Daily Digest

Daily Digest - October 11

Sunday, October 11, 2009, 9:56 AM
  • Gold as Preservation of Wealth, not an investment opportunity
  • Mauldin: Killing the goose 
  • Central Banking: A Blight on Humanity
  • Pfizer Big Winner in Health Care Fight 
  • Richard Maybury Videos
  • Derivatives Lobby Links With New Democrats to Blunt Obama Plan 
  • Retail Sales Probably Fell in September: U.S. Economy Preview 
  • Down the Rathole
  • How to Bring Solar Energy to 7 Billion People 
  • What Are Useful Wild Plants?


Gold as Preservation of Wealth, not an investment opportunity (Claire H.)

Spot gold and U.S. gold futures, both of which are priced in dollars, have gained ground in league with the U.S. currency's losses. Gold hit a record high earlier on Wednesday at $1,048.20 per ounce . But gold priced in other currencies has seen nothing like the same sorts of gains. While the precious metal has gained almost 20 percent in dollar terms so far this year, gold priced in Australian dollars has fallen 5.6 percent.

Kitco said its index aims to determine whether the value of gold is actual, a reflection of changes in the dollar value, or a combination of both.. "When you take the dollar out of the equation, which this basket does, and you start looking at gold in the six-currency basket, you realise that this has been a dollar story," Kitco senior analyst Jon Nadler told Reuters on the sidelines of the Commodities Week Europe conference in London.

Mauldin: Killing the goose (JRB)

Today we look at the possibility that the fiscal path of the enormous US government deficits we are on could indeed kill the goose, or harm it so badly it will make the lost decades that Japan has suffered seem like a stroll in the park.

Central Banking: A Blight on Humanity (Pinecarr)

“Impeccably reliable sources have informed me that as recently as Sept. 30, 2009 – the last possible day of trade in the Sept. 09 gold futures – a number of well-heeled market participants “bought” substantial tonnage worth of gold futures on the London Bullion Market [LBMA] and immediately told their counterparties they wanted to take instantaneous delivery of the underlying physical bullion. The unexpected immediate demand for substantial tonnage of gold bullion created utter panic in at least two banks who were counterparties to this trade – J.P. Morgan Chase and Deutsche Bank – because they simply did not posses the gold bullion which they had sold short [an illegal act which in trading parlance is referred to as a “naked short”].

Pfizer Big Winner in Health Care Fight (David M.)

Bloomberg has a run down on winners and losers to date in the health reform fight. Pfizer comes out in front. Winners so far. New York-based Pfizer and other pharmaceutical companies overcame attempts to torpedo a deal they made with Finance Committee Chairman Max Baucus and Obama that limits their contribution to the overhaul to $80 billion over 10 years.

Richard Maybury Videos (Pinecarr)

For whatever it's worth, I have the highest regard for Richard Maybury's research and analysis. It is much, much deeper than what comes across in these videos. They are really just introduction videos he put out. And I don't always agree with his specific investment advice in its totality, but my disagreements are quite minor. He is not exactly a goldbug, although he does highly recommend physical gold possession and ranks it the top asset in a category he calls "endurables", as opposed to "securities", which he says are no longer secure.

He calls himself "The 2,500 Year-Old Man" because he bases his research and analysis on his vast knowledge of history. In these videos he speaks as though he is teaching an elementary school class of children. But don't let that bother you. His analysis is solid and so is his message, and it is worth the time to watch.

Derivatives Lobby Links With New Democrats to Blunt Obama Plan (Vinny A.)

As President Barack Obama vowed in a Sept. 14 speech in New York’s Federal Hall to correct “reckless behavior and unchecked excess” on Wall Street, Mike McMahon and Barney Frank sat in the audience discussing how to ease proposed rules for the $592 trillion over-the-counter derivatives market. Side by side at 26 Wall St., across from the New York Stock Exchange, freshman congressman McMahon told House Financial Services Committee Chairman Frank he was worried that Obama’s derivatives plan, released in August, would penalize a wide swath of U.S. corporations and could push jobs in his home district overseas, McMahon said in an interview.

Retail Sales Probably Fell in September: U.S. Economy Preview (Vinny A.)

Retail sales in the U.S. probably fell in September as auto showrooms sat empty after the “cash for clunkers” program expired, economists said before a report this week. Purchases dropped 2.1 percent, the biggest decrease this year, after rising 2.7 percent in August, according to the median forecast of 56 economists surveyed by Bloomberg News ahead of Commerce Department figures due Oct. 14. Other reports may show inflation and factory production cooled last month.

Down the Rathole (Vinny A.)

The relentless financialization of the economy has resulted in a hybrid-system of credit expansion which depends on pools of loans sliced-and-diced into tranches and sold into the secondary market to yield-seeking investors. The process is called securitization and it lies at the heart of the current financial crisis. Securitization markets have grown exponentially over the last decade as foreign capital has flooded Wall Street due to the ballooning current account deficit.


How to Bring Solar Energy to 7 Billion People (David M.)

By exploiting the powers of nanotechnology and taking advantage of nontoxic, Earth-abundant materials, Berkeley Lab's Cyrus Wadia has fabricated new solar cell devices that have the potential to be several orders of magnitude less expensive than conventional solar cells


What Are Useful Wild Plants? (David M.)

They're the trees, flowers, and grasses, the vines and the bushes and even the weeds in your lawn. They're what our ancestors ate before we had supermarkets. They're what our great grandparents used to doctor the family, put food on the table, and make their tools. They're what we'll use in the future as renewable sources of oil, fuel, food, pharmaceuticals, and more. They are our vital link to life and they are our most important resource for our future.


Davos's picture
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Re: Daily Digest - October 11

Seen on Alea:

Not economic, but is says a tremendous amount about what our economic rat race has done to us.

pinecarr's picture
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Re: Daily Digest - October 11

Davos!  I miss you.  Nice to see you back where I'm used to seeing you; 1st post on the Daily Digest!:)

pinecarr's picture
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Re: Daily Digest - October 11

P.S. Great video; what fun!

rowmat's picture
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Is that what you call...

 'Steinway to Heaven!' Wink

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Ken C
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Re: Daily Digest - October 11

piano stairs- what a great idea!!!!!Laughing

saxplayer00o1's picture
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Re: Daily Digest - October 11

1) Who do you think just said this about the U.S. dollar and gold? Read and then look at the link and scroll to the bottom to see who @#$%^ is:


"It is not possible to also inundate the world with dollars and believe that the paper money without a gold backing can retain its value. Other sounder economies have emerged. The US dollar is no longer the hard currency reserve of every state. Actually, those who still have it wish to distance from it albeit trying as much as possible to prevent its devaluation before they can get rid of it.”

@#$%^ stated that the European Union’s Euro, the Chinese Yuan, the Suisse Franc, the Japanese Yen and even the Pound Sterling and other hard currencies had come to take the place of the US dollar in international commerce.

“Once again the metal gold is becoming a significant international reserve currency,” stated @#$%^. “This is not a whimsical personal opinion nor do I wish to slander that currency.”"

2) Rick Santelli 

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