Andy Xie : QE numberless oblivion
- world currency war : If you print a trillion, I'll print a trillion. No change in exchange rate after a trillion? Let's do it again, QE2 ...
It seems that nobody wants to appreciate. Most major economies will do something to keep their currencies down. That is checkmate for the US. Without the devaluation benefit on rising exports, QE just leads to inflation, first through rising oil prices. The American people are suffering from declining housing prices and high unemployment. If the gasoline price doubles, the country may not be stable. How would the elite react? Probably more of the same.
The world is heading towards high inflation and political instability. It's only a matter of time before there is another global crisis. The first sign would be a collapsing treasury market. The Fed is controlling the yield curve through its QE program. But, it is irrational for other investors to play this game. The only reason to stay in is that the Fed won't let the market fall. But, the underlying value is evaporating with rising money supply and the inflationary consequences. When all the investors realize this, they will run for the exits and the Fed won't be able to stop the stampede. If it prints enough money to take over the whole market, the people with freshly minted dollars would surely want to convert their money into other assets. The dollar would collapse too.
The world seems on course for another crisis in 2012. The same people who caused the last crisis are still in charge. They'll get us into another. Iceland is sending its former prime minister to court for causing the banking crisis. A worse fate awaits the people who are causing the next crisis.
Wednesday, October 27, 2010
Monday, October 25, 2010
Gold further to run - Aden
GOLD: FURTHER TO RUN - By Mary Anne & Pamela Aden, October 25, 2010
It's been an exciting month. Gold rose, surging well above the $1300 level. Silver and gold shares soared even more.
We hear that gold is in a bubble, it can't rise much further and so on. Many wonder, why it's even risen so much? For that, you again have to look at history from a global perspective and it'll provide the answer.
LOOKING BACK…
We've often pointed out that gold is money. It has been for thousands of years. Paper money is not really money and there isn't one paper currency that has survived over time. Gold, on the other hand, has. It can't be created at will, it's durable and it's always maintained its purchasing power.
In 1971 when foreign nations (particularly France) demanded that the U.S. settle its deficits with gold, Nixon, who was worried about the disappearing gold reserves, said "no." In doing so, he shut the gold window. So the time honored link between the U.S. dollar and gold was broken, the world went off the gold standard and the U.S. dollar became the world's reserve currency. The U.S. then created a false prosperity via inflation, and ever larger quantities of money and debt. But this was a fantasy that's now meeting head on with reality.
ABUSED DOLLAR IS THE CULPRIT
Since the U.S. is now going overboard with massive deficit spending and out of control debts, the world is starting to want real money, which is gold. And that's why the dollar is falling and gold is soaring.
Naturally, there will be corrections along the way. No market goes straight up, or straight down and the hardest part is to stay with it. We've been consistently recommending gold since 2002 and yes, there have been ups and downs.
In fact, gold's exceptional rise has now reached our temporary target level. It's been a super rise, up 55% since April 2009… or you could say, gold has soared 17% in recent weeks alone! By any standard, the surge is due for a rest, which is likely now beginning, and this could last for a few months.
Gold, however, is still far from the mania, bubble stage. Average investors are just starting to appreciate the rise in gold. They know things aren't right and they are learning that gold is a safe haven. They see the dollar falling, the economy dragging with debt and the Fed trying to keep it together. The public is concerned, but they're not yet buying gold. When they do, gold will surge to even far higher levels.
MEGA BULL MARKET
It's important to keep in mind that great bull markets in gold occur one or two times in a lifetime. The last one ended in 1980. It took 20 years before the next (and current) bull market to begin.
It began at a moment when most thought gold was dead and buried. Central banks couldn't sell their gold fast enough. The Bank of England sold theirs at the major low in 2001. Meanwhile, gold producers had been hedging their production in order to stay afloat. This despair marked the low.
But now 10 years later, we've seen the gold price produce consecutive annual gains. And with gold up more than 20% this year, 2010 will mark 10 full years of gains. This is the longest winning streak since the 1920s!
Times have changed. But it took the financial crisis and the ongoing aftermath to change the way people view gold. Confidence is growing and the change in the central banks' actions and attitude toward gold was key in giving a green light to investors.
Central banks stopped selling gold and they've become net buyers this year for the first time in two decades. They're expected to buy 15 metric tones of gold this year, which is a major turnaround. Gold is becoming an important reservable asset and again, this bull market has further to run. So use weakness in the weeks ahead as an opportunity to buy at a better price… and then plan to hold on for the long haul.
--------------------------------
Mary Anne & Pamela Aden are well known analysts and editors of The Aden Forecast, a market newsletter providing specific forecasts and recommendations on gold, stocks, interest rates and the other major markets. For more information, go to http://www.adenforecast.com/
It's been an exciting month. Gold rose, surging well above the $1300 level. Silver and gold shares soared even more.
We hear that gold is in a bubble, it can't rise much further and so on. Many wonder, why it's even risen so much? For that, you again have to look at history from a global perspective and it'll provide the answer.
LOOKING BACK…
We've often pointed out that gold is money. It has been for thousands of years. Paper money is not really money and there isn't one paper currency that has survived over time. Gold, on the other hand, has. It can't be created at will, it's durable and it's always maintained its purchasing power.
In 1971 when foreign nations (particularly France) demanded that the U.S. settle its deficits with gold, Nixon, who was worried about the disappearing gold reserves, said "no." In doing so, he shut the gold window. So the time honored link between the U.S. dollar and gold was broken, the world went off the gold standard and the U.S. dollar became the world's reserve currency. The U.S. then created a false prosperity via inflation, and ever larger quantities of money and debt. But this was a fantasy that's now meeting head on with reality.
ABUSED DOLLAR IS THE CULPRIT
Since the U.S. is now going overboard with massive deficit spending and out of control debts, the world is starting to want real money, which is gold. And that's why the dollar is falling and gold is soaring.
Naturally, there will be corrections along the way. No market goes straight up, or straight down and the hardest part is to stay with it. We've been consistently recommending gold since 2002 and yes, there have been ups and downs.
In fact, gold's exceptional rise has now reached our temporary target level. It's been a super rise, up 55% since April 2009… or you could say, gold has soared 17% in recent weeks alone! By any standard, the surge is due for a rest, which is likely now beginning, and this could last for a few months.
Gold, however, is still far from the mania, bubble stage. Average investors are just starting to appreciate the rise in gold. They know things aren't right and they are learning that gold is a safe haven. They see the dollar falling, the economy dragging with debt and the Fed trying to keep it together. The public is concerned, but they're not yet buying gold. When they do, gold will surge to even far higher levels.
MEGA BULL MARKET
It's important to keep in mind that great bull markets in gold occur one or two times in a lifetime. The last one ended in 1980. It took 20 years before the next (and current) bull market to begin.
It began at a moment when most thought gold was dead and buried. Central banks couldn't sell their gold fast enough. The Bank of England sold theirs at the major low in 2001. Meanwhile, gold producers had been hedging their production in order to stay afloat. This despair marked the low.
But now 10 years later, we've seen the gold price produce consecutive annual gains. And with gold up more than 20% this year, 2010 will mark 10 full years of gains. This is the longest winning streak since the 1920s!
Times have changed. But it took the financial crisis and the ongoing aftermath to change the way people view gold. Confidence is growing and the change in the central banks' actions and attitude toward gold was key in giving a green light to investors.
Central banks stopped selling gold and they've become net buyers this year for the first time in two decades. They're expected to buy 15 metric tones of gold this year, which is a major turnaround. Gold is becoming an important reservable asset and again, this bull market has further to run. So use weakness in the weeks ahead as an opportunity to buy at a better price… and then plan to hold on for the long haul.
--------------------------------
Mary Anne & Pamela Aden are well known analysts and editors of The Aden Forecast, a market newsletter providing specific forecasts and recommendations on gold, stocks, interest rates and the other major markets. For more information, go to http://www.adenforecast.com/
Saturday, October 2, 2010
Gold & Silver prices signal destruction of Dollar
InflationUS (video)
The Federal Reserve is Responsible for the last 2 Decades of Economic Turmoil
1. Beginning with the Savings & Loan crisis in 1990, each engineered crisis is growing in intensity and carnage. First, there was the Internet bubble crash then the Real Estate bubble meltdown and now we are at the footsteps of an unprecedented acceleration of price increases in food and energy.
In 2007, commodity prices soared when there was actually a slowdown in the global economy. There was no reason for commodity prices to go ballistic at that time, except for federal reserve intervention. The price of oil went from $78 to $147. High gas prices actually burdened the average US consumer with an additional "tax" of five hundred billion dollars.
That 500 billion dollar "hidden tax" was ONE of many reasons, we are IN the current Great (NON) Recession.
(The US Dollar Index is Worthless)
2. On CNBC they often point to the dollar index and state that a weaker dollar is good for the export economy. Currently US Dollar index looks bad - but it actually means nothing because it is being compared to other world wide fiat currencies undergoing massive debasement. Worldwide central banks, seem to be in a currency death dance, racing each other to the bottom in the name of international competitiveness.
Gold and Silver is the Only way to test the Strength of our Currency.
The dollar is weakening against other currencies but when compared against the price of precious metals and raw materials we can see THE THE TRUE VALUE OF A US FEDERAL RESERVE NOTE
(GOLD AND SILVER ARE NOT EXPENSIVE)
3. The truth is Gold and Silver prices are just Getting Started. If you pay attention the public is selling not buying gold (cash4gold commercial)
What happened during the Internet bubble? The average Joe was piling into tech stocks and many individuals were giving up there jobs to day trade full time
And we all know what transpired during the last death throws of the Real estate bubble. People were buying at the peak 3, 4, 5, 10 home and flipping every WHICH way to make AS LITTLE AS 20,000
The common JOE, BUYS into manias...When all your neighbors are hoarding and trading gold, and telling you real estate is a waste of time and money, it may be the time to look at diversifying some your investments out of gold and silver.
WHAT I SEE PERSONALLY IS :
4 (JOBS ARE NOT COMING BACK TO THE US)
TO QUOTE Dr. Marc Faber: "COMPANIES would be out of THEIR minds, with health care reforms, government interventions and the uncertainty about future taxes in the US, to even consider expanding in the US.
Corporations are expanding in China, India, Vietnam, Bangladesh, Africa and Brazil. The business world is an international place today, and if you run a corporation, whether you employ 50 or 10,000 PEOPLE, you can choose where you invest your money in terms of capital spending.
Where do you want to expand factories? If I employed people in the US, I would rather think of reducing the 50 employees RATHER THEN HIRING MORE.
The Federal Reserve is Responsible for the last 2 Decades of Economic Turmoil
1. Beginning with the Savings & Loan crisis in 1990, each engineered crisis is growing in intensity and carnage. First, there was the Internet bubble crash then the Real Estate bubble meltdown and now we are at the footsteps of an unprecedented acceleration of price increases in food and energy.
In 2007, commodity prices soared when there was actually a slowdown in the global economy. There was no reason for commodity prices to go ballistic at that time, except for federal reserve intervention. The price of oil went from $78 to $147. High gas prices actually burdened the average US consumer with an additional "tax" of five hundred billion dollars.
That 500 billion dollar "hidden tax" was ONE of many reasons, we are IN the current Great (NON) Recession.
(The US Dollar Index is Worthless)
2. On CNBC they often point to the dollar index and state that a weaker dollar is good for the export economy. Currently US Dollar index looks bad - but it actually means nothing because it is being compared to other world wide fiat currencies undergoing massive debasement. Worldwide central banks, seem to be in a currency death dance, racing each other to the bottom in the name of international competitiveness.
Gold and Silver is the Only way to test the Strength of our Currency.
The dollar is weakening against other currencies but when compared against the price of precious metals and raw materials we can see THE THE TRUE VALUE OF A US FEDERAL RESERVE NOTE
(GOLD AND SILVER ARE NOT EXPENSIVE)
3. The truth is Gold and Silver prices are just Getting Started. If you pay attention the public is selling not buying gold (cash4gold commercial)
What happened during the Internet bubble? The average Joe was piling into tech stocks and many individuals were giving up there jobs to day trade full time
And we all know what transpired during the last death throws of the Real estate bubble. People were buying at the peak 3, 4, 5, 10 home and flipping every WHICH way to make AS LITTLE AS 20,000
The common JOE, BUYS into manias...When all your neighbors are hoarding and trading gold, and telling you real estate is a waste of time and money, it may be the time to look at diversifying some your investments out of gold and silver.
WHAT I SEE PERSONALLY IS :
- 10 years of Real Estate Stagnation & Depreciation &
- 10 years of Gold & Silver Appreciation
4 (JOBS ARE NOT COMING BACK TO THE US)
TO QUOTE Dr. Marc Faber: "COMPANIES would be out of THEIR minds, with health care reforms, government interventions and the uncertainty about future taxes in the US, to even consider expanding in the US.
Corporations are expanding in China, India, Vietnam, Bangladesh, Africa and Brazil. The business world is an international place today, and if you run a corporation, whether you employ 50 or 10,000 PEOPLE, you can choose where you invest your money in terms of capital spending.
Where do you want to expand factories? If I employed people in the US, I would rather think of reducing the 50 employees RATHER THEN HIRING MORE.
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