Round and round we go
07/December/2007 04:16 PM Filed in: Precious
Metals
Good Friday metal bugs. Lets jump right in
and see how the financial markets fared today.
The equity markets ended mixed today after a mid-week rally. Wall Street bet (hoped and prayed) that the easy money from a rate cut next week and government intervention (bailout) via the Bush mortgage plan, would prevent the economy from slipping into recession. Too bad eliminating moral hazard and inflating the currency hurts more than helps in the long run. Oil is trading below $90/barrel due to uncertainty with OPEC, and overall demand. Spot gold is down trading below $800/ounce due to the dollar bounce and the tumble of crude oil prices. Spot silver followed gold by closing down at $14.39/ounce. As the precious metals continue to consolidate in preparation of their next run up NOW is the time to protect your assets from devaluation and hedge yourself against the turmoil that is upon us.
The real estate market continues to deteriorate as national home prices showed the biggest quarterly drop in 25 years during the third quarter.
According to mortgage lenders' trade group, the rate of homeowners going into foreclosure hit a record high in the third quarter, while those late with their payments rose to the highest level since 1986.
U.S. retail sales fell 4.4% last week, the most since March. The biggest driver of our DEBTOR nation, consumption, is slowly evaporating. Our guess is that as Americans continue to lose their homes, Christmas shopping becomes less of a priority.
The non-farm payrolls report for November showed strong job growth, higher than analysts estimates. That is, of course if you believe the numbers. Our opinion is that government economic reporting is just as reliable/accurate as anything else the government is involved with. If you want a thorough analysis and understanding on how the government reports on the state of the economy we highly recommend subscribing to John Williams' monthly newsletter, "Shadow Government Statistics". John also provides alternate data sources to assist you in making more accurate financial decisions with relation to the economic outlook. You can find more information at his website, http://www.shadowstats.com .
As we approach next week the big question on everyone's mind is how much of a rate cut is helicopter Ben going to provide to his friends on Wall Street. We believe the financial markets (including the metals) have priced in a 25 basis point rate cut. If Bernanke decides to provide his friends with an early Christmas present, and cut by 50 basis points then look for the dollar to weaken and Gold to take off again.
Until next week. Trade safe.
Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Please do your own due diligence.
The equity markets ended mixed today after a mid-week rally. Wall Street bet (hoped and prayed) that the easy money from a rate cut next week and government intervention (bailout) via the Bush mortgage plan, would prevent the economy from slipping into recession. Too bad eliminating moral hazard and inflating the currency hurts more than helps in the long run. Oil is trading below $90/barrel due to uncertainty with OPEC, and overall demand. Spot gold is down trading below $800/ounce due to the dollar bounce and the tumble of crude oil prices. Spot silver followed gold by closing down at $14.39/ounce. As the precious metals continue to consolidate in preparation of their next run up NOW is the time to protect your assets from devaluation and hedge yourself against the turmoil that is upon us.
The real estate market continues to deteriorate as national home prices showed the biggest quarterly drop in 25 years during the third quarter.
According to mortgage lenders' trade group, the rate of homeowners going into foreclosure hit a record high in the third quarter, while those late with their payments rose to the highest level since 1986.
U.S. retail sales fell 4.4% last week, the most since March. The biggest driver of our DEBTOR nation, consumption, is slowly evaporating. Our guess is that as Americans continue to lose their homes, Christmas shopping becomes less of a priority.
The non-farm payrolls report for November showed strong job growth, higher than analysts estimates. That is, of course if you believe the numbers. Our opinion is that government economic reporting is just as reliable/accurate as anything else the government is involved with. If you want a thorough analysis and understanding on how the government reports on the state of the economy we highly recommend subscribing to John Williams' monthly newsletter, "Shadow Government Statistics". John also provides alternate data sources to assist you in making more accurate financial decisions with relation to the economic outlook. You can find more information at his website, http://www.shadowstats.com .
As we approach next week the big question on everyone's mind is how much of a rate cut is helicopter Ben going to provide to his friends on Wall Street. We believe the financial markets (including the metals) have priced in a 25 basis point rate cut. If Bernanke decides to provide his friends with an early Christmas present, and cut by 50 basis points then look for the dollar to weaken and Gold to take off again.
Until next week. Trade safe.
Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Please do your own due diligence.
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