tag:blogger.com,1999:blog-47317096217229600082024-02-20T16:50:28.936-08:00forex newWorld nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.comBlogger50125tag:blogger.com,1999:blog-4731709621722960008.post-73516613960757392912011-02-08T23:57:00.001-08:002011-02-08T23:57:43.155-08:00$1,000 gold in a recession?<div dir="ltr" style="text-align: left;" trbidi="on">In my last post, I noted that Jessica Cross, CEO of Virtual Metals, had forecasted <a href="http://cmi-gold-silver.com/blog/wordpress/?p=87" jquery1297238211447="6"><span style="color: #293667;">$900 gold in 2008</span></a>. Now, Citigroup (Citibank) sees the possibility of <a href="http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=42265&sn=Detail" jquery1297238211447="7"><span style="color: #293667;">$1,000 gold if the US economy goes recessionary</span></a>. If we do see a recession, Citigroup ranks gold as the best likely performer, followed by copper, aluminum and zinc, with steel being the worst.<br />
Citigroup observed that “. . . gold is oscillating around $800/oz as speculators have locked in profits. We view the outlook favorable for a test of $1,000.”<br />
The Citigroup analysts see precious metals “as well-positioned” because the Fed and other central banks have made it clear that re-inflation is the operative for the times. Concerns about subprime debt have created what the money men call a “liquidity crisis.” Central bankers always attack liquidity crises by printing more money, which adds to inflationary pressures and makes precious metals more attractive to investors.<br />
Meanwhile, Citigroup analysts warn that “. . . the IMF is taking measures (e.g., job cuts) aimed at convincing the U.S. and Europe to allow 400 tons of gold sales.” If the IMF, which has made rumblings about selling gold for some time, is successful in getting the US to approve gold sales we can expect years of turmoil in the gold market.<br />
However, new comers to the gold market need to know that the IMF and the US were big sellers of gold in the early 1970s when gold had not topped even $200 and silver traded below $2.00. Sales of gold by “official” agencies do not necessarily result in lower gold prices over the long run. However, the short run can be hectic.<br />
What we have to keep in mind is that we are living in highly inflationary times, and that <a href="http://cmi-gold-silver.com/buy-gold-bullion-coins.html" jquery1297238211447="8"><span style="color: #293667;">gold </span></a>and <a href="http://cmi-gold-silver.com/buy-silver-bullion-coins.html" jquery1297238211447="9"><span style="color: #293667;">silver </span></a>have proven to be smart investments during inflationary times.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-55332774864718657912011-02-08T23:56:00.000-08:002011-02-08T23:56:11.982-08:00Reduced scrap gold sales suggest higher gold prices<div dir="ltr" style="text-align: left;" trbidi="on">Gold Fields Minerals Services (GFMS), the London-based metals consultancy, says that the <a href="http://www.resourceinvestor.com/pebble.asp?relid=38895" jquery1297238107989="6"><span style="color: #293667;">sale of scrap gold in India and the Middle East this year is down compared with prior years</span></a>. India and the Middle East are “price-sensitive” regions where gold sales usually increase with gold price increases.<br />
However, this year the average quarterly volume of gold sold in India is running less than 20 tons. In 2003 when the price of gold averaged $364, scrap sales ran at about 30 tons a quarter.<br />
GFMS analysts explain the aberration this way: “The most simple explanation appears to be that, as expectations of higher (and ever higher) prices have taken hold, consumers have reduced the amount of old jewellery they are willing to sell back.”<br />
In the industrialized countries this year, scrap gold sales increased with higher prices; however, sales have not kept pace with prior years’ sales. GFMS says that is because of “less of a clear-out from the trade than there was last year,” which means that commercial end users are holding on to their scrap gold.<br />
Supposedly, the jewelry industry, the major consumer of <a href="http://cmi-gold-silver.com/buy-gold-bullion-coins.html" jquery1297238107989="7"><span style="color: #293667;">gold</span></a>, is the best prognosticator of gold prices. So, reduced sales scrap gold sales may suggest higher gold prices.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-20271352988419655732011-02-08T23:55:00.000-08:002011-02-08T23:55:06.845-08:00Ron Paul II<div dir="ltr" style="text-align: left;" trbidi="on">In my December 12, 2007 article <strong><em><a href="http://cmi-gold-silver.com/onlyRon-Paul-Federal-Reserve-subprime.html" jquery1297238058327="6"><span style="color: #293667;">Only Ron Paul</span></a></em></strong>, I asserted that of the presidential candidates only Ron Paul had the economic understanding to deal with the subprime mess. Now, I present more evidence that Ron Paul is the man to deal with the impending recession. The medicine, however, would be bitter, but the results would be long-lasting. Ron Paul would call for a return to the <a href="http://en.wikipedia.org/wiki/Gold_standard" jquery1297238058327="7"><span style="color: #293667;">gold standard</span></a>.<br />
In 1985, Ron Paul presented a paper to the Mises’ Institute conference on the gold standard: <em><strong><a href="http://www.lewrockwell.com/paul/paul431.html" jquery1297238058327="8"><span style="color: #293667;">The Political and Economic Agenda for a Real Gold Standard</span></a></strong></em>. Nearly 23 years ago, Ron Paul exhibited his grasp of the <a href="http://www.mises.org/books/Theory_Money_Credit/Contents.aspx" jquery1297238058327="9"><span style="color: #293667;">Austrian Theory of Money</span></a> and the need for a return to the gold standard. Since 1985, we have seen the devastating results of not being on the gold standard: inflation and the destruction of the dollar as the world’s sole reserve currency.<br />
Because returning to the gold standard seems anachronistic to most Americans (because they do not understand the gold standard and the concept of money), implementing the ideas of Ludwig von Mises, which Paul discusses in his 1985 paper, would be next to impossible. However, Ron Paul discusses another tactic to return to the gold standard, a tactic which should be of interest to gold and silver investors.<br />
Paul asserts that the popularity of gold coins “have shown us that it is possible to adopt another tactic, that of getting gold coins into circulation prior to setting a new par value for the dollar.” (Par value for the dollar meaning the dollar’s conversion rate into gold [and maybe silver.])<br />
In other words, the people would lead the “leaders” in returning to the gold standard. As more and more people turn to gold as protection against inflation and its inevitable result, a declining dollar, they adopt gold as their standard investment. Eventually, our “leaders” will see the handwriting on the wall and return to gold. Returning to the gold standard would be much less painful for the nation if Ron Paul were president. The other candidates, steeped in statist economic theories, would fight returning to the gold standard.<br />
Paul’s piece is an educating read. If you do not grasp all of it, don’t worry. Just by reading Paul’s paper you will inherently know that now is the time to <a href="http://cmi-gold-silver.com/buy-gold-bullion-coins.html" jquery1297238058327="10"><span style="color: #293667;">invest in gold</span></a> and <a href="http://cmi-gold-silver.com/buy-silver-bullion-coins.html" jquery1297238058327="11"><span style="color: #293667;">silver</span></a>.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-78183016477782807932011-02-08T23:53:00.001-08:002011-02-08T23:53:56.627-08:00SA power shortages pressure price of gold<div dir="ltr" style="text-align: left;" trbidi="on">Worldwide concern about the dollar is the primary reason gold has surged to new highs this year. However, the dollar is not the only factor driving the price of gold. A <a href="http://www.mineweb.com/mineweb/view/mineweb/en/page38?oid=45735&sn=Detail" jquery1297237971783="5"><span style="color: #293667;">shortage of electric power in South Africa</span></a>, the <a href="http://www.kitco.com/ind/Wiegand/jan112007.html" jquery1297237971783="6"><span style="color: #293667;">world’s largest producer of newly mined gold</span></a>, is putting downward pressure on the supply.<br />
In South Africa, 95% of the electricity is generated by <a href="http://en.wikipedia.org/wiki/Eskom" jquery1297237971783="7"><span style="color: #293667;">Eskom</span></a>, a public utility that now cannot supply enough to meet the country’s needs. The gold mines (and the platinum mines), although South Africa’s economic lifelines because they generate the country’s export revenues, are suffering along with the South African people. Last week Eskom cut power to the mines, which resulted in an industry-wide shut down.<br />
Eskom is between the devil and the deep blue sea.<br />
If Eskom allocates enough electricity to the mines so that they can operate, other consumers will do without, those consumers being not only South African homes but also small businesses. That is a political nightmare for a public utility and the politicians running the country.<br />
However, if Eskom denies the mines the needed power, jobs and export revenues will be lost, further compounding South Africa’s social problems. <a href="http://en.wikipedia.org/wiki/Crime_in_South_Africa" jquery1297237971783="8"><span style="color: #293667;">South Africa has one of the highest crime rates in the world</span></a>.<br />
If the mines get 50% of the power they need, they can keep the mines open but with no production. The other 50% is needed to mine. If the mines get 90% of what they need, production can be cut not 10% but 20%.<br />
In the last few days, after much lobbying by the mining industry and its supporters, Eskom has been supplying 90% of the power the mines need, which has enabled Anglo Platinum to assert that they will be able to operate at “sustained levels” within two weeks if they continue to get the promised 90%.<br />
Gold Fields has been in constant dialogue with Eskom since having its power needs cut to 80% and has been promised, <a href="http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=45952&sn=Detail" jquery1297237971783="9"><span style="color: #293667;">according to a mineweb.com article</span></a>, that they will receive the minimum 90% needed to produce.<br />
But a major concern for the mines is the reliability. Can Eskom continue to supply the 90% that the mines say is the minimum needed to operate?<br />
Further, the miners—the guys doing the work—are at great risk if the power is cut unannounced. So far, that has not happened, but it remains a possibility. The power utility previously committed to give the mines at least four hours warning before power supply was shut down or reduced.<br />
Mining in South Africa has always been a great challenge because of the depths of the mines. An unreliable power source makes mining in South African even more challenging.<br />
I visited South Africa in 1979 and made a two-mile vertical drop in a cage attached to a cable (Technically, it was an elevator, but not the type most Americans are used.) into the bowels of the earth where the miners worked. The temperature at the bottom would have been something like 140°F had it not been for the massive—and I mean massive—air conditioning units.<br />
Additionally, there were the electric trains that hauled ore from miles of horizontal shafts. The use of electricity was enormous. Plain and simple: South African mines cannot operate without electricity.<br />
The root of the problems in South Africa lies in the country’s shift toward socialism, but that is a topic for another blog post.<br />
Meanwhile, a one would expect, South African gold shares have not done well since the problem arose. Some analysts say South Africa’s power problems cannot be solved for years. I suspect they will not be solved at all and that in time South Africa will resemble Zimbabwe, which can only be described as a cesspool.<br />
The circumstances in South African are positive for the <a href="http://cmi-gold-silver.com/gold-silver-daily-spot-prices.html" jquery1297237971783="10"><span style="color: #293667;">price of gold</span></a>, but sad on a human scale. South Africa is a beautiful country with vast resources, but the country is now in the grips of socialism, which, in the ends, spreads misery among the people.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com1tag:blogger.com,1999:blog-4731709621722960008.post-74912641359127765492011-02-08T23:52:00.001-08:002011-02-08T23:52:50.085-08:00Analysis of proposed IMF gold sales<div dir="ltr" style="text-align: left;" trbidi="on">Resourceinvestor.com has posted <a href="http://www.resourceinvestor.com/pebble.asp?relid=40395" jquery1297237928541="5"><span style="color: #293667;">an excellent report on the proposed gold sales by the IMF</span></a>.<br />
Before anyone panics at the idea of the IMF selling gold, I would like to point out that in the 1970s both the IMF and the US Treasury sold gold while it marched to $850. Further, European central banks have been selling gold for years, and gold prices are at record highs.<br />
Additionally, the recommendation for the sales calls for limited sales, maybe up to 400 tons and “sold in a way that didn’t disrupt the market, much like gold sold consistent with the European Central Bank Gold Agreement (EGA), which limits sales to 500 tonnes per year.”<br />
ResourceInvestor notes that past proposals have been blocked by the US Congress, which has, because of weighted voting power, a virtual veto on any IMF gold sales. However, come January 2009, I suspect Congress will have a much more liberal makeup than it now has, and it may not block IMF gold sales, especially with promises of limited sales that are done in a nondisruptive manner.<br />
We may have to put up with IMF gold sales in future years, but the possibility does not dampen my enthusiasm for gold (and sliver). None of the likely presidential winners has any plans to address the massive bleeding of dollars by the US Treasury.<br />
McCain is a war candidate and has said he will continue the occupation of Iraq. McCain has never addressed the financial cost of doing so. Clinton and Obama, while saying they will end the war in Iraq, offer such potpourris of social programs that the dollar will strain under them.<br />
With the likelihood of one of these three becoming president and major shift to the left in Congress (already 21 Republican members of the House have said they will not run for reelection.), I cannot find anything positive for the dollar on the political scene. Although IMF gold sales may turn into reality sometime in the future, I don’t worry about them at all. <a href="http://cmi-gold-silver.com/buy-gold-bullion-coins.html" jquery1297237928541="6"><span style="color: #293667;">Investing in gold</span></a> and <a href="http://cmi-gold-silver.com/buy-silver-bullion-coins.html" jquery1297237928541="7"><span style="color: #293667;">silver </span></a>makes a lot of sense for these times.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-40989871016699513782011-02-08T23:51:00.001-08:002011-02-08T23:51:50.826-08:00Gold in the news<div dir="ltr" style="text-align: left;" trbidi="on">The last few posts were about silver because that’s the way the news fell. Now, we have a plethora of articles about gold, some worth reading and one worth listening to if you prefer not to read.<br />
ANZ Australian Economics Weekly says gold prices may “firm this week.” With gold having hit $930 Wednesday morning, I bet ANZ now wishes they had predicted rising gold prices this week. Analysts love to be right about predicting short-term price moves. Accurate predictions sell subscriptions.<br />
Although ANZ advised that gold could firm this week because of surging oil prices, the analysis warned that concerns about oil prices were “re-setting” global inflation concerns, “which should trigger a catch-up rally in gold (compared to oil).” I guess that’s what we’re seeing with gold up $65 from this time last week.<br />
Nevertheless, ANZ cautioned, “We expect gold prices to drift lower over the coming months, with increasing signs that the fall in the USD is near the trough.” Seasonally, the summer is the low period for gold and silver prices, so there remains the possibility that “gold prices may drift lower over the coming months.” Still, past summers have not had the dollar in so much trouble and real fears that the Bush administration may bomb Iran’s nuclear research facilities.<br />
<a href="http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=53348&sn=Detail" jquery1297237867012="6"><br />
<span style="color: #293667;">Mineweb.com reviewed ANZ’s analysis, for those who want to read it</span></a>.<br />
Meanwhile, Kevin McArthur, President and CEO of Goldcorp, a major gold mining company, said Tuesday that he is certain that investors will again see four-digit gold prices this year with the potential to “go well into the four digits.” Four-digit means above $1,000, and I guess that “well into the four digits” means something like $3,000 or $4,000 gold. McArthur didn’t give a time frame, but I don’t think he was predicting $3,000 or $4,000 gold this year.<br />
I think that $3,000 – $4,000 gold is a real possibility, out there four to five years. A widened war in the Middle East, and it may not take four or five years.<br />
Mineweb.com ran an article on McArthur’s comments, but <a href="http://www.mineweb.com/mineweb/view/mineweb/en/page68?oid=53349&sn=Detail" jquery1297237867012="7"><span style="color: #293667;">the article</span></a> is mostly about “greens” dominating the conference where McArthur made his predictions.<br />
<a href="http://www.resourceinvestor.com/pebble.asp?relid=42919" jquery1297237867012="8"><span style="color: #293667;">The third article</span></a>, which you can listen to instead of read if you prefer, is titled Is the dollar doomed? and is more about the dollar than about gold. Because you can’t talk about a sinking dollar without talking about gold (if you’re giving an honest appraisal of the situation), the article really is quite good. Except where the speaker says, “Well, we don’t actually need a government run gold standard anymore.” Here, he covers himself by saying that there are places where individuals interested in <a href="http://cmi-gold-silver.com/" jquery1297237867012="9"><span style="color: #293667;">investing in gold</span></a> can go.<br />
When a government is not on the gold standard, the door is wide open for inflation, exactly what we’ve had in the United States since 1971 when President Richard Nixon closed the gold window.<br />
Meanwhile, resourceinvestor.com slapped gold around a little with an article titled <em><strong><a href="http://www.resourceinvestor.com/pebble.asp?relid=42981" jquery1297237867012="10"><span style="color: #293667;">Gold Demand Drops to Five-Year Low in Q1</span></a></strong></em>. The article, based on a GFMS study for the World Gold Council, noted reduced demand for gold, with the blame laid at the feet of higher gold prices. In India, for decades the biggest buyer of gold, demand shrank.<br />
Here’ how resourceinvestor.com summed it up:<br />
<blockquote>Gold demand in India, the world’s largest physical bullion consumer, was most severely affected by the movement in the gold price, falling 50% to 102.1 tonnes in Q1. Jewellery and investment demand, at 71.1 tonnes and 31.0 tonnes respectively, were half the levels of the correspondent quarter last year. </blockquote>In almost an after thought, the resourceinvestor.com article noted:<br />
<blockquote>In marked contrast to India, demand in China grew by 15% to 101.7 tonnes, with both jewellery and investment demand increasing during the first quarter as continued economic strength allowed consumers to increase their purchases regardless of the rising price. Jewellery demand rose 9% to 86.6 tonnes and investment demand surged 63% to 15.1 tonnes. </blockquote>Somewhere a news outlet should broadcast that China is about to replace India as the biggest buyer of gold. Further, with China’s increasing prosperity and its people freer to buy gold, China’s impact on the gold market should be huge in the years ahead. Wonder why only the perpetual bulls seem to know what’s going on in China when it comes to gold?</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-73623357559404997792011-02-08T15:36:00.001-08:002011-02-08T15:36:47.505-08:00Zimbabwean miners get paper for gold<div dir="ltr" style="text-align: left;" trbidi="on">Perhaps the fundamental fear behind every gold investment is that the paper money being gotten rid of could become worthless. In theory (probably in actuality), that fear rests with any currency not redeemable in gold or silver, which means all the world’s currencies. No world currency, not even the fabled Swiss franc can be redeemed for gold or silver at the Swiss National Bank, which is Switzerland’s central bank, the equivalent of the U.S. Federal Reserve Bank.<br />
The destruction of paper money usually comes about after the abandonment of the gold standard and the institution of fiat money, which is money by governmental decree. The dollar is money by decree, “all debts, public and private.” However, in many cases, one fiat currency is introduced to replace another fiat currency. Brazil is famous for doing that.<br />
Before moving on to the problems faced by the Zimbabwean gold miners, I should note that since the Bretton Woods Agreement of 1944, no country has been on the gold standard. The Bretton Woods Agreement established a gold exchange standard, under which the world’s currencies were redeemable in dollars, which were redeemable in gold. Although under the Agreement, currencies’ values were fixed relative to gold, central banks that were presented their nations’ currencies for redemption actually gave the redeemer dollars.<br />
Zimbabwe is an economic cesspool, with government regulations of nearly every facet of economic activity. One control in Zimbabwe is that all mined gold is to be sold to the Zimbabwean central bank, the Reserve Bank of Zimbabwe (RBZ).<br />
According to one source, gold miners are meant to be paid 35% of their production at the highly overvalued local currency and the remainder in US dollars. The RBZ pays partially in U.S. dollars because the gold mining companies need to buy equipment in foreign markets to keep operating. There is no market for Zimbabwean dollars outside Zimbabwe. Outside Zimbabwe, Zim dollars are paper.<br />
While the official policy is for the RBZ to pay partially in U.S. dollars, the RBZ now has no U.S. dollars, or any other foreign currencies, and the gold mining companies are receiving only Zim dollars. Because Zim dollars cannot be spent outside Zimbabwe, the mining companies are unable to replace worn out equipment.<br />
As a result, “Zimbabwe’s once proud and big gold sector could be set for a further decline,” says Tawanda Karombo, posting an article from Harare, the capital of Zimbabwe. Zimbabwe produced seven tons of gold last year compared to 11 tons in 2006, their lowest level in 90 years.<br />
Although Zimbabwe’s gold production has never rivaled that of neighbor South Africa, for nearly a hundred years it has been a solid gold producer. Now, Zimbabwe’s gold production looks set to grind to a halt, which will be positive for <a href="http://cmi-gold-silver.com/" jquery1297208088272="6"><span style="color: #293667;">gold investing</span></a>.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-27019533089983524282011-02-08T15:35:00.000-08:002011-02-08T15:35:10.531-08:00Owning and storing gold<div dir="ltr" style="text-align: left;" trbidi="on"><div class="MsoNormal"><span style="font-size: 9pt;">My advice on owning and storing gold: buy the physical gold and store it yourself.<span> </span>The form of the gold, be it <span style="text-decoration: underline;"><a href="http://cmi-gold-silver.com/krugerrand-gold-coins.html" jquery1297207949833="6"><span style="color: #293667;">Krugerrands</span></a></span>, <span style="text-decoration: underline;"><a href="http://cmi-gold-silver.com/american-eagles-gold-coins.html" jquery1297207949833="7"><span style="color: #293667;">American Gold Eagles</span></a></span> or <span style="text-decoration: underline;"><a href="http://cmi-gold-silver.com/buy-gold-bullion-bars.html" jquery1297207949833="8"><span style="color: #293667;">gold bars</span></a></span>, is not as important as taking physical possession.</span></div>CMIGS does not hold or store gold for its clients—we ship it to them—and we strongly warn against trusting a third party to look after one’s gold.<span> </span>Gold is too important to trust to someone else’s care.<br />
However, Americans who <span style="text-decoration: underline;"><a href="http://cmi-gold-silver.com/gold-silver-ira.html" jquery1297207949833="9"><span style="color: #293667;">put gold or silver in their IRAs</span></a></span> have to use precious metals warehouses.<span> </span>For those investors who buy gold (and silver) outside IRAs, we recommend that they secure the metal themselves.<br />
As to whether the gold or silver should be stored in a bank safe deposit box or secured away from a bank is a decision that each gold owner must make.<span> </span>Investors who own their homes have many more storage options than investors who live in apartments.<span> </span>Frankly, we caution against keeping gold in apartments; we think that bank safe deposit boxes are the preferred storage places for apartment dwellers.<br />
A final note on storing gold or silver at home, whether a house or an apartment: never, ever store gold or silver in a bedroom.<span> </span>That’s the first place that a common burglar goes, looking for cash, guns and jewelry.<br />
What about owning “other forms of gold,” such as ETFs, futures contracts and gold mining shares?<span> </span>With ETFs (Exchange Traded Funds) you do not own gold.<span> </span>You own shares in a company that owns gold.<span> </span>You get the price action dollar for dollar with prices of gold, but you do not own gold.<br />
With futures contracts, by going “long” them, you have the “right” to take delivery of the gold represented by the contract when it matures.<span> </span>With futures contracts, you get dollar for dollar price action plus you gain the advantage of leverage, meaning that you have to put up far less money than if you were buying gold for physical delivery, such as from CMI Gold & Silver Inc.<br />
As with ETFs, when you buy futures contracts you do not “own” gold.<span> </span>You have the right to take delivery of the gold represented by the contract when it matures and you pay the full value of the contract.<span> </span>As for the leverage that comes with futures contracts, it also works against you if gold goes down before it goes up.<span> </span>Futures contracts are not suitable for gold investors and should be left to commodity speculators.<br />
Mining shares also provide greater leverage than the outright ownership of gold because stock shares trade “times earnings.”<span> </span>Further, if you select a mining company that makes moves that increases earnings, you usually see the price of the stock rise.<span> </span>But, with stocks, you in no way “own” gold, you own “proxy gold,” which should increase in value if you select a gold mining company that makes good business decisions.<br />
In reiterate, it my position that persons wanting to hedge against inflation and protect against financial uncertainties should buy gold, be it gold bullion coins or gold bars, take delivery of it and secure it themselves.<span> </span>Leaving someone else to look after your gold is risky.<br />
Still, I recognize that some persons’ circumstances are such that buying and storing offshore, i.e., out of the United States, makes sense.<span> </span>In the past, I’ve had no good recommendations for investors wanting to buy offshore other than to seek out a Swiss bank.<span> </span>Now, though, I do.<br />
<span style="text-decoration: underline;"><a href="http://www.bullionvault.com/" jquery1297207949833="10"><span style="color: #293667;">BullionVault</span></a></span> is a highly-professional precious metals firm owned by Galmarley Limited, a UK-registered company located in West London.<span> </span>BullionVault offers its clients choices of storage in London, Zurich and New York.<span> </span>Obviously, if you choose New York, you are not going offshore, but with BullionVault you have the option of storing precious metals either in London or Zurich.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-19846319457941319832011-02-08T15:32:00.000-08:002011-02-08T15:32:59.108-08:00Buffett warms to gold; warns against the dollar<div dir="ltr" style="text-align: left;" trbidi="on">In his annual address to Berkshire Hathaway shareholders, famed investor Warren Buffett warned of the dangers of holding dollar-denominated investments. Buffett’s concerns about the dollar stem from the world’s governments “solutions” to the ongoing financial crisis: <strong>The dollar is headed south</strong>, and “<strong>You can bet on inflation</strong>,” he told shareholders during a six-hour question and answer marathon.<br />
Although having dabbled in gold and silver in the 1960s and having made his now legendary 130 million-ounce purchase in 1998, Buffett cannot be labeled a goldbug. He has always favored income producing investments. However, his strident attacks on the dollar and criticism of the handling of the financial crisis are certain to be viewed as backdoor recommendations to <a href="http://www.cmi-gold-silver.com/"><span style="color: #293667;">invest in gold</span></a>. Where else does one go to protect against inflation and the destruction of the dollar?<br />
Actually, Buffett did have recommendations for his shareholders: be good at what you do and increase your earning power, and (2nd recommendation) own a “wonderful business that does not need capital.”<br />
While these recommendations may sound great, they do not answer this question: How do you protect accumulated wealth against inflation if you no longer choose to work. Buffett can be excused for overlooking this. He’s still working at age 78, along with his partner Charlie Munger who is 85.<br />
Other Buffett observations spewed at the Berkshire Hathaway meeting:<br />
<strong>The world is in uncharted waters, and nobody knows the exact impact of unprecedented bailout and stimulation packages.</strong><br />
<strong>US Government Bonds are among the poorest choices for investors today, especially non-Americans.</strong><br />
<strong>The US is following policies that are bound to have inflationary consequences.</strong><br />
<strong>The people who are really going to pay (for the bailouts) are those who are buying fixed-interest US government bonds that will be worth less when they redeem them.</strong><br />
While Buffett may not have let the words <a href="http://www.cmi-gold-silver.com/buy-gold-bullion-100-gram-gold-bars.html"><em><span style="color: #293667;">buy gold bullion</span></em></a> or consider <a href="http://www.cmi-gold-silver.com/buy-silver-bullion-coins.html"><em><span style="color: #293667;">investing in silver</span></em></a> come out of his mouth, he said them anyway. Mineweb.com has <a href="http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=82710&sn=Detail" jquery1297207870489="6"><span style="color: #293667;">an article on the meeting</span></a>, as do other <a href="http://www.rationalwalk.com/?p=1298" jquery1297207870489="7"><span style="color: #293667;">financial websites</span></a>.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-22664706955645726762011-02-08T15:31:00.000-08:002011-02-08T15:31:05.657-08:00Northwestern Mutual buys gold<div dir="ltr" style="text-align: left;" trbidi="on">Spreading across the Internet like a wildfire is the <a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=ajf0L9wTPq6Y&refer=home" jquery1297207782723="6"><span style="color: #293667;">Bloomberg release</span></a> that “Northwestern Mutual Life Insurance Co., the third-largest U.S. life insurer by 2008 sales, has bought gold for the first time in 152 years to hedge against further asset declines.”<br />
“Gold just seems to make sense; it’s a store of value,” Chief Executive Officer Edward Zore said in an interview following his comments at a conference hosted by Standard & Poor’s in Brooklyn. “In the Depression, gold did very, very well.”<br />
Although many gold investors do not need validation to make them feel good about their <a href="http://www.cmi-gold-silver.com/buy-gold-bullion-coins.html"><span style="color: #293667;">gold investments</span></a>, other investors like to know that such an esteemed institution as Northwest Mutual shares their feelings about how to protect against potential declines in the value of the dollar.<br />
The insurance behemoth has accumulated about $400 million in gold; Zore did not disclose Northwestern’s plans for future <a href="http://www.cmi-gold-silver.com/"><span style="color: #293667;">gold investing</span></a>.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-86394166230741784922011-02-08T15:29:00.001-08:002011-02-08T15:29:41.292-08:00Congress to approve IMF gold sales<div dir="ltr" style="text-align: left;" trbidi="on">As noted on this blog before, the IMF wants to sell gold to fund more international welfare programs but must have the approval of the US Congress before it can sell any gold. In a <a href="http://cmi-gold-silver.com/blog/?p=95" jquery1297207703930="6"><span style="color: #293667;">February 2008 post</span></a>, I speculated that approval under a new Congress would be likely. Now, approval appears imminent.<br />
This week a House-Senate committee will meet to reconcile differences between the House and the Senate in the Supplemental Budget Appropriations Bill. Buried in the bill is approval for the IMF to sell gold. No one is objecting to the sale.<br />
To some, talk of a major institution <a href="http://www.cmi-gold-silver.com/buy-sell-gold-silver.html"><span style="color: #293667;">selling gold</span></a> is frightening. But, as I noted in the February 2008 post, the gold market has seen IMF sales before and has weathered them nicely.<br />
As the mainstream media report the approval, there may be some downside movement in gold, but at least one gold analyst and investor sees the IMF sale as positive for gold.<br />
Brian Kelly, writing for <a href="http://seekingalpha.com/article/140852-congress-to-approve-imf-gold-sale-this-week" jquery1297207703930="7"><span style="color: #293667;">seekingalpha.com</span></a>, sees China stepping forward and buying the gold. Kelly doesn’t think that it’s a coincidence that Treasury Secretary Timothy Geithner just ended a trip to China.<br />
By all reports, Geithner avoided all contentious issues with China, such as massive Chinese theft of intellectual property or revaluing the Chinese currency. Instead, he sought a “greater role for China in the International Monetary Fund.”<br />
Kelly further speculates that a sale to China would upset “India and several of the Gulf States as they all have expressed interest in purchasing the gold. If this occurs, nothing could be more bullish for the <a href="http://www.cmi-gold-silver.com/gold-silver-daily-spot-prices.html"><span style="color: #293667;">price of gold</span></a>.”<br />
Frankly, I haven’t seen anything substantive about India or any Gulf States wanting to buy the IMF gold. But, I guess it could be true. If I were sitting the gargantuan quantities of dollars that those nations hold, I’d want to <a href="http://www.cmi-gold-silver.com/buy-gold-bullion-100-gram-gold-bars.html"><span style="color: #293667;">buy gold</span></a>. I just wonder if Kelly really has such information or is he, as a gold investor, simply wishing a major buyer would step forward.<br />
Regardless, when news comes out that Congress has approved the sale of IMF gold, it will roil the markets. Bargain hunters may have opportunities to buy on dips in price. And, if Kelly is right about India and some Gulf States wanting to buy the IMF gold, he will certainly be right about that being bullish for <a href="http://www.cmi-gold-silver.com/"><span style="color: #293667;">gold</span></a>.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-20793167534771814172011-02-08T15:28:00.000-08:002011-02-08T15:28:23.435-08:00Gold breaks out<div dir="ltr" style="text-align: left;" trbidi="on">Readers of this blog mostly are long-term gold/silver investors who are not concerned with intermediate moves in gold/silver prices except to use dips in prices as opportunities to add to their positions. Still, daily $1 jumps in silver and $20 jumps in gold are of interest to all precious metals investors. If nothing else, investors have wonder if the moves are of significance in the long-term view.<br />
Gene Arensberg, analyst and editor of <a href="http://treo.typepad.com/got_gold_report/" jquery1297207675198="6"><strong><span style="color: #293667;">Got Gold Report</span></strong></a>, believes that gold’s September 2 price increase of $21.50 was significant in that it was a breakout from a huge consolidation triangle. Arensberg expects the trading to continue in the direction of the trend that preceded the consolidation. The direction of the trend preceding the consolidation triangle was, of course, up.<br />
This is reassuring to investors who have bought in the past few months. Investors who entered the gold/silver market a few years back were long ago confident that they made correct decisions. Technically, the picture is not as clear for silver, but the price action to the upside confirmed gold’s move out of the triangle.<br />
Reassuring to silver investors are the positions reported by the large bullion banks. The nominal sizes of the banks’ short positions in silver were essentially unchanged, meaning that the banks did not add to their short positions as prices rose, which is what they usually do if they expect lower prices in the intermediate. When the bullion banks expect lower intermediate prices, they add to their short positions.<br />
Relative to all commercial traders’ (36 in all) net short silver futures positions, the two bullion banks’ percentage fell from 76.3% to 62.2% over the past month. This is another short-term positive sign for <a href="http://www.cmi-gold-silver.com/buy-silver-bullion-coins.html"><span style="color: #293667;">silver investors</span></a> as it suggests the bullion banks are not yet ready again to take increased short positions in silver.<br />
Arensberg’s analysis also shows the bullion banks lightening their short positions in gold, which may be the reason that gold broke out of the consolidation triangle. Or, the bullion banks may have reduced their short gold positions out of fear that gold was going to break out the triangle regardless of what they did.<br />
Although following what the bullion banks are doing is interesting (sometimes fascinating), the overriding reasons for <a href="http://www.cmi-gold-silver.com/buy-gold-bars-kilo.html"><span style="color: #293667;">buying gold</span></a> and silver are the expansive monetary policies of the world’s central banks, primarily the US central bank, the Federal Reserve System. In the short-run, the bullion banks’ activities will influence the prices of gold and silver, but in the long-run the quantity of freshly-created fiat currencies will determine gold and <a href="http://www.cmi-gold-silver.com/gold-silver-daily-spot-prices.html"><span style="color: #293667;">silver prices</span></a>.<br />
Arensberg’s <strong>Got Gold Report</strong> is, in my opinion, the best free technical analysis of the gold/silver market, especially his look at the large commercials’ and the bullion banks’ positions in the gold and silver markets. I encourage gold/silver investors interested in technical analyses to read Arensberg’s <strong><a href="http://www.stockhouse.com//Columnists/2009/Nov/3/Got-Gold--Report--Gold,-silver-futures-in-backward" jquery1297207675198="7"><span style="color: #293667;">Got Gold Report</span></a></strong>, a copy of which will be posted on www.stockhouse.com in a few days. When the report is up, I will provide a link.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-43531898881789092482011-02-08T15:26:00.001-08:002011-02-08T15:26:33.275-08:00LCs increase gold short positions<div dir="ltr" style="text-align: left;" trbidi="on">My Sept. 7 post noted that gold had broken out from a consolidation triangle, a move that often forecasts still higher prices. And, higher prices we got, with gold hitting an intraday high just short of $1,012.00 in the New York market on Friday, Sept. 11. Silver followed suit, closing at $16.72. However, it was learned Friday that the large commercials (LCs) increased their COMEX short positions in gold to an all-time record high of 270,797 contracts. The previous record was 252,740 contracts, set in February 2008.<br />
It needs to be noted that the reporting cutoff was Tuesday, which means that the LCs had three additional trading days since the report to add to (or reduce) their positions. The common guess is that they increased their shorts, but we will not know until Friday, Sept. 18.<br />
Increases in the LCs’ short positions often have been harbingers of price declines, sometimes precipitous declines over a few days. However, the LCs have not always enjoyed lower prices after increasing their short positions. In fact, the previous record 252,740 contracts in February 2008 came just before sharp price increases. Although the LCs often get it right and get to cover their short positions at lower prices, that is not always the case.<br />
Gold’s mighty move from the summer of 2005 through the spring of 2006, basically a move from $450 to $700, occurred while the LCs carried large short positions, resulting huge losses for the LCs. So, the big boys are not always on the right side of the moves.<br />
If the LCs always increase their short positions on price rises, there have to be times when they suffer losses because gold and silver are in long-term bull markets. Could this be one of those times?<br />
Gold is up three-fold since 2001, from $250 to $1,000. Silver’s 2001 low was just above $4 to just short of $17. This is a great gold/silver bull market, and I don’t see it ending any time soon. If you’re in, buy the dips. If you’re not yet holding <a href="http://www.cmi-gold-silver.com/buy-gold-bars-kilo.html"><span style="color: #293667;">physical gold</span></a> or <a href="http://www.cmi-gold-silver.com/100-oz-silver-bars.html"><span style="color: #293667;">silver</span></a>, buy now. Get comfortable with the process. See that the metal you’re getting is real, not electronic impulses on silica bubbles.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-16304264634977917432011-02-08T15:25:00.001-08:002011-02-08T15:25:32.837-08:00IMF sells 200 tons of gold to India<div dir="ltr" style="text-align: left;" trbidi="on">In a move that the gold market did not anticipate, the IMF sold 200 tons of gold directly to India’s central. It was widely known–<a href="http://cmi-gold-silver.com/blog/lcs-increase-gold-short-positions/" jquery1297207502290="6"><span style="color: #293667;">commented on on this blog February 12, 2008</span></a>–that the IMF would be a gold seller.<br />
Several years ago, the IMF let known its intentions to sell 400 tons of gold and announced that the sale would be in compliance with the Central Bank Gold Agreement (CBGA) so as not to disrupt the market. Instead of selling under the CBGA, the IMF sold directly to the Reserve Bank of India.<br />
Some analysts are saying that they are surprised that the buyer was India and not China. Actually, I think they hoped that China would be a buyer as the IMF sold under the CBGA. Neither China nor India gave any indications of dealing directly with the IMF.<br />
Now, gold market analysts are speculating that China will take the remaining 200 tons. And, it is pure speculation because no analysts have pipelines to the decidafiers at the People’s Bank of China, as China’s central bank is known. More important, though, a major precedent has been set.<br />
The argument against central banks buying gold has been that the central banks would be cutting their own throats. Since they are major holders of dollars, any purchases of gold would be attacks on the dollar because dollars would be eschewed in favor of gold. Now, the Reserve Bank of India has set a precedent: it is acceptable for central banks to convert large quantities of dollars into gold. Who will be next?<br />
Possibly China, but why not Taiwan or Japan, both major holders of dollars.<br />
I have no doubts but that the bullion houses that are short huge quantities of gold on the COMEX, as discussed in Gene Arnsberg’s latest <a href="http://www.stockhouse.com/Columnists/2009/Nov/3/Got-Gold--Report--Gold,-silver-futures-in-backward" jquery1297207502290="7"><span style="color: #293667;">Got Gold Report</span></a>, were counting on the IMF sales being dampers on the <a href="http://www.cmi-gold-silver.com/gold-silver-daily-spot-prices.html"><span style="color: #293667;">price of gold</span></a>. As I speculated in my September 12 post, sometimes the big boys are on the wrong side of the market.<br />
This remains a major bull market for <a href="http://www.cmi-gold-silver.com/buy-gold-bullion-coins.html"><span style="color: #293667;">gold</span></a> and <a href="http://www.cmi-gold-silver.com/buy-silver-bullion-coins.html"><span style="color: #293667;">silver</span></a>. Investors already with big positions have the luxury of waiting on price dips to buy. Investors who have not yet entered the market should consider biting the bullet and entering at these levels. The major news about gold is to be bullish, and there is no way of putting a top on this move.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-9627518144175930942011-02-08T15:24:00.000-08:002011-02-08T15:24:39.730-08:00Rob McEwen sees $5,000 gold<div dir="ltr" style="text-align: left;" trbidi="on"><span style="font-size: x-small;">Rob McEwen, who can almost be called a living legend in the gold mining industry, says gold prices may reach $5,000 an ounce – and as soon as 2012 but maybe not until 2014.<span style="mso-spacerun: yes;"> </span>McEwen sees loss of faith in the dollar being the reason for gold’s coming rise.</span><br />
“Money supply has expanded so rapidly that there are a lot more dollars looking for a steady home,” McEwen said in a Bloomberg Television interview. “Governments cannot help themselves. They want to help the economy. They are printing money. They are going into debt on a horrific scale, and that will depreciate the value of the dollar.”<br />
The coming price rise represents a “once-in-every-300-years” phenomenon, McEwen said. He maintained his previous forecast that gold will rise to $2,000 an ounce by the end of this year.<br />
Such forecasts have been made by numerous newsletter writers and usually can be dismissed as hype.<span style="mso-spacerun: yes;"> </span>Often, those predictions come in advertisements for their newsletter.<span style="mso-spacerun: yes;"> </span>But, McEwen’s prognostication carries weight.<br />
McEwen invests tens of millions of dollars in his beliefs.<span style="mso-spacerun: yes;"> </span>Many of the newsletter writers are trying to make their first million.<span style="mso-spacerun: yes;"> </span>Still, there are credentialed newsletter writers who have called for gold prices in the multiple thousands of dollars.<br />
Richard Russell, editor of <em style="mso-bidi-font-style: normal;">Dow Theory Letters</em>, has written that before this primary bear market in stocks is over, the Dow and the price of gold will meet.<span style="mso-spacerun: yes;"> </span>Basically, Russell expects that somewhere in the future we will see something like 3,000 on the Dow and $3,000 gold, but maybe it will be 4,000 on the Dow and $4,000 gold.<span style="mso-spacerun: yes;"> </span>Or, maybe it will be 5,000 on the Dow and $5,000 gold.<br />
Jim Sinclair, not a letter writer but an acclaimed commodities investor, <a href="http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=95075&sn=Detail" jquery1297207415775="6"><span style="color: #293667;">sees $1,650 gold this year</span></a>.<span style="mso-spacerun: yes;"> </span>Not as optimistic as McEwen, but nonetheless a rosy outlook.<br />
Philip Manduca, Head of Investment and Chairman of the Investment Committee for ECU Group (London), sees gold topping $2,000 “<a href="http://theinflationist.com/stocks/philip-manduca-head-ecu-group-2009-gold-prediction" jquery1297207415775="7"><span style="color: #293667;">before 2010 is out</span></a>.”<br />
Although gold production has fallen in recent years, that is not the driving force behind gold’s price rise over the last decade.<span style="mso-spacerun: yes;"> </span>The reason for gold’s ascent is concern about the dollar—and other <em style="mso-bidi-font-style: normal;"><a href="http://en.wikipedia.org/wiki/Fiat_money" jquery1297207415775="8"><span style="color: #293667;">fiat<span style="font-style: normal;"> currencies</span></span></a></em> for that matter.<span style="mso-spacerun: yes;"> </span>Considering Washington’s “solutions” to today’s financial woes, investors have reasons to be concerned about the dollar.<br />
The outlook for <a href="http://www.cmi-gold-silver.com/buy-gold-bullion-coins.html"><span style="color: purple;">gold</span></a>—and <a href="http://www.cmi-gold-silver.com/buy-silver-bullion-coins.html"><span style="color: purple;">silver</span></a>—is bright. <span style="mso-spacerun: yes;"> </span>Rob McEwen says it is very bright.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-16755604539521376282011-02-08T14:25:00.000-08:002011-02-08T14:25:32.724-08:00Central bank gold buying ramped up in 2011<div dir="ltr" style="text-align: left;" trbidi="on">The World Gold Council recently updated its World Official Gold Holdings, as of March 2011. These are the data that everyone cites when talking about “official” gold holdings. The report raises interesting issues, all of which are bullish for gold, especially the central bank activity in the gold market. First, China admitted to “long-term purchases” of gold. In April, China’s central bank, the People’s Bank of China, revealed that it had bought 454 tons since 2003. As a result of the purchases, all of which are believed to have come from domestic sources, China now officially owns gold reserves of 1,054 tons and is number five on the World Official Gold Holdings list.<br />
Meanwhile, Russia’s central bank continued to accumulate gold, also primarily by purchasing gold in its domestic market. Purchases accelerated in the second half of 2009 when Russia’s gold reserves increased by 87.1 tons, versus 30.6 tons purchased in the first six months. For the year, Russia’s gold reserves increased 22%, to end the year at to 641.5 tons, which now puts Russia in the 9th slot in the table of World Official Gold Holdings.<br />
Of course, the really big news in the gold market in 2009 was <a href="http://cmi-gold-silver.com/blog/imf-sells-200-tons-of-gold-to-india/" jquery1297203823524="6"><span style="color: #293667;">India’s central bank purchase of 200 tons</span></a> from the IMF in an off-market transaction. Additionally (and generally overlooked), in two other off-market transactions Sri Lanka bought 12 tons and tiny Mauritius bought 2 tons.<br />
When the IMF announced in February last year it was going to sell 403.3 tons of gold, it agreed to do so under the Central Bank Gold Agreement (CBGA), an agreement(s) under which European central banks have been selling gold in coordinated efforts so as not to disrupt the gold market. However, when India stepped forward, before the IMF could go to the market, half the gold the IMF intended to sell over a five-year period was gone. Now, there is speculation that the remaining gold will also be sold off-market and not under CBGA. The IMF has said that it plans to the sell remaining the gold “in a transparent manner.”<br />
Regardless of how the remaining 191.3 tons are sold, the gold market is prepared to handle it. Monthly CBGA sales slowed rapidly in 2009 and by September had all but dried up. In December 2009, CBGA sales of only 1.61 tons were reported, compared with sales of almost 43 tons in December 2008.<br />
What is now happening in the <a href="http://cmi-gold-silver.com/buy-gold-bullion-coins.html" jquery1297203823524="7"><span style="color: #293667;">gold market</span></a> is a far cry from the 1990s when the first CBGA was announced. Then gold was in a bear market and headlines of proposed central bank gold sales (and speculation of IMF sales) roiled the markets. Now, IMF gold sales only bring speculation as to which central banks will be the buyers. From day one, I’ve said that <a href="http://cmi-gold-silver.com/blog/analysis-of-proposed-imf-gold-sales/" jquery1297203823524="8"><span style="color: #293667;">IMF gold sales would not deter this bull market</span></a>. IMF gold sales are only feeding a voracious demand.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-70615707586339081562011-02-08T14:23:00.000-08:002011-02-08T14:23:28.473-08:00Saudi Arabia gold reserves double what previously reported<div dir="ltr" style="text-align: left;" trbidi="on">According to the World Gold Council, which tracks official gold bullion holdings, Saudi Arabia now holds gold reserves of 322.9 tons, more than double the 143 tons previously reported. The Saudi central bank, officially the Arabian Monetary Authority (SAMA), did not disclose where the additional gold came from.<br />
Because the WGC gathered the information from a footnote in the latest SAMA quarterly report that read “Gold data have been modified from the first quarter 2008 as a result of the adjustment of the SAMA’s gold accounts,” there is speculation that the central bank had previously owned the additional 179.9 tons but not reported them as official holdings.<br />
Regardless of where the gold came from, Saudi Arabia, which is the world’s fourth-largest holder of foreign exchange reserves, is now the 16<sup>th</sup> largest gold holder. This put Saudi Arabia ahead of such countries as Great Britain and Spain. Still, the Saudi gold holdings make up only 2.8% of the country’s total reserves. The WGC’s Saudi revelation came only a year after China revealed that it was holding 1,000 tons of gold, more than double what it had previously reported for years.<br />
In decades past, any news about central banks was about selling. So damaging was central bank selling and speculation about still more central bank selling that in 1999 fifteen European central banks agreed to what is now called the <a href="http://www.reserveasset.gold.org/central_bank_agreements/cbga1/" jquery1297203713696="6"><span style="color: #293667;">Central Bank Gold Agreement</span></a>, which limits selling by those banks. The goal of the agreement was to provide for a more stable gold market so as not to damage the third world nations that relied on gold exports for foreign exchange. Now, some analysts are saying that this year, for the first time in nearly two decades, central banks may be net buyers of gold.<br />
Earlier this year, the <a href="http://cmi-gold-silver.com/blog/imf-sells-200-tons-of-gold-to-india/" jquery1297203713696="7"><span style="color: #293667;">Indian central bank bought 200 tons</span></a> from the IMF. (Although reported last year, the sale took place officially this year. Additionally, had India not stepped forward, that 200 tones would have been sold under the Central Bank Gold Agreement.) Further, Russia, China and other countries are adding to their reserves on a regular basis by purchasing from domestic producers.<br />
While the world is not yet set to go back on a gold standard, it appears that monetary authorities are again recognizing the value of gold. Undoubtedly, central banks adding to their gold holdings has played a major role in the price of gold reaching record highs. Continued central bank buying can only add to upward pressure on the price.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-7759084607349963592011-02-08T14:21:00.001-08:002011-02-08T14:21:49.607-08:00Huge reduction in LCs’ net short position in gold<div dir="ltr" style="text-align: left;" trbidi="on">Most gold and silver investors are in precious metals because of macro (big picture) economic and financial circumstances in which the world now finds itself after seven decades of Keynesian economics and statist politics. These investors are content to take positions in the metals and hold them, while maybe adding to their positions as opportunities arise.<br />
Still, there are other gold and silver investors who follow the markets closely, which usually means monitoring the activities of the large commercials (LCs), which are major players in the gold and silver markets, certainly on the COMEX where their positions have to be reported the Commodities Futures Trading Commission (CFTC).<br />
Among the LCs, the bullion banks are the guys to watch. They trade for central banks, investment houses, mining companies, refineries, commercial users and other large investment firms when they decide to enter the markets. The thing to watch is the sizes of the LCs’ reported positions, which has been on the short side for more than a decade. The big two bullion banks are JPMorgan Chase and HSBC.<br />
For the reporting week just ended, the Commitment of Traders report (COT) showed the largest one-week reduction in large commercial net short positioning for gold since August 12, 2008, says Gene Arensberg in his <em>Got Gold Report</em>. GGR notes that it’s the fifth largest one-week large commercials’ net short reduction in gold since 2003. In the past, large reductions in the LCs’ net positions have been harbingers of price moves to the upside. Not a guarantee, but it needs be remembered that the LCs are the big boys on the COMEX , and when they move they should not be ignored.<br />
Seasonally, the metals have just entered their weak period, June through August/September. So, the boys backing off on their short positions is interesting. (In years past, the LCs have added to their short positions during the summer.) Additionally, gold is trading only 6% above its 200-day moving average, and it is below its 50-day moving average, which means gold may not be as vulnerable to a big decline this summer as it has in past years. So, the large reduction in the LCs’ net short position in gold may be really significant.<br />
Arensberg’s <em>Got Gold Report</em> presently is free. Log on at <a href="http://www.gotgoldreport.com/" jquery1297203669833="6"><span style="color: #293667;">www.gotgoldreport.com</span></a>. In addition to analyses of the gold and silver markets, Arensberg also offers what he now calls his <em>Vulture Bargain Hunting</em> candidates: low-priced and <strong>high-risk</strong> gold mining stocks that he believes to be good <strong>speculations</strong>. Purchases of such companies should only be done by persons financially (and emotionally) capable of sustaining losses. Gene does good work, but he would be the first to tell you that speculative mining stocks are not the place for retirement funds.<br />
GGR also offers COT Flashes, which are email updates of the COT reports. This is a convenient way to be appraised of what’s happening with LCs’ short positions in gold and in silver.<br />
As noted, access to <a href="http://www.gotgoldreport.com/" jquery1297203669833="7"><span style="color: #293667;">www.gotgoldreport.com</span></a> presently is free. Plans are afoot for Gene’s work to be a subscription service. Now, though, it is free. Gold and silver investors who closely follow the markets may want to visit the site and sign up for the COT Flashes. However, after the site becomes a paid subscription, the COT Flashes will be part of the paid subscription.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-57448951213841892552011-02-08T14:20:00.001-08:002011-02-08T14:20:25.470-08:00Gold & Silver Breakout<div dir="ltr" style="text-align: left;" trbidi="on">In the September 11 <span style="text-decoration: underline;"><a href="http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/9/11_KWN_Weekly_Metals_Wrap_files/KWN%20Weekly%20Metals%20Wrap%209:11:2010.mp3" jquery1297203529461="6"><span style="color: #293667;">interview with Eric King of King World News</span></a></span>, I mentioned that a number of credible analysts were saying that gold and silver looked like they were about the have a technical breakout to the upside. Gold’s and silver’s price action since have confirmed those predictions.<br />
In the interview, I warned long-term investors to be prepared for volatile price action because such a move will bring technical traders to the <a href="http://www.cmi-gold-silver.com/buy-gold-bullion-coins.html"><span style="color: #293667;">gold</span></a> and <a href="http://www.cmi-gold-silver.com/buy-silver-bullion-coins.html"><span style="color: #293667;">silver</span></a> markets. These traders will not be there because of concerns about a declining dollar or the stability of the world’s financial structure, but solely because of the price action. When they perceive the move to the upside to be over, or they have hit their price targets, they will bail out, thereby adding to the metals volatility.<br />
So, as prices march higher, investors need to be prepared for some sharp corrections. This is not a prediction that a correction is imminent, only a warning that somewhere in this move there will be sharp downside moves. Considering the present state of financial affairs worldwide, physical gold and silver investors need to hold on and definitely not try to trade any intermediate moves.<br />
Over the years, during various precious metals bull markets I have seen investors attempt to trade intermediate moves only to be left on the sidelines as the metals marched high. Many times they accurately picked intermediate tops but failed to get back in before prices moved up again.<br />
As the old, seasoned veteran said in <em>Reminiscences of a Stock Market Operator</em>, “It’s a bull market. Get your position and hold on.”</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-80050042245847079792011-02-08T14:18:00.000-08:002011-02-08T14:18:43.551-08:00Central banks turning gold buyers<div dir="ltr" style="text-align: left;" trbidi="on">For the CBGA (<span style="text-decoration: underline;"><a href="http://www.reserveasset.gold.org/central_bank_agreements/" jquery1297203467642="6"><span style="color: #293667;">Central Bank Gold Agreement</span></a></span>) year to end September 30, central bank gold sales are estimated to be 6.2 tones, down 96% from their high of 497 tons for the CBGA year ended September 30, 2005, the year for the highest sales under the CBGA. Over the last ten years, central banks sold 442 tons a year on average. With this about-face, it is like a couple of gold mines shutting down. But, the news gets still better for gold investors.<br />
According to the <em>Financial Times</em>, the gold market analysts at GFMS estimates that central banks as a group will be buyers of gold this year for the first time since 1988. On a net basis, the <em>Times</em> reports, are forecast to be small, at around 15 tons. Large official purchases of gold – in the hundreds of tons – have not been seen since 1965, prior to the collapse of the Bretton Woods system of fixed exchange rates linked to the gold price. (In doing this analysis, obviously the <em>Times</em> ignored (missed?) the 200 ton purchase by the Reserve Bank of India from the IMF.)<br />
For two decades, central banks roiled the gold market with sales and announcements of sales. Could gold ever rise again, supposedly sage analysts asked, with central banks holding half the world’s supply of gold? It was an accepted Establishment position that selling gold and moving the funds to sovereign debts was a smart move.<br />
The most ignominious seller was the UK Treasury, which announced in May 1999 that it would be selling half of Britain’s gold reserves. Prices plummeted on the announcement, yet the UK Treasury sold. Today, Gordon Brown, then Chancellor of the Exchequer, still has egg on his face for that move. The UK averaged less than $300/oz for its gold. The UK sales were undoubtedly responsible for gold hitting a 23-year low at just above $250 an ounce.<br />
Other central bankers saw the brilliance (sic) of Brown’s move and joined in the selling. Spain halved its gold holdings, and France started a program of large disposals. The <em>Financial Times</em> calls it a gold rush – but in reverse. For nearly 20 years the world’s central banks, including the central banks of Canada, Switzerland, Belgium and Australia, sold their once prized gold bars<br />
From 1990 until last year, central banks around the world sold about 7,500 tons of gold. Over the last decade, the 442 tons central banks dumped each year, on average, add up to more than the annual output of China, the world’s biggest gold producer. The 442 tons equals about 10 per cent of annual demand.<br />
Now, though, things have changed as central bankers and investors alike have come to recognize the dangers of owning assets that can be created at will. Consequently, central gold sales that were relied on for years are, essentially, no more.<br />
Additionally, big mining companies, AngloGold Ashanti being the latest, have moved to eliminate their hedge books. This, along with central banks becoming net buyers, means less gold on the market at a time when investor demand for gold is increasing daily.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-27922330491686645992011-02-08T14:17:00.000-08:002011-02-08T14:17:31.576-08:00Gold buyers question viability of banking system<div dir="ltr" style="text-align: left;" trbidi="on">In a recent interview, Eric King of KingWorldNew.com asked me why CMIGS customers are buying. “Is it concern about inflation, the dollar or the economy?” he asked. My answer was that most buyers comment on concerns about the world’s financial structure. Will the banking system survive? Craig Stahl of <em>Problem Bank List</em> has put up a <span style="text-decoration: underline;"><a href="http://problembanklist.com/majority-of-americans-lack-confidence-in-stability-of-us-banking-system-0213/" jquery1297203399905="6"><span style="color: #293667;">blog post</span></a></span> that confirms why investors are turning to gold (and silver).<br />
According to Stahl<strong>, “a recent Rasmussen poll indicates a great sense of unease regarding the stability of the US banking system. ‘Only 8% are very confident in the stability of America’s banks, while 11% are not at all confident’. In addition, the survey shows that ’54% lack confidence in the stability of the US banking industry.’ Prior to the financial crisis, 68% of the public had confidence in the banking system.</strong><br />
<strong>“Rasmussen’s survey also showed that 32% of Americans are ‘at least somewhat worried’ and 8% are ‘very worried’ about the money they have on deposit in the bank. Most of the American public still professes to be unconcerned about <a href="http://problembanklist.com/my-bank-just-failed-should-i-hit-the-panic-button-0212/" jquery1297203399905="7" target="_blank"><span style="color: #293667;">losing money in a banking failure</span></a>, despite the admission by government officials that the entire financial system was on the precipice of collapse in 2008.”</strong><br />
That Americans are worried about the banking system but mostly are unconcerned about losing money in a banking failure does not surprise me. Ingrained in Americans is not necessarily faith in the FDIC, which guarantees deposits, but a strong belief – and a correct one, I believe – that fedgov will not let any depositors suffer any losses, which could precipitate a bank run.<br />
<em>Problem Bank List</em> counts 129 failures so far this year. And, not a depositor has lost a dime. Further, bank failures, except in the state of domicile, rarely get any news coverage. People in general simply are not concerned. However, the people who are <a href="http://www.cmi-gold-silver.com/buy-gold-bullion-100-gram-gold-bars.html"><span style="color: #293667;">buying gold</span></a> and <a href="http://www.cmi-gold-silver.com/buy-silver-bullion-coins.html"><span style="color: #293667;">silver</span></a> state that they are.<br />
<em>Problem Bank List</em> further notes that this year’s banking failures are on track to outpace the 140 banking failures of 2011.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-27503378619412564362011-02-08T14:15:00.001-08:002011-02-08T14:15:35.583-08:00Abundance of gold articles, not all bullish<div dir="ltr" style="text-align: left;" trbidi="on">Mineweb.com, a South African-based website dedicated to the mining industry, is an excellent source of articles about precious metals. With contributors around the globe, mineweb.com offers wide perspectives. Today’s issue has four articles and a podcast, most of which should be of interest to investors with gold hitting all-time highs and silver hitting 30-year highs.<br />
<strong><a href="http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=112890&sn=Detail&pid=110649" jquery1297203232454="6"><span style="color: #293667;">BIS taking in more gold – who are the counterparties this time?</span></a></strong><br />
The Bank of International Settlements hit the headlines earlier this year when it was discovered that its gold holdings had soared: now it appears BIS gold holdings are on the increase again.<br />
<strong><a href="http://www.mineweb.com/mineweb/view/mineweb/en/page504?oid=112893&sn=Detail&pid=110649" jquery1297203232454="7"><span style="color: #293667;">Gold near week high as dollar weakens</span></a></strong><br />
The dollar dropped after the Federal Reserve signaled that the US economy may need extra stimulus, pushing the yellow metal up.<br />
BH: Today gold popped again as news sources around the world revealed that indeed the Fed was prepared to create still more money in efforts to get the economy going. The Financial Times, a widely-read and respected newspaper, headlines: Fresh Fed boost more likely.<br />
The first sentence of the article predicted “that the US will soon launch a fresh burst of ‘quantitative easing.’ Quantitative easing is a new euphemism for the creation of new money out of thin air. We used to say, “The Fed is printing again.” Now, we say, “The Fed has started another round of quantitative easing.”<br />
<strong><a href="http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=112892&sn=Detail&pid=110649" jquery1297203232454="8"><span style="color: #293667;">Gold could reach peak in next 3 to 6 months</span></a></strong><br />
According to Natixis, the global economy is not in quite as bad a state as many in the market are thinking and as a result the price of gold could reach its zenith in 2011.<br />
“We are projecting that at some point in the next three to six months we will have reached the peak and (gold) prices will decline from then on. So we will be looking for prices to perhaps fall below $1,000/oz by the end of next year.”<br />
BH: to predict a top in 2011 is bold. The US is running trillion-dollar deficits, the financial survival of the PIIGS countries is in question, and concerns about the world’s financial structure abound. Yet someone says gold will top next year. An impossible call. However, I will concede that an intermediate top could be put in next year, but at this time I don’t see “prices declining from then on.”<br />
<strong><a href="http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=112864&sn=Detail&pid=34" jquery1297203232454="9"><span style="color: #293667;">Goldman Sachs raises 12 month gold forecast by 20%</span></a></strong><br />
The bank has raised its forecast to $1,650 after a slowing US recovery and falling interest rates drive further investment into the yellow metal.<br />
<br />
BH: In another bearish article, the same Nic Brown of Commodities Research Natixis, sees a correction, but he doesn’t know when, which is understandable.<br />
In the <em>Gold could peak in next 3 to 6 months </em>article, Brown predicted a correction in within six months. In this article, he hedges. There will be a correction, but will gold climb another $200 before the correction?<br />
<strong><a href="http://www.mineweb.com/mineweb/view/mineweb/en/page96990?oid=112878&sn=2010+Detail&pid=110649" jquery1297203232454="10"><span style="color: #293667;">Gold’s current fundamentals – Nic Brown, Head of Commodities Research Natixis</span></a></strong><br />
“There is the potential for a substantial correction in gold prices – when it’s going to start – very difficult to tell.”<br />
BH: Conflicting, confusing articles are the norm in the second phase of bull markets. Analysts will disagree with each other, and many observers will find valid arguments on both sides. In the third phase (and the final), the articles will be uniformly bullish, with hardly a bear around. In my opinion, the third phase is years away.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-76654982751379664912011-02-08T14:13:00.000-08:002011-02-08T14:13:37.294-08:00Have Asian buyers checkmated silver shorts?<div dir="ltr" style="text-align: left;" trbidi="on">Eric King of KingWorldNews.com blogged that his sources say <span style="text-decoration: underline;"><a href="http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/11/10_KWN_Source_-_Asian_Buyers_Have_Silver_Shorts_Checkmated.html" jquery1297203152950="6"><span style="color: #293667;">Asian buyers effectively have checkmated the silver shorts</span></a></span>. No doubt about it, there is a major battle going on in the <a href="http://www.cmi-gold-silver.com/buy-silver-bullion-coins.html"><span style="color: #293667;">silver</span></a> markets. Volumes are at record highs, and volatility is extreme.<br />
Many clients ask who’s doing all the selling. CFTC’s COT reports suggest it’s the usually suspects, the bullion houses. But, a better question may be who’s doing the buying? Eric King says it’s some Asians, who have brought some really big money to the game.<br />
Undoubtedly, the Fed’s announcement of Quantitative Easing 2, with one noted analyst saying it <a href="http://www.cmi-gold-silver.com/blog/qe2-to-bankrupt-fed/"><span style="color: #293667;">could bankrupt the Fed</span></a>. QE2 has made many people revaluate their desire to hold dollar-denominated investments, such as US treasuries.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0tag:blogger.com,1999:blog-4731709621722960008.post-16560860724526498812011-02-08T14:12:00.000-08:002011-02-08T14:12:28.799-08:00Premiums up on physical gold in Asia<div dir="ltr" style="text-align: left;" trbidi="on">The premiums that buyers put on physical forms of gold and silver indicate the level of interest for the most conservative forms of gold and silver. High or rising premiums indicate strong buying; declining premiums show declining demand; low premiums can indicate low interest but not necessarily. Sometimes demand can be strong but supplies are sufficient to meet demand.<br />
<a href="http://www.mineweb.com/mineweb/view/mineweb/en/page504?oid=118211&sn=Detail&pid=110649" jquery1297203082098="6"><span style="color: #293667;">Mineweb.com reports</span></a> that concerns about Euro zone debt have pushed gold bar premiums to two-year highs in Hong Kong, where gold bars are offered at a premium of $3 to the spot London prices. $3 premiums on gold bars in Hong Kong were last seen in late 2008 at the height of the global financial crisis.<br />
Concerns about Portugal seem to be the driver behind Hong Kong buying; and, with gold off its historical high of $1,430 in December, many investors see gold as cheap at the $1,375 level. Later this week, Portugal will go the bond market to raise funds. If unsuccessful, Portugal will be the third PIIGS nation to turn to the EU and IMF for financial aid.<br />
Of interest, is China’s entry into the Euro debt market, a development worth watching. China’s buying of Euro debt, especially PIIGS debt, could more political than for investment purposes.<br />
Greece and Ireland were the first and the second PIIGS to require bailout money. Spain is adamant that it will not need a bailout, but credit rating agencies think otherwise. Concerns about Italy are muted at the moment. <br />
Adding to bar demand in Hong Kong is strong demand from China where refineries have been closed for the holidays. Still, concerns about Portugal are on the forefront. Even if Portugal finds buyers for its debt, the rate it has to pay will be indicative of the marketplace’s concerns about Portugal.<br />
Presently in the US, premiums are normal, which means that such items as <a href="http://www.cmi-gold-silver.com/american-eagles-gold-coins.html"><span style="color: #293667;">Gold Eagles</span></a> and <a href="http://www.cmi-gold-silver.com/buy-gold-bullion-bars.html"><span style="color: #293667;">gold bars</span></a> can be bought at premiums that reflect normal markups by wholesalers and by retailers. Presently, <a href="http://www.cmi-gold-silver.com/krugerrand-gold-coins.html"><span style="color: #293667;">Krugerrands</span></a> can be bought about $15-$17 cheaper than Gold Eagles. At times, Rands are as much as $20 cheaper than Gold Eagles.</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com1tag:blogger.com,1999:blog-4731709621722960008.post-25036380299685833612011-02-08T10:20:00.000-08:002011-02-08T10:20:15.394-08:00US Dollar is Safe…For Now<div dir="ltr" style="text-align: left;" trbidi="on"><em>The Dollar is Crashing! The Dollar is Crashing!</em> Such is the perennial claim of doomsday predictors, conspiracy theorists, gold bugs, etc. Those of you who read my blog regularly know that I often come to the defense of the Dollar. Given that it has risen by more than 5% over the last month and is currently hovering around its average value of the last five years, I think this position is worth reiterating.<br />
<div style="text-align: left;"><img alt="US Dollar Index 2006 - 2010" class="aligncenter size-full wp-image-3206" height="434" src="http://www.forexblog.org/wp-content/uploads/2010/11/US-Dollar-Index-2006-2010.jpg" title="US Dollar Index 2006 - 2010" width="572" /><br />
In the months leading up to the expansion of the Fed’s Quantitative Easing Program (QE2), investors took an especially bearish view on the Dollar, precipitating a rapid and steep decline against most currencies. Analysts argued (somewhat contradictorily) that QE2 would be ineffective in the short-run and inflationary in the long-run, and that most of the new cash would be invested abroad – where returns are higher – rather than in the US.</div>Since the unveiling of QE2, however, the Dollar has rallied strongly. On the one hand, most economists remains skeptical that it will do much to lift GDP and boost employment. However, a <a href="http://www.csmonitor.com/Business/The-Reformed-Broker/2010/1122/QE2-the-world-s-biggest-shelf-offering"><span style="color: #003366;">parallel thread</span></a> holds that this was only the ostensible motive for QE2, and that the real motive was to prevent the outbreak of another financial crisis and consequent economic downturn. Given that housing prices are headed downward and banks’ balance sheets are still weak, the Fed’s move reads more like a preemptive move to further shore up the financial system than an economic stimulus program.<br />
At the very least, this probably won’t hurt the Dollar, and certainly not to the extent that the market had priced in prior to QE2. While the stock market rally has stalled, the rise in Treasury Yields has not. The 10-Year rate is close to 3% for the first time in months, making it more attractive (and less costly) to hold capital in Dollar-denominated assets. The Dollar was also helped by the release of <a href="http://uk.reuters.com/article/idUKN2312658620101123"><span style="color: #003366;">GDP data for Q3</span></a>, during which the US economy beat expectations and grew by 2.5%.<br />
<div style="text-align: left;"><img alt="10-Year Treasury Rate Vs. S&P 500 - 2006-2010" class="aligncenter size-full wp-image-3204" height="305" src="http://www.forexblog.org/wp-content/uploads/2010/11/10-Year-Treasury-Rate-Vs.-SP-500-2006-2010.jpg" title="10-Year Treasury Rate Vs. S&P 500 - 2006-2010" width="555" /><br />
As a result, traders are reducing their Dollar-short positions. Analysts have revised their forecasts to reflect a stronger Dollar, based on the notion that “<a href="http://www.businessweek.com/magazine/content/10_49/b4206055411492.htm"><span style="color: #003366;">The dollar has found a bottom</span></a>.” At this point, the main naysayers are “<a href="http://www.montrealgazette.com/business/Debasement+greenback+nowhere+sight/3869550/story.html"><span style="color: #003366;">overwhelmingly found</span></a> in the ranks of the opposition Republican party,” perhaps part of a cynical ploy to hurt both the economy and Barack Obama’s chances of being reelected.</div>To be sure, there may be other reasons for the Dollar’s rally, namely the growing turmoil in the EU. Evidence is mounting that the EU sovereign debt crisis is spreading, which has spurred both an increase in investor risk aversion and a decline in the Euro. Still, market chatter seems to be focusing less on the Dollar as safe-haven and more on the fact that the Dollar was merely oversold.<br />
On a purchasing power parity (ppp) basis, the Dollar is starting to look cheap. If the opinions of Europeans, Canadian, Australian, and Japanese tourists are to be taken at face value, the US is cheaper than it has been for years. As <a href="http://www.theglobeandmail.com/globe-investor/investment-ideas/features/the-buy-side/much-maligned-greenback-is-looking-increasingly-cheap/article1814079/"><span style="color: #003366;">one commentator</span></a> summarized, “If the PPP figures are right, the U.S. dollar has more upside than the negative sentiment around it would indicate. If the greenback were to decline further, it would have to do so from an already undervalued situation.”</div>World nowhttp://www.blogger.com/profile/10460284902536979626noreply@blogger.com0