Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks Correct into Bitcoin Happy Thanks Halving - Earnings Season Buying Opps - 4th July 24
24 Hours Until Clown Rishi Sunak is Booted Out of Number 10 - UIK General Election 2024 - 4th July 24
Clown Rishi Delivers Tory Election Bloodbath, Labour 400+ Seat Landslide - 1st July 24
Bitcoin Happy Thanks Halving - Crypto's Exist Strategy - 30th June 24
Is a China-Taiwan Conflict Likely? Watch the Region's Stock Market Indexes - 30th June 24
Gold Mining Stocks Record Quarter - 30th June 24
Could Low PCE Inflation Take Gold to the Moon? - 30th June 24
UK General Election 2024 Result Forecast - 26th June 24
AI Stocks Portfolio Accumulate and Distribute - 26th June 24
Gold Stocks Reloading - 26th June 24
Gold Price Completely Unsurprising Reversal and Next Steps - 26th June 24
Inflation – How It Started And Where We Are Now - 26th June 24
Can Stock Market Bad Breadth Be Good? - 26th June 24
How to Capitalise on the Robots - 20th June 24
Bitcoin, Gold, and Copper Paint a Coherent Picture - 20th June 24
Why a Dow Stock Market Peak Will Boost Silver - 20th June 24
QI Group: Leading With Integrity and Impactful Initiatives - 20th June 24
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Markets Feeding Off Blunders and Indecision

Stock-Markets / Stock Markets 2010 Jun 08, 2010 - 06:34 AM GMT

By: Miles_Banner


Best Financial Markets Analysis ArticleThe 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

We leave you this week with a fascinating article forwarded to us by one of our readers, James. It’s a Bloomberg story that reveals the insatiable appetite for gold amongst central banks – Central Bank Gold Holdings Expand at Fastest Pace Since 1964

© 2010 Copyright Gold Price Today - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in