Bill Gross said the zero-bound interest rate policies embraced by central banks including the Federal Reserve may end up killing as opposed to creating credit and developed economies may suffer accordingly.
While recent actions by policy makers provide assurances that short and intermediate U.S. bond yields may not change for years, any potential for price appreciation is limited, Gross, who runs the world’s biggest bond fund, wrote today in a monthly investment outlook released on Newport Beach, California-based Pacific Investment Management Co.’s website.
“Monetary and fiscal excesses carry with them explicit costs,” Gross wrote. “My intent really is to alert you, the reader, to the significant costs that may be ahead for a global economy and financial marketplace still functioning under the assumption that cheap and abundant central bank credit is always a positive dynamic.”
The Fed purchased $2.3 trillion of debt in two rounds of quantitative easing known as QE1 and QE2 as part of its efforts to support the world’s biggest economy. Policy makers last month said they plan to keep their benchmark interest rate near zero until at least the end of 2014. Fed Chairman Ben S. Bernanke said following the central bank’s Jan. 25 meeting that he’s considering another program of debt purchases if it appears the recovery isn’t progressing.
‘DEATH OF ABUNDANCE’
http://www.bloomberg.com/news/2012-02-01/gross-says-witnessing-death-of-abundance-birth-of-austerity.htmlIPO Shares May Be 5X as Expensive as Google
Facebook Inc. may command a valuation more than five times higher than Google (GOOG) Inc. as it seeks to raise $5 billion in the world’s largest initial public offering of an Internet company.
The social-networking company, which filed for the IPO today, may be valued at as much as $100 billion in the sale, two people with knowledge of the matter said last week. At that level the company would trade at 26.9 times 2011 sales, compared with about 5 times for search-engine operator Google.
“The $100 billion valuation that’s being tossed around just puts it at a level we’ve never seen,” said Jeffrey Sica, chief investment officer of Morristown, New Jersey-based Sica Wealth Management LLC, which oversees $1 billion. “They have to be able to show that not only do they deserve to be at that level, but they have multiple channels to create new revenue.”
Facebook co-founder Mark Zuckerberg is asking investors to pay more than double the valuation of Google’s 2004 IPO even as competition from Google+ and Twitter Inc. increases. The Menlo Park, California-based company wrested the lead in U.S. online display ads from Yahoo! Inc. (YHOO) in 2011, taking a 16.3 percent share, according to researcher EMarketer Inc.
Facebook didn’t disclose the number of shares it plans to sell in its filing today, and the amount it is seeking to raise may change. The company is considering a valuation of $75 billion to $100 billion, said the people, who declined to be identified because the matter is private.
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The Coming Paradigm Shift in Silver
The biggest problem for investors today in trying to forecast the future price of silver is the enormous amount of contradictory analysis on the Internet. There are bulls, bears, paper traders, physical buyers, technical analysts, hedge funds, commercial banks and silver manufacturers all trying to play a part in this highly volatile silver market. Trying to sift through the huge volumes of silver analysis on the internet can be extremely frustrating. In addition, some of this information is not meant to inform, but rather to confuse or mislead the investor.
There is a great deal of misinformation on the internet when it comes to silver. I find it ironic that one of the so-called “bullion specialists” seems to give bearish commentary whenever the price of gold or silver rises to new highs. This is akin to a CEO of a corporation telling the media and shareholders that the company’s stock price is too high and needs to drop down to more sustainable levels. What CEO on Earth would say something as stupid as this with the best interest of the company and shareholders in mind? Furthermore, how many CEOs would keep their job if they repeated this over and over for the past several years, and got it wrong time and time again?
Unless you have been in the precious metals markets for quite some time, it is easy to be misled by this type of information. This is the very reason behind the motivation that I had to write this article. In it, I will attempt to give the reader-investor a more detailed and fundamental comparative analysis of the future price of silver, rather than the typical fly-by-night technical charting or bull-bear rant. This should give a more commonsense methodology in forecasting the future path of silver and its eventual paradigm shift.
20 comments:
Is that the sound of a golden nail I hear, sealing the lid on wanton greed...
Australia’s Record Trade Surplus Spurs Currency
Q
By Michael Heath - Feb 2, 2012 4:58 PM ET
The data underscore the Reserve Bank of Australia’s expectation that Chinese demand for the nation’s commodities will help propel the domestic economy even as a global expansion slows.
Feb. 2 (Bloomberg) -- Australian Trade Minister Craig Emerson talks about the outlook for the nation's economy and trade within the Asia-Pacific region. Australia’s trade surplus unexpectedly widened in December as stronger exports of gold and coal outpaced increases in imports of fuel and lubricants. Emerson also discusses Europe's debt crisis. He speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Australia’s trade surplus soared to a record in 2011 on coal and iron ore shipments, sending the local currency to a five-month high.
Exports outpaced imports by A$19.3 billion ($20.7 billion) in the 12 months through Dec. 31, a Bureau of Statistics report showed in Sydney today. The December surplus unexpectedly widened to A$1.71 billion from a revised A$1.34 billion in November, compared with the median estimate of a A$1.2 billion surplus in a Bloomberg News survey of 21 economists.
The data underscore the Reserve Bank of Australia’s expectation that Chinese demand for the nation’s commodities will help propel the domestic economy even as a global expansion slows....
Bloomberg.com or smh.com.au
No collapse yet in property price or mining...still waiting on the big bust! But it is sure to happen...
The Gold & Silver charts went vertical at 10:00 a.m. EST; is this when facebook was cut loose?
Queenbee said…
“Silver to me is not fun. When I sell, I feel like it will go to 150 and when I hold, I feel like it will go back to 20. Go figure. When in doubt I don't do anything. I sold those rounds as a favor to my brother and I felt good. When I sold the ASE anniversary set I had regrets. Both were great profits so I have to keep that in perspective.”
All you think about is yourself! How do you think your poor Silver felt when you dumped it?
- - - - -
All kidding aside, you are violating Shaza’s Rule of Trading by allowing your emotions into the mix. Easier said than done, though. I admit liking the old coins myself, especially the ones that are in nice condition.
I will exercise better discipline the next time that prices spike, and sell before they drop back down. (Easy to say at this point in time!) At least I was happy to sell that 2010 set of America the Beautiful coins and my ASE anniversary set – easy profits on those.
Don’t feel bad about selling your ASE’s, Queenbee.
On the Local Craigslist someone is selling PCGS-graded sets for $775. Since it probably cost $400 to have those graded, I would say you did okay when you sold your ungraded set for $600.
Thanks Mammoth for the joke and the reminder. I reflect on emotions, but I don't act on them. The PM spike turned right back down at noon.
--- once silver reaches its real all-time inflation adjusted high of $500 per ounce. David Morgan also joins us to explore the very real possibility of hyperinflation in the United States by the year 2014.'
I think the silver doc should be taking some of his own meds.funny that bond yields are at 0% with hperinflation barely a year away.
I think I have the Silver Doc Blog so I can go on and make an anon snide comment. 500.00/ounce give me a break. Why not 50k Gold too? Inflation is here in the stuff you need, but deflation has front and center as the banks are still marked to fantasy on the value of they MBS and Commercial Properties. Once the charade ends you will hear that sucking sound as the US goes down the drain. Once the pool is drained the cockroaches will have nowhere left to hide.
Am I starting to sound like Edgar?
I KNOW Smithfield pork tenderloin was $6.99 last time I bought it on sale. (I bought 3). NOW it is $7.99. I know I used to get salmon pinwheels (stuffed with crab) as a special for $3.99 a piece. NOW they are $4.99. I know gas just went up $.06 overnight. I know how many people are in the dollar store shopping. (I go there for cards and bags.)
My friend who owns a 'used' bookstore says while she is getting customers NO ONE is going over their credit. On a good day LAST year she could pull in $500. Now, MAYBE $185. Barber told my husband same type of story this morning.
I don't care what Broke-anke is saying.
Please note that CHINA is buying farmland in South America.
"There are none so blind as those who will not see," may be a religious mantra to some but it fits what is happening--as does BREAD AND CIRCUSES.
Chicken Little, you are right about food prices climbing. You are not the only one having 'sticker-shock' at the grocery store.
With four more weeks left of my in-law's 3-month winter visit, I am thankful for having had the foresight to buy as much food as I did before their arrival.
Regretfully, I did not pack as much meat into the freezer as I could've.
If the groceries & other food-chain entities see no decrease in demand when they increase their prices, why should they stop?
With something like one out of every six households in America now receiving Food Stamps (errr... they're called 'Snap Cards' now), it seems this is actually contributing to the upward spiral in groceries.
Think about it: Supply vs. Demand. You have a huge number of customers buying what they have always bought, rather than carefully control & reduce their grocery spending.
Why should they reduce their spending and change their buying habits, when somebody else is paying for their groceries???
EXACTLY- Mammoth.
I'm soooo tired of hearing the "only $19.99 for a dozen roses for Valentine's Day. Tell her you love her, buy jewelry...etc."
As if THAT means you love someone! How about...give her a shoulder to cry on? Prop each other up when you are down? Stay when leaving would be easier? Face up to the difficulty of love as it is never 50/50 but someone always 'gives' a little more? Treasure each other for the gift you both bring? Commitment is rewarding as is trust? What is DIFFICULT to obtain is more appreciated in life and love?
Don't hear those sentiments on tv, do you?
You know I had a thought last night as Yvonne was watching American Idol. One of the auditions was from a young black man from Iberia who grew up in a refuge camp most of his life. Saw more that his share of death. He won't make it far as he has a limited range and his song sounded African. I always loved African songs, but this is American Idol. Well he has made a new life with his parents and were he to hear us talking about the price of food he would probably say "well at least you have access to it and medical care as well." He has probably never owned a car and couldn't care less what the price of gas is. The moral of my story is that perspective is everything. I moan and groan about things way too much. I complain about the banksters and the cost of living, but I cannot imagine what it is like to be really poor. Maybe I need to have a little better perspective and gratitude for what I do have. I own a house, two cars, gold and silver, stocks and cash in the bank. I owe no one a dime and I have loaned money to others knowing full well it will never be repaid. I am one lucky girl amongst a world of billions.
I still reserve the right to take jabs at the sociopaths that run this insane asylum.
Anyone have a good idea to short the Facebook IPO?
LOL, Queen. AND you have love. If you have your health and have love you are the richest woman/man going.
I think we're just suffering from watching the 'bad' always seem to get away with stuff. I keep telling myself that it does them in, in the end!
Tonight is 'Prince spaghetti' night. Anyone remember that? or 'tube steaks? Growing up we had fish sticks, eggs, tube steaks, spaghetti, meat loaf. No one lived high on the hog
CL that was the high life. Tube Steaks and Campbell's baked beans. Mrs Paul's Fish Sticks and a little tarter sauce. Spaghetti with tomato sauce from a can and mixed in was prime hamburger.
"Don't hear those sentiments on tv, do you?"
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I dunno, because I haven't watched TV at home ever since they changed to a digital signal a few years ago.
I am too cheap to buy a converter box or subscribe to cable - and to tell you the truth I do not miss TV.
But because of my ignorant posts, people can probably already tell that I live without TV.
/sarcasm off
Speaking of food, we were enjoying some cheese & crackers before dinner last night when my daughter said, “boys have to eat the crackers with the white cheese, and girls have to eat crackers with yellow cheese.” It was just cute ‘kid-talk,’ you know?
But then it hit me – Nadia was saying this in Russian! One month away from turning six, and she can already switch back and forth between languages in a conversation. That’s neat!
Teach her as many languages as you can while she is still young. Especially Mandarin, Japanese and Spanish. Children learn new languages easier and she will always have a job as an interpreter.
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