At the moment, money is being sucked out of the financial system, bringing the threat of deflation. But for James Howard Kunstler, the only question is when the new money being pumped in by the Fed will exceed the amount that has disappeared. James says we could see serious inflation - and a slump in the US dollar - before the end of 2009.

This from Whiskey & Gunpowder:

This is the “other shoe” that a lot of people are waiting to drop. Right now we are caught up in a compressive debt deflation as mortgages stop “performing” and loans of all kinds are welshed on. Since money is loaned into existence, and a great many loans are not being repaid, then a lot of money is going out of existence. That’s what I mean when I say that capital is leaving the system.

At the same time, the Federal Reserve has made

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Gold rose in the far East, peaking at $890 in early Hong Kong trading, fell back to $875 by the close of the Comex, but rallied through the Globex to finish at $880.60/oz., up $11.90. Overnight, gold has dropped off.

Platinum pushed above $900 in Hong Kong and held above the mark all day, ending at $911/0z., up $20. Overnight, platinum has slipped lower.

Silver was in positive territory from overseas trading to the New York open, at which point it went vertical in the first half-hour, pushing past $11 to just above $11.20, but then fell sharply through the rest of the Comex before adding back a little on the Globex to close at $10.86/oz., up 20 cents. Overnight, silver is trending lower. (Click here for charts)

The precious metals started off the post-Christmas week in strong fashion, as gold especially gained off of its safe haven status in the

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Nouriel Roubini, professor at Stern School of Business at New York University and chairman of RGE Monitor, is renowned for having foreseen the current economic malaise a number of years ago. He was scorned at the time by mainstream economists for being a crank, but the same people are now lauding him for his foresight and paying top price for the consulting services of Roubini Global Economics.

Aline van Duyn, US Markets Editor of the Financial Times, has just conducted a three-part video interview with Roubini on topics ranging from the likely duration of the recession to regulation, the demise of more hedge funds and the outlook for stocks, commodities, currencies and bonds.

In Part 1 of the interview, Roubini expects 2009 to be a

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We pause this morning, while the rest of the world contemplates Mr. Madoff’s Ponzi scheme and this week’s pending machinations of the Fed and OPEC, to ponder matters geopolitical. There’s something extremely telling about the reaction to the reporter who flung his shoes at That Lame Duck in the White House. And it doesn’t bode well for the next four years under the new president.

Something significant was missing from the main account of the incident, be it from the Associated Press or Reuters.

But McClatchy Newspapers (its pitiful financial state notwithstanding) got the real story. “Friends said Zaidi covered the U.S. bombing of Baghdad’s Sadr City area earlier this year and had been ‘emotionally influenced’ by the destruction he’d seen,” says its reporter in Baghdad.

This salient fact was otherwise missing from establishment media coverage.

If after nearly six years of war in Iraq, two of which were

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Highlighted stocks include Corn Products International, Inc. ( On Nov 10, Bunge Limited (...

HIDDEN VALUE

Dear Value Seeker,

The center cannot hold.

At least it seems that way from where we’re sitting.

Yesterday, the Dow closed below its October lows, breaking through the psychological barrier of 8,000 points.

The S&P 500 ended the day at 806, its lowest reading in six years.

Who knows how low stocks can go from here.

Nicole Elliott, a technical analyst at Mizuho Corporate Bank, says the Dow will sink to 6,400 within the next few weeks.

There is chatter among quants of a “Bermuda Triangle” setting itself up in the Dow charts.

We’re not sure what this means exactly. But it sounds bad.

Word is the Dow is now bouncing around within this triangle, posting lower high after lower high.

We do know that the losses are getting scary.

The planet’s losses from the sell-off of equities have now reached more than $30 trillion – or more than twice the GDP

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Industrialized countries are dropping like flies into recession. So far, emerging markets have avoided the economic meltdown. But that is changing, says David Newman. He says investors should not be tempted by the huge bond yields on offer in countries like Argentina. In today’s climate, knowing you will get your money back is much more valuable.

This from The Sovereign Society:

I found this chart online and thought it was such a good representation of what is going on that I just had to share it with you. (Thanks to the folks at http://frigginloon.com/ )

As I’ve written about before, this is really just the beginning of the flood of bad news we’re going to continually hear about over the next few months.

As you look back over this list, you’ll notice that none of the emerging market countries are on

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The G20 Summit was first proposed by the UK and France during the first waves of the global economic meltdown. It was long anticipated as a coming together of the major nations in the world to discuss necessary changes to help better regulate international finance, attempt to help stabilize the current turbulent markets, and discuss ways to have additional oversight on the international playing field.

After unprecedented global cooperation of bank bailouts and stimulus packages during the crisis, there was much debate about the outcome of the summit this past weekend. Unfortunately, world markets reflect a relatively negative viewpoint of the outcome– falling multiple percentage points in Europe (-2.4% UK, -3.35% Germany, -3.3% France), the Middle East (approx. -1.0% in Israel, Kenya, and Egypt, and 6% in Saudi Arabia), and mixed returns in Asia (+3/4% in Japan,

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It’s a buyer’s market in Dubai, where mansions on coastal developments, such as Palm Jebel Ali and the Palm Jumeirah, are selling at up to 40% below their peak.  But that’s lead to government concern, and now, intervention.

From Sunday’s Financial Times:
The Dubai government on Sunday formed a high level committee to tackle the impact of the widening financial crisis on the emirate’s once booming property market.

Amid signs of a deepening real estate correction, Mohammed Alabbar, chairman of the region’s biggest developer, Emaar Properties, said the committee was exploring various options to restore confidence in the market. Real estate agents report a slump in sales activity and price reductions in some developments of as much as 40 per cent.

Emaar Properties, the main driver behind the property market boom in Dubai since foreigners …

October, one of the worst month on stock markets, is over and Standard & Poor's have published statistics for major stock market indices. I picked group of emerging markets from S&P Global Equity Indices and added four fundamental indicators. Dividend yield, Price / Book Value, Price / Cash flow and Price / Earnings.On average for emerging markets as a group dividend yield is 4.2, P/BV is 1.9, P/CF is 9.5 and FY1 P/E ratio is 9.5.For comparison, in US dividend yield is 3.14, P/BV is 1.76, P/CF is 6.93 and FY1 P/E ratio is 11.8.For both, emerging markets and US markets, this level of fundamental valuation has not been seen in decades. You can also check my last post about stock markets valuation two months ago. Just before global sell-off had been triggered. ...