George Soros, the hedge fund investor who called gold "the ultimate bubble," has divested his portfolio of nearly its entire investment in the precious metal, inciting many to fear that the price will very soon plummet, devaluing the specie-heavy portfolios of millions of investors.
Investors will be anxiously watching when the New York Stock Exchange market opens Monday morning to see what effect Standard and Poor's downgrade of the U.S. credit rating will have on trading. The stock market fell by 7.1 percent last week, before S&P issued its report of the downgrade at the end of the day on Friday. The market fell despite the bill signed into law last Tuesday that allowed the raising of the debt limit to prevent the government from defaulting on its financial obligations, accompanied by a deficit reduction package aimed at trimming $2.1 trillion of deficit spending over the next 10 years.
During a 2½ year period starting at the end of 2007, the Federal Reserve provided more than $16 trillion in secret bailouts to banks and other companies around the world, according to a government audit of some of the U.S. central bank’s operations.
A new report released by the United Nations blames the “herd” mentality of investors and poor regulation for volatile commodity prices, suggesting new global “transaction” taxes on trading and more international government involvement in controlling markets as possible solutions.
The U.S. economy experienced disappointing jobs numbers in May, according to figures released June 3 by the U.S. Bureau of Labor Statistics (BLS), leaving the unemployment rate at 9.1 percent at the end of the month.
This was not a good week for the Federal Reserve. As if Rep. Ron Paul’s (R-Texas) congressional subcommittee hearing on the relationship of the Fed to the national debt weren’t bad enough news for the central bank, media mogul and former presidential candidate Steve Forbes has just joined the anti-Fed chorus, telling Human Events that the Fed’s inflationary policies have become so destructive that a return to the gold standard is likely “within the next five years.”
China's Central Bank Chairman Zhou Xiaochuan told a Chinese monetary conference last week that “Foreign-exchange reserves have exceeded the reasonable level that our country actually needs,” which is essentially code for China won't be buying U.S. government debt any more. China's foreign currency reserves exceeded $3 trillion at the end of March, more than $1 trillion of which is U.S. government debt.
The recent decision by Federal Reserve Chairman Ben Bernanke to begin holding press conferences may be one more indication of the increased influence of Representative Ron Paul (R-Texas). The Federal Reserve has long ignored the public and conducted its proceedings in cloister, but the Wall Street Journal reported April 21 that Bernanke will hold the Fed's first scheduled press conference ever after Wednesday April 27 Open Market Committee meeting.
Despite the White House’s contentions that the United States economy is improving, Standard & Poor’s recent decision to change its outlook on U.S. fiscal health over the next two years from “stable” to “negative” tells a different tale. Besides the obvious impact such an announcement would have on the economic recovery, as well as the stock market, it also appears to play a role in the current debate over a potential raise of the debt ceiling.
According to the International Monetary Fund and the World Bank, the global economy is "one shock away from a “full-grown crisis.” In a weekend-long meeting at the World Bank building in Washington, D.C., global leaders discussed the global economy and the financial struggles that lie ahead.