Saturday, July 31, 2010
Although gold continues to grab most of the attention in the precious metal world, its less glamorous sister, silver, may be more appealing, and for good reason.
First off, silver has many more uses than gold. It's used for numerous industrial purposes and nearly 55% of total silver fabrication is used for industrial purposes. Silver is commonly used in the electronics space and can be found in plasma display panels and printed circuit boards, as well as in the lining of refrigerators, for food storage containers, and for water purification. Additionally, the metal can be used as an antimicrobial to fight bacteria and as an antiseptic to treat fungal infections. Silver's industrial uses even span to the solar energy industry. As economies around the world continue to expand, the industrial demand for silver will likely follow. See also, "The Misleading Nature of Beating Estimates in the Mining Sector."
Another force that's likely to support silver is that valuations appear to be strong. In a nutshell, silver is cheap and depressed on a historical basis, when compared to its sister metal, gold. Gold is trading much higher than its long-term ratio of 16 times the price of silver, indicating that there's plenty of room for silver prices to run. Additionally, silver is nearly 70% below its all-time high witnessed in 1980 and well below its near-term high of $21 per ounce seen in 2008. (more)
By Charlie Gasparino,| FOXBusiness
Congressional Republicans are now ramping up their criticism of the secrecy surrounding another government agency, the Federal Reserve, which under the new financial regulatory overhaul gains vast new powers to regulate Wall Street firms and banks, yet receives minimal oversight, FOX Business Network has learned.
The new initiative, spearheaded by Congressman Spencer Bachus, a ranking member of the House Banking Committee, comes after a FOX detailed how the Securities and Exchange Commission, which polices the securities markets for wrongdoing, can now withhold more information from the public through new exemptions to the federal Freedom of Information Act created during the financial reform legislation that was recently signed into law by President Obama.
CNBC Senior News Editor
In the August edition of the ‘The Gloom, Boom & Doom Report’ Marc Faber questions whether the Dow could hit 1,000 as predicted by Robert Prechter, based on his interpretation of Elliot Waves, Fibonacci numbers and socioeconomic trends.
Prechter, who has written 13 books on finance, believes that the stock market is historically overvalued in terms of dividends and earnings, because of a "great rise in positive social mood."
But the mood changed in 2000 and the "trend toward negative social mood will lead to an economic contraction," according to Prechter.
"Small bear markets lead to recessions, big bear markets lead to depressions. The current bear market will be the biggest in nearly 300 years, so the depression will be correspondingly deep," Prechter said. (more)
The amount of debt that states are carrying spiked 10.3% last year to $460 billion, according to Moody's Investors Service. The debt is paid for through taxes and fees, making residents ultimately responsible.
And it's likely that states will turn to the bond markets even more this year as federal stimulus money dwindles, experts said. After all, officials face an additional $12 billion shortfall for the current fiscal year and a $72 billion gap for fiscal 2012, which starts next July 1. (more)
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Stocks were supported this month by strong quarterly financial results from major U.S. companies. About 75% of the roughly 300 companies in the S&P 500 that have reported earnings so far have beat analysts' estimates.
"Even though earnings and guidance have been better than expected, there's still skepticism in the market because jobs have been missing in action," said Alec Young, an equity strategist at Standard & Poor's. (more)