Gold Befuddles Bernanke as Central Banks’
Losses at $545 Billion - (www.bloomberg.com) Ben
S. Bernanke, the world’s most-powerful central banker, says he doesn’t
understand gold prices. If his peers had paid attention, they might have
stopped expanding reserves that lost $545 billion in value since bullion peaked
in 2011. Bernanke, who holds economics degrees from Harvard College and the
Massachusetts Institute of Technology and led the Federal Reserve through the
biggest financial disaster since the Great Depression, told the Senate Banking
Committee in July that “nobody really understands gold prices and I don’t
pretend to really understand them either.” Central banks, which own 18 percent
of all the gold ever mined, will add as much as 350 tons valued at about $15
billion this year, the London-based World Gold Council estimates. They
purchased 535 tons in 2012, the most since 1964. Russia is the biggest buyer, expanding reserves
by 20 percent since prices reached a record $1,921.15 an ounce in September
2011. Gold slumped 31 percent since then.
Peter
Schiff Warns of Martial Law - (www.infowars.com) American
investment broker, businessman, author and financial commentator Peter Schiff
warns us that we are in worse shape now economically than we were just before
the 2008 financial crisis, which we still have yet to recover from. “I think
the U.S. has been in a depression or a recession for the entirety of the Obama
presidency,” Schiff said. “I think there’s going to be a depression, but I
don’t think it’s going to be global.” “When the dollar collapses and when the
rest of the world stops wasting their resources, propping up our economy,
buying our debt, selling us products that we can’t pay for, I think you’re
going to have a global economic boom outside of the United States.” “I just
hope that one day we’re smart enough to jump in on it by adopting free market
principles.” “I hope we can reclaim our former glory,” he continued. “But to do
that’s we’re going to have to reclaim the values that we have abandoned and
those are the ones that our Founding Fathers wrote into our Constitution, not
the ones that we’re following now.”
Lockheed
plans to furlough 3,000 employees next week - (www.washingtonpost.com) Bethesda-based Lockheed Martin said
Friday that it will furlough about 3,000 employees next week due to the
government shutdown and expects that number to grow if the budget standoff
doesn’t end soon. The figure represents a fraction of the company’s roughly
120,000 employees but reflects a growing concern among contractors about
Congress’s failure to reach an agreement to fund the government. Private
companies have had more flexibility in the early days of the shutdown, but
contracting executives have warned that the situation will soon worsen. In a
memo to employees, Marillyn A. Hewson, Lockheed’s chief executive, said
affected employees should use vacation time and floating holidays so they can
continue to be paid during the furlough. Those without enough vacation time
will be given an advance on up to 40 hours of their salary, she said.
Catastrophic Consequences of a U.S. Default
Explained - (finance.yahoo.com) As
we close out the first week of the government shutdown, a bigger and even more
toxic disaster is creeping into the fray that could make the contentious budget
battle look like a slap fight. The Treasury Department said Uncle Sam will be
broke by October 17th unless something is done. Treasury secretary Jack Lew hammered
home that point Thursday by releasing an unusually ominous statement that warned of catastrophic risks to the economy. House Speaker John
Boehner has said he won't let the government default on its debt, but until steps are taken to
raise the nation's debt ceiling, the possibility of default is still
theoretically alive. "If they seriously default on the debt, what we're
really talking about is a depression," says veteran financial sector
analyst Richard Bove, VP of research at Rafferty Capital Markets. In the
attached video he explains how the fallout would be a lot worse than the
recession suffered in 2008 and the aftershocks would be felt for at least a
decade. "The first thing you have to do is look at who holds the
debt," Bove says of the $16.7 trillion of bonds the U.S. currently has
outstanding. "The first, biggest owner (of U.S. debt) is the social
security fund, so you'd have all of these people who are receiving social
security payments who now have to question whether they'll get their
payments."
Caviar
Off Indian Officials’ Menu as Junk Rating Looms - (www.bloomberg.com) Tough life!! J For
Arvind Mayaram, India’s
push to avoid having its credit
rating cut
to junk means he’ll have to forgo caviar and a two-meter-long flat bed in first
class on his flight from New Delhi to Washington D.C. this week. Mayaram,
India’s Economic Affairs Secretary, will fly business class instead to the
annual World Bank and International Monetary Fund meetings, saving taxpayers at
least $3,000. The change is part of moves to narrow a budget deficit that
reached almost 75 percent of the 5.4 trillion-rupee ($88 billion) target in the
first five months of the fiscal year, imperiling efforts to limit the widest
shortfall in major emerging nations. Prime Minister Manmohan
Singh faces
a slump in economic expansion that’s hurting tax revenues as rupee weakness
raises the cost of oil imports and fuel subsidies. He’ll likely scale back
spending on areas such as research and development while maintaining energy,
food and fertilizer aid to court support before elections due by May, Religare
Capital Markets Ltd. said.
Fed's Bernanke questioning whether bond-buying
works - (www.reuters.com) The Federal Reserve's powerful chairman
and architect of the U.S. central bank's massive bond-buying program is serious
about questioning its effectiveness, a Fed policymaker known for his opposition
to the program said on Thursday. "The difference I have with my colleagues
is the question of efficacy," Richard Fisher, president of the Dallas
Federal Reserve Bank, told a group of CEOs in Little Rock, Arkansas. "To
his great credit, Chairman Bernanke has made this the driving point of every
discussion: Is this working or is it not working?" Fisher, repeating
comments he made just hours earlier in his hometown of Dallas, said he believes
it is not.
India
Cuts MSF Rate to Ease Cash Squeeze After Climb in Rupee - (www.bloomberg.com)
China's Xi sees 'long and tortuous' world economic recovery - (www.reuters.com)
China's Xi sees 'long and tortuous' world economic recovery - (www.reuters.com)
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