Bonds Fall When Interest Rates Rise - Gold - Silver
By the way, it may be time to look at bonds. If interest rates do rise in the not too distant future, the market value of existing bonds will go down and ETFs like TBT which represents a short on Long Term Treasuries will rise in market value. Check it out, if you have the risk tolerance.
From Bloomberg.com:Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs
Feb. 23 (Bloomberg) -- When a congressional panel convened a hearing on the government rescue of American International Group Inc. in January, the public scolding of Treasury Secretary Timothy F. Geithner got the most attention. Lawmakers said the former head of the New York Federal Reserve Bank had presided over a backdoor bailout of Wall Street firms and a coverup. Geithner countered that he had acted properly to avert the collapse of the financial system. Read it HERE.
Thus, we see, if the report is correct, that the main culprit in the financial fiasco received the greatest rewards of the bailout. Situation normal, but not correct.
More on the banks sneaky deals from the DailyPfennig.com: "From a story written by Nelson D Schwartz and Eric Dash in today's New York Times: "As Greece's financial condition has worsened, undermining the euro, the role of Goldman Sachs and other major banks in masking the true extent of the country's problems has drawn criticism from European leaders. But even before that issue became apparent, a little-known company backed by Goldman, JP Morgan Chase and about a dozen other banks had created an index that enabled market players to bet on whether Greece and other European nations would go bust.
Last September, the company, the Markit Group of London, introduced the iTraxx SovX Western Europe index, which is based on such swaps and let traders gamble on Greece shortly before the crisis. Such derivatives have assumed an outsize role in Europe's debt crisis, as traders focus on their daily gyrations.
A result, some traders say, is a vicious circle. As banks and others rush into these swaps, the cost of insuring Greece's debt rises. Alarmed by that bearish signal, bond investors then shun Greek bonds, making it harder for the country to borrow. That, in turn, adds to the anxiety - and the whole thing starts over again."
Boy does this ever stink!! Goldman and their cohorts are similar to drug dealers, who give out free drugs and then purchase medical insurance on the junkies which they have created! But I wouldn't bet against these guys in the short run, as they seem to be playing with a stacked deck. While I still believe the Euro will pull through this crisis, short term the big boys have made big bets that the euro will continue to fall, so in the short term that is exactly what will probably happen. But over time, the debts and deficits of the US$ will cause the dollar to fall, and the euro will remain as one of the offset currencies, causing it to recover."
From Financial Times London:
Silver and gold critics win CFTC hearing
By Gregory Meyer in New York, February 24 2010 19:26 | Last updated: February 24 2010 19:26
When the US commodities regulator sought public input last year on a plan to damp oil speculation, most of the hundreds of missives it received were not about energy, but silver and gold .
One letter read: “I know your time is precious so I will make my request short and sweet. Please limit concentrated short positions in the silver futures market. This will allow the little guy a fighting chance against powerful market manipulators.” Read it HERE.
From GoldEagle.com:
"I KNEW I SHOULD HAVE BOUGHT GOLD"
Editor & Partner - Gold-Eagle
All should be moved by the following dramatic picture and eye-popping gold price charts. The first is an actual photo of currency traders in Sao Paulo, Brazil in early 1999.
The chart shows how the Brazilian currency (called the "real") price of gold soared nearly 80% in a two week period in January 1999. I believe the US dollar price rise of gold will be equally dramatic, violent and without notice sometime during the next 6-8 months. Read it and view the great graphs HERE.
We all should have bought and kept gold and silver bullion coins years ago. It is possible that gold below 1100 and silver below 16 are good buys today. That depends upon your comfort and patience, as well as your risk tolerance. This could be a better risk than anything in the general market, and certainly better than the dollar long term.
Hyperinflation Watch by James Turk. Read it HERE.
Paving the way for more inflation.
From MineWeb.com:
India again seen as likely buyer of more IMF gold
With India's gold holdings still lagging other major economies, it is said to be closely watching the gold market for other buying opportunities
Author: Abhijit Neogy and Suvashree Dey ChoudhuryPosted: Wednesday , 24 Feb 2010
NEW DELHI/MUMBAI -
India's central bank, which has increased its gold holdings to diversify its reserves, looks set to be a buyer again when the International Monetary Fund begins selling 191.3 tonnes of the precious metal amid volatility in major currencies.
The uncertain outlook for two of the world's major reserve currencies -- the dollar and euro -- provides a spur for central banks, including India's, to buy gold. India's gold holdings lag those of major economies despite a big purchase in October. Read it HERE.
They may be buying along with China. Both countries see the value of holding gold as the dollar depreciates over time.
The miners from Scottrade.com:
The currencies from Kitco.com:
Questions about the direction of the markets short term is still very confusing. It's a jungle out there. Bernanke speaks to Congress and the dollar swings wildly upward, downward, and the returns to the pre-speech level. Talk has consequences, and that is the way it is today. Rhetoric rather than fundamentals drives the markets. Buyer Beware is the watch word.
The Words of God a sure, fixed, and changeless. That is one of the great beauties of our Sovereign Lord. He changes not! We can be certain of that.
Best to each, Doug
posted by Doug @ 8:08 AM
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