Newsroom

The GoldBugg Report - June 24, 2008

June 24, 2008

-Silver bulls predict price bounce. The 'poor man's gold' is off its March high. 'This is the time to buy.

-Central bank body warns of Great Depression.

-RBS issues global stock and credit crash alert.

-Will the Hunts buy silver again after selling Hunt Petroleum?

GOLD

-Gold May Rise to $5,000 on Inflation, Schroder Says. Gold prices may rise to $5,000 an ounce as investors seek to protect themselves against accelerating inflation, said Schroder Investment Management Ltd., which oversees $277 billion of assets globally.

"You could easily see for the next several years that prices rise not to $1,000 an ounce, but prices rise to $5,000 an ounce or beyond as inflation psychology becomes more and more embedded and people become desperate to have a source of value," said Christopher Wyke, London-based emerging market debt and commodities product manager at Schroder, which oversees about $10 billion of commodity assets.

Investors are turning to gold for protection as two-thirds of the world's population cope with inflation rates that are climbing to more than 10 percent, Wyke said. Cash and inflation- linked bonds are poor substitutes as low interest rates, coupled with surging inflation, erode the real value of assets, he said.

Demand for gold will also rise as central banks become net buyers for the first time in 20 years, driven by developing countries, he added. Last year, world production of gold sank to the lowest since 1937 as reserves are depleted and few new sources of gold have been found. Read more here-http://www.bloomberg.com/apps/news?pid=20601012&sid=aF1439PVhAgk&refer=commodities

-China gold fund manager sees potential for rally. After doubling his money in the gold market in just six months, Wang Weilie, one of China's leading gold fund managers, believes another surge in gold prices is likely in the next few years as global inflation escalates and the dollar sags.

Wang, who manages nearly 2 billion yuan ($290 million) invested in the Shanghai Gold Exchange and the spot gold market for his own and clients' accounts, said gold could be a useful hedging tool and worthwhile investment in the next decade for the Chinese, who traditionally think of gold mainly as jewellery.

"I have bought and stored several hundred kilograms of gold bars but I do not wear any gold jewellery," Wang, wearing jeans and a T-shirt, told Reuters in the Shanghai office of a business partner who manages the country's largest gold trust.

Wang said gold had the potential to surge again, arguing that the dollar was due for further declines, while stocks, property and other assets were overvalued, making gold more attractive as a store of wealth. "We have reason to believe that gold will hit $2,000 in coming years after it broke the $1,000 level," he said. Read more here-http://www.reuters.com/article/idUSSHA27743120080613

-Gold fever. The value of gold has been going through the roof. Its price has quadrupled since 1999, and in March this year it reached $1,000 an ounce for the first time. With uncertainty in the markets and turmoil in the banks, more and more people are turning to gold.

"Since the financial crisis erupted last August, there's been a flood of investment into gold, really because of its safe haven properties," says Jill Leyland, economic advisor to the World Gold Council. "Gold is no one's liability and that means it is the ultimate defense against unforeseen contingencies." Read more here-http://news.bbc.co.uk/2/hi/business/7450751.stm

-The Gold to Oil Ratio. The gold to oil ratio remains near all time multi decade lows and clearly shows gold is undervalued vis a vis the lifeblood of the global economy - black gold or oil. With gold at $880 per ounce and oil at $135 per barrel, the gold/oil ratio is now at 6.5. The average in the last 40 years is 15. Oil has well surpassed its inflation adjusted 1980 high of $104 a barrel (the nominal high in 1980 was $39.50 a barrel which equals $103.76 in today's money).

Gold continues to play laggard as it often does but will outperform oil in the later stages of the bull market as recession and demand destruction leads to a fall in oil prices but leads to safe haven buying of gold. Gold's inflation adjusted high of $2,200 per ounce remains a very likely price target in the next 3 to 5 years. Gold.ie

-Is gold too low compared with oil or is it that oil is just too high. With oil costs reaching potentially unsustainable levels, the gold market has to be prepared for a reaction to a possible puncturing of the oil price bubble. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=54909&sn=Detail

-Tokyo bourse says to list first gold ETF. Read more here-http://www.reuters.com/article/rbssInvestmentServices/idUST2289120080613

-S.Africa gold output down 10.1 pct yr/yr in April. South African gold output fell 10.1 percent in volume terms, while overall mineral production declined 2.0 percent in April compared to the same month in the previous year, official data showed on Thursday. Production of non-gold minerals fell by 0.7 percent in April, Statistics South Africa added.

Mining output in South Africa has taken a hit after state-owned power utility Eskom struggled to provide sufficient power to mines, following a near collapse in the electricity grid in January, which led to a five-day countrywide mine shutdown. Eskom has since supplied around 90 to 95 percent power to mines in the country. Reuters

-Global gold mine reserve additions stymied by high oil and equipment delays other metals too. The rising costs of equipment and the long delivery times necessary for many items are additional factors increasing capital costs and lead times for the mining sector. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=54741&sn=Detail

SILVER

-Silver bulls predict price bounce. The 'poor man's gold' is off its March high. 'This is the time to buy.' Silver has a reputation as a "poor man's gold," but some market watchers are betting the metal is poised to gain more respect. While its price in New York is off 17 per cent from its multidecade high of $20.66 (U.S.) an ounce in March, some predict it will rebound and blow past that peak by year end.

With the silver price possibly falling further during the typically weak summer months for precious metals, it may be time to consider investing in silver stocks or bullion for an expected fall rally, observers suggest. "I wouldn't be surprised to see it [silver] spike down as low as $13.50 or $14" in the July-August period, said Jeff Christian, managing director of New York-based metals consultancy CPM Group. "That is the time to buy," he said.

"I am not sure how high it could go, but I wouldn't be surprised to see it at $22 or $23 by the end of December." Silver is used in jewellery, but has varied industrial uses, including in electronics equipment. Like many silver bulls, Mr. Christian predicts a big price driver will be rising investor demand for the metal as a "safe haven" because of concerns about inflation, the devaluing U.S. dollar and the global credit crisis.

The recent pullback in price, meanwhile, stems from some industrial users reducing inventories in the face of higher costs, while investors have been taking profits after a strong runup. David Morgan, a U.S.-based precious metals analyst and writer of resources newsletter The Morgan Report, recommended his clients take some money off the table in March. "I love silver, but let's be realistic," said Mr. Morgan, who is also founder of Silver-Investor.com.

"These things can get over exuberant." "I see a bottoming process [for the metal] between June and August," he added. "By the end of the year, I see gold over $1,000 per ounce, and silver back over $21 an ounce. I think the fourth quarter is going to be very strong for metals." Mr. Morgan's bullish case for silver stems partly from the declining supply of above-ground, investable supplies of the metal as governments such as that of the United States have sold off their stockpiles.

Evidence of rising investor demand has been the popularity of the iShares Silver Trust, an exchange-traded fund launched in 2006 and which is now backed by more than 190 million ounces of bullion. Silver has also attracted wealthy investors like Microsoft Corp.'s chairman Bill Gates, whose Cascade Investment LLC is the third-largest shareholder of Pan American Silver. Billionaire investor Warren Buffett's Berkshire Hathaway bet heavily on silver in 1997, and bought 130 million ounces, but he has alluded to selling this investment by 2006.

Nick Barisheff, president of BMG Management Group Inc. in Toronto, expects silver to rally in the fall because of seasonality patterns tied to the wedding season in India. "Gold and silver are a big part of dowries," said Mr. Barisheff, who runs the $189-million BMG Bullion Fund, which invests equally in gold, silver and platinum. "My view is that silver will be above $21 (U.S.) by the end of the year." Silver soared as high at $50 an ounce in January, 1980, when the Hunt brothers of Texas tried to corner the silver market.

But that spike only lasted a day, and the average price for silver that year was about $21 an ounce. Charles Oliver, an investment strategist with Sprott Asset Management Inc. in Toronto, is forecasting silver to reach $40 and gold to hit $2,000 an ounce in four years. The price target stems from calculating that gold historically trades at a 50-to-1 ratio to silver, even though those numbers can get "out of whack, periodically," he said.

He oversees the $614-million (Canadian) Sprott Gold and Precious Metals Fund, which has 9 per cent of its assets in silver bars and another 20 per cent in silver stocks. "We are probably at the higher end than some of our [equity] competitors" in terms of a weighting in silver, he said. Raymond James Ltd. analyst Brad Humphrey expects the silver price to remain strong for the next 18 to 24 months on the back of a strong gold market, industrial demand and strong investor sentiment. That "will offset the near-term increase in mine supply," he wrote in a report. Read more here-http://www.reportonbusiness.com/servlet/story/RTGAM.20080617.wrsilver17/BNStory/SpecialEvents2/home

-Silver's more than a sparkle in investors' eyes. Analysts see price for 'undervalued' metal hitting $50 in next few years. Silver has been notorious for moving in tandem with gold, but silver prices have yet to trade anywhere near their record level.

Like gold, investors' appetite for silver has been a key catalyst for the increase in the metal's prices, according to CPM Group, a commodity research and consulting-services provider. Gold futures climbed past $1,000 an ounce in March to mark their highest level. Around the same time, silver futures reached a high of around $21 an ounce four times higher than the price five years ago, but a far cry from the peak level around $50 in 1980.

"Silver remains the most undervalued of all the commodities and all the precious metals and at the very least, the $50 per ounce nominal high of 1980 is very likely to be reached in the next 2 to 3 years," said Mark O'Byrne, a director at Gold and Silver Investments Ltd. Read more here-http://www.marketwatch.com/news/story/silvers-more-sparkle-investors-eyes/story.aspx?guid=%7bA59BEE16-7BF7-4A72-8C4F-582FCF3BC72D%7d&print=true&dist=printMidSection

-Strategist Donald Coxe of BMO Capital Markets is also bullish on an old commodities standby: gold. He sees it as a further hedge against both currency risk and the ongoing financial contagion on Wall Street. When investors panic about the prospects of banks, gold a.k.a. "the one true currency" tends to rise.

But investors might also investigate another precious metal: silver. Whereas gold touched new all-time highs above $1,000 an ounce earlier this year before pulling back, silver remains 60% below its 1980 record price of $50 an ounce, even after more than tripling over the past five years. Plus, potential new industrial uses for silver in cutting-edge batteries and nanotechnology could add to demand. Read more here-http://money.cnn.com/2008/06/06/pf/retirement/okeefe_hot_commodities.fortune/index.htm

-Silver prices to average $18/oz in 2008 GFMS. Read more here-http://money.ninemsn.com.au/article.aspx?id=579296

-Will the Hunts buy silver again after selling Hunt Petroleum? This week XTO Energy finally agreed to buy Hunt Petroleum for $4.2 billion after a long legal tussle between Hunt family heirs. The firm was founded by the late billionaire HL Hunt whose sons Nelson Bunker Hunt and William Herbert Hunt once cornered the world silver market in the 1970s.

Hunt is a privately held company which makes no public comment on its affairs. But commentators think the Hunts are calling the top of the oil market and that the price for Hunt Petroleum suggests a quick deal was the objective. However, market watchers are bound to wonder if the Hunts are planning to re-enter the silver market which they so dramatically dominated in the 1970s. It was in 1973 that the family first decided to buy precious metals to hedge against inflation, much as many rich investors are doing today.

Together with several wealthy investors the Hunts formed a silver pool and by 1979 held half the world's deliverable silver supply, some 200 million ounces. Having effectively cornered the markets, the pool used leverage to drive the price of silver to $54 an ounce. But the authorities changed the rules on margin trading and crashed the market. The Hunt brothers eventually declared bankruptcy and by 1987 their liabilities of $2.5 billion exceeded assets of $1.5 billion. Read more here-http://www.silverbearcafe.com/private/6.08/hunts.html

-A Hidden Silver Default? Read more here-http://news.silverseek.com/TedButler/1213640342.php

-Recently, when silver was topping out at around $21 per ounce, there was an acute shortage of silver available for investing. This investment demand problem threatened to kick silver into an industrial deficit driven price revolution. The problem was resolved via unofficial rationing.

New silver eagles and new 100 ounce bars have become increasingly unavailable since that time. In fact the time required to get new 100 ounce silver bars continues to increase. However, as the futures market price of silver went down from $21 dollars per ounce, weak hands holding silver once again have come forward to sell.

The weak hands fear further price declines and are unable to wait because of financial stress. I monitor this by watching the prices on ebay. These prices have begun to converge with the futures price for the nearest delivery month. Smart, strong hands are buying this cheap silver. Read more here-http://news.silverseek.com/SilverSeek/1213458334.php

-New back side silver paste from Heraeus offers savings for silicon PV cell fabricators. Read more here-http://www.emsnow.com/npps/story.cfm?pg=story&id=34113

PLATINUM-PALLADIUM

-"Mixed" outlook for platinum, palladium in transport sectors. The Fortis/VM Group's new Materials in Transport research says demand for platinum and palladium varies in the short and long-term. Interestingly, the possibility of smaller catalytic converters in Europe will lead to lower use of both metals. Read more here-

http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=54635&sn=Detail

-The Russian palladium stockpile do we need to worry? Comments on the Russian palladium stockpile caused immediate movement in the market, but do these comments mean much in the scheme of things? The comments from Anton Berlin, the head of Norilsk's department for analysis and development, that Russian palladium stockpiles might be "depleted" in one to five years, have prompted a rally in the previously somnolent palladium market. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=54685&sn=Detail

-Swiss platinum ETF grows 45% in volume in three months. Zurich Cantonal Bank's platinum ETF holdings have grown by 45% on concerns over South African platinum supply and a promising demand outlook. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page504?oid=54868&sn=Detail

-Rare metal prices soar on demand for more fuel-efficient jet engines. Read more here-http://www.ft.com/cms/s/0/a299a7ea-3ccf-11dd-b958-0000779fd2ac.html?nclick_check=1

DEFINITIONS-QUOTES-QUICK HITS

-"Efforts and courage are not enough without purpose and direction." John F. Kennedy

-"At times it is folly to hasten at other times, to delay. The wise do everything in its proper time." Ovid

-Current Account Deficit. Occurs when a country's total imports of goods, services and transfers is greater than the country's total export of goods, services and transfers. This situation makes a country a net debtor to the rest of the world.

A substantial current account deficit is not necessarily a bad thing for certain countries. Developing counties may run a current account deficit in the short term to increase local productivity and exports in the future. Investopedia.com

-"The odds of rate increases have gone down," said Matt Zeman, of LaSalle Futures Group in Chicago. "We're still losing jobs, and housing is incapable of turning around. The dollar has very limited upside potential." Kitco Daily Resource

-RBS issues global stock and credit crash alert. The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks. "A very nasty period is soon to be upon us, be prepared," said Bob Janjuah, the bank's credit strategist.

A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets. Such a slide on world bourses would amount to one of the worst bear markets over the last century. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/18/cnrbs118.xml

-Central bank body warns of Great Depression. The Bank for International Settlements (BIS), the organization that fosters cooperation between central banks, has warned that the credit crisis could lead world economies into a crash on a scale not seen since the 1930s.

In its latest quarterly report, the body points out that the Great Depression of the 1930s was not foreseen and that commentators on the financial turmoil, instigated by the US sub-prime mortgage crisis, may not have grasped the level of exposure that lies at its heart.

According to the BIS, complex credit instruments, a strong appetite for risk, rising levels of household debt and long-term imbalances in the world currency system, all form part of the loose monetarist policy that could result in another Great Depression. The report points out that between March and May of this year, interbank lending continued to show signs of extreme stress and that this could be set to continue well into the future. Read more here-http://www.bankingtimes.co.uk/09062008-central-bank-body-warns-of-great-depression/

-Monetary policy should allow a temporary rise in unemployment and inflation to let an economy find its balance from an oil-price shock, said Federal Reserve Vice-Chairman Donald Kohn on Wednesday.

Monetary policy should allow a temporary rise in unemployment and inflation to let an economy find its balance from an oil-price shock, Federal Reserve Vice Chairman Donald Kohn said last Wednesday. Read more here-http://www.marketwatch.com/news/story/story.aspx?guid={0404E150-F28F-4729-86C6-088FDDF2EFCF}&siteid=rss

-Iran withdraws $75 billion from Europe: report. Iran has withdrawn around $75 billion from Europe to prevent the assets from being blocked under threatened new sanctions over Tehran's disputed nuclear ambitions, an Iranian weekly said. Read more here-http://www.reuters.com/article/topNews/idUSDAH63024720080616?feedType=RSS&feedName=topNews&rpc=22&sp=true

-Iran says it will sell euro instruments for gold and stocks. Good news for long-suffering gold bugs: Iran is switching a chunk of its $80 billion reserves into bullion. Mohsen Talaie, the deputy foreign minister in charge of economic affairs, said Tehran was pulling its money out of euro instruments (presumably Bunds, BTps, EIB bonds, etc.) to avoid sanctions over its nuclear weapons programme.

"Upon the decision of the government's task force a segment of Iran's foreign exchange assets will be converted into real assets such as gold and stocks," he told Iran's Etemad-e Melli newspaper. Read more here-http://www.gata.org/node/6368

-Gazprom CEO's $250 Oil Forecast Deals Doom Options Traders Love. At $250 a barrel for crude oil, food prices double. The U.S., Japan and Europe plunge into deep recession. Companies go bankrupt. Airlines are nationalized. Sport-utility vehicle sales dry up as gasoline tops $7 a gallon. The scenario may not be unimaginable. Alexei Miller, chief executive officer of OAO Gazprom, the world's biggest natural- gas company, said June 10 that crude will climb to $250 a barrel in the "foreseeable future."

Prices may reach that level only after a war or attack on major oil installations, says Jeff Spittel, an analyst at Natixis Bleichroeder Inc. in New York. While executives, elected leaders and economists disagree on the probability of Miller's vision, there is consensus that the price would jolt everyday life. Read more here-

http://www.bloomberg.com/apps/news?pid=20601087&sid=aWwoUcZaR5BY&refer=home

-The U.S. current account deficit in the first quarter of this year amounted to $176.38 billion, up 5.5 percent from the previous quarter for the first upturn in a year, due to a decrease in the income balance surplus, the Commerce Department said Tuesday. Read more here-http://www.breitbart.com/print.php?id=D91BRFGG1&show_article=1

-China's Retail-Sales Growth Is Close to 9-Year High. China's retail sales growth stayed close to the fastest pace in at least nine years in May as incomes climbed, underscoring the country's economic strength amid a world slowdown. Sales soared 21.6 percent to 870.4 billion yuan ($126 billion) after gaining 22 percent in April, the statistics bureau said today.

The increase was seven times faster than the pace of U.S. retail-sales growth and follows a stronger-than-estimated surge in Chinese exports last month. The nation's deadliest earthquake in 32 years has fed demand, with survivors supplied with 1.1 million quilts, 4.8 million beds and 14 million pieces of clothing, the State Council said yesterday. Read more here-

http://www.bloomberg.com/apps/news?pid=20601087&sid=aO52Z9gbg7Hw&refer=home

-World's Most Worthless Money. Read more here-http://www.portfolio.com/slideshows/2008/3/Worlds-Most-Worthless-Money/?TID=advert/drudge/worthless_moneyPhone

-"Brainwashing 101 for Dummies" and investors! Eleven reasons passive investors let Wall Street steal their money. Read more here-http://www.marketwatch.com/news/story/11-reasons-passive-investors-let/story.aspx?guid={62AB4A8E-65F4-4D29-8807-8A152450738B}&dist=TNMostRead

-Life without plastic. You'd be surprised by the benefits of giving up your credit cards even if you never carry a balance. Read more here-http://money.cnn.com/2008/06/16/pf/without_plastic.moneymag/index.htm

-They cut out their credit cards. 10 families decided it was time to break their bad plastic habits. Here's how they did it. Read more here-http://money.cnn.com/galleries/2008/pf/0806/gallery.sans_plastic.moneymag/index.html

-World population to hit 7 billion in 2012. Read more here-http://www.breitbart.com/article.php?id=D91DB6RO2&show_article=1

RARE COLORED DIAMONDS

-First publicly listed diamond fund to launch. The first publicly listed fund investing in rare white and coloured diamonds is close to launching on the London Stock Exchange, fund and market sources said on Tuesday. The closed-end fund will invest in the high-quality segment of the physical polished diamond market, according to a prospectus for the initial public share offer, expected to take place on June 24, obtained by Reuters.

Fund-raising will close on Wednesday and one industry source said institutional investors had raised nearly $100 million (50 million pounds). "Catalysts for growth in investment demand are in place for large high-quality diamonds, underpinned by the rising number of high net-worth individuals, especially in the Middle East, Southeast Asia and the Russian Federation," said the prospectus for investment company Diamond Circle Capital plc. The prospectus said a steadily declining mineral reserve base, compounded by limited exploration success, suggested tight supplies would continue, which industry analysts say could mean long-term growth for the fund.

"It is the first listed polished diamond fund," said Jamie Strauss, managing director, UK equity products, of BMO Capital Markets (Bank of Montreal), who closely tracks diamond markets. "It will be invested in white and colored diamonds. It will become one of the world's finest diamond collections." Read more here-http://www.reuters.com/article/investmentTrustsNews/idUSNOA83295920080618

-Champagne glasses with diamonds on show. If you thought drinking champagne couldn't get any more posh, then try downing it from diamond-encrusted glasses worth almost half a million US dollars. An Australian jeweller has unveiled what he says are the world's most expensive champagne glasses, valued at $400,000 and adorned with 1,700 white and pink diamonds.

Designer John Calleija said five jewellers spent more than three months finishing the two glasses, which were individually chiselled from 8kg blocks of quartz rock crystal. Each glass stands 15cm tall, weighs 250 grams, and together are encrusted with 15 carats of white diamonds and six carats of the rare argyle pink diamonds. They are finished with platinum 18 carat white and rose gold.

Mr. Calleija said he was experimenting with his designs when he came up with the idea, but it just as easily could have been a pair of diamond-encrusted chopsticks. "I just wanted to get into a different area of objects, like luxury goods," he told AAP. "I drew a whole series of diamond-encrusted letter openers, salt and pepper shakers, scissors, everything, even chopsticks.

"But I drew the glasses and there was just something about them." Though the designs were at first just a pipe dream, he showed them to one of his long-term clients, who immediately commissioned the pricey artworks. "I told him they'd be around $400,000 and he said 'I'd like to put my hand up for them, I'll take them," Mr. Calleija said.

He also said the buyer, an anonymous Melbourne businessman, had vowed to put the glasses to good use, promising to bust them out for special occasions and to turn them into cherished family heirlooms. The glasses, which will head to London for the official opening of Mr Calleija's second store, were the pride and joy of his team, the designer said. "Tears were coming from their eyes because they know how much this has been a labour of love," he said. "We've put tonnes of effort and time, and design into these. "They're just spectacular." Smh.com.au

OIL

-Saudi summit aims at oil prices. The world's largest oil producer, worried the escalating cost of crude will dampen demand, is convening a special meeting on Sunday to seek solutions. Read more here-http://money.cnn.com/2008/06/19/news/international/saudi_oil/index.htm?postversion=2008061913

-Deals with Iraq are set to bring oil giants back. Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power.

Exxon Mobil, Shell, Total and BP the original partners in the Iraq Petroleum Company along with Chevron and a number of smaller oil companies, are in talks with Iraq's Oil Ministry for no-bid contracts to service Iraq's largest fields, according to ministry officials, oil company officials and an American diplomat. Read more here-http://www.iht.com/articles/2008/06/19/africa/19iraq.php

-Bush Urges Congress to End Ban on Offshore Drilling. President George W. Bush called on Congress to lift a 27-year-old moratorium on offshore oil and gas drilling, putting himself in the middle of an election-year debate over U.S. energy policy.

By urging lawmakers to lift the federal ban and work with coastal states to open up more areas of the outer continental shelf to exploration, Bush is reinforcing a similar proposal endorsed yesterday by John McCain, the presumptive Republican presidential nominee. Barack Obama, the Democratic candidate, opposes taking such a step. Read more here-

http://www.bloomberg.com/apps/news?pid=20601087&sid=auiTIXlxsWCA&refer=home

-Mexico May Raise Daily Oil Output 4.3 Percent by 2009. Read more here-http://www.bloomberg.com/apps/news?pid=20601072&sid=aaZZqwVHFAGs&refer=energy

-Saudi King: 'We will pump more oil'. Read more here-http://www.independent.co.uk/news/world/middle-east/saudi-king-we-will-pump-more-oil-847830.html

-Iran's Ahmadinejad says oil price artificial. Read more here-http://www.breitbart.com/print.php?id=080617080043.afcygse0&show_article=1

-Kuwait Says Oil Over $100 Is Too High; Support Saudis. Read more here-http://www.bloomberg.com/apps/news?pid=20601072&sid=axRA4mkZ9.AU&refer=energy

-A Monumental Petro-Wealth Transfer. Bottom Line-We are witnessing the beginning of a monumental transfer of wealth to oil-exporting countries that may last beyond our generation. Saudi Arabia is earning more than US$1 billion a day from its oil exports, and the GCC hold some US$65 trillion worth of oil reserves, most of which will one day be consumed and the GCC will have converted oil into paper assets of this amount. There are geopolitical, economic and financial consequences from this wealth transfer. Read more here-

http://www.morganstanley.com/views/gef/archive/2008/20080616-Mon.html#anchor6517

-Oilsands Producers Grapple With Rising Costs Despite High Crude Prices. Read more here-http://www.resourceinvestor.com/pebble.asp?relid=43704

-U.S. Oil Stupidity. Read more here-http://www.321energy.com/editorials/casey/casey061308.html?print=on

-SEC to Consider `Modernizing' Rules on Oil Reserves. Read more here-http://www.bloomberg.com/apps/news?pid=20601072&sid=aSB2tK9lEIgU&refer=energy

-Oil Rally of 697% Surpassed Dot-Com Craze in Speculators' Mania. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid=a9wRqtCtGjZY&refer=home

GASOLINE

-$5 Gas Likely by July 4th; Get Ready for 'Stay-cation'. Read more here-http://www.cnbc.com/id/25140711

-Oil tumbles $5 as China raises gas prices. Crude prices fall after China says it will raise gas and diesel prices and sentiment spreads about softening demand. China's National Development and Reform Commission said that prices of gasoline, diesel and aviation fuel will increase by 8% beginning Friday. Read more here-http://money.cnn.com/2008/06/19/markets/oil/index.htm?postversion=2008061912

-Refining shortage cause of high oil price: UAE. Read more here-http://uk.reuters.com/article/oilRpt/idUKL1767484120080617

-Gas prices latest worry for real estate market. Read more here-http://www.latimes.com/business/la-fi-homes17-2008jun17,0,2766175.story

COMMODITIES-FOOD

-JPMAM and BlackRock repudiate commodities bubble. JPMorgan Asset Management and BlackRock commodities managers have dismissed concerns of a growing bubble in the sector, claiming demand will continue to sky-rocket. Ian Henderson, manager of the £1.7bn JPM Natural Resources fund, said: "A few years ago, nobody thought we would be where we are at the moment and who knows where we are going.

"But at the moment there are some very real shortages and people are prepared to pay what they are paying. "The energy sector is not showing the current price of oil in its valuations. It is ridiculously cheap today most companies are representing an oil price of about $60 a barrel, when its currently costs double that." Read more here-http://ftadviser.com/InvestmentAdviser/Investments/AssetClass/Equities/News/article/20080616/44bd6c66-37ce-11dd-842b-0015171400aa/JPMAM-and-BlackRock-repudiate-commodities-bubble.jsp

-The 'age of infrastructure' will gobble up physical commodities for years. A massive infrastructure build-out to support future growth of emerging markets, combined with a focus on infrastructure repair and replacement in G-7 nations, portends tremendous benefits to global mining. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=55003&sn=Detail

-Corn prices jump as Midwest floods. At nearly $8 a bushel, corn prices climb 11% in past week; world food prices expected to spike as wheat, soybean crops also damaged. Read more here-http://money.cnn.com/2008/06/16/news/economy/corn_dollars.ap/index.htm?postversion=2008061614

-Cut your grocery bill in half. Everyone's hurting thanks to high food prices here's how to slash what you spend on groceries. Read more here-http://money.cnn.com/2008/06/13/pf/savings_groceries/index.htm

-Food prices force groups that offer square meals to cut corners. As costs rise, the sting is magnified for schools, the military, prisons, food banks and other institutions nationwide. Read more here-http://www.latimes.com/news/nationworld/nation/la-na-food15-2008jun15,0,946363.story

-Shoppers set to count rising cost of bananas. Bananas have joined the ranks of dairy, meat and wheat products among foodstuffs whose prices are set to surge because of the sharp rise in fuel costs. Chiquita, one of the world's biggest banana groups, said yesterday that the price of Britain's most popular fruit had risen 36 per cent last month against the same period a year ago.

The company also said that it expected prices to continue to rise throughout the rest of the year, lifted by mounting fuel and fertiliser costs and adverse weather conditions in Central America. To add to the gloom, Chiquita said that it had raised its forecast for the total cost of increased fuel and fertiliser by $200 million (£101.8 million) over the past four weeks. It expects additional costs of $265 million over the year as a whole. Read more here-http://business.timesonline.co.uk/tol/business/economics/article4151774.ece

-Hawaiians hit by skyrocketing shipping costs. Americans are paying more for their groceries these days as both food and fuel prices push higher. But Hawaiians who need most of their fresh foods imported are being pinched even more. Read more here-http://money.cnn.com/2008/06/18/news/economy/Lawrrence_Hawaii_shipping/index.htm

-High food prices "are here to stay," said Peter Brabeck-Letmathe, chairman of Nestle SA, the world's largest food company. Food prices "will establish themselves on a higher level but not at the peaks we have seen in some weeks," he said in an interview Monday.

He added that Nestle has no plans to raise prices further this year. Finance ministers from the Group of Eight nations warned Saturday that surging food and fuel prices have replaced the credit squeeze as the biggest threat to the world economy. Prices of corn, wheat, rice and palm oil have soared, putting millions in Asia at risk, according to the Asian Development Bank. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aQx_y9y.0JyM&refer=home

-USDA's Schafer Says No Biofuels Policy Changes Needed. Agriculture Secretary Ed Schafer said increased use of corn-based ethanol isn't a major cause of higher food prices in the U.S. and he doesn't expect any significant changes in the country's renewable fuels policy. "We don't think conditions today warrant changes," Schafer said today in a meeting with Bloomberg News reporters and editors in Washington.

Industry groups representing companies including Kellogg Co., Tyson Foods Inc. and Kroger Co. said June 10 they are coordinating efforts to reduce U.S. biofuels-use requirements with a new "Food Before Fuel" lobbying campaign. Biofuels produced by Poet LLC, VeraSun Energy Corp. and Archer Daniels Midland Co. are being blamed for rising food inflation.

The White House estimates that ethanol is contributing 2 to 3 percent of the gain, while the Washington- based International Food Policy Research Institute says it accounts for about 30 percent. The Senate Energy and Natural Resources Committee is holding a hearing today on the relationship between the renewable fuel standard and rising food prices. Read more here-http://www.bloomberg.com/apps/news?pid=20601072&sid=anQH6p9TN0R0&refer=energy

INTEREST RATES

-Speculation that the Federal Reserve is about to begin inflation-fighting interest rate increases appears to be dead wrong. Fed Chairman Ben S. Bernanke is worried more about runaway oil prices contracting the global economy than inflating it through a wage-cost spiral. According to sources close to him, America's leading central banker has no plans for a raise. Read more here-http://www.washingtonpost.com/wp-dyn/content/article/2008/06/15/AR2008061501452.html?sub=AR

-Big three central banks tone down rate hike threats. Read more here-http://news.yahoo.com/s/nm/20080617/bs_nm/global_centralbanks_dc_2&printer=1;_ylt=ApJZQaXolr96NLmYcVA3w.Kb.HQA

-Bank of England signals interest rates will be at 5pc for some time. Investors have scaled back their expectations for interest rate rises at the fastest speed in 14 years after Meryvn King indicated that borrowing costs may remain on hold for some time. Markets are now pricing in only one rate hike before the end of the year, compared with the three borrowing cost increases they were anticipating only yesterday.

In a co-ordinated move, the world's big two central banks, the Federal Reserve and European Central Bank, also gave warning that investors were in danger of getting carried away with their expectations of higher rates.

King, the Bank of England governor, used his letter of explanation to the Chancellor to say that, although inflation had hit a 15-year high of 3.3 percent last month and would rise above 4 percent thereafter, the increases would be short-lived.

He said: "There are good reasons to expect the period of above-target inflation we are experiencing now to be temporary," adding that higher inflation was caused by the rising prices of food and energy goods generated overseas. Significantly, when he explained the actions the Bank is taking to clamp down on prices he did not mention the prospect of a rate rise. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/17/bcnrates217.xml

-BOE Voted 8-1 for 5% Rate; Some Considered Increase. Bank of England policy makers defeated David Blanchflower's call for an interest-rate cut this month as the threat of inflation intensified, prompting some of them to consider an increase.

The Monetary Policy Committee, led by Governor Mervyn King, voted 8-1 to keep the benchmark rate at 5 percent, minutes of the June 5 decision showed. Blanchflower voted for a quarter-point reduction, arguing that there was a small, but growing risk of a "very negative outcome." Read more here-

http://www.bloomberg.com/apps/news?pid=20601068&sid=aSieqLsf_iP4&refer=home

-Catastrophic' event feared as Fed fights ECB on rates. The clash between the European Central Bank and the US Federal Reserve over monetary strategy is causing serious strains in the global financial system and could lead to a replay of Europe's exchange rate crisis in the 1990s, a team of bankers has warned.

"We see striking similarities between the transatlantic tensions that built up in the early 1990s and those that are accumulating again today. The outcome of the 1992 deadlock was a major currency crisis and a recession in Europe," said a report by Morgan Stanley's European experts.

Just as then, Washington has slashed rates to bail out the banks and prevent an economic hard landing, while Frankfurt has stuck to its hawkish line ignoring angry protests from politicians and squeals of pain from Europe's export industry. Indeed, the ECB has let the de-facto interest rate Euribor rise by more than 100 basis points since the credit crisis began. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/16/bcnecb116.xml

INFLATION

-Emerging markets face inflation meltdown. Central banks across much of Asia, Latin America, and Eastern Europe will soon have to jam on the brakes or risk a serious crisis as inflation spirals into the danger zone. As the stark reality becomes ever clearer, this year's correction in emerging market bourses and bond markets has now accelerated into a full-fledged rout. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/13/cnemerging113.xml

-U.K. inflation: Prepare for the worst. Read more here-http://business.timesonline.co.uk/tol/business/money/article4156227.ece

-British inflation at 16-year high on oil, food prices. British annual inflation leapt above-target to a 16-year high point of 3.3 percent in May on the back of surging food and energy prices, official data showed on Tuesday. Read more here-http://www.breitbart.com/print.php?id=080617130653.u2gqw6z7&show_article=1

-Learn to live with inflation, says King. British households must learn to live with higher prices and without increased wages, Mervyn King warned on Tuesday, as he predicted inflation would reach at least 4 per cent by the end of the year. The governor of the Bank of England also surprised markets by failing to use the letter to signal a series of interest rate rises to combat higher inflation. Read more here-http://www.ft.com/cms/s/0/bfc5f72a-3cab-11dd-b958-0000779fd2ac.html?nclick_check=1

-European Inflation Accelerates to Highest in 16 Years. European inflation accelerated to the highest in 16 years last month as food and energy costs soared, intensifying what finance ministers from the world's richest nations said is becoming a "more complicated" dilemma. The inflation rate in the euro area rose to 3.7 percent, the highest since June 1992, from 3.3 percent in April, the European Union's statistics office in Luxembourg said today.

The rate for May is higher than the 3.6 percent estimate published on May 30. Soaring commodity prices have pushed up costs for companies and consumers and at the same time are posing a "serious challenge" to economic growth, officials from the Group of Eight nations said yesterday after a meeting in Japan.

European Central Bank President Jean-Claude Trichet this month said the ECB may raise its benchmark interest rate a quarter point in July, signaling he is setting aside concerns about the economy's expansion to combat inflation. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid=akkyzsJZBKG0&refer=home

-Canada Inflation Rate Rises More Than Forecast on Gas. Canada's annual inflation accelerated for the second straight month in May as gasoline prices surged, lending support to the Bank of Canada's assertion last week that prices may keep rising all year.

Consumer prices rose 2.2 percent from a year earlier, the fastest pace since January, Statistics Canada said today. Economists surveyed by Bloomberg said inflation would accelerate 1.9 percent, the median of 22 estimates. Consumer prices rose 1 percent from April, the most since January 1991, exceeding analysts' 0.6 percent forecast. Read more here-

http://www.bloomberg.com/apps/news?pid=20601082&sid=a1yZS1TY_CVA&refer=canada

-Employer Health Costs to Rise 10 Percent, Double Inflation Rate. Health care costs for employers will increase almost 10 percent next year, double the rate of inflation, on rising hospital charges and costs for covering the uninsured, a study found. Read more here-http://www.bloomberg.com/apps/news?pid=20601103&sid=acu6wumX6ed0&refer=us

-U.S. inflation getting 'uglier and uglier'. Surging energy prices help drive annual cost-of-living rate rise to 4.2%. Read more here-http://money.cnn.com/2008/06/13/news/economy/CPI/index.htm

-U.S. Wholesale Inflation Increased More Than Forecast. Prices paid to U.S. producers rose more than forecast in May as fuel and food costs climbed. The 1.4 percent jump was the biggest gain since November and followed a 0.2 percent increase in April, the Labor Department said today in Washington. So-called core prices, which exclude energy and food, increased 0.2 percent.

Companies are paying more for energy and raw materials, which erodes profits and makes it more likely they'll be forced to raise prices. The report reinforces Federal Reserve policy makers' concern that inflation pressures are picking up. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a98NHvUcXIfI&refer=home

-Inflation hits hard in Hawaii. Residents have long paid above-average prices and the latest inflation spike is especially rough. Imagine going to your local grocery store and paying over $8 for a jar of Jif peanut butter. How about $5.50 for a loaf of white bread, $6.50 for a gallon of milk or $7.19 for a half-gallon of orange juice?

These are just some of the prices we found in a recent survey of Hawaii's supermarkets. Families there are certainly paying the price for living in paradise. Dave and Susan Ohamada were leaving the Honolulu Safeway when we asked to see their bill.

"I just spent $4.29 for a half-gallon of milk and that was a sale price," said Susan. "Kleenex! I bought Kleenex for $2.99!" The Ohamadas have two young daughters, Rachel and Erin, and these days, shopping for a family of four is enough to empty their wallets. Read more here-http://money.cnn.com/2008/06/19/news/economy/Lawrence_Hawaii_inflation/index.htm

-Kodak is likely to raise the price of some films as part of its worldwide response to the increased cost of raw materials. At first Kodak had only suggested that photographic paper and chemistry would be hit. But Patrick Hamilton, the company's European PR director for consumer digital products, said it is 'likely' some films will also be affected though he could not yet confirm details.

Eastman Kodak recently stated that the price of some consumer products would rise worldwide by up to 20% in response to the higher cost of materials such as silver, aluminium and petrol. The price rises take effect from 1 July. Amateurphotographer.co.uk

-With Inflation, There's No Free Lunch. Clearly, if you reside in one of the countries mentioned in the chart, and want to avoid being wiped out entirely, one of the safest hedges against inflation is to buy gold and silver. Richard Benson-Read more here-http://www.321gold.com/editorials/benson/benson061308.html

-Inflation has yet to hit the vital water market. But shortages, rising demand could accelerate prices, analysts say. Read more here-http://www.marketwatch.com/news/story/inflation-has-yet-hit-water/story.aspx?guid={A603238C-DB8B-4AEC-9684-854EE21800E8

U.S. DOLLAR

-Time to "Wheedle and Cajole." This past Friday The Wall Street Journal reported that the "U.S. continues to wheedle and cajole to shore up" support for its wars in Iraq and Afghanistan. Wheedling and cajoling can also be used to explain how the U.S. is trying to support the dollar. Barron's this weekend quotes a prominent bank economist as follows: "I think Ben [Bernanke] is bluffing. [He] is engaged in open-mouth policy in an attempt to stabilize the dollar." James Turk-Read more here-http://www.goldmoney.com/en/commentary.php

-China `Not Smart' to Invest in U.S. Bonds, Cheng Says. China's government, which invests up to a third of its $1.68 trillion in currency reserves in Treasuries, is "not smart" to invest in U.S. debt and should seek higher returns, a former legislator said.

"I don't think it's a smart move to invest in U.S. bonds," said Cheng Siwei, former vice chairman of the National People's Congress, China's legislature, at a Beijing conference. "We need smart capitalists to invest ourselves," instead of lending money to American investors and earning interest, he said.

Cheng's remarks on Nov. 7 that China should improve the structure of its foreign reserves by favoring stronger currencies helped pushed the dollar to record lows against the euro. He said today his comments represented his "personal opinion, not the government's policy."

Countries in Asia have amassed a record $4.2 trillion in foreign exchange reserves since the 1997-98 financial crisis, seeking to protect their economies from a similar regional currency slump. China set up China Investment Corp., a $200 billion sovereign wealth fund, in September to seek higher returns on its holdings. Read more here-

http://www.bloomberg.com/apps/news?pid=20601009&sid=az.moYIdDgYo&refer=bond

EURO

-Support for euro in doubt as Germans reject Latin bloc notes. Notes printed in Berlin have more currency for bank customers who fear a 'value crisis.' Ordinary Germans have begun to reject euro bank notes with serial numbers from Italy, Spain, Greece and Portugal, raising concerns that public support for monetary union may be waning in the eurozone's anchor country.

Germany's Handelsblatt newspaper says bankers have detected a curious pattern where customers are withdrawing cash directly from branches, screening the notes to determine the origin of issue. They ask for paper from the southern states to be exchanged for German notes.

Each country prints its own notes according to its economic weight, under strict guidelines from the European Central Bank in Frankfurt. The German notes have an "X"' at the start of the serial numbers, showing that they come from the Bundesdruckerei in Berlin. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/13/cneuro113.xml

U.S. RECESSION

-Why we're Gloomier than the Economy. U.S. Consumer Anxiety Outstrips the Data. Ask Americans how the economy is doing, and their answer is stark: It is not just bad, it is run-for-the-hills terrible. Consumer confidence is at its lowest level in almost 30 years. Only 12 percent of Americans think the economy is in good shape. On the Internet, comparisons to the Great Depression are widespread. Read more here-http://www.washingtonpost.com/wp-dyn/content/article/2008/06/17/AR2008061702463_pf.html

-A third of CEOs expect to slash payrolls. Most see stronger economy, according to a Business Roundtable survey, but remain cautious about hiring. Read more here-

http://money.cnn.com/2008/06/18/news/economy/business_outlook.ap/index.htm

-McClatchy Plans to Cut 1,400 Jobs, 10% of Workforce. McClatchy Co., owner of the Miami Herald and 29 other daily newspapers, will cut about 1,400 jobs, or 10 percent of its workforce, to save $70 million annually after a record drop in industry wide advertising sales.

The reductions are part of a plan to cut costs as much as $100 million in the next four quarters, Sacramento-based McClatchy said today in a statement. The Miami Herald plans to eliminate 250 positions, or 17 percent of its staff, and the Charlotte Observer will cut 123 positions, or 11 percent, the newspapers reported.

Tribune Co. and New York Times Co. have also reduced staff to save money as companies that historically advertised in newspapers shift their spending to the Internet. Newspaper print ad sales slumped 14 percent in the first quarter, the most on record, the Newspaper Association of America said June 13. Read more here-

http://www.marketwatch.com/news/story/mcclatchy-lay-off-10-workforce/story.aspx?guid={C1683653-439C-4BC3-8AB3-FD0D8045BEC2}&siteid=yahoomy

-Newspaper Advertising Takes Big Fall. Print advertising sales by American newspapers fell the most on record in the first quarter, tumbling 14 percent as the real estate and job markets shrank and business was lost to the Internet. Advertisers spent $8.43 billion on newspaper ads in the first three months of 2008, according to the Newspaper Association of America, the eighth drop in a row.

Real estate and recruitment ads each fell 35 percent. Many of the industry's biggest advertisers in real estate, automotive and employment are cutting spending and shifting advertising to their own Web sites, said Kip Cassino, research director at Borrell Associates, a consulting firm in Williamsburg, Va. Newspapers' Web sites are not picking up all of the slack.

Newspaper-owned sites attracted $804 million in advertising during the quarter, the association said, up 7.2 percent from last year and the smallest gain since the industry group began reporting online sales growth in 2004. Bloomberg

-WaMu cuts 1,200 jobs. The nation's largest savings and loan announces it has cut 2.6% of its workforce, under pressure from the rising cost of delinquencies and foreclosures. Read more here-http://money.cnn.com/2008/06/19/news/companies/washington_mutual.ap/index.htm

-How the floods will hurt the economy. Beyond the human tragedy, the flooding in Iowa and other parts of the Midwest may also lead to higher food prices and lower exports. Read more here-http://money.cnn.com/2008/06/16/news/economy/flooding_impact/index.htm?postversion=2008061707

-Bankruptcy rising among seniors. Read more here-http://www.usatoday.com/money/perfi/retirement/2008-06-16-bankruptcy-seniors_N.htm

CREDIT CRISIS

-Paulson & Co. Says Writedowns May Reach $1.3 Trillion. John Paulson, founder of hedge fund Paulson & Co., said global writedowns and losses from the credit crisis may reach $1.3 trillion, exceeding the International Monetary Fund's $945 billion estimate.

"We're only about a third of the way through the writedowns," Paulson, 52, told the GAIM International hedge fund conference in Monaco today. "There are a lot of problems out there and it will continue to be felt through the year. We don't see any signs of stabilizing." Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=alYak4riQl0c&refer=home

-Fed auctions $75 billion to banks. In most recent auction, Fed lets investment firms get emergency loans directly; central bank swamped with bids to help ease credit crunch. Read more here-http://money.cnn.com/2008/06/17/news/economy/fed_credit.ap/index.htm?postversion=2008061710

-The Federal Reserve is just days away from completing the financing for its bailout of Bear Stearns Cos., after which the central bank will have another big decision to make: how to account for it. Read more here-http://www.gata.org/node/6382

-Fidelity sued over short-term bond fund. Investor claims fund giant didn't disclose risks; portfolio loaded with mortgage-backed securities. Read more here-

http://www.financialweek.com/apps/pbcs.dll/article?AID=/20080612/REG/368121834/1036

-Nearly Half of Wall St. Bank Profits Are Gone. Read more here-http://www.nytimes.com/2008/06/16/business/16earnings.html?_r=2&oref=slogin&partner=rssyahoo&emc=rss&adxnnlx=1213578294-YuMp24lK1Bcp9AhIf1S2Ng&pagewanted=print&oref=slogin

-Lehman Brothers posts $2.87 billion 2Q loss. Read more here-http://news.yahoo.com/s/ap/20080616/ap_on_bi_ge/earns_lehman_brothers_12&printer=1;_ylt=AiiFZF_jWnzR7xRDBo51Oltv24cA

-Morgan Stanley's profits take a tumble. Earnings drop 57%, hurt by slower investment banking, fixed income activity; stock slumps. Read more here-

http://money.cnn.com/2008/06/18/news/companies/morgan_stanley/index.htm

-More big bank dividend cuts lie ahead. After a sharp selloff, BofA, Wachovia and other high-yielders may need to cut their payouts before long. Read more here-

http://money.cnn.com/2008/06/17/news/dividends.we.fall.fortune/index.htm

-Citi to suffer more 'substantial' writedowns. CFO says banking conglomerate will increase writedowns related to leveraged loan and bond insurers but decrease CDO writedowns. Read more here-http://money.cnn.com/2008/06/19/news/companies/bc.apfn.citigroup.outlook.ap/index.htm

-Secrecy for NY Fed's derivatives bailout scheme challenged. The New York Federal Reserve's closed-door rule making with top players in the massive $60 trillion credit default swaps market came under legal fire on Sunday, as a fair finance activist filed a complaint questioning why it was done in the dark.

"The Federal Reserve seems to think it can engage in rule making in secret only with the industry," said Matthew Lee, executive director of the New York-based non-profit group Inner City Press/Community on the Move. Read more here-http://www.gata.org/node/6373

-Crime and delusion on Wall Street. Prosecutors allege two ex-Bear Stearns hedge fund managers misled investors. Perhaps, but Wall Street has long been kidding itself about the credit crunch. Read more here-http://money.cnn.com/2008/06/19/news/newsmakers/bear_cioffi.fortune/index.htm?postversion=2008061914

AIRLINES-HARD TIMES

-Air travellers more vexed by poor service than high prices: survey. Overall satisfaction with the North American airline industry has dropped to its lowest level in three years, largely owing to flagging customer service, according to a consumer satisfaction survey.

Customers interviewed in the J.D. Power and Associates survey, released by the consumer research company Wednesday, said they had grown less satisfied with the knowledge and courtesy demonstrated by gate agents and flight crew. Read more here-http://www.cbc.ca/consumer/story/2008/06/19/airline-survey.html

-Air Canada to cut 2,000 jobs. The airline slashes 7% of its workforce and reduces capacity, citing record fuel prices as a contributing factor. Read more here-

http://money.cnn.com/2008/06/17/news/international/aircanada_jobs.ap/index.htm

-Northwest announces more capacity cuts. Airline expects to trim total capacity by as much as 10% below last year's levels; also says that layoffs are possible. Read more here-

http://money.cnn.com/2008/06/17/news/companies/northwest_airlines.ap/index.htm

-Southwest Says Fares Must Rise `Continuously' on Fuel. Southwest Airlines Co., the biggest discount carrier, must keep increasing fares "gradually and continuously" as jet-fuel prices surge, Chief Executive Officer Gary Kelly said. The U.S. airline industry is struggling with a "terrible" operating environment as fuel stays near $4 a gallon, Kelly said today at a Merrill Lynch & Co. conference in New York.

"We're going to have to move fares along gradually and continuously to be able to overcome these dramatically high fuel costs," Kelly said. An 82 percent surge in jet fuel in the past year is forcing Dallas-based Southwest to juggle its low-fare business model with the need to charge more to recoup its costs. Kelly said that after taking no first-quarter price increases, Southwest has adopted three this quarter. Bloomberg

-U.K. Holidaymakers face 40% hike in airfares due to soaring price of fuel. Read more here-http://www.dailymail.co.uk/news/article-1027778/Holidaymakers-face-40-hike-airfares-soaring-price-fuel.html

-5 ways to fly for cheap. The deals are still out there, but travel experts say flexibility is key when looking for discount air fares. Read more here-http://money.cnn.com/2008/06/16/pf/cheap_tickets/index.htm

MOTOR VEHICLES-THE FUTURE?

-Ford shuts SUV plant due to low sales. Lackluster demand forces American automaker to close plant for 9 weeks and layoff 1,400 hourly workers. Read more here-

http://money.cnn.com/2008/06/16/news/companies/ford_suvs.ap/index.htm

-Adapt or die: Future of big SUVs. Large trucks and SUV will still be needed in 5 to 10 years. But they'll need to change. Read more here-

http://money.cnn.com/2008/06/11/autos/future_suv/index.htm

-Honda rolls out fuel cell car. Japanese automaker's hydrogen-powered FCX Clarity promises twice the efficiency of gas-electric hybrids. Read more here-

http://money.cnn.com/2008/06/16/autos/honda_zev.ap/index.htm

-GM: 18,657 took buyouts, retirements. The Detroit auto company will replace some workers with new, entry-level employees. Read more here-

http://money.cnn.com/2008/06/19/news/companies/bc.gm.buyouts.ap/index.htm

-Deepening gloom at General Motors. As the auto giant grows sicker, its chances for a full recovery get dimmer. Read more here-

http://money.cnn.com/2008/06/19/news/companies/taylor_gm.fortune/index.htm

-5 electric cars you can buy now. With gas prices soaring, plugging in has its appeal. But there are trade-offs: high costs and low speed. Read more here-http://money.cnn.com/galleries/2008/autos/0806/gallery.electric_cars_now/index.html

REAL ESTATE

-Canadian real estate boom over, statistics indicate. Read more here-http://www.cbc.ca/money/story/2008/06/13/crea-house.html

-U.S. Housing Starts Drop to Lowest Level in 17 Years. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid=aVrx2EuK2NzU&refer=home

-When Builders Go Broke. Read more here-http://biz.yahoo.com/bizwk/080618/jun2008bw20080617159524.html?.v=1&printer=1

-Builders' confidence matches record low. A survey of homebuilders' assessment of the housing market shows the industry's sentiment tied the mark set in December. Read more here-

http://money.cnn.com/2008/06/16/news/economy/builders_confidence/index.htm

-NAR: 4% Quarterly Gain is (Oops) Actually a 30% Loss. We have long complained about the spinmeisters at the National Association of Realtors (NAR) for their pollyannish views and their continual bottom calling. It turns out that the spin from the NAR isn't the only thing that is suspect. It seems their data collection and basic math skills are questionable, also.

Case in point: Q1 Housing Sales. James Bednar is Editor of the NJ Real Estate Report a blog about Garden State realty issues. James is also a realtor, and was rather surprised to learn back on May 13th, that first quarter sales in New Jersey were up 4% year over year. At least, that's what the National Association of Realtors claimed when they released their first quarter 2008 sales data.

That didn't jibe with what James was seeing, so he requested the data from the NAR. Five times all to no avail. Despite what local realtors were experiencing, both the NAR and the NJAR believed that NJ was improving. Good news and proof of the housing bottom at last! Only, it was not to be. As was reported in the Star-Ledger this morning, NJ home sales were not up 4% in the first quarter; they had (whoops!) plunged 30 percent! Read more here-http://bigpicture.typepad.com/comments/2008/06/nar-30-loss-4.html

-Chuck Prince Finds Selling Home No Easier Than Fixing Subprime. Former Citigroup Inc. Chief Executive Officer Charles O. "Chuck" Prince III lost his job because of the housing slump. Now he's having a hard time selling his home. Prince's five-bedroom Tudor-style house in Greenwich, Connecticut, has been on the market for six months. He has cut the price by $300,000 to $5.85 million, according to the property listing. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid=auXmRexARYhc&refer=home

-California Home Market Shows First Signs of Recovery. The California housing market may be showing the first signs of a recovery after three years of declining sales and two years of rising foreclosures, the UCLA Anderson Forecast said today.

While home prices in the most populous U.S. state are still weak, the number of houses and condominiums changing hands in some parts of California is rising, according to the Anderson Forecast at the University of California, Los Angeles, which released its 127-page forecast for both the state and the U.S. today.

"The combination of steep price declines, lower interest rates and an easing of the credit crunch may now be bringing bargain-hunting buyers back into the market" for California homes, Ryan Ratcliff, an Anderson Forecast economist, wrote in the report. Riverside County posted a year-on-year gain in the number of homes sold, he wrote.

The collapse of the subprime-mortgage market contributed to an increase in foreclosures as well as drops in home prices and sales in California. In the first quarter, mortgage defaults in the state rose 143 percent to the highest level in 15 years, according to La Jolla, California-based DataQuick Information Systems.

Foreclosures will probably continue to hurt California's housing market for the rest of this year and then start to moderate in 2009, the Anderson Forecast said. While a "normal" housing market "is still a long way off," according to the report, the increase in home sales in some parts of the state is a positive sign. Read more here-

http://www.bloomberg.com/apps/news?pid=20601087&sid=aKG8Ek_sgLWM&refer=home

FORECLOSURES-MORTGAGES

-Foreclosures Rise 48% in May as Repossessions Double. Bank repossessions more than doubled in May and foreclosure filings rose 48 percent from a year earlier as previously foreclosed properties dragged down housing prices, trapping borrowers in mortgages they couldn't afford, RealtyTrac Inc. said in a report today. One in every 483 U.S. households either lost the home to foreclosure, received a default notice or was warned of a pending auction, RealtyTrac said.

That was the highest rate since the Irvine, California-based company began reporting in January 2005 and the 29th consecutive month of year-over-year increases. Nevada, California and Arizona posted the highest rates in the U.S. and New Jersey entered the top 10. "It's definitely a different kind of market than what we got used to a couple years ago," said Devin Reiss, owner of Realty 500 Reiss Corp. in Las Vegas. "We used to sell homes in a day. Now 50 percent of our sales are foreclosures."

Foreclosures add to inventory and crowd out regular sales, Michelle Meyer and Ethan Harris, economists at Lehman Brothers Holdings Inc. in New York, wrote in a report yesterday. Foreclosures will account for 30 percent of national home sales this year as 1.2 million foreclosed single-family homes will eventually enter the market, they said. They estimate foreclosed properties, which typically sell for about 20 percent less than other homes, will depress home prices nationally by 6 percent. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aexLG6Bdlf8g&refer=home

-Property-flipping rule suspended. The White House temporarily suspends a rule that imposes a 90-day waiting period before foreclosed homes can be sold to receive government loans. Read more here-http://money.cnn.com/2008/06/13/real_estate/property_flipping.ap/index.htm

-How homeowners, speculators and Wall Street dealmakers rode a wave of easy money with crippling consequences. Read more here-

http://www.washingtonpost.com/wp-dyn/content/article/2008/06/14/AR2008061401479.html

-Mortgage fraud inquiry nets hundreds. Government official says losses in the fraud cases total about $1 billion. Hundreds of people across the country have been arrested by law enforcement officials targeting crooked mortgage brokers, real estate agents, and other industry officials, the head of the FBI and a top Justice Department official said Thursday. Read more here-http://money.cnn.com/2008/06/19/real_estate/mortgage_fraud/index.htm

GEOPOLITICAL NEWS

-Get Osama Bin Laden before I leave office, orders George W Bush. Read more here-http://www.timesonline.co.uk/tol/news/world/us_and_americas/article4138791.ece

-Ahmadinejad says West failed in Iran nuclear crisis. President Mahmoud Ahmadinejad said on Thursday the West has failed to break Iran's will in the nuclear standoff, days after world powers presented Tehran with a new offer aimed at ending the crisis. "In the nuclear issue, the bullying powers have used up all their capabilities but could not break the will of the Iranian nation," Ahmadinejad was quoted as saying by state television.

World powers Britain, China, France, Germany, Russia and the United States on Saturday offered Tehran a new package of technological and economic incentives in exchange for suspending uranium enrichment activities. Read more here-http://www.breitbart.com/print.php?id=080619105417.ysx0pu2g&show_article=1

-Iran Considering Proposals to Drop Enrichment Program. Iran is studying incentives from the world's powers for the country to drop its uranium-enrichment program and will respond "at an appropriate time," Foreign Minister Manouchehr Mottaki said. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=anr6u_8MRiZA&refer=home

-Is Israel indirectly buying Iranian oil? Read more here-http://www.jpost.com/servlet/Satellite?cid=1212659723371&pagename=JPost%2FJPArticle%2FPrinter

-US N-weapons parts missing, Pentagon says. The US military cannot locate hundreds of sensitive nuclear missile components, according to several government officials familiar with a Pentagon report on nuclear safeguards.

Robert Gates, US defence secretary, recently fired both the US Air Force chief of staff and air force secretary after an investigation blamed the air force for the inadvertent shipment of nuclear missile nose cones to Taiwan. Read more here-http://www.ft.com/cms/s/0/04dfa24c-3db6-11dd-bbb5-0000779fd2ac.html

-Smugglers Had Design For Advanced Warhead. Read more here-

http://www.washingtonpost.com/wp-dyn/content/article/2008/06/14/AR2008061402032_pf.html

-Pakistan's Khan denies selling advanced nuke blueprint. Read more here-http://www.breitbart.com/print.php?id=080617075252.37a1b9ik&show_article=1

The GoldBugg Report - June 24, 2008
Posted by Worldwide Precious Metals on Tuesday, June 24, 2008

The GoldBugg Report - June 17, 2008

June 17, 2008

-"There's a good chance that Gold may go back above $1,000 in the short- to medium-term," reckons Richard Davis at Blackrock, the investment group half-owned by Merrill Lynch.

"We're headed for inflationary times and gold has always been a safe asset to protect your wealth against inflation." Reuters-Read more here-http://in.reuters.com/article/domesticNews/idINL1013902120080611

-Gold Remains Fringe and the Preserve of the Smart Money. Gold remains off the radar of the vast majority of investors who remain determinedly focused on property and equities despite their dreadful performance in the recent months and their likely underperformance in the coming years. The majority of investors know little or nothing about gold and the what, why and how of investing in gold. Gold.ie

-Gold remains the preserve of the risk conscious and the knowledgeable. It is slow monthly and quarterly money and allocations from individual investors, pension funds and institutions pushing up prices because they want a finite currency and hard asset and need diversification as many remain overweight equities (some dramatically so) and overexposed to property markets.

Gold remains a fringe investment. This will change in the coming months and years and gold will again become a mainstream asset class alongside property and equities. It will then likely experience mass participation and the herd will plow in as they unfortunately tend to do near market tops.

When gold is featured on the radio and T.V. and there are a large number of companies selling gold, then we will have reached the bubble stage and it will be time to sell. When gold is the investment topic du jour at dinner parties in the western world, it will be time to sell. When your taxi driver tells you to sell everything and buy gold then it will be time to sell your gold.

That day is a long way off yet. Gold.ie

-Inflationary Psychology. The relationship between inflation and individuals' behavior. For example, in times of higher-than-average inflation, consumers have a higher likelihood of borrowing to buy things because they are assuming goods will cost more tomorrow than they do today. This increased buying only exacerbates inflation. Investopedia.com

-Fisher Effect. A theory describing the long-run relationship between inflation and interest rates. This equation tells us that, all things being equal, a rise in a country's expected inflation rate will eventually cause an equal rise in the interest rate (and vice versa). Investopedia.com

-Gold remains underpinned by international tensions, particularly those between Iran and Israel that were fanned last week after talk that Israel was prepared to move unilaterally against Iran if that country did not discontinue its nuclear program. All the war talk "increases the uncertainty in the geopolitical situation and adds to safe-haven buying in gold," said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. Kitco Daily Resource

-Ralph Preston, an analyst at Heritage West Futures in San Diego, went further. Calling gold a "barometer for geopolitical activity," he predicted that the metal would reach $1,200/ounce and oil would top $175/barrel "within 30 to 90 days stemming from an international event, whether it would be a coup in Pakistan" or an escalation of the unrest in the Middle East. Kitco Daily Resource

-Looking down the road, wrote James Moore, an analyst at TheBullionDesk.com, "short-term direction is still likely to be dollar-driven." But Moore added that "with inflation on the increase, longer-term investors should continue to look favourably towards gold, with the metal likely to carry out further base building ahead of $850 before rallying back towards $1,000 later in the year."

Crude oil, which remains at nosebleed levels, is a primary driver of inflation, and after oil's meteoric rise, gold has a lot of catch-up still to play. And Matt Zeman, a metals trader at LaSalle Futures Group in Chicago believes that the difference between interest rates on euros and dollars is paramount, leading him to conclude that, "Traders are looking at the difference between rates. You've got to believe that people are going to step in and buy gold right now." Kitco Daily Resource

-More financial land mines ahead. The worst of subprime mortgage crisis may now be out in the open. But more problems are lurking in prime mortgages, credit cards and auto loans. Read more here-http://money.cnn.com/2008/06/10/news/economy/next_financial_woe/index.htm?postversion=2008061012

GOLD

-The Map of Gold for 2008 from Jim Sinclair:

Gold will now go to $960 on its way to $980, at that point scrapping with the metals dealers.

After $980 has been breached we will move on to cross $1000 once again, followed by a modest back off.

After that $1024 and $1033 are in Gold's site.

After fighting at those levels, $1200 is in the cards this year. Jsmineset.com

-John Embry June commentary, gold will recover stronger and faster than ever. Read more here-http://www.sprott.com/pdf/investorsdigest/digest.pdf

-An Historic Year for Gold: That Was the Year That Was. Read chart here-http://news.goldseek.com/GoldSeek/1213206060.php

-Gold coins outshine gold shares. Read more here-http://www.miningmx.com/met_heads/518064.htm

-India gold demand beginning to pick up as prices fall. The falling price of gold already seems to be having an impact in the vitally important Indian gold market. Read more here-

http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=54643&sn=Detail

-Dubai gold imports expected to rise again. High gold prices are unlikely to affect the level of imports into Dubai, despite the recent 7.6% fall in purchases by the ‘City of Gold' say industry executives. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=54360&sn=Detail

-Does gold, commodities surge signal war? Gold bug sees impending attack on Iran. Read more here-http://www.marketwatch.com/news/story/does-gold-commodities-surge-signal/story.aspx?guid=%7bD534C413-16E9-4738-A2A2-5BF0D81936DB%7d&print=true&dist=printMidSection

-Medicine is going for gold as experts rediscover the ancient properties of the precious metal. Read more here-http://www.dailymail.co.uk/health/article-1024865/Medicine-going-gold-experts-rediscover-ancient-properties-precious-metal.html

SILVER

-Ten Phony Reasons To Sell Gold and Silver Now from Roger Wiegand. Keeping Score on Nonsense Is a Full Time Job; the highs are in for gold and silver. The market will be over-run with central bank gold selling should these markets get out of hand. Technically, we forecast gold at a minimum price of $2,960 with a probability of much higher prices. Silver is near $17 and $50 is a sure thing with our expectations of $176 to $256 within five years.

Markets ebb and flow with cycles and profit-taking. Do not be fooled with hollow selling bearish news and threats by those who prefer gold sell-off to lower prices. Gold is the only real money in the world and its rally has barely begun. Also, keep in mind the adjusted for inflation gold and silver prices have farther to go. Read more here-http://www.kitco.com/ind/Wiegand/printerfriendly/jun112008.html

-U.S. Mint says its silver supply will be cut in half. Silver Eagle Rationing Gets Even Tighter By Dave Harper Numismatic News, Cincinnati, Ohio Friday, June 6, 2008. I just received a copy of a letter being sent to the U.S. Mint's authorized purchasers of silver American Eagles. The tight supply situation continues and will get even tighter next week. The text of the letter follows.

June 6, 2008

MEMORANDUM TO ALL
AMERICAN EAGLE
AUTHORIZED PURCHASERS

FROM: Cathy Laperle
Team Lead, Bullion Program
United States Mint

SUBJECT: American Eagle Silver Bullion Coin Update

The United States Mint has been informed by its silver blank vendors that the volume of blanks they will be shipping to us in the coming weeks will be significantly reduced. Specifically, the quantities they will ship to us during the week of June 9 are expected to be less than half the quantities they shipped to us during the week of June 2. Our vendors, however, expect to be able to make incremental increases in supplies each week thereafter.

In the mean time, the significant reduction in the number of blanks they supply to us will, of course, directly affect the quantity of coins we can make available for allocation to our Authorized Purchasers. Accordingly, the United States Mint will continue allocating American Eagle Silver Bullion Coins per the process initiated on April 21, 2008. As you know, in the first six months of 2008 production, the United States Mint produced more American Eagle Silver Bullion Coins (10.07 million) than we did during the entire 12-month period of 2007 (9.03 million).

The United States Mint stands ready to continue this high level of production as additional blanks become available from our suppliers. The United States Mint is making every effort to increase its acquisition of silver bullion blanks that meet the specifications and requirements of the law. In our efforts to meet unprecedented demand, the United States Mint is again preparing a request for proposals for additional silver blank suppliers.

Additionally, we are not using incoming supplies of silver blanks to produce numismatic versions of these coins (American Eagle Silver Proof and Uncirculated Coins); all incoming inventory is being used solely for silver bullion coins during this reduced supply period. Thank you for your patience and your continued support of the United States Mint American Eagle Silver Bullion Coin Program. GATA.org

-Mint replies to Silver Institute's complaint about shortage of coins. Read more here-http://www.gata.org/node/6349

-Got Gold Report Keep Focused on Gold, Silver This Summer. Keep focused on the big picture and the prize during this best, most powerful secular bull market for precious metals in a generation. Read more here-http://www.resourceinvestor.com/pebble.asp?relid=43437

-Silver Delivery "Delays". Read more here-http://www.financialsense.com/fsu/editorials/2008/0607.html

-Silver commentary from David Morgan. Read more here-http://news.silverseek.com/SilverInvestor/1212763382.php

-Gold/Silver Market Updates from Clive Maund. Read more here-http://www.321gold.com/editorials/maund/maund060608.html

-Silver jewellery gaining popularity. Gold used to be the top priority of women in jewellery, but the trend is changing and silver jewellery is gaining popularity, said silver jewellery designer Maria Athar on Monday. Maria is a young designer from Islamabad. An exhibition of silver jewellery designed by her is on display at the Pakistan Fashion Design Council (PFDC). The sterling silver, popularly known as rhodium plating, with semi precious stones looked stunning and glamorous, she said.

Earrings designed by her are up to four inches in length. Silver rings studded with semi precious stones are also displayed there. Maria said that rhodium plating protected jewelry from turning black. She said that since gold prices had skyrocketed, silver was gradually taking its place. Talking about the people's response, she said that it was wonderful. The exhibition will end today. Dailytimes.com.pk

COMMODITIES

-Scotiabank: Some high metal prices are sustainable in commodity ‘supercycle' During this second most powerful expansion in commodity prices since World War II, Scotiabank Group is confident that some high metals prices are sustainable, during what they termed "the commodity price supercycle." Read more here-

http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=54345&sn=Detail

-Corn jumps to record for 6th day on Midwest floods. Read more here-http://biz.yahoo.com/ap/080612/commodities_review.html?.v=3

OIL

-BP's Hayward Says Era of Cheap Energy Prices Is Over. Read more here-http://www.bloomberg.com/apps/news?pid=20601085&sid=abCY6FIqVnAw&refer=europe

-Gazprom Sees Oil at $250 in 'Foreseeable Future'. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aIjhO.KunHcE

-An ominous warning that the rapid rise in oil prices has only just begun. Read more here-http://www.independent.co.uk/news/uk/home-news/an-ominous-warning-that-the-rapid-rise-in-oil-prices-has-only-just-begun-844217.html

-Oil price likely to hit $150 this summer Goldman. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page38?oid=54347&sn=Detail

-Iran sees oil at 150 dollars a barrel this summer. Read more here-http://www.breitbart.com/print.php?id=080608172829.ydg7ngw5&show_article=1

INFLATION

-Oil prices and overall price inflation will remain elevated for the foreseeable future, former U.S. Federal Reserve chairman Alan Greenspan predicted Friday. Read more here-http://www.thecanadianpress.com/english/online/OnlineFullStory.aspx?filename=b053098A&newsitemid=61695033&languageid=1

-Concerns on Economy Are Shifting to Inflation. In the past 48 hours, Wall Street has issued a sobering message: The days of easy money from the Federal Reserve are nearly over.Read more here-http://www.nytimes.com/2008/06/11/business/worldbusiness/11stox.html?_r=4&oref=slogin&ref=business&adxnnlx=1213189392-1ILNSOTCqnXQYlVBGy7dug&pagewanted=print

-Inflation Is Biggest Threat to Global Economy, Executives Say. Read more here-http://www.bloomberg.com/apps/news?pid=20601013&sid=a.keTd1NB52c&refer=emergingmarkets

-China Inflation Rate Falls From Close to 12-Year High. Read more here-http://www.bloomberg.com/apps/news?pid=20601013&sid=ackxCTWPdYz4&refer

-Japan's wholesale inflation rate surged to a 27-year high in May as companies charged clients more to meet record oil and commodity costs. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aCWziCutwUCI&refer

-Russian Inflation Accelerated to 15.1% in May on Food. Read more here-http://www.bloomberg.com/apps/news?pid=20601013&sid=aUsDv_RZrMkE&refer=emergingmarkets

-U.K. Producer Prices Rise at Fastest Pace Since 1986. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid=aPRRwkNA82L8&refer=home

-Despite oil wealth, Venezuela inflation rises. Read more here-http://economictimes.indiatimes.com/articleshow/msid-3111726,prtpage-1.cms

-Iranian inflation tops 25 percent. Read more here-http://afp.google.com/article/ALeqM5gzoNXv43CZC07ZQso6PD8ZvhmKkQ

-Get used to high prices. The Fed has a mandate to keep inflation in check. But global forces and worries about the U.S. economy will keep prices high for the foreseeable future. Read more here-http://money.cnn.com/2008/06/12/news/economy/inflation_outlook/index.htm?postversion=2008061215

-Why higher prices are here to stay. Even if crude oil and crop prices come back down to earth, you won't pay less for gas or groceries. And investors won't make out like bandits while consumers suffer. Read more here-http://articles.moneycentral.msn.com/Investing/JubaksJournal/WhyHigherPricesAreHereToStay.aspx?page=all

-Stagflation is back, but the outlook is grimmer this time. Which is worse, wages that keep up with inflation or wages that don't? Nowadays, a lot of comparisons are being made to the 1970s. This is because the U.S. economy is once again in the throes of stagflation. The combination of little or no growth (stagnation) and rapidly rising prices (inflation), the term stagflation was first coined by Iain Macleod, the chancellor of the exchequer, in a speech to the House of Commons in 1965.

He said, "We now have the worst of both worlds not just inflation on one side or stagnation on the other, but both of them together sort of a stagflation situation." At first glance, it does appear to be déjà vu all over again. Read more here-http://www.marketwatch.com/news/story/if-only-were-70s/story.aspx?guid=%7b4D9BD801-7274-48F3-AFE9-75DF268CEC6E%7d&dist=msr_3&print=true&dist=printMidSection

INTEREST RATES

-Canada Unexpectedly Keeps Rate Unchanged on Inflation. The Bank of Canada unexpectedly kept its benchmark interest rate unchanged on concerns energy costs may push inflation past the top of its target band later this year.

Governor Mark Carney and his five deputies held the rate on overnight loans between banks at 3 percent, surprising all 30 economists surveyed by Bloomberg. Carney also surprised half the economists in a March poll by Bloomberg when he cut borrowing costs by half a point cut instead of 25 basis points. Read more here-

http://www.bloomberg.com/apps/news?pid=20601087&sid=aJckn8gI1_is&refer=home

-Inflation data trigger rethink on rate rises. Investors are betting the Bank of England will have to raise interest rates at least once before the end of the year to curb inflation, after wholesale gas prices hit a new high and official data showed producer prices increasing at a record pace. Read more here-http://www.ft.com/cms/s/0/398def1a-3688-11dd-8bb8-0000779fd2ac.html?nclick_check=1

-Inflation shock leaves markets fearing three interest rate increases this year. Investors have bet that the Bank of England will have to raise interest rates as many as three times before the end of the year. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/10/cnrates110.xml

-India Raises Interest Rate to 8% to Rein in Inflation. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=adYX_8CTB4W0&refer=home

U.S. DOLLAR

-China urges U.S. to stabilize dollar. Read more here-http://www.gata.org/node/6358

-Bush and Paulson try talking the dollar up. Read more here-http://www.gata.org/node/6360

-The Fed's Strong Dollar Policy. Peter Schiff-Read more here-http://www.321gold.com/editorials/schiff/schiff060908.html

-The Weak-Dollar Threat to World Order. Read more here-http://online.wsj.com/article/SB121296987173655833.html?mod=fallstreet.com

-The Fed's New Strong Dollar Policy. Adrian Ash-Read more here-http://www.321gold.com/editorials/ash/ash061008.html

-Fed Not in It to Back a 'Strong Dollar' Policy. Let's get one thing straight: The Federal Reserve isn't going to raise interest rates to back a ''strong dollar'' policy. The dollar's value isn't a central consideration in the Fed's interest-rate policy deliberations. Only on rare occasions has it ever been, such as in the late 1970s when the country was having difficulty financing its current account deficit. Read more here-http://www.bloomberg.com/apps/news?pid=20601039&sid=ahl4XeXsUduY&refer=home

-Bernanke Jeopardizes Dollar. Read more here-http://www.321gold.com/editorials/merk/merk061008.html

-Bernanke is 'walking a fine line' Fortune's Andy Serwer breaks down the Fed chairman's recent comments on the economic downturn. Watch video here-

http://money.cnn.com/video/ft/#/video/fortune/2008/06/10/fortune.sl.bernanke.fortune

U.S. RECESSION-DEPRESSION

-IMF outlook on U.S. economy remains bleak. Read more here-http://www.reuters.com/article/idUSN0928809420080609

-U.S. Economy: Payrolls Fall, Unemployment Rate Climbs. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aGhzl5b7XNZA&refer=home

-Unemployment pain to continue index. A new employment trends measure from the Conference Board signals that more months of job losses lie ahead. Read more here-

http://money.cnn.com/2008/06/09/news/economy/job_trend_index/index.htm

-America's Money: Debt crush. Americans deep in debt are struggling more than ever amid the credit crisis and economic downturn. See how people got in the hole and what they're doing to get out. Read more here-http://money.cnn.com/galleries/2008/news/0805/gallery.real_people_debt/index.html

-Stimulus gives a lift to consumers. May retail sales report shows 1% overall gain, twice what economists expected. Read more here-http://money.cnn.com/2008/06/12/news/economy/retail_sales/index.htm

CREDIT CRISIS

-Investment firms steady Fed borrowing. A report released from the Federal Reserve says Wall Street borrowed an average of $8.4 billion a day over the past week. Read more here-

http://money.cnn.com/2008/06/12/news/economy/investment_firms.ap/index.htm

-Tough love from Bernanke. By declaring war on inflation, the Fed signals it can't be there to hold investors' hands through the rest of the credit crisis. Read more here-

http://money.cnn.com/2008/06/12/news/newsmakers/bernanke.inflation.fortune/index.htm?postversion=2008061208

-Federal Reserve and ECB are in no mood to save us from the consequences of our debt. Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/09/ccview109.xml

-Citi, Merrill, UBS Face Monoline Losses, Whitney Says. Citigroup Inc., Merrill Lynch & Co. and UBS AG may post losses of $10 billion on bond insurance after MBIA Inc. and Ambac Financial Group Inc. lost their top credit ratings, Oppenheimer & Co. analyst Meredith Whitney said. MBIA and Ambac, the world's largest bond insurers, had their AAA ratings cut two levels by Standard & Poor's June 5, which trimmed ratings on more than $1 trillion of securities they guaranteed. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aWzDAfdNmgOw&refer=home

REAL ESTATE

-Canadian housing prices up 5.2% in April, slowest rise in 2 years: StatsCan. Read more here-http://www.cbc.ca/consumer/story/2008/06/11/housing-index.html

-A 20% decline in home prices would put 25% of mortgages upside down and a 30% fall would put lots more under water, probably over 70% will walk away. That inventory then has to be cleared and that can only happen with lower prices no matter what government does to try to remedy the situation. We are probably looking at a $7 trillion loss. That would be a loss in household spending of $300 billion or about 2% of GDP. Bob Chapman-Read more here-http://news.goldseek.com/InternationalForecaster/1213250760.php

-About 1 in 11 Mortgageholders Face Loan Problems. Read more here-http://www.nytimes.com/2008/06/06/business/06mortgage.html?_r=3&adxnnl=1&oref=slogin&partner=rssyahoo&emc=rss&pagewanted=print&adxnnlx=1213284549-K32r4xhuiXP6mf68DX0scQ

GEOPOLITICAL

-Iraq war could cost taxpayers $2.7 trillion. In addition to the cost of war, taxpayers pay for rising veteran health care costs, and returning soldiers faced with foreclosure and unemployment. Read more here-http://money.cnn.com/2008/06/11/news/economy/iraq_war_hearing/index.htm?postversion=2008061212

-Israeli minister says alternatives to attack on Iran running out. An Israeli deputy prime minister on Friday warned that Iran would face attack if it pursues what he said was its nuclear weapons programme. "If Iran continues its nuclear weapons programme, we will attack it," said Shaul Mofaz, who is also transportation minister. "Other options are disappearing. The sanctions are not effective. There will be no alternative but to attack Iran in order to stop the Iranian nuclear programme," Mofaz told the Yediot Aharonot daily.

He stressed such an operation could only be conducted with US support. A former defence minister and armed forces chief of staff, Mofaz hopes to replace embattled Ehud Olmert as prime minister and at the helm of the Kadima party. Copyright AFP 2008, AFP stories and photos shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP

-Israel tries to play down minister's warning of attack on Iran. Read more here-http://www.guardian.co.uk/world/2008/jun/09/israelandthepalestinians.iran

-Iran warns of "painful" response if Israel attacks. Read more here-http://news.yahoo.com/s/nm/20080610/ts_nm/iran_israel_dc&printer=1;_ylt=AkIbKcA0TzjRSc8Y04F16iVg.3QA

-As more than 50 mortar shells, Kassam and Katyusha rockets were fired into Israel from Gaza on Thursday, the Defense Ministry was still working to "exhaust" the dialogue with Egypt on a cease-fire with Hamas, sources in the Prime Minister's Office said. Read more here-http://www.jpost.com/servlet/Satellite?cid=1212659716281&pagename=JPost%2FJPArticle%2FShowFull

-EU mulls asset freeze for Iranian banks. Read more here-http://news.bbc.co.uk/2/hi/middle_east/7444525.stm

-Ahmadinejad Says Bush Administration Can't Hurt Iran. Read more here-

http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aEGiHkOEuuHM

-Bush, Merkel Say More Iran Sanctions May Be Necessary. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aILJg4P_AuWk&refer=home

-Secret al-Qaida, Iraq files found on British train. Read more here-http://www.washingtonpost.com/wp-dyn/content/article/2008/06/11/AR2008061101776_pf.html or http://news.bbc.co.uk/2/hi/uk_news/7449255.stm

The GoldBugg Report - June 17, 2008
Posted by Worldwide Precious Metals on Tuesday, June 17, 2008

The GoldBugg Report - June 10, 2008

June 10, 2008

-"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value." Alan Greenspan

-"I see gold at $1,250 to $1,500 in the next 12 months." Peter Brieger on BNN June 4 2008

-"The gains in silver will be double those of gold on the next uplegs." "My favorite remains silver, for many reasons." Jim Willie CB

-"As gold regains its footing and contemplates the next run above $1000, I believe to $1400 within six to nine months, if not far sooner." Kevin Kerr-Read more here-http://www.marketwatch.com/news/story/story.aspx?guid=%7B0DB29E93-78B3-4A75-B1D1-6E7F166F5E4A%7D

-Israeli official says attack on Iran 'unavoidable'

"If Iran continues with its program for developing nuclear weapons, we will attack it. The sanctions are ineffective" Read more- http://www.msnbc.msn.com/id/24998146/

-Mark O'Byrne, of Gold and Silver Investments Ltd., said that "no amount of jawboning by Bernanke or anyone else will help rectify the huge fundamental headwinds facing the U.S. economy in the face of a housing crash, huge deficits, huge credit and systemic risks and the increasing reality of stagflation." Kitco Daily Resource

-Fund managers are switching to cash and commodities such as gold for asset allocation after profits fell in the first quarter, Standard & Poor's Fund Services said. Active managed funds lost a median of 7.9 percent in the first three months of 2008, compared with a 5.7 percent gain in the year-earlier period, while balanced managed funds lost 7.5 percent and cautious managed funds 5.2 percent, the fund research company said in an e-mailed statement today.

Funds such as Jupiter Merlin Income Portfolio have bought gold as a hedge against inflation, and funds denominated in sterling to gain from currency appreciation, S&P said. ``In the cautious managed sector, some managers we interviewed have added to gold as a hedge against inflation and some also have a preference for cash,'' said Frankfurt-based analyst Irina Schoenberg, adding that corporate bonds have also become more attractive to investors. Bloomberg

-"Physical buyers are coming back into the market," said Matthew Zeman, a metals trader at LaSalle Futures Group in Chicago. "People are thinking it's better to buy now at these discounted levels, than wait as it moves higher and have to buy at full price." Kitco Daily Resource

-The reason why prices are so stable during a gold standard is that the rate of increase in the gold supply corresponds very closely to the increase in population. Since 1800 the annual compound increase in the gold supply has been around 1.5% while the population growth has been approximately 1% per year. If we allow 0.5% per year for productivity increases we see that prices should be very stable indeed under a gold standard, over the long term. Historical data corroborates this proposition. Paul van Eeden

-Report: U.S. to order limited raid on Iran. The United States is moving closer to ordering a limited attack on Iranian Revolutionary Guard installations, a military intelligence group reports. The operation would target training camps and munitions factories that assist Iraqi insurgents, Hezbollah and terrorist groups in Gaza, DEBKAfile.com, a military intelligence Web site, reported Tuesday, quoting sources in Washington.

U.S. President George Bush in May said talk of a military action of some kind against Iran is "highly speculative." "I've always made it clear that options are on the table, but, you know, the biggest weapon we have against those who can't stand freedom is the advance of freedom," he said. Iran reportedly is preparing counter measures, perhaps on a larger scale, the Web site said.

"Iran's Armed Forces are fully prepared to counter any military attack with any intensity and to make the enemy regret initiating any such incursions," Iran defense minister Gen. Mostafa Mohammad-Najjar said Sunday. The Revolutionary Guard has completed preparations for a U.S. attack on their bases, DEBKAfile.com said, and have evacuated training camps and bases. UPI

GOLD

-Some bullish thoughts on gold from Dr. Martin Murenbeeld. Read more here-http://www.resourceinvestor.com/pebble.asp?relid=43261

-Gold Market Update Clive Maund. Gold is now in position to begin its next major uptrend, and in relation to where this uptrend is going to take it, it is considered to be at a very good price right now. According to the "Summer doldrums" crowd who are obsessed with seasonal factors, gold has to wait until August to go up, because everyone is preoccupied with Summer holidays, making the most of the good weather, pursuing pretty girls and looking after unruly kids released from the confines of school etc etc.

Oh is that so? Try telling that to Wall St traders who thought they were safe on the beaches of Long Island with their huge picnic hampers last August. So let's get this straight we no longer live in normal times and the markets are not going to wait on the convenience of people whose minds are not on their work. So if you are planning on strolling down to the station in August to find the train waiting for you, you may find that it left long ago without you. Read more with charts here-http://news.goldseek.com/CliveMaund/1212693870.php

-What is the biggest mistake you can make with your money in 2008? Ignoring gold, silver and their related inflation hedges can lose you more money than all the other mistakes you can make put together, except for playing the roulette table in Vegas.

Once in a lifetime, there comes a chance to turn a relatively small amount of money into a fortune, and this is one of them. We are in the early stages of a massive multi-year bull market in the metals. The supply-demand situation beggars belief. This is as close to riskless as anything I have ever recommended in 31 years of publishing The Ruff Times.

You can put a list of mining stocks on the wall, throw a dart at them, invest in the holes and make a lot of money, in effect creating your personal mutual fund. When the wind blows, even the turkeys fly. the metals are going to the moon. $2500 gold or $125 silver anyone? And what about 500% to 2000% profits in the next few years. That is written in cement over the next few years or in gold or silver. Read more here-http://www.kitco.com/ind/Ruff/ruff_jun032008.html

-Don't be Afraid, Buy Gold. As the price of gold has taken some lumps since it crashed into the symbolically significant $1,000 per ounce mark back in March, those on Wall Street who had consistently underplayed its potential on its way up are now assuring its continued retreat. According to these gold market spectators, prices have risen solely as a result of financial panic, and now that the fear has apparently subsided, gold's gains will evaporate as well.

I have been buying gold and gold stocks for myself and my clients since 1999 and not once did I buy out of fear. In fact, from my perspective the only fear I've observed in the gold market is from those who have been too afraid to buy. While fear may from time to time play a role in creating price spikes in gold, the underlying bull market has been driven by solid fundamentals.

Those who have been too afraid to buy simply do not understand the underlying dynamics and have instead decided that the market is irrational. As a result, gold continues to climb the classic wall of worry as any dip in its otherwise upward trajectory causes the speculative investors to jump ship. Gold's ascent from less than $300 an ounce to its current level was, and is, being driven by those who prefer it as a store of value to the paper alternatives offered by governments.

As the Federal Reserve's dollar debasement policy kicks into high gear and other central banks around the world are forced to follow suit to maintain their pegs against the dollar, the rational choice for long term investors is gold. Thus, the decision to buy is not rooted in fear but reason. On the other hand, the decision not to buy is not only rooted in fear, but ignorance as well. Read more here-http://news.goldseek.com/EuroCapital/1212164525.php

-How will Gold Perform in the Coming Months? Recent dollar strength has led some to the erroneous conclusion that gold may struggle in the coming months. While true that short term dollar strength will affect gold in the short term, what is more important is the medium to long term supply and demand. So what is the summer like for Gold Investments?

Traditionally, summer months are a good buying opportunity with period of sideways movement or slight sell off prior to strength in August, September and October. In the last 35 years, over two-thirds of the average annual gains have been registered between August and December so it is important that investors have taken positions in the summer in order to take advantage of seasonal strength in late summer and autumn.

Could this possibly be a summer of difference? With the credit crisis gathering momentum still a lot of traditional cycles might just go out the window? This could well be the case. But given all the extra risk credit, systemic and stagflation gold is likely to surprise to the upside rather than the downside. However further consolidation may be necessary near 200 day moving average which has steadily risen and is now at $875. Gold is looking very well supported above $850 and we would be very surprised to see it materially below $850.

In bull markets the 200 day moving average is normally where support is found in periods of correction. For 8 years, gold's 200 DMA has acted as very strong support with only extremely brief periods below it. It is thus a great average price for buyers to get in at. This was seen in June, July and August of last year when gold traded around its 200 DMA at around $650 to $680 prior to taking off in September as per the chart.

Given the prevailing macroeconomic and systemic climate, we believe gold will likely start moving up sooner than September. We could well see a gradual move back towards $1,000 in the summer months (June, July, August) prior to accelerating higher in the Autumn months targeting our year end high prediction of $1,200 per ounce. Gold.ie

-Gold price to rise long term, according to China's central bank. International gold prices are likely to rise further in the long term due to dollar depreciation, rising demand and global political and economic uncertainty, a researcher at China's central bank said. Worries about global inflation, a possible worldwide economic slowdown and geopolitical instability will also bolster the metal's price, Wang Yu, director of the gold and foreign exchange market division of the People's Bank of China, told an industry conference.

"My personal conclusion is that international gold prices will remain volatile in the short term, while from a long-term perspective there is a possibility for and room for prices to increase further," she said. Wang said she believed that the U.S. dollar was likely to depreciate further despite a recent rebound. Gold often moves in the opposite direction to the dollar, which tends to weaken when U.S. interest rates are cut. On the demand side, Wang said rising prices would actually be likely to encourage buying in developing countries, where the metal is considered an important store of value.

"Global gold demand is increasing steadily with strong economic growth in developing countries, but the supply of the metal is stable," Wang said. "That creates a deficit." Gold demand in China, the world's second-largest jewellery market, is expected to rise this year despite high prices that have depressed demand elsewhere, Philip Klapwijk, executive chairman of metals consultancy GFMS Ltd, said on Wednesday. Reuters

-Gold is seen as a safe bet, with 28 per cent of people claiming to feel most confident investing in gold during the current economic uncertainty. According to research published by specialist insurance broker Aon Private Clients, gold was seen as the safest bet, compared to 20 per cent of people feeling confident in property investment. However, of the 2,031 adults surveyed, a third (34 per cent) said they were not confident of investing in anything at all.

Women are much more cautious, with 38 per cent not willing to take the risk compared to just 24 per cent of men. The results are dramatically different to those on Aon's 2006 research, which showed that 58 per cent of people favored property investment to supplement a pension, followed by 50 per cent preferring shares. Director at Aon Artscope & Specie Daniel Smith said: "Gold has historically been a safe haven for investors in times of trouble. Even the credit crunch and the biggest fall in gold price for a quarter of a century in March have failed to dent confidence.

"As with any market, prices will go up and down, but the price of gold has consistently increased over the longer period, so is still considered by most to be a sound investment. "The survey results reflect the growing global appetite for gold and other precious metals. With its global appeal and emerging consumers, such as in China, the good news is that demand continues to outstrip supply, suggesting that the price will remain buoyant for the long term." Ftadviser.com

-Soc Gen gold mine hedge book: big cuts in Q1 and more expected in Q2. Producers continue to dehedge at a high rate led mainly by AngloGold Ashanti and are expected to repurchase at least 200 tons during the year or probably much more. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=53865&sn=Detail

-Australian quarterly gold output plunges to lowest level in 19 years. Read more here-http://www.miningweekly.com/article.php?a_id=134650

-South African gold production again down - 15.6% lower in Q1. South Africa's gold production fell to 52 228k (52.2 tnnes)g in the first quarter of 2008 as gold miners battled with lower power supply. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=54062&sn=Detail

-Zimbabwe's gold production to decline to 4 tonnes this year. Zimbabwe's Chamber of Mines now predicts that the country's annual gold output will decline even more to 4 tonnes this year a far cry from its theoretical output capacity of around 30 tonnes a year. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=54038&sn=Detail

-What does a US recession imply for the gold price? Recent research from the World Gold Council is particularly pertinent following the revision to the US First Quarter GDP figures. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=54175&sn=Detail

-Gold particles can cleanse Oil spills! Read more here-http://www.commodityonline.com/news/topstory/newsdetails.php?id=9081

SILVER

-This secular silver bull likely still has a long way to go. And I believe we will eventually see silver prices much higher than the highs experienced in March. The bottom line is silver's long-term fundamentals remain excellent.

While mined supply is expected to rise, demand should also continue to grow mainly led by investment. As silver's powerful bull market continues to gather strength, more and more investors will see the fortunes of investing in this precious metal. Scott Wright

-Silver Wheaton chief sees $30/oz silver in 'next couple of years'. Vancouver-based silver reseller Silver Wheaton's president and CEO, Peter Barnes, expects the spot price for the precious metal will continue to rise, in the medium term, underpinned by both physical and investment demand, he said on Tuesday. "My view is that silver is going through $30/oz in the next couple of years," he said on a conference call with investors.

The supply and demand outlook was "pretty robust", and the combined effects of geopolitical risk and a weaker US dollar would continue to support higher prices. "My strong feeling is that, in the long term, the US dollar still has a long way to go [downwards]," Barnes said. Silver Wheaton buys silver from producers on a long-term basis, at predetermined prices, and then sells the metal at the current spot price.

The spot price for silver reached a 27-year high above $21/oz last month, but has since slipped back to around $17/oz. "It takes a bit of consolidation, whenever it hits new levels it consolidates for a while and then it takes another run," Barnes commented. Miningweekly.com

-High flying U.S. Silver Eagle Bullion coin sales grounded by U.S. Mint. Silver's growing popularity as an investment vehicle has stymied the U.S. Mint, which stopped taking orders for its American Eagle Silver Bullion coin, and rationed sales for the remainder of this year. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=53852&sn=Detail

-Tracking the Re-Monetization of Silver. Read more here-http://news.silverseek.com/SilverSeek/1212414200.php

-Bubble Mania? Such a bubble phase in silver could easily lift the price into the hundreds of dollars price range. And in some ways, silver may not appear at that time to be excessively valued. For instance, at $200 per ounce, the 1 billion ounces of real investment silver in existence would be worth $200 billion.

Assuming that gold was only priced at that time at $1000 per ounce (an admittedly very low number), that would make all the gold in the world worth $5 trillion, or still 25 times what all the silver was worth. And if gold were much higher, as is likely, the comparison would be more favorable for silver. With potential new investors realizing silver is rarer than gold, silver could still look cheap to them.

This is not a promise that silver is going into a bubble and will trade at hundreds of dollars per ounce in the next few years. It is intended as an additional thought process for you to consider. Don't you wish someone hinted at such a possibility in tech stocks or real estate before those bubbles developed? Ted Butler-Read more here-http://news.silverseek.com/TedButler/1212510161.php

-Mitsui in talks to sell silver-based autocats. Mitsui Mining and Smelting Co Ltd aims to start commercial production of its new, less costly catalyst which applies silver rather than platinum in 2011/12, a company official said last week. The use of silver instead of the more expensive platinum, currently trading near a historical high, will enable the company to cut metals costs by more than 90 percent. Read more here-http://www.miningmx.com/mining_fin/395594.htm

-Silver-Coated Endotracheal Tubes Cut Down on Infections. Saves money and time spent in intensive care units, researcher says. Read more here-

http://health.usnews.com/articles/health/healthday/2008/05/19/silver-coated-endotracheal-tubes-cut-down-on_print.htm

-Silver zinc laptop batteries last 40 percent longer. Read more here-http://news.idealo.co.uk/news/1559/zpower-silver-zinc-batteries-last-40-percent-longer.html

-A Silver Coating in the Fight Against Microbes. Silver nanoparticles could be the next step forward in antibacterial products. A new technique in paint making could soon make almost any surface germfree. Researchers have made paint that is embedded with silver nanoparticles known for their ability to kill bacteria and other microbes, in the hope that hospitals will coat their walls and countertops to fight infection.

According to the U.S. Centers for Disease Control and Prevention (CDC), more than one million people a year contract bacterial infections in hospitals. Silver itself is an excellent bacteria fighter, and in nanoparticle form it is even more potent at killing microorganisms. So far it has not shown any adverse effects in humans. Read more here-

http://www.sciam.com/article.cfm?id=silver-coating-fights-microbes

PLATINUM-PALLADIUM

-Implats needs power to add 600,000 platinum ounces. Impala Platinum has growth plans at various operations that will boost production from 2012 to 2018, but the company has yet to secure power to realize some of the projects. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=54179&sn=Detail

-Implats Power Deal to Open New Shafts. Read more here-http://www.resourceinvestor.com/pebble.asp?relid=43368

-Platinum demand to climb despite high oil price. Investec Asset Management expects platinum demand from autocatalysts still to increase this year as vehicle demand in the East surpasses a slowdown in the West. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=53883&sn=Detail

-The platinum supply equation refrigeration key to ongoing supply levels. As platinum mines get deeper they need to refrigerate intake air to maintain reasonable working conditions and this requires a big increase in power which may just not be available in the short to medium term. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=53494&sn=Detail

-Platinum 2008: key trends for the year ahead. Jewellery scrap return becomes an important component of the market; so does second-hand goods. Read more here-

http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=53382&sn=Detail

COMMODITIES-GLOBAL FOOD CRISIS

-BMO's Coxe hangs tough and optimistic on future of commodity stocks. BMO Financial Guru Don Coxe advises that gold and gold stocks become more attractive each week that global food and fuel costs rise along with writedowns on bank balance sheets. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=53951&sn=Detail

-The Race Is On to Produce Increased Volumes of Rare Earth Metals. Read more here-http://www.resourceinvestor.com/pebble.asp?relid=43162

-U.N. Issues Warning on Food Crisis. Read more here-http://www.nytimes.com/2008/06/04/world/04food.html?partner=rssyahoo&emc=rss&pagewanted=print

-Report forecasts higher food prices for next decade. Read more here-http://www.iht.com/articles/2008/05/29/business/food.php

OIL-GASOLINE

-Soros Says Oil `Bubble,' Market Basics May Trigger Recession. Billionaire investor George Soros said an oil price ``bubble'' is working with fundamentals in the market that may lead to a recession in the world's largest economy. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=awcupddOAymk&refer=home

-Shocked! How the oil crisis has hit the world. British pensioners who cannot afford to heat their homes. European hauliers and fishermen whose livelihoods are under threat. Palestinians forced to fill up their cars with olive oil. Americans asked to go down to a four-day week.

All around the world, in a multitude of ways, the soaring price of oil is hurting rich and poor alike. For the lucky ones, it is simply a matter of changing their lifestyle. But those most vulnerable to the price of oil have been driven on to the streets in angry protests, which raise a fundamental question: what can we do to survive in a world where a barrel of oil costs $130. Read more here-http://www.independent.co.uk/environment/green-living/shocked-how-the-oil-crisis-has-hit-the-world-837477.html?service=Print

-Double, double, oil and trouble. Is it "peak oil" or a speculative bubble? Neither, really. Read more here-http://www.economist.com/displaystory.cfm?story_id=11453090

-Brazilian Oil Finds May Cost a Record $240 Billion to Develop. Brazil's oil discoveries, including the Western Hemisphere's largest in three decades, may cost $100 billion more to develop than the industry's most costly field.

The Tupi deposit and nearby offshore prospects probably will cost $240 billion to exploit, said Peter Wells, director of U.K. research firm Neftex Petroleum Consultants Ltd. and a former Royal Dutch Shell Plc exploration manager. The total exceeds the $136 billion estimate for Kazakhstan's Kashagan field, led by Eni SpA, and would be enough to fund the U.S. space program for 14 years. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=aPxoq_nbbUbM&refer=home

-China Has a Role in Higher Oil Prices. You can give a much stronger answer to Fed Vice Chairman Donald Kohn's objection that the low interest-rate driven declining foreign-exchange value of the dollar has played only "a small" role in the oil price rise, that David T. King in his accompanying op-ed "Oil Is Up Because the Dollar Is Down" shows to be half of the oil price rise since 2002.

Indeed much of the other half of the oil price rise is due to the third of world oil demand due to the U.S. and to U.S.-dollar-linked China. China accounts for 40% of all new oil demand that sets the marginal price of oil. China has hurt itself and the world by being the only major net oil importer to subsidize domestic oil product prices, a policy usually practiced only by the net oil exporters.

China still hasn't adjusted its pricing policy, though it hasn't been a net oil exporter since 1993. This has the same effect as if China had suddenly depreciated the U.S. dollar and thereby made the U.S. Fed's rate-cutting binge play an even bigger role in depreciating the dollar and driving up oil prices for everybody. WSJ

-Gas prices: Another record closer to $4. The national average price for a gallon of regular unleaded gasoline rose to new highs, inching ever closer to $4 a gallon, according to AAA. Read more here-http://money.cnn.com/2008/06/05/news/economy/gas_prices/index.htm

-High gas prices hit consumers worldwide. Read more here-http://news.yahoo.com/s/ap/20080531/ap_on_bi_ge/price_at_the_pump_4&printer=1;_ylt=Ajg.dm0Xd2P_bp650l8BTeFv24cA

-Americans' Record $4 Gasoline Price Remains Bargain in Europe. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aB9b2rPXKVBY

CREDIT CRISIS

-Fed auctions $75 billion to banks to ease credit woes, total is $435 billion since December. Read more here-http://biz.yahoo.com/ap/080506/fed_credit_crisis.html?.v=2&printer=1

-Derivatives Traders Signal Bank Woes Likely to Worsen. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=a4FnKND7aXCY&refer=home

-Leave it to Wall Street to profit from its own distress. Merrill Lynch & Co., Citigroup Inc. and four other U.S. financial companies have used an accounting rule adopted last year to book almost $12 billion of revenue after a decline in prices of their own bonds. The rule, intended to expand the "mark-to-market" accounting that banks use to record profits or losses on trading assets, allows them to report gains when market prices for their liabilities fall. Read more here-http://www.gata.org/node/6339

-Banks' credit crisis solutions have echoes of 1929 Depression. As banks look to shore up their balance sheets in the wake of the credit squeeze, Philip Aldrick asks whether it is all short-term trickery. We are in the midst of the worst financial crisis since the 1930s," warns the eminent financier George Soros in his latest book, The New Paradigm for Financial Markets.

It's a rather extreme view, but the man who broke the Bank of England is not alone in his dark funk. At a recent event, one banker laced Soros's sentiment with a little gallows humour, ruefully predicting "10 years of depression followed by a world war". Read more here-http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/01/cccrisis101.xml

U.S. RECESSION

-Will the Credit Crunch Lead to Recession? Read more here-http://www.resourceinvestor.com/pebble.asp?relid=43316

-Americans Unload Prized Belongings to Make Ends Meat. Engagement Rings, Family China and Heirlooms are sold to Pay for Food and Gas. Read more here-

http://abcnews.go.com/Business/Economy/story?id=4750846&page=1

-Slow economic times mean pay cuts for many workers. Read more here-http://www.usatoday.com/money/economy/2008-06-01-commission-tips-pay-income_N.htm?loc=interstitialskip

-America's recession could slip into depression. Read more here-http://waldo.villagesoup.com/print/Print.cfm?StoryID=116955

-Fat pensions spell doom for many cities. Vallejo, Calif., took the extreme step of filing for bankruptcy to get out of generous obligations to public employees. Other cities and states are watching. Read more here-http://money.cnn.com/2008/06/02/pf/retirement/vallejo.moneymag/index.htm?postversion=2008060305

INTEREST RATES

-Trichet Says ECB May Consider Raising Rates in July. Read more here-

http://www.bloomberg.com/apps/news?pid=20601087&sid=aqQ4r70Qq5yE&refer=home

-Bernanke Says Rate `Well Positioned,' Watching Dollar. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=ay75h.mme3Sk&refer=home

INFLATION

-Bernanke Says Inflation Much Higher Than Fed Wants. Read more here-

http://www.bloomberg.com/apps/news?pid=20601068&sid=a6duOndpDE7Y&refer=home

-Russia 2008 Inflation May Accelerate to 14%, IMF Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601013&sid=axKBXVsNZZzM&refer=emergingmarkets

-Commodity costs inflate Kodak prices. The company is raising prices by as much as 20% on a range of products, due to the soaring expense of raw materials. Read more here-

http://money.cnn.com/2008/05/30/technology/kodak.ap/index.htm

U.S. DOLLAR-EURO

-Dollar crisis looms, says Nobel laureate Mundell. A major dollar crisis could come within five years and China is discussing reforms to the global monetary system to protect its $1.6-trillion (U.S.) reserves pile, says Nobel Prize-winning economist Robert Mundell. Read more here-http://www.reportonbusiness.com/servlet/story/RTGAM.20080603.wmundell0603/BNStory/Business/home or http://www.gata.org/node/6345

-U.S. dollar faces threats to its reign. War spending, trade deficits, and devaluation against foreign currencies weigh on the greenback. Read more here-

http://www.csmonitor.com/2008/0604/p15s01-wmgn.html?page=1

-Waiting for the Dollar's Next New Low. The dollar is in a major bear market, and is losing purchasing power day after day because of debasement and inflation. Continue to avoid it. Hold gold and/or silver instead. James Turk-Read more here-http://goldmoney.com/en/commentary-print.html

-Paulson committed to dollar as reserve currency. Read more here-http://www.reuters.com/article/idUSL0244883920080602

-Al-Assaf, Paulson Agree on Saudis Keeping Dollar Peg. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid=ay8XOXdaLAOg&refer=home

-There is no excuse for Britain not to join the euro. Read more here-http://www.ft.com/cms/s/0/4232f4e6-3109-11dd-bc93-000077b07658.html

CONSUMER CONFIDENCE LOW WORLDWIDE

-Canadian consumer confidence wanes on gas-price hikes. Read more here-

http://www.cbc.ca/money/story/2008/06/02/consumerconfidence.html

-Personal bankruptcies in Canada reached their highest level in more than four years in April. Read more here-

http://www.globeinvestor.com/servlet/story/RTGAM.20080604.wbankruptcy0604/GIStory/

-Britons' Confidence Reaches Lowest Level Since Thatcher Quit. period of consumer confidence dropping and if that carries on, people start changing their purchasing behavior.'' Read more here-

http://www.bloomberg.com/apps/news?pid=20601068&sid=ay8rcTIQllJA&refer=home

-Consumers pick home over flying; avoided trips cost economy billions. Read more here-http://www.usatoday.com/money/industries/travel/2008-05-29-fly-delays-hassles_N.htm?loc=interstitialskip

REAL ESTATE

-CEO declares 'depression' in housing. Toll Brothers head says market could fall by 20% and recovery could be up to three years away. Read more here-

http://money.cnn.com/2008/06/04/real_estate/toll_depression.ap/index.htm?postversion=2008060414

-America's house prices are falling even faster than during the Great Depression. Read more here- http://www.economist.com/PrinterFriendly.cfm?story_id=11465476

-Home Prices Fall in 23 U.S. Cities as Defaults Rise. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid=a1GftpGS76j4&refer=home

-Home prices fall 2.5% in U.K. Decline in May is biggest one-month drop in home prices on record, according to Nationwide Building Society survey. Read more here-

http://money.cnn.com/2008/05/29/news/international/uk_home_prices.ap/index.htm

-Up to a million in U.K. headed for negative equity in their home. Read more here-http://ftadviser.com/FinancialAdviser/Mortgages/News/article/20080605/450e8976-307f-11dd-95d6-0015171400aa/Up-to-a-million-headed-for-negative-equity.jsp

CELEBRITY FORECLOSURES

-Ed McMahon fighting foreclosure on his Beverly Hills home. http://news.yahoo.com/s/ap/20080604/ap_on_en_tv/people_ed_mcmahon&printer=1;_ylt=At5DNSH6DHSbpmAxyK4dH2m2GL8C

-Holyfield facing foreclosure

http://www.cnn.com/video/#/video/showbiz/2008/06/06/dnt.holyfield.foreclosure.wsb

GEOPOLITICAL NEWS

-'Miracle' needed to reach peace deal: top Palestinian negotiator. Read more here-

http://www.cbc.ca/world/story/2008/06/04/palestinian-negotiator.html

-Syria says Israel should face nuclear checks. Read more here-http://www.breitbart.com/print.php?id=080603112019.ics2x60l&show_article=1

-Ahmadinejad says Israel will soon disappear. Read more here-http://www.breitbart.com/print.php?id=080602124328.f6eyi8y1&show_article=1

-Iraq hits milestones on U.S. troop deaths, oil. Read more here-http://www.reuters.com/article/idUSL01687040

-US paying allies to fight war in Iraq. Read more here-http://timesofindia.indiatimes.com/articleshow/msid-3087326,prtpage-1.cms

The GoldBugg Report - June 10, 2008
Posted by Worldwide Precious Metals on Tuesday, June 10, 2008

The GoldBugg Report - June 03, 2008

June 3, 2008

-"We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." Warren Buffett

-"At times like this," Bill Murphy of GATA writes, "when The Gold Cartel is going all out, it is critical to keep the big picture in focus. Gold is on pace to finish the year up again. This will make it 8 years in a row and still Planet Wall Street pays it scant attention and only when it has to.

The likely upside potential for gold and silver is staggering as future demand for both will probably go off the charts, while mine supply is declining and available central bank gold supply dries up already it seems the ECB banks are now inclined to keep most of what they have left. Kitco Daily Resource

-Personally, I'd buy gold here before I sold it. I think we saw the low for gold on May 1 when June gold hit a low of 849. The 40-week moving average for June gold stands at 843. So 843-849, that should be about the low area for gold. Sit tight. Get some sun. Stop worrying. Richard Russell

-Poor Man's Gold-The U.S. government is imposing quotas on silver dollar coins, and the rare shortage offers a glimpse into the growing popularity of the Silver Eagles. See charts here-

http://online.wsj.com/article/SB121026905137777883.html

-If you own gold and silver, fear not. The Fed is years away from ever admitting a mistake, like printing too much money. Moreover, this is America. Congress will never call out for tight money. As long as the Chairman of the Fed still believes in the economic tooth fairy, rising inflation is guaranteed. Unfortunately, the outlook looks grim. Inflation causes stagnation as people can afford to buy less and less.

At the same time, a weak economy only encourages the Fed to print more money that will continue to rob me of my savings, and generate even more inflation. Bernanke may have been educated at Princeton but from what we have seen, he still knows very little. And in turn, this means we all get to learn firsthand what stagflation is all about. Richard Benson-Read more here- http://www.321gold.com/
editorials/benson/benson052808.html

GOLD

-The current strong investor demand will push gold above $1,100 a troy ounce by the end of this year, GFMS Ltd. chairman Philip Klatwijk said Wednesday. "The subprime crisis has put gold in the spotlight," Klatwijk said, adding volatile stock markets and a high-inflation environment will further increase the appeal of gold as a safe-haven investment in the coming months.

"In the short term, prices could fall as low as $850-870/oz, but bargain hunting will emerge" as jewelry fabricators return to the market to replenish stocks, he said at the Shanghai Futures Exchange Annual Forum. Klatwijk noted despite a rally in prices that pushed gold above the $1,030/oz level in March this year, the supply reaction including mine production and official sector sales has been limited so far.

On the demand side, however, GFMS's latest data show fabrication demand from the jewelry sector fell 21 percent on year in the first quarter. But the fall in fabrication demand will be more than compensated by rising investment demand, Klatwijk said. Dow Jones

-The Case for USD 1,300/oz Gold. Our 2009 gold target of USD 1,300/oz does not factor in external elements such as geo-politics or the speculative herd-following frenzy. I have a feeling this once-unthinkable 4-digit target will turn out to be too conservative. Read more here- http://www.kitco.com/ind/Lee/
printerfriendly/may232008.html

-When you start worrying about your portfolio, please remember these simple data points that make precious metals a good investment:

-Oil is now over $130. Of course there has to be some speculation here, but there are many commodities that are also at sky high prices and these do not trade on exchanges - just producer to industrial end user, meaning there are no speculators or hedge funds involved. The list is so long I won't include it here.

The key thing to remember is that if these commodities are also in very strong bull markets it confirms that the general trend in almost all commodities is higher due to economic basics. These basics are: a) the supply demand impact of a new world (China, India, Russia, Brazil, etc.), b) a decade or more of global paper money increases well above normal, creating inflation and c) the normal 20-25 year commodity up cycle that just started in 2001

-Politicians are out of control and have no intention of dealing with deficits, debt levels or reckless monetary policies. The only solution they understand is more paper money to keep financial and political promises that will be impossible to deliver to the electorates of their countries.

-One of the smartest and respected Wall Street firms, Bear Stearns went under and was bailed out by the Fed (an unprecedented bailout as the Fed is suppose to deal only with the banking system not investment banks). There are probably more institutions with similar problems that will require more paper money or created credit. Even worse is the fact that if the Fed can bail out Bear Stearns, it gives a green light to Congress to bail out anyone and everyone else in trouble. The Senate Banking Committee just approved such a bailout bill for housing speculators. This will lead to more paper money and more inflation.

-Gold and silver are commodities and will respond like other commodities in the coming grand cycle commodity bull market. But these metals are also possible currency substitutes that cannot be wiped out by a bank run or a printing press. This will have increased appeal as we move further into more of a paper money crazed world. Ken Gerbino-Read more here-

http://www.321gold.com/editorials/
gerbino/gerbino052308.html

-Indian money likely to buy more gold. The WGC says in its latest World Gold Trends the potential for additional gold buying in the world's largest gold market, India, is increasing.

-Zimbabwe official gold price hiked to Z$7 billion per gramme. Even though the official Zimbabwean gold price has been hiked to Z$7 billion a gramme, miners in the hyper-inflation ravaged country say this is still nowhere near enough to meet their costs of production. Read more here- http://www.mineweb.com/mineweb/view/mineweb/en/
page34?oid=52659&sn=Detail

-Realtors will tell you that nearly anything both parties agree to can be written into a residential purchase contract. On Monday, Realtor Kim Ogilvie closed a deal with a very interesting twist. A golden one to be exact.

The buyer of a downtown Sarasota residence that sold for more than $1 million brought a briefcase filled with $400,000 worth of South African Krugerrands to the closing that is about 444 of the gold coins. A foreign coin expert was at the closing and verified the coins' authenticity and weight.

"This was a first," Ogilvie acknowledged, adding in Realtor fashion: "It really shows you the depth to which buyers will go to use their resources to acquire properties they think are well-priced." Despite the big push by Realtors regionwide for international buyers and, of course, the foreign-born Krugerrands both the buyer and the seller were Americans. Read more here- http://www.heraldtribune.com/article/20080521/
BUSINESS/805210601/0/FRONTPAGE

-Researchers at North Carolina State University have discovered that gold nanoparticles are helping a once-failed drug to safely stop HIV from invading the body's immune system. Read more here- http://www.photonics.com/printerFriendly.aspx ?contentID=91748&Publication=1

SILVER

-Mitsui in talks to sell silver-based autocats. Mitsui Mining and Smelting Co Ltd aims to start commercial production of its new, less costly catalyst which applies silver rather than platinum in 2011/12, a company official said on Tuesday. The use of silver instead of the more expensive platinum, currently trading near a historical high, will enable the company to cut metals costs by more than 90 percent.

Kentaro Kato, a senior official in the company's sales department, said cutting costs was the primary aim of the development project, which began about five years ago. "We focused on how we could cut costs, because we had heard that high platinum prices were giving manufacturers a really hard time," Kato said in an interview. After testing several metals, Mitsui Mining decided that silver showed the most promise, being much cheaper and yet having comparable ability to remove soot from diesel exhausts.

"At a rough calculation, sales cost will probably be reduced by about 50 percent," Kato said. He said the company plans to begin commercial production of the new catalyst in time for application in diesel engines for construction machinery and other industrial equipment that will need to meet stricter emission standards from 2012. The new standards will be introduced in Japan, North America and Europe.

Tighter diesel emissions standards have already been introduced for trucks, buses and passenger vehicles. Mitsui Mining will aim for first-year sales of 9 billion yen ($87 million).

The new technology to make a silver-based catalyst will be used for diesel particulate filters (DPFs). It hopes to sell DPFs in a set with oxidation catalysts, which will continue to be platinum-based. Read more here- http://www.miningmx.com/mining_fin/395594.htm

-Collectors angered as U.S. rations 'silver eagles'. The government rationed food during World War II and gasoline in the 1970s. Now it's imposing quotas on another precious commodity: 2008 dollar coins known as silver eagles. The coins, each containing about an ounce of silver, have become so popular among investors seeking alternatives to stocks and real estate that the U.S. Mint can't make them fast enough.

In March the mint stopped taking orders for the bullion coins. Late last month it began limiting how many coins its 13 authorized buyers worldwide are allowed to purchase. "This came out of nowhere," says Mark Oliari, owner of Coins 'N Things Inc. in Bridgewater, Mass., one of the biggest buyers of silver eagles. With customers demanding twice as many as they did last year, Mr. Oliari would like to buy 500,000 a week.

But the mint will sell him only around 100,000. The coins have a face value of $1. But the mint sells them for the going price of silver, plus a small premium, to a handful of wholesalers, brokerage companies, precious-metals firms, coin dealers, and banks. The dealers mark the coins up a bit more and sell them to the public. Currently, the coins are fetching about $19 apiece, with some sellers seeking more than $20.

For Coins 'N Things alone, the shortage is costing hundreds of thousands of dollars in lost sales of silver eagles. The firm sells about $1 billion worth of precious metal every year, including silver, gold, and platinum coins. Mr. Oliari, a 50-year-old numismatist who has been in the business since 1973, sniffs: "You can't print what I want to say about the mint."

The mint, a bureau of the U.S. Treasury, has offered little explanation beyond a memo last month to its dealers. "The unprecedented demand for American Eagle Silver Bullion Coins necessitates our allocating these coins on a weekly basis until we are able to meet demand," the mint wrote. A spokesman declined to elaborate. Read more here- http://www.gata.org/node/6323

-Silver Rationing-Jason Hommel. Read more here- http://news.silverseek.com/GoldIsMoney/1211842966.php

-Silver Shortages Misunderstood-Jason Hommel. Read more here- http://news.silverseek.com/GoldIsMoney/1211991685.php

-Mary Anne & Pamela Aden frequently asked questions. Read more here- http://news.goldseek.com/AdenResearch/1211988600.php

Q. Would you buy new gold positions now?

A. It's always a good strategy to average into any market. That is, buy a certain amount on a monthly basis knowing that you will likely hold this position for years because gold's major bull market is still evolving.

Buying at intermediate lows is ideal, which is why we follow the intermediate trend. To give you an example, last Summer was an ideal buying time and so was the Summer of 2006. If you would've bought then, you would have obtained the best price of the last two years on an intermediate basis. But if you'd averaged into the market since the Summer of 2006, you would have also done very well.

Q. Would you ever sell gold?

A. As special as gold is, we're not married to it. Our devotion is to the major trend and when it's up, like it is now, we will stay invested. Gold has been in a confirmed uptrend since August, 2001, and as long as this uptrend stays intact, we'll stay with it. This trend is truly your friend.

Q. So what's better to buy, gold or silver?

A. Gold led silver when the bull market started in 2001. Silver didn't take off until 2003, but once it did, it made up for lost time and it clearly outperformed gold. Overall, we recommend buying and holding both metals, but it looks like silver will soon be outperforming gold again.

-In reality, silver's price action doesn't look all that bad in recent months if you divorce yourself from your emotions. I've been studying silver for a long time and think it looks very impressive today. Perspective on silver's technicals is everything, and it is impossible to get perspective on anything if you are too emotionally involved.

Silver is great, but it must be viewed with cold neutrality like all assets. If you're a silver owner, you should take comfort that silver is basing high for its next major upleg. Now since silver follows gold, and gold's seasonals are very unfavorable in summer, we may have to wait until autumn for the next major gold and silver uplegs.

Both of the past two uplegs started in Augusts of their respective years. But if there was ever a summer for gold to buck seasonal trends, 2008 is it. The coming inflation scare is going to be the worst seen since the 1970s, great for gold investment demand. Adam Hamilton-Read more here- http://www.321gold.com/editorials/
hamilton/hamilton052608.html

-New Hunt brothers of the silver market most likely to live in Arabia. Beginning in 1973 the then richest family in America decided to beat inflation by buying silver, then $1.95 an ounce. It worked brilliantly and by 1979 the Hunt brothers had amassed half the world's silver in a pool with wealthy Arab investors and the price peaked at $54. But they used too much leverage and the authorities changed the rules to pop the silver bubble. Could this happen again today?

As inflation rears its ugly head there are bound to be very wealthy people like the Hunts who look for a way to protect their assets. Indeed, Warren Buffett, George Soros and Bill Gates are among individuals known to have invested in silver. Read more here- http://arabianmoney.net/2008/05/27/
new-hunt-brothers-of-the-silver-
market-most-likely-to-live-in-arabia/

-A recurring theme keeps surfacing in analysts' comments regarding both gold and silver around this time of year and that is that the summer months tend to be weaker for gold and silver. That is more or less historically accurate and all over the world some investors and futures traders are currently positioning for expected summer weakness. However, it is arrogant and foolish to presume that this year will follow some predetermined seasonal path.

Seasonality is just one of many factors at play and it is certainly not the strongest factor. Silver very well may pull back harshly over the summer months and if (repeat IF) it does it will have followed the more expected path, but the trading graveyard is filled to the brim with the bodies of those who placed oversized bets based on seasonal expectations. Silver also very well may not follow those expectations.

Neither scenario should surprise us. It's much more important to keep focused on the longer-term fundamentals for the white metal, nearly all of which remain extraordinarily bullish and nearly all of which continue to improve with time. Every now and then we have a year which bucks the seasonal trend. This one, 2008, is a good candidate to do just that too if the consistent positive money flow into SLV, shown in the graph below, is any guide.

It should be obvious from looking at the graph that there has been more buying pressure for the largest silver ETF than selling pressure as silver metal pulled back harshly from over $21.00 to around $16.00 and has now crawled back up to challenge $18.00. Indeed, we have yet to see ANY significant negative money flow from the silver ETF in 2008. Part of the reason for that is that silver is still so darn cheap compared to its more popular yellow cousin. But that's not the only reason.

Repeating from the last Got Gold Report, written when silver was challenging $16.00: "While we have seen considerable negative money flow from the largest gold ETF as gold prices fell, we see the opposite in the U.S. silver ETF. That means that people are buying this dip in silver. At least so far. It also probably means that the continued existence of the current paper-silver-market-influenced pullback for the white metal may already be in jeopardy. We'll see." Gene Arensberg-Read more here- http://www.resourceinvestor.com/pebble.asp?relid=43070

PLATINUM-PALLADIUM

Perhaps slightly glossed over in the various reports and comments on the short to medium term future of the platinum price, and the power problems being faced by the South African mines which produce the vast bulk of the world's new mined supply is that of refrigeration.

No this is not some esoteric new use for platinum catalysts, but an absolute necessity for the deeper platinum mining operations and the world's two largest producers, Anglo Platinum and Implats are both fast approaching mining depths where refrigeration of the intake air into the mines will be vital to maintain safe working conditions and productivity.

Without refrigeration working conditions become too hot for miners to maintain concentration over a full shift and there is the attendant risk of death from heatstroke. Read more here-

http://www.mineweb.com/mineweb/view/mineweb/en/
page35?oid=53494&sn=Detail

OIL

-Oil rises despite falling demand. Analyst says prices can go to $150 a barrel, even as U.S. demand for oil-based products continues to slump. Read more here-

http://money.cnn.com/2008/05/28/markets/oil_prices
/index.htm?postversion=2008052815

-British PM warns of global oil 'shock'. British Prime Minister Gordon Brown warned Wednesday that the world faced an era-defining oil "shock" that required urgent action, as European leaders struggled to contain growing protests over soaring fuel prices. "It is now understood that a global shock on this scale requires global solutions," Brown wrote in The Guardian newspaper. Read more here-

http://www.breitbart.com/print.php?id=08052813534
1.va9dpf9d&show_article=1

-Shell sees end of 'easy oil' era. Read more here- http://news.bbc.co.uk/2/hi/business/7421792.stm

-There seems to be no stopping the high flying oil price as it leaps above $130, a price that seemed unlikely just last December. The growth in oil demand will continue to be driven by China and Asia, in spite of the U.S. economic slowdown.

In fact, according to the International Energy Agency, China, India, Russia and the Middle East will consume more crude than the U.S., for the first time. Oil use worldwide will increase 2% this year because of the emerging markets. So with demand as robust as it is, any possible supply disruption will simply push oil up further.

This has already been happening, for instance, with the ongoing supply threats in Nigeria, Africa's biggest oil producer. And it's been another main factor keeping upward pressure on the oil price over the past few months.

Chart 1A shows the incredible run up in oil. It's now overshooting the top side of a 23 year channel, while its leading indicator (B) is at an overbought area, the most since 2000. This is saying that oil is near, or at a high area for now. Keep an eye on $112 as oil will remain very strong even if it declines to this level. Major support is at $85 and as long as the oil price stays above $85, this bull market will continue to march onward and upward.

Meanwhile, an enormous transfer of wealth is going to the countries with energy reserves. And with the recent oil discovery in Brazil, the world's biggest since 2000, you can understand why the Brazilian stock market is hitting new record highs. The global transfer of wealth, and the gap between rich and poor is widening, in large part due to oil, and this too will likely continue. Mary Anne & Pamela Aden

GASOLINE

-Another big jump in gas prices. Read more here- http://www.cbc.ca/money/story/2008/
05/27/gasprices.html

-Teeth Gritted, Drivers Adjust to $4 Gasoline. Read more here- http://www.theledger.com/article/20080524/
ZNYT01/805240509/1001/BUSINESS

LIQUIDITY-CREDIT CRISIS

-The debt markets in the US and Europe have begun to flash warning signals yet again, raising fears that the global credit crisis could be entering another turbulent phase. Read more here- http://www.gata.org/node/6332

-Federal Reserve Board Vice Chairman Donald Kohn raised the possibility of giving Wall Street securities firms permanent access to loans from the central bank, as long as regulators tighten oversight of the companies. Read more here- http://www.bloomberg.com/apps/news
?pid=20601087&sid=a0YTGdK9u_P8&refer=home

-Bank failures to surge in coming years. IndyMac, Corus, UCBH under pressure as credit crunch slows economy. Read more here- http://www.marketwatch.com/news/story/
bank-failures-surge-credit-crunch/story.aspx?
guid=%7B2FCA4A0C%2D227D%2D48FE%2DB
42C%2D8DDF75D838DA%7D

-Auction-Rate Notes Leave Investors in Cash Purgatory. Read more here-

http://www.bloomberg.com/apps/news
?pid=20601103&sid=aTOi_Y.89Pck&refer=us

-Auto Industry Feels the Pain of Tight Credit. Read more here- http://www.nytimes.com/2008/05/27/business/27
auto.html?partner=rssyahoo&emc=rss&pagewanted=print

-Royal Bank of Canada and National Bank of Canada reported profit declines as writedowns on subprime debt overshadowed higher revenue from consumer banking and insurance. Read more here- http://www.bloomberg.com/apps/
news?pid=20601087&sid=aZcqDW4Lo7P8&refer=home

U.S. RECESSION

-Buffett sees "long, deep" U.S. recession. The United States is already in a recession and it will be longer as well as deeper than many people expect, U.S. investor Warren Buffett said in an interview published in German magazine Der Spiegel on Saturday. He said the United States was "already in recession" and added: "Perhaps not in the sense that economists would define it" with two consecutive quarters of negative growth.

"But the people are already feeling the effects," said Buffett, the world's richest man. "It will be deeper and last longer than many think." But he said that won't stop him from investing in selected companies and said he remained interested in well-managed German family-owned companies. "If the world were falling apart I'd still invest in companies," he said.

Buffett also renewed his criticism of derivatives trading. "It's not right that hundreds of thousands of jobs are being eliminated, that entire industrial sectors in the real economy are being wiped out by financial bets even though the sectors are actually in good health." Buffett complained about the lack of effective controls. "That's the problem," he said. "You can't steer it, you can't regulate it anymore. You can't get the genie back in the bottle." Reuters

-George Soros: 'We face the most serious recession of our lifetime'. 'This is a period of wealth destruction. The people who make money will be few and far between. There will be a lot more money lost than made." When George Soros the phenomenally successful hedge fund manager says this, you know something is wrong, very wrong. And indeed it is. The 77-year-old billionaire sinks back into the sofa in his Chelsea townhouse and exhales.

He has managed to make money almost consistently for over half a century - from his early days as one of the world's first major hedge fund traders to his involvement in Black Wednesday as the man who "broke the Bank of England", and in the latter years generating multi-billion-dollar annual profits throughout the 1990s. The conditions today are almost uniquely dismal, however.

"I think this is probably more serious than anything in our lifetime," he says. In short, his feeling is that the United States and Britain are facing a recession of a scale greater than the early-1990s, greater even than the 1970s. Read more here- http://www.telegraph.co.uk/money/
main.jhtml?xml=/money/2008/05/26/ccsoros126.xml

-JPMorgan Chase CEO James Dimon says banks will suffer more from the recession than from the subprime debacle itself. Read more here-

http://moneynews.newsmax.com/streettalk/
Jamie_Dimon_worst_ahead/2008/05/20/97555.html

-Consumer confidence hits 16-year low in May. Read more here- http://news.yahoo.com/s/nm/20080527/
bs_nm/usa_economy_confidence_dc_
4&printer=1;_ylt=Atfq4PqwiHA8Y9gptGEK1MCb.HQA

U.S. DOLLAR-FOREIGN CURRENCY

-It's not an Oil Crisis it's a Dollar Crisis. Read more here- http://www.321gold.com/editorials/schiff
/schiff052308.html

-Merrill Lynch & Co said the United States has effectively given Gulf Arab oil producers the go ahead for making changes to their dollar-pegged foreign exchange policies, by recognizing inflation as a problem. Read more here- http://www.reuters.com/article/business
News/idUSL2565817720080525?feedType=RSS&feedName=businessNews

-Investors bet Persian Gulf will loosen dollar pegs. Read more here- http://www.gata.org/node/6327

INTEREST RATES

-Fed Signals Contraction Won't Spur Interest-Rate Cut. Federal Reserve policy makers signaled that an economic contraction in the first half won't be enough to spur further interest-rate cuts because of a rising threat from inflation. Minutes of the Federal Open Market Committee's April 29-30 meeting, released yesterday in Washington, showed many officials foresaw a contraction from January to June. At the same time, they raised their consumer-price estimates and said risks are more closely balanced between weaker growth and faster inflation.

``They will be patient,'' said Vincent Reinhart, former head of the Fed's monetary-affairs division and now a scholar at the American Enterprise Institute in Washington. ``They are signaling that they will probably control the inflation risk by keeping the federal funds rate tighter than usual in 2009.''

The report indicated Chairman Ben S. Bernanke and his colleagues are increasingly concerned by public expectations for inflation that climbed to a 12-year high this month. Traders anticipate the Fed will keep its benchmark rate unchanged next month and raise it by year-end.

The April 30 decision to lower the main rate by a quarter point, to 2 percent, was a ``close call'' for most FOMC members, the minutes said. The reduction capped off 2.25 percentage points of reductions this year, including cuts of 0.75 point in January and in March. Read more here- http://www.bloomberg.com/apps/news
?pid=20601068&sid=aJvGB_RrBEjE&refer=economy

INFLATION

-Zimbabwe inflation now over 1 million percent. Read more here-

http://ap.google.com/article/ALeqM5i4kT7p
JlnuzY_vpKdTACcQYIPcvQD90Q4G401

-Weimar Inflation in America. Read more here- http://www.kitco.com/ind/Turk/turk_may262008.html

-Corn Costs Signal Biggest Beef Surge Since 2003 as Herds Shrink. Read more here- http://www.bloomberg.com/apps/news?
pid=20601109&sid=axIrowbBQ7fo&refer=home

-Inflation and the lessons of the 1970s. Inflation is rising and it seems the world's central banks have critically misjudged the situation. Until a few months ago, most commentators worried about a repeat of the Great Depression. But the 1930s have virtually no relevance to our situation except that some paranoid economists remain obsessed with this period.

The only historical period that bears any resemblance to what is happening today is the 1970s. Then, and now, an oil price shock turned into a rise in the general price level. Both then and today, central banks largely accommodated this price rise, which was a mistake then and is a mistake now. Read more here- http://money.ninemsn.com.au/article.aspx?id=569169

REAL ESTATE

-S&P/Case-Shiller U.S. Home-Price Index Falls 14.4%. Home prices in 20 U.S. metropolitan areas fell in March by the most in at least seven years, pointing to weakness in the housing market that will constrain economic growth. The S&P/Case-Shiller home-price index dropped 14.4 percent from a year earlier, more than forecast and the most since the figures were first published in 2001. The gauge has fallen every month since January 2007. Read more here- http://www.bloomberg.com/apps/news?
pid=20601087&sid=aYDfc3P6rZys&refer=home

-Existing home sales fell for the eighth time in the past nine months, a string of weakness expected to continue as the housing industry, mired in its worst slump in decades, battles falling home prices, tight lending conditions and a weak economy. Read more here- http://biz.yahoo.com/ap/080523/
economy.html?printer=1

-Case Says More Foreclosure Auctions May Hasten Housing Comeback. Read more here- http://www.bloomberg.com/apps/news
?pid=20601087&sid=a.lI1DpVwA3E&refer=home

-Abandoned Houses Are Keeping Contractors Busy. Read more here- http://www.nytimes.com/2008/05/26
/business/26cnd-home.html?_r=3&oref=slogin&partner=rssyahoo&emc=rss&
pagewanted=print&oref=slogin

FORECLOSURES

-Foreclosures in Military Towns Surge at Four Times U.S. Rate. Read more here- http://www.bloomberg.com/apps/news
?pid=20601109&sid=awj2TMDLnwsU&refer=home

GEOPOLITICAL

-Bush 'plans Iran air strike by August'. Read more here- http://www.atimes.com/atimes/Middle_East/JE28Ak01.html

-Rise of Ahmadinejad rival hints at a shift in Iran. Read more here- http://www.iht.com/articles/2008/05/29/mideast/iran.php

-Al Qaeda Tape to Call for Use of WMDs. Authorities: New Tape to Urge Use of Weapons of Mass Destruction on Civilians. Read more here- http://abcnews.go.com/TheLaw/FedCrimes/story?id=4941724

-Iran's Ahmadinejad requests meeting with pope. Iran's President Mahmoud Ahmadinejad has asked for an audience next week with Pope Benedict which would be the first meeting between the two leaders, a diplomatic source said on Tuesday. Ahmadinejad is among the heads of state expected to visit Rome to attend a June 3-5 United Nations summit on global food security, hosted by the U.N. Food and Agriculture Organization.

Vatican sources said earlier this week that it was not yet clear if the pope would meet individual heads of state attending the U.N. event or hold a collective audience for them in order to save time. The Vatican has criticized Ahmadinejad for calling for Israel to be wiped off the map. Read more here- http://www.reuters.com/article/topNews/
idUSL272939920080527

The GoldBugg Report - June 03, 2008
Posted by Worldwide Precious Metals on Tuesday, June 03, 2008

Information Request

Use our Information Request Form and one of our helpful customer service representatives will contact you promptly.

Request Info

Chat Online

Talk live right now with one of our Precious Metals Experts.

WWPMC Newsletter

Subscribe to our newsletter to receive timely information on precious metals by email.

Newsroom

The GoldBugg Report - June 24, 2008

June 24, 2008

The GoldBugg Report - June 17, 2008

June 17, 2008

The GoldBugg Report - June 10, 2008

June 10, 2008

The GoldBugg Report - June 03, 2008

June 3, 2008

Information Request

Chat Online

WWPMC Newsletter

WWPMC Articles

WWPMC Archives