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Stock Ideas Investors Daily Edge Bank for International Settlements (BIS) and Goldman Sachs has Come out with warnings
Stock Ideas Investors Daily Edge Bank for International Settlements (BIS) and Goldman Sachs has Come out with warnings 
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By Rick Pendergraft Almost all the economic reports due out this week are expected to come in worse than the previous reports. |
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| Bank for International Settlements (BIS) and Goldman Sachs has Come out with warnings |
| Wednesday, 02 July 2008 | ||||||||
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We’re living in some pretty hairy times right now. More and more people are bringing up comparisons to the Great Depression in the 1930's. For good reason. Unplugged reader, Richard, poses the following two questions regarding his concerns along these lines: Question #1. Is a global stock crisis around the corner? "The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyzes the major central banks." I read this article, Richard, and its conclusion cannot be taken lightly. A couple of other major institutions, like the Bank for International Settlements (BIS) and Goldman Sachs, have also recently come out with similar warnings. Global banking and monetary authorities do everything within their power to avoid unsettling markets. They are not in the habit of giving frivolous warnings. Too bad they didn’t do enough to help correct the underlying imbalances years ago. Even a simple dentist has long seen these problems manifesting. Abuses of money and markets have consequences. There are natural laws in economics some of which are not widely perceived. You cannot run up $60 trillion in unpayable debt (US) and expect business as usual for too long. You cannot print unlimited amounts of dollars and expect “king dollar” to remain on the throne. You cannot blow a series of credit bubbles and not expect repercussions. You cannot export trillions of dollars of “toxic” financial vehicles and expect the global economy not be affected. Truth be told... the US absolutely deserves a serious depression. We’ve simply strayed too far. It will take a tightrope walk to avoid one. Why hasn’t it already happened? The little man behind the curtain still maintains the illusions and has a few remaining tricks up his sleeve. Most of the people are still deceived. The inevitable gets a stay of execution.
The problems originated in the US, but the entire globe will take the brunt of them. The elitists love nothing more than creating order out of chaos. Unfortunately, it’s the New World Order they have in mind. Their “solutions” to problems always give them more power and control over the individual. What is the timing? I’m not in the prediction business. Trends can go on longer than most people can imagine. What is inevitable is not always imminent. Still, it’s best to get your house in order NOW. Question #2. "Mining is an energy-intensive industry. Although it might be getting more revenues for each ounce of gold it produces, those increased revenues have been offset by higher costs. The costs of tires, electricity, water, fuel and everything else required to operate a mine have climbed right along with gold prices. As a result, the flight to safety will have to go somewhere else. Where’s it going you ask? To be honest, I’m still trying to figure that one out. Maybe it’s physical gold, oil or other commodities. We’ll watch for a trend, but it won’t be gold-mining shares or treasury bonds." Another good question, Richard. There is much truth behind the problems related to energy and other costs and mining production. Mining production continues to be stagnant or actually decline in spite of higher gold and commodity prices. Still, that does NOT mean the gold mining shares will remain locked in the present investment trend indefinitely. It is typically a mistake to project current trends far into the future. You must realize that a lack of mining success will further curtail mining product. Also, I continue to state that the current monetary and economic mess could hardly be more gold, silver and commodity friendly. Gold and silver remain one of the few viable escapes from the coming carnage. The miners are not putting out this fire at this point. Higher prices for gold and silver will solve the miners’ cost problems. You can also rest assured that a $1,200 price for gold or $25 for silver will bring back the investing and speculating hoards into the mining and exploration shares. Those that are presently turning up their noses at this sector are missing the big picture fundamentals. Mining shares historically show leverage to the underlying commodities. That correlation is presently out of sync. There is an element of disbelief in commodity prices. You shouldn’t plan on seeing plummeting commodity prices. They are real for the most part. Abuses of fiat systems are supposed to drive investors towards tangible assets. Present abuses are historic. Sooner or later, the commodity mining shares will return to the mean. Here’s one more quick piece of reader feedback from Kabo in Botswana: “As usual you have managed to bring out your raw opinion in an ideally sensitive topic. How can you say that "Most politicians are whores and crooks"? I am not an American but I do know that America has bore sons and daughters who have and continue to serve our world diligently. Take Martin Luther King (civil rights), Al Gore (climate change), Hillary Clinton (female empowerment), are you saying all these people are whores and crooks? I wouldn’t be surprised if the CIA were to investigate you Rusty. You are truly a monolithic ***hole with enough wit to earn a permanent place at Guantanamo Bay Cuba.” Thanks Kabo. We love all the international feedback that IDE receives. Truth is I have nothing against MLK. In fact, I have met the Mrs. as well as “Daddy” King. Besides, MLK wasn’t exactly a politician. Your other favorite Americans remain on the usual suspects list. Of course, you and I wouldn’t even be communicating if Gore hadn’t invented the internet. The CIA isn’t really the problem you believe them to be. Surely they defend and support “freedom of speech” as our Constitution guarantees? Besides, they’re too busy laundering drug money to fool with a simple guy like me. I’m most relieved to know that you’re not the one in charge of assigning Gitmo residencies. Or are you? The US certainly outsources a lot of jobs. Live Free and Resourcefully, Rusty P.S. To let me know what you thought of today's article, send an e-mail to: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
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