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Gold hit record of $989 an ounce, falls back $981

Bloomberg
March 4, 2008

Gold declined from a record today in Asia as some investors judged the recent rally overdone. Silver also fell.

Gold has gained 19 percent this year to a record $989.54 yesterday, as the U.S. dollar tumbled to record low against the euro at $1.5274 while the crude oil rose to record $103.95. Dollar gained to $1.5187 at 1:41 p.m. Singapore time and crude oil declined to $102.25.

“There’s been some short-term profit-taking going on this afternoon,” Charles Dowsett, head of structuring and trading of precious metals at ABN Amro Holding NV., said by telephone from Sydney today. “But we are seeing support at $980 level.”

Gold for immediate delivery fell $2.36, or 0.2 percent, to $981.34 at 1:42 p.m. Singapore time, after reaching as low as $979.00.

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Buffett: US Economy In Recession
Economists and business heads agree US is in recession, Federal Reserve is doing nothing to counter

Steve Watson
Infowars.net
March 3, 2008

American investor, businessman and philanthropist Warren Buffett is the latest in a string of notable figures to concede that the US economy is now in recession.

Buffett, the largest shareholder and chief executive officer of Berkshire Hathaway, and the third-richest person in the world, made the comments in an interview with cable network CNBC.

“I would say, by any commonsense definition, we are in a recession,” Buffett said.

His comments come on the back of an annual letter to shareholders (PDF), which he released Friday along with Berkshire’s 2007 financial report, in which he made similar warnings.

“It’s a certainty that insurance-industry profit margins, including ours, will fall significantly in 2008,” he said. “Prices are down, and exposures inexorably rise. Even if the U.S. has its third consecutive catastrophe-light year, industry profit margins will probably shrink by 4 percentage points or so.

“If the winds roar or the earth trembles, results could be far worse.”

Buffett is one of the most successful investors in the history and an economic expert.

He has previously warned of the expanding trade deficit’s slow devaluation of the dollar and other U.S. assets.

Buffett is not the only notable figure waving the red flag. A survey released last week by the National Association for Business Economics showed that 45 percent of economists are predicting a recession in 2008.

Indeed, economists everywhere are sounding the alarm and asking why the Federal Reserve continues to do little or nothing to counter the rapid downturn as stocks around the world continue to tumble, inflation spirals and the dollar falls to new lows.

“We are becoming increasingly concerned that the authorities in the world do not get it,” said Bernard Connolly, global strategist at Banque AIG. “The extent of de-leveraging involves a wholesale destruction of credit. The risk is that the ’shadow banking system’ completely collapses,” he said.

“I never thought I would see anything like this in my life,” said James Steele, an HSBC economist in New York.

“The verdict is in. The Fed’s emergency rate cuts in January have failed to halt the downward spiral towards a full-blown debt deflation. Much more drastic action will be needed. As the once unthinkable unfolds, the leaders of global finance dither. For the first time since this Greek tragedy began, I am now really frightened.” writes Ambrose Evans-Pritchard, International Business Editor for the London Telegraph.

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