Friday, November 27, 2009


How to Invest in Gold Mania

“There’s no doubt in my mind that we’ll have a mania in gold. And because the gold and especially silver markets are so tiny, the rush into them will be like trying to push the contents of Hoover Dam through a garden hose. Our positions will go absolutely ballistic.” – Doug Casey, September 2009

There’s certain to be a rush into gold and silver, and buying before Main Street catches gold fever is the only way to play this trend. Because when Midas fever hits, prices will explode to the upside, for both the metals and the stocks. How do we know that?

First, let’s look at gold. If we added up all the gold ever mined on the planet, its total value would equal no more than $5 trillion at today’s prices. Yet, look at how this compares to the debt and bailouts and other monetary mischief of current governments… (more)

California Housing Market Turns Corner, Realtors Say

California, one-time hub of subprime mortgage lending and the nation’s leader in home foreclosures, has turned the corner toward a housing recovery, according to the state Association of Realtors.

Single-family home prices in California rose for the eighth consecutive month in October. The median cost of an existing, detached house gained 0.3 percent from the previous month to $297,500. Prices dropped about 3.2 percent from a year earlier, compared with annual declines of 7.3 percent in September and 17 percent in August.

“California has hit and passed the bottom of this real estate cycle,” Leslie Appleton-Young, vice president and chief economist of the Los Angeles-based Realtors group, said in a statement today. (more)

Mortgage Rates in U.S. Match Record Low Set in April

Fixed 30-year mortgage rates dropped for a fourth consecutive week, matching a record low set in April, in a decline that may further support increasing sales in the battered housing market.

The rate dropped to 4.78 percent from 4.83 percent last week, mortgage buyer Freddie Mac of McLean, Virginia, said today in a statement. The average 15-year rate was 4.29 percent.

Low mortgage costs and a tax credit for first-time homebuyers are helping increase demand for property, putting existing home sales on pace to hit 6.1 million this year. A falling number of unsold homes is also beginning to stabilize prices. The S&P/Case-Shiller home-price index rose 0.27 percent in September from August, the fourth consecutive gain. (more)

Treasuries Rise Most in Two Weeks on Dubai’s Debt Payment Delay

Treasuries rose the most in almost two weeks after a Dubai proposal to delay debt payments set off a slide in stocks and higher-yielding assets worldwide.

Ten-year Treasury yields fell toward the lowest level in seven weeks as the yen strengthened to a 14-year high versus the dollar, boosting speculation the Bank of Japan will intervene in the currency markets. Treasuries headed for a third weekly gain on speculation the Federal Reserve will avoid raising interest rates until the third quarter of next year. U.S. markets were closed yesterday for the Thanksgiving holiday.

“The Dubai issue has caused a flight-to-quality move, which is positive for Treasuries,” said Hiromasa Nakamura, a senior investor in Tokyo at Mizuho Asset Management Co., which oversees the equivalent of $21 billion and is part of Japan’s second-largest bank. “The Fed will keep low interest rates for a long time due to low inflation and the continuing credit crunch. That’s supportive for shorter-zone Treasury notes.” (more)

India plans to buy more gold from IMF

India is open to buying more gold from the International Monetary Fund (IMF). It bought 200 tonnes for $6.7 billion on November 3. The Reserve Bank of India (RBI) may well buy IMF’s remaining hoard of 201.3 tonnes on acceptable terms, which are now under negotiation.
A government official said that the additional purchase would depend on the “successful pitching by RBI”. “RBI is an independent body, and the government does not interfere in its affairs. It will get the gold if its bid is successful and at the price it has offered,” said the official.

RBI did not respond to Financial Chronicle questions if it was bidding for the remaining IMF gold. The purchase of the first lot of 200 tonnes, RBI had said at the time, was a part of its foreign exchange reserves management operations. (more)

Dubai in deep water as ripples from debt crisis spread

Fears of a dangerous new phase in the economic crisis swept around the globe yesterday as traders responded to the shock announcement that a debt-laden Dubai state corporation was unable to meet its interest bill.

Shares plunged, weak currencies were battered and more than £14 billion was wiped from the value of British banks on fears that they would be left nursing new losses.

Nervous traders transferred the focus of their anxieties from the risk of companies failing to the risk of nation states defaulting. Investors owed money by Mexico, Russia and Greece saw the price of insuring themselves against default rocket. (more)

An Especially Bullish Gold Prediction: $8,000