News You Can Use for Monday

A Secret Time Bomb Made of Gold: A little-known fountain of free money called the "gold carry trade" is in danger of drying up. And if it does, then markets from gold to bonds and even stocks can be in for a wild ride. Before even explaining what the gold carry trade entails, let me first say that its demise has been forecast for nearly a decade. In researching this topic, I found articles as far back as 1998 looking for an explosion in gold prices and commensurate damage to other markets, if not the economy. In other words, this is a story that is as old as Methuselah. But with a sinking dollar, soaring commodities, and several diverse technical conditions on the charts, the dynamics are coming together to make the end of the gold carry trade a lot closer to reality than ever before. (Barron's)

Gulf of Mexico storm possible this week
Ingrid is a disorganized system, but may reform later in week. The real news …

The four reliable computer models for forecasting genesis of tropical cyclones have been very busy the past few runs cooking up some nasty storms in the Western Caribbean and Gulf of Mexico for the coming week. Neither the timing nor the location of these hypothetical storms has been consistent. However, the models are insistent enough that something might happen, that there is about a 40% chance we'll see a tropical storm in the Gulf of Mexico by week's end.

British Pound's Overnight Rate Rises the Most Since June on Northern Rock The cost of borrowing in pounds climbed the most since June as Northern Rock Plc depositors queued to withdraw their savings for a third day, heightening concern about the credit drought.

Gold Rises to Near 16-Month High as Run on Northern Rock Enters Third Day Gold rose to near a 16-month high in London as customers lined up across the U.K. for a third day to withdraw funds from branches of Northern Rock Plc after the lender was bailed out by the Bank of England.

Canadian Dollar Dominance Shows Break With Weakening U.S. Economy, Markets Currency traders are concluding that there's nothing the U.S. economy can do that Canada's can't do better. Much better.

Petroleos de Venezuela to Convert Accounts Away From Dollars Into Euros Venezuelan President Hugo Chavez instructed Petroleos de Venezuela SA, the state oil company, to convert its investment accounts from dollars to euros and Asian currencies to reduce risk.

Soybeans Rise to 3-Year High as U.S. Crop Faces Frost Damage in Minnesota Soybean futures jumped to a three- year high, rallying for a seventh day, on concern freezing weather will damage crops. Wheat futures also rose.

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