A worsening economy has pushed the market down. A global recession has pushed it down further. Will the latest Wall Street scandal push it down more? Some of the hundreds of losing hedge funds have written letters to investors saying that they won’t accept requests for redemptions until a later date.
A lot of investors woke up recently to find their money had ‘disappeared’ in Bernie Madoff’s $50 billion Ponzi scheme. And it all happened under the noses of the regulators. Byron King says there are probably many more scammers out there. And the US government is among them. He says this just strengthens the case to buy gold and silver.
Gold bugs have suffered one of their worst years in history, says Keith Fitz-Gerald. But the US dollar looks increasingly fragile beyond this period of short-term panic buying. And that means the outlook for gold remains strong. Keith says every investor should ensure gold forms part of their investment strategy for 2009.
The government is printing money so fast that even cash isn’t a safe bet any more, says Daniel Zurbrügg. And even though gold has slumped during this crisis, its long-term outlook remains attractive. Once institutional investors stop dumping gold holdings and the US dollar rally stalls, Daniel says gold will zoom back up to $1,000 an ounce and beyond.
How the might have fallen. Once dominant hedge funds have been in a spectacular freefall since their complex world of finance imploded this year. Adrian Ash charts the rise and fall of these giants in Whiskey & Gunpowder:
Gold demand increased by 45% from the second quarter to the third. So why are gold prices falling? Mike Caggeso says frantic de-leveraging by hedge funds outweighed record retail demand for the precious metal. But he says the inflationary impact of the government’s bailout bonanza will be the catalyst for soaring gold prices in 2009.
In the currency market, the dollar slipped lower against the euro. Late Monday, the euro was trading at $1.2643 vs. $1.2596 on Friday.
G20 largely a non-event… Pound moves up… Brazil falls on sell off of emerging markets… Japan enters recession… And Now… Today’s Pfennig!
Never has there been a time where the stock market has influenced the commodities markets so much.
Last time I checked, the price of soybeans, cocoa or orange juice had absolutely no relationship to whether Microsoft (Nasdaq: MSFT), Disney (NYSE: DIS), or Google (Nasdaq: GOOG) declined in price.
But these days, we’ve got a serious blurring of the lines between global marketplaces. In addition, the prevalence and ease of electronic trading, coupled with well-capitalized hedge funds, means we’re seeing all kinds of different markets having an affect on one another.
Not so long ago, it used to be that money typically flowed from one asset class to another – for example, from stocks to commodities. But that isn’t happening now as most players have either bailed…
Whether you agree with them or not, the bailout programs will keep on coming. Keith Fitz-Gerald looks at the key impact these will have on the dollar, commodities and global stocks. He says we could be in line for a market rebound by mid-2009, and suggests six ways to prepare your portfolio now.
