Rome: Another Example of Detroit?
Rome, perhaps the first European capital city to be on the verge of bankruptcy, demonstrates that in economics, nothing is eternal. Governments everywhere are in trouble thanks to decades of corruption and socialism. Taxes have only risen, never declined, and laws are enacted so if you do not pay, they just come and seize your property for taxes. In reality, you do not own your home, rather you occupy it for as long as you can afford the taxes. Rome is going the way of Detroit – corruption and declining tax revenues in the face of oppressive austerity.
Kohl’s Dream for the Euro 1998 Speech to Bundestag
Helmut Kohl was a powerful politician in Germany. He convinced the German people to enter the euro and his 1998 speech in Bundestag generated a vote of 632 out of 672 deputies who voted for the introduction of the euro, with only 35 in opposition. He said the euro was simply the greatest thing that would ever exist in Europe, that it would be economically stable, dynamic, and would promote a growth-oriented environment that he said would be the “event of the century”. Here in the article you will find the beautiful prophecies of Helmut Kohl of the euro: Helmut Kohl speech on the euro 1998 in the Bundestag – Kopp Online.
Gold Miners
As long as there are people who still believe that the gold market is uniquely manipulated rather than simply in sync with the world economy, then the sad truth remains that we have not yet seen the bottom of the slide in gold prices just yet. Gold’s weakness led to a brutal sell-off among the world’s top gold miners and our Energy Models warn we areSTILL not yet in an oversold position.
On Friday, more than 22 million shares of Barrick changed hands as the price plummeted some 5% to the lowest seen since 1990. Gold has no friends left, only believers as the price collapsed to the lowest level since April 2010 after the Fed said the world’s largest economy favors a rate hike counter-trend to Europe before year-end which has strengthened the dollar. This was augmented by China announcing it has diversified its foreign reserves placing only 1.6% in gold – a number that took the wind out of the gold conspiracy that China would back its currency with gold.
The gold market has turned increasingly bearish with the once large gold futures investors such as hedge funds slashing long positions. The holding of such funds has collapsed falling below 1 million ounces reaching new nine year lows. As European austerity becomes widely seen as just insanity, the big money is starting to see the writing on the wall – buy dollars.
The sell-off in gold was led by Barrick Gold Corp (NYSE:ABX, TSE:ABX), which is the world’s leading producer as its shares fell 5% to the lowest in USD terms since 1990. Barrick’s market value is now down 32% over the last three months alone bringing its market-cap to just under $14 billion in New York down from $64 billion at its peak in 2011. Barrick’s gold production is expected to fall further as it faces an oppressive debt-load of more than $13 billion – an amount equal now to nearly the total value of shares. This warns that a rate hike may see the value of Barric collapse even further.
Denver-based Newmont mines is actually the only gold company that forms part of the S&P500 index and is the second largest producer fell just under 3% on Friday. ADRs of AngloGold Ashanti (NYSE:AU), the world’s third largest gold producer in terms of output fell 5.8% for a market value of $3.1 billion on the NYSE.
No comments:
Post a Comment