Oldtent Archives 2007 - 2008

most votes are to ‘buy silver’.  That’s what I voted and interesting that a few others are also on board the physical silver route.  Cheers.  Equiz.

AND THE GAS TAX IN CANADA .. WHAT……… A 1/3 of the price hit .. ????? close to $2,00 per.. is this about right .. give or take …

That is $4.99 per american gallon, or $6/imperial gallon…. Yahoo!!! glad I live in an Oil rich province….

…I voted a second time on another laptop…

…I hit the button beside ” Stuff it up Paulson’s xxx”

….and buy did that ever feel good….

…anybody know a good doctor for that kind of thing ?

the crude is running practically straight up. look for some correction or sideways movement at about $126.00. if that doesn’t hold, the $135.50 area is the next stop. i may need to get the tack out and oiled soon. oil at $135. bbl translates to gasoline over $4.50 a gallon at the pump.

rno

…..I think you just inspired me….I have been looking for what the BLS stands for…….I think I know now…

….BLS = Balony Sandwich !

“There is a `too big to fail’ thing here and the banks would have pretty big negative repercussions for themselves if they brought Centro down,” Andrew Rosivach, an analyst at Credit Suisse Group in Sydney, said today.

Centro creditors including JPMorgan Chase & Co. and National Australia Bank Ltd., the country’s biggest by assets, face earnings declines after the U.S. subprime collapse drove up borrowing costs and forced them to set aside more money against bad loans. St. George Bank, the nation’s fifth-largest, this week posted its first profit decline in six years after increasing provisions against credits to companies including Centro.

This is “only” the fourth time the company has stated they could not pay there creditors. A mere 6.4 Billion dollars. Maybe the Australian government will bail out J.P.Morgan.

And, of course as George Souraus (Spelling?) stated , the worse of the credit crisis is over………..NOT

May 8 (Bloomberg) — Asian stocks fell for a second day, led by financial companies, on concern new disclosure requirements for U.S. investment banks will expose further credit-related losses.

Mizuho Financial Group Inc., Japan’s third-largest publicly traded bank, and Kookmin Bank, South Korea’s largest, led declines after U.S. regulators said investment banks will be required to disclose capital and liquidity levels.

“The fact that it’s been taken negatively seems to suggest there are some skeletons in the closet,” said Winston Sammut, managing director of Maxim Asset Management Ltd. in Sydney. “This is a negative in a global sense because of the contagion that could follow on from that.”

How could a govt dept. know anything about “productivity”?

I’ve given up on all the stats.  The numbers are so big, and so are the lies, that it is difficult to see the truth in anything.  Fairly safe to say that good news is either spin or untrue, and bad news is probably better than it really is!

And commentators who actually use stats. like the official GDP numbers to make forecasts or form opinions, such as Mauldin or Russell, just can’t be taken seriously.

WASHINGTON, May 7 (Reuters) - U.S. businesses cut back on worker hours during the first three months of this year as the economy slowed, driving up productivity to a higher-than-expected 2.2 percent annual pace, a government report on Wednesday showed.

Economists polled by Reuters were expecting nonfarm worker productivity, or hourly output per worker, to increase at a 1.5 percent annualized rate.

The Labor Department said worker hours fell at a 1.8 percent rate during the quarter, making it the biggest decline since the start of 2003.

Unit labor costs, a gauge of inflation and profit pressures under close scrutiny by the Federal Reserve, rose at a 2.2 percent annual pace, slower than the 2.5 percent increases analysts were expecting.

Compensation per hour rose at a 4.4 percent annual rate, but adjusted for inflation, it rose a scant 0.1 percent.

-END-

Throwing the above into the financial market/US economic mix, it is reasonable to conclude that stress in our systems is actually increasing, not on the way out.

During the height of the mortgage fiasco, the Fed was lowering rates to combat one disaster after another. It threw a blind eye to the obvious growing inflation problem at the time. NOW, it appears to have run out of that option. After lowering rates extravagantly and injecting untold liquidity into the markets, there is a growing understanding and yearning for the Fed to regain some credibility. The dollar bulls are banking on it.

But, will the Fed be forced to blink again, as they have all along, because the US economy is so fragile and the housing sector ready to completely implode? My bet is yes. And that yes will set us up for an explosive move in gold which even The Gold Cartel will not be able to handle.

Outside of the surge in crude oil, the big story today was the dollar’s rise.

Roger’s inside source has been spot on after he told us the Europeans went to Bush and told him to get the dollar up, or else. The latest:

Hi Bill, Here is an update from “inside sources”. They are going to try to keep the dollar up due to massive world complaints. They also want to keep gold tied up tight. That is their plan.

Interesting enough Jim Willie said this morning in his report that he sees gold over $1200 and silver north of $26 in a few months. This is due to further bond blow-ups in Alt-A failures putting the banks back in the panic mode. I will go with Willie’s forecast.
GO GATA,
Roger

And, they certainly have done a job on gold. Gold traded $1033 with crude oil at $108, thought to be a sky high price at the time. Now look at the price discrepancies between the two. That is all Gold Cartel related.

Yep. Same old, same old.
Still rising. Another All Time High.
The Mother of All Bull Markets lives.
GOLD’s 300 DMA now at $773.44 - Live it, love it!
New target now is $1,153.66

JBI

21,547,310 . . . . . . . . . . .

SP 500 and Gold: Indications of a Carry Trade

This chart compares the recent performance of Gold and the SP 500 in their twelve week moving averages of year over year change.

We use positions in gold to hedge movements in the SP 500. The nature of their inversion could be attributed to a ‘flight to safety’ position for gold, or the use of gold as an instrument of the carry trade as are the yen and the swiss franc.

The flight to safety notion is easy to understand and relatively well established.

The idea of the carry trade is that gold, like the yen and the swiss franc, can be borrowed for a nominally low interest rate and then sold, with the proceeds being invested in other instruments. In the case of the yen and the swiss franc their government bonds have notoriously low interest rates. In the case of gold, the central banks lease their gold to private parties at very low interest rates and then those parties sell the gold, and use the proceeds.

It will be interesting to see the strains that occur in this end of the carry trade since the largest supply of readily available gold is being held by the central banks themselves. Where will the large traders go when they need to ‘pay back’ the gold which they borrowed and sold?

This is the czse one can make that the central bank gold sales, including those of the IMF, are really being conducted to allow the large trading banks to cover their short gold positions to the central banks themselves!

Posted by Jesse at 11:35 AM

http://jessescrossroadscafe.blogspot.com/

got your message today and will call you tomorrow when I get to a land line-cannot call out of States with mobile service. After your message, this kept going through my head…….
www.youtube.com/watch?v=QPlMmwOq7U8

GOLD OPPORTUNITY & SILVER PLATTER
The opportunities given today in gold & silver will be written about for another few years. The prices offered in early 2008 will be seen as tremendous bargains. Price bargains were last seen in August 2007, in September 2006, and in mid-2005. The breakout of gold past the elusive 700 mark foretold the rally not just to 1000 but to 2000 and higher. It unleashed a new era. Ditto for silver, which rose past the elusive 15.50 level. Doing so foretold a rally not just to 20 but to 50. Give it time. Things are unraveling. Systems are broken. Solutions are nowhere. All efforts have an inflation stench to them. Desperation has entered central banker offices.

The gold price has found support off the 200-day moving average in classic form. The triple leg correction off the 1020 high is also a classic long-term pattern. It guarantees a firm foundation for the assault on 1000 with stable success. Note how the 1000 mark was eclipsed, but from a base around 650 to 670. The next base will be 850 or so. The silver price movement and patterns are similar. However, silver is heading to the heavens in price, joining its platinum brother and palladium cousin. Gold will be stuck fighting political wars, but making strong gains. The gold/silver ratio will show pronounced improvement in favor of silver in the next two to three years. Silver is in default on a nearly global basis. COMEX delivery of silver is interfered with. Silver coin dealers have almost nothing to sell. Even the USMint has halted production of silver eagles! So silver price has declined amidst profound shortages? The stage is set for huge uplegs in the silver price. Gold will rise in concert.

The triggers for the USDollar on the downside, and for gold & silver on the upside are more big bank bond losses. Nevermind the cause being the housing price declines. That has been ignored. When banks announce further big bond losses, the winds will change very rapidly, and with anger by the people. Rating agencies are cooperating in ways, but not offering ratings on debt securities in certain bond types. Yet they also are issuing huge downgrades of typically safe asset backed bonds. This summer will involve a very very rude awakening. The reality of recession, housing decline, and bank losses will undo the positive attitudes that are lifting the subprime USDollar and stock prices broadly