Wednesday, October 14, 2009
The currency fell to a 14-month low last week. In fact, the US dollar index is now off more than 15% from its March high. More to the point, some economists and strategists argue that the greenback’s fall won’t come to an end anytime soon.
Dr. Bill Witherell, chief global economist for Cumberland Advisors, wrote recently to his clients that he'll be looking for advance indications that the greenback’s decline has come to a halt.
“We fear that wait could be a long one,” he said.
So, how can investors position their portfolios for a continuation of US dollar weakness? (more)
I’m moving to China … possibly to live in a bunker. At least that was my inclination after listening to a presentation by Jim Rogers yesterday.
Now don’t get me wrong – Mr. Commodities wasn’t all doom and gloom. In fact, his talk was both informative and highly entertaining. But Rogers doesn’t sugarcoat things – he’s very matter-of-fact about his concerns and projections for the future. And most of them don’t bode well for the U.S. (more)
City bank Goldman Sachs is expected to confirm tomorrow that bonuses will smash all records in 2009, just a year after the Government rescued the financial system from oblivion.
The Wall Street giant is on course to lavish £14billion on pay and bonuses on staff this year following a surge in profits between July and September, experts said.
Goldman's 5,500 UK workers are now set to pocket an average of almost £500,000 each for this year - the highest rewards in the firm's 140-year history. (more)
Sharp increases in rice prices since last year have hit consumers across the world, especially in Asia and the Americas, the Food and Agriculture Organization said. Whole communities depend on the grain as their staple food or as an important ingredient, as in Asian American communities.
Amid warnings of another surge in rice prices, after the runaway inflation triggered by shortages or export cuts in 2008, FAO experts are citing sharp reductions in the stockpiles of the grain held by the five leading exporters -- the United States, Vietnam, Thailand, Pakistan and India. (more)
Yale professor Robert Shiller says the recent upturn in housing prices doesn’t signal that everything is now hunky dory for the home market.
In fact, it’s just typical price volatility in an uncertain market, says the guru who called the massive housing crash years early.
“The sudden rise in home prices suggests that the psychology of the market has shifted substantially,” Shiller wrote in The New York Times.
“But what should we expect in the months ahead? Not necessarily that we’re entering a new housing boom.” (more)
Investors should buy gold and gold stocks right now, says David Skarica, gold expert and editor of The Gold Stock Adviser newsletter.
Skarica says gold is entering its buying season, so investors should begin acquire the metal, better still, leveraged gold mining stocks, soon.
November has been the start of a popular buying period since 2000, Skarica notes.
“That is the seasonality where the gold and gold stocks have been strong,” he said.
Part of the demand occurs because the Indian wedding season occurs in the fourth quarter and increases buying, he says. (more)
“Consumers continue to ditch credit cards at a hefty clip,” writes Rob Parenteau, “exceeding that of the two prior steep recessions of 1973-5 and 1980-2. Since this is the highest-cost form of household debt, this reduction of consumer credit outstanding helps immensely in slimming the interest expense burden of debtor households while at the same time reducing the leverage on household balance sheets.“There are many who are eager for banks and other creditors to open up the taps again for private credit flows. We have no disagreement in the case where sound business expansion plans need to be financed, especially for small businesses. But we see much to be gained by encouraging households to save for future expenses and by encouraging households to keep their spending growth below their income growth. After the debt distress and financial fragility revealed in this last recession, when the household sector achieved an unprecedented deficit-spending position, it is hard to understand why this is even a source of dispute, but there are many who seem convinced a return to just a lighter, somewhat diluted version of the prior growth pattern, which was clearly dependent upon serial asset and credit bubbles, is the best way forward. We are certain Dr. Richebächer would find this s tance rather bizarre, but old habits and addictions don’t tend to die very easily.” (From Agoracom)