Government and Banking, who rules?

October 31, 2008 | Comments Off

The events of the last two weeks have presented enormous ‘moral’ hazards for governments and the banking industry. When we call them moral hazards we are not talking about biblical morality, but the principles behind government [Democracy] and banking [Profit and Prudence]. Read more

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Why the Indian market buys gold when the price is falling.

October 30, 2008 | Comments Off

The short response to such a question is that they aren’t. They are buying gold in Rupees, whose price has been stable as the gold price fell in the U.S. $. Because the Rupee is falling, gold has appeared to hold steady in the Rupee. Because Indians see the Rupee as a problem there is even more incentive to buy gold for the security of their daughters as they enter marriage. But in this essay we also look at other currencies where gold has done its job of holding up when local equities have fallen. Read more

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Fed rate cut widely expected

October 29, 2008 | Comments Off

The Dow managed to gain a ho-hum 890 points on Tuesday (October 28), the second largest point gain for the index this month, and also, by the way, ever. Most analysts agreed there really was very little news on Tuesday to drive such again. It was simply a matter of the same momentum buying that has caused the Dow to experience 18 triple-digit moves in its last 20 trading days coming into play. Bargain hunters kicked things off by driving up the blue-chip index nearly 500 points by early afternoon and momentum buying driving it toward 900 points. Read more

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When Inflation Erupts, Gold Will Take Off

October 23, 2008 | Comments Off

Expect short-term hesitancy in the upward movement of the gold price until liquidity returns to the markets, says Frank Holmes, CEO and chief investment officer at U. S. Global Investors and co-author of the new book “The Goldwatcher: Demystifying Gold Investing” (John Wiley & Sons). In this exclusive interview with The Gold Report, he predicts gold will go to $1,000, even $2,000, over the next two years. A growing money supply due to a change in government policies will help lift some juniors out of their misery, too. Holmes advises selective nibbling until conditions improve and names a few companies to consider. Read more

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A tale of two companies: Yahoo and Apple

October 22, 2008 | Comments Off

Yahoo and Apple both reported quarterly earnings on Tuesday (October 21). The results were quite opposite for the tech bell weathers. Yahoo announced a 64 per cent third quarter profit drop and said it was set to let go 1,500 workers in lieu of the struggling economy. Many analysts and investors in the search engine giant have intensified their voicing of anger that the Yahoo board failed to take advantage of a $47.5 billion buyout offer from Microsoft earlier this year. Read more

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Flat consumer prices suggest easing inflation

October 17, 2008 | Comments Off

Many of the most pessimistic analysts have expressed concern about the Fed’s move back to a rate cut philosophy given the ongoing price and inflation challenges. The Fed had been on hold with rate cuts for a while after a strong series of cuts in late 2007 and the first half of 2008 that brought the Fed funds rate to two per cent. The Fed paused about halfway through 2008, believing the economy might be prepared to push higher off its bottom. Read more

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Gold Bounces from $830

October 16, 2008 | Comments Off

THE SPOT PRICE of GOLD BULLION twice bounced off $830 an ounce early Thursday – the floor set five times already this week – as world equity prices sank yet again.Hurricane Omar strengthened to category 3 in the Caribbean, but the price of crude oil sank to a fresh 14-month low below $73 per barrel. Read more

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US Government dives into credit markets

October 15, 2008 | Comments Off

The US government has made its move into the credit market. It is kind of ironic that the world’s most free enterprise economy, under the direction of a “less” government republican president, has made its first move into government-funded credit. Read more

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