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Sunday, May 2, 2010

Gold World News Flash

Gold World News Flash

What will happen to currencies if the Euro collapses?

Posted: 02 May 2010 01:00 PM PDT

Let us start off by saying that we do not see the Euro collapsing and being shelved, at least not yet, anyway. No exit process was written into their rules anyway. But it is technically possible, so better to be forewarned. What would prompt such a collapse? The future of the Euro lies in the hands of its members, especially Germany - the richest and strongest member of the Eurozone.


International Forecaster May 2010 (#2) - Gold, Silver, Economy + More

Posted: 02 May 2010 04:00 AM PDT

America and the world face a financial conflagration of immense proportions. The world of fiat money and massive credit is buckling under the pressure of unpayable debt. Each day the safe haven of gold and silver related assets become more attractive. We ask where else do you go for safety? A conflagration is a fire out of control and that is exactly the conditions the world faces today. The inflationary depression has smoldered for 14 months and it will soon accelerate.


The Future of Public Debt

Posted: 02 May 2010 03:05 AM PDT

Everyone and their brother intuitively knows that the current government fiscal deficits in the developed world are unsustainable. They have to be brought under control, but that requires some short-term pain. Today we look at a rather remarkable piece of research from the Bank of International Settlements (BIS) on what the fiscal crisis may morph into in the future, how much pain will be needed, and what will happen if various countries stay on their present courses. Some countries could end up paying north of 20% of GDP just on the interest to serve their debt, within just 30 years.


Roast the PIIGS, and End the Euro Crisis

Posted: 02 May 2010 03:00 AM PDT

The last meltdown was caused by the financial crisis in the United States, which was triggered by the onset of the housing and mortgage crisis. We now have the potential for a full blown currency crisis to unfold. Greek debt has been reduced to junk status and both Spain and Portugal have had their ratings lowered. This is going to make it much harder and more expensive for these 3 nations to borrow money, especially Greece and rightly so.


Where'd the Greek Money Go?

Posted: 02 May 2010 02:00 AM PDT

THERE IS NO last mover advantage in fleeing a debt default. Not least when it's so clearly flagged in advance. So whether or not the Greek government has to restructure its finances – screwing one set of creditors or another – you can't blame Greek savers for moving a chunk of their money out of the country since New Year.


More Bearish Food For Thought

Posted: 02 May 2010 12:05 AM PDT

I do not believe in "pure" technical analysis (i.e. in a vacuum). Knowing that we are in a secular general stock bear market and secular Gold and Gold stock bull market colors my views. A pure chartist may see blue skies from here to Dow 20,000, but a deflationary secular private sector debt collapse plus helicopter Ben and his crew does not equal a new secular general stock bull market in my opinion.


Gold and Silver Prices Jump as Stocks Start Big Sell-Off

Posted: 01 May 2010 10:00 PM PDT

Gold and silver prices rallied sharply yesterday to close the week at $1,179 and $18.69 while US stocks fell by the most since January with the the Dow jones off 158 points at 11,008 and the S&P off 50 points at 1,186.


The gold group, represented by Newmont Mining, was the best-performer for the week

Posted: 01 May 2010 06:19 PM PDT

Index Summary [LIST] [*]The major market indices were down this week. The Dow Jones Industrial Index fell 1.75 percent. The S&P 500 Stock Index lost 2.51 percent, while the Nasdaq Composite finished 2.73 percent lower. [*]Barra Growth underperformed Barra Value as Barra Value finished 2.46 percent lower while Barra Growth lost 2.57 percent. The Russell 2000 closed the week with a loss of 3.41 percent. [*]The Hang Seng Composite finished lower by 0.51 percent, Taiwan was down 0.01 percent, and the Kospi advanced 0.26 percent. [*]The 10-year Treasury bond yield closed at 3.66 percent, down 15 basis points for the week. [/LIST] All American Equity Fund - GBTFX • Holmes Growth Fund - ACBGX • Global MegaTrends Fund - MEGAX Domestic Equity Market The figure above shows the performance of each sector in the S&P 500 Index for the week. All ten sectors were down. The best-performing sector was utilities, down 0.75 percent. Other better-performing sectors ...


John Williams: A Hyper-Inflationary Great Depression Is Coming

Posted: 01 May 2010 06:12 PM PDT

Source: Tim McLaughlin and Karen Roche of The Gold Report 04/30/2010 ShadowStats' John Williams has done his math and believes his numbers tell the truth. He explains why the U.S. is in a depression and why a "Hyper-Inflationary Great Depression" is now unavoidable. John also shares why he selects gold as a metal for asset conversion in this exclusive interview with The Gold Report. The Gold Report: John, last December you stated, "The U.S. economic and systemic crisis of the past of the past two years are just precursors to a great collapse," or what you call a "hyper-inflationary great depression." Is this prediction unique to the U.S., or do you feel that other economies face the same fate? John Williams: The hyper-inflationary portion largely will be unique to the U.S. If the U.S. falls into a great depression, there's no way the rest of the world cannot have some negative economic impact. TGR: How will the United States' decreased economic power impact global...


The Euro Is Screwed

Posted: 01 May 2010 06:09 PM PDT

By Kevin Brekke and David Galland, The Casey Report On April 22, Eurostat, the statistical arm of the European Union, released figures on EU member states’ government deficits and debt for 2006-2009. The European Commission requires member states to report certain data every April. The timing of the report’s release could not be more problematic for Greece, which has been in discussions with the IMF and other EU states over possible bailout assistance. In a note to the report, Eurostat expressed reservations about Greece’s accuracy in its numbers from last year, saying: Eurostat is expressing a reservation on the quality of the data reported by Greece, due to uncertainties on the surplus of social security funds for 2009, on the classification of some public entities and on the recording of off-market swaps. Following completion of the investigations that Eurostat is undertaking on these issues in cooperation with the Greek Statistical Authorities, this...


Some Second-Guessing Going On?

Posted: 01 May 2010 06:02 PM PDT

There seems perhaps to be a little bit of second-guessing going on Friday. Although the Chicago Manufacturing index was stronger-than-expected at 63.8, and although GDP was near-expectations at 3.2% (Personal Consumption was +3.6%) and +0.6% on the PCE deflator, and although the Employment Cost Index recorded a near-expectations +0.6%, the stock market fell (-1.7%) significantly for the second time in a week and the bond market rallied (+15/32nds on TYM0, 3.66%).

This despite the talk, predicted here on Thursday, that the ECB would shortly announce the rescue plan for Greece. Ordinarily, that produces a Friday rally and Monday disappointing selloff, but on Friday the rally did not materialize. Perhaps it was the rumors that the ECB was asking the Fed to renew swap lines, which some people felt implied the ECB expected a possibility of a tight financing environment for European institutions in the near future. I have no information on the rumor other than to observe that a tight financing environment, until we know which institutions are most vulnerable to a Greek default (and others), isn’t a stretch as far as concerns go. If in fact the ECB made such a pre-emptive request, then good for them!


Complete Story »


The Golden Jubilee

Posted: 01 May 2010 06:00 PM PDT

Got Gold Report - COT Flash April 30

Posted: 01 May 2010 05:59 PM PDT

Friday, April 30, 2010 Got Gold Report - COT Flash April 30 COT report issued today, Friday, April 30, 2010 at 15:30. Bottom line: COMEX commercials’ increase short bets for both gold and silver, but not aggressively. Gold +2.4% and the gold LCNS +3.2%. Silver +1.9% and the silver LCNS 3.9%. Details just below. HOUSTON -- First, just to follow up on our coverage of the gold/silver ratio (GSR), we noted that the GSR did indeed snap back lower yesterday (Thursday) as shown in the short-term graph below. On Wednesday the GSR remained above 64 ounces of silver to “buy” one ounce of gold metal. Silver finally “answered” gold’s move higher on Thursday, however, and the GSR came back in to 63.12. We view the snap lower of the GSR as more bullish than bearish short term. As we write this, the GSR looks to be heading for a close similar to yesterday with gold trading near $1,179 and silver in the low $18.60s – or something like 63.20 ...


Nuggets, Flakes and Dust

Posted: 01 May 2010 05:20 PM PDT

Nuggets, Flakes and Dust

I purchased 5 flasks of nuggets, flakes and dust of what I'm lead to believe is equals 5 ounces. I'm now at a cross roads of what to do. My first reaction is to send it off to Midwest for smelting (I've heard good things about them – On a side note, does anyone know if they have an option to have your gold returned in assayed loaf form?) – But as I admire these 5 tiny containers, I see many larger nuggets of interest – I remembered reading somewhere that these may be worth more as is.

Looking for thoughts and comments.

Perhaps Speculators Aren't Really the Cause of Greece's Debt Crisis

Posted: 01 May 2010 05:01 PM PDT

Kid Dynamite submits:
98% of Greek pool owners lied on their taxes. It's true. It's not just some evil speculator hyperbole I made up to sink Greece (note: I have no position in any sort of Greece interests) - it's just one of the real reasons why Greece has a massive solvency problem. From the NY Times:

ATHENS — In the wealthy, northern suburbs of this city, where summer temperatures often hit the high 90s, just 324 residents checked the box on their tax returns admitting that they owned pools.

So tax investigators studied satellite photos of the area — a sprawling collection of expensive villas tucked behind tall gates — and came back with a decidedly different number: 16,974 pools.


Complete Story »


Weighing the Week Ahead: Focusing on the Future

Posted: 01 May 2010 04:55 PM PDT

Jeff Miller submits:

One of the biggest investment challenges is keeping focused on the future. We all know that we cannot change the past, but there is a powerful temptation to use current decisions to justify past mistakes.

The most common market sentiment right now is one of denial. Many sophisticated market observers have hated the rally. It is natural to want to seem smart in writing or on TV, so successful investors have been portrayed as "dumb money."


Complete Story »


Anti-Trust Division of the Department of Justice Will Look Into Silver Manipulation

Posted: 01 May 2010 04:06 PM PDT

Gold made slow, steady gains all through Far East, London and early New York trading. But, at precisely 12:00 noon Eastern time, someone got tired of this slow and steady rise... and put an end to it. The high price tick at noon was $1,183.00 spot... and from there it got sold off about four bucks and then traded sideways into the close of electronic trading at 5:15 p.m. Silver's price action wasn't exciting either... and the metal didn't show any signs of life until shortly after London opened its doors on Friday morning. The high price came shortly before London closed at 4:00 p.m. local time... which was shortly before 11:00 a.m. in New York. The high tick was $18.79 spot... and from there got sold off 15 cents going into the close of trading. Once again the dollar was not a factor in precious metals prices... and if it was, it's not worth mentioning. The precious metals stocks were pretty strong at the beginning of the day... but starting at 12:...


Cut the Partisan Crap ... BOTH the Private Sector AND the Government are to Blame for the Financial Crisis

Posted: 01 May 2010 03:26 PM PDT


→ Washington’s Blog

Partisan GOP hacks say the financial crisis was caused by too much regulation, and government interference in the markets.

But Glass-Steagall was repealed, derivatives were left unregulated, and the regulators were watching porn instead of preventing fraud. Giant banks, hedge funds and other fat cat private players knowingly gamed the market and committed fraud in more ways than can be listed in a single post.

And remember, even the "father of economics" - Adam Smith - didn't believe in completely unfettered free markets.

On the other hand, partisan Democratic party hacks say that bad corporations caused the crisis, and that if more power is given to Summers, Bernanke, Geithner and the other governmental honchos, they'll fix everything.

But Summers, Bernanke, Geithner and the other meatheads largely caused the crisis through their actions. And as Simon Johnson points out, the government created the mega-giants, and they are not the product of free market competition.

As I pointed out in February 2009, government fraud is pervasive:

In case you believe that there are only "a couple of bad apples" in the United States, here is an off-the-top-of-my-head list of corruption by leading pillars of American society:

  • Senior military officials stole approximately $125 billion dollars out of Iraq reconstruction funds, dwarfing Madoff's $50 billion Ponzi scheme (in turn, the looting which is now occurring under the bailout/stimulus programs will far surpass $150 billion)
  • The government-endorsed ratings agencies which were supposed to accurately rate the credit-worthiness of companies and nations committed massive fraud

There are hundreds of similar stories of corruption which have come out recently.

 

But surely government employees would have done something to stop such corruption if had known about it, right?

 

Well, actually:

  • Instead of insisting on accurate books, the government encouraged fraudulent bookkeeping. For example, as of 2006:
    "President George W. Bush has bestowed on his intelligence czar ... broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations."
  • The government knew about mortgage fraud a long time ago. For example, the FBI warned of an "epidemic" of mortgage fraud in 2004. However, the FBI, DOJ and other government agencies then stood down and did nothing. See this and this
These are just some of the many examples of the government aiding and abetting corruption.

A lot has come out since then about Geithner, Bernanke, and other officials. See this, this, this, this, this and this.

Indeed, government employees are mainly using their time in office to feather their own nests, rather than to do anything constructive.

So let's cut the partisan crap.

Both the fat cat players and the government are to blame for the financial crisis, and we need to rein in corruption and fraud in both.

Technical Market Report for May 1, 2010

Posted: 01 May 2010 12:56 PM PDT

'Sell in May and go away' is a saying that has been around as long as I can remember. It appears to be based on the markets behavior during the 2nd year of the Presidential Cycle. It also has been more pronounced during recent times. Read More...



Guest Post: The End Of The Beginning

Posted: 01 May 2010 11:58 AM PDT


Guest Post: Guest Post: The End Of The Beginning, by Oisin Zimmermann

 

AttachmentSize
Greece, The End of the Beginning - Oisin Zimmermann - April 30, 2010.pdf1.18 MB


This posting includes an audio/video/photo media file: Download Now

Gold At New All Time Highs - Again

Posted: 01 May 2010 11:10 AM PDT


On a weekly closing basis, Gold finished Friday at a new all-time nominal high (we missed


Richard Russell's in Cash and Gold: 'No Time to Be Cute'

Posted: 01 May 2010 10:06 AM PDT

prieur du plessis Prieur du Plessis submits:

I often quote Richard Russell, the 85-year-old writer of the Dow Theory Letters, in my blog posts. Although I may not necessarily always agree with his views, they are always stimulating and important to consider when piecing together the financial puzzle.

Here is the latest from the long-timer:


Complete Story »


Greek Tax Avoidance 101: Cover Your Swimming Pool With A Tarp, Fool A Satellite

Posted: 01 May 2010 09:12 AM PDT


No photos or videos of Greek street riots, or burning Athens policemen here. With all the serious discourse over Greek bankruptcy and what not, the general public sometimes ignores the levity of the broader comedy that has brought us here in the first place, i.e. that the Greek government simply sucks at collecting taxes. And no matter how many decrees from above come, this will not change. Case in point: the Guardian reports about the latest tax collection, and immediate ensuing tax avoidance scheme implemented by the Greek government and the Greek wealthy, essentially includes the usage of Google Earth to track those who have swimming pools, cross indexing it with tax collections by address, and catching perpetrators. The loophole - green tarps to fool Google. In other words, good luck IMF.

Vangelis Vasilopoulos is the chief engineer for a company which builds swimming pools in the wealthy northern suburbs of Athens, home to ship-owners and tycoons like Spyros Latsis, one of the richest men in the world, who hosts Prince Charles on his travels to Greece. Industrialist Theodore Angelopoulos and his wife Gianna, who led the organising committee for the Athens Olympic Games (only six years ago, when Greece was heralded a "little nation miracle") are installed there too, as is Mr Papandreou himself.

Mr Vasilopoulos says his company has been "inundated with calls" from residents of such elite residential neighbourhoods as to how to camouflage their swimming pools. At first blush, the requests seem bizarre.

In fact, they stem from the revelation that the Greek finance ministry is using Google Earth software to track down the owners of the pools, which tax inspectors consider an indicator of wealth, and which have often been built illegally.

"There are therefore two reasons to hide one's swimming pool," said a pool-owner who confessed guilt on both counts and, not surprisingly, asked not to be named.

Fortunately for him, however, there is a ingenious solution.

"The formula is simple," said Mr Vasilopoulos. "All you need is a green-coloured cover and then the pool cannot be spotted from above. But if the water is visible, or the netting or cover is blue, then you've had it".

Although even cat and mouse games may be coming to an end.

Despite such inventiveness, even the most determined tax-dodger recognises that a new era is at hand. And for a country which prides itself on being the seat of European civilisation, a nation which claims to have exported the continent's values of democracy, the prospect of having a different way of life dictated to it is a devastating and humiliating reversal of fortune.

Alas for the Greek, and all their "Club Med" buddies, the cultural de-evolution is on. And sooner or later it is coming to the U.S.

In the meantime, here is a sampling of a "hornets nest" of potential tax evaders in one of Athens wealthiest neighborhoods. And an investent idea as a bonus: go long all Greenwich, CT green tarp-makers.

Gold Bullion Advances in All Currencies

Posted: 01 May 2010 09:10 AM PDT

prieur du plessis Prieur du Plessis submits:

The gold price is not only making headway in U.S. dollar terms, but also in most major (and minor) currencies as illustrated by the table and graph below. Bullion veterans will recognize this phenomenon as a manifestation of solid investment demand (and a vote of no confidence in fiat paper per se).

The picture and the numbers tell the full story. (Click to enlarge)


Complete Story »


Today’s Most Important Price Points in Gold

Posted: 01 May 2010 08:02 AM PDT

By Bill Downey, GoldTrends

Ever since the price high of 1227 in December, gold has been in a trading range. The most recent rally has brought gold to the upper ceiling of that trading range and the question now is whether this move will propel gold higher and above the trading range, whether we in for more sideways action or a seasonal correction.

To better understand where gold currently stands in this "The 21st Century Gold Bull Market", a look at the entire bull market to date will give us a good understanding and appreciation for where gold finds itself today. Let's look at three views.

We will begin with a five month perspective of gold.

This view demonstrates that gold has remained strong even during a correction.

For five months gold has been going sideways and has yet to establish a downtrend. The three blue dots at the bottom of the chart suggest that gold has potentially formed a strong base from which to attempt a continuation of the current rally.

The recent price pullback to the orange downtrend line, while remaining above the support of the blue and red 34 and 13 day moving averages, is a second indication that bodes well for a continuation of this rally. As long as price holds above this recent area the most likely move now is to the white channel line at 117 in GLD (1200 in Gold). And there is a potential for further price appreciation should gold move above that white trend line.

There is one observation about this latest rise that is different than the corrective phases in January and March. And that is the blue 34 day moving average is above the red 13 day moving average. This momentum strength tends to favor a bullish outcome.

Wednesday's GLD price low on the daily bar (113.63) was at the same spot as the price high of January 11th. This is significant because gold is at the point where the bears either hold price in place or the bulls will run price up to 117 (1200 in gold).

As the closing price for the month of April will be decided this Friday, there is a lot of incentive for both sides to try to control price for the next couple days. I believe this is the most important price test for gold so far this year.

In order to better understand just how important current price is on the first chart, we need to now take a look at this second chart below.

The Winter/Spring Fractal

This chart perspective is over a three year period. The highlighted areas show the winter correction as well as the spring rallies of 2008 and 2009. Notice how similar the price patterns are.

In each previous year, price made it above the secondary highs but failed to move to new highs immediately. In 2008 it turned out to be the price peak before the crash. In 2009 it turned out to be a high point followed by a five week correction before the big rally of 2009 took off.

The price chart tells us that winter corrections have a tendency to last about 9 weeks and that a spring rally then develops. On average (but not always) the spring rally is where a price peak is likely to develop.

While price could continue higher here, and I think that will be the likely outcome, one should be on the lookout for any evidence that suggests a price high for this spring rally. So far there is none, but price is just arriving at the key price point for which we need to watch carefully. So what do we look for?

The first clue that a potential peak could be in place would be the failure of gold to exceed the 1185-1192 area followed by a pullback below the lows of the last week or the last two weeks. That would be a caution flag. As long as price remains above the lows we've established over the past few weeks – the 1125 -1135 area – the potential for a further move higher will still be in play.

In order to better understand just how important price is on the second chart above, let's now take a look at the third chart which is below.

The third chart looks at a major portion of the 21st Century Gold Bull Market and it is an impressive sight. We can see from this chart that the white channel line we saw on the first chart earlier is actually a 5 year resistance line.

And we note there have only been four visits ever to this upper resistance line. This line represents the height of momentum of the entire bull market to date. It is a major resistance area. Our current bumping up against this line goes a long ways towards explaining why gold has been consolidating sideways for the past 5 months.

From this view we can see that gold is coiling up to make another attempt at this major resistance line as it did in 2008.

Compare the 2008 area on the chart with where we are today. Notice how uncanny the similarities are.

The probe above the channel line during 2006 produced a pullback and then a subsequent rally back to the white channel line. The current pattern is almost exact. It would only take one more push up to reach the line.

If we get a solid move above the white line, the upper green momentum channel line would become the next area of resistance. In this scenario, gold will literally go far higher than 1200.

What does this longer term timeframe of this chart tell us?

Well, it tells us that from past price action we find ourselves in an area now that has usually begun a good sized correction. Not that it will happen this time, or that it must happen. But this has been true in the past.

We can see the effect of the white upper resistance line in 2006, 2008 and now in 2010. This resistance line has not ended the bull market but it has certainly inspired corrective setbacks in price.

Could it be different this time? Were the circumstances at the previous peaks different from today?

Debt correlation

The first time gold reached this resistance area was in 2008 on the day that Lehman Brothers went bankrupt. And, we know that a subsequent market crash took place four months later.

The next time we hit the white line was in December 2009. That high in gold was only ONE WEEK after the Dubai debt announcement. That incident sent gold into a four month consolidation period. And now we have had a subsequent rally back up that has brought up back up to the white channel line.

I couldn't help but observe that this time the bankruptcy headlines are the sovereign nations of Europe. Once again gold is in the same position as the previous times when a debt crisis flared up. It would seem the stakes are growing. The question we would

ask is should we expect the same reaction from gold as in the past (i.e. gold corrects lower)? Or should we expect gold to escalate higher?

Let's look at one more chart.

The long term chart of gold below shows that price has arrived at the final resistance area of the 21st Century Gold Bull Market. The white and red upper channel lines represent resistance areas that, if exceeded, could very well provide the exact spot where gold will accelerate much higher. Likewise, if this resistance area is not exceeded, this would represent the final technical stopping point for gold's advance.

Notice how gold is coiled to the very brim of the upper most longest and oldest channel lines of the entire bull market. There is no other place for price to go. It must make a trend decision soon. That decision will likely determine whether price will continue to escalate at an even faster rate than we have seen in the past 10 years or whether gold is about to take a breather.

The red major resistance line is a 17 year old trend line drawn off the 1993 price high at 400 dollars per ounce. We can see how this red trend line is meeting up with the upper white channel line we observed on the earlier charts at the exact same time that price is reaching the potential zenith of this move.

There is a lower white line under price in this chart that is drawn off of the 2008 deflation crash low. This second white line has now reached and is touching the upper 17 year trend line. In between both of these two white lines lodged up into this upper boundary is PRICE.

From this view we can now see just how important our current price zone is and why gold has been consolidating for the past 4 or 5 months.


Here is another view on the weekly chart below.


Summary:

Gold has arrived at what is most likely its most important turning point of not only this year, but perhaps of its entire bull market. We can see now just how important the 1175-1225 area is for gold bullion. We can infer that gold is at the greatest risk/reward price zone of the entire bull market. The resistance lines meeting our current price point (or just above it) is where every major price high for gold has appeared in the past 10 years.

Can gold go higher from here? Is it different this time?

Yes, it can go higher.

If gold does break out above this major resistance zone, the odds would increase the probability that a projection of 1600-2000, or even higher, could become a reality.

If the past is to repeat then gold is nearing a correction into the middle portion of this year. Admittedly, this is what usually occurs at this time of year.

But with the convergence of several short and long term support/resistance lines at today's price point, I have a feeling gold may surprise us with a break from past history. We will know this to be the case by the same way we always know. And that is by observing the price action.

If gold explodes higher from here, a new momentum channel will be formed. The most likely scenario will be the green channel lines labeled Momentum on the third chart would become new resistance.

And, should gold close below the lower white trend line on the final chart, then the potential for gold to reach the 980-1000 area this year will gain credibility.

The only thing that has affected gold in this bull market was the debt crisis of 2008. Since we are having the first throws of the sovereign debt crisis now, it would be prudent to keep a close eye on gold at this most important area.

Price lows for the year usually occur in the July/August time period. Not always, but more so than not. The metals have risen since February 5th. The potential for a price peak near our current price level cannot be discounted.

But until price stops going higher, we will respect this rally. If we falter near here we will respect historical precedence and look for a pullback into summer by calling an end to this spring rally.

We are now at a critical juncture in gold's bull market. At www.GoldTrends.net we monitor the price pattern on an hourly, daily, weekly and monthly chart basis. And we offer extensive commentary on what it all means, along with support and resistance levels in advance of each day's trade. If you would like to join us for the month of May and follow along with a free pass, send us an email. We'd like for you to join us.

May you all prosper,

Bill Downey

Bill Downey
http://www.goldtrends.net/

Goldtrends1@gmail.com

Bill Downey is an independent investor/ trader involved with the study of the Gold and Silver markets since the mid 1980s. He writes articles for public distribution for other websites and well as his own website at http://www.goldtrends.net/ . He has written articles for Futures magazine as well.

Copyright © 2010 Bill Downey



Price suppression may end by itself, but not as fast

Posted: 01 May 2010 07:38 AM PDT

2:49p ET Saturday, May 1, 2010

Dear Friend of GATA and Gold (and Silver):

Alerted by our friend F.R. to yesterday's GATA Dispatch decrying the abuse of financial letter writer Marc Faber by people urging support of GATA (http://www.gata.org/node/8592), Faber has sent GATA a brief statement acknowledging suppression of gold and silver prices:

"My position is very simple," Faber writes. "I am grateful that precious metal prices have been manipulated down, so it gave me and my readers the opportunity to buy gold and silver at artificially depressed prices for the last 10 years. Eventually, if GATA is right, prices will explode on the upside."

(For information about Faber's letter, the Gloom, Boom, & Doom Report, please visit http://www.gloomboomdoom.com.)

GATA's officers also are glad to have gotten into the precious metals many years ago. But some people carry their acknowledgement of precious metals price manipulation a little too far -- carry it to acceptance and even indifference if not approval.

GATA first may have run into such attitudes with financial letter writer Dennis Gartman (http://www.thegartmanletter.com), who, while not quite acknowledging gold and silver price manipulation then (he since has come a lot closer), advised some of GATA's officers during the Vancouver conference a few years ago to consider it just a great opportunity to make money.

Concurring with Gartman, the other day our friend Mike Maloney, a metals dealer and market analyst, remarked of the manipulation of the precious metals market, "Let them manipulate it as long as they can," because the longer the manipulation lasts, the higher metals prices will go when the free market defeats the manipulation:

http://goldsilver.com/newsletters/newsID/7901/

And this month Vedant Mimani and Pratik Sharma of Atyant Capital Partners in Boca Raton, Florida, (http://atyantcapital.com/) produced a long report concluding, on its last page:

"The gold market is a manipulated market. It has been since the beginning of governments. Accept this fact and learn how to trade the market instead of complaining about it."

You can find the Atyant Capital report here:

http://www.scribd.com/doc/30714154/Final-Why-George-Soros-and-John-Pauls...

GATA has a few problems with such attitudes.

First, time is money. The eventual establishment of free markets in the precious metals will be little consolation to those precious metals investors who don't live long enough to see it happen. Many such investors have died since the manipulation became especially heavy-handed around 1995. They were profoundly cheated and there can be no justice for them. Other precious metals investors may not live very long after the manipulation ends. Unless they can find a way to take their winnings with them, they will have been profoundly cheated too.

Second, while market forces may overwhelm the manipulation eventually, the end of the manipulation can be hastened by education and agitation. That is what GATA was chartered to undertake, not to sit around smugly and wait for supposed nature to take its course.

Third, while there is one great economic certainty -- that Western currencies will be substantially devalued, Western central banking having been invented precisely to devalue the currency -- there is also one great economic uncertainty -- how, upon that substantial devaluation, governments will treat the private ownership of the precious metals. Precious metals in possession may have no counterparty risk, but they never will be able to escape political risk. Confiscation or disproportionate new capital gains taxes could take a lot of the fun out of owning them and mining shares, and even precious metals investors who still have long lives ahead of them when the price suppression ends could find themselves cheated of the rewards that were due to them years earlier while the suppression and different rules of ownership were still in force.

And fourth, regardless of everything else, the manipulation of precious metals prices is a cosmic deception and fraud, and the great enabler of all sorts of vast evils -- from what U.S. Rep. Ron Paul has called "the welfare/warfare state" to the expropriation and grinding down of the working class and the developing world by the financial class, a vile national and class imperialism -- in the here and now. People are suffering and even dying every day all over the world because of this fraud, and no eventual profit to gold and silver investors can ever undo that.

The people behind GATA would like to make money as much as anyone else, and we would not like to be forced to choose between making money or doing some good in the world. We are not monks or hermits -- we enjoy good lives -- and some of us have families to support. To us the ideal has seemed to be to try to prosper in the course of doing some good. If we could blow up the manipulation today, this very instant, even if waiting a week or a month or a year might profit us more, we'd be obliged to blow it up right now. If we ever have such an opportunity, we will seize it.

In the meantime we make progress every day. Even cynical urgings like those from Atyant Capital -- just make money off the manipulation and stop complaining about it -- advance our progress, because they spread the word and show that increasingly the manipulation is taken for granted in the most informed circles. The recent news shows that the bad guys are worried, possibly even on the run already. So:

... Say not the struggle naught availeth,
... The labor and the wounds are vain,
... The enemy faints not, nor faileth,
... And as things have been they remain.

Things are changing, and the more we all do, the faster they'll change.

CHRIS POWELL, Secretrary/Treasurer
Gold Anti-Trust Action Committee Inc.


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Silver Phoenix Resources Inc. [CNSX: SP] has announced a non-brokered private placement offering to raise up to $2 million by issuance of up to 4 million flow-through units at a price of $0.50 per unit. Non-flow-through common shares are being offered on the same terms to interested subscribers.

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Following a comprehensive field program in 1991, a structural re-interpretation of the complex folds hosting the King fissure deposit resulted in a major increase in potential mineralization to 20 million tonnes of 7.5 percent lead, 7.5 percent zinc, and 100 g/t silver [Laird and Clark, 1991]. The estimated tonnage of the light rare earth and niobium-bearing extrusive carbonatite unit is on the order of 33,750,000 tonnes, with no ore grade currently established. This historical estimate predates National Instrument 43-101 legislation.

Interested parties can contact:

William J. Murray, President and CEO
Silver Phoenix Resources Inc.
Box 134 / 4631 75th Ave. NE
Canoe, British Columbia, V0E 1K0 Canada
250-832-0336
bmurray@sunwave.net
www.silverphoenixresources.com

For more information about the River Jordan Property, please visit:

http://public.iwork.com/document/?a=p1047687515&d=River_Jordan_Property....


Support GATA by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:

http://www.goldrush21.com/

* * *

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

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To contribute to GATA, please visit:

http://www.gata.org/node/16


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International Forecaster May 2010 (#1) – Gold, Silver, Economy + More

Posted: 01 May 2010 07:34 AM PDT

By Bob Chapman, The International Forecaster

US MARKETS

America and the world face a financial conflagration of immense proportions. The world of fiat money and massive credit is buckling under the pressure of unpayable debt. Each day the safe haven of gold and silver related assets become more attractive. We ask where else do you go for safety? A conflagration is a fire out of control and that is exactly the conditions the world faces today. The inflationary depression has smoldered for 14 months and it will soon accelerate.

For the last 15 years the world has lived far beyond its means especially the US, UK and Europe and as we all know that cannot continue indefinitely. The federal government continues to hire when it should be firing. Having lost 80% of our industrial base we struggle in a service economy that cannot service 300 million plus people, never mind supply exports to offset the cost of imports that we no longer manufacture. We now supply indefinite unemployment benefits, which in reality cannot go on forever. The fiscal debt spirals ever higher and the Fed creates money and credit with no end in sight, which devalues the dollar. Taxation on individuals and businesses continues relentlessly higher. This is the way of corporatist fascism. This is now the way of America.

Officially the destruction of America began on August 15, 1971 when the US abandoned the gold standard. The Council on Foreign Relations said years ago, that 2012 would be the year for the implementation of world government.

In Europe we see the manifestations of years of reckless spending in Greece., a nation that will have to be bailed out by the IMF and other European countries, especially by Germany that holds much of the worthless bonds issued by Greece. Greek bonds are now yielding 17%. Such a premium will not save the economy. The debt service is unpayable. Greece should leave the euro zone; reissue the drachma and default, now. Their position is untenable. We said this on Athens International, French International, BBC worldwide and Deutsch Welle radio a few weeks ago. The Greeks certainly are not blameless, but 80% of the blame lies with the bankers. The outcome is Inevitable, whether it's now or 1-1/2 years from now. These problems affect all euro zone nations and all will suffer accordingly. For the time being most of the damage to the euro is over, but in time the euro will break up, probably in the next two years. As a result official EU unemployment will hit 14%.

We do not believe the powers that be want Greece to bite the dust just yet, as we pointed out previously. We believe they envision a simultaneous collapse of many nations and multilateral devaluation and debt default. This is their style. This way they believe they can control things and cover up one of the biggest transfers of wealth and power in history. The elitists expect to then usher in world government, as they create another world war.

Those who recognize what the elitist plays are can safeguard their assets and perhaps become very wealthy in that process. Those who ignore the signs and warnings are doomed to lose most everything. Political solutions won't work now and they won't work later.

The life of the euro zone and the EU, which consistently have been wrong, at least for now, are trying to make us believe all is well. All is not well. We are told over and over again the crisis won't spread and it will spread and is spreading. Borrowing costs are already rising in Portugal, Spain, and Germany and throughout Europe.

The euro zone is in jeopardy as Greek contagion affects Portugal and Spain. Sovereign debt is the new subprime paper. We could perhaps see a domino effect as bond yields use in the weaker countries and eventually spread to the stronger European countries, and to the UK and US. The problem will eventually affect the entire world if it rolls out that way. Such a situation could cause a crisis of confidence, which would most certainly drive gold and silver prices higher. Bond markets would already have been affected and world stock markets would be falling. We are perhaps seeing that already with a topping in the US and European equities suffering their largest losses this year. In Europe, Greek bond losses are onerous. A bailout of Greece will probably come and their debt rescheduled. If the bailout doesn't come watch out. The fallout of a Greek default, the exit from the euro, and the reintroduction of the drachma could force the other 18 nations in trouble to the edge if not into insolvency. These ideas are what we expressed this week in an interview with Greece's largest newspaper. In addition we could see the dumping of PIIGS bonds and stocks. This could cause major losses and freeze markets. It could also lead to the demise of the euro zone and deeply damage the EU. Another unexpected outcome could be the withdrawal of Britain from the EU followed by the imposition of tariffs on goods and services by the UK, which would be followed by the US.

Another aspect to the Greek problem is that rating cuts are going to force Greek banks to post more collateral, which would force them into a liquidity trap and that could spread the contagion through the global financial system. If more collateral is not forthcoming the banks' bonds would be downgraded. This also could cause Greek banks to sell assets, putting more pressure on an already weak system. Is it no wonder that gold and silver prices are rising?

In spite of all this the euro zone has the fiscal capacity to backstop banks within the region and to support the PIIGS. The question is will they? Germany seems to be in no hurry to do so. Greece needs loans or to float bonds in the amount of $350 billion over the next five years, which is a tall order. The present approach is to solve this year's problems of some $80 billion, but bondholders are looking out five years. They are saying to themselves what is going to happen next year and up to five years from now. One good thing is if the Greeks stay in the euro zone they cannot monetize debt away and ruin bond values. Seventy percent of Greeks oppose dealing with the IMF, or accepting loans from the EU. We ask then what do they propose? This is why many investors are throwing their hands in the air and opting to buy gold throughout Europe. No matter which way Greece takes gold is really the only good hedge against a devaluing euro. Gold is not only a hedge against the euro, but also against commodity inflation. A recovery, if it did take place in Europe, would cause higher inflation as well. Causing conflict on the inflation issue is the ECB's opinion that there is no inflation, when even officially there is. Germany had best not press Greece too hard, because if Greece leaves the euro it would rock global markets. We believe a deal will be done and that will temporarily solve the problem, perhaps for 1 or 1-1/2 years. That is when all the financial derelicts will be taken down together.

We in switching gears must look at the sovereign debt problems of many nations, the US as well. We see a fierce loss of integrity in US markets, due to the play unfolding in the US House and Senate via inquiry and actions by the SEC against Goldman Sachs and others. The US is not Greece, but it has many similar problems. These terrible events unfolding have to eventually reflect lower dollar values as well as a lower market, higher interest rates and higher gold and silver prices. It is apparent and transparent that Goldman has been charged civilly by the SEC in order to protect the firm and its employees from criminal charges, to divert attention away from the passage of a new financial regulatory bill that would make the Fed a despotic power and to make the administration and the Democrats look good going into the November election. Then there is the ongoing mortgage fallout and all the Fed and Treasury giveaways. Making matters worse is the refusal to answer important questions by the Fed for spurious reasons. Then worse yet the SEC told Goldman they were going to be charged two weeks before the announcement was made.

Sixty percent of the toxic waste was sold in Europe, mostly to Germans and they are not happy about that. We cannot understand why the Germans did not sue 2-1/2 years ago, and still haven't.

Was the SEC civil fraud suit designed to fail? That may be so, but many other suits will follow. This could be a complete set up in the sense that the planned outcome has already been predetermined. A big fine, restitution, and GS is off the hook.

We are hearing rumors that officers of GS in different parts of the world may be arrested as a criminal organization. That in spite of the possibility that we suspect that plea-bargaining will probably take place quickly.

Goldman Sachs, JPMorgan Chase, Citigroup, Deutsche Bank and HSBC have been an integral part of the manipulation of markets, by the "Working Group on Financial Markets.

Goldman's actions were so bad exposure had to come. Why it didn't come earlier is a great surprise to us. Hopefully other bankers and brokerage houses will be exposed and punished as well and be put out of business along with the rating companies. Goldman is just the tip of the iceberg.

The problems in Europe, the UK and US are going to be with us for a long time to come. In time the government's suppression of the gold price will become common knowledge. The LBMA, Comex, GLD and SLV will eventually collapse under the leverage they have used and prices will be allowed to reach free market levels. This is the last inexpensive opportunity to protect your assets by owning gold and silver related assets. Do so now to stay out of harms way.

– This was a section from the most recent issue of the International Forecaster. You can read the full 22 page issue by using the information below to subscribe.

THE INTERNATIONAL FORECASTER
Saturday, May 1, 2010
042810(1) IF

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Greece Has Hired Lazard For Restructuring Advice

Posted: 01 May 2010 06:48 AM PDT


EuroWeek magazine reports that Greece has hired Lazard in an advisory capacity: it is not a stretch to assume that this is in connection with a potential, and some say inevitable, bankruptcy... unless the country is really serious about procuring a stalking horse distressed M&A bidder for Santorini. We also note that DebtWire has yet to report on this development: looks like the FT is really starting to slip. It would not be a stretch to see why Greece and Lazard are on good terms: after Greece basically put all banks on the kleptocrata non grata list, the pseudo-French company seems like a legitimated candidate (not to mention that France will fail first should Greece default). Additionally, in March 2009 the firm advised the Hellenic Government on the sale of various Olympic Airlines assets to Marfin. Greece is also no stranger to sovereign reorg, having worked with Nicaragua, Ecuador and Cote d'Ivoire on various restructuring assignments. However, while those deals were a walk in the park, Jim Millstein and and new (and critical) addition Felix Rohatyn will find Greece, where 80% of the population does not want a bailout and in fact is rooting for a default, a much tougher nut to crack.

Then again, the recent retention of Rohatyn just when Greece was imploding may have been clutch for Lazard. As EuroWeek reports:

If Lazard does have the big mandate, then the bank’s rehiring of advisory veteran Felix Rohatyn in February is a masterstroke. Rohatyn was the man behind the restructuring of New York’s public debt in the 1970s and since returning to Lazard he has been a vocal advocate of creating a regional IMF to deal with Europe’s sovereign debt problems. The recruitment of Rohatyn is the most obvious example of banks ramping up their expertise and coverage of national governments, which have become big users of investment banks since the crisis first started in 2007.

The biggest loser if the Lazard news is confirmed (incidentally the firm has not commented either way yet), is Credit Suissde:

Many government mandates involve dozens of bankers working across a diverse range of products — "a complicated matrix of country, capital markets and advisory and the make-up of the team changes, according to one banker at a leading US bank — and they say that governments are among the toughest clients to manage, because they operate across different departments with often conflicting goals. But they have become crucial to banks since the crisis, and the transfer of risk from the private to the public sector last year means they will only become more important.

Credit Suisse is one bank to set up a formal network focused on government work across its investment bank, launching a global government segment (GSS) last year to "promote a bank-wide focus on government clients across products and geographies". Paul Tregidgo, a vice chairman of the bank’s DCM operations, who co-ordinates the group has the job within GSS to pull together expertise from across the bank when required and as a 25 year veteran of the firm he is ideally placed to locate and deploy that expertise. The emphasis of the effort, as with those of its rivals, is on flexibility, allowing banks to draft in the most relevant banker for any given project or country.

Credit Suisse for instance has assembled a formidable team that advises the UK Treasury, led by James Leigh-Pemberton, that includes Sebastian Grigg, the firm’s head of UK investment banking, Euan Ferguson, co-head of European FIG, and Chris Williams, whom it hired from Citigroup in 2008. Williams, who worked with Grigg at Goldman Sachs, is regarded as one of the ‘turn-to’ bankers for the UK Treasury. Other teams are equally stocked with heavyweights of banking and capital markets. Deutsche Bank’s Treasury team comprises Ivor Dunbar, head of global capital markets, Anshu Jain, who runs trading, and Tadhg Flood, European head of the firm’s banking business who was named on the World Economic Forum’s 2010 list of young global leaders.

Another big loser from the upcoming avalanche of sovereign defaults, it stands without mention, is Goldman Sachs:

One bank that has not enjoyed its usual flurry of state-sponsored mandates is Goldman Sachs, formerly a stalwart of government advisory work. Despite its strong links to governments across the world, it has played a minor role in the banking bail-outs. The firm may have made the decision that fees are more important but its low profile has benefited rivals.,

"Goldman used to be the turn-to adviser on big, high profile mandates in the UK and elsewhere. It’s not now. Credit Suisse and others have stolen its thunder," said one banker at a rival US firm.

Goldman’s travails arising from the Securities and Exchange Commission’s fraud charges will not help its cause with governments, irrespective of whether it has done anything illegal. As governments wrestle with spiralling deficits and the risk of contagion, while trying to appease taxpayers, appointing Goldman could be seen as showing a lack of judgement. Chief executives might still, as the mantra goes, appoint Goldman because they know it is the best but government’s may have a different view.

If Goldman misses out on the current wave of government mandates, its investment banking team may find itself struggling for relevance while others sacrifice high fees in favour of building their businesses.

We won't cry for Goldman - after all we are convinced that its prop desk has already reaped mad profits from its directional bets on Greek spreads, while its flow and Corr trading desk has likely traded tens of billions in Greek CDS with Paulson and all these other funds who attended the Goldman organized Greece "reconnaisance' mission. Plus, due to conflicts of interest (yes, when too glaringly obvious, even Goldman would acknowledge them), should the firm get caught up in advising various European nations, it would be prevented from trading respective cash and CDS product, expect on an unsolicited basis... Which as we all know kills sales people and trader margins... Which hurts almost as much as when they lose their credibility when pitching Timberwold, GSAMP and Hudson CDOs to clients only to see the price plunge from 95 to 15 in a matter of weeks.

Yet the take home here is that Greece has finally acknowledged that a Chapter [11|7] may be inevitable. Just as AIG stock plunged about 25% when David Faber broke that the firm had hired Weil Gotschal for bankruptcy work in March 2009 (and which associated advisory presentation by Morgan Stanley) we are still waiting for as per our FOIA with the FRBNY, we anticipate that this news will make an the need for an ironclad IMF agreement emerging over the next 24 hours to unavoidable, absent Greek bonds hitting 30on Monday. 


The Silver Price Spiral, Part II: paper “inventories”

Posted: 01 May 2010 06:15 AM PDT

By Jeff Nielson, Bullion Bulls Canada

In Part I of this series, I suggested to investors that the price of silver will explode in an upward spiral – reaching levels even unimaginable to most silver bulls. A three-digit price for silver is guaranteed, while a four-digit price cannot be completely ruled out.

This price spiral will be caused by a combination of supply and demand dynamics. In the second part of this three-part series, I will focus upon the supply-side dynamics, and point out how recent trends are reaffirming my earlier analysis in this area. To do so, I will refer to a couple of recent articles, which on their surface, seem almost contradictory.

The first of these pieces is another misguided analysis of bullion-ETF's (and in this case, SLV) by precious metals commentator, Adam Hamilton. Regular readers will recall that I have previously singled-out Hamilton, for being both outspoken and wrong about (so-called) "bullion-ETF's" ("Even Gold Experts Fooled by Bullion-ETF's").

With apologies to Mr. Hamilton, it is through pointing out the errors in his analysis that the truth becomes plain to see – since his own analysis treats the funds as totally legitimate investments. Given this mistaken assumption, here is his analysis of the "strange" occurrences in the silver market during the month of March.

Specifically, Hamilton noted that holdings in SLV have "plunged rather sharply" since the beginning of March. He then observed that contrary to this sudden liquidation, the price of silver had risen, not fallen as SLV units were liquidated. Given his assumption of legitimacy with this fraud-fund, it is only natural that Hamilton would have been surprised by this development – as supply/demand fundamentals appear to dictate that the price of silver should have fallen as a consequence of the sudden liquidation of SLV units.

In fact, according to the real supply/demand fundamentals of the silver market, the market reacted exactly as I predicted it would to a liquidation of SLV units. Here is how these "fundamentals" are currently operating.

More articles from Bullion Bulls Canada….

Stock Market Investing: Why the Majority Must Lose

Posted: 01 May 2010 06:15 AM PDT

By The Mogambo Guru

I was sitting there, cool and comfy, wearing my new Mogambo Crisis Outfit (MCO), consisting of a pair of snazzy red cowboy boots, a combat helmet, a bullet-proof vest and a ballerina tutu (which, as an aside, does a lousy job of concealing a pistol in a shoulder holster), each piece of my dazzling and daring fashion ensemble carefully chosen for either maximum protection or maximum confusion to the enemy, which, at last count, is apparently everybody.

I was idly thinking that maybe a nice tiara would really add that "little extra something" to my finery when I was interrupted in my meditations by Chris Mayer here at The Daily Reckoning saying, "Ken Heebner's CGM Focus Fund was the best US stock fund of the past decade. It rose 18% a year, beating its nearest rival by more than three percentage points. Yet according to research by Morningstar, the typical investor in the fund lost 11% annually! How can that happen?"

Naturally, I figured that he was tossing me an easy question to which I already knew the answer; the majority of investors must, by necessity, lose money so that a minority of investors can make a small profit (and the financial services industry can screw us with charges and fees and the government tax everything involved).

I mean, it's simple arithmetic that a million guys putting $100 into the market can't each take $200 out!

And besides, this ugly "loss of 11%" result is only the dismal result in nominal terms, because when using inflation-adjusted dollars, virtually all investors will lose over the long-term because of the loss of purchasing power of their dollars (because the Federal Reserve and the banking system keeps creating more and more money, measured in the literal trillions and trillions of dollars) makes prices go up, and which has the same effect as a tax, or a regular, nominal loss (like where that stupid stock you bought on the advice of your brother went bust), which you notice only when you compute the comparative metric of "the pile of stuff you could buy with your money when you started is smaller than the pile of stuff you can buy at the end."

Unfortunately and embarrassingly for me, this was not exactly what Mr. Mayer was talking about, he ignored me and my fabulous explanation completely, and went on "It happened because investors tended to take money out after a bad stretch and put it back in after a strong run", which, in short, is that the investors made the worst possible trading decisions, in that "They sold low and bought high. Incredibly, these investors owned the best fund you could own over the last 10 years – and still managed to lose money".

Naturally, I interrupt and say, "Of course they lost money! They were the majority, and the majority of investors must lose money so that the minority of investors can make a profit, however small after suffering the fees-and-expenses pillage by the financial services industry and the tax bite of the government!"

Well, I suddenly noticed that Mr. Mayer must have been impressed with either my snazzy, radiant resplendence or the powerful logic of my original point (which was that the overwhelming majority of investors must lose money by investing, and that all investors will lose by virtue of the loss of buying power of their dollars) because he then went on to note that James Montier's book, Value Investing: Tools and Techniques for Intelligent Investment, "cites research by the Brandes Institute that shows how, in any three-year period, the best investors find themselves among the worst performers about 40% of the time!"

Naturally, I think smugly to myself that this means that majority of idiots investing their pathetic IRAs and 401(k)s in the stock and bond markets are going to get whacked because of simple arithmetic, while I will wax prosperous because I invest in gold, silver and oil because, as Jethro Bodine said to his uncle on The Beverly Hillbillies, "I can cipher, uncle Jed!"

And then I smile because, "Whee! This investing stuff is easy as shootin' at some food and up from the ground came a bubbling crude. Oil, that is. Black gold. Texas tea!"

The Mogambo Guru
for The Daily Reckoning

Stock Market Investing: Why the Majority Must Lose originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day." Check out our new special report Investing in Offshore Oil

On KWN, Ted Butler reveals Justice Dept. probe of Morgan silver rigging

Posted: 01 May 2010 06:14 AM PDT

10:15a ET Saturday, May 1, 2010

Dear Friend of GATA and Gold (and Silver):

In his weekly interview with Eric King of King World News, silver market analyst Ted Butler announces that the Anti-Trust Division of the U.S. Justice Department has told a Butler newsletter subscriber that it is investigating a complaint of silver market manipulation against JPMorgan Chase & Co.

In a subsequent King World News interview, market analyst James G. Rickards, senior managing director for market intelligence at the Virginia-based research consultancy Omnis Inc., notes that the Justice Department's reply to the Butler newsletter subscriber went out of its way to mention Morgan Chase, even as the Butler newsletter subscriber, in writing to the Anti-Trust Division, had not mentioned the investment bank. Thus, Rickards says, the Anti-Trust's Division's reply is "a stunning communication."

Rickards speculates that the Anti-Trust Division's reference to Morgan Chase may have been prompted by press reports linking Morgan Chase to silver market manipulation. Of course such press reports have arisen from the complaint brought by GATA to the March 25 hearing held by the U.S. Commodity Futures Trading Commission about trading practices in the precious metals futures markets. At that hearing GATA presented the story of London trader Andrew Maguire's attempt to walk the CFTC through an ongoing market manipulation by traders for Morgan Chase, and the CFTC's seeming lack of interest.

The King World News interview with Butler is 10 minutes long and you can find it here:

http://www.kingworldnews.com/kingworldnews/Broadcast_Gold+/Entries/2010/…

The King World News interview with Rickards is 12 minutes long and you can find it here:

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/5/1_Ji…

Please remember that King World News isn't just audio anymore — that it has started posting some pretty compelling text commentary as well, including commentary by Rickards, Richard Russell, Nouriel Roubini, and Marc Faber. You can find the King World News text commentary section here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/KWN_DailyWeb.html

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Jay Taylor tells BNN about loss of confidence in fiat currencies

Posted: 01 May 2010 06:13 AM PDT

9:10p ET Friday, April 30, 2010

Dear Friend of GATA and Gold:

On its "Trading Day" program today, Canada's Business News Network interviewed precious metals newsletter writer Jay Taylor (www.MiningStocks.com) for six minutes about the loss of faith in government currencies and the worldwide monetary system, a perfect environment for gold. While the Western public is largely oblivious to gold, Taylor says, Asians have never forgotten that it is money. You can watch the interview at the BNN Internet site here:

http://watch.bnn.ca/#clip296257

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

James Turk: Gold needed now more than ever

Posted: 01 May 2010 06:13 AM PDT

8:45p ET Friday, April 30, 2010

Dear Friend of GATA and Gold:

In his commentary today at the Free Gold Money Report, GoldMoney founder and GATA consultant James Turk reviews a recent study by the Bank for International Settlements about the danger that national debts will be inflated away through monetary devaluation. Sovereign debt instruments, Turk writes, are anything but "risk-free," while only gold carries no counterparty risk. Turk's commentary is headlined "Gold: Needed Now More Than Ever" and you can find it at the Free Gold Money Report here:

http://www.fgmr.com/gold-needed-now-more-than-ever.html

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Is Silver Coming Into Its Own?

Posted: 01 May 2010 06:13 AM PDT

Hard Assets Investor submits:

By Lara Crigger

When it comes to precious metals, silver frequently gets short shrift. The metal is often seen as the "poor man's gold" — a cheap entry point into precious metals investing for those who can't afford to buy its posher yellow cousin.

But silver's hybrid personality — half precious metal, half industrial workhorse— means it can be used in a much wider array of applications. And it's silver's increasing use as a biocide and antimicrobial agent that may be the most promising demand sector of all, says Jessica Cross, CEO of VM Group. Working in conjunction with Fortis Bank Nederland, VM Group provides research and analysis of the metals and broader commodities markets, including precious and base metals, energy, agribusiness and renewables.

In this second of two interviews, HAI Associate Editor Lara Crigger sat down with Cross to discuss the outlook for silver, including whether faith in the gold/silver ratio is well-founded, why silver recycling is set to decline and how silver's being used to purify water and gym clothes alike.

Crigger: In a recent speech to the London Bullion Market Association, you said silver had been "typecast" by investors. What did you mean by that?

Cross: I think it's been typecast by two completely separate markets. In India, you have a large population of rural-based people, who aren't very high on the income ladder. They'll tend to invest in silver, as far as they can invest in anything, and when they get more wealthy and affluent, they then tend to "trade up" into gold. So silver is the first point of entry, but gold is what they really aspire to, when their income allows them. But you see this in the US as well. There, I think you have a sector of investors who say, "Well, we can't really afford gold, but we will take silver." So silver is seen as the poor man's gold — which I think is completely wrong, as silver has a huge role to play as part of an investment portfolio.

But apart from that, people also watch the gold/silver ratio. And when the ratio deteriorates out of silver's favor, it's used as sort of a secondary investment opportunity. A lot of people put a lot of faith in the gold/silver ratio.

Crigger: Is that faith well-placed?

Cross: Over time, I think there's certainly been a place for that perception. I much prefer to look at them as completely different, even though they're both precious metals. Gold has very limited industrial end use, while silver offers an array of end uses, which are becoming increasingly more interesting. At the end of the day, that silver supply/demand balance is going to get increasingly healthier. So although the prices will sometimes move in tandem, they're really very different.

Read more »

Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Over 2% on the Week

Posted: 01 May 2010 06:13 AM PDT

Gold steadily rose throughout most of trade in Asia, London, and New York and ended near its noontime (EST) high of $1181.60 with a gain of 1.02%. Silver rose to as high as $18.75 by late morning before it fell back off in the last couple of hours of trade, but it still ended with a gain of 0.49%.

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