Tuesday, January 19, 2010
We have often reminded readers in different GEAB issues that gold constitutes both a medium/long term investment intended to protect one’s capital against the risk of a loss in value of paper currencies and financial assets, and an eventual means of payment in the event of a very serious monetary crisis. In these two cases the choice of placing a portion of one’s assets in gold is a response to anticipating events and risks in the coming years (and not the coming weeks or months). For this GEAB N°41, a special edition at the beginning of a new decade, it seems opportune to LEAP/E2020 to put forward its anticipations on gold’s progress for 2010 – 2020, completing what the team wrote in issue N°34 of the GEAB in April 2009. (more)
This week ETFS physical platinum shares PPLT was holding 89,948 ounces of platinum, while the ETFS physical palladium shares PALL had 99,977 ounces of palladium,
according to ETF Securities’ website.
The new exchange products are expected to give US investors easier access to the industrial metals, which have already rallied on hopes of more fund-based stockpiling. (more)
In his weekly column in Forbes, along with his collaborator, Arpitha Bykere, a research analyst, Roubini, now a professor of economics at New York University, said that the decisions by governments in 2008 and 2009 to do "whatever it takes" to be a backstop their financial systems and keep their economies afloat temporarily eased investor concerns.
“But if countries remain biased toward continuing with loose fiscal and monetary policies to support growth, rather than focusing on fiscal consolidation, investors will become increasingly concerned about fiscal sustainability and gradually move out of debt markets they have long considered safe havens,” writes Roubini. (more)
But Harvard economist Ken Rogoff isn’t so sure.
Sustained low interest rates may well spark a bubble in the junk bond market, the former IMF chief economist told Bloomberg.
“I care when there’s massive borrowing, especially short-term borrowing, that’s fueling asset-price rising. That I think is a big cause for concern.”
Junk bonds returned 57.5 percent last year, and many junk bond fund managers see more gains ahead. (more)
Can Canada restitch the fraying financial safety net citizens count on when we stop working?
On Dec. 17, federal and provincial finance ministers will meet in Whitehorse for talks focussing on retirement and pension reform. Hopes are high for an historic moment -- the dawn of "Pensioncare."
Fears are equally high -- that the history will have more to do with squandered opportunities and fumbled balls.
Triggering this confab is the growing consensus that Canada needs to figure out a way to get pensions for people who don't have them, and to shore up the retirement savings for people who aren't accumulating what they expected. (more)