numerous excellent tidbits about gold, rates, economy
from Swiss American Trading Corp of Phoenix (coin dealer)
GREENSPAN TO THE RESCUE!- Real Money Perspectives - Jun 27, 2003
GDP & Confidence erode... Stocks zig-zag... $346 Gold
("Good time to BUY!")... Japanese Borrowers Paid...
Dead Men Laughing... Greenspan "bubbles"... Coins advance.
-----------------------------------------------------------
MARKET NEWS DIGEST
-Fed Cuts Rate to 1%; Deflation, Growth View Split - Bloomberg
-Fed Set to Cut Rates to 45-Year Lows - Reuters
-Bond prices may be in for a long tumble - USA TODAY
-Stock Market Valuation - CrestmontResearch
-Keys, Walkers, Morgans advance - COINWORLD
COMMENTARY
-DEAD MEN LAUGHING - Bill Bonner, Daily Reckoning
-Still Blowing Bubbles - PAUL KRUGMAN, NY Times
-Endless Bubbles - STEPHEN ROACH, Morgan Stanley
-Fed vs. Deflation. Who will win? - Martin Weiss
-Bull Market or Bear Market Rally? - John Mauldin
-----------------------------------------------------------
QUOTES OF THE WEEK
-----------------------------------------------------------
"The Committee perceives that the upside and downside risks
to the attainment of sustainable growth for the next few quarters
are roughly equal. In contrast, the probability, though minor,
of an unwelcome substantial fall in inflation exceeds that of a
pickup in inflation from its already low level. On balance, the
Committee believes that the latter concern is likely to predominate
for the foreseeable future...Recent signs point to a firming in
spending, markedly improved financial conditions, and labor and
product markets that are stabilizing. The economy, nonetheless,
has yet to exhibit sustainable growth."
-FEDERAL RESERVE BOARD STATEMENT, 6-25-03 (see below)
What has Greenspan said about gold and economic freedom?
swissamerica.com
-----------------------------------------------------------
"I think what they really need to do is to save this rate
cut for real contingency situations and not just cut because
of a belief that financial markets expect them to."
-RAJEEV DHAWAN, Economist, Georgia State University, (see below)
-----------------------------------------------------------
"Why did Treasuries rally when Greenspan lowered short-term
rates? Are they sending a signal of dissatisfaction or are they
saying the next move is an increase in rates? Are you aware of
the following news story which was not covered heavily in the
financial press:
"Japan's overnight call rate dipped to minus 0.001 percent
Wednesday, the first time it has fallen below zero, Kyodo
quoted the Bank of Japan as saying. A below-zero rate means
that lenders are paying interest to borrowers. The call rate
is the rate charged on overnight loans between commercial banks."
Is this good news? I don't think so.
The market is reasserting the short-term downtrend and it
all makes sense. The press has been pushing the story of end of
the quarter window dressing and the Fourth of July rally. Money
managers with sense are selling NOT b uying. They want to lock
in the only gains they've seen in three years. For many, they
have made the annual returns since March and why risk it?"
-MARK LEIBOVIT, VRTrader.com
-----------------------------------------------------------
"Gold’s bull market is solid and it’s poised to rise to
new bull market highs before the year is over. In fact, for the
first time in years both the technicals and the fundamentals are
glittering brightly. The most important technical step in the big
picture happened last December when gold shot above $330. This
marked the first time since 1979-80 that gold rose above its
prior peak."
-MARY ANN & PAN ADEN, Aden Forecast, 6-26-03 Good Time to Buy
swissamerica.com
-----------------------------------------------------------
"The Fed seems to guarantee that investors will not lose
money - no matter how extreme prices become. In the stock market,
the 'Greenspan Put' was supposed to make sure stock prices didn't
fall significantly; if prices began to fall, or so the Moms and
Pops believed, Greenspan would simply lower rates and drive them
back up again. When that failed, along came the 'Bernanke Put.'
The economy depends on housing, went the logic, and housing
depends on low mortgage rates. No way will Bernanke let rates
rise; instead, he'll cut them further in order to keep 'the
recovery' on track."
-BILL BONNER, Daily Reckoning, 6-23-03 (see below)
-----------------------------------------------------------
"The only way an economy such as ours can heal itself is by
an extended period of “digestion” of its current debt levels.
However, this Federal Reserve seems to feel that high debt
levels, over consumption and overcapacity caused by plentiful
credit in the past can be fixed by more of the same. Greenspan
and Company are obviously of a mind that they can fight both
the laws of nature and of simple mathematics by using a bulldozer
to push on the string. In the end it still won’t work, any more
than it has worked in Japan, even if in the near term we see
some continued reinflating in the stock market."
-CHRIS TEMPLE, HANDICAPPING THE FED, National Investor
-----------------------------------------------------------
"We've been down this sorry road before. The majority of
analysts in 2001 and again in 2002 forecasted strong earnings
growth accompanied by major stock gains. Instead earnings went
nowhere, resulting in two poor years for investors. What's
different now? Not much. First Call consensus forecasts put
expected third-quarter earnings up 12.7% over 2002 and fourth-
quarter ones up 21.1%. Too bad that nothing like that is going
to happen. Investors today are not euphoric; they're punch-
drunk. And they will come to their senses eventually."
-DAVID DREMAN, "Earnings Shortage," FORBES
-----------------------------------------------------------
"Gold has become the color of hope for paralyzed investors
in the past year. Since the start of 2002, shares of the public
companies that dig the stuff out of the earth have marched
forward 50% to 300% to the drumbeat of war as all the major
equity indexes have plunged. It has become the investment of
choice, not just for wizened old men on park benches and 'fraidy
cats in the Adirondacks, but for everyday professionals saving
for retirement, daytrading speculators and sober fund managers
seeking a hedge against uncertainty. Whether in the form of
100-ounce bars, futures, stocks or coins, the metal has come
to be seen as the antistock of the post-dot-com world. It's a
combination of security blanket, insurance policy and Lotto
ticket. The metal with moxie."
-JON D. MARKMAN, Managing Editor, MSN MoneyCentral
Four Ways to Play New Gold Rush, 1/30/03
thestreet.com
-----------------------------------------------------------
"Gold-bugs always say we should return to 'honest money.'
Paper-tigers and normal people just want efficient money.
Politicians want your money, banks want to loan money (into
existence) and central banks just print money and then loan
it to the government. It’s downright insane."
-ALEX WALLENWEIN, GOLD AS FIAT'S AUTOPILOT? - LeMetropolecafe
-----------------------------------------------------------
"The deficit in the broadest measure of trade swelled to a
record $136.1 billion in the first three months of 2003 as war
tensions stoked the prices of imported crude oil and other
petroleum products."
-MSNBC, 6-20-03, U.S. trade gap soars to record
-----------------------------------------------------------
"Even an extended period of 20 years does not ensure positive
cumulative returns in the stock market. Returns appear to be
dependant upon the stating level of P/E ratios. When P/E's are
relatively high and above the average, investors' returns over
the subsequent 20 years have been below average or negative."
-Crestmont Research, Stock Market Valuation (see below)
-----------------------------------------------------------
"The big rise in the stock market is definitely telling us
something. Bulls think it says the economy is about to take off.
But I think it's a sign that America is still blowing bubbles —
that a three-year bear market and the biggest corporate scandals
in history haven't cured investors of irrational exuberance yet."
PAUL KRUGMAN, Still Blowing Bubbles, NY Times (see below)
-----------------------------------------------------------
"I maintain my view that America still needs to be seen
through the lens of a post-bubble workout. As one bubble morphs
into the next one, the moral hazard dilemma only deepens. And
the endgame -- including the risks of deflation and a dollar
crisis -- appears all the more treacherous."
-STEPHEN ROACH, Morgan Stanley, 6-20-03 (see below)
-----------------------------------------------------------
"Indeed, there is something comforting about all the bubble
chatter, whether it is in stocks, bonds or housing. It suggests
an investing climate that has become a great deal warier, and
thus much less prone to problems. But there's a danger here, too.
The word "bubble" is getting thrown around so much that it's
beginning to seem like just another way of saying overvalued.
Pretty soon people might start forgetting exactly how disastrous
bubbles can be."
-JUSTIN LAHART, CNN/Money, Bubbleology
-----------------------------------------------------------
"Are we in a new bull market or in a series of bear market
rallies? As part one of this series suggests, this rally has a
lot of precedents for short term gains, but long term index
investors are likely to be disappointed."
-JOHN MAULDIN, Frontlinethoughts.com, 2-21-03 (see below)
-----------------------------------------------------------
"With so many people either out of work or afraid of losing
their jobs, consumers are reluctant to open their purse strings.
So businesses are cutting prices to entice spenders, and that
is raising the danger of a vicious wave of deflation. In fact,
producer prices are already falling -- down 0.3% in May. The
bad news continues to mount when it comes to the US economy.
Bottom line: It's just a matter of time before investors wake
up to reality and head for the exits on Wall Street."
-MARTIN WEISS, PhD, Safemoneyreport.com, 6-20-03
-----------------------------------------------------------
"Compare today's psychology in equities vs. the psychology
in gold. I don't think it's debatable that gold has embarked on
a new bull market, yet I don't receive any panicked e-mails from
people concerned about missing that market. It is the nature of
bear markets that they tend to suck people back in, just as the
nature of bull markets is to try to keep people out. I don't
make the rules, folks. That is simply how it works."
-BILL FLECKENSTIEN, MoneyCentral 6-22-03
moneycentral.msn.com
-----------------------------------------------------------
"Key [date] coins continue to be the blue chips of the coin
market. These are the scarcest and highest priced coins of a
series, generally in all grades, rather than just the high grades."
-COINWORLD, 6-23-03
-----------------------------------------------------------
"The Lord restored Job’s losses when he prayed for his friends"
—Job 42:10
-----------------------------------------------------------
EDITORS NOTE: In the interest of brevity, weekly emails from now
on will include only headlines and quotes of the week. -db
READ THE REST OF THE STORIES HERE:
swissamerica.com
-----------------------------------------------------------
ABOUT THE EDITOR
David Bradshaw is the editor of Swiss America's Market
News Digest and Real Money Perspectives. He is the founder
of Idea Factory Press... publisher of Rediscovering Gold
in the 21st Century... and The Big Picture...Contact at
ideaman@buycoin.com |
