This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Ambrose Evans-Pritchard (Telegraph): Is $6,300 fair value for gold? November 19, 2009. The last parabolic spike in gold took off when central banks joined the fray in the 1970s, hoarding bullion with the same enthusiasm as gold bugs. Dylan Grice from Société Générale says it smells much the same today. He sees an eerie similarity between the decision of India’s central bank to buy half the IMF’s entire sale of gold, and the move by France’s central bank to start converting dollars into gold in 1965.

• Gregory Zuckerman (The Wall Street Journal): John Paulson making big new bet on gold, November 19, 2009. John Paulson, who scored about $20 billion of profits between 2007 and early

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The following appeared in the November issue of Business Diary Botswana:

Despite the IMF’s recent projection that Botswana’s economy will contract 10.3% this year, the lender expects a 4.1% uptick next year such that emergency funding would not be required. Back in June the country tapped a $1.5bn “budget support loan” from the African Development Bank–the largest such facility ever granted by the Bank–in order to finance part of a budget deficit then estimated at around 13.5% of GDP, and since revised to 14%. The IMF cited a renewal of demand for diamonds as a central facet of its optimistic forecast. Furthermore, it predicted, GDP growth across sub-Saharan Africa will rise to approximately 4% next year and 5% in 2011, up from 1.1% in 2009. “We think it should be possible for sub-Saharan Africa to recover quicker this time around and have a ‘V-shaped recovery,’”

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Bill Bonner (The Daily Reckoning) In the short run, it might have enough life in it to bite investors on the derrière

London , England

We got back from South America on Friday… ready for a rest. So, we spent the weekend reading… and occasionally, thinking.

What we’ve been thinking is that the dollar is dead meat in the long run. But in the short run, it might have enough life in it to bite investors on the derrière.

The US stock market rose 73 points on Friday, to bring the Dow just 30 points south of the 10,300 mark. Why is this level important? It’s not really. But it reminds us that this is still just in “bounce range.” Big drops in stock prices are followed by bounces – always. A bounce of 50% of what was lost is not unusual. That’s what

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'The primitive structure of our economy', was one of President Medvedev's keynote complaints in his second annual address, which emphasized the need for technological innovation. The speech was 'disappointing from an investment point of view [...] it was very light on any specific point of action, just a reiteration of what we have already been hearing', comments one strategist. Excessive state involvement in the economy was another point raised: three state corporations, Russian Technologies, Rusnano and Vneshekonombank will lose their status as such as early as next year. The President did suggest that it should be the job of the Foreign Ministry to systematically encourage foreign investments, by reducing bureaucratic hurdles. The economic decline has apparently eased during the last quarter after record lows. Rusal may offer stakes in mines to Chinese companies to contribute to the success ...

This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Daniel Gross (Newsweek): The greatest trade ever, November 10, 2009. How hedge fund manager John Paulson bet against the real estate bubble and made $15 billion in a single year.

• abc News: SocGen’s top analyst sees market lows next year, November 9, 2009. Albert Edwards, a top analyst with French bank Societe Generale, expects global markets to hit a new low in 2010, adding that he would not be surprised if the global economy enters another recession next year. Edwards, one of the leading equities bears and a long-term critic of the policies of Western central banks, is skeptical of popular opinion that extreme policy response will safeguard the West against a repeat of Japan’s lost decade of the 1990’s.

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International stocks continue to gain popularity as investors look to align their portfolios with emerging market economies and creditor nations. Brazilian stocks have been at the top of the list, with the South American juggernaut being fueled by a pro-growth government, booming exports and the modernization of its infrastructure.

Pro-Growth Government

Brazilian President Luiz Inácio Lula da Silva, otherwise known as "Lula", has led the country's pro-growth strategy, appointing the market oriented economist and former CEO of Bank Boston Henrique Meirelles as head of the Brazilian Central Bank. Lula and his administration quickly strengthened the country's relationship with the IMF by renewing agreements and paying off its debt early.

Next up was the Growth Acceleration Program, an initiative designed to free the country's economy from growth constraints. By 2008 Brazil had became a creditor nation, with its debt recently getting the nod from Standard & Poors

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Byron King, Whiskey and Gunpowder Let’s review the big picture for gold. What’s going on? And what are people saying?

For much of 2009, gold traded in the range of low-mid $900 per ounce. There was a dip over the summer, with a strong upswing starting in September. Gold is now trading well over $1,000 per ounce, in fact just under $1,100.

Turns out that the government of India was buying gold in mid-October. Over a two-week span, the central bank of India bought 200 tonnes (metric tons) of gold from the International Monetary Fund (IMF) at an average price of $1,045. The IMF — over which the U.S. holds veto power for most actions — got approval to sell the gold from — where else? — the U.S. Congress, last spring.

Previously, the government of India held 350 tonnes of gold reserves. This 200-tonne purchase is a 57% increase in India’s

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This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Business Intelligence: Marc Faber has short term concerns about commodities, says gold may drop to US$800, November 6, 2009. Marc Faber the Swiss fund manager and Gloom Boom & Doom editor said he has some short-term concerns about commodity prices including gold. He is also reluctant to invest in bonds.

• Aline van Duyn (Financial Times): Why dollar carry trade faces hidden dangers, November 7, 2009. Most investors agree that it is out there. What is less clear is how big it is, or how worried investors should be about it. The “it” in question is the dollar carry trade. This is an investment strategy that has recently been extremely profitable and as a result has become increasingly popular.

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This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Economist.com: Jobs gloom, with glimmers, November 6, 2009. America’s jobless rate passes 10% but the job market should start to improve soon.

• Paul Krugman (The New York Times): Why not a WPA? November 6, 2009. A question I’m occasionally asked at public events is, why aren’t we creating jobs with a WPA-type program? It’s a very good question. As it is, job-creation efforts are generally indirect. Tax cuts and transfers in the hope that people will spend them; aid to state governments in the hope of averting layoffs. Even infrastructure spending is routed through private contractors. You can make a pretty good case that just employing a lot of people directly would be a lot more cost-effective.

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I argued the bull case for gold in my posts over the past few months (see “Gold bullion - regaining its shine?“, “Gold bullion glitters bright” and “Gold bullion - challenging $1,000“. With the gold price scaling fresh peaks and closing in on $1,100, it would certainly seem as if renewed interest in the yellow metal is being stirred up, especially subsequent to the purchase by India’s central bank of 200 metric tons of gold from the International Monetary Fund.

As printing presses are running at full speed to produce ever-increasing quantities of fiat money as governments engineer the greatest asset price reflation in human history - and the US greenback is heading South - the longer-term fundamental case for the yellow metal is arguably positive.

“The gold bug has caught several big hedge fund managers this year including John Paulson of Paulson & Company, Kyle

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