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Platinum fell today, the most in four months on speculation that demand from the auto industry would drop, since that is where it is mostly consumed, while output has stabilized. Palladium also dropped. Platinum closed at $1,630.00, down by $106.00, and Palladium closed at $365.00, down $14.00 as of the NYME close on August 1, 2008.

U.S. auto sales remained at the lowest annual rate in 15 years, in July 2008. That fueled concerns that demand will decline for platinum and palladium for auto-emissions control parts. Production in South Africa, the source of 78 % of the world's supply, has stabilized after power shortages disrupted mines in January. As of August 1, 2008 the production of Platinum was reported at 36,282 ounces.

The rout in the platinum group of metals continues to unfold, a senior analyst said. The automobile manufacturers reports, and a brighter supply outlook out of South Africa continue to present a hurdle to price advances.

Platinum futures for October delivery tumbled $106.00, or 6.1 %, to $1,630.00 an ounce on the New York Mercantile Exchange (NYME), the biggest one day drop since March 7. The most active contract slid 5.9 % this week, the third straight weekly decline.

Palladium futures for September delivery sank $14.00, or 3.2 %, to $365.00 an ounce. The price dropped for a sixth consecutive week, declining 3.1 %. The most active futures fell 17 % last month, the biggest such decline since a 22 % plunge in March.

General Motors, Ford Motor and Toyota Motor Corp.'s U.S. reported declined sales last month, record gasoline prices depressed demand, for trucks and large vehicles, and a slowing economy kept consumers away from dealer lots. Ford Motor reported a 15 % drop from a year earlier, Toyota's sales fell 12 %, and GM posted a 27 % decline.

The Platinum group metals have been hit the strongest as investors believe they have hit their top and want to be in the more liquid gold, where they can get in and get out quickly. With platinum below $1,700 an ounce, it is expected that good industrial buying in South American countries will occur.

Platinum, which gained 36 % this year through June, tumbled 15 % in July, partly because of poor automobile sales. It was the biggest one month drop since December 1988.

Platinum reached a record $2,308.80 on March 4, 2008 partly because of output cuts in South Africa. But, by May, precious metal output, except for gold, rose at a 2.6 % annual pace, according to Statistics in South Africa.

Platinum fell as the dollar rose against the Euro, following a government report that showed U.S. employers eliminated fewer jobs in July than the analysts had forecasted. Some investors sell metals priced in dollars, and that includes platinum and palladium, when the U.S. Currency gains.

The dollar rose 0.6 % against the Euro, heading for its biggest weekly gain since June 13. The dollar traded at $1.5541 per Euro, up 3.1 % from a record low reached on July 15, 2008 against the European currency.

Dollar traders are also anticipating further strength in the currency as conditions in Europe continue to pressure the Euro towards the $1.54 level.

Many firms benefit significantly from either setting up on their own or partnering with a third part to set up a customer financing program for their products. Key benefits are increased sales, cash flow, customer loyalty, etc.

But are there also some risks for the company to be aware of also - Of course there are and let's look at some of those risks.

We would also point out that these risks are in fact the same ones taken on by independent leasing firms also.

Foremost from a risk perspective is that fact the customer financing program will be viewed by the customers as the one and same as your company. Therefore customer service and financing ability are in fact now part of your firm's reputation.

Companies may also find that the borrowing costs to set up a program are in fact higher than their normal business operating costs. Naturally the method in which the finance division is set up also affects the debt levels of your company. No business wants to fail because it took on higher debt in an effort to in fact help their customers!

On a long term basis company lenders might view your firms foray into customer financing as an additional risk factor, which they might try to compensate on by imposing restrictions such as additional covenants, requests for more equity into the firm, etc. The bottom line is simply that setting up a customer financing scenario may in fact affect your own firm's ability to borrow.

If your firm is larger then analysts and firms looking at your firm might in fact be raising issues and perceptions around which business you are actually in, i.e. your products, or the financing of those products. Business owners and financial managers will always want to ensure that ultimately they are sticking to their core business model and philosophies. If your firm becomes too enamored by financing you possibly run the risk of total business failure. There are numerous cases in financial history where firms collapsed because of the shenanigans of the finance division.

We have heard the term in business 'sticking to our knitting', which of course simply means that management needs unique skills to run a business, and those skills are different in financing. Owners and managers related to the customer financing division must have strong skills in financial sales, structuring, and credit... Naturally we are also inferring that additional skilled personnel ultimately must be hired.

No company every wants to look back in hindsight and say that if failed or stumbled because efforts and funds went into financing, as opposed to r&d, marketing, staff, and product growth. Do not let a customer finance program become an obstacle to your ultimate business success

Business owners should ensure that there is good communications between the main operating company and the customer financing division - clear goals and philosophies should be set out re the function of such a customer finance program.

In summary the benefits of offering financing to your customer are very obvious, and proven true by some of the largest and most successful companies in the world - but all you have to do is to do it right! Ensure your firm is aware of the risks and challenges and monitor your customer financing program on an ongoing basis to ensure you are not straying from your core business model.

Penny stock brokers claim they can make you very profitable trades in the penny stock market. They say they will do all the work for you. So now you can just sit back and wait for the money to flow in right? There is only one problem with that theory. You will be waiting forever as no penny stock brokers have your best interest in mind.

You see, penny stock brokers earn a very nice commission when you trade through them. They are also paid a flat fee for there services. They are not at all interested in you making money! They only care about lining their own pockets. I have worked with many penny stock brokers before and can tell you that I never did as well as I do now. All I have ever experienced is penny stock brokers that give me unsound advice that makes them money. So if penny stock brokers will not make you money, how do you do it?

The truth is, you can do it all by yourself with great success! I never made much money at all with penny stock brokers. It was only when I took matters into my own hands that I really started to see a large cash flow come from my investments. So you see, I am my own penny stock broker, and I would not have it any other way! It is really not as hard as you may think to be your own penny stock broker.

What is so great about not dealing with penny stock brokers is that my life is in my own hands. I no longer listen to anyone. I have earned my financial freedom by trading penny stocks and am living my life the way I have always wanted! I simply took my life and did what I wanted with it. No more penny stock brokers for me.

Without the US juggernaut pushing us toward prosperity, the world economy is about to fall into an abyss. Don't let people talk about the rise of Chindia (China and India) and economic decoupling from the US. World growth has been powered by the US Fed dumping money into the financial markets, since 9.11. Just as the Soviets crumbled economically during the end of the cold war, the US is now making the same mistake. This will be the last world economic cycle they drive, the next boom will almost certainly be out of Asia.

If you're into investing, the holiday period is a great time to reflect on the year passed and look at developing some short term financial strategies for the year ahead. While any good investor always has a long term plan quietly working to consolidate their wealth, it's the short term opportunities that can really boost your growth.

Examine the global economy's performance over the last few years and BOOM!- that says it all. Since the central banks poured money into the global markets post 9.11, the world has been awash with money. The resultant excess liquidity made money cheaper and therefore credit easier for both business and personal loans.

Of course there were several factors that came into alignment and ignited the boom. Growth in China, India and Russia lead a resource resurgence, and interest rate cuts by the Fed in the US created an American led economic revival that triggered growth around the world. The US markets are 25% of the global economy- and although some analysts talk of an economic 'decoupling', the truth is that world economic fortunes are still very much dependant on conditions in America- at least for this economic cycle anyway.

So with ample money available on the world bourses there was plenty of money made available for lending. The way these international money markets work is not unfamiliar to those of us with our own loans, except that deals are done on a much larger scale. In the international arena anyone with enough security can acquire millions or billions of dollars in credit at a wholesale interest rate. These borrowers, usually banks, then on-sell the credit as loans or mortgages to businesses and individuals adding a margin to the interest rate that provides them with a profit.

While interest rates are low, the borrower's ability to repay the loan increases, allowing the lender to offer more money. Offering more credit also allows the lender to increase their profit margin. If credit is cheap, available and used wisely, it becomes a marvellous tool that can help you increase your wealth very, very quickly.

If you were to have borrowed money at the very start of the housing boom, you would have not only been able to buy a house cheaply, but you would enjoy a small mortgage at low interest rates- and for some it meant they could buy a house cheaper than they could rent one. But even if you bought at the peak of the housing market early last year, while your loan would much larger, low interest rates kept repayments at a manageable level.

Economic conditions between 2002 and 2007 assisted the growth of credit. Low unemployment, wage increases and on-going low interest rates meant that the banks could continue to issue more and more affordable credit to borrowers. For many home owners, the purchase of big ticket household items and even cars could now be added to the home mortgage.

Correspondingly, many well known financial institutions issued a range of new credit cards. It was now possible to get $50 000 unsecured at rate of 10%! In fact credit was available for anything from margin loans to buy shares with, through to plasma TVs. Credit had never been seen before on a scale like this, and practically any employed person was eligible to join in.

With all this credit available to be spent on all manner of things, the world economy was boosted thereby feeding the system- more credit equalled more spending. You didn't need to have a million dollars to live like a millionaire any more, you just needed to borrow the cash. As long as you could afford the repayments, the millionaire lifestyle was yours today.

Of course, if a borrower had been diligent during this period by not over committing to credit and working hard to reduce their loan currently they will have increased their wealth. The value of the assets acquired will have risen while they have worked to reduce their debt, thereby increasing their equity and eventual returns on their purchase.

The importance of this strategy can not be underestimated. The principal of using a credit to advance your position is a fundamental building block of wealth creation. The most basic of all errors that brings down companies and individuals alike is the accumulation of too much debt. Unfortunately like most things, for one reason or another economic booms can't last for ever. And when the good times end, the lenders need higher returns on their money- so up go interest rates.

Is there anyone out there who hasn't heard the alarm bells ringing since last June? The "credit crunch" is on its way and here comes the pain. If you think things are bad now, just wait, they are going to get worse. Sub-prime mortgage defaults in the US wiping out billions of dollars across the board. Stifled growth, falling employment, and dampened consumer spending are pushing the US economy toward the brink of recession. And rather than let things take their normal course, by letting interest rates rise, the US Fed is subsidising the losses itself, by lowering interest rates. The party is over!

So if you haven't been working hard to pay off your mortgage or loan, now is a good time to start. Or if you're getting nervous now about the future now is equally as a good a time to downsize your home, car, or lifestyle. Sell for what you can at the top of this market and sit on the cash in the meantime. Another 6 months might be too late. While world governments will stave off disaster as long as they can, it's only a matter of time before it all crashes down around us.

All the signs are there. Gold prices are up, institutional investors are running for cover. Anyone with any market savvy is seeking to cut debt and cash up as fast as they can. When the bust comes, interest rates will finally rise and the borrowers that can no longer service their debt will be forced into a sale of assets. Credit will tighten. Money will become expensive and when the sellers outnumber the buyers, demand drops and prices fall. Who can forget the pain of the late 80s and early 90s.

Unmanageable debt is not something you want to be stuck with come 2009. If you are in debt, use this year to get yourself in a sustainable financial situation. Long term, it can only be to your benefit.

You have a wealth of choices in how to buy and sell stocks these days, but you always need a stock broker. Learn how to pick a broker who will give you exactly the service level you want and ensure you don't overpay!

Due to the financial markets deregulation that began in the U.S. in the 1970's and today extends into many countries around the world, investors have more choices of stock brokers than ever before. However, with this wealth of choices comes the responsibility (some would say opportunity!) to choose just the right kind of stock broker to meet your needs.

Let's begin with explaining what a broker does. While you do choose and hire your broker, it's important to remember and understand that they are, at the end of the day, a salesperson. They work for a stock brokerage house who is out to make money for themselves and their sales staff (the brokers!). The broker's job is to carry out your transactions. Brokers are paid by salary, commissions on sales or a mixture of both.

In the U.S., to become a broker one must first pass two licensing exams called Series 7 and Series 63. If they successfully complete these exams, the broker is then allowed to advise you, solicit business from you, and to execute your transactions for you.

Got that? A broker can advise you, try to sell you, and do your trades for you. Now that you know that, it's easy to understand the basic difference between a full service stock broker and discount stock broker. Basically, full service brokers offer you advice and hand holding, whilst the discount folks just execute your trade orders and perhaps try to solicit more business from you.

Full-Service Stock Brokers

Full-service brokers usually offer a wide variety of financial products as well as investment advice and research. They charge higher fees than discount brokers. Full-service firms often offer bonds, derivatives, annuities and insurance in addition to stocks. Full-service stock brokers solicit business from you (e.g., call you up and say 'I think you should consider buying such-and-such stock because...'). Importantly, these stock brokers are mostly paid by commissions. This means he makes money when you buy and sell stocks. But he doesn't make money based on the performance of your portfolio or group of stocks making money for you! So his or her interests are not necessarily very aligned with yours.

Discount Stock Brokers

Discount stock brokerages do not offer any advice or research - they just execute your trade instructions. Because they don't have to hire expensive stock analysts and expensive stock brokers, discounters can charge considerably lower fees thatn full-service brokers. Most good discount houses also offer online computer order entry services. If you can handle ordering a book online from Amazon, you can use these firms online trading web interfaces - they are that easy. If you need to, you can speak with live brokers at these firms - the brokers are paid a salary usually, not commissions, so they are just there to help you, not to encourage you to make lots of trades.

Sound too good to be true? It isn't - you see, discount firms make most of their money by doing business in high volumes, competing mostly on price and the ease & reliability of their service.

A Warning

If you receive a call offering you the chance to buy shares at what is claimed a great price and that you're going to make money quickly and the price might 'go through the roof', beware! This is probably a 'boiler room' sales operation that is contacting you. Boiler rooms are sales operations that fleece the unsuspecting public by pitching them to buy stocks that have little merit - but that the boiler room probably bought earlier at a cheap price. Once they get you and others to buy in, driving the price up, they sell their position and leave you with stock that may well be worthless. Boiler rooms often break many laws and are always closing down one office and opening another.

How to Choose Your Broker

It's essential that you determine the level of service you need. If you aren't willing to do your own homework on choosing investments in the stock market, then a full service broker might be for you. If you plan to mostly buy investments for the long term and hold on to them, then you won't be trading so often and the higher commissions won't matter so much in the big picture. It's not going to sound high tech, but a great way to find a good full-service stock broker is by word-of-mouth recommendations. Ask your friends if they know of a great broker, or know someone who would know a good stock broker.

On the other hand, if you are planning to trade more often, then you really should only be doing this if your investing your own time to carefully research & choose your trades - and, in this case, discount brokers are ideal for you. They give you the lower costs of trades, which matters a lot since you'll be trading more often.

It’s almost a cliche in the investment world: Rising interest rates and higher gold prices aren’t supposed to get along. The reasons are seemingly clear: As interest rates head higher, the widespread perception is that gold—which doesn’t pay any interest—can’t go along for the ride.

And because it can’t go along for the ride—can’t generate those higher payouts—investors are inclined to look elsewhere. That’s what is supposed to happen, anyway. But the funny thing here, in later 2007, is that interest rates are up—the latest cut is the first since July of 2003, in fact—but gold’s been up, too, and has been since 2001.

So much for investment cliches.

It’s Not the First Time, Either

This cliche-busting phenomenon of rising interest rates and rising gold has happened before, of course.
It was back in the 1970s. You remember those days of “oil shock,” Jimmy Carter’s smarmy smile, Iran and Afghanistan? Well, after the overthrow of the Shah in late ’78. Iranian oil, formerly a safe bet for the US, took a drastic production cut from 5.2 million barrels in ’78 to just 1.7 million barrels in ’80.

Oil prices in the US soon rose 30 percent to $9 a barrel in ’78. Inflation followed right on its heels, jumping to a hefty 9 percent. Trying to catch up, the prime rate climbed as well, hitting nearly 12 percent—at the exact same time gold crossed the $200/oz barrier for the first time ever.

Just a year later, oil spiraled higher to $12.64 for another 40 percent jump. And everything else, not unexpectedly, followed: Inflation rose to 11 percent, interest rates hit a jaw-dropping 15.25 by year’s end, and gold crossed first the $300, then the $400 barrier, hitting $455 on its way to averaging $306/oz for the year.

But That Just Set The Stage

For The Thrilling 1980 Climax

In 1980, oil prices reached $21 a barrel due in large part to Iran invading Iraq. Accordingly, that spurred inflation to an “official” 13.58 percent. The prime answered with an almost loan shark 20 percent on April 2nd. And gold? It hovered in the $500 vicinity on that same April 2nd day, after setting the current $850/oz record on January 21st (thereby smashing the $500, $600, $700 and $800 barriers in one fell swoop).

So both gold and interest rates set nearly simultaneous records.

Then came the late 80s.

In ’87 and ’88, interest rates responded to higher oil and inflation by rising from 7.75 to 10.5 percent. Meanwhile gold followed suit, jumping $100 (from $390 to $499).

Interesting picture. Are we now seeing that same picture today?

What’s “Supposed” to Happen Isn’t Happening

What’s supposed to happen today with the price of gold has to do with the difference between interest rates and inflation.

When interest rates are lower than inflation, gold is supposed to be considered a good investment. When rates are significantly higher than inflation, though, borrowing is considered “expensive”— if the rate were 9 percent and inflation were 3.5 percent, for example, the resulting 5.5 yield would be regarded as “high.” Conventional wisdom says it’s during just such times that the price of gold is supposed to go south.

Yet with the prime currently at 8.25 percent and the “core” inflation rate (which is, ridiculously enough, minus the everyday essentials of energy and food) at under a measly 2 percent annual pace, the resulting yield should be high enough to put gold back on its heels. It hasn’t. While gold has been a bit range-bound of late, it shows no signs of heading south.

In fact, as mentioned earlier, it’s been up strongly, impressively, over six years now.

So…either this “rising interest rate theory of avoiding gold” is just a bunch of hooey…or, as in the late 70s, inflation really is a lot higher than its officially being pegged.

When Inflation, Interest Rates AND

Gold Go Up At the Same Time

According to the Federal Reserve Bank of Dallas, “nine of the ten post-World-War-II recessions were preceded by sharply rising oil prices.” And that’s despite any tactics the Fed did or didn’t employ.

Higher interest rates are certainly no panacea. There can be so much weakness inherent in the economy, so much “oil shock,” so much debt, so much doubt, that higher rates simply fail to gain the expected traction (unless it’s to demolish the real estate market).

When the majority of people notice the inability of higher rates to calm the economy, when they witness raging inflation in their everyday purchases —something that isn’t, as in the 70s, reflected by “official government statistics”—then their attention can be drawn to other means of financial security. Like precious metals.
And that can be what’s accounted for gold’s 6-year bull run.

Hopefully, we won’t follow that startling post-World War track record and suffer a serious recession just up ahead. But whether we do or not, your job is to protect your family, yourself and your hard-earned assets in the best way you know how.

Now I realize that rates are on the verge of being cut to save the floundering housing industry. But, whether the interest rates are rising or falling, it’s not hard to see that the kind of financial security most of us seek comes in a gleaming, beautiful form.

Banks and lenders should be making all kinds of loans right now on real property and real estate. After all, the best time to buy a piece of property is at the bottom of the market when they are being sold too cheaply in distressed sales. If the bank lends money on such a piece of property, and it appreciates, even if the consumer or the borrower fails to pay, the bank owns an asset that is worth well above the original purchasing price; the exact opposite scenario of what hurt the banks so badly during the economic crash.

Unfortunately, due to new restrictions and banking rules, real estate lenders have to have more money on hand, and thus, are unable to lend out money right now when they should due to liquidity rules. The Risk Reward scenarios and valuations are completely out of whack, with the banks operational lending criteria. Of course, the banks are not looking at the consumer; they're looking at their own books, and afraid to make any risks right now.

Many banks are also highly exposed to commercial loans that they've made and commercial real estate is not out of the woods yet, and some say that crap is getting ready to hit the proverbial fan as we speak. This is all well known to economic analysts, bankers, and those in the real estate profession.

But what about consumer credit, revolving credit, credit cards, car loans, cash advances, and home equity lines of credit? Why are all these Consumer lenders being so sketchy? Because, they also have new rules, and this jobless recovery is continuing to shed jobs, even as the stock market points towards an expansion period, which has already started.

You would think that if the economy is now getting better that consumer credit would be loosened, as in the very near future credit defaults by consumers will go down drastically. Of course, right now everyone is playing it safe, so safe in fact, they may prevent the strong recovery that everyone is hoping for. Please consider all this.