The US Dollar Collapse is Imminent and there will be global economic catastrohpe when it is rejected as the currency for trade, former Malaysian prime minister Mahathir Mohamad said on Tuesday.
The US dollar was retaining some value because of fears of a global economic catastrophe if it was rejected, he told a conference of some 650 chief executives from 30 countries at a conference in Kota Kinabalu on Borneo.
"But the catastrophe will come one day because even the most powerful country in the world cannot repay loans amounting to seven trillion dollars," Mahathir said.
He said, Central banks worldwide were reducing their US dollar reserves and he suspected that Malaysia was also switching to other currencies.
The huge deficit meant that the US dollar had no backing but it continued to be used internationally because some people still accepted payments in US dollars, he said.
"But there will come a time when we will switch away from the US dollar and we have suggested the use of gold for international trade," he said.
Wednesday, March 30, 2005
Sunday, March 27, 2005
Three Gold Price Myths
Here are three myths about the gold price from elliotwave.com.
Myth One: The gold price rises during inflation.
The team at elliotwave.com say this myth has been busted because when the Federal Reserve raised short-term interest rates by a quarter-percentage point on Wednesday, the move apparently “set off alarms of rising inflationary pressure.” And, gold prices FELL to a five-week low.
Myth Two: The gold price and stocks move in opposite directions.
Again the team at elliotwave.com say this myth has been busted because, following rate-hike number seven, stocks supposedly stayed at a seven-week low as “investors were rattled by the Fed’s comments.” Again, gold prices also remained in the pits of a five-week low.
They also point out that blue-chip stocks have been falling in sync with the gold price for the past two weeks.
Myth Three: The news effects the gold price
They say this myth was busted because CNN money only reported that the Gold Price “tumbles after Fed’s comments,” But, elliotwave.com points out that the gold price began to decline after March 11.
The team at elliotwave.com on the 9th of March predicted that after gold price reached $447.30 an advance in the gold price would have been completed and that a powerful wave down would follow. Two days latter the gold price turned down and since then has lost 5%
You can get elliotwave.com's lattest prediction for the gold price by subscribing to their gold price forecast service.
Myth One: The gold price rises during inflation.
The team at elliotwave.com say this myth has been busted because when the Federal Reserve raised short-term interest rates by a quarter-percentage point on Wednesday, the move apparently “set off alarms of rising inflationary pressure.” And, gold prices FELL to a five-week low.
Myth Two: The gold price and stocks move in opposite directions.
Again the team at elliotwave.com say this myth has been busted because, following rate-hike number seven, stocks supposedly stayed at a seven-week low as “investors were rattled by the Fed’s comments.” Again, gold prices also remained in the pits of a five-week low.
They also point out that blue-chip stocks have been falling in sync with the gold price for the past two weeks.
Myth Three: The news effects the gold price
They say this myth was busted because CNN money only reported that the Gold Price “tumbles after Fed’s comments,” But, elliotwave.com points out that the gold price began to decline after March 11.
The team at elliotwave.com on the 9th of March predicted that after gold price reached $447.30 an advance in the gold price would have been completed and that a powerful wave down would follow. Two days latter the gold price turned down and since then has lost 5%
You can get elliotwave.com's lattest prediction for the gold price by subscribing to their gold price forecast service.
Saturday, March 26, 2005
Gold Near Five Week Low Due To Stonger Dollar
The gold price is near a five-week low on speculation the U.S. Federal Reserve will raise interest rates further, causing the US dollar to rise.
The Federal Open Market Committee on March 22 said ``pressures on inflation have picked up,'' boosting speculation the central bank may quicken the pace of rate rises. U.S.
Source: bloomberg.com
The Federal Open Market Committee on March 22 said ``pressures on inflation have picked up,'' boosting speculation the central bank may quicken the pace of rate rises. U.S.
Source: bloomberg.com
Saturday, March 12, 2005
Evidence of Rigging by Central Banks
Gold's Lagging Commodities is Evidence of Rigging by Central Banks, GATA Says
Gold's failure to keep up with exploding commodity prices, as it did during the last commodities boom in 1980, is more powerful evidence of surreptitious intervention by central banks in the gold market, the Gold Anti-Trust Action Committee said today.
Below is comparison of the CRB to the spot gold price in the last five months of 1980. The last five months of 1980 were the only times prior to this year when the CRB Index was above 300, GATA said. The lowest gold price during these months was $591.30 USD, and that price was registered as the CRB Index was falling in response to an increase in interest rates arranged by the Federal Reserve Board to attack inflation. Every other time in 1980 when the CRB Index was above 300, GATA said, gold was above $600 per ounce, more than $150 above where gold is priced today.
Wednesday's close on the CRB Index was 313.70 but the London PM spot gold price was only $437.25 and the New York Comex gold price was only $441.10. With the CRB Index where it is today, GATA said the price history of the last boom in commodities suggests that gold now should be priced between $591 and $647 per ounce -- and that does not adjust for the dollar's loss of purchasing power in the last 25 years.
Here is a chart of the CRB Index and spot gold prices at the end of the last six months of 1980:
Date CRB Spot Gold
----------------------------------------------------------------------
June 30, 1980 286.40 $647.4
July 31, 1980 302.30 $619.7
August 29, 1980 308.40 $ 635
September 30, 1980 319.40 $671.5
October 31, 1980 327.10 $ 636
November 28, 1980 334.80 $624.6
December 31, 1980 308.50 $591.3
Source: GATA.ORG
Gold's failure to keep up with exploding commodity prices, as it did during the last commodities boom in 1980, is more powerful evidence of surreptitious intervention by central banks in the gold market, the Gold Anti-Trust Action Committee said today.
Below is comparison of the CRB to the spot gold price in the last five months of 1980. The last five months of 1980 were the only times prior to this year when the CRB Index was above 300, GATA said. The lowest gold price during these months was $591.30 USD, and that price was registered as the CRB Index was falling in response to an increase in interest rates arranged by the Federal Reserve Board to attack inflation. Every other time in 1980 when the CRB Index was above 300, GATA said, gold was above $600 per ounce, more than $150 above where gold is priced today.
Wednesday's close on the CRB Index was 313.70 but the London PM spot gold price was only $437.25 and the New York Comex gold price was only $441.10. With the CRB Index where it is today, GATA said the price history of the last boom in commodities suggests that gold now should be priced between $591 and $647 per ounce -- and that does not adjust for the dollar's loss of purchasing power in the last 25 years.
Here is a chart of the CRB Index and spot gold prices at the end of the last six months of 1980:
Date CRB Spot Gold
----------------------------------------------------------------------
June 30, 1980 286.40 $647.4
July 31, 1980 302.30 $619.7
August 29, 1980 308.40 $ 635
September 30, 1980 319.40 $671.5
October 31, 1980 327.10 $ 636
November 28, 1980 334.80 $624.6
December 31, 1980 308.50 $591.3
Source: GATA.ORG
Friday, March 11, 2005
Gold Futures Hit 2005 High
U.S. gold futures reached a high for 2005 after the 2nd highest U.S. trade deficit on record.
Gold for April delivery at the COMEX division of the New York Mercantile Exchange gained $3.40 to end at $446.80 an ounce, which was the highest close for futures since Dec. 28 with an intra day high of $448.
Gold for April delivery at the COMEX division of the New York Mercantile Exchange gained $3.40 to end at $446.80 an ounce, which was the highest close for futures since Dec. 28 with an intra day high of $448.
2nd Highest US Trade Deficit
The US had the 2nd highest trade deficit on record being 58.3 billion in January which was 4.5 percent higher than December's $55.7 billion deficit and was just below the all time monthly record of $59.4 billion set last November.
Japan Considers Diversifying Foreign Reserves
"Japan should in general consider the necessity of
diversifying the investment of its foreign reserves", Japan's Prime Minister
Junichiro Koizumi said.
"I think it's necessary to diversify the investment destinations" of
foreign reserves, at the same time, we have to make a judgment in general, considering what's profitable and what's stable" Koizumi said.
Japan's has the worlds largest reserve assests with $840.6 billion, U.S. Dollars accounted for 63.8% of those reserves at the end of 2003, down from 66.9% in 2001. The government projects that unrealized losses in its foreign reserve holdings will reach about 11.4 trillion yen ($110 billion) by March 31.
diversifying the investment of its foreign reserves", Japan's Prime Minister
Junichiro Koizumi said.
"I think it's necessary to diversify the investment destinations" of
foreign reserves, at the same time, we have to make a judgment in general, considering what's profitable and what's stable" Koizumi said.
Japan's has the worlds largest reserve assests with $840.6 billion, U.S. Dollars accounted for 63.8% of those reserves at the end of 2003, down from 66.9% in 2001. The government projects that unrealized losses in its foreign reserve holdings will reach about 11.4 trillion yen ($110 billion) by March 31.
Wednesday, March 09, 2005
Russian Central Bank Gold Reserves Soar
The Russian Central Bank has announced that gold or hard currency reserves soared 7.7 per cent to a record $134.15 billion in January-February 2005.
Russian Central Bank gold reserves grew 260% in 2004. With an increase from $47.4 billion at the end of 2003 to $124.5 billion at the end of 2004.
Source: The Russia Journal Daily
Russian Central Bank gold reserves grew 260% in 2004. With an increase from $47.4 billion at the end of 2003 to $124.5 billion at the end of 2004.
Source: The Russia Journal Daily
Tuesday, March 08, 2005
Gold Supply Shortage
The world's biggest gold producers won't be able to sustain the millions of ounces mined every year, according to Edmonton-based consultant Ralph Bullis who spoke at the Prospectors & Developers Association of Canada conference in Toronto. "Because discoveries are not keeping pace with output and building new mines takes a long time", Bullis said.
"It is highly unlikely, at least in my opinion, that new discoveries of a world-class size can be made on an annual basis by each of the very large gold producers" Bullis said, defining "world class" as deposits of 5 million ounces of gold or more.
Kevin DeMeritt, President of Lear Financial, a precious metal asset management firm believes the stage is being set for a coming gold shortage. "The world's biggest mines, Barrick Gold and Newmont, have all talked about it. Barrick said that at current production rates, gold reserves will be depleted in 10 years", said Deritt.
Despite demand in China and India rappidly increasing,and the price of gold likely to rise, "That won't instantly turn gold production on. The president of Newmont said that if gold were $1,000 an ounce, it would still take four to seven years to open a new mine."
Source: yahoo.com and reuters.com
"It is highly unlikely, at least in my opinion, that new discoveries of a world-class size can be made on an annual basis by each of the very large gold producers" Bullis said, defining "world class" as deposits of 5 million ounces of gold or more.
Kevin DeMeritt, President of Lear Financial, a precious metal asset management firm believes the stage is being set for a coming gold shortage. "The world's biggest mines, Barrick Gold and Newmont, have all talked about it. Barrick said that at current production rates, gold reserves will be depleted in 10 years", said Deritt.
Despite demand in China and India rappidly increasing,and the price of gold likely to rise, "That won't instantly turn gold production on. The president of Newmont said that if gold were $1,000 an ounce, it would still take four to seven years to open a new mine."
Source: yahoo.com and reuters.com
Saturday, March 05, 2005
Major Turn in Markets in Next Two-Three Months
Due to better than expected US employment data a break down in the bonds market has been staved off and the bond market rallied. The bond market was at a critical spot in the charts and a further break down would have represented a major break down in the bond market. Although some economist point out that the jobs data is not as strong as they look, 100,000 of 200,000 are fictitious jobs from the births deaths model.
As a result of this the US stock market is likely to go higher in the next few months and the gold market will retest recent lows, setting up a major low in gold in late April or May. Good time to look for a buy signal, while the stock market and bond market will be lining up as major exit situations around the same time.
Source: FinancialSense.com News Hour
As a result of this the US stock market is likely to go higher in the next few months and the gold market will retest recent lows, setting up a major low in gold in late April or May. Good time to look for a buy signal, while the stock market and bond market will be lining up as major exit situations around the same time.
Source: FinancialSense.com News Hour
Thursday, March 03, 2005
Western Central Banks Have Rigged the Gold Market
A study published by the Gulf Research Centre foundation in Dubai has endorsed the Gold Anti-Trust Action Committee's findings that Western central and commercial banks have rigged the gold market and have much less gold than they claim to have and so are vulnerable to rising demand for gold. The study recommends that the oil-producing countries of the Middle East diversify their ever-depreciating U.S. dollar holdings into gold.
The study predicts that the gold price suppression scheme of the Western banks will fail just as their similar scheme of the 1960s, the so-called London Gold Pool, failed when the drain on Western gold reserves became too great. Once the scheme fails, the study says, "it will be highly difficult and expensive to accumulate a gold reserve. This is especially true for central banks that have low gold reserves like those in the Gulf Cooperation Council countries."
The study concludes: "The paper dollar standard is a dead man walking. Its debt, accumulated over the recent decades, is too high to be effectively repaid. It will either default or be inflated to such an extent that it will not 'hurt' to pay it back. Therefore, the accrued imbalances in global finance and the inherent weakness of worldwide growth models that rely on a continuance of U.S. deficit spending are likely to usher in a serious crisis of currency systems in coming years."
"Gold will be a suitable means of asset protection and ultimate payment in such a scenario. It will preserve the wealth of individuals and central banks alike and will ensure important maneuverability for the latter."
Source: The Role of Gold Digital
Another report on gold price manipulation which supports this study is by Sprott Asset Management of Toronto -- "Not Free Not Fair: The Long-Term Manipulation of the Gold Price" -- is accomplishing in the West.
The study predicts that the gold price suppression scheme of the Western banks will fail just as their similar scheme of the 1960s, the so-called London Gold Pool, failed when the drain on Western gold reserves became too great. Once the scheme fails, the study says, "it will be highly difficult and expensive to accumulate a gold reserve. This is especially true for central banks that have low gold reserves like those in the Gulf Cooperation Council countries."
The study concludes: "The paper dollar standard is a dead man walking. Its debt, accumulated over the recent decades, is too high to be effectively repaid. It will either default or be inflated to such an extent that it will not 'hurt' to pay it back. Therefore, the accrued imbalances in global finance and the inherent weakness of worldwide growth models that rely on a continuance of U.S. deficit spending are likely to usher in a serious crisis of currency systems in coming years."
"Gold will be a suitable means of asset protection and ultimate payment in such a scenario. It will preserve the wealth of individuals and central banks alike and will ensure important maneuverability for the latter."
Source: The Role of Gold Digital
Another report on gold price manipulation which supports this study is by Sprott Asset Management of Toronto -- "Not Free Not Fair: The Long-Term Manipulation of the Gold Price" -- is accomplishing in the West.
Wednesday, March 02, 2005
Gold Demand in China
Consumer demand for gold in the Chinese mainland increased 12.8 per cent last year from 2003 when the growth was only 1.7 per cent, according to the World Gold Council (WGC). The mainland's consumer demand for gold was 234 tonnes in 2004, up from 207.4 tonnes in 2003, according a report from the WGC.
Gold demand as retail investment in the mainland surged 53.1 per cent to 9.8 tonnes last year from 2003, according to the WGC.
China is the fourth gold consumer after Inda, the United States and Turkey.
The China Banking Regulatory Commission (CBRC) permited the marketing of investment gold products by commercial banks at the end of 2004. In the past, Chinese individuals were forbidden to own gold bullion.
China's three major State-owned commercial banks have been approved by the CBRC to conduct gold retail investment businesses.
With several other banks finding ways to do the businesses prior to the CBRC's nod, gold retail investment demand in the mainland increased to 4 tonnes in the fourth quarter of 2004 from 1.7 tonnes in the third quarter.
The Shanghai gold exchange was launched in 2002 and now has 108 trading members, including commercial banks, gold producers and processors in the mainland. 665.3 tonnes of gold was traded in 2004, up 41.35 per cent from the previous year.
Source: China View
Gold demand as retail investment in the mainland surged 53.1 per cent to 9.8 tonnes last year from 2003, according to the WGC.
China is the fourth gold consumer after Inda, the United States and Turkey.
The China Banking Regulatory Commission (CBRC) permited the marketing of investment gold products by commercial banks at the end of 2004. In the past, Chinese individuals were forbidden to own gold bullion.
China's three major State-owned commercial banks have been approved by the CBRC to conduct gold retail investment businesses.
With several other banks finding ways to do the businesses prior to the CBRC's nod, gold retail investment demand in the mainland increased to 4 tonnes in the fourth quarter of 2004 from 1.7 tonnes in the third quarter.
The Shanghai gold exchange was launched in 2002 and now has 108 trading members, including commercial banks, gold producers and processors in the mainland. 665.3 tonnes of gold was traded in 2004, up 41.35 per cent from the previous year.
Source: China View
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