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Showing posts from April, 2013

Economics professor New York University : Get ready for depression not recession-Stocks will rise then fall after 2 years

Roubini is predicting an uptick in stock prices over the next two years as the Federal Reserve continues its stimulus efforts. But buyer beware, Dr. Doom says, because a day of reckoning is lurking at the end of the two-year horizon.
Roubini, an economics professor at New York University best known for predicting the U.S. housing crisis, thinks the Federal Reserve and other central banks around the world can and will prop up stocks and bonds for the next two years.


Growth in U.S.far less than Forecasts as Defense Spending Falls

Gross domestic product rose at a 2.5 percent annualized rate following a 0.4 percent fourth-quarter advance, according to data from the Commerce Department issued today inWashington. The median estimate of 86 economists surveyed by Bloomberg called for a 3 percent gain. Another report today showedconsumer confidencefell in April, signaling that households, which sustained spending last quarter by dipping into savings, may not be able keep shopping at the same pace as tax increases start to pinch. Across-the board cutbacks in federal government spending that took effect in March will also take a toll on growth. http://www.bloomberg.com/news/2013-04-26/economy-in-u-s-grows-at-faster-pace-as-consumers-boost-spending.html

Commodities slump sends slow ripples through world economy-prices of everything falling

As seen above, Rogers commodity index is falling since 6 months. It is composed of Energy, Agriculture, Metals
See details at http://en.wikipedia.org/wiki/Rogers_International_Commodity_Index

Chart from:  http://www.bloomberg.com/quote/RICIGLTR:IND/chart
* Consumers to gain slowly but surely from commodity rout * Disinflation gives even more leeway(Margin of safety) to central banks * Exchange rates, premium pricing models limit pass through * India, China among gainers; Australia's luck may run out LONDON, April 21 (Reuters) - Lower airfares, cheaper food and rising profit margins are among the benefits that should flow from tumbling oil and commodity prices - but only after a long lead time. Having poured $400 billion into commodities over the past decade, many investors are now selling. Their confidence that risky assets could only float higher on a rising tide of cheap central bank money has crumbled as the global economy fails to respond to the stimulus. Even China, an impo…

Gold forecast - will fall to $1200-1250 (Rs 23000 per 10gm).

USD1200 be the level at which gold can be bought for very good returns. It will go above $2500 and more in the long term.



As we can see, in the last 10 years, gold has been formaing a pattern of rises and falls. The fall is equal to approximately 50% to 65% of the rise. then the rise happens to about 3 times of the last fall. Thus in the current cycle which began around early 2010, gold has risen $1000 hence a maximum fall of 65% or $650 from $1900 level is expected which is around a level of 1250. Thus a good time to invest in gold will be around $ 1250. 
Also see:  Foreing exchange reserves of countries and what percent of the amount is in Gold holdingshttp://drkhalid.blogspot.in/2013/04/foreing-exchange-reserves-of-countries.html
Gold forecast - when will the fall stop and gold rise again? http://drkhalid.blogspot.in/2013/04/foreing-exchange-reserves-of-countries.html#!/2013/04/gold-forecast-when-will-fall-stop-and.html

Gold forecast - Why gold fell - was it deflation?

Gold fell along with most commodities and Equities. The movement of most other financialmarketsrecently was consistent with spluttering growth and a rising risk of deflation rather than a new-found and sudden belief that the fiscal and monetary medicine is working.

It is not the first time this is happenning. In 2008 Gold fell from $1000 per ounce to $700. That is a 30% fall. Then in the next 4 years it reached $1400 or doubled. See chart below.

It isn't simply that equities are falling, but more importantly that gold's swoon has come at the same time as steep falls in a number of economically sensitivecommodities. Oil is down nearly 6 percent since last week, copper fell to its lowest in a year and a half andaluminumtouched 3.5-year lows. Even the prices of wheat, corn and soybeans are down.  Deflation seems the logical reason for the fall of Gold.

Commodities slump sends slow ripples through world economy-prices of everything falling  http://drkhalid.blogspot.in/2013/04/commodit…

Foreing exchange reserves of countries and what percent of the amount is in Gold holdings

Countries which have become stronger economically have not accumulated gold till recently but now as European nations are selling gold, they are buying it and making their position strong.

Foreing exchange reserves of countries and what percent of the amount is in Gold holdings . courtesy Peter Schiff's speech:

Cyprus 1.1 billlion 58%
Greece 7.1 billion 82%
Portugal  22 billion 90% in Gold
Spain 50 billion 30% in Gold
Italy 175 billion 72% in Gold
France 179 billion  71% in Gold
Slovakia 2.5 billion  68% in Gold
Netherland 53 billion 60% in Gold
Belgium 30 billion  39% in Gold

China 3.3 trillion 2% in Gold
Japan 1.25 trillion 3% in Gold
Saudi 627 billion  3% in Gold
Russia 527 billion  9% in Gold
Swit 522 billion 11% in Gold
Taiwan 423  billion 6% in Gold
Brazil 373billion  0.5% in Gold
South korea 327 billion 1% in Gold
Hong kong 304 billion  0% in Gold

India 290 billion 10% in Gold
Singapore 259 billion 3% in Gold
Thailand 179 billion 4% in Gold
Malaysia 140 billion  1.5% in Go…

Why an attack on Syria by USA is indirectly that on Iran and can start world war III

China Australia to bypass the dollar in currency trade

SHANGHAI, April 3 (Reuters) - China and Australia will launch direct trading between the two currencies in Shanghai and Sydney within weeks to lower trade transaction costs, a foreign bank source with direct knowledge of the matter told Reuters on Wednesday.

The new currency deal will eliminate the spread between U.S. dollars and Australian dollars from the cost of converting between the yuan and the Aussie dollar.
China has launched other new currency pairs in recent years , including with the Canadian dollar, Malaysian ringgit, and Hong Kong dollar, but the exchange rates for these pairs are still calculated based on the corresponding U.S. dollar rates. The countries will announce the move on Friday during the visit of Australian Prime Minister Julia Gillard to China, which will begin at the Boao Forum for Asia on China's Hainan island. Direct trading will begin soon after the announcements and no later than the first half of this year, the foreign bank source said. "Consi…

Massive cyberattack hits Internet users

(CNN)-- Internet users around the globe are facing slowed-down service, thanks to what's being called the biggest cyberattack in history The prolonged denial-of-service assault is targetingThe Spamhaus Project, a European spam-fighting group that has gone after CyberBunker, a data-storage company that offers to host any content "except child porn and anything related to terrorism." The organization has been in a long-running feud withCyberBunkerand claims spammers use it as a host from which to spray junk mail across the Web. Internet security firm CloudFlare said Spamhaus contacted it last week, saying it had been hit with an attack big enough to knock its site offline. Security experts say the attack uses more sophisticated techniques than most DDoS (distributed denial of service) attacks and targets the Web's infrastructure, which has led to other sites performing slowly.

"It's the biggest attack we've seen," Matthew Prince, CloudFlare's CEO,…

North Korea's nuclear capabilities are far more advanced than Iran's.

The twin nuclear crises the Obama administration faces in Asia and the Middle East underline a harsh reality for U.S. strategists: North Korea's weapons capabilities are far more advanced than Iran's. Pyongyang, as a result of decades of covert atomic work, is close to mastering the technology to mount one of its estimated dozen nuclear warheads atop medium-range missiles that are capable of striking U.S. allies South Korea and Japan, American officials and international nuclear experts believe. Iran, by comparison, has no atomic bombs in its military arsenal, nor the ability to deliver them, say U.S. and United Nations experts. Iran says its nuclear program is strictly for civilian purposes, although the Obama administration has charged Tehran with trying to develop nuclear weapons. "By many estimates, North Korea will have the ability to deliver nuclear weapons using long-range ballistic missiles to distant targets within four to five years," said Evans Revere, a …

California city files bankrupcy- being watched closely by other struggling US cities and towns that may also seek bankruptcy protection.

A court has approved the California city of Stockton's bankruptcy filing, making it the most populous US city ever to enter bankruptcy protection. A federal judge said without bankruptcy protection, Stockton would be unable to provide basic government services.

Officials were forced to make dramatic spending cuts to patch a budget deficit - roughly $26m (£17m) this year. The city eliminated a quarter of its police officers, one third of the fire department staff and 40% of all other employees. It also cut wages and medical benefits. Stockton's unemployment and violent crime rates now rank among the worst in the nation. The city's case was being watched closely by other struggling US cities and towns that may also seek bankruptcy protection.

France in trouble- people not spending on common needs- government trying hard to keep treasury filled.

French PresidentFrancois Hollandemade changes to his failed proposal for a 75% top tax rate on Thursday, shifting the burden of payment from individuals to businesses that pay salaries over 1 million euros.
http://money.cnn.com/2013/03/29/news/economy/france-tax-hollande/index.html?iid=HP_MP_River


French economy dogged by weak spending, fiscal strain. President Francois Hollande sought to reassure the public in a TV interview on Thursday that he has thetoolsto restoreFranceto growth, promising measures to boost consumer spending, which accounts for more than half of theeconomy. But data on Friday showed that spending on goods slipped 0.2 percent in February from the previous month, disappointing analysts polled by Reuters who expected a rebound, and following a 0.9 percent drop in January as rampant unemployment and tax rises continued to bite. "This is the result of very bad consumer morale," said BNP Paribas economist Dominique Barbet, adding that consumption would likely s…

Europe unemployment hits record high

Some 19 million people are out of work in the eurozone, 3.6 million of them under the age of 25, meaning nearly one in every four young people are without a job. Compared with the same month a year earlier, the jobless total in the eurozone has increased by 1.8 million, with the depressed economies of southern Europe suffering the most. There is little hope that Europe will return to growth this quarter, especially in the wake of a messy andtumultuous bailoutfor the tiny nation of Cyprus.
http://money.cnn.com/2013/04/02/news/economy/europe-unemployment/index.html?iid=HP_MP_River

Is the world economy following a cycle?

Editor’s Note We bring to the attention of Global research readers a study by two prominent Russian economists on Kondratief’s “Long Wave”. The Long Wave Theory of Nikolai Kondratiev’s, first formulated in the 1920s, constitutes an important landmark in economic theory. As to whether it is useful in understanding the current global economic crisis, however, is another matter. The K cycle approach posits a regular long cycle. It tends, therefore, to ignore the deliberate process of market manipulation which characterizes the current financial crisis. Michel Chossudovsky, Global Research, November 27, 2008 THE LONG WAVE THEORY IS REMEMBERED ONLY IN CASES OF COLLAPSE The financial crisis that has broken out in the United States and lately encompassed the whole world requires adequate measures from the global community. But what action should be in this case considered adequate? To answer this question, we have first to identify the real underlying reasons that generated the crisis, and estim…