Peter Schiff Interview On Glenn Beck Radio

Part I



Part II

Greenspan's Flaw

Alan "Serial Bubble Blower" Greenspan, being an early admirer of Ayn Rand was for a Gold standard and hard money. In 1966, he wrote an essay titled "Gold and Economic Freedom". Ironically, went on to become a Central Banker. He supervised the biggest expansion of credit and money out of thin air backed by nothing.

Early Greenspan was not a free-marketer in the Friedmanite mold, instead, he was even more rooted in free market in the Misesian mold.

His whole life became a lie, the moment he became and advisor to President Richard Nixon.
Recently, Fox business interviewed Mr. Bubbles, where Alan, in a moment of honesty, revealed that he still believes in Gold standard. His 19 years at the helm of the politbureau, was a complete lie, he was doing something he never believed in.

Watch it here for yourself - the admission comes at 6 minutes and 35 seconds into the video.



In addition, in the above video, Greenspan asserted that he never discussed with his mentor Ayn Rand, the proper role of central banks in an economy; thats something really hard for me to believe.

Mike "Mish" Shedlock has a very interesting take on all this...

Only the free market can judge risks. The failures are not of the free market,
the failures happened because we did not have a free market.
Instead we had
governments sponsorship of the GSEs, government sponsorship of the ratings
agencies, micro management of interest rates by the Fed, fractional reserve
lending compounded by Greenspan himself authorizing sweeps of checking
accounts.
Sweeps permitted nearly every penny of money that is supposed to be
available on demand to be lent out. Money that you think is in your checking
account is simply not there. It has been lent out.

Here is congressman Ron Paul on Neil Cavuto discussing Greenspan's lies.

Admission of Guilt! A Reply to Mish

Mish over at the Global Economic Analysis asks the following in the comments section:

“Can I ask a question?

With oil at $84 ....
Where is Oil Shock?

Mish
Like this comment?
link to the post

Oil Shock was indeed wrong. Yes, I called the bottom at $90 for oil. It was indeed the bottom until Oil declined one more time. Yes, so far it about 7% below that price. I still have called a perfect bottom in gold. Dollar index is about 2% higher than my prediction top.

Australian Dollar cliff dived yesterday, partly due to the unwinding of the carry trade. Just two months ago, the Ozzie was at near parity with the USD, but today you could buy 1 Ozzie for 64 cents U.S. Do you think Australian economy is fundamentally a lot weaker than the U.S economy? Do you think what happened to Iceland and Australia are impossible to happen here?

Much of the strength in dollar index is due to the weakness of Euro, it is not an indication of Dollar strength. Euro is a doomed currency. I heard somebody put it as the Deutsche Mark + some parasites, and that is very true.

Was my bottom and top calls based on any specific formula? No. It was just rhetoric meant to say that inflation is still in play. Did I strongly believe in my prediction? Yes I did. Did I know that for 100% sure that Oil will bottom at $90.00, and Gold at $750? No I did not.

As for all those deflationary derivatives worth 500 trillion floating around, it is all hogwash. Derivatives can go to zero and 80-90% of them do, even in a bull market. Have you read stats on options? Most of them go to zero? If one were to really believe that those derivatives are part of the money supply, what do you think the price of a refrigerator full of groceries would be?

Is there an unwillingness to lend right now? Yes. But all the debt will be monetized away, and some more will be accumulated by the local, state, and federal governments and monetized.

Stop kidding yourself. Oil at $84 is a lot higher than were it was, when Mish started denying that inflation was non-existent, go back, he has a lot of charts and graphs starting from 2005 to prove his point.

Mish has been consistently wrong for many years with his predictions, and yet he needs a great deal of credit for predicting the crisis very accurately as it unfolded. There were a lot of guys predicting shallow recessions, muddle throughs etc. But Mish could see a lot further than those others; he predicted a deeper recession. He was just a little early. Mish is still wrong about deflation.

Real wealth is ability to produce real goods, and that is one area that American economy lacks clearly. Yes, America has a lot of productive capacity, but no where close the purported size of the economy. So, what really is backing our dollar? yes,a lot of productive capacity, and a lot more of hot air.

Peter Schiff versus Diane Swonk ( 06/13/06)

Why did Keynesians and Monetarists Get It All Wrong?

Bailout marks Karl Marx's comeback ( click to read the whole article )

In his Communist Manifesto, published in 1848, Karl Marx proposed 10 measures to be implemented after the proletariat takes power, with the aim of centralizing all instruments of production in the hands of the state. Proposal Number Five was to bring about the “centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.”

If he were to rise from the dead today, Marx might be delighted to discover that most economists and financial commentators, including many who claim to favour the free market, agree with him.

Indeed, analysts at the Heritage and Cato Institute, and commentators in The Wall Street Journal and on this very page, have made declarations in favour of the massive “injection of liquidities” engineered by central banks in recent months, the government takeover of giant financial institutions, as well as the still stalled US$700-billion bailout package. Some of the same voices were calling for similar
interventions following the burst of the dot-com bubble in 2001.

“Whatever happened to the modern followers of my free-market opponents?” Marx would likely wonder.

Credit Bubble Update - 07/13/07

Banks losing up to $52 bln over subprime
Credit Suisse analysts estimated banks could lose up to $52 billion over time due to their exposure to collateralized debt obligations that invested in U.S. subprime mortgages.

Most of the losses would stem from loans to hedge funds, compared with an expected $5 billion to $10 billion from banks' direct investment in subprime CDOs, the Credit Suisse analysts said in a report dated July 6.


1,300 arrested in Zimbabwe prices crackdown
More than 1,300 shop owners and business managers have been arrested in Zimbabwe as part of a crackdown on firms accused of flouting government-imposed price controls, police said Monday.

Most of the 1,328 bosses had been fined but the number also includes around two dozen company executives arrested since Friday who are due to appear before magistrates, said police spokesman Chief Superintendent Oliver Mandipaka.


Sarkozy's blitz puts paid to pact on policy

French President Nicolas Sarkozy threw down the gauntlet in Brussels last night, vowing to press ahead with his plans for a "fiscal shock" regardless of EU rules on budget policy.

Softening his tone slightly after a blizzard of criticism, he told eurozone finance ministers that his government would "aim" for a balanced budget by 2010, but refused to give real ground.


Bernanke: Anchored expectations mute price swings

Swings in volatile energy and food prices will have minimal impact on inflation as long as expectations of future price gains are held steady, Federal Reserve Chairman Ben Bernanke said on Tuesday.

"If inflation expectations are well anchored, changes in energy (and food) prices should have relatively little influence on 'core' inflation, that is, inflation excluding the prices of food and energy," Bernanke told the National Bureau of Economic Research.


Japan Should Diversify Reserves, Abe Adviser Ito Says

Japan, the largest overseas holder of U.S. Treasuries, should invest $700 billion of its currency reserves in higher-yielding assets such as stocks and corporate bonds, said Takatoshi Ito, an adviser to the prime minister.

The reserves should be managed by a special fund that will gradually diversify into euros, Australian dollars and emerging- market currencies, Ito said in an interview in Tokyo.


Russians Selling Off US Currency

The Central Bank of Russia says the amount of U.S. dollars held by individual citizens of this country is rapidly declining. The bank says Russians are also moving increasing sums abroad. Moscow correspondent Peter Fedynsky follows the money trail and reports that Russians are gaining confidence in their own economy.

New figures released by the Russian Central Bank indicate the amount of U.S. dollars held by private Russian citizens has dropped since 2002 from $35 billion to less than $12 billion as of July 1.

Australian hedge fund warns about withdrawals

An Australian hedge fund manager with $1bn in structured credits and junk-rated loans warned investors yesterday it could restrict withdrawals to ensure its survival as it reported losses of 14 per cent in one fund in June.

Basis Capital, based in Sydney, said in a letter to investors it had been hit by “indiscriminate” repricing of “otherwise fundamentally sound collateral” amid the crisis in US home loans to less creditworthy investors. It said it had deliberately avoided the worst-hit 2006 subprime loans.


Kuwait revalues as dollar weighs on Gulf currencies

Kuwait allowed its dinar to appreciate against the dollar for a second time this year after the US currency’s slide raised pressure on pegged exchange rates throughout the world’s biggest oil exporting region.

The dinar would trade at 0.28690 per dollar from Thursday, an appreciation of 0.4 percent, the central bank said, confirming expectations it would respond to the dollar’s tumble to record lows against the euro this week.


LBO Credit Quality Falls to Lowest in Nine Months

Loans used to finance leveraged buyouts are the riskiest in at least nine months on speculation that losses on subprime mortgage securities will spread to other markets, according to traders of credit-default swaps.

The iTraxx LevX Index of credit-default swaps on loans to 35 European companies fell as much as 1 percent to the lowest since the index started last October, according to Deutsche Bank AG prices. The LCDX index of loans to 100 U.S. companies dropped as much as 0.57 percent to 96, Phoenix Partners Group in New York said.


Dollar Slumps to Record Low Versus Euro as Retail Sales Drop

The dollar dropped to a record low against the euro and slumped versus the yen after a government report showed retail sales fell last month by more than analysts expected.

The data may add to concern that the U.S. economy will slow, lifting speculation the Federal Reserve will cut borrowing costs this year.


Retail sales drop worst in 2 years

Retail sales posted the biggest drop in nearly two years in June, the government reported Friday, fanning worries that consumers were starting to feel the pinch of higher gas prices and the slumping housing market.

"This report is a much weaker report than most analysts expected, and presumably it will come as a shock to people who bought retail stocks yesterday on the basis of [some] 'better' chain store numbers," Ian Shepherdson, chief U.S. economist with High Frequency Economics, wrote in a note Friday.


Foreclosure activity rises dramatically

Foreclosures continued to rise throughout the country, the state and the Bay Area in June, according to a report to be released today. Nationally, 164,644 foreclosure notices were filed in June, up 87 percent from June of last year, said RealtyTrac.com, an online marketplace for foreclosure properties. In the Bay Area, the number of foreclosure notices was 5,018, almost triple the 1,780 in June 2006.


The greatest economic boom ever

Just how red-hot is the current worldwide expansion? "This is far and away the strongest global economy I've seen in my business lifetime," U.S. Treasury Secretary Hank Paulson declared on a recent visit to Fortune's offices.

That may come as news to many Americans, whose boom-time memories are stuck in the 1990s, when Silicon Valley was the epicenter of our growth fantasies. But the fellow now occupying Paulson's old office at 85 Broad Street in downtown Manhattan shares that upbeat view. Just returned from a ribbon-cutting ceremony in the Middle East, Goldman Sachs (Charts, Fortune 500) CEO Lloyd Blankfein waves out toward the East River as he explains how the rise of the "BRICs" has altered his strategy and his travel schedule. (BRIC is an acronym Goldman coined in 2001 reflecting the rising economic power of Brazil, Russia, India, and China.)


U.S. trade deficit widens

The U.S. trade deficit widened to $60 billion in May as oil prices jumped and the volume of foreign oil coming into the country rose, the government said Thursday. But the overall trend still appears to be improving, economists said.

The Census Bureau said that the trade imbalance - the gap between what is imported and exported - grew 2.3 percent from April in seasonally adjusted terms. For the first five months of the year, however, the deficit grew at a slower pace than it did last year. From January through May, the deficit was $295.5 billion, compared with $317.8 billion in the first five months of 2006.


Moody's May Cut $5 Billion of Subprime-Backed CDOs

Moody's Investors Service may cut $5 billion of collateralized debt obligations after lowering the ratings of subprime mortgage bonds that make up the securities.

A downgrade would affect 184 pieces of 91 CDOs, representing about 3.6 percent of rated CDOs containing asset-backed securities, Moody's said in a statement today. Moody's yesterday sliced ratings on $5.2 billion of subprime bonds that back CDOs, which are also sliced into pieces to allow investors to choose how much risk they bear for the returns they receive.


D.R. Horton home sales plunge; expects loss

Home builder D.R. Horton said Tuesday declining home values would lead to its first quarterly loss since it listed on the New York Stock Exchange in 1995, sending its shares to a three-year low.

Hurt by the deteriorating U.S. housing market, the No. 1 U.S. home builder said net sales orders in its fiscal third quarter, ended June 30, fell 40 percent to 8,559 homes. The dollar value of the orders dropped 47 percent to $2.0 billion.


Zimbabwe: Inflation - the Endless Battle of the Zeros

WHEN Princess Nyathi retired to her rural home after a 20-year flirtation with a furniture shop, she was confident monthly payments in pension would be enough to buy the basic commodities.

But five years down the line, Nyathi is bitter after watching her monthly pension eroded heavily by inflation. "Six hundred dollars five years ago would buy you groceries, now with the $12 900 payment, you can only buy half a loaf of bread," she said.


Jeff Saut Presents: Subprime Sublime?

"Liquidity is a coward, when you need her most she runs away and hides.” That old market axiom has clearly stood the test of time. Most recently, the “liquidity cowardess” ran and hid from the subprime complex, causing the ABX-HE.BBB-Subprime Index to lose nearly 50% of its value. Concurrent with that price decline has been a sentiment slide, as reflected in The New York Times, whose reference to the subprime woes has seen a downward verbiage skein that has the glide path of a stone. To wit, “Largely contained,” “mostly contained,” “reasonably well-contained,” “severe but contained.” “Contained?” ... Well, maybe on a macro basis, but try telling that to investors in certain subprime-focused investment funds that have seen their principal erode and in some cases evaporate. Indeed, just a few weeks ago the Bear Stearns (BSC) “bombshell” brought the issue home to roost with the implosion of a couple of highly-leveraged subprime hedge funds. "

Credit Bubble Update - 07/08/07

A Mortgage-Securities Hedge Fund Suspends Payouts

In another sign that troubles in the mortgage market are spreading, a prominent hedge fund that specializes in bonds backed by home loans has suspended redemption requests by investors.

The Horizon ABS Fund managed by John Devaney, a well-known trader of asset-backed securities who is based in Florida, said yesterday that it made the decision to block withdrawals after one investor who accounted for about a quarter of its $650 million in assets sought to leave the fund.


Italease blow-up stokes derivatives fears

A derivative blow-up at the Italian bank Italease has sent tremors through Milan's banking fraternity and exposed the hidden dangers of exotic credit instruments.

The bank has paid off 610 million euros (£419m) in recent days to counter-parties in what amounts to a massive margin call after interest rate rises in Europe caused hedging and derivative losses by clients to mushroom out of control.


Newmont Eliminates Gold Hedges, Creating the World's Largest Unhedged Gold Company, and Announces Strategic Initiatives

Newmont Mining Corporation today announced the elimination of its entire 1.85 million ounce gold hedge position, establishing the Company as the world's largest unhedged gold producer. Newmont also announced plans to monetize components of its royalty and equity portfolio in the next twelve months, resulting in the discontinuation of the Company's Merchant Banking Segment as a separate business unit.


Berlin defends its 'crown jewels'

Germany is drawing up detailed plans to stop strategic assets falling into the hands of "giant locust funds" controlled by Russia, China and Middle East governments.

Finance minister Peer Steinbrück said "telecoms, banks, post, logistics and energy" were among the sectors that would be shielded from sovereign wealth funds, the new state trusts that are fast swamping global asset markets.


Canadian dollar hits high vs. greenback

The Canadian dollar climbed to a 30-year high against the U.S. currency Friday, bolstered by higher oil prices, a strong economy and a looming interest rate hike.

Canada's currency advanced as high as 95.53 U.S. cents Friday, pushing past the 95 U.S. cents mark for the first time since May 1977. It has risen 10.8 percent so far this year.


As 'China effect' reverses, inflation threatens

When the Prime Minister appears on television vowing to "get to grips with inflation", you know that a serious problem is taking shape.

Gordon Brown had the good fortune to be Chancellor over a golden decade as the industrial revolutions of China, India and emerging Asia supplied us ever cheaper manufactures.

In this miracle world, we have had 5pc global growth for five years - the best since the Second World War - without overheating.


Money falls from sky

A German motorist surprised by euro notes swirling in the air around her car hit the brakes and collected a "substantial amount of money" before turning it over to police, authorities in Worms said on Thursday.

A police spokesman in the small western town said the 24-year-old woman saw the money flying through the air in her rear view mirror late on Wednesday. She pulled over and tried to collect all the notes, unsuccessfully.


Subprime risks come home to roost for hedge funds

Bad bets revealed by some hedge funds in recent weeks may mean other funds will be forced to accept the market's deteriorating views on subprime mortgages and report their own losses soon.

Some managers have resisted accepting market views on their assets, claiming declines represent short-term market volatility and not underlying financial value in their subprime bonds, analysts said. Since the bonds trade infrequently, managers' have turned to pricing models that may ignore market sentiment, buoying prices.


Spain selling gold to cover up worsening trade deficit

In an interesting commentary entitled “The Gold of Spain’s Central Bank,” Gerardo del Caz debates the reasoning behind Spain’s massive gold sales, selling off 30% of its reserves (80 tonnes) in just two months. In March of 2004, Spain held eleventh place in the world’s ranking with 523 tonnes, but today has little more than 300 tonnes.


Subprime poor practice risks turning to malpractice

Regulators tread a fine line between the Keystone Cops – galumphing hopelessly after escaping criminals – and Captain Renault in Casablanca. The Financial Services Authority has put paid to the first criticism by warning intermediaries and subprime mortgage lenders before poor practice turns to malpractice. But given the subprime scandal unfolding in the US, the regulator can’t really be “shocked, shocked” to have uncovered market weaknesses.


LBO Loans May Follow Subprime Collapse, Moulton Says

Loans to fund leveraged buyouts may dry up just like subprime mortgages in the U.S., according to Jon Moulton, the British venture capitalist who tried and failed to buy the carmaker MG Rover.

``It's near the top. There are some difficulties beginning to emerge in the debt markets,'' Moulton, who runs the private equity firm Alchemy Partners, told a meeting of the U.K. Parliament's Treasury committee today. ``At some stage no one will be willing to underwrite fresh debt.''

Debt, Deficits, Derivatives & Delusions - 06/11/07

Spain Shifting Reserve Assets To Bonds From Gold - Fin Min

The Bank of Spain's recent gold sales are part of a strategy to shift its reserves into more profitable fixed-income instruments, Spanish Finance Minister Pedro Solbes said Wednesday.

"What we aim to do is to sell gold, an unprofitable asset, to reinvest in bonds, which are more profitable," a Solbes spokeswoman quoted the minister as saying in answer to a question about the gold sales in a Senate hearing.

I'VE GOT A HOT TIP FOR THE FINANCIAL PRESS

The Labor Department over-estimated job growth again.

Last Friday the department reported that 157,000 new jobs were created in May.

That was considerably higher than the 140,000 that the "experts" had been expecting.

China may want BHP

BHP Billiton could be in the sights of a new $237 billion Chinese state-owned investment fund, according to Bell Potter research chief Peter Quinton.

The new Chinese State Investment Company was established last month to manage part of China's foreign investment reserves and made its debut on the world stage with a $US3 billion investment in private equity firm Blackstone.

LME intervenes in nickel market

The London Metal Exchange has intervened in the nickel market amid suspected collusion at a time of soaring prices and critically low stock levels.

“The LME has detected collusive behaviour in nickel trading and acted to tighten the lending guidelines for the metal significantly,” said John Kemp, analyst at Sempra Metals.

Putin wants new economic "architecture"

President Vladimir Putin sought to reassure investors and foreign leaders that Russia remained committed to free trade and investment for businesses that work here, in spite of a chill in political relations with the West.

But Putin said Russia would integrate with the world economy on its own terms - and possibly not by embracing the current rules of the global economic order.

OTC derivatives to reach USD550trn by 2008, says Celent

Over-the-counter derivatives will exceed the USD550trn mark in 2008, up from USD375trn at the end of 2006, according to a new report from Celent, a research and consulting firm that focuses on the application of information technology in the global financial services industry.

Growing OTC derivatives trading volume, escalating exposure to OTC derivatives and structured deals, the increased complexity of products and lack of trade automation have increased the importance of accurate valuation, according to the report, entitled Risk and Pricing Analytics: Addressing Valuation Challenges in OTC and Structured Products.

The subprime barn door

HOME FORECLOSURES are on the rise, and lenders specializing in subprime mortgages -- that is, loans for homebuyers with blemished credit -- have been evaporating left and right. At long last, lawmakers and regulators have taken an interest in this untidy corner of the mortgage market, and financial-services trade groups are getting in on the act, too, recently issuing a joint statement offering their response to the mess.

Narrowing U.S. trade deficit may lift economic growth

The U.S. trade imbalance with the rest of the world narrowed slightly in April, providing a tentative sign that less-lopsided trade could help lift the economy this year.

With economic growth expected to be only about two-thirds the pace of last year, trade could be an important factor in keeping the economy from stalling, economists said. Growth has slowed in the United States, but economies in Asia and Europe are surging and consuming more and more American exports.

Gold jumps, but bugs still suspicious

Gold closed Friday up $10.20 in New York, close to the year's high. But that followed a week in which the failure of the metal to respond to usually helpful influences - a reeling dollar, surging metal prices, various economic and political factors - had caused widespread gold bug grief and rage. Over the weekend, that's been intensified by rumors of renewed official-sector gold selling.

Oil hits seven-month high, palladium shines

The price of crude oil reached the highest level since September in London trading this week as the market worried about tight US stockpiles of motor fuel heading into the peak demand season.

Palladium was an unlikely star performer among precious metals, with its price approaching a one-year high. Lead and nickel notched up further historic records amid dwindling stockpiles. Friday’s prices are compared with those recorded late on Thursday of the previous week. Markets had shut on Friday, April 6 owing to the Easter festivities.

Palladium hits 11-month highs, gold off 6-week peak

Palladium rose to its highest in nearly 11 months on Wednesday, boosted by technical and speculative buying, but traders said market fundamentals might cap gains.

Other precious metals also advanced from the close in New York, with platinum matching Tuesday's five-month peak and gold and silver trading near their six-week highs.

Commodity Markets Analysis, Meat, Gold, Corn and Peak Oil

Where's the Beef?? It Better be in Your Freezer - Several different things I want to address first before getting to analysis of the HUI. The first one has to do with meat. The governments do not include the price of food or energy in the core rate of inflation (soon they will be including those that lie in graveyards into their index to further “average” the price down I am sure of it) so everything that you or I have to buy in the grocery store no matter how much costs rise is not “their definition of inflation”. This is the government's way of hiding the volumes of money being created out of thin air.

A History of the Gold Standard

It appears that we are slowly drifting into a period of monetary turmoil. Turmoil leads to change, and ideally the result of a widespread desire for change will be the establishment of a new gold standard. Indeed, there are some indications that this may be achieved by the end of this year, although it may seem unlikely at this moment.

Gold poised for record run

Gold prices could exceed last year’s 26 year high of $730 an ounce within the next 12 months due to a weaker dollar, rising geopolitical tensions and an investment led rally, according to the annual survey by GFMS, the metals consultancy.

GFMS said given the general favourable backdrop and the still low level of participation form institutional and private inventors in most countries, there remains considerable upside potential for gold even as the current rally enters its seventh year.

Gold Jumps As Peace Breaks Out!

"...If you want to hedge yourself against oil, buy oil. Don't mistake it for gold..."

WHATEVER happened to gold as a "safe haven"?

"The British sailors are free. They can go back to their families," announced Iran's president Ahmadinejad at a press conference on Wednesday, just as New York was about to open for business.

How Much Longer Will the Current Gold Bull Last?

The purpose of this article is to attempt to determine how much the current gold bull market has left to offer, both in chronological and dollar terms. If one presumes that this gold bull is going to be similar to the last gold bull then we can begin to build up a picture of what gold may look like over the coming years, based on the events leading up to gold's all time high in 1980.

A commonly known figure amongst gold bugs is just over $2000, which is the figure you get when you adjust the 1980 high for inflation and represent it in terms of today's rapidly devaluing US Dollar. If this is to be the high for gold in the current bull then this would suggest that we have at least another $1000-$1500 rise in gold prices to come.

Gold May Extend Rally on Investor Demand for Inflation Hedge

Gold may rise for a third straight week on speculation that rising energy costs will boost the appeal of the precious metal as a hedge against inflation.

Twenty-three of the 32 traders, investors and analysts surveyed by Bloomberg from Sydney to Chicago on March 15 and March 16 advised buying gold, which rose 0.3 percent to $653.90 an ounce last week on the Comex division of the New York Mercantile Exchange. Three said to sell and five were neutral.

Hyperinflation and the case for Gold

With the collapse of the sub-prime lending stocks the leadership of the current bull market has narrowed. Expect it to get narrower. This narrowing down of best-performing stocks and sectors is also a classic sign of the late stages of an asset bubble. Leadership of the market becomes concentrated in fewer and fewer stocks as the breadth deteriorates and other stocks fall apart technically (and fundamentally).

Gold 1: Why South Africa Is Mining Less Gold

It's been one of the most striking features of the world gold market in recent years: the fall of South Africa and the rise of China.

This was again confirmed in figures released in South Africa on Friday and in the outlook papers from the 2007 commodities forecasting conference held by the Australian Bureau of Agricultural and Resource Economics, or ABARE, in Canberra at the start of last week.

Global Gold Production on the Decline

Yesterday, South Africa’s Chamber of Mines reported that gold output fell last year to 275 tonnes, down 8% from 2005. Some sources say South Africa’s decline in gold production is now becoming a global affair, as seen in leading gold producing countries.

According to stats from GoldSheets.com, U.S. gold output for last year declined from 262 tonnes to 260 tonnes. Australian production fell to 251 tonnes from 263 tonnes. Gold produced in Peru declined to 203 tonnes from 207 tonnes. Russian gold output dropped 4 tonnes in 2006 to152 tonnes, while Canada fell from 118 tonnes to 104 tonnes.

Gold, Interest, Basis

The Inaugural Session of Gold Standard University was successfully completed at the Martineum Academy in Szombathely, Hungary, in February, 2007. By unanimous request the original program Gold and Interest was extended to include Basis as well. As those who follow my writings on the Internet well know, basis is the difference between the nearest futures price and the spot price. The gold basis is one of the most sensitive economic indicators with a seismographic predictive power. In particular, if taken in conjunction with other indicators such as the silver basis, volume, open interest, and the lease rates for the monetary metals, it is capable of predicting the beginning of the disintegration of the world’s payments system. No other scientific method of early warning can come close. Moreover, basis could also be used as the guiding star of bimetallic arbitrage between the gold and silver market. If you have a program to accumulate monetary metals, then the basis will tell you which account you should increase at any particular moment in time, in order to maximize the efficiency of accumulation. You always buy the metal with the wider basis. By the same token, you always sell the one with the narrower basis.

Mysterious movement in gold market

No stock market enthusiasts will have any sympathy, but gold's friends are aggrieved. A week ago gold bullion closed at a 2007 high, and early this past week made highs in several major currencies, a favored sign of bulls. But furious selling, starting rather strangely in the thin aftermarket after Tuesday's close in New York, ultimately sent the metal reeling to a $39 per-ounce loss on the week.
Not all gold observers were caught. Pring.com's Martin Pring, who places great faith in the predicative power of gold equities, was worrying in his Weekly InfoMovie Report about their nonconfirmation of the metal. And several old hands were suspicious about the ballooning "open interest" in gold on the New York Commodity Exchange. In essence, this is a measure of the size of the bet laid down by speculators in gold futures. Seeing it pass 2005's record high without a new high in gold set off alarm bells. How big was the seller?

Why Precious Metals?

G’day. What disappointment I’ve suffered these last few days! No, not the fact that metals have copped a few uppercuts and look like having a nice pullback for those looking to enter the Precious Metals realm. Rather, it's that the launch of my new fund has been delayed 'til April 1 due to documentation issues. Bugger it. Another month of sitting on the sidelines doesn’t impress me but I reckon it may be a blessing in disguise, especially for my investors.

Major Top in Gold this Year ? - Elliott 5th Wave Peak ?

Gold and silver were caught in the downdraft of selling on the stock exchanges today but having surged from last October's lows, a respite was always looming as the price increased.

However, the subject of this article is not the short-term movement of gold but where the next major sell point will be. There are various commentaries suggesting that gold will move fairly easily into quadruple digits with some breath to spare. I agree with these analysts that gold will move into four figures and then some. The only argument is when?

Peak Platinum, Perhaps?

The very small club of platinum group metals producers and traders is currently basking in the warmth of sustained high prices for their highest volume products, platinum and palladium. This is due to the public perception that as more and more cars and trucks are built with internal combustion engines (ICEs), the demand for platinum group metals (PGMs) for emission control catalysts and particulate filters will increase ahead of supply.

In addition the public has been led to believe that even if there is ultimately a “hydrogen fuelled energy” economy in place of our current petroleum fuelled one the vehicles of that future will be powered by mobile fuel cells that will transform hydrogen to electricity that will be used indirectly, through batteries or directly by connection to electric motors attached to the wheels.

Bullish about bullion

Soaring gold prices have led to a new trend among buyers, who are now buying more bullion in the form of coins.

Malaysian Indian Goldsmith and Jewellers Association adviser N.P. Raman said, “Many regular buyers are now beginning to look at gold purely as a financial asset, adding to their investment portfolio.

“Many women now choose to buy gold coins or even bars as investment, instead of jewellery as jewellery adds 25% to 30 % to the cost, to cover craftsmanship,” he said.

The Price of Gold: We could see a repeat of 1979

“You can never really know about these things,” said a guest at our beach shack on Saturday night. Our friend runs an investment fund, mostly family money and mostly following a macro-economic analysis.

“There is clearly a bubble in liquidity. But when they are throwing a big party like this you don’t like to miss it. We pulled out of Russia too early. We could have made a lot more money by sticking around a bit longer. Now, we’re in Chinese stocks, oil, and tourism. And cash. We’ve increased our cash to 25%. We’re definitely worried that this thing is going to come to an end. And when it does, those Chinese stocks will take a beating. But we don’t invest for the short term. We’re looking 10 years ahead. And what we see 10 years ahead is higher prices on Chinese shares, higher energy prices, and a real boom in tourism in many places.

Gold Rises; Higher Energy Costs Spur Demand for Inflation Hedge

Gold in New York rose, extending a rally to a nine-month high, as climbing energy costs boosted the appeal of the precious metal as a hedge against inflation.

Gold sometimes moves in the same direction as crude oil, which last week rose above $61 a barrel for the first time this year. Gold has more than doubled and oil has almost tripled in the past five years.

Ctrl Bks Raise Euro, Cut Dollar Share Of Reserves -CBP Survey

The euro made small gains as a reserve currency at the expense of the U.S. dollar in the final months of 2006, while gold is set to make a comeback as a reserve asset, a survey by Central Banking Publications showed Monday.

Although respondents to the confidential survey don't appear to have included the People's Bank of China or the Bank of Japan - which hold the world's largest foreign exchange reserves - they do account for 30% of total reserves held worldwide, or $1.5 trillion, CBP said. Of the 47 central banks that responded by December to the survey, 21 of them, managing reservesof $630 billion, said they had increased the share of their reserves held as euros, and 15 of thosesaid they had done so at the expense of the dollar.

Gold, Silver Rise to 9-Month High on Demand for Inflation Hedge

Gold and silver climbed to nine- month highs as a rally in commodity prices spurred demand for precious metals as a hedge against inflation.

Investment in exchange-traded funds for gold rose 5.4 percent this year amid gains in commodities including natural gas, nickel, corn and soybeans. The Reuters-Jefferies CRB Commodity Price Index is the highest since Dec. 8 as oil rose to the highest price this year and copper climbed for a third day.

Gold Rallies to Seven-Month High on Buying Frenzy

Gold futures rallied almost 3.5% today to $684 an ounce, up $23 a day after losing nearly $12 on the New York Mercantile Exchange. This was the metal’s highest close since July 7 and very reminiscent of moves made when gold was hitting all-time highs of $850.

“Today’s gyrations not only hark back to last spring’s high-wire act, but bring to memory shades of 1979-1980 when daily moves of this type and magnitude were seen as more or less ‘routine’,” said Jon Nadler, analyst for Kitco.com.

UTI Mutual rolls out gold ETF -Video

UTI Mutual Fund today launched its gold exchange traded fund (GETF), becoming the second fund house in the country after Benchmark AMC to offer this asset class investment.

The new fund offer (NFO), with a minimum investment of Rs 20,000, would be available between March 1 and 12 and would be listed on the National Stock Exchange (NSE) on March 26.

Will gold or gold shares offer the best downside protection in a global asset sell-off?

Investors around the world are starting to sound alarm bells at the length of the bull market in equities, now approaching four years old. Investors in precious metals and related shares are also concerned that they will get dragged down by a big global asset sell-off. But are physical gold or silver, or mining shares the better buy?

Gold demand climbs, while supply wanes

Demand for gold hit a record $65-billion (U.S.) last year, propelled by both investors and the jewellery industry, according to statistics compiled for the World Gold Council by GFMS Ltd.

But the supply of gold and tonnage sold declined.

The Gold Council is optimistic about the prospects for 2007, noting that investor demand remains positive and demand in most jewellery markets has been brisk. But it warns that the return of excessive price volatility could hinder jewellery purchases.

Gold sets fresh 7-month peak, sentiment upbeat

Gold eked out a new seven-month high on Tuesday, helped by a weaker dollar and firmer oil prices, although prices may still need to consolidate recent gains before launching an attack on $700.

Sentiment was generally upbeat, with banks reporting that investors were taking another look at gold due to increased tensions in the Middle East, while price charts were sending out positive signals to funds who use such tools to trade.

Juniors and self publicists: how to profit most from gold at $1000

Whether the International Monetary fund recasts its rule book against the manipulation of the gold market by central banks, or Chinese and speculative buyers push up the price from $666 an ounce at the close last week, there is an emerging consensus that $1,000 is a reasonable target for the yellow metal. Leveraging off this trend then ought then to be a friend indeed.

Gold bulls entice SARB

The South African Reserve Bank's (SARB) holdings of gold reserves increased markedly in January to 4.684 million ounces from 3.990 million ounces in December 2006, and according to a leading economist, this could be due to the Bank taking the opportunity to build up reserves when it is "hard to argue against a long-term bullish view on gold".

"Keep in mind that they do not declare the constituents of the portfolio, so whatever we say is speculation. You could, however, look at gold as another reserve currency and it is hard to argue against a long-term bullish view on gold," explained Goolam Ballim, chief economist from Standard Bank.

Gold touches 7-mth high, silver sees 2-mth peak

Gold jumped to a seven-month high on Friday, boosted by oil's spike above $60 a barrel and fresh buying prompted by the precious metal's break above a key resistance level, traders said.

Silver tracked gold higher, hitting a two-month of $13.93 an ounce, and platinum saw $1,203, the highest since November 22.

Gold Prices Rise as Gold Mining Output Drops

Gold prices rose 22% last year in Dollar terms. They've almost doubled for Sterling investors since 1999. So you might expect gold mining output to be rising in response. But no. Gold mining supplies fell by 2% last year...

Gold rush tears up a patch of the Amazon

Brazil - It's a gold rush in the Amazon jungle, driven by the Internet.

Speeding past unbroken walls of foliage, a motorboat packed with gritty prospectors veers toward the shore of the Juma river and spills its passengers into a city of black plastic lean-tos veiled by greasy smoke.

All around them are newly dug pits, felled trees, misery and tales of striking it rich.

GLOBAL MARKETS-US bonds, dollar gain after jobs data, gold falls

U.S. Treasury bond prices rose on Friday after government data showed moderate job creation, suggesting the Federal Reserve will keep interest rates steady for some time.

The dollar gained as investors focused on upward revisions in the jobs numbers for previous months, while U.S. stocks ended mixed.

The Labor Department's nonfarm payrolls report showed that the U.S. economy created 111,000 new jobs in January -- below forecasts for 149,000. But the government also revised upward estimates of job growth in previous month.

Blanchard & Co. research note: IMF can't scare gold anymore

Gold is breaking out of a range between $640-650. We should see prices continue rising toward to the $680 range with little resistance and then need a new period of consolidation before setting off to challenge the May 2006 highs of $730.

So the big news out yesterday after the FOMC non-event meeting was the recommendation from the International Monetary Fund's panel of distinguished current and former central bankers calling for the IMF to sell 400 tonnes of gold to help plug the IMF's operating budget deficits. There are a number of reasons why this probably won't happen, but should it still come to pass, it will give the gold market yet another bullish signal on prices.

International Monetary Fund Told to Sell Gold

An esteemed group of eminent persons, including former Fed Chairman Alan Greenspan and current President of the European Central Bank Claude Trichet, has recommended that the International Monetary Fund (IMF) sell up to 400 tonnes of gold as means to finance ongoing costs.

In a report submitted to the IMF Executive Board today, a Committee of Eminent Persons concluded that the IMF's current income model, which relies heavily on the interest it earns from loans to member nations, is “no longer appropriate.”

Gold and silver rally on fund buying, weakening dollar

Fund buying and a softer U.S. dollar enabled gold and silver futures to rally Wednesday.

April gold settled up $7.70 at $657.90 a troy ounce on the New York Mercantile Exchange. March silver rose 19.5 cents to $13.57, the highest level in six weeks.

$1000 Gold Price Isn’t Far Off

Today being Australia Day we thought there is probably no better subject to look at than Gold. Seeing as Gold is one half of the nation’s official colours, it is even more apt. As for the other half, the Green, well we can’t say that we have seen all that much green around. Brown on the other hand is in abundant supply. Although we are not sure that Gold and Brown match. We’ll leave that one to the style gurus.

Gold Stock Earnings to Shine in 2007

As gold stocks were declining last fall I began to put my “shopping list” together for 2007. My strategy was to focus on production. It was pointed out by Steve Saville, at TSI, that producing companies tend to lead the pure exploration companies after significant market corrections. Producing companies are also less likely to be raising equity capital, which dilutes shareholders and pressures their stock.

Gulf states seen shifting away from U.S. assets

Oil-rich Gulf Arab estates are seen shifting their assets away from the United States, and Qatar is keen on customer states including Asia and Europe as destination, the country's financial regulator says.

Middle Eastern countries have been scaling back its once near full reliance on U.S. assets in recent years to minimize risks and enhance returns as they diversify the massive windfall from oil and gas revenues.

Coin shortage could turn pennies to nickels

A potential shortage of coins in the United States could mean all those pennies in your piggy bank could be worth five times their current value soon, says an economist at the Federal Reserve Bank of Chicago.

Sharply rising prices of metals such as copper and nickel have meant the face value of pennies and nickels are worth less than the material that they are made of, increasing the risk that speculators could melt the coins and sell them for a profit.

Blanchard Lauds IMF Central Bank Gold Lending Accounting Change as Industry Landmark

After months of inquiries and a
hotly debated, in-depth position paper by its economic research unit,
Blanchard and Company has learned that the International Monetary Fund has
adopted a landmark accounting change to the way Central Banks account for
their gold loans, giving this sector of the commodities market more
transparency than it has ever had, the precious metals market leader
announced today.

Gold rallies to 7-week high on fund buying

Gold jumped more than 2 percent to a seven-week high on Tuesday as a sharp decline in the dollar and firmer oil prices triggered speculative fund buying, dealers said.

Other precious metals tracked gold higher, with spot palladium hitting a 4-1/2-month peak, platinum rising to a seven-week high and silver reaching its highest level in more than a month.

US gold speculators raise net longs by 19%

Speculators in US gold futures raised their net long position by 19 per cent in the week to January 16 as prices touched an eight-day high, trade data released on Friday showed.

Just a week prior to that, noncommercial players in US gold - basically speculators - had trimmed net longs by 32 per cent, the Commodity Futures Trading Commission said in its weekly Commitment of Traders report.

Gold-Oil Ratio Hits Multi-Year High

The gold to oil ratio hit a multi-year high today, surpassing 12 barrels per gold ounce after crude dropped below 52/bbl and gold fell below 625/oz. So far in 2007, crude has given up 15% while gold has lost 1.5%, following last year’s drop of 3.6% in crude and gold’s gain of 23%. Analysts see a trend forming.

Dennis Gartman, Editor of The Gartman Letter, said in a report today that the ratio has hit yet another new high for the past several years and “the trend is clearly in our favour.”

SEBI allows MFs to float gold exchange traded funds

Market regulator SEBI today gave a go-ahead to mutual funds for floating gold exchange traded funds (GETF), thus enabling the investors to trade in gold as shares in the stock market.

In a notification, SEBI said: "The gold held by a gold exchange traded fund scheme shall be valued at the AM fixing price of London Bullion Market Association (LBMA) in US dollars per troy ounce for gold having a fineness of 995.0 parts per thousand." The Custodian of Securities Act has also been amended, enabling custodians of the proposed gold funds to outsource safekeeping of bullion to other agencies.

Silver Analysis Update

The silver market continues to move in a state of flux as the metal struggles to free itself from its current period of price correction. However, one must not take this to be a sign of overall weakness in the silver bull market but rather a normal adjustment to the recent $15 highs that caused silver to race too far ahead of its normative indicators. In terms of Elliott Wave analysis, the most probable picture to me is laid out below.

Gold May Rise for 2nd Week as Alternative to Dollar

Gold may rise for a second week on speculation that Russia and oil-producing nations in the Middle East will shift reserves away from the dollar, boosting the appeal of the precious metal as an alternative.

Twenty-two of the 31 traders, investors and analysts surveyed by Bloomberg News from Sydney to Chicago on Jan. 11 and Jan. 12 advised buying gold, which rose 3.3 percent last week to $626.90 an ounce in New York. Four respondents said to sell, and five were neutral.

Was the 2006 gold price peak like 1980 or 1975?

For gold investors this is an enormously significant question as the blow-off in 1980 marked the start of a 20-year bear market while the 1975-6 correction was merely a stumble on the road to the biggest ever surge in gold prices in 1980, price levels that have still not been exceeded.