Finance Trends Letter

Color me surprised to find an MSN Money article on the Fed's decision to stop publishing the M3 money supply figures for public release. Jim Jubak's latest installment, entitled, "Fed kills a key inflation gauge" , deals with this very topic. Although it comes after the fact of M3's discontinuance (publication of M3 data ceased on March 23), I am still a bit astonished to read the contents of this article. Jubak has addressed in print some of the important issues associated with the loss of this data, but I have yet to see many other mainstream news sources do the same. Whiile he doesn't exactly go in for the kill (Jubak relates some of the Fed's possible motives for shelving M3 as being drawn from the realm of "conspiracy theories", a device which provides him with some cover), the article does a pretty admirable job of relating why the eradication of this data is important. In the following passage, Jubak relates his bewilderment over the remo...

I liked the opening of this editorial by Richard J. Greene, so I thought I'd include part of it here. I think it really sums up what is really going on with inflation, and succinctly describes the phenomenon that the man in the street is starting to notice. "The man on the street is increasingly beginning to figure it out that the Government has been lying to him and, in effect, stealing from him. The retired person is finding out because after his cost of living adjustments he is just not making ends meet. The purchaser of inflation-adjusted securities is noticing that after his return of capital the capital does not purchase what it once did. The sender of a Federal Express letter can find a fuel adjustment charge of $4.13 now for just a single letter! Even producers of gold and silver, the ultimate defense against inflation, notice the price of steel and fuel are rising even faster than their end products. These are all dead giveaways that inflation is higher than reported ...

Gold broke out to a 25 year high Thursday and the COMEX June gold contract ended the day up $13.20 to close at 591.80 an ounce. Silver was up $0.54 to close at $11.66, a 22 year high. See Reuters article for more info. The backers of the NYSE listed Gold Shares ETF (ticker: GLD) hope to extend the product's reach to Asia and the Middle East. In an interview with Dow Jones Newswires, George Milling-Stanley of World Gold Trust Services, GLD's sponsor, said he wants to increase investment demand for gold through ETFs. "We want to grow the market," said Milling-Stanley citing his biggest challenge for the ETF. "Our goal is to have 24/7 coverage. Right now GLD trades about 16 hours a day," said Milling-Stanley. "We would like to see a product in Asia." The full article can be read here .

Update: The video this post refers to is no longer available at the Howestreet.com web site. We've tracked down another Marc Faber video interview from the Howestreet.com archives for you instead. Here is Marc Faber in a 2005 interview , discussing his book, Tomorrow's Gold: Asia's Age of Discovery with Sterling Faux on the Corus Radio Network. You will have to select the Windows Media Player option in order to play the interview; the pop-up window player options no longer seem to work. Enjoy. For more recent posts on Marc Faber, including interviews and commentary, see the results from our Marc Faber blog search. Marc Faber speaks about geopolitics, monetary policy and commodity prices in a video monologue brought to us by howestreet.com . Highly recommended. Just click the link and you will see the interview link with Faber at the top of the main page. The video will automatically open up in a seperate media player window when you select an interview. If the video stops ...

Link to the International Herald Tribune site, which features a New York Times article detailing the confidential memo that centered on a January 31, 2003 meeting between President George Bush and British PM Tony Blair.

Mergers and acquisitions activity in the oil & gas industry has surged in recent years; the value of deals last year tripled to $160 billion according to a Financial Times report by Carola Hoyas. An industry study suggests oil execs and government leaders have been "on a frantic buying spree" to secure assets. The full report, prepared by research firms Harrison Lovegrove and John S. Herold, will be released in April 2006. Among its key findings : buyers loosened their valuation criteria for deals due to competitive pressures; national oil companies played an increasing role in the battle for assets; and the continued importance of unconventional resource deals.

Financial Times reports that Shenhua Energy, China's biggest coal company, hopes Beijing will back its plans to build coal-to-liquids plants by making energy from large scale plants part of the country's strategic oil reserves. Coal-to-liquids refers to the process of converting coal into liquid fuels, such as diesel. Methods for coal liquefaction are derived from the Fischer Tropsch process, and most expertly exploited in recent times by South Africa's Sasol . The firm's current capacity of CTL is about 150,000 barrels per day. Shenhua hopes the government will set a floor price for oil, thereby protecting it from losses in the event that oil prices were to drop below levels that make CTL profitable.