Why the “Bond King” Is Having Flashbacks of the 2008 Financial Crisis

By Justin Spittler

As you probably know, Great Britain stunned the world by voting to leave the European Union on June 23. The “Brexit,” as folks are calling it, triggered a selloff that wiped $3 trillion from global stocks in two days. The announcement also shook the currency market. The pound sterling plunged 8% the day after the news broke. It was one of the British currency’s worst days ever. The U.S. dollar, euro, and Japanese yen experienced huge moves too.

It’s now been two weeks since the historic event and panic is still in the air. Investors around the world have piled into government bonds, which are widely considered safe assets. Yesterday, the yield on the 10 year U.S. Treasury hit a fresh all time low. Yields on British, Irish, German, and Japanese 10 year bonds also hit record lows. A bond’s yield falls when its price rises. Investors have loaded up on gold too. The price of gold has shot up 8% since June 23.
 
This shouldn’t surprise you if you’ve been reading the Dispatch. Regular readers know gold is the ultimate safe haven asset. It’s preserved wealth through every sort of financial crisis because it’s unlike any other asset. It’s durable, easily divisible, and easy to carry. Its value doesn’t depend on “confidence” in any government. In other words, it’s real money. After its Brexit fueled rally, gold is up 29% on the year. It’s at its highest price since March 2014. Yet, this rally is showing no signs of slowing down.

The SPDR Gold Shares ETF (GLD) just had one of its best days ever..…
On Tuesday, investors put $1.3 billion into the fund, which tracks the price of gold. According to Investor's Business Daily, it was the fund’s third best day ever. It was also the fund’s best day since stocks crashed on August 8, 2011. Investors have now plowed $15.26 billion into GLD this year. That’s the most of any of the 1,931 ETFs tracked by global analytics and research firm XTF.

In London, the panic has gotten so bad that several fund managers stopped their funds from trading..…
The Wall Street Journal reported yesterday:

Henderson Global Investors, Columbia Threadneedle and Canada Life are the latest fund managers to stop investors pulling their money out against a backdrop of political and economic uncertainty following Britain’s vote to leave the European Union. The fresh moves by fund companies to suspend redemptions Wednesday came after Standard Life Investments, Aviva Investors and M&G Investments suspended trading on U.K. property funds earlier this week. This means that half of the 10 largest U.K. property fund managers have suspended trading temporarily.

In other words, these managers have trapped their investors’ money to keep their funds from collapsing.

"Bond King" Bill Gross says something very similar happened just before the 2008 financial crisis..…
Gross is one of the world’s most well-known investors. He founded Pacific Investment Management Company (PIMCO) in 1971. Under his watch, PIMCO grew into the world’s biggest bond fund. Today, he runs his own bond fund at Janus Capital. Like us, Gross is worried about what’s happening in London right now. Bloomberg Business reported yesterday:

“It’s reminiscent of Bear Stearns’ subprime funds before the Lehman debacle,” Bill Gross, a fund manager at Janus Capital Group, said on Bloomberg TV. “The system doesn’t allow liquidity to flow into the proper places. If these property funds are just one indication, perhaps there will be others to follow. I think it’s something to worry about.”

The collapse of Lehman Brothers in 2008 helped set the global financial crisis in motion. The S&P 500 went on to plunge 57% in two years. And the U.S. economy entered its worst downturn since the Great Depression.

Government officials are scrambling to contain the crisis..…
Last week, the Bank of England (BoE) pumped £3.1 billion into Britain’s banking system. It pledged to inject as much as £250 billion to stabilize its financial system. And on Tuesday this week, the BoE announced more “stimulus” measures. It eased special capital requirements for Britain’s banks. Specifically, the BoE lowered how much money banks need to hold as a “buffer.” The move increases the lending capacity of U.K. banks by as much as £150 billion. Economists at the BoE believe more borrowing and spending will stimulate the economy. As we’ve shown you many times, this won’t work. Casey Research founder Doug Casey explains:

It’s part of the Keynesian view, in which spending and consumption drive the economy. This isn’t just wrong, it’s the exact opposite of what’s true. It’s production and saving that drive an economy. You have to save to build capital, and capital is necessary for…everything. What these people are doing is destructive of civilization itself.

Still, this won’t be the last stimulus measure that the BoE rolls out..…
Last Tuesday, we said the BoE would likely cut interest rates. Two days later, Mark Carney, who heads the BoE, said the central bank needs to cut rates soon. The Wall Street Journal reported:

Mr. Carney said it was his personal view that the central bank would need to cut its key interest rate, currently 0.5%, “over the summer,” adding that an initial assessment of the economic damage caused by the vote to leave the EU would be made at the Monetary Policy Committee’s July meeting, and a “full assessment,” alongside new forecasts for growth and inflation, would take place in August. That suggests he favors an August move, while leaving the door open to an earlier decision.

According to The Telegraph, the BoE could cut rates much sooner than August. That’s because the financial markets have “priced in” a 78% chance that the BoE will cut rates next week. But there’s a problem. The BoE’s key rate is currently 0.50%. In other words, it doesn’t have much room to cut rates. To stimulate the economy, the BoE will likely have to launch quantitative easing (QE), which is just another term for “money printing.”

The BoE won’t fix Britain’s economy by cutting rates or printing money..…
According to MarketWatch, central banks have cut rates more than 650 times since Lehman Brothers collapsed in September 2008. They have also “printed” more than $12 trillion over the same period. And yet, the global economy is barely growing. The U.S., Europe, Japan, and China—the world’s four biggest economies—are all growing at their slowest rates in decades. There’s no reason to think these easy money policies will work this time. It’s much more likely that central bankers will destroy the currencies they’re supposed to defend. Doug Casey explains:

In a desperate attempt to stave off a day of financial reckoning during the 2008 financial crisis, global central banks began printing trillions of new currency units. The printing continues to this day. And it’s not just the Federal Reserve that’s doing it: it’s just the leader of the pack. The U.S., Japan, Europe, China…all major central banks are participating in the biggest increase in global monetary units in history. These reckless policies have produced not just billions, but trillions in malinvestment that will inevitably be liquidated. This will lead us to an economic disaster that will in many ways dwarf the Great Depression of 1929–1946. Paper currencies will fall apart, as they have many times throughout history.

If you do one thing to protect yourself from reckless governments, own gold. As we mentioned above, gold is real money—it’s the only currency that doesn’t depend on a government or central bank doing the right thing. For other ways to safeguard your wealth, watch this free presentation. We encourage you watch this video even if you don’t have a dime in the stock market. That’s because the coming crisis will hit you no matter where you keep your money. The good news is that you can protect your money if you make the right moves soon. You could even turn this threat into an opportunity to make a lot of money. Watch this short video to learn how.

REMINDER: Doug Casey will be in Las Vegas next week..…
Doug will be at FreedomFest 2016: Freedom Rising, an annual festival where free minds meet to talk, strategize, socialize, and celebrate liberty. Doug will be giving several speeches, and he’ll also receive an award for his new novel, Speculator. He’ll join a star-studded lineup of speakers that includes Libertarian presidential candidate Gary Johnson, Senator Rand Paul, and Agora founder Bill Bonner. FreedomFest takes place July 13–16 at Planet Hollywood in Las Vegas. To learn more, visit www.freedomfest.com. Enter the code SALEM to get $100 off the ticket price.

Chart of the Day

Silver just set a new two year high. As you can see from today's chart, silver has soared 45% this year. On Monday, it topped $20 for the first time since August 2014. Longtime readers know that silver is gold’s more volatile cousin. Like gold, silver is real money. But unlike gold, it’s an industrial metal. It goes into everything from solar panels to batteries. Because of this, it's more volatile, and more sensitive to an economic slowdown than gold is.

So, if you’re nervous about the economy or financial system, the first thing you should do is own gold. We encourage most folks to hold 10% to 15% of their wealth in gold. Once you own enough gold, consider adding silver to your portfolio. It could see even bigger gains than gold in the years to come.

The article Why the “Bond King” Is Having Flashbacks of the 2008 Financial Crisis was originally published at caseyresearch.com.

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Six Traits of Successful Retirees

By Dennis Miller

When I coached baseball many years ago, a young ballplayer came to me asking for advice. I offered my opinion: he needed to get his act together. Then, like many young men might do, he griped about me to one of the other coaches. Our paths crossed again when he was 28 years old, at which point he said, "Now that I have a family of my own, I've thought back on your 'lectures' and realized you were just answering my questions honestly. Thank you."


Not surprisingly, my lectures as a coach weren't so different from those I'd received from a WWII colonel turned coach and teacher at my high school. The only difference: I never asked for his opinion, it was offered as he held my shirt collar. Still, when I came home on leave from the Marine Corps a few years later, I showed up at my old high school, walked onto the practice field, and thanked him. He was a solid mentor when I needed one but was too young to know it.

Years later, as a retirement mentor, I've spent countless hours analyzing the habits shared by successful retirees. Six stand out, and I urge all of our readers to take these steps sooner rather than later. I'm not going to grab you by the shirt collar like my coach did, but I'm confident you'll find this "lecture" worth reading.

1. Cut the financial cord with your children. All parents have one basic responsibility: to equip their children to survive on their own, both emotionally and financially.
   
   Retirees are often the wealthier members of an extended family, or they are perceived as such. But having money does not make you a bank. If a family member needs money, let him or her borrow it elsewhere. The wealth you've accumulated has to last you the rest of your life. The best way to remind your family and yourself of this simple fact is to simply say "no."
   
   Of course, some accidents and disabilities cannot be prevented, and there are times to rally behind family members truly unable to put a roof over their heads or food in their bellies. But for every truly unavoidable catastrophe, there are dozens more instances of parents enabling a freeloader.
   
   You've worked too hard to sacrifice your financial independence and give up your golden years. Even if you have enough to support two generations indefinitely, being the "Bank of Parents" won't help anyone in the long run.
2. Be your own "pension fund" manager. Independence is the real goal of retirement. That means listening to experts, but also learning to make savvy financial decisions for yourself.
   
   Today, pensions are virtually nonexistent in the private sector. Soon they won't exist in the public sector either. So all of your retirement, including saving, investing, debt reduction, tax planning, estate planning, is up to you.
   
   There's a lot to learn, but the information is there for the taking. I've known too many people who retired with a large chunk of change only to panic because they had no clue how to manage it. These folks were afraid, rightly so, because their lack of financial know how made them vulnerable.
   
   Give yourself a financial education while you're accumulating wealth so you can enjoy that wealth once you retire. Otherwise, you might leave a high stress job for a high stress retirement.
3. Maximize your tax-preferred retirement savings. Only 10% of those eligible for employer-sponsored 401(k) programs maximize their contributions. There are real financial benefits to contributing to your 401(k), and it's a mistake to turn down that free money, especially if your employer will match all or part of your contributions.
   
   In that same vein, tapping into retirement accounts to pay off bills is almost always a mistake. Unless you absolutely need the money for basic survival, you're much better off leaving your retirement money alone. Like many things in life, once you tap those funds, it gets easier and easier to do it again.
   
   Before Congress passed the first Social Security Act in 1935, retirement was for a wealthy few. Since then, Social Security has fostered the illusion that we need not worry about money and that retirement doesn't require a large personal nest egg. Reality is far harsher.
   
   I know people who've tried to live on their Social Security alone; now they are all back at work. A happy retirement rarely comes for people who choose to worry about retirement later.
4.  Get out of debt. Many retirees are drowning in debt. It's a topic we touched on in The Reverse Mortgage Guide when discussing why seniors are turning to reverse mortgages at an increasingly younger age.
   
   Independence is pretty hard when you don't have any money. And don't fool yourself: if you have a million dollars in your brokerage account and a million dollar mortgage, you're broke. Forget all the fancy formulas. When you stop paying people to rent their money, that's when real wealth building can start.
5. Get some professional help. Even if you have a small nest egg, I strongly recommend going to a professional certified financial planner (CFP) for a regular checkup. I don't mean pay someone to manage your money, although that is an option. Much like an annual physical, however, we can all benefit from an independent, qualified professional assessing where we are and how to stay (or get) on course.
   
   The checkup might cost a few hundred dollars, but it's money well spent. Retirees cannot afford to be penny wise and pound foolish.
6. Get in synch with your spouse sooner rather than later. During your working years, you trade time and expertise for money. For most folks, the goal is to save enough so that they don't have to work full time to survive. Then, during retirement you trade money for time to pursue other interests. Sad to say, many people struggle to pinpoint what those interests are once they get there. One spouse might want to travel while the other is a homebody, etc.
   
   Retirement is no fun if only one spouse is living their dream. Happier couples talk and plan how they want to spend their time long before retirement day.

As someone in or approaching retirement age, you've lived long enough to be a mentor in some area of life. So you already know that mentoring is about telling people what they need to hear, whether it's on the baseball field, in the boardroom, or at the kitchen table (where most life lessons are learned).
I urge you to pass your own "secrets to success" on to the next generation; they will thank you for it… eventually.

In addition to our regular weekly and premium monthly issues, we've been hard at work producing a series of special reports on need to know retirement topics: financial advisors, reverse mortgages, income-producing stocks and low-fee ETFs, to name a few.

You can download each of these timely special reports individually; or, if you really want to kick start your financial education, you can begin your Money Forever premium subscription now and receive access to all of our special reports, our current issue, and the Money Forever archives.


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Mid Week Market Summary for Wednesday December 11th

The S&P 500 closed lower on Wednesday. The low range close sets the stage for a steady to lower opening when Thursday's night session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. If March renews this year's rally into uncharted territory upside targets will be hard to project. Multiple closes below last Wednesday's low crossing at 1774.80 are needed to confirm that a short term top has been posted. First resistance is November's high crossing at 1805.50. Second resistance is unknown. First support is last Wednesday's low crossing at 1774.80. Second support is the reaction low crossing at 1769.00.

Crude oil closed lower due to profit taking on Wednesday as it consolidated some of the rally off November's low. The low range close sets the stage for a steady to lower opening when Thursday's night session begins. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If January extends the rally off November's low, the 50% retracement level of the August-November decline crossing at 99.87 is the next upside target. Closes below the 20 day moving average crossing at 95.16 would confirm that a short term top has been posted. First resistance is today's high crossing at 98.75. Second resistance is the 50% retracement level of the August-November decline crossing at 99.87. First support is the 20 day moving average crossing at 95.16. Second support is November's low crossing at 91.77.


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Natural gas closed sharply higher on Wednesday and above the 62% retracement level of this year's decline crossing at 4.307 as it extends the rally off November's low. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If January extends the rally off November's low, the 75% retracement level of this year's decline crossing at 4.487 is the next upside target. Closes below the 20 day moving average crossing at 3.902 would confirm that a short term top has been posted. First resistance is today's high crossing at 4.340. Second resistance is the 75% retracement level of this year's decline crossing at 4.487. First support is the 10 day moving average crossing at 4.082. Second support is the 20 day moving average crossing at 3.902.

Gold closed lower as it consolidated some of on Tuesday rally but remains above the 20 day moving average crossing at 1250.50. The low range close sets the stage for a steady to lower opening when Thursday's night session begins trading. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If February extends Tuesday's rally, the reaction high crossing at 1294.70 is the next upside target. If February renews the decline off August' high, June's low crossing at 1187.90 is the next downside target. First resistance is Tuesday's high crossing at 1267.50. Second resistance is the reaction high crossing at 1294.70. First support is last Friday's low crossing at 1210.10. Second support is June's low crossing at 1187.90.

Silver closed higher on Wednesday as it extended the rally off last Wednesday's low. The low range close set the stage for a steady to lower opening when Thursday's night session begins trading. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If January extends this week's rally, the reaction high crossing at 20.805 is the next upside target. If January renews the decline off October's high, June's low crossing at 18.615 is the next downside target. First resistance is today's high crossing at 20.430. Second resistance is the reaction high crossing at 20.805. First support is last Wednesday's low crossing at 18.900. Second support is June's low crossing at 18.615.

The U.S. Dollar closed lower on Wednesday as it extends the decline off November's high. The mid range close sets the stage for a steady to lower opening when Thursday's night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If March extends the decline off November's high, October's low crossing at 79.35 is the next downside target. Closes above the 20 day moving average crossing at 80.82 would confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 80.82. Second resistance is November's high crossing at 81.73. First support is today's low crossing at 79.87. Second support is October's low crossing at 79.35.

The Japanese Yen closed higher due to short covering on Wednesday. The mid-range close sets the stage for a steady opening when Thursday's night session begins trading. Stochastics and the RSI are diverging but are neutral to bearish signaling that sideways to lower prices are possible near term. If March extends the decline off October's high, weekly support crossing at .9640 is the next downside target. Closes above the 20 day moving average crossing at .9857 are needed to confirm that a short term low has been posted. First resistance is last Thursday's high crossing at .9845. Second resistance is the 20 day moving average crossing at .9857. First support is Tuesday's low crossing at .9678. Second support is weekly support crossing at .9640.

Coffee closed lower on Wednesday. The low range close set the stage for a steady to lower opening on Thursday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. Closes above the reaction high crossing at 11.29 are needed to renew the rally off November's low. If March renews last week's decline, November's low crossing at 10.41 is the next downside target.

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Gold Chart of The Week

After the worst weekly decline of the year in US equities, we are slowly on the mend as we enter a week full of FED activity.

A few standouts from last week included a terrible Non Farm Payroll number on Friday and a full throttle campaign from the BOJ to continue to crush the Yen. Fridays jobs number was a big miss as 88,000 jobs were added and some real numbers regarding the drop in individuals that are actively looking for jobs was revealed. Even after these figures were announced, the stock indexes were only rattled for a short period of time before the realization that the FED will step up Quantitative Easing set back in. Since then, the stock market seems to be holding up fairly well.

The Japanese Yen had a wild week last week after the BOJ doubled down on its asset purchase program and effectively wiped out two week’s worth of recovery, and more. I think it will be interesting to see how the Yen responds to this weeks FOMC announcement that will be held on Wednesday.

The week ahead of us may be tricky as Wednesday’s Interest Rate decision looms. Traders will be less concerned about the actual rate decision, and will focus on the language used by Bernanke and other FED members throughout the week. The standout will be Bernanke’s view on the amount and the length of time the FED plans to participate in easing the market.

Keep in mind that in last month’s report, the FED maintained its focus on the labor market and we also saw a less divided FED panel on the length of Quantitative Easing. After a big miss in the Non Farm Payroll, it would be difficult to expect anything but a more aggressive campaign to keep Interest Rates row in an effort to stimulate growth.

After Wednesdays news, the markets will begin to use this information along with first quarter earnings and Fridays Retail Sales and Consumer Confidence numbers. Overall, this week should be very active for the US markets as well as commodities like Gold. The question for Gold prices is whether last week’s drop to test last Summers low is actually the low. I think after Wednesday, we should have the information necessary to make a confident decision.

The chart shows last week’s test of support, which will continue to be the focal point as Wednesdays FOMC announcement comes to pass.




Posted courtesy of Brian Booth and the staff at INO.com

Phil Flynn: Confidence Game

When it comes to the markets confidence is key. Yet obviously if you look at the last 24 hours confidence has been shaken. Whether it be the call for a Greek referendum on the EU bailout or the weakness in the Chinese manufacturing data or the situation with the bankruptcy of MF Global confidence has been shaken. And despite the blow to confidence, the markets are something that you can believe in. You can also believe in the protections offered the customer provided by the exchanges.

The oil market, despite the absence of MF Global traders, had a very low volume and oil prices acted like they would have if all traders were present. They reacted as you might expect to the movement from the Japanese yen and dollar intervention and the economic data. They reacted to strong Libyan oil production that rose 245,000 barrels to 345,000, the highest level since March. Or strong production out of Iraq and the highest OPEC oil production since 2008.....Read Phil's entire article.


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Phil Flynn: I'm Starting With The Man With The Money

The Europeans are Asking Him To Change His Ways. And No Message Could Have Been Any Clearer; If You Wanna Make The World A Better Place, If You Wanna Make The World A Better Place Take A Look At Yourself, And Then make a change. Or stop printing some for a change. The Man in the mirror or at least the spotlight is Fed Chairman Ben Bernanke! The whole world has gone on an anticipatory tear after his promise to print more money and now some officials are fearful that this printing binge could destabilize the global economy and start a currency war.

The Financial Times says that one unnamed European official said that a further aggressive round of qualitative easing by the Federal Reserve would make US exports more competitive at the expense of its rival. This comes as an ironic situation especially considering the fact that US trade deficit hit 46.3 billion in August as imports from China continue to rise. China of course might be named a currency manipulator which could even increase the chances of a potential currency war looming ahead. This comes after the dollar hit a 15 year low against the yen and metal prices such as silver and copper soared yesterday.....Read the entire article.


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Phil Flynn: I Have a Yen For Oil

Say goodbye to the Euro and hello to the Japanese yen. China may be raising reserve requirements to slow demand but today it is strong economic data out of Japan that seems to be giving oil a bit of a lift. Last week oil shuttered when China increased reserves on banks for a second time in a month. Yet that seems to be a bit of a distant memory this morning after strong data out of Japan.

Bloomberg news reported that crude oil rose after gains in Asian equities and growth in Japan’s economy increased confidence that a global economic recovery will lead to higher fuel demand. Better than expected demand expectations for oil came from the fact that Japan, the world’s third-biggest oil consuming country, yesterday reported 4.6 percent growth in gross domestic product for the three months ended Dec. 31, surpassing the 3.5 percent median estimate of economists surveyed by Bloomberg.

This strong data saved oil from its bearish fate as the carry traders may look to the yen as an alternative currency to play with. The situation in Europe is looking even more uncertain as the debt problems surrounding Portugal, Ireland, Italy and Greece and that makes the yen a more attractive alternative.

Oil has a lot to prove with seasonal demand peaking as we enter the long slow march out of winter. The Energy Information Agency reported that the U.S. average price for regular gasoline fell for the fourth week in a row, dropping less than a penny to reach $2.65 per gallon, which was still $0.73 above last year. On the East Coast the price decreased almost two cents to $2.67 per gallon.

The Midwest average increased by over a penny to $2.57 per gallon, and Rocky Mountain prices rose by less than half a cent to $2.62 per gallon. Gulf Coast average prices fell almost 3 cents to $2.52 per gallon and remained the lowest regional prices in the Nation. The West Coast average dropped close to 2 cents to $2.90 per gallon and the price in California decreased over a penny to $2.96 per gallon.....Read the entire article.


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Phil Flynn: Vying to be Mr. Yen

Whose yen is it anyway? Strong yen, weak yen and why in the world does the oil market care? Well the Japanese yen along with the dollar, have been bit players in the massive run in the oil. This year as traders looked for trades to carry them away, one trade that was very bullish for oil was the dollar/yen carry trade.

Oil soared as investor sold dollars because of our negative interest and bought other currencies, even the yen for heaven’s sake, that were yielding a higher interest rate. Traders tried to lock in the difference between the rates. Aggressive traders would take the profit from that yield and try to use it as free money to make more aggressive trades! Some even bought oil! Imagine that. By buying oil, it was like doubling down because as the trade gained more popularity and because oil is priced in dollars as the dollar weakened, oil rallied even more.

Other traders just took a piece of this trade by just selling the dollar outright or going long the yen or just buying things that would benefit by the weak dollar scenario like gold, silver, grains, copper and yes, even oil. Yet big changes in Japan and some mixed signals on the yen is causing some adjustment in this carry trade. It is also causing adjustments in the many cross currency/commodity spreads that in part explains why the oil and other commodities may seem to be less sensitive to movements in the dollar as of late.....Read the entire article.

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Dollar Gains on Speculation U.S. Companies Bringing Back Funds

The dollar gained versus the euro and yen on speculation U.S. companies are bringing back earnings on overseas assets before the end of the year. The greenback strengthened against 13 of its 16 major counterparts on prospects U.S. reports tomorrow will show the world’s largest economy is recovering, backing the case for the Federal Reserve to withdraw emergency stimulus measures. The yen fell for the first time in four days versus the dollar after Japanese Prime Minister Yukio Hatoyama unveiled a record budget of 92.3 trillion yen ($1 trillion).

“There seems to be last minute repatriation by U.S. firms before year end,” said Yuji Saito, head of the foreign exchange group in Tokyo at Societe Generale SA. “This is helping to boost the dollar.” The dollar rose to $1.4372 per euro as of 8:30 a.m. in Tokyo from $1.4411 in New York on Dec. 25. The U.S. currency advanced to 91.55 yen from 91.11 yen. The euro traded at 131.57 yen from 131.64 yen.....Read the entire article.

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Oil Pares Weekly Gain as Bernanke Says Fed May Tighten Policy

Crude oil fell in New York, paring its weekly gain, as the dollar climbed after Federal Reserve Chairman Ben S. Bernanke said monetary policy may be tightened once the economic outlook has “improved sufficiently.” Oil traded near $71 a barrel as the U.S. currency rose against the yen and the euro, damping the investment appeal of commodities including gold. Prices rallied 3 percent yesterday after the dollar declined and the number of Americans filing for unemployment benefits dropped.

Bernanke’s remarks have had “a small impact on the immediate market,” said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge in Tokyo. “It shows policy is not decided yet. The trend of the dollar will continue” to give direction to oil prices, he said. Crude oil for November delivery fell as much as 66 cents, or 0.9 percent, to $71.03 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $71.13 at 11:09 a.m. Singapore time. Yesterday, it rose $2.12 to settle at $71.69. Futures are poised.....Read the entire article.