would give him a free pass to wreak hell and mayhem.
Because the key criterion in the comparison of 1907 to 2007– 2011 has been missing, this nation if not the world haven’t a snowball’s chance in hell.
Gold is going to $1,200 and then to $1,650. The USDX is going to .72 -.62 -.52 regardless of all the BS spin and for hire butt kissing pundits.
-------------------------------------------
Buy Gold & Silver
Physical Bullion Supplies Tight - Expect Delivery Delays
Many bullion dealers are experiencing tight bullion supplies and delayed deliveries. The demand has been very strong at these prices and have virtually wiped out much of the physical inventory. It's been reported that bullion refiner, Johnson Matthey has a 3 month delivery time for 100 oz. bars and are requiring payment in advance. If you do find a dealer with inventory expect to pay a premium.
It seems that a lot of folks consider the current prices to be a bargain.
---------------------
Buy Gold & Silver
It seems that a lot of folks consider the current prices to be a bargain.
---------------------
Buy Gold & Silver
Saturday, September 13, 2008
Gold - Has it run into trouble?
Here is an excellent analysis of the current situation in gold and how current economic policy will ensure its future rise:
Gold - Has it run into trouble?
by Dr. Martin Murenbeeld
---------------------------------------------
Friday, September 12, 2008
Can Gold Be Suppressed Indefinitely?
By James West
Sep 10 2008 3:15PM
Recently a subscriber wrote to me and inquired, "if gold has been subject to manipulation by the dark forces at the top of the economic pecking order, then why couldn’t they continue to do so ad infinitum?"
Arriving at an answer to that has taken me several weeks of noodling it around in my head while observing developments in the gold market and the housing market and the global economy.
It seemed obvious to me, as it does to many of the writers lobbing missives into the blogosphere on the subject, that the continuous printing of currency would cause a proportional devaluation of said currency in line with the excessive representation of ersatz wealth it theoretically should be backing. And that’s the bottom line for a currency, isn’t it?
A dollar is supposed to represent a share in the collective wealth of a nation. And in a truly democratic and fair society, the citizens and the government should all be genuinely and sincerely motivated to ensure that the valuation accorded to its dollar is indeed a fair and accurate expression of the appropriate portion of its wealth. They would seek to thwart at all costs any over-supply of dollars, for otherwise, the purchasing power of their collective wealth would diminish, and its ability to borrow might be encumbered, as those in a position to lend would regard the borrower’s integrity questionable, if it wasn’t even able to manage an accurate representation of its balance sheet, which the value of a dollar inevitably does.
But that is not the case for the United States.
Instead of clear and level-headed financial stewardship by the country’s "leaders", we have a situation where the government, at an ever increasingly transparent level, seeks to enrich itself at the cost of its citizenry, a situation they at the same time claim to be in the position of defending against. Its George Orwell’s doublespeak enshrined in a political system.
The nationalization of Fannie and Freddie, both "government sponsored" corporations, presents just such a perversion of language designed to confound and anesthetize a general public already muddled with the continuous bombardment of juvenile and conflicting messaging from both public and private enterprise.
I watched an hour of television last night (a rarity) and was stunned to realize that of the 9 commercials being aired at each break, all but one were for medications of one type or another.
But, to stay on topic, note that in the mainstream newswire description of the nationalization announcement on Sunday, Fannie and Freddie had been placed under “conservatorship”.
Conservatorship?!
Searching through Google News, the use of the word "conservatorship" prior to Sunday is limited primarily to references to the "conservatorship" of Brittney Spears’children by her father Jamie, with one notable excpetion.
It turns out the collapse of IndyMac in July was actually succeeded by its placement under Federal Deposit Insurance Corporation (FDIC) conservatorship. Under this arrangement, the accounts of deposits up to $100,000 are guaranteed by the FDIC, and the $58 Billion fund that backs the FDIC is accessed to cover any shortfall from the illiquid bank’s cash on hand as customers withdraw those deposits.
There have been 11 bank failures so far this year where the banks have been placed under FDIC "conservatorship", while the banks affairs are unwound, its assets sold, and all insurable deposits are returned to customers who had deposited them.
In 2007, there were 3 bank failures for the entire year.
At this point, there are 117 banks in the United States that are deemed as troubled by the FDIC, and the news is that the FDIC will be seeking funds from the U.S. Treasury to shore up the depository insurance fund as banks fail and the $58 billion that was left after IndyMac dwindles.
Now that Fannie and Freddie are under conservatorship, and not by the FDIC but by the United States Treasury, the federal bank account of the United States of America is now acting as the FDIC for the trillions of dollars of mortgages, among which even the default rate on primes is accelerating.
The only way for the U.S. Treasury to continue to provide bailouts to the backers of these mortgages, which for the most part are sovereign treasuries of other nations, is to print more money, or else sell assets to raise money. What assets does the United States have that it can sell to raise money?
T-Bills? Well, it doesn’t take a rocket scientist to see that T-Bill is just a new word for common share of Freddie and/or Fannie, and we’ve seen how those are being valued by the market.
What about the U.S. inventory of gold?
Well, according to the International Monetary Fund’s Official World Gold Holdings report, the U.S., at December 2007, held 8,133.5 tonnes of gold, or 75.3% of the world’s central bank holdings. That’s 261.5 million troy ounces, valued at $209.2 Billion at US$800 per ounce.
Never mind the Gold Anti-Trust Action Committee’s assertion that that gold has long been surreptitiously leased out and subsequently sold, thereby suppressing the price of gold while claiming to have this gold still intact in its vaults. In the discussion as to the solvency of the United States treasury, that’s really a trifling amount.
So why would the United States even care what the price of gold is. You’d think they’d want it to go up, if they are in fact as broke as all evidence seems to suggest.
Ah, but here’s the rub. Historically, a nation’s currency was valued according to how much it took to buy one troy ounce of gold. When the United States government confiscated all the private gold and pegged the price at $35, it became a question of how many U.S. dollars could your currency buy. The U.S. currency was governed by how much gold it held in reserve, which limited the amount of currency it could issue. From that period in 1933 until the abolition of this "gold standard" in 1971, was the foundation from which the U.S. Dollar as the official Foreign Reserve
Currency usurped gold’s historic hold on that position.
Since 1971, when the U.S. dollar was representative of whatever others were willing to pay for it, there has been a pervasive and subversive conflict inherent in holding U.S. Dollars in your coffers as primary foreign currency. The further the dollar declines in price, the less value your own currency has, because your entire foreign holdings are in U.S. dollars. If, for example, it took 5,000 U.S. dollars to buy an ounce of gold, what would that say about the value of the rouble, the yuan, the yen or the British pound?
And so, if one asks, could the price of gold be suppressed indefinitely, the answer is YES! Sure it could! If central bankers around the world are so profoundly incentivized to protect the value and purchasing power of their own currencies by continuously mis-representing how much gold they actually had, and how much they had in the past sold and were presently selling, then the answer is yes.
And here’s the scary part. There is no way of knowing how much gold is actually bought or sold in a single day. Apart from official central bank disclosure documents, which are released quarterly, there’s no daily tally of what anybody has bought or sold.
Three things should now be abundantly clear to the investing public:
1. Mainstream media acts as PR and Image Perception Management for big business and government;
2. The government acts in the interests of itself primarily;
and
3. If the information issued by any of these entities is suspect in its integrity, then its impossible to know what’s coming next.
Chris Powell from GATA says, “Governments may be able to suppress the gold price forever but only if, first, their own gold reserves are infinite and the governments are prepared to dishoard them indefinitely, or if governments are prepared to put legal restrictions on gold ownership.
Unless such restrictions can be enacted worldwide -- in every major country -- it's unlikely that the gold price can be surpressed forever.
James West
-------------------
Buy Gold & Silver
Sep 10 2008 3:15PM
Recently a subscriber wrote to me and inquired, "if gold has been subject to manipulation by the dark forces at the top of the economic pecking order, then why couldn’t they continue to do so ad infinitum?"
Arriving at an answer to that has taken me several weeks of noodling it around in my head while observing developments in the gold market and the housing market and the global economy.
It seemed obvious to me, as it does to many of the writers lobbing missives into the blogosphere on the subject, that the continuous printing of currency would cause a proportional devaluation of said currency in line with the excessive representation of ersatz wealth it theoretically should be backing. And that’s the bottom line for a currency, isn’t it?
A dollar is supposed to represent a share in the collective wealth of a nation. And in a truly democratic and fair society, the citizens and the government should all be genuinely and sincerely motivated to ensure that the valuation accorded to its dollar is indeed a fair and accurate expression of the appropriate portion of its wealth. They would seek to thwart at all costs any over-supply of dollars, for otherwise, the purchasing power of their collective wealth would diminish, and its ability to borrow might be encumbered, as those in a position to lend would regard the borrower’s integrity questionable, if it wasn’t even able to manage an accurate representation of its balance sheet, which the value of a dollar inevitably does.
But that is not the case for the United States.
Instead of clear and level-headed financial stewardship by the country’s "leaders", we have a situation where the government, at an ever increasingly transparent level, seeks to enrich itself at the cost of its citizenry, a situation they at the same time claim to be in the position of defending against. Its George Orwell’s doublespeak enshrined in a political system.
The nationalization of Fannie and Freddie, both "government sponsored" corporations, presents just such a perversion of language designed to confound and anesthetize a general public already muddled with the continuous bombardment of juvenile and conflicting messaging from both public and private enterprise.
I watched an hour of television last night (a rarity) and was stunned to realize that of the 9 commercials being aired at each break, all but one were for medications of one type or another.
But, to stay on topic, note that in the mainstream newswire description of the nationalization announcement on Sunday, Fannie and Freddie had been placed under “conservatorship”.
Conservatorship?!
Searching through Google News, the use of the word "conservatorship" prior to Sunday is limited primarily to references to the "conservatorship" of Brittney Spears’children by her father Jamie, with one notable excpetion.
It turns out the collapse of IndyMac in July was actually succeeded by its placement under Federal Deposit Insurance Corporation (FDIC) conservatorship. Under this arrangement, the accounts of deposits up to $100,000 are guaranteed by the FDIC, and the $58 Billion fund that backs the FDIC is accessed to cover any shortfall from the illiquid bank’s cash on hand as customers withdraw those deposits.
There have been 11 bank failures so far this year where the banks have been placed under FDIC "conservatorship", while the banks affairs are unwound, its assets sold, and all insurable deposits are returned to customers who had deposited them.
In 2007, there were 3 bank failures for the entire year.
At this point, there are 117 banks in the United States that are deemed as troubled by the FDIC, and the news is that the FDIC will be seeking funds from the U.S. Treasury to shore up the depository insurance fund as banks fail and the $58 billion that was left after IndyMac dwindles.
Now that Fannie and Freddie are under conservatorship, and not by the FDIC but by the United States Treasury, the federal bank account of the United States of America is now acting as the FDIC for the trillions of dollars of mortgages, among which even the default rate on primes is accelerating.
The only way for the U.S. Treasury to continue to provide bailouts to the backers of these mortgages, which for the most part are sovereign treasuries of other nations, is to print more money, or else sell assets to raise money. What assets does the United States have that it can sell to raise money?
T-Bills? Well, it doesn’t take a rocket scientist to see that T-Bill is just a new word for common share of Freddie and/or Fannie, and we’ve seen how those are being valued by the market.
What about the U.S. inventory of gold?
Well, according to the International Monetary Fund’s Official World Gold Holdings report, the U.S., at December 2007, held 8,133.5 tonnes of gold, or 75.3% of the world’s central bank holdings. That’s 261.5 million troy ounces, valued at $209.2 Billion at US$800 per ounce.
Never mind the Gold Anti-Trust Action Committee’s assertion that that gold has long been surreptitiously leased out and subsequently sold, thereby suppressing the price of gold while claiming to have this gold still intact in its vaults. In the discussion as to the solvency of the United States treasury, that’s really a trifling amount.
So why would the United States even care what the price of gold is. You’d think they’d want it to go up, if they are in fact as broke as all evidence seems to suggest.
Ah, but here’s the rub. Historically, a nation’s currency was valued according to how much it took to buy one troy ounce of gold. When the United States government confiscated all the private gold and pegged the price at $35, it became a question of how many U.S. dollars could your currency buy. The U.S. currency was governed by how much gold it held in reserve, which limited the amount of currency it could issue. From that period in 1933 until the abolition of this "gold standard" in 1971, was the foundation from which the U.S. Dollar as the official Foreign Reserve
Currency usurped gold’s historic hold on that position.
Since 1971, when the U.S. dollar was representative of whatever others were willing to pay for it, there has been a pervasive and subversive conflict inherent in holding U.S. Dollars in your coffers as primary foreign currency. The further the dollar declines in price, the less value your own currency has, because your entire foreign holdings are in U.S. dollars. If, for example, it took 5,000 U.S. dollars to buy an ounce of gold, what would that say about the value of the rouble, the yuan, the yen or the British pound?
And so, if one asks, could the price of gold be suppressed indefinitely, the answer is YES! Sure it could! If central bankers around the world are so profoundly incentivized to protect the value and purchasing power of their own currencies by continuously mis-representing how much gold they actually had, and how much they had in the past sold and were presently selling, then the answer is yes.
And here’s the scary part. There is no way of knowing how much gold is actually bought or sold in a single day. Apart from official central bank disclosure documents, which are released quarterly, there’s no daily tally of what anybody has bought or sold.
Three things should now be abundantly clear to the investing public:
1. Mainstream media acts as PR and Image Perception Management for big business and government;
2. The government acts in the interests of itself primarily;
and
3. If the information issued by any of these entities is suspect in its integrity, then its impossible to know what’s coming next.
Chris Powell from GATA says, “Governments may be able to suppress the gold price forever but only if, first, their own gold reserves are infinite and the governments are prepared to dishoard them indefinitely, or if governments are prepared to put legal restrictions on gold ownership.
Unless such restrictions can be enacted worldwide -- in every major country -- it's unlikely that the gold price can be surpressed forever.
James West
-------------------
Buy Gold & Silver
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