Hard assets are the likely benefactors of the U.S. sovereign debt downgrade on Friday. U.S. Treasury debt was sent to the minor leagues on Friday by Standard & Poor’s and is now rated AA+.
Joel Smolen, hedge fund manager at Axion Capital in San Rafael, says hard assets like gold, silver and equities of mining and metals companies in countries like Australia and Brazil are the places to be following the U.S. credit downgrade.
Lou Gerken of Gerken Capital in San Francisco says gold is going to $2,000 an ounce, an record. It closed Friday at $1,648 for the August futures contract.
“Maybe over the short run Treasurys will be okay, but if you consider what the government backs in terms of state funding then it’s going to hurt municiaplities a lot down the road. Maybe in the next week or two we won’t see much pain, but over the long term you will see a change in market thinking in bonds. I have a feeling that the J&Js of the world and the IBMs and the Apples are going to have a more attractiveness to bond investors because of the cash they carry,” Smolen says, which makes servicing debt a piece of cake.
http://www.forbes.com/sites/kenrapoza/2011/08/06/hard-assets-the-place-to-be-following-us-credit-downgrade/
In wake of riots, British PM proposes social media ban
(CNN) -- British Prime Minister David Cameron thinks he's found some culprits to blame in the recent riots that have rocked London and other cities -- Facebook and Twitter.
Saying the "free flow of information" can sometimes be a problem, Cameron's government has summoned those two social-networking sites, as well as Research In Motion, makers of the BlackBerry, for a meeting to discuss their roles during the violent outbreaks.