Gold Price Today's  Instablog

Gold Price Today
Send Message
News stories will bring you the daily rounds, we bring you the dirt, the things that are behind what is happening. If anything the last decade has told us there are always consequences. A simple case of cause and effect. An effect is what happens as a result of the cause. Stay with us as we look... More
My company:
Gold Price Today
My blog:
  • Feeding off blunders and indecision 0 comments
    Jun 8, 2010 6:47 AM

    The markets have been thrashed up and down. We’ve witnessed one of the greatest bull runs since the suckers rally in the 1930s, and whilst many are calling this a top, there are some that are calling this a market correction... albeit one that may last a few months.

    In The Market Oracle Nadeem Walayat points out that the market is in a period of correction - but will continue to rise in the very long term as it has done over the past year. We value Nadeem’s opinion very highly but we can’t help but think that no one can ever really foresee what the market wants to do next.  Events over the last week highlight what we mean.

    Over the course of the weekend the G20 members gathered round in plush offices, treated to expensive wine, luxurious hotel rooms, first class travel and decided they knew nothing.

    The finance ministers and central bankers that make up the G20 were dumbfounded by recent events in the markets and could only reverse opinions they gave in April.

    In the communiqué that follows the lavish get togethers the G20 members confirmed the whole show is pointless. In April they were singing the tunes of global visions - a global banking levy, a global stand on budget deficits and debt, a united front. Last weekend they declared - every country for itself.

    The communiqué expressed the need for each country to react differently depending on their problems.

    "The recent events highlight the importance of sustainable public finances and the need for our countries to put in place credible, growth-friendly measures, to deliver fiscal sustainability, differentiated for and tailored to national circumstances."
    What we really wanted to see was some clout behind the punch. For all the twaddle that comes with the formalities what do we actually get?

    In a recent video which highlights the expenditure of the G20 meetings, Canadians are looking at the costs for the G8 and G20 meetings which they’re hosting later this month. The security alone is estimated to cost in the region of $933m (£607.94m). The estimated cost of ensuring all the food is safe stands at $1m!

    And it’s only 3 days.

    It’s such a staggering figure for which we should be entitled to see what we get for our money. What’s the end result? - The same as the beginning.

    We can only look into the future as far as our nose goes... and it doesn’t smell good.

    But as our leaders swap stories we’re all too familiar with - the debt problems, the deficits, exports and the like, we’re really interested in gold.

    Last week gold prices rose on the back of weak US employment data, poor Chinese manufacturing figures and the huge slap in the face from Hungary declaring their economy is in some ways, similar to Greece’s.

    Hungary like Greece?

    In one of those moments that could have been written by Harry Enfield, a spokesman for the Hungarian Prime Minister announced on Friday that the country was facing a similar crisis as Greece and in possible danger of defaulting on their debt.

    The Guardian reported:

    "A spokesman for Hungarian Prime Minister Viktor Orban set off alarm bells among investors when he conceded in a television interview that the Hungarian budget was in a "much worse" state than the previous government had indicated and "skeletons were continuously falling out of the closet".


    "On Thursday, the ruling Fidesz party’s vice chairman Lajos Kosa was reported online as saying that it had found the public finances in a much worse shape than previously expected and there was only a slim chance of avoiding a Greek-style crisis.

    When asked about those comments, Orban’s spokesman, Peter Szijjarto, told a news conference: "In Hungary the previous government falsified data. In Greece, they also falsified data. In Greece the moment of truth has arrived. Hungary is still before that."
    Moments later the Hungarian Finance Minister gave numerous television interviews to dispel these former statements, explaining that it was the new government’s way of frightening the Hungarian population into believing the coming tax cuts were necessary. Jolly good, frighten the people, spread the fear then backtrack quickly when it doesn’t go very well.

    All of this is against the backdrop that the Hungarians are pushing for acceptance into the euro by 2014 - lets see, something similar to Greece you say, with a budget deficit likely to be way above the 3.8% agreed with the EU and IMF after they bailed them out to the tune of $28bn in 2008. It sounds an excellent candidate, I wonder if the German taxpayers think so.

    On the back of the Hungarian news the euro slid to a four year low. Yesterday gold carried on breaking record highs in euros - 1,044 (per troy ounce), and falling just short of previous highs in USD. It remains a positive outlook for gold especially given the likelihood for further sovereign debt crises.  We look forward to finding out what comes next.

    Gold Price Today

    Disclosure: No positions
Back To Gold Price Today's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.