Global Gold Demand Up U.S. Dollar Down

China the world’s largest gold producer is set to break records for both production and consumption of gold. China over took South Africa, in 2007, to become the World’s largest producer of gold.

“Gold demand may be more than 450 metric tons compared with 395.6 tons in 2008, and output may climb to 310 tons, compared with 282 tons a year earlier, Zhang Yongtao, deputy secretary- general of the association, said at a conference in Kunming yesterday.”
Source: Bloomberg News

Gold is now flirting with a $1,200 an ounce (11-26-09). The continued weak U.S. Dollar could push a $1,500 an ounce sooner than later.

“The inflation concern this year has boosted the Chinese consumer demand for things like property, autos and gold…” This demand for hard goods vs. U.S. Dollar will most likely push China past India as the number one consumer of gold.

Read the full Story here:
Also, 60 Minutes did a story on Gold production from Congo and its tie in with the bloody conflict in that region. Story and video here:

Recession Will Be ‘Full-Blown Depression’: Strategist

“This global recession will turn into a “full-blown depression,” Nicu Harajchi, CEO of N1 Asset Management, said Friday, adding that global stimulus hasn’t come down to Main Street.”

“When it comes down to corporate America, corporate Europe or even in Asia, in Japan, we are not seeing Main Street making any money,” he said. “Consumers are losing their jobs. They are struggling with their mortgages, with their credit. And we are just seeing this continuing.”

The $5 trillion injection is “monetary expansion,” according to Harajchi. “At some point, which we believe to be 2010/11, some of the central banks are going to recall some of that money and that will turn from monetary expansion to monetary contraction.”

He also said he doesn’t see the corporates or the public “being able to pay back that debt.”

You can read the full article here

Audit the Federal Reserve: HR 1207 and S 6055

This is not about Politics, this is about our Country. We need to know what the Fed is doing. Please Support HR 1207.

“Ron Paul’s bill to audit the Federal Reserve (HR 1207) now has 245 co-sponsors, and the numbers keep growing! HR 1207’s companion bill in the Senate, S 604, is now beginning to attract its first co-sponsors!”

Step 1: Your Representative

If your representative is not on the following list of HR 1207 co-sponsors, call their offices, write to them, email them. Let them know they need to support HR 1207. If you live in their district, let them know. Go to their office.

Capitol Switchboard: (202) 224-3121

Step 2: Your Senator

HR 1207’s identical companion bill in the Senate is known as S 604, the Federal Reserve Sunshine Act, sponsored by Sen. Bernie Sanders.

If your Senator is not on the following list of S 604 co-sponsors, call their offices, write to them, email them. Let them know they need to support S 604. If you live in their district, let them know. Go to their office.

S 604 Co-Sponsors (as of 6/26/2009)

Sen Crapo, Mike [ID] – 6/25/2009
Sen DeMint, Jim [SC] – 6/11/2009
Sen Vitter, David [LA] – 6/16/2009

Step 3: Financial Services Committee

HR 1207 is now in the House Committee on Financial Services. This is THE MOST IMPORTANT STEP in this legislation! If it doesn’t get out of committee it will not come to a vote! There are 71 members on this committee and they are all listed below.

We need to let all members of the House Committee on Financial Services know that we want them to allow full House consideration of HR 1207 so it can move forward; we need them to support this. Now is the time.

Call their offices, write to them, email them. Let them know they need to support HR 1207. If you live in their district, let them know. Go to their office.

Source: http://www.ronpaul.com/on-the-issues/audit-the-federal-reserve-hr-1207/
Click the More Link to see the video:
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U.S. Jobless Rate Explodes

Caterpillar announces fourth quarter profits drop by 32%. Caterpillar announces it will slash 20,000 jobs.

Sprint Nextel announced they will emanate 8000 jobs in the first quarter of 2009. Job cuts will affect every level of the company.

Home Depot to cut 7,000 jobs which represents 2% of its workforce. Home Depot also announced they will shut down their Expo division.

Texas Instruments reported a large profit drop which led to the announcement it will cut 3400 jobs

IBM will cut at least 20,800 jobs. This announcement comes just a few days after Microsoft announced they will be eliminating 5000 jobs.

Layoffs are coming from every sector of the economy, which is troubling because it represents a wide and deep recession. It is now expected January will see another 500,000 jobs evaporate.

On a side note

Falling home prices in December pushed existing home sales up by 6.5%. Bargain hunters snapped up foreclosures, taking advantage of the largest price decline in 70 years. 45% of the homes sold in December consider distress sales, either short sales or foreclosures.

2008: The year in markets (from MarketWatch)

U.S. indexes
Dow Jones Industrial Average -34%
S&P 500 -38%
Nasdaq -40%
Dow Jones Financials -55%
Amex Oil Index -37%

International indexes
Germany DAX -40%
FTSE 100 -31%
Japan Nikkei 225 -42%
China Shanghai Composite -65%
Mexico IPC -24%
Brazil Bovespa -41%

Currencies/commodities
Gold +5%
Crude -54%
Dollar index +6%
Pound vs. dollar -28%
Dollar vs. yen -18%

2008 Numbers provided by MarketWatch.com

The Republicans are Right NO Bail Out

Update:

For all of you who argued with me about the big three missing market trends in relation to SUV vs. Hybrid, hear straight from the horse’s mouth. They acknowledged I was right.

“We also biased our product mix toward pick-up trucks and SUVs. And, we made commitments to compensation plans that have proven to be unsustainable in today’s globally competitive industry. We have paid dearly for these decisions, learned from them and are working hard to correct them by restructuring our U.S. business to be viable for the long term.”

Again, yes there was a demand for SUVs but it was a downward trend. They did not see the upward trend of green cars…

I just watched Henry Paulson fumble his way through a Congressional hearing regarding the Wall Street bail out, and as a tax payer I was not pleased. However, Paulson and the current Republican Congress are against giving the Detroit based Auto industry $25 billion in bail out money. I agree.

In early 2000 the leadership of the “Big Three” missed the trend from gas guzzling SUVs and trucks to more full efficient cars. Maybe the Auto industry leadership thought the “Rock and Roll” bubble economy would never end. Perhaps the industry was simply too “drunk” on their boom time success and they took their eyes of the shifting and evolving markets. Meanwhile, their competitors, Toyota and Honda soared into the top spots, riding the hybrid wave. Markets called out and the Japanese Auto industry responded in spades. When I drive around Los Angeles it seems like every other car is a Toyota Prius.

If the Big Three do not get a bail out, they will be forced to restructure their business. This is not a bad thing. This is the free markets doing its job. Out of the restructure will come a leaner and meaner Auto industry. A government bailout will only reinforce failed leadership in Detroit. When American companies are forced to refocus and do more with less, amazing innovation takes place. America needs innovation and not bailouts.

President Bush Now Believes in Free Markets

President Bush is pushing for free markets when it comes to the faltering economy and global financial meltdown!!
I agree 100% with Bush. I do have one question. What happened to FREE MARKETS when we bailed out the banks and Wall Street? (Who are not lending out any of our Tax dollar bail out. They are hording the capital!)

You can’t suspend free markets one day and then believe in them the next. I agree government has a role in our economy but we need to let the principles of the free markets work. It is the foundation of capitalism!

Out of this recession, better companies will arise. We always bounce back and we always will. We just need to let the free markets work. Yes, it will be painful but it’s necessary.

Will Home Prices Bottom Out In Late 2009?

Source: NYT

According to the New York Times, they are reporting falling home prices through late 2009. “The No. 1 thing that drives housing values is incomes.” States Todd Sinai, professor of real estate at the Wharton School at the University of Pennsylvania.

First, here in California we will be lucky if it’s 2009 when we see the bottom. I think we are looking 2010 or 2011, until we hit bottom. This is supported by the last California housing boom and bust of the 1990’s.

“In a previous boom, home prices peaked in the Los Angeles area in 1990 but did not hit bottom until 1996. Prices remained near that low for more than a year before starting to climb again.”
Second, the fact that home values are now based on incomes is shocking. By not using income as the measure if a person can afford a home, is what caused the housing bubble and collapse.

Oil down $69.85 a barrel a 14 month Low

Credit: herzogbr

With a global economic recession looming, the demand for oil will be slashed. This is forcing prices to a 14 month low. Since July 2008, oil prices have declined 50%.

Japan’s Nikkei took a beating last night, down more than 11%. This represents the single worst single day performance in more than two decades. With U.S. markets opening to this news, I am sure it put pressure on oil futures.

Read More Here

Bush to meet with G 7

Source:Reuters

On Friday, U.S. Treasury Secretary Henry Paulson and his team were working on a plan to inject cash into the US financial institutions. The G7 also had a similar plan but both lacked any details. They did share one specific similarity, recapitalizing the banks.

“We’re in this together. We will come through this together,” Bush said Saturday after meeting with the leaders of the G7.

The world financial leaders are fighting against the clock. Without a credible plan set by Monday, we could see another massive sell off in all the major stock markets.

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