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There is a Canadian double short etf for natgas, HND.TO.
What happens when the first million people in your situation have the same thought?
SAN FRANCISCO (MarketWatch) -- The Chinese government has agreed to purchase up to $50 billion worth of International Monetary Fund bonds, the first such notes in the fund's history, the IMF said Wednesday.
The global organization said the note purchase agreement "offers China a safe investment instrument," and is part of a broader plan to help the fund weather the economic downturn.
The IMF announced plans to issue bonds to member countries in June, as part of a plan to help bolster its resources. China expressed interest at that time in purchasing the notes.
Other countries reportedly interested in purchasing the IMF bonds include Russia and India.
The IMF said in a statement that the Chinese purchase will help "boost the Fund's capacity to help its membership -- particularly the developing and emerging market countries -- weather the global financial crisis, and facilitate an early recovery of the global economy."
Chinese officials have previously held up the IMF as a possible source for a world reserve currency to supplement or replace the dominant role of the U.S. dollar.
John Letzing is a MarketWatch reporter based in San Francisco.
http://www.marketwatch.com/story/china-to-buy-up-to-50-billion-of-first-imf-bonds-2009-09-02?siteid=yahoomy
DXO tried to obtain 2x the index - Deutsche Bank Liquid Commodity index - Optimum Yield Oil Excess Return. They had to use options, swaps etc to gain leverage. I'm glad to see these things go away. The price of oil has been distorted by leveraged speculators with seemingly unlimited resources. The global liquidity pools created by quantitative easing have been tapped by the big trading desks. GS is the largest oil trader in the US. That ought not be true. The US commercial oil inventories are 44 million barrels (14.6%) higher than a year ago. Demand is down and yet oil has been run to 75 a barrel. That is not "price discovery". UNG is another bad idea. At one point speculators owned nearly 20% of the front month for natgas. The futures markets were not created for that kind of speculation. Kill all the juiced etfs and let the markets get back to real supply and demand, producer to user. . . with limited speculation allowed. The NYMEX is supposed to limit speculators now to 6000 contracts in the front month. That ought to be enough (6 million barrels).
NEW YORK (Dow Jones)--Political pressure to reign in energy "speculators" appears to have claimed its first victim in the ETF industry.
On Tuesday Deutsche Bank said it will redeem all shares of PowerShares DB Crude Oil Double Long Exchange Traded Note (DXO), an ETF-like security that helps investor double bets on the price of oil.
In the week ending 28 August 2009 the increase of EUR 2 million in gold and gold receivables (asset item 1) reflected the net purchases of gold coin by a Eurosystem central bank.
http://www.ecb.int/press/pr/wfs/2009/html/fs090901.en.html
He talked about position limits, leveling the playing field and outsized speculation. Maria missed the point about speculators vs outsized speculators. She failed to grasp the difference between oil companies and speculators. Gensler said he would add more transparency, sounded like they will show who has the larger positions. Gensler talked about more cooperation globally. I wonder how fast they will exempt GS, MS and JPM? I heard nothing about etfs.
The CFTC head will be on CNBC after the bell today. fyi
You are right but the dollar fell today and the black boxes bought commodities no matter what the storage numbers said. At some point a human will review the computer purchases and we will get a nice correction again.
CHK curtailed production earlier this year and then stopped. Aubrey McClendon said recently that they would sell all they could produce until the forced curtailment hits all of the producers.
The IV CWEI board has a priceless poster "robry825" who compiles a tremendous amount of data daily on natgas.
http://www.investorvillage.com/iv1/smbd.asp?mb=2234&mn=218858&pt=msg&mid=7768665
The IV site went to a pay basis recently. Robry gathers his data from various sources like the EIA site
The theoretical maximum storage available is debateable, but I've included Robry's notes below...
Futures attract speculators. Speculators keep buying natgas contracts for all kinds of reasons, weather, charts or whatever. The guys using only charts have been trying to get bullish on UNG since March. They have been wrong.
there is a surplus of natgas of at least 55-60 bcf per week and that surplus is filling storage at a record rate. Once the storage is full, producers will be forced to curtail their production. . . they will live on cash flow until demand returns. . .
====Estimate of Operationally Available Working Gas Storage Capacity (in BCF)====
..................(Prepared from information for gas week ended 08/07/09)
___________Data Sample___________________Capacity___Inventory__%Full___
Publicly available data................................................1410.............1182.........83.8
EIA-Reported data (100% of US Storage)..................3760(e).........3152.........83.8(e)
......(e).Estimate of Capacity calculated as 3152 / (1182/1410) = 3760
Natgas storage is 82% full and 8 weeks ahead of the average refill schedule. CHK stated in their quarterly report that they removed all of their curtailment and sold gas at full throttle. I suspect that the other producers did also. They expect curtailment to come from OFOs (operational flow orders) as storage nears full. Prices for spot gas are under 3 bucks in many places and will fall as pipeline pressures rise and storage fills. Normal seasonality is overwhelmed this year by huge surpluses. Unless and until industrial demand returns, natgas prices will remain depressed.
European central banks agree to limit gold sales
http://www.marketwatch.com/story/european-cenral-banks-agree-to-limit-gold-sales-2009-08-07
The new agreement sets an annual limit of 400 tonnes and will accommodate the IMF sales.
It could be a setup. But I like Rick Santelli and he was the one who broke the Trimtabs story. The market looks toppy to me, so I'm already biased short.
http://www.froogalizer.com/news/trimtabs-continues-throwing-sand-in-the-eyes-of-fake-economic-data.html
TrimTabs Investment Research estimates that the U.S. economy lost 488,000 jobs in July, considerably more than the consensus estimate of a loss of 305,000 jobs. In addition, TrimTabs expects the Bureau of Labor Statistics to revise its job loss estimates sharply higher for the first half of 2009 based on the latest unemployment insurance survey results.
Thanks for the juniors. Gold closed nicely over 960.
Gold is over 960, so perhaps the seller that Mr. Gartman references is gone or has retreated to the next resistance level. I want to see a couple of closes over 960.
The US Dollar made a new low for the year. DXY hit 78.22 and that sent gold/oil etc higher.
Ammo and guns have been running higher since the election and there have been shortages for many calibers. SWHC, RGR, CAB, are all making big profits.
UBS Wealth Management Americas has suspended purchases of leveraged and inverse ETFs to our clients, effective immediately, as the short-term nature of these securities is generally inconsistent with the long-term view of investing that UBS advocates when building client portfolios. In addition, recent regulatory guidance on leveraged and inverse ETFs reinforces the short-term nature of these products, particularly in volatile markets. UBS Wealth Management Americas’ financial advisors have been fully briefed and our clients are being contacted regarding these securities.”
Edward Jones did this last week.
http://ftalphaville.ft.com/blog/2009/07/27/63961/the-etf-blowup-begins/?source=rss
zerohedge has a thread on this too.
Thanks for posting those Gartman updates. He is smarter in print than on CNBC.
http://www.kitco.com/charts/popup/au24hr3day.html They dunked it early and failed, then hit it again afternoon and succeeded. I like the netdania charts, can change the time frame with a button push.
http://netdania.com/Products/live-streaming-currency-exchange-rates/real-time-forex-charts/FinanceChartPopUp.aspx?symbol=XAUUSDOZ|comstock_lite&name=Gold, spot
http://netdania.com/Products/live-streaming-currency-rates-foreign-exchange/real-time-quotes/QuoteList.aspx
What happened to the gold chart after noon? The 5 min looks like a water fall.
Is there a similar complaint about the CEF? I have some money in that because I thought it was safer than the GLD. TIA
Roubini says his comments were taken out of context. Some retractions hit CNBC and Fox Business already.
INTC beat on their pro forma earnings and gave some positive guidance during their conf call. That kicked the Semis higher and that carried over to the nasdaq and spx.
Thx, Basser, what a story!
One of the financial stations said that less than 10% of the stimulous money has actually been spent. Apparently, most of the money is earmarked for 2010 (election year) and beyond. Now that the jobs number has their attention and the market appears to be in "dive" mode, perhaps we will see more of that money actually spent. My costs here in central Texas are above last year across the board. Tuition, property taxes, food, services like the a/c repair guy and the plumber are either at the same rate or slightly higher. . . so my perception is colored by the region in which I live.
What would change your mind? We aren't using the same definitions of inflation and deflation, so what empirical evidence would indicate to you that inflation is indeed present?
Harry Dent - DOW to 40,000 in 2000 and 2004. .
Periods of inflation often coincide with high unemployment. I entered the work force in 1977 and remember well the inflation and recession of the late 70's and early 80's. Interest rates ran into the high teens. Unemployment was over 10%. Jimmy Carter was beaten in 1980 by a campaign that used a "misery index" that added the inflation rate to the unemployment rate. Dent's designer definition fits the Keynesian model, but fails on first inspection.
http://mises.org/story/3525
How Much Money Inflation?
Mises Daily by Howard S. Katz | Posted on 7/1/2009 12:00:00 AM
The Federal Reserve is lying about the nation's money supply (M1). The current figure for money supply is being given as $1.6 trillion. The actual number is $2.34 trillion. The reported number is equivalent to an increase of 16% over the past year. The actual number is equivalent to an increase of 70% over the past year. This compares with the nation's high money-supply increase of 16.9% in 1986.
Astute observers of the Federal Reserve have noticed that, since the large infusion of money of last autumn, the monetary base has exceeded the money supply:
Figure 1reported monetary base ($1.8 trillion) Figure 2reported money supply ($1.6 trillion) These figures are from Federal Reserve releases H-6 and H-3.
However, the monetary base is a part of the money supply. How can the part exceed the whole? (Money is created in 2 basic steps. First, the Federal Reserve prints up paper money. This is called special money and is usable by private banks as reserves. It is treated in the system in the way gold used to be. This money is measured by Federal Reserve credit, or Reserve Bank credit. With a few adjustments, this becomes the monetary base, which can be thought of as the special money that is available to the banking system for the second step. In the second step, the private banks create money in the form of demand, and other checkable, deposits. They do this in the process of making loans. Essentially, the nation's money supply is cash — the special money — plus bank deposits.)
In pursuit of the answer to how the monetary base got to be bigger than the money supply itself, I called the St. Louis Federal Reserve, and they were good enough to send me the following reply:
Half of all transaction deposits do not appear in M1 [the money supply] due to retail deposit sweeping. Adding these back into M1 causes M1 to be larger than the monetary base. (In retail deposit sweeping, banks reclassify checkable deposits as savings deposits so as to reduce statutory reserve requirements. Within certain legal bounds, such behavior is acceptable to the Fed. Bank customers are unaware that such reclassification is occurring.)
Plus the FOMC has increased the Fed balance sheet to levels never before seen. Banks are holding deposits at the Fed and not making a great deal of new loans (they are making some, but it is a recession after all). If the banks made new loans, that would generate more deposits to be included in M1.
Transactions deposits are simply demand deposits plus other checkable deposits. That is, they are total bank deposits and, as such, are an important part of the money supply. Immediately prior to the crisis of last autumn and the massive creation of over one trillion dollars out of nothing by the Federal Reserve, total bank deposits were about 40% of the money supply, with the monetary base as the other 60%. According to the St. Louis memo, half of these deposits are "swept," that is, they are reclassified as time deposits. (The memo did not say, but probably it is done overnight or over the weekend.)
This process of reclassifying bank demand deposits as time deposits is the fraudulent part of the new procedure. Despite the fact that both are called deposits, time deposits are fundamentally different from demand deposits as follows:
A demand deposit is money given to a (banking) institution that does not earn interest and can be withdrawn by the person who gives it (the depositor) whenever he wants (on demand).
A time deposit is money given to a (banking) institution that earns interest but cannot be withdrawn except after giving notice for a defined period of time (usually 90 days). A time deposit at a bank should be thought of as similar to a certificate of deposit. You can't get your money out for a certain period of time, but while it is there, it earns you interest.
Because of these differences, economists, for many centuries, have classified demand deposits as money but have said that time deposits are not money. A simple example will illustrate the point. Money is that economic good which can be used to buy things. Suppose you go to the store and see an item that you want. If you pull out your checkbook, which is a demand deposit, it will be accepted as money. But if you pull out your passbook to the savings account, then you will politely be told to take the passbook to the bank and get money for it. The passbook is not money (because of the time restriction on it), and you cannot buy things with it.
Notice that the St. Louis memo tiptoes around the question of telling a depositor that he has a demand deposit while telling the rest of the country that he has a time deposit. It states, "Within certain legal bounds, such behavior is acceptable to the Fed."
Well, since the Fed is trying to lie to the American people, I imagine that it certainly would be acceptable. The question is not whether the banks' behavior is acceptable to the Fed; the question is whether the Fed's behavior is acceptable to the nation. At least the memo is candid when it concludes, "Bank customers are unaware that such reclassification is occurring."
According to the June 1, 2009, Federal Reserve release H-6 (table 3), demand deposits plus other checkable deposits are equal to $740 billion. But, according to the memo, this reported figure is only half of the real deposits. Thus the true number for bank deposits is $1,480 billion. Adding back the missing $740 billion gives us a money supply of $2.34 trillion (1.6 + .74).
Calculating from the end of May 2008 to the end of May 2009, the US money supply has grown from $1.37 trillion to $2.34 trillion. This is an increase of 70%.
To put this figure into context, the previous high one-year growth in US money supply was 16.9% in 1986. The money supply figures for the late '70s, which gave us a 13.3% rise in the consumer price index, were in the range of 8%–9% per year.
Barack Obama has projected a budget deficit for the coming year of $1.8 trillion. (To be honest, it seems strange to me to be using the T-word.) There is something that is not understood about budget deficits. We are always told that this is bad because it is borrowing from the future and that our children will be responsible for our debts. This, however, is an earlier-day lie. No government in history has ever been able to borrow the money for any sizable spending program from the people. The government's deficits are simply too big and would overwhelm the credit markets of the nation.
What every government has done when it faces sizable deficits is to simply print the money. If America is facing a $1.8 trillion deficit later this year, then it will probably print (another) trillion dollars to finance this. And then, as a political reality, it will be impossible to significantly cut the deficit for the next year, and the year after, etc., etc., etc. In this way, our children do not get poorer in the future. We get poorer, here and now. But we get poorer by having our dollars worth less. We have a bigger quantity of dollars but a smaller quantity of goods.
This means printing of money (the Fed prints the money and then "lends" it to the Treasury) of $500 billion to $1 trillion addition to the money supply, each year for the next several years. A few years down the road, we could easily be looking at a money supply of $4 trillion to $5 trillion.. This is 3–4 times the level of a year ago.
Last year practically every newspaper in the country was telling you that the problem we faced was "deflation." That was a gigantic piece of propaganda designed to frighten you into holding cash. Remember the flight to "safety" into T-bills and T-bonds? Most people fled from hard assets. These are the victims. They believed the propaganda of the establishment. When the debris of our collapsing society starts to come down, they will be its victims. Their assets will be "safe" in the US dollar as it loses its place as the world's reserve currency.
Inflation: What You See and What You Don't See
Mises Daily by Thorsten Polleit | Posted on 6/30/2009 12:00:00 AM
In an attempt to fight the international credit market turmoil and its effects on economic activity and overall prices, the US Federal Reserve (Fed) keeps increasing the supply of base money — which is cash in circulation and commercial banks' money balances held with the Fed.
From August 2008 to May 2009, the monetary base in the United States more than doubled. The bulk of the expansion reflects an unprecedented rise in banks' excess reserves — that is, banks' base money which is available for additional credit and money creation.[1]
http://mises.org/story/3522
People are being told by governments, central bankers, and leading mainstream economists that such a policy wouldn't be inflationary — because the money would remain in the portfolios of banks and would not spill over into the hands of firms and private households.
This is, to put it mildly, an uninformed view. To show that a rise in base money is inflationary — that it either lowers the purchasing power of money or, what basically amounts to the same, prevents money's exchange value from rising — let us start right from the beginning.
How Mainstream Economists Define Inflation
If you ask mainstream economists what inflation is, they typically respond that inflation is an ongoing rise in the consumer price index of more than 2 or 3 percent per annum; if the increase remains between zero and 2 to 3 per annum, these economists would speak of price (or price-level) stability.
Currently, annual changes in consumer price are running at around zero. So it comes as no surprise that mainstream economists do not see inflation whatsoever; in fact, they would warn against deflation — which they characterize as an ongoing decline in consumer prices.
The prices of assets such as stocks, bonds, real estate, and housing are typically considered different from consumer prices. Asset prices are seen as prices sui generis, especially as they are not included in the official definitions of price indices.
So-called asset price inflation — a term which mainstream economists use for characterizing the phenomena of extraordinarily strong and ongoing increases in the prices of, for instance, stocks and housing — is not seen for what it really is: a visible symptom of the erosion of the purchasing power of money.
What is more, mainstream economists wouldn't mind about the Fed increasing the monetary base, or commercial banks increasing money supply, per se. This is because they do not see a direct, let alone a logically necessary, link between changes in the money stock and the purchasing power of money.
Austrians' Definition of Inflation
In sharp contrast, Austrians hold that inflation is an increase in the money stock, and that the upward drift of money prices is a consequence of a rise in the money stock; from the Austrians' viewpoint, rising prices are a symptom of an increase in the money stock.
Mainstream economists may say that if a rise in the money stock is accompanied by a (sufficient) rise in the supply of goods and services, an increase in the money stock would not cause inflation, as it would not make prices go up.
From the Austrian viewpoint, such an argument does not hold water, though: had the money remained unchanged, money prices would have actually declined (other things being equal), thereby having increasing the purchasing power of money.
In other words, a rise in the money stock prevents the money stock from gaining in purchasing power (other things being equal). That said, there are two consequences that come with a rise in the money stock that need to be highlighted in this context.
First, the visible effect is a rise in money prices; it is the result of a rise in the money stock while the supply of goods and services remains unchanged.
Second, the invisible effect is brought about by a rise in the money stock, even if it is accompanied by a rising supply of goods and services: the rise in the money stock prevents money prices from declining.
Needless to say, to most people the first effect goes unnoticed — as a result of a misguided definition of inflation. That said, the only economically meaningful definition of inflation is a rise in the money stock.
An Invisible Effect of a Rising Monetary Base
As far as its impact on prices goes, the rise in the monetary base sponsored by the Fed has so far been restricted to an invisible effect.
First and foremost, the base money increase prevents banks' troubled asset prices from adjusting to lower levels. Buyers of these assets have to pay a higher price when compared to the scenario in which the Fed hadn't increased the money supply.
In addition, prohibiting the prices of banks' assets from adjusting downwards keeps markets from performing an essential function, namely, rewarding those players who serve the needs of their clients and pushing those players out of the market who do not.
Furthermore, as prices of banks' troubled assets are kept from declining, the need for revaluing other assets (such as book loans extended to firms, house builders, and governments; bonds; stocks, etc.) tends to decline or is prevented altogether.
If, however, asset prices are kept from falling by monetary policy expanding the money supply, the mechanism of relative prices cannot do its job properly. It actually paves the way for making other prices — such as wages, and producer and consumer prices — go up.
A Visible Effect of a Rise in the Money Stock
Let us take a look at the visible effect caused by a rise of money on consumer prices — an effect that is put into question by mainstream economists. The graph below plots annual changes in the stock of M2 against those of the consumer price index from 1960 to May 2009.
At first glance, there isn't much of a correlation between the series under review. However, if a closer look is taken at series' underlying trends, which strip out short-term fluctuations and "noise," two findings stand out.
First, trend money growth of M2 and trend changes in consumer prices are pretty much on the same wavelength, and they are positively and highly correlated. Second, trend changes in the money stock seem to affect trend changes in prices with a time lag, and trend money growth seems to lead trend changes in prices.
The (admittedly arbitrary) trend lines suggest that consumer prices will go up and that the latest drop in rising consumer prices should be interpreted as a temporary downward blip (driven by lower commodity prices).
Will It or Will It Not?
A key issue for many market observers is this: will the massive increase in base money really translate into a rise in the money stock in the hands of private households and firms, which would then lead to visible effects of a rise in the money stock?
The multipliers — which show the relationships between credit and commercial-bank money stocks relative to banks' holdings of base money — have collapsed since late summer 2008. Banks' willingness and ability to churn out credit and money have declined severely.
Commercial banks are in a process of deleveraging and derisking their balance sheets. Private owners of the banks are no longer willing to risk their capital in the credit business at currently prevailing return levels.
That said, one can say that markets have embarked on a process of correcting the effects of misguided policies — caused by a relentless expansion of circulation credit and money created out of thin air, encouraged by central banks' artificial lowering of interest rates.
Markets are about to cause a contraction of credit and money supply; if banks are no longer willing to extend additional credit and call in maturing loans, credit and money supply will decline, leading to recession and deflation.
Such a development would be highly undesirable from the viewpoint of governments and their beneficiaries in particular; in fact, it would threaten their very existence. And it is from here that the real danger for even higher inflation comes.
Why Inflation Will Become Worse, Not Better
The policy of expanding the money stock is the foremost tool of government aggrandizement. It allows financing the state's income, public deficits, and elections, and for expropriating and corrupting members of society in the most subtle way. As Ludwig von Mises noted,
A government always finds itself obliged to resort to inflationary measures when it cannot negotiate loans and dare not levy taxes, because it has reason to fear that it will forfeit approval of the policy it is following if it reveals too soon the financial and general economic consequences of that policy. Thus inflation becomes the most important psychological resource of any economic policy whose consequences have to be concealed; and so in this sense it can be called an instrument of unpopular, i.e. of anti-democratic, policy, since by misleading public opinion it makes possible the continued existence of a system of government that would have no hope of the consent of the people if the circumstances were clearly laid before them. That is the political function of inflation. It explains why inflation has always been an important resource of policies of war and revolution and why we also find it in the service of socialism. When governments do not think it necessary to accommodate their expenditure to their revenue and arrogate to themselves the right of making up the deficit by issuing notes, their ideology is merely a disguised absolutism.
Those who hope that inflation will now come to an end — given that market is close to contracting circulation credit expansion and the money supply — implicitly express optimism that the government leviathan is on the retreat. Unfortunately, the latest developments — namely, increasing base money and the running up even bigger public deficits — don't support such a view.
Even though banks scale back on their lending activity, one should not forget that, under today's government-controlled fiat-money systems, the money stock can be increased at any time, in any amount deemed politically desirable. Tragically, deflation — the decline in the money stock, which is so widely feared these days — can be prevented if this is politically desired.
Inflation can be produced by central banks or commercial banks, simply by lending or purchasing assets from nonbanks, paying with newly issued money. As things stand, central banks' monetizing government debt is presumably the way forward for producing inflation — which is, and must be, defined as a rise in the money stock.
Here is a link to spot prices for natgas around the country. http://intelligencepress.com/features/intcx/gas/
Check out the west and mid-continent. UNG is sucking in a bunch of speculative money and at some point they will be smacked. We are going to fill storage early and before that happens the operational flow orders (OFO) will hit the producers forcing curtailment. It's a tough year for natgas companies and relief may not come until 2010.
Here is the calendar for treasury auctions. http://www.treas.gov/offices/domestic-finance/debt-management/auctions/auctions.pdf
Results are posted here http://www.treasurydirect.gov/RT/RTGateway?page=institAnnceRes
TLT tends to drift higher between the auctions for the long bonds. Given the huge amount of debt to be financed this year, I think the TBT long play will work best. Good luck.
Of course, what was I thinking? Viva la revolucion!
The president cannot make that declaration. Only Congress can remove an issue from the purview of the court. Let's see how the Supremes handle it.
That May 6 don harrold video told people not to take any loss on those shorts. The market went higher over the next two days touching 8650 intraday. So presumably anybody following his advice covered and got out. Now he is back a week later claiming to have called the top and that those shorts are still on. That sounds remarkably like Cramer week over week. lol
IMF gold sales
http://www.asianage.com/presentation/leftnavigation/news/business/imf-sale-will-hit-gold-price.aspx
IMF sale will hit gold price
New Delhi/London, April 3: Gold prices are expected to slump by five per cent before the end of this month to $855 per ounce as leaders of G-20 nations agreed on Thursday that the International Monetary Fund should sell gold from its reserve to help stimulate the world economy.
Analysts say the prices may dip further by June once the supply of the precious metal rises due to sale by the IMF. The IMF can sell up to 403.3 tonnes, which is the equivalent of one-eighth of its holdings.
Already, spot prices of gold at the London Metal Exchange fell to $902.5 per ounce, down by 0.17 per cent from the previous close, due to the announcement by the G-20.
"We have started to see impact of the decision and the fall will continue. I expect the prices to come down to $855 an ounce before the end of April and it may dip further to $810 on or before June," said Mr Ashok Mittal, the vice-president and country head (India) of Karvy Comtrade.
"Gold prices will suffer as there is no consumer demand in India but only investment-side demand. If the supply rises and demand remains low, the prices will slump," he said.
In a communique, the G-20 said: "Additional resources from agreed sales of IMF gold will be used, together with the surplus income, to provide $6 billion additional concessional and flexible finance for the poorest countries over the next 2-3 years."
Demand for gold in India, the largest importer of the precious metal, has taken a knock, evident from the fact that the country has not purchased gold from the overseas market in the last two months.
Gold prices in the spot market tumbled by Rs 350 per ten gm to nearly one-and-a-half month low of
Rs 14,900 in the Delhi bullion market on stockist selling triggered by the annou-ncement. — PTI
Schiff just keeps hitting it out of the park...
Fox just ran a blurb on their ticker saying that Congress may let the FDIC borrow 500 Billion.
Stimulus Cash to Spur Inflation, Commodity Rally: Chart of Day
By Millie Munshi
March 5 (Bloomberg) -- U.S. government plans to spend more than $11.6 trillion to revive the economy are going to accelerate the pace of inflation and send raw-material prices surging, said Michael Pento, the chief economist at Delta Global Advisors who correctly predicted last year’s commodity collapse.
The CHART OF THE DAY shows expectations for U.S. inflation during the past two years have anticipated changes in commodity prices measured by the Reuters/Jefferies CRB Index. In May, the Reuters/University of Michigan survey of consumers’ expectations for five-year inflation climbed to the highest since 1995, and by July, the CRB index had surged to a record.
Inflation expectations tumbled in the second half of last year, and by December had reached the lowest since September 2002. During that period, the CRB had its biggest six-month decline since the index was created in the 1950s. Expectations for inflation have since rebounded, signaling commodities will climb, Pento said.
“The government has created a massive increase in the monetary base, and it means we are entering a massive inflation cycle,” Pento said in a telephone interview from Holmdel, New Jersey. “Inflation will be intractable. All of these commodities will start to act as an alternative to currency and start to pick up. Gold should be the primary investment, and energy and base metals should be secondary.”
Gold may jump as much as 54 percent to between $1,250 and $1,400 an ounce by late 2009 or early 2010, Pento said. Copper will surge 77 percent to $3 a pound, he said.
Gold futures for April delivery closed at $906.70 an ounce yesterday on the Comex division of the New York Mercantile Exchange. Copper for May delivery closed at $1.694 a pound on the Comex.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aIwFmyvJJiv4&refer=home
The FDIC won't be allowed to go broke. They will be funded like FNM or AIG, in tranches of billions as needed.