Debt-to-GDP and Misdiagnosing a Bubble Economy’s Ills. Guest Post by Tim Iacono

A few economists seem to be catching on, but not nearly enough…

About a year ago, St. Louis Fed President James Bullard wondered whether too much faith was being placed in what models say economic growth should be but, as detailed in When Models Trump Common Sense, he was rebuffed by nearly the entire establishment (or at least “a small army of bloggers with PhDs in economics”).

Now, in a story at Project Syndicate, Raghuram Rajan, Professor of Finance at the University of Chicago Booth School of Business and the IMF’s youngest-ever chief economist tries to explain Why Stimulus Has Failed and, in doing so, questions whether the root cause of our current economic troubles is simply a lack of demand, casting himself as an Austrian sympathizer in the process: Read more…

About Tim:

Tim Iacono is the founder of the investment website ‘Iacono Research’ (http://iaconoresearch.com/), a subscription service providing market commentary and investment advisory services specializing in natural resources. He also writes a financial blog, formerly known as ‘The Mess That Greenspan Made’, a sometimes irreverent look at the many and varied after-effects of the Greenspan term at the Federal Reserve.

Disclaimer:

The views expressed in the posts and comments of this blog do not necessarily reflect APMEX Inc. They should be understood as the personal opinions of the author. No information on this blog will be understood as official.

 

Gold Dips- Jobless Claims Down

Analysts had expected an increase in jobless claims but the number of Americans filing for unemployment benefits fell to its lowest level since January 2008.  This is the second straight week of falling claims.  The unemployment rate held steady at 7.8 percent.  Although is appears many companies are not laying off workers as anticipated, they are adding new jobs at a slow rate. Some economists caution while interpreting these numbers, there is usually a lot of volatility this time of the year.

The Gold price fell overnight without breaking a key technical level.  For five days the Gold price has been just below $1,695 and ounce, an important level for Gold.  Additional pressure came against Gold as the U.S. House voted to suspend the nations borrowing limit until May 19 in effect pushing the debt ceiling threat down the road.

At 9 a.m. (EST), the APMEX Precious Metals spot prices were:

  • Gold, $1,674.70, Down $14.00.
  • Silver, $31.86, Down $0.62.
  • Platinum, $1,683.70, Up $8.10.
  • Palladium, $723.90, Down $3.30.

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EST)! Or call us Fridays until 6 p.m. (EST)! If you have any questions about investing in precious metals or simply would prefer to place your order by telephone, we are here to help.

Spanish debt auction a success; Platinum tops

If you are looking for excitement in the U.S. stock market, you may be left wanting. Futures on the Dow and the S&P are not showing us much this morning; however, the euro took a stronger position against the dollar and yen in overnight trading when a Spanish debt auction lifted sentiment toward riskier assets. They sold 4.5 billion euros in new bonds at a lower cost than in previous auctions. This was a sign of growing confidence among investors in the recession prone area.

The Gold price traded in a tight range overnight despite the positive news for the euro. Andrey Kryuchenkov, capital analyst with VTB Capital, said, “We maintain our preference for wider ranges to hold on spot Gold prices as choppy macro trading prevails, with attention to U.S. December housing starts and weekly jobless claims later today.” The Gold price may begin to increase again when debt ceiling talks come back into focus. In positive news for Platinum, the metal surpassed Gold in overnight trading for the first time in 10 months.

At 9 a.m. (EST), the APMEX Precious Metals spot prices were:

  • Gold, $1,671.70, Down $13.40.
  • Silver, $31.19, Down $0.39.
  • Platinum, $1,685.90, Down $7.80.
  • Palladium, $723.00, Down $4.50.

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EST)! Or call us Fridays until 6 p.m. (EST)! If you have any questions about investing in Precious Metals or simply would prefer to place your order by telephone, we are here to help.

 

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Great Buying Opportunity – Both Silver and Gold Prices Retreat

SILVER & GOLD PRICES ARE ON THE MOVE
TAKE ADVANTAGE OF THIS BUYING OPPORTUNITY!

If you’ve been waiting for a price dip in order to begin or expand your holdings in Silver or Gold, now may be a good time to act. Both Silver and Gold prices have pulled back, creating opportunities for savvy investors.

SILVER AND GOLD REMAIN VALUABLE ASSETS

Given the ongoing uncertainty of the global markets and today’s retreat in Silver and Gold prices, now may be the time to build your Precious Metals investments. Read more about Precious Metals prices in our Daily Gold & Silver Market Report, always updated three times throughout the day.

LOCK IN YOUR PRICE WHEN YOU ORDER FROM APMEX

When you buy Precious Metals from APMEX, the price listed is the price you pay (not including shipping) — locked in at the time of your order. There are no commissions and no hidden fees. That means you can take maximum advantage of the recent price pullback in Silver and Gold to buy your favorite items.

 

 

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10 Reasons to Choose APMEX as Your Precious Metals Provider

English: APMEX headquarters in Oklahoma City

English: APMEX headquarters in Oklahoma City (Photo credit: Wikipedia)

APMEX. You’ve probably heard the name before, but what’s in a name? What does it really tell you about the company that you’re doing business with? If you’re finally ready to invest in Precious Metals, we’re here to let you know why APMEX should be your first choice.

  1. We stand behind our products. All 7,000+ of them. When you decide to make a purchase with APMEX, you’re choosing to invest in quality products. Unhappy with the product you purchased? Our return specialists are available to help you swiftly resolve the issue.
  2. We’ve been in business since 1999. Precious metals are what we know best and we have the tenure and the knowledge base to prove it.
  3. APMEX is here to serve our customers and we have an expert team ready and willing to do just that. Get all of your questions answered through our informative customer service and account management team.
  4. So what if the market is closed? Our website is available to help you 24/7 with securing an order.
  5. We’re big! As in one of the largest online provider of precious metals. See the difference now at www.APMEX.com.
  6. Shipment discretion and insurance are a major part of APMEX customer service. Your metals are shipped like the precious cargo that they are and have no obvious packaging or logos that reveal the contents of the items being shipped.
  7. Not interested in taking physical possession of your items? You don’t have to. Keep your investment secure with our Citadel Global Depository Services.
  8. APMEX is a Global company. Find out about international shipments here.
  9.  Buy and sell right here with APMEX! Our purchasing department will help you get the return on your investment.  Call us at (800) 375-9006
  10. Sure, we can come up with some pretty good reasons for you to buy from us, but our customers can give you even more. We have an A+ plus rating with the Better Business Bureau and 96% of our customers say they would recommend us to friends and family. Become our latest rave review by shopping with us today!

Visit APMEX.com or call (800) 375-9006 to find out more about buying Precious Metals.

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End of Week Report: Gold Fails to Break $1,800 an ounce

TAKING GOLD PROFITS:
Gold’s failure to break $1,800 an ounce this week, along with positive U.S. economic data, had many investors looking to cash out gains. This week’s retail sales data shows Americans bought more of everything in September and could indicate greater than expected growth in the third quarter. “The University of Michigan data on Friday, retail sales today — it all adds up to suggest that the U.S. economy is starting to step in line, and the downward revisions we saw in the past half of the year may be coming to an end,” Danske Bank analyst Christin Tuxen said. This week also saw positive news out of China indicating reduced inflation and growing exports.  As the United States election draws near, the economy is by far the number one topic of debate. This week’s reports from the Federal Reserve shone a positive light on the U.S. economy, as industrial production rose in September. Reports have shown that consumer spending and the housing markets have also improved. “The economy is regaining momentum it appeared to have lost in the spring,” said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh.
 
EUROPEAN SUMMIT MOVES THE MARKET:
Gold is set to end the week down as the euro softened in anticipation of the EU summit’s closing in Brussels. Plans for immediate assistance to the profoundly struggling nations of Greece and Spain went largely unmentioned as the falling euro dragged Gold down with it. Though the metal has descended sharply from recent highs near $1,800, many analysts are still bullish on Gold for the long-term. “There is a clear lack of momentum in the Gold price at the moment,” BNP Paribas analyst Anne-Laure Tremblay said. “The recent correction from $1,800 to $1,735, and possibly a bit lower, is likely to be a temporary pause in a wider upward trend.” French President Francois Hollande believes the eurozone is “on track” to fixing the problems in the region, but he’s not fooling anyone. A statement from the summit claimed that banking supervision was coming, but as Alex White of JPMorgan said, “The statement repeated the passage from the June summit word for word – indicating how little progress has been made. While France and the periphery continue to see banking sector support coming early next year, the German vision still looks like it is based around a timeframe from 2015 and beyond.” If this is true, it could be more than two years before the eurozone is on track again.
 
AFRICAN MINING SUSPENDED:
Africa’s leading Gold mining operation has been suspended as a reported 19,500 of the 26,700 workers have gone on strike. “The current impasse is extremely unfortunate, not only for the industry and its employees, but also for future growth and development in South Africa, given the critical role that Gold mining plays in our country’s economic development,” Elize Strydom, the mines chamber’s senior executive for employer relations, said in an emailed statement. South Africa was the fifth-largest Gold producing country in 2010.

Gold & Silver Prices Moving Down in Morning Trading

Whether it is the effects of the QE3 announcement wearing off or investor’s taking profits off the table, gold and silver prices have been moving down throughout the morning. There was news coming out this weekend from the International Monetary Fund (IMF) meeting in Tokyo. Federal Reserve Chairman Ben Bernanke found himself defending QE3. International criticism is centered on currency valuations. The International community feels that Federal Reserve actions are artificially boosting their currencies, which puts them at a disadvantage for exporting their goods and services. This dialog brings into play a reoccurring theme that global currencies are in a race to the bottom.

Regarding the above mentioned race to the bottom, IMF Managing Director Christine Lagarde is urging Europe to roll out a bailout. The European bailout would look much like the US QE3. The European Central bank is being urged to aggressively begin buying bonds to lower the borrowing costs of the respective nation. Such measures will pump more euros into the marketplace and most likely will continue to depress the valuation of the euro. IMF’s Lagarde is also requesting that Greece be given more time to get their financial house in order.

U.S. retail sales rose more than expected in September as U.S. consumers spent more on gas and cars. The core retail sales (which do not include cars & gas) rose 0.9%. Analysts had expected a gain of 0.3%. This indicates that consumer sales from July- September were stronger than expected. The New York Federal reserve “Empire State” report was not as positive. This report is seen as a gauge of general business conditions. It did rise from a minus 10.41 to a minus 6.16, but economists were expecting minus 4.55.

At 9AM EDT the APMEX precious metal prices were:

  • Gold price –$1,744.00 – down $15.20
  • Silver price – $33.16 – down 51 cents
  • Platinum price – $1,641.30 – down $15.00
  • Palladium price – $639.00 – down $1.00