Yesterday’s “The Financial Physician” radio shows on both WOBM-AM in New Jersey and XM Satellite Talk Radio 165 are now available.
John Paulson the venerable hedge fund manager who made billions shorting sub-prime mortgage securites, has move into gold -Big Time. The chart above shows his holdings in relation to 9 medium size countries. My money would be on Paulson.-Lou
Amazon.com has begun shipping copies of “The Financial Physician: How to Cure Your Money Problems and Boost Your Financial Health”.
The book will be in bookstores nationwide by December 15th. It will make a great Christmas present for everyone in your family. Order at Amazon.com for only $11.69.
What took him so long, we have been nationalizing our banks for over a year.-Lou
Chavez threatens to nationalize Venezuelan banks
CARACAS (Reuters) – Venezuelan President Hugo Chavez said on Sunday he could nationalize private banks unless they comply with the law, adding he had “no problem with that because the banks don’t want to extend credit to the poor.”
In a broadcast from nationalized farmland in central Venezuela, he said: “To all the country’s private bankers … (I’m saying) he who slips up loses; I’ll take over the bank, whatever its size.”
“You want me to nationalize the banks?” he said during the broadcast of his weekly TV show “Alo Presidente.”
“I have no problem with that because the banks don’t want to extend credit to the poor, they don’t comply, they don’t want to comply with the bank’s purpose for existence, and that is the law.”
Chavez said the purpose of banks was not to enrich a small group of people but “should be to collect funds and savings to help aid the country’s development by making loans, extending credits for housing.”
In power for a decade, Chavez has nationalized broad swathes of the economy.
His banking nationalization threats on Sunday appeared to be broader in scope than his well-publicized warnings in recent years to nationalize Spanish-owned banks in Venezuela.
He repeatedly threatened to seize Spanish bank subsidiaries in Venezuela unless Spain’s king apologized for telling him to “shut up” in November 2007 at a regional summit where Chavez branded a recent ex-Spanish prime minister a fascist.
But the only major private bank, foreign or Venezuelan, to fall into state hands under Chavez’s rule was Spain’s Banco Santander unit Banco de Venezuela, sold to Venezuela in July for $1.05 billion.
The government’s last banking takeover was on November 20, when it seized four small banks, accounting for about 6 percent of Venezuela’s deposits.
Finance Minister Ali Rodriguez then said the move stemmed from concerns about credit portfolios, problems explaining the source of funds and failure to comply with some obligations.
So sad, so very sad. The coming inflation wave will make life very hard for our seniors. All of us who have the means should make a donation this Christmas season to our local food bank.-Lou
Recession Sends Older Americans To Food Pantries
ALBANY, N.Y. — Older Americans who were raised on stories of the Great Depression and acquired lifelong habits of thrift now find themselves crowding soup kitchens and food pantries in greater numbers for the first time after seeing retirement funds, second jobs and nest eggs wiped out by recession.
“What we see in line is lots of gray hair, lots of walkers,” said Marti Forman, CEO of The Cooperative Feeding Program in Fort Lauderdale, Fla.
The help is crucial for many fixed-income seniors, who can’t always keep up with rising food prices.
“It’s a lifeline. It just means that you can function,” said Ronald Shewchuk of Ithaca, N.Y. “Otherwise we would have to sell our house. I don’t know what we would do. Go to an old age home.”
The number of seniors living alone who seek help from food pantries in the U.S. increased 81 percent to 408,000 in 2008, compared to 225,000 in 2006, according to the U.S. Department of Agriculture. Overall, 4.7 million households used American food pantries in 2008, compared to about 3.7 million in 2006.
“Seniors thought they were OK, but they’re not OK,” said Virginia Skinner, director of Development at The Association of Arizona Food Banks in Phoenix, citing the downturn in the area’s housing market.
Catholic Charities USA, which has 170 agencies across the country helping the needy, issued a 2009 third-quarter report that found a 54 percent increase in requests for food and services from seniors nationwide compared to the same period last year.
Despite the increased need, it can be difficult for some older people to come forward and seek help.
“They’re of a generation that feels they took care of themselves, and now in these desperate straits they don’t want to acknowledge it,” said Catholic Charities spokesman Roger Conner. “With seniors and retirees – people that were planning for that period of their life – they are often very proud and very private, and they want no one to know of the difficulties they might be experiencing.”
Shewchuk, a 72-year-old retired technician, said he’s been struggling to pay his bills and keep up with rising food costs. He said he and his wife Helen, 75, never needed charity before and used to volunteer at their local soup kitchen. This year, they started using it five days a week and getting assistance from food banks and the state. They have no children.
“We just have Social Security and a small pension, and we just can’t make it with the mortgage payments and the gas and electric and so forth,” Shewchuk said. “It’s just draining our resources.”
At St. Mary’s Food Bank in Phoenix, 64-year-old Sherry Whittemore was collecting her monthly box of canned juice, pasta, beans and vegetables. She began coming to the food bank in January after losing her customer relations job at a Fry’s Electronics store.
“I thought I would be able to get a job soon, but that’s just unrealistic,” Whittemore said.
Even with a temporary job helping people with vocational training and unemployment payments, she has had to tap into about $14,000 in savings.
Hubert Scheid, 76, drives a Lexus and owns a two-bedroom condo in Fort Lauderdale, Fla., but says he has depleted his savings and works part time as a security guard to pay for rent, food and medication.
Even then, it’s still not enough. But he makes too much money to qualify for most assistance. For the Thanksgiving holidays, he expected to get a food box and turkey from The Pantry of Broward.
“I owned a Porsche. I had all the trimmings, the way you want to live when you’re young and successful,” Scheid said. “I went from rags to riches and from riches back to rags. You can’t get help because you have it too good, but you don’t have it good enough.”
Older people also have the added disappointment of no cost-of-living increase in Social Security checks this year.
“Seniors were hit with the decline in the stock market,” said Mark Dunlea, executive director of the Hunger Action Network of New York State. “It’s unsettling when you lose a lot of your investment.”
A very depressing article from Bob Chapmen’s “International Forecaster”. Bob has been spot on in the past, forecasting the 2008 financial crisis. -Lou
Nov 26, 2009 – 02:59 AM
By: Bob_Chapman
Investors buy gold when there is inflation and when there is a flight to quality. They buy gold when they no longer trust currencies, due to government or central bank profligacy. Due to those and other reasons gold has broken out to new highs. It could well be that gold may never see $1,000 again. Long ago the world’s central banks set the course for a planned collapse of the world economy to implement world government and there is now no turning back. We have proof stretching back to 1965 that intervention by the Treasury and the Fed was taking place in the gold market.
The illegal sale of gold on 10/19/87 was a good example of that. Then came the FOMC memos of the 1980s and 1990s to kill the perception that gold be allowed to reflect a policy of a weak dollar unbacked by gold. It is all there and probably more proof which our government and the Fed hides from us. We have to laugh at the smug who say why would the Treasury bother to rig the gold price? The point is they have and they are still doing it.
The perception now is that the massive stimulus put into international markets, especially US markets, will be withdrawn as interest rates are allowed to float upward. This stimulus was responsible for the stock market climbing from Dow 6600 to 10,500, a 60% leap built on monetization. If the punch bowl is removed the market will return to test 6600. In addition, the deflationary undertow kept at bay by the stimulus, will overcome monetary policy and the nation and the world will slip into monetary, deflationary depression.
The Fed is now forced to allow gold to trade higher and the dollar to fall lower. What else would one expect under current monetary circumstances? This policy will allow both gold and the dollar to play out to their full extent. The Fed’s job has been very difficult considering a fiscal budget deficit of $1.5 trillion not counting off budget items that take it over $2 trillion – a condition we are told that will persist for the next ten years. The solution has been the creation of ever more money and credit. There has been no cooperation. Nothing has worked together. All the problems have gone spinning off into a number of directions. There is no control on fiscal or monetary policy. What the players refuse to understand is that until the system is purged the situation is only going to get worse. There is no recovery. It is only an interlude in an ongoing depression.
The result will be gold at $2,500 by the end of 2010, and perhaps much sooner. The buyers know what we know. Real inflation since 1980 dictates $6,700 to $7,200 gold. Even official inflation demands a $2,400 price. In both instances how much inflation will 2010 bring? We are projecting 14% real inflation and government and the Fed keep telling us inflation is 1.2%. Our figures show 6-1/8%. In addition the fundamentals show us that gold production has been in shortfall to usage by 150 or more tons for years and that situation will worsen over the next ten years. Yes, we have hit peak gold. Interest rates rises won’t come for at least a year, if ever, and 5% growth in aggregates is in the realm of wishful thinking. Less gold is currently produced annually than in 1980 and there are trillions more dollars sloshing about the world financial system, a good part of it for speculative purposes. Without changes in monetary and fiscal policies, gold and silver prices will just keep rising.
The further our government, via Goldman Sacks, JPMorgan Chase, HSBC and Citigroup, short gold and silver and the shares, the greater price appreciation will be in the future as they ultimately will have to cover their shorts. We are at the confluence of big things happening. The fiscal debt overhand is so onerous that a ¾% rise in interest rates would mean the Fed would have to monetize another $150 billion and a 5% increase in interest rates would increase debt service interest by $600 billion additional dollars. Yes, gold could reach $3,000 in 2010 and 2011 could bring another doubling as a result of the Fed and government just continuing what they are doing. Will inflation reach 25% or 30% in 2011? We don’t know, but as we reflect on what the Fed has been doing we say that possibility certainly exists. Could that mean $11,000 gold? Perhaps it does, we won’t know until we get there.
From the venerable Richard Russell:
Gold is the immutable standard of value. Everything I watch is now sinking in relation to gold. And I’m talking about stocks, the Dow, the S&P, almost all the world’s currencies, all the world’s stock averages, most commodities, bonds, real estate, land, you name it. My old friend, James Dines calls it the “great stealth bear market,” and he’s been very right.
I could include relative strength charts of gold against all of the above items, but what’s the use — you get the idea. Against the standard, gold, the world is deflating, and no amount of paper-creation has been able to change that!
For some long-term perspective, the chart below shows the Dow in term of gold going back to the year 1999, Take your choice, you can call it the “stealth bear market” in the Dow,” or the “stealth bull market” in gold.
Gold — There’s still loads of scepticism about the rising price of gold and the bull market in gold. It’s been so long since the US public (since 1971) realized the gold was real, Constitutional money, that they don’t know what to make of the gold action. They think gold near $1200 an ounce is expensive and they’d rather have dollar bills. I’ve coined the phrase, “dollar-bugs” for these ignorant Americans. I guess they’ll have to get educated the hard way, which means holding on to their fading Federal Reserve Notes, no matter what. As far as I’m concerned, it’s an amazing example of mass brain washing. “Hey, I’d rather have junk paper turned out by the Fed than the real thing — gold.” Pathetic. And the happy thought is that you can (legally) still swap your junk fiat paper for gold.
Richard Russell
Editor-in-chief – DOW THEORY LETTERS
The public has yet to realize the extent of U.S. dollar debasement and what it means to their financial future. Smart money has been flowing into gold for some time and is now pouring in at an accelerated rate. Once the public starts looking for gold then the real fireworks will begin.-Lou
US Mint to suspend American Eagle gold 1-oz coins
NEW YORK, Nov 25 (Reuters) – The U.S. Mint said on
Wednesday it will suspend sales of the popular American Eagle
1-ounce bullion coins as rising demand depleted its inventory.
"The United States Mint has depleted its current inventory of 2009 American Eagle 1-ounce gold bullion coins due to the continued strong demand for this product," the Mint told its authorized dealers in a memorandum on Wednesday.
November sales to date were at 124,000 ounces, higher than the 115,500 ounces sold in each month of September and October, the Mint said.
The Mint said it expects to resume sales in early December.
Increasing worries about inflation, a falling U.S. dollar and geopolitical tensions are prompting individual investors to take physical possession of gold coins and other bullion products due to the metal's appeal as a safe haven in financial and political crises.
Gold XAU= hit a record high at just under $1,190 an ounce on Wednesday due to a broadly lower dollar and renewed interest from central banks. Year to date, the metal has risen more than 35 percent. [GOL/]
Last year, the Mint had also briefly suspended sales of its American Eagle gold and silver coins due to high demand and a lack of coin blanks.
Produced from gold mined in the United States, the 22-karat American Eagles have been novel items among collectors and investors since their introduction in 1986. Each coin has a face value of $50 but it is sold by authorized dealers at a premium to the price of gold.
Isn’t this just sweet. U.S. taxpayers are on the line for $8 billion due to Citigroup’s reckless lending right after it received a $25 billion bailout.-Lou
US outrage over Citi loan to Dubai
The US public will be “outraged” by Citibank’s $8 billion loan to Dubai just six weeks after the bank was bailed out, US House of Representatives domestic policy subcommittee chair-man has said. Dennis Kucinich commented on the Dubai loan and other US banking investments as a congressional panel released a report that strongly questioned Citibank’s actions. The report, shown to 7DAYS, cites the Dubai loan as the largest of the “questionable transactions” by banks after the US government bailed them out. It notes that the loan to Dubai’s public sector came on December 14, just six weeks after the US government gave Citibank a $25 billion bail-out.
The report quotes Win Bischoof, then chairman of Citi, as saying the bank agreed to the Dubai loan because “we continue to place the Gulf region among our globally most significant markets”. The report also questions JP Morgan’s $1 billion investment in India and Bank of America’s $7 billion investment in China. “When the American people find that their tax dollars, which were supposed to be used to get us out of this financial crisis, are instead being used to ship jobs and investments overseas, there will be outrage,” Kucinich said. The report notes the loans were not illegal and that it is not known if they were directly funded by bail-out funds. A Citibank official was quoted at the time as saying the $8 billion came from the bank’s own funds and third party sources. The report was released as the committee prepares to question banking chiefs about their use of bail-out funds.
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