Saturday, April 10, 2010


As Greek Bond Rates Soar, Bankruptcy Looms

As interest rates on Greek debt spiral upward again, the question facing Europe is no longer whether Athens has the political will to cut spending and raise taxes to curb its gaping budget deficit, but whether Greece will run out of money before it gets the chance to do so.

With the rate on 10-year Greek bonds reaching as high as 7.5 percent on Thursday, up from 6.5 just three days ago, the cost of insuring against a Greek default hit a record high.

The message from the market could not be clearer: artfully worded communiqu├ęs from Brussels will no longer suffice. To avoid bankruptcy, analysts said, Greece needs a bailout from Europe, and fast. (more)

World Financial Report, April 8, 2010

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China on ‘Treadmill to Hell’ Amid Bubble, Chanos Says

China’s property market is a bubble that may burst by as early as this year, according to hedge fund manager James Chanos.

The world’s third-biggest economy may need to keep up the pace of property investment because up to 60 percent of its gross domestic product relies on construction, said Chanos. The bubble may begin to “run its course” in late-2010 or 2011, he said in an interview on “The Charlie Rose Show” that will air on PBS and Bloomberg TV.

China is “on a treadmill to hell,” said Chanos, who said in January the nation is Dubai times a thousand. “They can’t afford to get off this heroin of property development. It is the only thing keeping the economic growth numbers growing.” (more)

Analyst Rubin: Oil to Hit Triple Digits, Set New High

Energy analyst Jeff Rubin says oil will reach triple digits before year’s end.

By the fourth quarter of this year, oil prices will be back in triple-digit range, and by next year oil prices will rise to record highs, taking out the high-water mark of $147 a barrel set before the recession began in 2008, Rubin says.

Oil fell to around $85 a barrel on Friday, retreating further from an 18-month high reached on Tuesday, after a credit agency cut Greece's debt rating and investors focused on healthy oil supplies.

"We’re barely out of the recession, and already we face prices that, just a few years ago, our government, our oil industry and our economists told us we would never see," he wrote in the Globe And Mail. (more)

The Economist April 10th - April 16th 2010

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China's Gold Quest

The World Gold Council predicts gold consumption in China will double in the next decade. Jewelry demand, investment demand, even industrial demand… they all factor in.

"This forecast seems reasonable," says Frank Holmes, "and it lines up with what I've long been saying about the profound evolution in China's economy -- domestic consumption is replacing exports as the growth engine as more poor Chinese move up into the middle class and from there into the ranks of the wealthy.

"China has a centuries-long cultural affinity for gold, so it makes sense that more middle class and wealthy would mean more gold sales.

"The line on the WGC chart above shows how investment demand for gold has rocketed up from next to nothing in 2001 to 80 tonnes (2.6 million troy ounces) last year, with the sharpest upswing coming after trading rules were liberalized in mid-2007.

"Over the same period, China's GDP roughly tripled. The Chinese are famous for their high savings rate, and the chart shows how important gold has become as a store of their growing wealth."

The Coming European Debt Wars

Government debt in Greece is just the first in a series of European debt bombs that are set to explode. The mortgage debts in post-Soviet economies and Iceland are more explosive. Although these countries are not in the Eurozone, most of their debts are denominated in euros. Some 87% of Latvia’s debts are in euros or other foreign currencies, and are owed mainly to Swedish banks, while Hungary and Romania owe euro-debts mainly to Austrian banks. So their government borrowing by non-euro members has been to support exchange rates to pay these private-sector debts to foreign banks, not to finance a domestic budget deficit as in Greece. (more)

To the US Department of Justice! (The World's Biggest Fraud!)

1. What are the names of companies, individuals, or organizations that are involved?

The CFTC, the Commodity Futures Trading Commission, is withholding the names, with the excuse given that they cannot reveal the names, because of statute. But, a statute, which may violate other laws, is no excuse for obstruction of justice, dereliction of duty, misprison of fraud, or conspiracy to defraud the United States.

The COMEX, owned by the CME Group, also has the data on who is primarily involved, as the antitrust violaters trade on their exchange.

JPMorgan Chase & Co. has been named by thousands of writers in the private sector, all over the internet, based on the reports of the BIS, the Bank of International Settlements and the OCC, the Office of the Comptroller of the Currency at the US Treasury, that they manipulate the precious metals markets by fraudulently selling metal that does not exist. This Bank report indicates that JPMorgan Chase & Co. is heavily involved, far more than any other, in derivatives, exceeding $72 trillion. (more)

Jim Rogers Discusses Commodities Market, Gold Prices

King World News- Harvey Lenny Organ Adrian Douglas on Gold & Silver

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China may raise rates soon, revalue yuan by Oct

China might increase interest rates as early as this month, but Beijing will probably not resume yuan appreciation as soon as that, a senior government economist said on Friday.

Another one-off currency revaluation looked unlikely, said Zhu Baoliang, chief economist at the State Information Center (SIC), a think-tank that comes under the National Development and Reform Commission, China's powerful planning agency.

"I believe a band widening is possible but another one-off revaluation is unlikely. The yuan might be pegged to a basket of currencies," he told Reuters. (more)

U.S. Stocks Rise as Inventories Point to Strengthening Economy

U.S. stocks rose, sending the Dow Jones Industrial Average briefly above 11,000 for the first time since September 2008, as growth in wholesale inventories added to signs the economy is strengthening.

Chevron Corp. led the Dow’s gain after saying its oil refineries returned to profitability. Dish Network Corp. and Abercrombie & Fitch Co. rallied at least 3.5 percent on analyst upgrades. Equities also advanced as European officials said they’re ready to bail out Greece if needed, assuaging concern a default by the nation will stifle the global economic recovery.

The S&P 500 gained 0.7 percent to an 18-month high of 1,194.37 at 4 p.m. in New York and rose 1.4 percent over the past five days for a sixth-straight weekly gain, its longest streak in a year. The Dow increased 70.28 points, or 0.6 percent, to 10,997.35 and reached as high as 11,000.98. (more)

BusinessWeek - 19 April 2010

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