Wednesday, February 22, 2006


Futures Little Moved By CPI Report

The CPI report pulled gold slightly lower this morning. "Gold futures fell early Wednesday, pulling other metals with them as traders digested the January consumer inflation report. The Labor Department said consumer prices rose 0.7% in January, led by higher energy, food and housing costs. The core consumer price index, which excludes food and energy prices, increased 0.2%, as expected."

"Gold for April delivery was last trading down $3.30 at $553.30 an ounce, off its low of $549.80. Silver was flat at $9.545 an ounce. Platinum fell $8 to $1,026.50 an ounce and palladium lost $2 to $292 an ounce. Copper fell 2.75 cents to $2.246 a pound."

The futures have since recovered to about even as of this writing.

If this prediction turns into reality it would be a good idea to batten your hatches and don some foul-weather gear. It might also be prudent to add a little to your precious metals stash. Besides, if nothing happens there is that worrisome CPI jump in price inflation in January. On an annualized basis it works out to close to double-digits, and that will surely boost gold/silver prices.

The Laboratoire Européen d’Anticipation Politique Europe 2020, LEAP/E2020, now estimates to over 80% the probability that the week of March 20-26, 2006 will be the beginning of the most significant political crisis the world has known since the Fall of the Iron Curtain in 1989, together with an economic and financial crisis of a scope comparable with that of 1929. This last week of March 2006 will be the turning-point of a number of critical developments, resulting in an acceleration of all the factors leading to a major crisis, disregard any American or Israeli military intervention against Iran. In case such an intervention is conducted, the probability of a major crisis to start rises up to 100%, according to LEAP/E2020.

An Alarm based on 2 verifiable events
The announcement of this crisis results from the analysis of decisions taken by the two key-actors of the main on-going international crisis, i.e. the United States and Iran:

- on the one hand there is the Iranian decision of opening the first oil bourse priced in Euros on March 20th, 2006 in Teheran, available to all oil producers of the region ;

- on the other hand, there is the decision of the American Federal Reserve to stop publishing M3 figures (the most reliable indicator on the amount of dollars circulating in the world) from March 23, 2006 onward[1].
Another interruption.

This currently shows the 6 month to 30 flat. It briefly inverted for 1/2 an hour this morning and the 2 to 30 is up to 19 basis points.

The length and depth of the inversion seems to be heralding 1 heck of a recession(or worse).
Crude futures fall as much as 2.6%
Wednesday, February 22, 2006 5:43:11 PM

SAN FRANCISCO (AFX) -- April crude fell $1.49, or 2.4%, to $61.25 a barrel in afternoon dealings, trading as low as $61.10 after climbing 2% in the previous session. "The Governor of Nigeria doesn't think that militants are set to attack again soon and that has apparently prompted a little profit taking in front of tomorrow's reports," Michael Fitzpatrick, an analyst at Fimat USA, said in a research note Wednesday. The Energy Department will release two separate reports on petroleum and natural-gas supplies on Thursday morning and most analysts are looking for a climb in crude inventories

This story was supplied by MarketWatch. For further information see
Japan's Boom May Explode Yen-Carry Trade: William Pesek Jr

Emerging market currencies slide on contagion fear

Iceland's currency dropped 3.4% versus the dollar.

does this sound familiar?

"The krona suffered its biggest one-day fall against the US dollar for most five years on Tuesday, tumbling 4.6 per cent, as Fitch lowered the outlook on Iceland's country rating from "stable" to "negative", citing an "unsustainable" current account deficit and soaring net external indebtedness."
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