Thursday, August 4, 2011

Stocks Nose-Dive More than 500 Points Amid Global Fears

Gains from the entire year gone in one day. Where do you invest now?
Stocks spiraled downward Thursday as investors buckled under the strain of the global economic slowdown and the failure of policy makers to stabilize financial markets.

The selling began in Europe and continued in the U.S., where stocks plunged from the opening bell. The Dow Jones Industrial Average posted its worst point drop since the financial crisis in December 2008, falling 512.76 points, or 4.31%, to 11383.68. Oil and other commodities were also hammered. Even gold was a safe haven no more as prices fell. Tokyo's market slid on Friday morning, falling more than 4% in early trading.

Stocks Nose-Dive Amid Global Fears - WSJ.com

Gold Heading Toward Record as Investors Look for Safe Haven

How high will gold go by the end of the year?

Some are saying $2000 an ounce. We think it will be even higher than that, maybe $2500. What do you think? Comments below.
Gold traded near an all-time high as investors sought a refuge from depreciating currencies amid concern the U.S. Federal Reserve may provide additional stimulus as the economic recovery falters.

Immediate-delivery gold, which jumped to a record $1,672.80 an ounce yesterday, gained as much as 0.5 percent to $1,669.35, before trading at $1,662.05 at 2:36 p.m. in Singapore. Spot gold has rallied 2.4 percent this week as investors sought haven assets on concern that debt problems in the U.S. and Europe will slow growth. Holdings in exchange-traded products rose to 2,178.467 metric tons yesterday, the highest level ever.

Gold May Climb Toward Record as Global Slowdown Increases Demand for Haven - Bloomberg

Analysis: Downgrade of US Credit Rating Could Accelerate Dollar Decline

Well, duh! And country with poor credit is going to be a bad investment risk. In fact, many are saying that the marketplace has already "downgraded" the US as investments are moving out of the country and into other "safer" areas.
A downgrade to the U.S. sovereign credit rating could open up a new world of pain for the dollar.  Already reeling from low interest rates, slow economic growth, and foreign investors eager to diversify away from U.S. assets, the loss of AAA status could cement the view the dollar is no longer the safest harbor in a troubled world.

The risk of a downgrade remains real even after Washington's $2.1 trillion budget savings deal, since it fell well short of the $4 trillion Standard & Poor's said would be enough to support the AAA rating with a stable outlook.

That it took so much drama to produce such a limited round of cuts has disappointed investors who had grown weary of fiscal weakness during budget crises in the euro zone countries.  "A debt ceiling raised plus downgrade equals weak dollar," said Jonathan Lewis, founding principal of Samson Capital Advisors in New York, which manages assets of $7 billion.
Analysis: U.S. downgrade could accelerate dollar decline | Reuters

Wednesday, August 3, 2011

Video: Russians Say 'US Dollar as Reserve Currency Vulnerable'

Russian Prime Minister Vladimir Putin's calls for a reserve currency other than the dollar come at a time when the US dollar is at its most vulnerable. Press TV talks with Larry Birns, Director, Council on Hemispheric Affairs in Washington, who takes Putin's statement into account with the fragility of the US House's agreement to raise the debt ceiling.

Gold Hits Record High on US Economic Woes

Are you invested in gold? Should you be?  If not, is it too late to get in?

Your comments below.
Gold hit a second successive record high on Wednesday, driven by deepening fears over the spread of the European debt crisis and its impact on regional growth, while data showed a number of central banks including Thailand bought gold in June.

The United States managed to avert an unprecedented debt default on Tuesday after lawmakers agreed to raise the country's borrowing limit. But, the focus turned to credit ratings agencies, which have warned the country could lose its top-notch rating as its finances remain fragile.

The nervousness over the U.S. economy was compounded by the latest developments in Europe, where Italian bond yields rose to their highest in over a decade above 6 percent, a level widely viewed as unsustainable, adding to the lure of gold as a safe-haven investment.

PRECIOUS-Gold hits record as debt worries mount, Thailand buys | Reuters

Tuesday, August 2, 2011

Professor: US Default Could Be a Good Thing

Could the US debt default actually be a good thing? One college professor seems to think so.
One Bay Area professor has said that the deal to increase the Federal debt ceiling is no cause for celebration.  San Jose State Economics Professor Jeff Hummel has said it would have been a good thing if the government had defaulted on its debt.

“I think that a treasury default is inevitable, and has been inevitable for a long time,” said Hummel.  Hummel said he believes the U.S. should go beyond default and repudiate the debt – essentially saying we have not intention to pay the debt back in its entirety.

He wants the government to enact immediate governmental reform to encourage elected leaders to be more fiscally responsible in the future.  “It would make it more difficult for the U.S. Government to borrow, so it would be a balanced budget with real teeth,” said Hummel.
SJSU Professor Says Default Preferable To Debt Deal « CBS San Francisco

Stock Market Down as Concern Over Weak Economy Grows

The dollar is up slightly, but the outlook for the US economy is looking bleaker.  Are we headed for a double-dip recession? Your comments below.
A sell-off is erasing all of the year's gains in the stock market. Major market indexes fell more than 2 percent Tuesday as investors reacted to more signs of weakness in the U.S. economy and poor earnings from several big companies.

The Dow Jones industrial average plummeted 265 points, to 11,866, a loss of nearly 2.2 percent. The Standard & Poor's 500 index dropped 2.6 percent and the technology-heavy Nasdaq fell 2.8 percent.  The broader stock market is on pace for its longest losing streak in two years.

"The market is starting to wonder where the growth is going to come from," said Nick Kalivas, a vice president of financial research at MF Global. "It hasn't hit the panic button yet, but that's where we're drifting."

Behind the sharp decline in stocks: A series of weak economic reports. The Commerce Department reported that consumers cut their spending in June for the first time in nearly two years. Analysts had predicted a slight increase. Incomes also rose by the smallest amount since September, reflecting a weak job market.
Stocks Slump As Concerns About Economy Grow : NPR

Moody's: US Credit Rating Remains at AAA, But Outlook Remains Negative

The debt crisis may be "solved" but the US government and the US dollar aren't out of the woods yet.
Moody's Investors Service on Tuesday confirmed its Aaa rating of the United States, citing the decision to raise the debt limit, but assigned a negative outlook to the rating, pressuring lawmakers to create a long-term fiscal consolidation plan. Moody's assigned a negative outlook to the rating.

The ratings agency confirmed the United States' Aaa rating after congressional lawmakers agreed to raise the country's debt ceiling, which will allow the Treasury to keep servicing U.S. debt obligations.
Moody's confirms U.S. rating at AAA, outlook negative | Reuters

Video: 8/1/2011 - Peter Schiff On Freedom Watch - You Cannot Own The Dollar Or Dollar Denominated Debt!

Schiff makes another prediction. How will it impact your future investments?

Monday, August 1, 2011

World Warms of Disaster if No US Debt Deal Reached

Has the US Debt Train finally reached the station? Is it time to get off, or pay an additional toll and keep riding it further?
Governments and policy makers around the world warned of the risk of financial disaster if Washington fails to raise the U.S. debt ceiling. As Congress haggled over a deal to stave off the risk of an unprecedented U.S. default, British and Japanese officials on Sunday said failure could hurt households across the globe.

"The world is watching the United States with trepidation, with anxiety, with concern, but also with hope," International Monetary Fund Managing Director Christine Lagarde told CNN.  "Instability is never a good idea, never a good idea. And this level of uncertainty, the trepidation arising from August 2, is bringing about a lot of instability," she added.
World warns of disaster if no debt deal done | Reuters

Sunday, July 31, 2011

Ron Paul's Urgent Warning on the Inevitable Collapse of the US Dollar

Is this man the only one in the US government who sees when this thing is heading? Or is he crazy and WAY off the mark?

Your comments below.
Republican presidential candidate Ron Paul has issued an urgent warning to the public about the collapse of the U.S. dollar that now appears to be inevitable.due to political bickering and a dead-lock in congress on how to deal with the nation's debt ceiling crisis.

In the video attached to this page, Ron Paul warns that at U.S. dollar collapse followed by surging interest rates and eventual martial law will be the result of an economic collapse due to political grand standing in Washington.
Ron Paul’s Urgent Warning On The Inevitable Collapse Of The Dollar - Jersey City Civil Rights | Examiner.com

US Debt Crisis: Markets Focus on Implications of a Default

Yeah, it looks like the US won't default on its debt after all, but that doesn't mean everyone thinks it won't happen at some point in the future. And then what?
Despite a debt deal not looking any closer, the reality is that one will be made, because the alternative is unthinkable. If no deal were struck by August 2, default would soon follow as the Government would quickly be unable to meet payments for things like interest on its debt, welfare benefit and military pensions.

We would see the dollar collapse, which would jolt global trade. The dollar is the world’s reserve currency, underpinning global financial systems. Globally, countries hold US dollars, US debt and dollar-denominated debt. On default, the world would face a financial crisis of significant proportions. We could see gold breaking through $2000 in the short term, along with widespread political unrest.

US debt crisis: markets focus on implications of a default - Telegraph

Breaking US Dollar Collapse News

What's Behind the Decline of the US Dollar?

This is one the of the best and simplest explanations we have seen:
The U.S. dollar's downward slide is accelerating as low interest rates, inflation concerns and the massive federal budget deficit undermine the currency. - Wall Street Journal, April 23, 2011
Interestingly, the Federal Reserve is responsible for, or an active participant in all three of these factors.