Continue reading Gold and Silver Hit New Highs

Gold and Silver Hit New Highs originally appeared on BloggingStocks on Fri, 01 Apr 2011 11:40:00 EST. Please see our terms for use of feeds.

This is indeed a dramatic move. The world's largest bondholder, Pacific Invest Management Company, dubbed Pimco, sold all of its U.S. government holdings including U.S. treasuries.

At the end of February, Pimco had $236.93 billion or 12% of its holdings in the Total Return Fund in U.S. holdings. That was cut to zero.

Continue reading Pimco's Gross Sells All U.S. Government Holdings

Pimco's Gross Sells All U.S. Government Holdings originally appeared on BloggingStocks on Wed, 09 Mar 2011 15:30:00 EST. Please see our terms for use of feeds.

Is the glass half full of half empty? This is a perennial debate.

Those who are bearish say the market has gone too far to the upside; investors are shrugging off the latest debt scare in Europe; we have rising global interest rates; there's a potential meltdown in the municipal bond market; earnings may disappoint; the VIX is too low; and on and on we go.

For the bulls, the S&P 500 has traded above its 50-day moving average for 94 consecutive sessions, according to Birinyi Associates. This is the first time this has happened in five years. Many analysts consider stock valuations to be at relatively low levels. The glass for them is still half full.

Continue reading Are You a Stock Market Bull or Bear?

Are You a Stock Market Bull or Bear? originally appeared on BloggingStocks on Tue, 18 Jan 2011 10:00:00 EST. Please see our terms for use of feeds.

Continue reading U.S. Dollar Tanks, Commodities and Stocks Fly

U.S. Dollar Tanks, Commodities and Stocks Fly originally appeared on BloggingStocks on Thu, 04 Nov 2010 13:30:00 EST. Please see our terms for use of feeds.

Continue reading U.S. Dollar Continues to Fall

U.S. Dollar Continues to Fall originally appeared on BloggingStocks on Mon, 25 Oct 2010 09:30:00 EST. Please see our terms for use of feeds.

It's more of the same old, same old. When the dollar is hit, commodities and the stock market rally. October oil is at $77.11 per barrel, up 66 cents. December wheat is at $47.74 per bushel, up 7.4 cents. September S & P is at 1117.75, up 800. October gold is trading at $1,246.20 per ounce, up $1.20.

Continue reading U.S. Dollar Is Sharply Lower

U.S. Dollar Is Sharply Lower originally appeared on BloggingStocks on Mon, 13 Sep 2010 16:40:00 EST. Please see our terms for use of feeds.

This post is part of a special report, Top Picks for 2010, the 27th annual survey in which TheStockAdvisors.com asks the nation's leading advisors for their single favorite stock for the new year. See all 80 stocks listed here.

"When extreme valuations are accompanied by unbridled optimism or abject pessimism, it virtually always marks a turning point -- and an opportunity; and this is no exception," says Alex Green, referring to the U.S. dollar.

Here, the senior investment advisor to The Oxford Club and Investment U looks to PowerShares DB US Dollar Index Bullish ETF (UUP) as a favorite idea for the coming year.

Continue reading Top Picks for 2010: Powershares US Dollar Bullish (UUP)

Top Picks for 2010: Powershares US Dollar Bullish (UUP) originally appeared on BloggingStocks on Mon, 04 Jan 2010 12:00:00 EST. Please see our terms for use of feeds.

Lloyd's of London is poised to take some risks in 2010. In fact, it's ready to put more than $36 billion into the insurance and reinsurance world, according to analysts at reinsurance intermediary Guy Carpenter, a division of Marsh & McLennan (MMC).

The year-over-year increase could be as high as 27% compared to 2009, with the additional capacity coming from lower risk-transfer rates for some lines of business, though much of it is being offered to compensate for the weakness of the British pound relative to stronger currencies, such as the U.S. dollar.

Continue reading Lloyd's Amps Up Insurance and Reinsurance Capacity This Year

Lloyd's Amps Up Insurance and Reinsurance Capacity This Year originally appeared on BloggingStocks on Mon, 04 Jan 2010 11:30:00 EST. Please see our terms for use of feeds.

A weak US dollar is the main stimulus for central bankers' gold purchases. India just bought 200 metric tons from the International Monetary Fund. Central bankers in Mexico, Russia, the Philippines, all have increased their gold purchases.

Continue reading Why is gold marching higher? Ask the central bankers

Why is gold marching higher? Ask the central bankers originally appeared on BloggingStocks on Fri, 20 Nov 2009 18:00:00 EST. Please see our terms for use of feeds.

Gold is trading at $1,118.00 per ounce. What is that number telling us? Pure and simple, the market is telling us that inflation is on the way. The Indian government just bought 200 tons of gold valued at over $7 trillion dollars. In other words they exchanged $7 trillion US dollars for the 200 tons of gold.

At the same time the December US dollar contract traded below 75.00 on a trade-weighted basis. What is that number telling us? Traders are turning in dollars for other investments, mainly stocks and commodities.

Continue reading Why is gold making a new high, trading at $1,118.00 per ounce?

Why is gold making a new high, trading at $1,118.00 per ounce? originally appeared on BloggingStocks on Wed, 11 Nov 2009 18:30:00 EST. Please see our terms for use of feeds.

The stock market is rallying. Commodities are on a tear. Yet the dollar is falling. Why?

There are several reasons for the drop in the dollar, but the most obvious and simple answer is that investors around the world are selling dollars and using the money to buy stocks and commodities, particularly oil and gold.

Last week India announced that it had bought 200 tons of gold from the International Monetary Fund (IMF.) At an average of say $1000.00 per ounce, the transaction amounted to about $7 trillion dollars. Chances are that India sold dollars from their sovereign fund to buy the gold.

Continue reading Why do we have a weak dollar?

Why do we have a weak dollar? originally appeared on BloggingStocks on Tue, 10 Nov 2009 17:45:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: A great day that may feel empty (AA, PEP, VG, LEN, RPRX, PLUG, MMM, WFC)

Closing Bell: A great day that may feel empty (AA, PEP, VG, LEN, RPRX, PLUG, MMM, WFC) originally appeared on BloggingStocks on Thu, 08 Oct 2009 16:00:00 EST. Please see our terms for use of feeds.

You are probably wondering: "When will this happen?" and "Which currencies will be included in the basket? In answer to first question the changeover would take place over nine years. The currencies to be included in the basket include the Japanese yen, the Chinese yuan, the euro, gold and a new unified currency planned for nations in the Gulf Cooperation Council, including Saudi Arabia, the United Arab Emirates, Kuwait, and Qatar.

What this means is that oil will no longer priced in dollars.The article in The Independent claimed the U.S. is aware of the talks and is "sure to fight this international cabal."

Continue reading Gulf Arab states are in talks to replace the U.S. dollar for oil

Gulf Arab states are in talks to replace the U.S. dollar for oil originally appeared on BloggingStocks on Tue, 06 Oct 2009 13:40:00 EST. Please see our terms for use of feeds.

Gold bugs around the world have been rejoicing this week as the price of gold has climbed above $1,000 per ounce. On the same note, forex investors with money in the Australian dollar have been rejoicing for the same reason.

You see, the Australian dollar has a cozy relationship with gold. As gold prices go up, the Australian dollar typically goes up, and as gold prices go down, the Australian dollar typically goes down. This relationship stems from the fact that Australia mines and exports a good portion of the world's gold.

Continue reading FXA soaring on gold prices

FXA soaring on gold prices originally appeared on BloggingStocks on Fri, 18 Sep 2009 19:00:00 EST. Please see our terms for use of feeds.

At first we thought that it was rather unusual that the US Treasury Secretary, Geithner, would make a special trip to China. What were the reasons for his trip? The purpose of the mission became clear when Geithner announced that the dollar would remain as the world reserve currency. There had been a lot of scuttle but about replacing the dollar as the world reserve currency, but some of this has been put to rest with the support of Chinese backing.

As usual the Chinese remarks were guarded and a bit fuzzy. Guo Shuging, Chairman of China Construction Bank and former head of the country's foreign exchange administrator said: "In the short term, I don't think we can find another currency to replace the US dollar." He also said, "the US dollar is the main currency because their economy is number one in terms of competitiveness, in terms of innovation."

Continue reading US and China agree that the US dollar will remain as the world reserve currency

US and China agree that the US dollar will remain as the world reserve currency originally appeared on BloggingStocks on Tue, 02 Jun 2009 17:15:00 EST. Please see our terms for use of feeds.

The British pound (CME: $BPY) hit $1.60 for the first time in more than half a year this morning, thanks to improved service company sentiment and an increase in mortgage approvals. A rise in consumer confidence in the United States increased risk appetite and lifted the pound, as well.

The news was good enough for a 0.5% gain for the pound against the dollar, a 0.6% increase relative to the euro and 1% against the yen (CME: /JY\M09).

Continue reading British pound hits seven-month high on U.S. dollar

British pound hits seven-month high on U.S. dollar originally appeared on BloggingStocks on Wed, 27 May 2009 11:00:00 EST. Please see our terms for use of feeds.

The U.S. dollar is getting hammered in world markets after the Federal Reserve announced plans to buy $300 billion in long-term U.S. Treasuries. When the Fed buys bonds, it creates more money and that money is pumped into the economy. More dollars have the effect of weakening a country's currency. This is what is causing the present sell off in the dollar.

For investors this creates a new dilemma. For the short term, there will be pressure on the dollar. Should you then bet on further weakness and sell short the U.S. currency? That might work. On the other hand, if the Fed is right and the U.S. economy recovers quicker than other world economies, the dollar would gain strength against other currencies. So then do you seize this opportunity and use the present dollar weakness as a chance to buy the U.S. dollar?

Continue reading Would you buy or sell the U.S. dollar?

Would you buy or sell the U.S. dollar? originally appeared on BloggingStocks on Sat, 21 Mar 2009 09:40:00 EST. Please see our terms for use of feeds.

This post was written as part of a feature offering ideas from bloggers on ways to make more money in 2009. See all 18 suggestions.

Gold and the U.S. dollar are inexorably linked. The U.S. dollar represents the U.S. economy as a paper asset, while gold represents a standard of international value that transcends national boundaries. The value of both of these asset classes is very difficult to determine. Both are affected by geo-political events and both move up or down as a matter of perception.

Let's look at a few examples. With the large bank bailouts of 2008 and the coming Obama stimulus package, there are those who say that we are way overextended and have printed too much paper money. Those who take this position are the "gold bugs," the ones who are running away from paper assets to the safety of a hard asset like gold. This is where you find predictions that gold will rise to $2,000-$5,000 per ounce. It is this perception of the U.S. economy that drives investors to buy gold.

Then there are those who look at the world a bit differently. They see a world with 6 billion plus people that is running out of natural resources and that will not be able to meet the demand for basic commodities such as food, energy and raw materials. As a result of these shortages, commodity prices will rise to irrationally high levels. This in turn will cause rampant inflation and devalue paper assets even further and make gold even more valuable.

Continue reading 2009 Money moves: Play with gold

2009 Money moves: Play with gold originally appeared on BloggingStocks on Fri, 16 Jan 2009 14:40:00 EST. Please see our terms for use of feeds.

With the 4th of July approaching, it's always a good time to get a bit of perspective and take a look at what may happen in the second half of the year. As with predictions they generally tend to never come true, but here are 3 market predictions for the 2nd half of the year.

1- Crude oil will trade down under $100/barrel. As global growth continues to slow, especially in overheated emerging markets, some of the the speculative froth will leave the market and the price will start heading down to a point more in line with fundamentals.

2- The US Dollar will rally against the Euro, and reach a level of 1.42 by the end of December, down from the 1.58 current levels. With European growth expected to potentially contract by more than 1% in the coming quarters, and the US staying out of recession, the market will re-focus on growth differentials in the for-ex markets, providing some much needed strength for the greenback.

Continue reading Three market predictions for the second half of '08

Three market predictions for the second half of '08 originally appeared on BloggingStocks on Thu, 03 Jul 2008 16:53:00 EST. Please see our terms for use of feeds.

With the Japanese yen continuing to fall against the US dollar as well as higher yielding currencies such as the South African rand and the British pound, the question is whether the "carry-trade" is back on? If so, stocks may continue to rise.

What's the "carry trade"? It's an investment strategy with currencies, where investors borrow money in a currency with low borrowing costs (such as the yen) and then invest in higher yielding currencies (such as the rand or Australian dollar), earning the spread. If this trade is "back-on," then it shows that investors are more willing to take on some risk, boding well for a continued stock rally as well.

In a report on Bloomberg: "The currency weakened the most against the South African rand and the British pound, two favorites of so-called carry trades, as the cost of protecting bonds from default declined."

The report then spoke with a currency manager: "With stocks rising this much, it doesn't augur well for the yen," said Mitsuru Sahara, senior currency sales manager at Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan's second- biggest lender. "Calm is returning to financial markets, and that allows currency traders to focus on rate differentials. The Fed may not have to cut rates much further.''

Keep your eyes on the carry trade to see where the markets may be heading.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 5/2/08

Is the carry-trade back on? originally appeared on BloggingStocks on Fri, 02 May 2008 10:46:00 EST. Please see our terms for use of feeds.