Gold Buying Contributing To Criminality?

In the following video I discuss the explosion of the gold buying culture in the United States and I illustrate how gold buying is indirectly contributing to a sharp rise in jewelry theft.

The State of the States: 46 US States Could File Bankruptcy in 2009 – 2010

States are facing a great fiscal crisis. At least 46 states faced or are facing shortfalls in their budgets for this and/or next year, and severe fiscal problems are highly likely to continue into the following year as well. Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total more than $350 billion.

States are currently at the mid-point of fiscal year 2009 — which started July 1 in most states — and are in the process of preparing their budgets for the next year. Over half the states had already cut spending, used reserves, or raised revenues in order to adopt a balanced budget for the current fiscal year — which started July 1 in most states. Now, their budgets have fallen out of balance again. New gaps of $46 billion (over 9% of state budgets) have opened up in the budgets of at least 42 states plus the District of Columbia. These budget gaps are in addition to the $48 billion shortfalls that these and other states faced as they adopted their budgets for the current fiscal year, bringing total gaps for the year to over 14 percent of budgets.

The states’ fiscal problems are continuing into the next two years. At least 41 states have looked ahead and anticipate deficits for fiscal year 2010 and beyond. These gaps total almost $88 billion — 16 percent of budgets — for the 34 states that have estimated the size of these gaps and are likely to grow as gaps are re-estimated in the next few months.

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Gold likely to hit new highs on dollar fear

Gold is likely to hit new record highs, spurred by serious concern about the U.S. currency and doubt about the state of the world economy, the chairman of Barrick Gold Corp. said on Thursday.

There was even a possibility, although not a probability, central banks, including China’s, might start to switch from dollar holdings to gold, which could cause the metal’s price to treble or more.

From a gold producers’ perspective, one negative is that the cost of bringing on production has remained high, even as other raw materials, including base metals and energy, have slumped.

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Monetary union has left half of Europe trapped in depression

Events are moving fast in Europe. The worst riots since the fall of Communism have swept the Baltics and the south Balkans. An incipient crisis is taking shape in the Club Med bond markets. S&P has cut Greek debt to near junk. Spanish, Portuguese, and Irish bonds are on negative watch.

Dublin has nationalised Anglo Irish Bank with its half-built folly on North Wall Quay and €73bn (£65bn) of liabilities, moving a step nearer the line where markets probe the solvency of the Irish state.

A great ring of EU states stretching from Eastern Europe down across Mare Nostrum to the Celtic fringe are either in a 1930s depression already or soon will be. Greece’s social fabric is unravelling before the pain begins, which bodes ill.

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World Demand Collapse, Bonds Next

Anyone following the economic news in recent months has to be stunned at the declining economic activity. Japan had a 16% drop in machine orders for November. US car sales down 30 to 40%. Even world car leader Toyota has sales down 20 to 30%. Worldwide car sales are way down too, anywhere from 10 to 20% depending on which area.

US retail sales are down 2 plus percent, but depending on what stats you look at, autos -30% plus, that 2% number is far worse than it looks.

The EU region is seeing marked declines in orders and exports. Japan had a stunning 15 to 17 % drop in exports from the previous year. China had over 100,000 factories close by end of 08. The list is endless.

Of course all this collapsing demand is hitting commodities and energy. Gold has fared better overall, but is torn between central bank inflation efforts and deflation in general in every major economy. Even China is said to see possible flat growth in 09, something that they consider akin to Armageddon, as they need 15 million new jobs each year just to stay even with population growth.

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Merrill Lynch says rich turning to gold bars for safety

Merrill Lynch has revealed that some of its richest clients are so alarmed by the state of the financial system and signs of political instability around the world that they are now insisting on the purchase of gold bars, shunning derivatives or “paper” proxies.

Gary Dugan, the chief investment officer for the US bank, said there has been a remarkable change in sentiment. “People are genuinely worried about what the world is going to look like in 2009. It is amazing how many clients want physical gold, not ETFs,” he said, referring to exchange trade funds listed in London, New York, and other bourses.

“They are so worried they want a portable asset in their house. I never thought I would be getting calls from clients saying they want a box of krugerrands,” he said.

Merrill predicted that gold would soon blast through its all time-high of $1,030 an ounce, and would hit $1,150 by June.

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Gold Market Update

The way things look it will soon be impossible – or very difficult and expensive – to obtain physical gold and silver. The first major wave of physical buying has bought up all of the coins and small bar gold and silver available on the market, with the result that if you want any, you must pay a large premium. Right now, the second wave is underway, with astute investors forcing the Comex to deliver, which is having the effect of drawing down their warehouse stocks at a rapid rate.

As the Comex is massively leveraged and trades hundreds of times more gold and silver than it has in its possession, it is clear that immediately their warehouse stocks are completely depleted, there will be a mad scramble to buy physical gold and silver in order to meet contract obligations.

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