March 11, 2009

Global Market Comments for March 11, 2009
Featured Trades: (GOLD)

1) Noted international monetary economist Judy Shelton believes the US should return to at least a partial gold standard to help damp volatility in the $4.4 trillion a day foreign exchange market to hasten an economic recovery. The current 'dirty float' system, where a free market is subject to occasional coordinated central bank intervention that emerged after the collapse of the original Bretton Woods agreement in 1973, is not working. The US currently holds 260 million ounces of the yellow metal, which for some arcane government accounting reason is still carried on its books at the old fixed rate of $42 an ounce. At today's prices the holdings are worth no less than $231 billion. Such a system would make it easier for governments to manage interest rates and control inflation. The highlight of the evening came when she passed around a ten ounce gold bar worth $9,000 and a one billion deutschmark Weimar Republic bank note, both of which were miraculously returned to her. In the meantime, the recent bounce in global stock markets raise the risk that we have put in a medium term double top in the chart for the barbaric relic.

GoldNew.png picture by sbronte

2) The economic crisis is accelerating the demise of print journalism, whose migration to the Internet was already well underway as cash hemorrhaging owners desperately take a hatchet to costs. Advertising by car dealers has almost vaporized, and revenues from retailers are off by half. The Seattle Post-Intelligencer is in the process of downsizing from print to online only, and early indications are that 85% of the staff will be laid off. If you extrapolate these figures nationally, 37,000 of the 44,000 full time employed journalists in this country are soon to be fired. Newly laid off investment bankers, brokers, and hedge fund managers hoping to build second careers as writers are jumping out of the frying pan into the fire.


'When we declared war in 1941, there were not 8,000 earmarks attached,' said Warren Buffet in chiding congress in its handling of the economic crisis.