By Javier Blas in London
Published: October 7 2009 20:11 | Last updated: October 7 2009 20:11
Gold prices continued to surge on Wednesday, hitting a fresh record close to $1,050 a troy ounce as investors bet that trading momentum would push the precious metal still higher.
Barclays Capital said gold prices, which have risen 10.3 per cent since the end of August, could run to as high as $1,500 an ounce if previous technical trading patterns were extrapolated.“We believe gold has a significant upside potential into 2010,” the bank said, adding current prices “were off the charts”. In spite of a 40 per cent rally in gold prices since Lehman Brothers collapsed a year ago, few traders appeared to be taking profits or betting on a price fall.
2)Obama under fire over falling dollar
By Edward Luce and Krishna Guha in Washington
Published: October 7 2009 19:37 | Last updated: October 8 2009 00:30
The falling US dollar is giving ammunition to the critics of the Obama administration and fuelling broader concerns about the potential erosion of America’s reserve currency status.
Republican politicians have highlighted the dollar’s slide as evidence of waning US power.
Sarah Palin, the former vice-presidential Republican candidate, on Wednesday sought to link the dollar decline to rising US indebtedness and dependence on foreign oil. “We can see the effect of this in the price of gold, which hit a record high today in response to fears about the weakened dollar,” she wrote on her Facebook page.
With other nations also expressing concern about dollar weakness, the administration is at pains to emphasise that it understands the responsibilities that come with issuing the world’s reserve currency and will live up to them.“It is very important to the United States that we continue to have a strong dollar,” Tim Geithner, Treasury secretary, said at the weekend. “We recognise that the dollar’s important role in the system conveys special burdens and responsibilities on us and we are going to do everything necessary to make sure we sustain confidence.”
Angst about the dollar – which has fallen 11.5 per cent on a trade-weighted basis over the past six months – extends beyond ideological conservative political circles.
Last week, Robert Zoellick, president of the World Bank, warned that “the United States would be mistaken to take for granted the dollar’s place as the world’s predominant reserve currency.”
We are in for a long term set of problems, and much of the reason history will trace the selection of solutions initiated by Bush (NO CONSERVATIVE), but taken wildly out of all control by Obama's attempt to replace the spending of the employed, confident, prosperous, responsible, american homeowners and consumers with a tortuous plan to print and borrow our way to the same place. Unfortunately, we all FEEL that this plan is along the same lines as the political friends of democratic Chicago who bought the land and rights of way to be pre-positioned for the Chicago Olympics. With the gold prices increasing and the dollar worth less, the only good news will be Nissan's and Toyota's will become so expensive we will have to buy Ford's. This nation and this world is headed to a place where commodities will have more relative value than manufactured and intellectually related products, since labor costs (wages, and numbers of employees WORLDWIDE) will be crushed.
The fed and Bernanke trying to increase the supply of dollars will so change and worry our trading partners, that pressures will increase to the point that open rancor (it's all about MONEY, folks) will be seen, and money WARS will follow ..perhaps real ones.
In London, spot gold hit an intraday high of $1,048.20 per ounce on Wednesday, up 0.7 per cent from New York’s last quote on Tuesday, in spite of the US dollar strengthening against the euro and a basket of currencies.
Gold prices rose sharply in euro and sterling terms, suggesting that investors were buying the metal as a hedge not only against the weakness of the US dollar, but also to guard against further financial stress.
Bachmann voices ire at ‘Bail-out Nation’
By Edward Luce and Tom Braithwaite in Washington
Published: October 7 2009 19:26 | Last updated: October 7 2009 23:02
Reaction against Barack Obama’s “Bail-out Nation” is provoking the emergence of a coalition of conservatives, libertarians and independents increasingly alarmed over the growth of US national debt and budget deficits, according to Michele Bachmann, a rising rightwing star of the Republican party.
Ms Bachmann, a second-term congresswoman, who played a prominent role in the “town hall” agitations against Mr Obama’s healthcare reform agenda in August, made her comments against the backdrop of sharply falling support for the Democratic party – although Mr Obama’s personal approval rating remains high.
On Wednesday a Gallup poll showed the two parties running almost neck and neck for the first time since 2006 – with the Republicans at 44 per cent and the Democrats at 46 per cent.
The pollster also showed a majority of independents favouring the Republicans over the Democrats – again, reversing the trend of recent years.
“What we are seeing is a real sense of unease among American people and not just Republicans,” Ms Bachmann contended in an interview with the Financial Times.
THE DEBT THIS YEAR:
WASHINGTON – The federal budget deficit tripled to a record $1.4 trillion for the 2009 fiscal year that ended last week, congressional analysts said Wednesday.
The Congressional Budget Office estimate, while expected, is bad news for the White House and its allies in Congress as they press ahead with health care overhaul legislation that could cost $900 billion over the next decade.
The unprecedented flood of red ink flows from several factors, including a big drop in tax revenues due to the recession, $245 billion in emergency spending on the Wall Street bailout and the takeover of mortgage giants Fannie Mae and Freddie Mac. Then there is almost $200 billion in costs from President Barack Obama's economic stimulus bill, as well as increases in programs such as unemployment benefits and food stamps.
The previous record deficit was $459 billion and was set just last year.
The Obama health plan would be "paid for" with new revenues and curbs in spending. But the overhaul effort would eat up tax increases and spending cuts that could be used to bring the deficit down.
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