sovereign debt

Commodities are Poised to Head Higher

Having lived through the 70s, it’s hard to look back on those days without having a good chuckle… What with disco, bell bottoms, and all of that hair, the “me decade” seems kind of comical compared to what followed it. But one thing that definitely wasn’t groovy back then was the misery index. Talk about a bummer. Created by economist Arthur Okun, the misery index was calculated by adding the unemployment rate to the inflation rate. Naturally, the higher the number turned out to be, the greater the level of misery. A 70s rerun But as it turned out, the misery index wasn’t just some tool used by economists to put a hard number on the suffering; in the hands of James Earl Carter, it actually became a ticket to the White House. During the presidential campaign of 1976, Candidate Carter made frequent references to the misery index, stating that no man responsible for a misery index that high had a right to even ask to be president. Of course, Carter was referring to President Gerald Ford, who presided over an economy with a score of almost 14% during the campaign. (In May of that year, the inflation rate was 6.2%, while unemployment rate stood at 7.40%.) The rest, as they say, is history— and as history provided the crack, Carter waltzed right through it. But by the election of 1980, Carter’s own words turned on him as he lost in a landslide to Ronald Reagan. Under Carter, the misery index had reached an all-time high of 21.98%, giving a whole new meaning to the word malaise . Some 34 years later, history might be on the verge of repeating itself again because of higher commodity prices. Because with the unemployment rate stuck seemingly in the 9%-10% range, and the Fed working overtime to create inflation, the misery index is on the cusp of a comeback in the familiar form of stagflation. Stagflation, of course, is the worst-case scenario. In short, it’s a period during which …

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Barrick (NYSE:ABX) Sees $1,500 Gold in 2011

The largest gold mine in the world, Barrick Gold (NYSE:ABX), said it sees gold prices in 2011 “easily” surpassing $1,500 an ounce. Barrick CFO Jamie Sokalsky cites the underlying supports which should ensure gold continues to rise, as the reason for his optimism. Those supports include the European sovereign debt crisis which won’t go away, geopolitical circumstances, macroeconomic issues, and

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Citigroup (NYSE:C) Right on $1,300 Gold?

Citigroup (NYSE:C) said last week if we hear the phrase “quantitative easing” used by the Federal Reserve this week, we’ll probably see gold prices soar to record levels above $1,300.Investors are strongly tuned into gold now, especially in light of the ongoing disaster with the European sovereign debt crisis and weak U.S. economy.Ben Bernanke has already stated he’s ready to intervene and resume

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Panama: the next Singapore?

Filed in Debt, Gold, Gold Investing, Gold Prices, sov, sovere, sovereign debt by on September 18, 2010 0 Comments
Panama: the next Singapore?

In its recent special on Latin America, The Economist notes that “Panama, which has embarked on a $5.25 billion scheme to expand its canal, has a chance of becoming a Singapore-style entrepot for Latin America.”  Back in May, after Panama’s sovereign debt received a coveted investment grade rating by both Fitch and S&P, a Reuters piece observed

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Gold Prices Today Hit Another Record as Rally Continues

Gold prices today surged to another record, as mixed economic data, European sovereign debt, and probably most importantly, fears over a return to quantitative easing by the Federal Reserve, continue to drive the gold price up. In the middle of the trading session gold futures December delivery moved as high as $1,284.40 an ounce, surpassing the previous intraday record of $1,279.50 an ounce and

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Gold Prices Reaching for New High Today

Gold prices today have soared on the news the so-called stress tests of the European banks probably didn’t accurately portray the level of government debt they held. In mid-day, gold for December delivery increased to $1,261.60. If it were to close at those levels, it would surpass the record high of $1,258.30 an ounce, set on the Comex division of the New York Mercantile Exchange in June,

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Worries of European Sovereign Default Rattle the Markets

Worries of European Sovereign Default Rattle the Markets

Filed under: International Markets , Commodities , Financial Crisis , Currency So you thought the sovereign debt crisis in Europe was over? Wrong. For the past two months we’ve had a temporary respite. The euro rose and we got a nice warm and fuzzy feeling. But now the problem is back. Even though Europe did stress tests on their banks, there is still concern that one or more countries could default. Banks hold sovereign debt bonds from many different countries. That is putting pressure on all eurozone banks. A default by Greece could trigger the collapse of banks with large holdings of Greek debt. Europe’s largest banks hold €134 billion in Greek, Portuguese and Spanish government bonds. Continue reading Worries of European Sovereign Default Rattle the Markets Worries of European Sovereign Default Rattle the Markets originally appeared on BloggingStocks on Tue, 07 Sep 2010 09:30:00 EST. Please see our terms for use of feeds . Read | Permalink | Email this | Comments

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Swiss Franc at Record High Against Euro

Swiss Franc at Record High Against Euro

Filed under: Japan , Personal Finance , Commodities , Currency Why buy the Swiss franc ? There are many reasons. Here are just a few: The Swiss franc is the stand-alone currency of Switzerland. By this we mean that Switzerland is not part of the European Union and does not use the euro as its currency. The Swiss franc offers currency exposure to Europe, while not subject to problems of countries like Greece and Spain defaulting on their sovereign debt. Continue reading Swiss Franc at Record High Against Euro Swiss Franc at Record High Against Euro originally appeared on BloggingStocks on Fri, 27 Aug 2010 09:30:00 EST. Please see our terms for use of feeds . Read | Permalink | Email this | Comments

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Bernanke: Economy Still Short of a Full Recovery

Bernanke: Economy Still Short of a Full Recovery

Filed under: International Markets , Market Matters , Money and Finance Today , Personal Finance , Headline News , Housing , Federal Reserve Speaking to state legislators, Federal Reserve Chairman Ben Bernanke detailed specific areas in the economy that are still weak and holding back full recovery. Among them are: Topping the list is high unemployment and a weak housing market. Speaking to this point Bernanke said: “We have a considerable way to go to achieve full recovery in our economy, and many Americans are still grappling with unemployment, foreclosure and lost savings.” Continue reading Bernanke: Economy Still Short of a Full Recovery Bernanke: Economy Still Short of a Full Recovery originally appeared on BloggingStocks on Tue, 03 Aug 2010 11:20:00 EST. Please see our terms for use of feeds . Permalink | Email this | Comments

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Fed Up with the Fed and the Welfare State

When we have a look at markets today, well…it’s depressing. Day after day we all have to put up with the fraud of serious looking men and women in suits making a complete mockery of common sense, reason, and good judgement. As exhibit A in the case against the absurdists running our money and our economy into the ground, we offer the remarks this week of Federal Reserve Chairman Ben Bernanke. Bernanke spooked investors in New York when he fronted a group of empty headed Senators in Washington and told them that the future of the U.S. economy was “unusually uncertain.” But in a real boon to those of us looking forward to the inflationary effects of trillions of dollars more in quantitative easing, Bernanke assured the Senators that, “We remain prepared to take further policy actions as needed to foster a return to full utilization of our nation’s productive potential in a context of price stability.” Can this sort of nonsense really be taken seriously? Unfortunately, we have to take it seriously because it has serious investment consequences. But how long will it be before most people understand that the Fed, the regulators, and the monetary authorities have no credibility when it comes to: a) understanding what is going on, b) fixing it, c) confessing to their culpability in causing the misallocation of capital and the zombification of large chunks of the global banking sector and generally forcing all of us contemplate their moronic and opaque pablum? These people really are vandals and thieves. We are encouraged to take them seriously and cede micromanagement of the economy and public life to people who don’t have an entrepreneurial bone in their body. What a big con. In any event, don’t be fooled by the results of the stress test. Those so-called stress tests for European banks are just as much a whitewash of the real capital inadequacy issues as were the American stress tests. In fact, the whole exercise is…

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UBS (NYSE:UBS) Likes Newmont (NYSE:NEM), Barrick (NYSE:ABX)

UBS (NYSE:UBS) via UBS Investment Research, said they like the overall mining and metals sector, and within the gold segment, Newmont Mining (NYSE:NEM) and Barrick Gold (NYSE:ABX) are their top picks.UBS analysts cited these as the reasons for their positive outlook on gold:”We believe that ongoing pressure on sovereign debt markets, combined with persistent concerns over private sector credit

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Ignoring Sovereign Default Damages Credibility of EU’s Bank Stress Tests

Filed in Debt, euro, Gold Investing, sov, sovereign debt by on July 24, 2010 0 Comments

The European Union (EU) bank stress tests failed to account for a sovereign default, meaning results show a healthier banking sector than actually exists. The tests results were released Friday with seven banks failing, but analysts say many more institutions could have failed if the tests simulated a sovereign default. Testing regulators from the Committee of European Banking Supervisors (CEBS) decided against testing securities held in lenders’ banking books, where sovereign debt is held and only written down in the case of default. ” The long awaited stress tests do not seem to have been that stressful after all, ” said Gary Jenkins, an analyst at Evolution Securities Ltd. “The most controversial area surrounds the treatment of the banks’ sovereign debt holdings.”

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