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Mar 6, 2009

GATA Dispatches Chairman Murphy is keynote speaker at Bahamas conference

GATA Chairman Murphy is keynote speaker at Bahamas conference


Submitted by cpowell on 08:18PM ET Friday, March 6, 2009. Section: Daily Dispatches 11:17p ET Friday, March 6, 2009Dear Friend of GATA and Gold:GATA Chairman Bill Murphy will be the keynote speaker at the Bahamas Investment Conference at the Atlantis Resort and Casino, to be held Thursday and Friday, March 26 and 27. The conference is being organized by Mike Swanson of the Wall Street Window letter and Dave Skarica of the Addicted to Profits letter and you can get the details and register HERE

Forbes.com Alerts

Asian stocks resume slide after U,S. rout. Europe up.

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Citi Shares Close At A Dollar

This is a transcript of the Market Update: After Hours video report.

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Forbes.com Alerts

Citigroup falls below $1 a share.

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GATA Dispatches "ECB cuts rates to record 1.5%, mulls radical action

ECB cuts rates to record 1.5%, mulls radical action

Submitted by cpowell on 02:43PM ET Thursday, March 5, 2009. Section: Daily Dispatches By Ambrose Evans-PritchardThe Telegraph, LondonThursday, March 5, 2009http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4944887...The European Central Bank has cut interest rates a half point to an historic low of 1.5 percent and opened the door for extreme measures akin to the quantitative easing(QE) under way in America, Britain, and Japan. "I don't exclude anything," said Jean-Claude Trichet, the ECB's president. "We did not decide that this is the lowest level. We are studying additional non-standard measures." Bond yields plummeted across the eurozone as the markets instantly priced in further monetary loosening. None of the eurozone's 16 central banks have ever seen interest rates this low. The cut follows a collapse in industrial production over the last five months. The pace of deterioration has been faster than the early 1930s, when falls were mostly stretched over a longer period. The ECB has torn up its growth forecast for this year and expects an unprecedented contraction 2.7 percent for the eurozone. Even this may prove optimistic. Output fell 1.5 percent in the fourth quarter and the picture seems to be going from bad to worse. Export orders for German engineering companies fell 47 percent in January. Julian Callow from Barclays Capital said the ECB had responded too slowly over recent months as credit tightened. Rates should be "minus 1 percent" under a "Taylor Rule" analysis of economic conditions, suggesting the bank is still far behind the curve. "They need to move urgently. The euro area is besieged by sharply rising unemployment. This is going to a scourge over coming years, with the jobless rating rising to a postwar high of 11 percent," he said. The Handelsblatt's "shadow ECB" of economists from across Europe voted for more drastic action. "I can see no reason for delaying rate cuts to the minimum and moving quickly to quantitative easing (QE)," said Erik Nielsen from Goldman Sachs. He slammed ECB hardliners for clinging to "Voodoo" theories. Mr Trichet said the ECB had cut its deposit rate to 0.5 percent -- bringing down the market Eonia rate in lockstep -- and was providing unlimited liquidity to banks. "This is of great importance," he said. The ECB has boosted its balance sheet to E600 billion by lending freely but appears deeply reluctant to escalate to QE by purchasing bonds and other assets -- although the German and French governors have both hinted at ECB purchases of commercial paper. Mr Trichet said there is no hurry because "the risks of deflation are very meagre" -- though CPI inflation may turn briefly negative by mid-year. Deflation expectations are not becoming embedded, he said. Critics retort that is that once they are embedded, it is already too late to arrest the downward spiral. This is why other central banks are taking pre-emptive steps. The suspicion is that a German led bloc of ECB hawks are dragging their feet in part because QE measures would blur the lines between the bank and the fiscal authorities. This risks opening a can of worms in euroland where there is no single treasury. ECB bond purchases would be tantamount to the creation of an EU debt union. This is a huge political step, and anathema to Berlin.
* * * Help keep GATA goingGATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at
http://www.gata.org/.Contact GATAinfo@gata.orgGold Anti-Trust Action Committee7 Villa Louisa RoadManchester, Connecticut06043-7541 USA
www.gata.org

AS safe as gold - which isn't spelled "G-L-D"

As safe as gold -- which isn't spelled 'G-L-D'

Submitted by cpowell on 07:52PM ET Thursday, March 5, 2009. Section: Daily Dispatches 10:45p ET Thursday, March 5, 2009Dear Friend of GATA and Gold:In their new essay, "As Safe as Gold," Eric Sprott and Sasha Solunac of Sprott Asset Management in Toronto make the case for the premier precious metal, and they are careful to distinguish between real metal and exchange-traded-fund metal. They write:"Recently, the gold exchange-traded fund, as represented by the ticker GLD, has become a very popular investment vehicle for those looking to invest in gold. This ETF is now purported to hold over 1,000 tons of gold, having reportedly bought 220 tons in January alone. At this rate, GLD is effectively buying all the gold that is being produced at any given time. That's just one ETF."Being gold investors ourselves, we know the difficulties involved in taking physical delivery of gold. To buy physical gold in that quantity in that short a timeframe would be a significant market-moving event. Did they really buy that much physical gold? Furthermore, is all that gold tucked away in some vault? Maybe it is ... or maybe it isn't. "GLD is a complex legal structure, with the Bank of New York as the trustee, HSBC Holdings as the custodian, and a chain of subcustodians and sub-subcustodians, many of which are banks that are known to actively lease gold."In our opinion, owning physical gold is very different from owning a lease-receivable. If any of the numerous counterparties were to default, it could be very difficult for GLD to actually get the gold it is purported to own. "We're not saying that it's a fraud. It's a structure whose price is meant to legitimately track the price of gold. That said, in our opinion, an ETF is not a substitute for owning physical gold. It defeats one of the main reasons to own gold during these times -- namely, that gold is nobody else's liability. This is not the case with GLD. It is essentially a creditor, whose assets are somebody else's promise."Why take the risk? Especially when it will cost just as much, perhaps a little bit more, to own the real thing. Don't settle for a paper asset -- a second-rate knock-off. In this environment, counterparty risk lurks around every corner. Buy the real thing: GOLD, not GLD."You can find the Sprott-Solunac essay at the Sprott Internet site here:http://www.sprott.com/pdf/marketsataglance/MAAG.pdfCHRIS POWELL, Secretary/TreasurerGold Anti-Trust Action Committee Inc.
* * * Help keep GATA goingGATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at
http://www.gata.org/.Contact GATAinfo@gata.orgGold Anti-Trust Action Committee7 Villa Louisa RoadManchester, Connecticut06043-7541 USA
www.gata.org

FORA.TV

David Beim: No Road Map for Nationalizing Citibank Columbia Business School

FORA.TV

Dan Roam : The Back To the Napking: To watch this Dissertation click Here