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Dear CIGAs,
There is absolutely no question that the price of gold will reach $1200, $1650 and then continue onward to Alf’s numbers.
Three hoots for Panizutti, a close friend of Carlo Fibonacci.
Gold May Advance for Eighth Year as ‘Perfect Insurance’ Sought
By Nicholas Larkin, Claudia Carpenter and Pham-Duy Nguyen
Jan. 6 (Bloomberg) — Gold, the best-performing metal in 2008, may appreciate for an eighth year as investors seek a refuge from declining interest rates at the same time that central banks inject more cash into the banking system.
The metal will average $910 an ounce in 2009, 4.3 percent more than last year, according to the median forecast of 20 analysts, traders and investors surveyed by Bloomberg. Silver and platinum, which averaged at least 12 percent more in 2008, will decline this year, the survey showed.
Gold prices may strengthen after about $29 trillion was wiped offequities last year, the Federal Reserve cut interest rates to as low as zero and governments sought to end the worst financial crisis since World War II. The metal was one of only four commodities to rise when the Reuters/Jefferies CRB Index fell 36 percent, the worst year in a half-century.
“People fear inflation, they fear the credit crunch and they fear currency losses, and gold is the perfect insurance against all of that,” said Frederic Panizzutti, a senior vice president at Geneva-based bullion refiner MKS Finance SA, who forecasts gold will average more than $900 in the first half of 2009. Panizzutti was the most accurate forecaster in the London Bullion Market Association’s 2008 survey.
Average gold prices have risen for seven consecutive years, the longest winning streak since at least 1949. While the return of 5.8 percent through 2008 was the smallest since 2004 in dollar terms, gold rose 11 percent in euros and 44 percent in British pounds, data on Bloomberg show.
Jim Sinclair’s Commentary
This number will rise to $17.2 trillion by June of 2010 or sooner.
You want to own the dollar and have no Gold? That is called financial suicide, yet horses still run back into burning barns from time to time, therein killing themselves.
The $8 trillion bailout
Many details of Obama’s rescue plan remain uncertain. But it’s likely to cost at least $700 billion – and that would push Uncle Sam’s bailouts near $8 trillion.
By David Goldman, CNNMoney.com staff writer
Last Updated: January 6, 2009: 9:28 AM ET
NEW YORK (CNNMoney.com) — Sitting down? It’s time to tally up the federal government’s bailout tab.
There was $29 billion for Bear Stearns, $345 billion for Citigroup. The Federal Reserve put up $600 billion to guarantee money market deposits and has aggressively driven down interest rates to essentially zero.
The list goes on and on. All told, Congress, the Treasury Department, the Federal Reserve and other agencies have taken dozens of steps to prop up the economy.
Total price tag so far: $7.2 trillion in investment and loans. That puts a lot of taxpayer money at risk. Now comes President-elect Barack Obama’s economic stimulus plan, some details of which were made public on Monday. The tally is getting awfully close to $8 trillion.
Obama’s plan would combine tax cuts with infrastructure job creation efforts. Economists say it could serve as an integral piece to the government’s remaining economic recovery puzzle.
Jim Sinclair’s Commentary
Yes, "MASSIVE" is a good description of the up-coming, DOWNWARD heading US dollar.
Willem Buiter warns of massive dollar collapse
Americans must prepare themselves for a massive collapse in the dollar as investors around the world dump their US assets, a former Bank of England policymaker has warned.
By Edmund Conway, Economics Editor
Last Updated: 6:32PM GMT 05 Jan 2009
The long-held assumption that US assets – particularly government bonds – are a safe haven will soon be overturned as investors lose their patience with the world’s biggest economy, according to Willem Buiter.
Professor Buiter, a former Monetary Policy Committee member who is now at the London School of Economics, said this increasing disenchantment would result in an exodus of foreign cash from the US.
The warning comes despite the dollar having strengthened significantly against other major currencies, including sterling and the euro, after hitting historic lows last year. It will reignite fears about the currency’s prospects, as well as sparking fears about the sustainability of President-Elect Barack Obama’s mooted plans for a Keynesian-style increase in public spending to pull the US out of recession.
Writing on his blog, Prof Buiter said: "There will, before long (my best guess is between two and five years from now) be a global dumping of US dollar assets, including US government assets. Old habits die hard. The US dollar and US Treasury bills and bonds are still viewed as a safe haven by many. But learning takes place."
He said that the dollar had been kept elevated in recent years by what some called "dark matter" or "American alpha" – an assumption that the US could earn more on its overseas investments than foreign investors could make on their American assets. However, this notion had been gradually dismantled in recent years, before being dealt a fatal blow by the current financial crisis, he said.
Jim Sinclair’s Commentary
Pakistan in the News:
Taliban kill two US ’spies’ in Pakistan: official
MIRANSHAH, Pakistan (AFP) — Taliban militants hanged one man and shot dead another in a restive Pakistani tribal region near the Afghan border, after accusing them of spying for the United States, an official said Tuesday.
The body of local tribesman Shahjir Khan, 25, was found early Tuesday dumped in the central market of Miranshah, the main town in the North Waziristan tribal district, a security official told AFP.
A note found with Khan’s body said he had been hanged because he had spied on Taliban activities and passed information to the United States, the official said.
The bullet-riddled body of an Afghan refugee identified as Akram Khan was found late Monday near the village of Sarobi, some 10 kilometres (six miles) south of Miranshah, with a similar note, he said.
Pakistan Agencies Aided Mumbai Attack, Singh Says (Update1)
By Bibhudatta Pradhan and James Rupert
Jan. 6 (Bloomberg) — “Official agencies” in Pakistan supported the militants who attacked Mumbai in November, Indian Prime Minister Manmohan Singh said, making India’s sharpest accusation yet that Pakistan’s government was involved.
“There is enough evidence to show that, given the sophistication and military precision of the attack it must have had the support of some official agencies in Pakistan,” Singh told chief ministers of India’s states today at a meeting on counter-terrorism.
India yesterday gave Pakistan and other governments what it said was evidence linking Pakistani “elements” to the Nov. 26- 29 attack on Mumbai, increasing pressure on its neighbor to act against the militant group India has blamed for the assault. It is unclear how long Pakistan will need to judge the evidence and decide on any action, Farhatullah Babar, a spokesman for Pakistan’s president, told India’s NDTV television today.
Pakistan ‘knew of Mumbai plot’
A senior Indian government official has suggested that leading figures in the Pakistani establishment must have known of the plot to carry out last November’s deadly attacks in Mumbai, and hinted that some may have actively supported it.
Shivshankar Menon, India’s foreign secretary said he found it "hard to believe that something of this scale … could occur without anybody, anywhere in the establishment knowing that this was happening."
Speaking to reporters in New Delhi, Menon dismissed repeated Pakistani assertions that the attacks were carried out by "non-state actors" and said India was unimpressed by Pakistani pledges to crackdown on suspects.
The attacks on multiple targets in India’s financial capital lasted for nearly three days and left 179 people dead with hundreds more wounded.
Menon’s comments came after Indian officials handed Islamabad evidence they say clearly shows the attack originated in Pakistan.
New Delhi has previously been careful not to blame the attacks on the Pakistani government, and Monday’s statement accused "elements in Pakistan" of being behind the plot.
