pywong
8th January 2009, 10:29 AM
Those who hope for salvation from Obama have better think again. He is under the control of the Financial Class and is no different from the rest. Just look at who he is appointing to take care of the US Treasury and related agencies and you can get a very clear picture - the same people who created the financial mess in the first place are now asked to solve it. Talk about putting the fox in the hen house.
US governors seek $1 trillion federal assistance
By Jon Hurdle, Reuters; Jan 2, 2009
http://www.reuters.com/article/bondsNews/idUSN0237447720090102
Governors of five U.S. states urged the federal government to provide
$1 trillion in aid to the country's 50 states to help pay for
education, welfare and infrastructure as states struggle with steep
budget deficits amid a deepening recession.
"It's clear that the federal government needs to step in and jump-start
the economy," said Gov. Deval Patrick of Massachusetts.
The latest package calls for $350 billion to create jobs by building or
repairing roads, bridges and other public works; $250 billion to
maintain education; and another $250 billion in "counter-cyclical"
spending such as extending unemployment benefits and food stamps, which
are typically a responsibility of the states.
Gov. Jon Corzine of New Jersey said ... in light of the $700 billion
provided to bail out the financial industry, "It's not shockingly
large."
USAGOLD Comment: The states are in line for "free money", and
Washington is poised to continue giving it away to all who come hat in
hand...
Obama says trillion-dollar deficits may last years
By Charles Babington, Associated Press; Jan. 6, 2009
http://www.google.com/hostednews/ap/article/ALeqM5hYDDOaOTJtpTO4bJzk4Gyg6G63SAD95HPTU80
President-elect Barack Obama says the nation probably faces huge
deficits for years to come, but heavy spending is needed now to spur
the economy. Obama said: "Potentially we've got trillion-dollar
deficits for years to come, even with the economic recovery that we are
working on."
USAGOLD Comment: Surely this sort of situation comes with consequences.
Read on...
United States a Banana Republic?
By Michael Pento, Senior Market Strategist, Delta Global Advisors, Jan 02, 2009
http://www.marketoracle.co.uk/Article8045.html
If the current path remains unaltered, our trillion dollar annual
deficits and artificially-derived zero percent interest rates could
become habitual, leading eventually to the once endemic economies of
Honduras, Columbia and others to be our own.
The two hallmarks of a banana republic are very high rates of inflation
coupled with substantial government controls over the economy.
Mr. Obama plans to hit the ground running with a massive stimulus
package that, according to many estimates, could exceed $1 trillion
dollars! As the unemployment rate climes to a 26-year high, our
government is seeking to replace the private sector's role in providing
market based employment with mandates from Washington.
All of the above sets the stage for a protracted period of inflation
and economic turmoil unless the U.S. abandons its pursuit of a
centralized command and control economy, and decides that savings and
production will stem this tide, not more spending and debt.
The only thing we should envy about any banana republic is its climate,
not its economy. Until our politicians show signs of understanding
this, keep your focus on hard assets.
USAGOLD Comment: Almost in passing, this article said of the dollar:
"What was once the world's reserve currency now sadly offers little in
the way of interest to our foreign purchasers." Our next featured
article develops that theme further...
Willem Buiter warns of massive dollar collapse
by Edmund Conway, Economics Editor; The Telegraph, 06 Jan 2009
http://www.telegraph.co.uk/finance/4125947/Willem-Buiter-warns-of-massive-dollar-collapse.html
Americans must prepare themselves for a massive collapse in the dollar
as investors around the world dump their US assets, a former Bank of
England policymaker has warned.
The long-held assumption that US assets -- particularly government
bonds -- are a safe haven will soon be overturned as investors lose
their patience with the world's biggest economy, according to Willem
Buiter.
Professor Buiter, a former Monetary Policy Committee member who is now
at the London School of Economics, said this increasing disenchantment
would result in an exodus of foreign cash from the US.
"There will, before long (my best guess is between two and five years
from now) be a global dumping of US dollar assets, including US
government assets. Old habits die hard. The US dollar and US Treasury
bills and bonds are still viewed as a safe haven by many. But learning
takes place."
He said investors would, rightly, suspect that the US would have to
generate major inflation to whittle away its debt and this dollar
collapse means that the US has less leeway for major spending plans
than politicians realise.
USAGOLD Comment: With such a dismal outlook for the U.S. dollar and
Treasury bonds, and with most stocks likely to be mired within an
equally dismal economy, it almost begs the question, What avenue is
left for a wary (and weary) investor? For an answer, we turn to our
final two featured articles...
FT: There is only one alternative to the dollar -- gold
By David Hale; Financial Times, January 5 2009
http://www.ft.com/cms/s/0/5b21dafc-db5a-11dd-be53-000077b07658.html
The great challenge confronting the foreign exchange market at the
start of 2009 is finding a good alternative to the US dollar.
The fallout has triggered a $32,000 bn decline in global stock market
capitalisation and driven all the Group of Seven leading industrialised
countries into recession.
The risk posed by US policy comes from potential market concerns about
monetary policy becoming inflationary. The current growth rate of the
Fed's balance sheet is totally unprecedented...
As a result of the global scope of the recession, there is no country
that wants its exchange rate to appreciate. The clear alternative to
the dollar in 2009 is not other currencies but that ancient form of
money: gold.
Precious metals could emerge as a hedge for investors suspicious of
central banks and fearful that inflation will be the simplest solution
to the challenge of global deleveraging.
USAGOLD Comment: Gold "could emerge" and, in fact, IS emerging --
precisely as detailed in our final article.
Woes on Wall Street coincide with gold coin rush US Mint labors to meet
demand as investors buy up assets they can hold in their hands
By Sandy Shore, AP Business Writer; 24 December 2008
http://biz.yahoo.com/ap/081224/gold_hunt.html?.v=4
As the worst recession in at least a generation spreads, so too does
the clamor for gold bars and coins, assets less likely to go up on
smoke like so many derivatives and asset-backed securities.
"I've never seen a case where demand was so high and supply was so
short," said Chicago coin dealer Harlan Berk, who has been in the
business 44 years.
Spikes in demand for gold coins this year appear to run parallel with
the mounting woes on Wall Street... investors had begun to load up on
gold and other assets that could be held in the hand.
In the third quarter, when the U.S. bailed out Fannie Mae and Freddie
Mac, the Fed gathered the chiefs of major banks on Wall Street to plot
a rescue, and Lehman Brothers descended into bankruptcy protection,
gold sales went into high gear... U.S. demand for gold coins and small
bars jumped 600 percent and international demand rose 121 percent,
according to the World Gold Council.
"The fact that gold is nobody else's liability was really an extremely
important trait for investors in Q3 that were growing increasingly
mistrustful of financial institutions in general."
In early October, the Dow Jones industrial average closed below 10,000
points for the first time since 2004. At the same time, coin dealers
saw demand a hit a peak, and bullion coins were fetching huge premiums,
said Larry Shepherd, executive director of the American Numismatic
Association.
"That's created a shortage not only in the secondary market, where
shops are competing with each other to find enough supply to meet the
demand but it's also created a real shortage in the primary market
where the Mint itself is having difficulty getting enough supply to
meet demand," he said.
USAGOLD Comment: As brisk demand and supply constraints in the market
persist into the new year, we invite you to stay in touch with your
broker at USAGOLD-Centennial Precious Metals for the latest in pricing
and availability.
US governors seek $1 trillion federal assistance
By Jon Hurdle, Reuters; Jan 2, 2009
http://www.reuters.com/article/bondsNews/idUSN0237447720090102
Governors of five U.S. states urged the federal government to provide
$1 trillion in aid to the country's 50 states to help pay for
education, welfare and infrastructure as states struggle with steep
budget deficits amid a deepening recession.
"It's clear that the federal government needs to step in and jump-start
the economy," said Gov. Deval Patrick of Massachusetts.
The latest package calls for $350 billion to create jobs by building or
repairing roads, bridges and other public works; $250 billion to
maintain education; and another $250 billion in "counter-cyclical"
spending such as extending unemployment benefits and food stamps, which
are typically a responsibility of the states.
Gov. Jon Corzine of New Jersey said ... in light of the $700 billion
provided to bail out the financial industry, "It's not shockingly
large."
USAGOLD Comment: The states are in line for "free money", and
Washington is poised to continue giving it away to all who come hat in
hand...
Obama says trillion-dollar deficits may last years
By Charles Babington, Associated Press; Jan. 6, 2009
http://www.google.com/hostednews/ap/article/ALeqM5hYDDOaOTJtpTO4bJzk4Gyg6G63SAD95HPTU80
President-elect Barack Obama says the nation probably faces huge
deficits for years to come, but heavy spending is needed now to spur
the economy. Obama said: "Potentially we've got trillion-dollar
deficits for years to come, even with the economic recovery that we are
working on."
USAGOLD Comment: Surely this sort of situation comes with consequences.
Read on...
United States a Banana Republic?
By Michael Pento, Senior Market Strategist, Delta Global Advisors, Jan 02, 2009
http://www.marketoracle.co.uk/Article8045.html
If the current path remains unaltered, our trillion dollar annual
deficits and artificially-derived zero percent interest rates could
become habitual, leading eventually to the once endemic economies of
Honduras, Columbia and others to be our own.
The two hallmarks of a banana republic are very high rates of inflation
coupled with substantial government controls over the economy.
Mr. Obama plans to hit the ground running with a massive stimulus
package that, according to many estimates, could exceed $1 trillion
dollars! As the unemployment rate climes to a 26-year high, our
government is seeking to replace the private sector's role in providing
market based employment with mandates from Washington.
All of the above sets the stage for a protracted period of inflation
and economic turmoil unless the U.S. abandons its pursuit of a
centralized command and control economy, and decides that savings and
production will stem this tide, not more spending and debt.
The only thing we should envy about any banana republic is its climate,
not its economy. Until our politicians show signs of understanding
this, keep your focus on hard assets.
USAGOLD Comment: Almost in passing, this article said of the dollar:
"What was once the world's reserve currency now sadly offers little in
the way of interest to our foreign purchasers." Our next featured
article develops that theme further...
Willem Buiter warns of massive dollar collapse
by Edmund Conway, Economics Editor; The Telegraph, 06 Jan 2009
http://www.telegraph.co.uk/finance/4125947/Willem-Buiter-warns-of-massive-dollar-collapse.html
Americans must prepare themselves for a massive collapse in the dollar
as investors around the world dump their US assets, a former Bank of
England policymaker has warned.
The long-held assumption that US assets -- particularly government
bonds -- are a safe haven will soon be overturned as investors lose
their patience with the world's biggest economy, according to Willem
Buiter.
Professor Buiter, a former Monetary Policy Committee member who is now
at the London School of Economics, said this increasing disenchantment
would result in an exodus of foreign cash from the US.
"There will, before long (my best guess is between two and five years
from now) be a global dumping of US dollar assets, including US
government assets. Old habits die hard. The US dollar and US Treasury
bills and bonds are still viewed as a safe haven by many. But learning
takes place."
He said investors would, rightly, suspect that the US would have to
generate major inflation to whittle away its debt and this dollar
collapse means that the US has less leeway for major spending plans
than politicians realise.
USAGOLD Comment: With such a dismal outlook for the U.S. dollar and
Treasury bonds, and with most stocks likely to be mired within an
equally dismal economy, it almost begs the question, What avenue is
left for a wary (and weary) investor? For an answer, we turn to our
final two featured articles...
FT: There is only one alternative to the dollar -- gold
By David Hale; Financial Times, January 5 2009
http://www.ft.com/cms/s/0/5b21dafc-db5a-11dd-be53-000077b07658.html
The great challenge confronting the foreign exchange market at the
start of 2009 is finding a good alternative to the US dollar.
The fallout has triggered a $32,000 bn decline in global stock market
capitalisation and driven all the Group of Seven leading industrialised
countries into recession.
The risk posed by US policy comes from potential market concerns about
monetary policy becoming inflationary. The current growth rate of the
Fed's balance sheet is totally unprecedented...
As a result of the global scope of the recession, there is no country
that wants its exchange rate to appreciate. The clear alternative to
the dollar in 2009 is not other currencies but that ancient form of
money: gold.
Precious metals could emerge as a hedge for investors suspicious of
central banks and fearful that inflation will be the simplest solution
to the challenge of global deleveraging.
USAGOLD Comment: Gold "could emerge" and, in fact, IS emerging --
precisely as detailed in our final article.
Woes on Wall Street coincide with gold coin rush US Mint labors to meet
demand as investors buy up assets they can hold in their hands
By Sandy Shore, AP Business Writer; 24 December 2008
http://biz.yahoo.com/ap/081224/gold_hunt.html?.v=4
As the worst recession in at least a generation spreads, so too does
the clamor for gold bars and coins, assets less likely to go up on
smoke like so many derivatives and asset-backed securities.
"I've never seen a case where demand was so high and supply was so
short," said Chicago coin dealer Harlan Berk, who has been in the
business 44 years.
Spikes in demand for gold coins this year appear to run parallel with
the mounting woes on Wall Street... investors had begun to load up on
gold and other assets that could be held in the hand.
In the third quarter, when the U.S. bailed out Fannie Mae and Freddie
Mac, the Fed gathered the chiefs of major banks on Wall Street to plot
a rescue, and Lehman Brothers descended into bankruptcy protection,
gold sales went into high gear... U.S. demand for gold coins and small
bars jumped 600 percent and international demand rose 121 percent,
according to the World Gold Council.
"The fact that gold is nobody else's liability was really an extremely
important trait for investors in Q3 that were growing increasingly
mistrustful of financial institutions in general."
In early October, the Dow Jones industrial average closed below 10,000
points for the first time since 2004. At the same time, coin dealers
saw demand a hit a peak, and bullion coins were fetching huge premiums,
said Larry Shepherd, executive director of the American Numismatic
Association.
"That's created a shortage not only in the secondary market, where
shops are competing with each other to find enough supply to meet the
demand but it's also created a real shortage in the primary market
where the Mint itself is having difficulty getting enough supply to
meet demand," he said.
USAGOLD Comment: As brisk demand and supply constraints in the market
persist into the new year, we invite you to stay in touch with your
broker at USAGOLD-Centennial Precious Metals for the latest in pricing
and availability.