Friday, February 12, 2010

Gold price will surge to $5,000 in two years

Gold Prices will climb to $5,000 within two years due to US dollar weakness and significant buying by players in the hedge fund industry looking to preserve the value of their funds.

That is the opinion of New Zealand market trading expert Welles Wilder, who has previously been highlighted by publications such as Forbes and Barron's for his skill in the markets, reports.

His belief was revealed by another local trader Oli Hille, who trades in New Zealand's currency markets, and is currently writing a book, which is to be titled Creating the Perfect Lifestyle. (more)

Hourly Action In Gold From Trader Dan for Feb 11, 2010

Why silver price will boom to $50/oz

Silver remains very undervalued on a historical basis and is undervalued even against gold. While gold has begun to receive some interest from a small minority of retail investors, silver remains the preserve of relatively few contrarian investors and the media and financial press rarely, if ever, covers silver. And yet silver is quite likely in the intermediate stage of a bull market that will rival or surpass that of the 1970s.

Silver is currently worth less than $17.00 per ounce. It rose to a recent nominal high $20.88/oz in March 2008. After an 18 month period of correction and consolidation, silver looks set to challenge that high in the coming months. We continue to be bullish on gold and particularly silver and believe that silver will likely surpass its non inflation adjusted high of $48.70 per ounce and its inflation adjusted high of some $130 per ounce in the coming years. (more)

Faber: U.S., Western Europe Will Default on Debt

The U.S. and Western European governments will default on their debt, says Marc Faber, editor of the Gloom Boom & Doom Report.

Asked on CNBC whether he would buy Greek government debt, the investment guru responded, “I’m not interested in sovereign debt, because I think all governments will eventually default, including the U.S.”

He later amended that statement, saying emerging market countries with small debt burdens and large currency reserves are exempt.

“The problem is that emerging market economies today are much sounder in terms of debt-to-GDP ratios than the developed world, including the U.S. and Western Europe,” Faber said. (more)

Toyota Bulls Say Recall Makes Its Stock a Bargain

ou can hate the cars but still love the stock.

Lost in the flurry of headlines recently about Toyota Motor's recall over faulty gas pedals and brakes was news of a remarkable feat for an automaker these days: The Japanese company actually made a profit last quarter.

Which raises an intriguing possibility: If Toyota strings together more profitable quarters, will investors kick themselves someday for missing a chance to have bought a piece of what is still arguably a great company on the cheap?

Sean Thorpe, co-manager of foreign stock investments at Reed, Conner & Birdwell in Los Angeles, thinks so. (more)

Davos: The Bomb Shelter

Predators and parasites recently gathered in Davos to discuss the mounting problems of their prey. All present agreed the problem needed urgent attention.

Historian David Hackett Fisher describes this passing era as the period of Victorian Equilibrium. England’s Victorian Equilibrium, however, was built on banker’s credit, a foundation of sand; and like the story of Cinderella where the carriage turns into a pumpkin at midnight, the banker’s credit has now turned into defaulting debt and the fairy-tale world it built is collapsing.

Lies, lies and more lies

On February 5th, a Bloomberg headline reported: US Economy, Unemployment Unexpected Falls To 9.7%. Bloomberg’s headline wasattempting to convey a more positive outlook for those considering additional borrowings to help restart the banker’s stalled engine of credit and debt (their credit and your debt); but the following chart tells the real story about US unemployment, a far different version than the optimistic story being spun by Bloomberg: (more)

The Great Highway Robbery Continues: How The FDIC Is Legally Transferring Billions In Taxpayer Money To Hedge Funds

It is not a secret to anyone who has been closely following the FDIC's quasi criminal bank takeover practices over the past year, that acquirors of failed banks end up receiving a massive and risk-free gift in the form of taxpayer benefits via the FDIC when it comes to funding losses on a given bank acquisition. Should there be a short sale resulting in a loss to the full principal (not the cost basis mind you)? Not to worry, Sheila Bair is there to hand out taxpayer money to the hedge funds/banks owning the newly transferred assets. A recent example of this was the glaring insider trading which preceded the acquisition of failed AmTrust Bank by New York Community Bancorp, in which both NYB and those who bought calls in advance of information being made public, made massive illegal profits. And as the SEC continues to pretend like this episode never happened, we remind the intellectually subprime Mary Schapiro to finally pursue those involved, and will continue doing so for as long as it takes. But back to the FDIC: the folks at Think Big Work Small have compiled a terrific video detailing exactly how several hedge funds, currently owners of recently created shell holding company OneWest Bank, are picking apart the carcass of failed IndyMac, all the while encouraging short sales (instead of loan mods) as only that way do they get to benefit fully from the taxpayer funded FDIC loss-share arrangements which makes the IndyMac transaction an immediate slam dunk for everyone involved...except America's taxpayers, and the FDIC's ever depleting DIF reserve. (more)

How the Federal Reserve Created the US Recession

Putting Today's Record 30 Year Direct Take Down In Perspective

The chart below demonstrates how something is very busted when it comes to bond auctions recently. We have previously discussed the ever increasing proportion of Direct take downs in the short-end. Today, we saw a record explosion in the Direct take down for the longest bond purchasable. Just who are the Direct bidders? Whose orders are they executing? Are these merely a proxy for China or the Fed? What happens when that "mysterious" demand disappears? Nobody knows. Which is why Rick Santelli called this a failed auction. (more)

Peter Schiff On FOX Business 02/08/2010 - Hedging Against The FED