Daily Business Report

Party time (until real estate collapses) by PAUL B. FARRELL

2006-05-16T07:52:00.000-04:00

Like now with America the oil addict, the debt addict. It's party time. Government cannot stop spending. Consumers can't stop buying. We're partying! Spend what's left of your savings, have a great time before you're forced to stop living high on the hog. Before rehab. Yes, we all know we'll have to cut back. Just not now. It's coming, we just want one last fling!

The equity bull market is dead, say City experts by Edward Simpkins and Robert Watts

2006-05-15T06:55:00.000-04:00

The bull market that has seen shares rise in value by a third over the past two years is finished, according to leading equity strategists and economists.

Market analysts say that low growth prospects in the US and the weak dollar, combined with rising inflation, could see an end to the growth in stock market values for the rest of the year.

Beijing whispers push gold to $700 by Ambrose Evans-Pritchard

2006-05-11T06:46:00.000-04:00

They seized on comments yesterday by Liu Shanen, an official at the Beijing Gold Economy Development Research Centre, who said China should raise the portion of gold in its reserves from 1.3pc today to between 3pc and 5pc. Such a move would entail the purchase of 1,900 tonnes of gold, equivalent to gobbling up nine months of global mine production.

Monetary Myths by Aaron Singleton

2006-05-10T21:01:00.000-04:00

"Money carries with it an expectation. We see it as the symbol of our productive effort, which can be traded for the things we desire. That’s why we accept it. We expect that others will do the same. In our minds, money becomes the physical embodiment of our sweat, our hard effort, our ideas, our achievements, and our labor. It is these things, and the material goods they produce, that do not grow on trees. The money we currently use does."

Dollar weakens on deficit fears

2006-05-09T08:27:00.000-04:00

The dollar slid further against sterling this morning amid speculation that the US wants a weaker greenback to help tackle its severe current account deficit and that 15 consecutive interest rate rises are about to come to a halt.

The fallout from a falling dollar by Ron Scherer

2006-05-08T06:52:00.000-04:00

As a result, the Canadian "loonie" is at its highest point in 30 years. The British pound is at its uppermost level since last September. Even the closely managed yen is at a six-month peak.

If the dollar were to continue falling, it could have wide ramifications:

If Cuba Can Drill for Oil, Why Can't We? by Jerome R. Corsi

2006-05-05T07:44:00.000-04:00

The U.S. Geological Service estimates there may be as much as 9 billion barrels of oil in the North Cuba Basin. The Gulf of Mexico may be one of the world's largest oil resources, but truly we don't know. We have yet to explore the entire Gulf, especially not in the deeper waters more than 125 miles offshore.

Canadian Dollar, Mining Stocks and Warrants by Dudley Baker

2006-05-04T06:50:00.000-04:00

Are you keeping up with the Canadian Dollar (commonly known as the Loonie)?

The Canadian Dollar is now the strongest currency in the world and there have been many forecasts of parity with the U.S. Dollar and as of today, the Loonie is trading at 90.35 as we write this article.

The first and second charts below shows the strength of the Loonie over the last year and the third chart is of the XAU Gold Index. Observe the long term trends in all of the charts.

Has Bernanke's credibility taken a hit?

2006-05-03T10:22:00.000-04:00

"Federal Reserve Chairman Bernanke told me over the weekend that the media and the markets basically got it wrong last week in speculating that the Fed is done raising interest rates," she said moments before a live interview with Chicago Fed President Michael Moskow.

Canada's Dollar Has Biggest Monthly Gain Since 1971 on Rates

2006-05-02T20:44:00.000-04:00

Canada's dollar posted its biggest monthly gain since at least 1971 on prospects the Bank of Canada will keep raising borrowing costs to prevent the economy from overheating.

Iran oil bourse next week

2006-05-01T12:47:00.000-04:00

Oil Minister Kazem Vaziri Hamaneh said on Wednesday that the establishment of Oil Stock Exchange is in its final stage and the bourse will be launched in Iran in the next week.

He told reporters, upon arrival from Qatar where he attended the 10th General Assembly of International Energy Agency and consultations with OPEC member states, that registration of the Oil Stock Exchange is underway and the entity will operate after being approved by by Council of Stock Exchange.

Silver bullet cocked and ready by John Spence

2006-04-28T07:29:00.000-04:00

At long last, a silver exchange-traded fund that has been in the works for over a year is expected to begin trading Friday.

A registration statement for the highly-anticipated ETF from Barclays Global Investors was declared effective at 10 a.m. Eastern time Thursday by the Securities and Exchange Commission, clearing the way for the ETF to list, an SEC spokesman said.

The real federal deficit weighs in at $760 billion by Jerry Reynolds

2006-04-27T04:31:00.000-04:00

For those who have harbored doubts about the Bush administration's official statements of the federal deficit, a harrowing confirmation came in mid-April. The federal deficit for fiscal year 2005 was not $319 billion, the figure given for the official national budget. The federal deficit for fiscal year 2005 was, in fact, $760 billion, or $156,000 for every person in America.

The figure is found in the Financial Report of the United States Government, a rare document run to earth by nationally distributed Washington Post columnist David Broder.

A Look at Hyperinflation by Mike Shedlock

2006-04-26T18:01:00.000-04:00

The Fed is almost always fighting the wrong battle so I agree with Faber that it should be abolished. A return to the gold standard and elimination of fractional reserve lending is just what we need. It would be a very painful adjustment to make, but a serious adjustment is coming anyway. We may as well make it the right one.

The threat to a fistful of petrodollars by Liam Halligan

2006-04-24T13:31:00.000-04:00

The greenback's recent volatility and the yawning US trade deficit, "are definitely causing concern with regard to its reserve currency status," he said. "The international community can hardly be satisfied with this instability."

IMF says global economy needs significantly weaker dollar by Lesley Wroughton

2006-04-20T07:34:00.000-04:00

Of the economic imbalances, the IMF said: “An orderly resolution of global imbalances will require measures to facilitate a rebalancing of demand across countries and a realignment of exchange rates over the medium term, with the US dollar needing to depreciate significantly from current levels, and currencies in surplus countries — including in parts of Asia and among oil producers — needing to appreciate.”

Fed chief sees high energy prices as drain on economy by Barbara Hagenbaugh

2006-04-19T06:26:00.000-04:00

Bernanke's opinion on energy prices is important. If he and his Fed colleagues view the run-up in energy prices as a drain on the economy, not as an inflation spark, policymakers could lean toward holding interest rates steady in a bid to support the economy rather than raising them to curb inflation.

What U.S. Government Won't Reveal About Inflation by John Wasik

2006-04-18T08:03:00.000-04:00

As the largest component of the CPI at 23 percent, housing represents a huge portion of the overall cost of living. Yet the Labor Department's indirect measure vastly underestimates actual housing costs since it doesn't reflect home-purchase prices, financing, maintenance or property taxes. Done any roofing, remodeling or painting lately? Have you noticed how much your property-tax bill has climbed to match higher home values?

Guns, butter and the Fed by Greg Robb

2006-04-17T09:42:00.000-04:00

Name an unpopular war that Congress and the White House were reluctant to pay for with tax increases, leading to budget deficits, sweeping global economic changes and crippling inflation.
A) Vietnam
B) Iraq
C) Both A and B

Ready for $262 a barrel oil? by Nelson Schwartz

2006-04-13T06:20:00.000-04:00

"U.S. power and influence has declined precipitously because of Iraq and the war on terror and that creates an incentive for anyone who wants to make trouble to go ahead and make it." As an example, Soros pointed to the regime in Iran, which is heading towards a confrontation with the West over its nuclear power program and doesn't show any signs of compromising. "Iran is on a collision course and I have a difficulty seeing how such a collision can be avoided," he says.

Dollar Is Little Changed Before Reports on U.S. Trade Balance and Budget

2006-04-12T08:19:00.000-04:00

A bigger deficit means more dollars must be converted to other currencies to pay for imports. The gap was $67.5 billion, according to the median estimate of economists in a Bloomberg survey. A separate report may show the budget gap widened last month, raising concern about dependence on foreign investors, who own more than half of tradable Treasuries.

Oil-backed ETF makes US debut by Kevin Morrison

2006-04-11T07:37:00.000-04:00

The first fund to be listed in the US to track the price of oil made its market debut on Monday on the American Stock Exchange.

The United States Oil Fund, an oil-backed exchange traded fund, will aim to tap into the growing appetite for commodity investments.

Commodity prices continue upward charge by Kevin Morrison

2006-04-10T13:38:00.000-04:00

The five-year commodity price boom that has catapulted metal, energy and some agricultural prices to record highs continued on Monday and is set to extend further, according to investors, mining groups and sector analysts.

Intermediate-term Outlook for the US Stock Market by Steve Saville

2006-04-07T10:03:00.000-04:00

The US stock market appears, on the surface, to have been quite firm over the past several months, but in real terms (that is, relative to gold) the market has been very weak. In fact, the following chart shows that the S&P500/gold ratio broke downward from a lengthy sideways consolidation during the final quarter of last year and is presently testing its February-2003 bottom.

The National Debt is $8.3 Trillion!

2006-04-06T10:33:00.000-04:00

In Fiscal Year 2005, the U. S. Government spent $352 Billion of your money on interest payments* to the holders of the National Debt. Compare that to NASA at $15 Billion, Education at $61 Billion, and Department of Transportation at $56 Billion. For the current FY06, we've already spent $174 billion on interest payments! So how do we fix this growing debt problem? Here is one suggested solution. What's your solution? FAQs and Answers on the Balanced Budget Amendment.