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Gold Buying by Central Banks Signals Sell as Past Haunts Future

Some of the biggest buyers of gold may be sending the strongest signal to sell it, if past performance is indicative of future results.

Central banks, holding about 18 percent of all gold ever mined, are expanding their reserves for the first time in a generation as a nine-year bull market drives prices to a record.

The banks will buy 13.8 million ounces (429 metric tons) this year, worth $15.5 billion, for the first net expansion in reserves since 1988, New York-based researcher CPM Group estimates. Gold fell 15 percent that year and took another 15 years to trade again at the same price as central banks from Switzerland to the U.K. cut their holdings. (more)

The True Danger Lurking Behind 0.00% Treasury Yields and The 1-3-6 Rule Part I

Many a moon ago, a strange comment was made to me by what might be called a ’sage’ in the idea of trading in markets of all types. If it appeared that too much money was pouring into one particular investment or vehicle, then something was wrong with the efficient functioning of that market. Forever and a day I ignored this sage and probably should not have. Think about what we have witnessed since the great “crisis” began. In February of 2007 when the first cracks became evident that our subprime society was filled with cracks and that an earthquake was imminent with the failure of several medium sized mortgage lenders, the notion that we should expect an all out collapse was there and certain celebrity investors and talking heads made billions from the idiocy and misfortunes of those who thought that nothing could be whipped into something profitable and the residue they wiped on the curb by that fire hydrant was actually gold. (more)

The Return of Gold and Silver Eagle Rationing

In a return to the situation experienced during most of 2008 and the first half of 2009, the limited number of gold and silver bullion coins available from the US Mint are subject to rationing.

US Mint bullion coins are not sold directly to the public. These coins are distributed through a network of authorized purchasers, who resell the coins to other bullion dealers and the public. During times when demand for the bullion coins has exceeded the amount the US Mint was able to supply, the Mint has rationed coins at the authorized purchaser level through an "allocation program."

On November 25, 2009, the US Mint had announced the suspension of sales for one ounce American Gold Eagle and American Silver Eagle bullion coins. Sales of the Silver Eagles resumed on December 7, 2009, but sales were subject to rationing. Sales of the one ounce Gold Eagles will resume tomorrow December 15, also subject to allocation. (more)

Airlines in Deeper Trouble than Forecast

Airline losses in 2010 will total $5.6 billion, 47 percent wider than an earlier forecast, as oil prices rise while carriers compete for passengers with lower fares, the International Air Transport Association said.

Projected losses for 2010 are about half the $11 billion deficit that IATA predicts for this year. Passenger demand, after a decline of 4.1 percent in 2009, may grow by 4.5 percent in 2010 as the industry rebounds from the recession, IATA General Director Giovanni Bisignani said today in Geneva.

"Fuel costs are rising and yields are a continuing disaster," Bisignani said. Yields, or average fares, fell 12 percent in 2009 and will remain at depressed levels, he said.

The group had forecast in September that the industrywide loss in 2010 would be $3.8 billion. IATA said today that global revenue will rise by 4.9 percent to $478 billion in 2010, below the peak of $535 billion in 2008. (more)

Investors Flock to Inflation Hedges

Investors are pouring money into mutual funds and exchange traded funds that hold inflation-protected bonds and commodities as protection against inflation.

The worry is that the massive fiscal and monetary stimulus implemented to fight the recession won’t be withdrawn quickly enough to avoid a jump in inflation.

In November alone, investors allocated $3.9 billion to commodity-related mutual funds and ETFs and $2 billion to mutual funds holding inflation-protected bonds, according to research firm Morningstar.

Even stock funds are seeking hedges against inflation, putting money into basic materials companies and companies that can raise prices. (more)

Deprive banking and other financial businesses of the income they gain from credit and debit card services, fees, penalties and interest

Big Banking is out of control. Many corporate financial institutions, considered too big to fail, received a share of a trillion dollars of taxpayer money. To thank us, they are hiking interest rates on existing credit card debt, lowering and cancelling small business credit lines, and imposing more and higher fees and penalties with impunity.

As taxpayers, workers, citizens and merchants we can fight back. Not with letters to the editor nor with calls to our government representatives. There is an easy, immediate and direct path toward banking and monetary reform that benefits people, not corporations, through everyday transactions in the marketplace.

Use cash. (more)

Pillaging the Average American: Wall Street Paying Back Bailouts with Bailouts

In the last few weeks the corporatocracy has gone on a massive Madison Avenue public relations tour touting the great job banks are doing and how they are paying back the taxpayer for the generous gift of life. Instead of working with small business or lowering credit card rates banks have taken it upon their shoulders to issue record breaking bonuses. It is true that banks are paying back TARP handouts yet few are focusing on how the banks have made profits in the last 9 months since those dismal days of March. There is also this convenient avoidance of fact that some $14 trillion in bailouts have been made to banks and Wall Street. The TARP repayments amount to a few hundred billion, no small amount, but a fraction of the real cost to the American taxpayer. The average American has benefitted very little from the corporatocracy handout to their banking colleagues. (more)