Gold World News Flash

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• Trader Dan Comments On This Week?s COT Data
• Main Street Is In The Hands Of A Roulette Wheel
• The Center Cannot Hold
• The Dollar Rally Is Hugely Bullish For Precious Metals
• Gold Forecaster – Gold at $1,200 Why and will it hold and rise?
• Will Chinas Bubble Implode and Bring the U.S. Down with It?
• In Treasury report, shocking evidence of silver price suppression
• COT Flash May 7
• Will China's Bubble Implode and Bring the U.S. Down with It?
• Is Sovereign Debt Crisis Contained to Subprime?
• Taking Weighty Steps Making a Golden Getaway
• Inside the Market Meltdown, Beneficiaries of the Plunge, An Oil Spill Opportunity and
• The Moment If Truth for Gold, Silver, Oil & SP500
• Daily Dispatch: Notes From the Field: Peru Prevails
• Offshore Miners Not Directly Affected
• Expanding On The Crash Yesterday: NBBO
• The Canary is Dead
• Hourly Action In Gold From Trader Dan
• In The News Today
• 'Gold is the New Reserve Currency' - Larry Kudlow, CNBC
• Gold Stock Valuations 6
• Keep a Close Eye on Investor Fear
• Gold Price and Volatility Parabola
• Follow-Up on Continental Minerals
• ECB paralysis rattles markets as debt costs hit new highs
• Jim Sinclair: Dow Falls 1,000 Points Intra-Day
• Eldorado Gold Q1 2010 Earnings Call Transcript
• The German Hyperinflation, 1923
• David Morgan: Update on Gold & Silver
• Silver - The Retaking of Twenty
• Gold Seeker Weekly Wrap-Up: Gold and Silver End Mixed on the Week
• 20 Things You Will Need To Survive When The Economy Collapses And The Next Great Depression Begins
• Following the ’03-’07 Template?
• Jim Cramer: The One Gold Stock to Own?
• U.S. gold coin sales surge as investors flee risk
• Silver’s Plunge – Last Chance to Sell or Buying Opportunity?
• Gene Arensberg is surprised large commercials didn't get shorter
• Gene Arensberg is surprised large commercials didn't get shorter
• Stocks Plunge: What is Going On?
• Will China’s Bubble Implode and Bring the U.S. Down with It?
• Silver's Plunge - Last Chance to Sell or Buying Opportunity?
• America is Wall Street's Sucker
• Global Investors Turning to Physical Gold…
• Gold at $1,200 Why and Will It Hold and Rise?
• Has Gold Become A New Reserve Currency?
• Any Higher Gold Price Close Now Will Send The Gold Price Shooting Toward $1,300 Fast
• Graceland Updates 4am-7am
• Masterpieces Are Recession-Proof
• FRIDAY Market Excerpts
• Treasury Redeems $144 Billion In Bills In First Four Days Of May

Trader Dan Comments On This Week?s COT Data Posted: 07 May 2010 07:01 PM PDT View the original post at jsmineset.com... May 07, 2010 10:19 PM Dear Friends, This week's Commitment of Traders report details what we have come to expect with gold for the most part but with one exception which merits mentioning. Front month gold closed at $1162.20 on Tuesday of last week (April 27, 2010). It went on to make a high of $1192.80 on the following Tuesday of this week (May 4) before settling lower on the day at $1169.20. The translation – the COT report covers the time period during which gold added $30 to its price before a wave of selling shaved off most of those gains when the reporting period came to a close. If you look at the COT data, the Managed Money side of things increased their net longs over this time frame by approximately 3,400. The other large reportables increased their net long position by roughly 6,100. The public increased their net long stance by 1,000 contracts. The Producer/User/merchant increased their net short stance by about 11,500...

Main Street Is In The Hands Of A Roulette Wheel Posted: 07 May 2010 07:01 PM PDT View the original post at jsmineset.com... May 07, 2010 06:10 PM Dear Extended Family, The solution is the problem. To quote Bill Carleton’s album, Squeeze the People, "Main Street is in the hands of a Roulette Wheel." He is so correct. The name of the "Roulette Wheel" is Credit Default Swaps. It does not matter what the G-7 or the G-20 does. It does not matter what the IMF, ECB and Fed under a beard do. Mrs. Merkel’s foolish political strategy fits right into the equation. CDS are going to take down every major currency, making trillions for the players. It will in time turn on the USA as it is already operating against the financially weaker Illinois and New York debt. The dollar, as it gains ground due to the mirror image of the euro, becomes weaker and weaker due to overvaluation with no fundamental legs. The dollar’s time will come. The OTC derivative credit default swap is about to clean the clock of the world. Der Spiegel is right but the debt is there. ...

The Center Cannot Hold Posted: 07 May 2010 07:01 PM PDT The Risks from Fiscal Imbalances The Challenge for Central Banks Bang, Indeed! The Center Cannot Hold A Decent Employment Report Montreal and New York and Italy Turning and turning in the widening gyre The falcon cannot hear the falconer; Things fall apart; the center cannot hold; Mere anarchy is loosed upon the world, The blood-dimmed tide is loosed, and everywhere The ceremony of innocence is drowned; The best lack all conviction, while the worst Are full of passionate intensity. - William Butler Yeats Last week we focused on the first half of a paper by the Bank of International Settlements, discussing what they characterized as the need for "Drastic measures ... to check the rapid growth of current and future liabilities of governments and reduce their adverse consequences for long-term growth and monetary stability." As I noted, you don't often see the term drastic measures in a staid economic paper from the BIS...

The Dollar Rally Is Hugely Bullish For Precious Metals Posted: 07 May 2010 06:44 PM PDT

Gold Forecaster – Gold at $1,200 Why and will it hold and rise? Posted: 07 May 2010 06:33 PM PDT

Will Chinas Bubble Implode and Bring the U.S. Down with It? Posted: 07 May 2010 06:28 PM PDT

In Treasury report, shocking evidence of silver price suppression Posted: 07 May 2010 06:22 PM PDT

COT Flash May 7 Posted: 07 May 2010 06:04 PM PDT Bottom line: COT report suggests COMEX commercials not confident in lower gold and silver prices. Gold +0.25% and the gold LCNS +2.3%. Silver -1.8% and the silver LCNS -1.8%. Details just below. ATLANTA – One bizarre circumstance of yesterday's 15-minute Big Market mistake meltdown is that it gives traders a cover-scapegoat to forget that the problems which had boiled to the surface in Europe had all markets under pressure at the time of the "glitch." "Oh, it was just a computer thing. Guess we can go play golf now…" Wrong! The last thing an already nervous market needs is a confidence puncture, no matter where it hails from. Make no mistake, yesterday was a colossal confidence puncture for the NYSE and the NASDAQ. With red all over everyone's trading screens and a nearly constant bombardment in televised financial media of "sovereign default contagion risk," we can easily imagine that yesterday's panic plunge was a last-straw event – for some. ...

Will China's Bubble Implode and Bring the U.S. Down with It? Posted: 07 May 2010 06:04 PM PDT Source: Clif Droke for The Gold Report 5/7/10 http://www.theaureport.com/pub/na/6223 It's the world's biggest and fastest-growing economic powerhouse, the subject of countless daily discussions and conjectures in the news media and an endless source of controversy, fear and confusion among investors, businessmen, politicians, bankers and bureaucrats. For those who follow the global economic outlook, it's probably the single-most important focus in trying to solve the global financial crisis. And answers to the questions surrounding this country's near-term future will undoubtedly have a momentous impact on your own financial future. It's also the subject of our commentary today: The China outlook. If you're like me, you've followed the China musings of many analysts and commentators over the years and you've probably been perplexed at how there can be so much disparity among what these analysts are claiming about China's financial and economic outlook. It would s...

Is Sovereign Debt Crisis Contained to Subprime? Posted: 07 May 2010 06:04 PM PDT [COLOR=#000000][FONT=Arial]As Americans observe the chaos in Greece, most assume that the strength of our currency, the credit worthiness of our government, and the vast expanse of two oceans, will prevent a similar scene from playing out in our streets. I believe these protections to be illusory. Once again the vast majority fails to see a crisis in the making, even as it stares at them from close range. Just as market observers in 2007 told us that the credit crisis would be confined to the subprime mortgage market, current analysts tell us that sovereign debt problems are confined to Greece, Spain, Portugal, and perhaps Italy. They were wrong then, and I believe that they're wrong now. During the housing boom, subprime and prime borrowers made many of the same mistakes. Both groups overpaid for their homes, bought with low or no down payments, financed using ARMs instead of fixed rate mortgages, and repeatedly cashed out appreciated home equity through re-financings...

Taking Weighty Steps Making a Golden Getaway Posted: 07 May 2010 06:04 PM PDT To those who say that Goldman Sachs is a bunch of lying, deceptive, greedy, cheating, backstabbing vipers, let me remind you that Goldman Sachs is just one small, dark, slimy corner of the world. And I further say that you would probably dump a Big Stinking Load (BSL) in your underwear if you suddenly knew the extent of the unbelievable-but-true, deplorable, pandemic, grubby self-aggrandizement and sheer corruption that is always at its most repugnant extreme at the end of long monetary booms. Without exception. There are, of course, many paths to becoming a Junior Mogambo Ranger (JMR), including actually depositing a BSL in your drawers at the satori-like realization of the sheer economic horror of the bloated, distorted financial monstrosity built on lies, corruption, government control, fiat money and fractional-reserve banking, all abused on a gargantuan scale. And so, perhaps, it is this kind of sudden realization that "That idiot Mogambo was right after all!" is what is causin...

Inside the Market Meltdown, Beneficiaries of the Plunge, An Oil Spill Opportunity and Posted: 07 May 2010 06:04 PM PDT The 5 min. Forecast May 07, 2010 01:25 PM by Addison Wiggin & Ian Mathias [LIST] [*] An epidemic of “tickeritis” becomes a plague… The 5 makes sense of yesterday’s nonsensical market action [*] Beyond the nutty trades: Reasons the bull market is due for a rest [*] The dual beneficiaries of the plunge [*] “Asymmetrical warfare” -- how the Coast Guard is approaching the big oil spill, and an opportunity to profit [*] Readers see conspiracy in yesterday’s market action… Our response, below [/LIST] Looking back, we recognize some interesting words showed up in yesterday’s issue, characterizing the market as of late: “Volatility” “Gyroscopic action” “Tickeritis” A “crazy market” Little did we expect that moments after the issue arrived in your inbox, the market would take these terms to an entirely new level. ...

The Moment If Truth for Gold, Silver, Oil & SP500 Posted: 07 May 2010 06:04 PM PDT It has been an exciting couple weeks with the stock market slowly forming its top before breaking down this week. I have been warning everyone keep tightening your protective stops and to keep new positions small because once prices start to sell off they will most likely drop like a rock. This week we have seen all the markets around the world breakdown and this indicates that there could be some large waves of selling in the near future. Traders and investors are very bullish on both stocks and commodities and financial market is designed to hurt the largest group of investors possible. So with over 53% of trader's bullish and only 18% bearish (same readings as the Jan high) it makes for a perfect blood bath in the market catching the majority off guard left holding the shares. Here is a chart of the SP500 ETF – SPY Daily Chart You can see from simple analysis these repeated patterns in price and volume. Video - Gold, Silver, Oil and SP500 Technical Ana...

Daily Dispatch: Notes From the Field: Peru Prevails Posted: 07 May 2010 06:04 PM PDT Filed by Louis James, Senior Editor, Casey's International Speculator Last month I visited Peru again, penetrating perhaps a bit deeper but certainly higher up in the Andes than I've gone before. No nose-bleeds, but I'm not ashamed to admit that scrambling over rocks in search of boiling textures at 5,300 meters (17,400 feet) elevation left me wheezing like Darth Vader. But I found them, laying atop the gold zone at the silver project of one of the companies I came to Peru to look at. I've never seen boiling textures on such a large scale, but everything else at the project is big, so why not? What it boils down to is that I like Peru better than ever. I'm particularly pleased to see weakened support behind leftist firebrand Ollanta Humala in his second bid for the presidency. This was hard to quantify, especially while bouncing along in a jeep over "roads" that are little more than a pair of tire ruts carved into a cliff, while attempting to k...

Offshore Miners Not Directly Affected Posted: 07 May 2010 06:04 PM PDT By Neil Charnock www.goldoz.com.au It has been a hectic week here educating clients about global capital flows and debt cycles. One of the really interesting factors at play Down Under has been the unwinding of the carry trade which accelerated last night. The message it not always understood so I will be preparing a file to explain how this works as further education in the Members area of my site as soon as time allows. I have been warning that the AUD is an exotic currency and this means that when risk aversion increases the AUD gets dumped. When I hit the office at 7am this morning it was down to US88.6c off approximately 3c. We have been waiting for this opportunity to start to unfold for our offshore clients and warning this would happen in articles like this one. We have several negative influences in the markets at present. These are the Australian resource super tax proposal, global sovereign debt issues, the growing wild fire in the banking syst...

Expanding On The Crash Yesterday: NBBO Posted: 07 May 2010 06:04 PM PDT Market Ticker - Karl Denninger View original article May 07, 2010 09:53 AM If The SEC is anything other than a lying sack of squeeze, it must force all brokers to HONOR NBBO from yesterday's trades. The definition of NBBO is: [INDENT] A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities. [/INDENT] So during the collapse yesterday Accenture traded at 0.01, as the below shows: But Accenture's "Best Bid" was never 1 cent on the NYSE. It was on some other markets (e.g. ECNs), and transacted there.  That's bogus folks. That the NYSE was "slowing things down" and looking at orders before releasing matched orders does not excuse the broker's responsibility to get you the best bid or offer. Those 1 cent prints on Accenture and the ridiculously low prints on P&G and other stocks, at least for issues traded on the NY...

The Canary is Dead Posted: 07 May 2010 06:04 PM PDT View the original post at jsmineset.com... May 07, 2010 09:12 AM Dear CIGAs, In the early days of coal mining, canaries acted as a warning that odorless poisonous gas was present.  If there was a dangerous gas build-up, the canary would be the first to keel over.  You can use the "canary in a coal mine" metaphor to describe the situation in today's financial world.  Greece is the canary.  The poisonous gas is debt.  Greece has just keeled over, and the rest of the world is running scared.  That's why the Dow was down 1,000 points at one time yesterday!  Oh yes, there was talk of "unregulated high frequency computerized trading" and "bad trades," but make no mistake, the market is worried about massive amounts of sour debt at all levels around the globe.    In a nutshell, Greece borrowed way too much money, and does not want to drive old cars and eat rice and beans for years to pay it back.  That's why you are seeing riots ...

Hourly Action In Gold From Trader Dan Posted: 07 May 2010 06:04 PM PDT View the original post at jsmineset.com... May 07, 2010 10:04 AM Dear CIGAs, There was a great deal of volatility in gold today although you could not tell it by just looking at the daily chart. The five minute chart shows a market bouncing back and forth between $1194 on the downside and $1206 on the upside. Volume picked up every time the market dipped down towards $1194 with buyers coming in and taking it back above $1200. When it got back above that level, it seemed as if they lacked the conviction to take it up through $1206. Finally, about 45 minutes before the close of the pit session trading, the longs were able to take it up through the barrier erected at $1206 and off she went carrying the shorts out with it. Once the pit session closed, the sellers came back in and tried pushing it back below $1206. The battle rages on. Technically the gold bulls have cleared a significant hurtle and coming on a Friday in front of a weekend in which anything is possible, that was no mea...

In The News Today Posted: 07 May 2010 06:04 PM PDT View the original post at jsmineset.com... May 07, 2010 10:48 AM Physical market has smashed gold paper, Sinclair tells King World News Submitted by cpowell on 06:46PM ET Thursday, May 6, 2010. Section: Daily Dispatches 9:40p ET Thursday, May 6, 2010 Dear Friend of GATA and Gold: Eric King of King World News today got a most incisive 12-minute interview out of Jim Sinclair, proprietor of JSMineSet.com, and America’s "Mister Gold," in which Sinclair remarked, among other things: – Physical demand for gold has overwhelmed paper gold selling five times in the last two weeks and the cash market will run the gold market – Gold is now the leading currency. – While the bankruptcy of Greece is convulsing the financial markets, the bankruptcy of California is four times worse. – All states and nations will be bailed out by central banks with "qualitative easing to infinity." – The continuing pessimism about gold’s...

'Gold is the New Reserve Currency' - Larry Kudlow, CNBC Posted: 07 May 2010 06:04 PM PDT That quote was all over the Internet yesterday. There was another wonderful quote that I found posted in Bill Murphy's MIDAS commentary over at Where Gold Investors come for crucial market insight! yesterday as well.This one could be the quote of the week, month, and year. George Dowd on CNBC described the U.S. dollar as "the best looking horse in the glue factory." Ain't that the truth, dear reader! Anyway, the little gold rally in early London trading that I mentioned in my closing comments on Thursday, didn't amount to much. But, minutes before 9:00 a.m. in New York, that all changed as gold spent the next seven hours moving steadily higher despite heavy selling pressure from the New York bullion banks in electronic trading after the Comex close. Gold's high price spike came at precisely 4:00 p.m. Eastern time... and was recorded at $1,212.60 spot... and closed very close to that. Silver remained fast asleep all day long... remaining within about 20 cents of ...

Gold Stock Valuations 6 Posted: 07 May 2010 06:04 PM PDT As gold stocks continue to power higher in their usual spring rally, they are starting to attract investors’ attention again. This includes some value investors, a group that is always concerned with valuations. Unfortunately, valuation analysis of gold stocks is fairly rare. But I’ve been researching this thread for over 6 years now, and this week is a great time for an update. Valuation is exceedingly important for stock investing in general. It measures how cheap or expensive individual stocks happen to be, greatly enhancing investors’ ability to buy low and sell high. Valuation is expressed in terms of price-to-earnings ratios. It shows where a stock happens to be trading relative to the underlying earnings per share that company can generate for investors. The more profits a company can spin off relative to any stock price, the cheaper the stock and the greater the odds it will be bid higher. General-stock-market valuations drive the...

Keep a Close Eye on Investor Fear Posted: 07 May 2010 06:04 PM PDT Historically, the "fear index," or the VIX, had minimal impact on the price of precious metals. However, as investors forgo treasury bonds in search of even safer investments, the VIX is correlating very well with the price of precious metals. The Risk Spiral With each passing recession, the appetite for risk among investors grows smaller and smaller. Previously, investors would shed equities for corporate debt, knowing full well the economy would recover and most businesses would survive and make good on their obligations. Decades later, the growth of international banking organizations brought about new fears. With economies so interconnected, many investors feared corporate debt was not safe enough, and instead of buying bonds with liquidated stock proceeds, they fled to government debt. Thanks to an open printing press and eager-to-inflate chairmen, the printing presses ensure the debts will be repaid, albeit with less valuable currency. Fast for...

Gold Price and Volatility Parabola Posted: 07 May 2010 06:04 PM PDT Graceland Updates 4am-7am www.gracelandupdates.com Email: [EMAIL="s2p3t4@sympatico.ca"]s2p3t4@sympatico.ca[/EMAIL] [LIST] [*] May 7, 2010 [/LIST] [*]Let's get right to business. Here's the gold juniors chart, via the GDXJ. I've highlighted the key HSR levels in blue. After hitting my "enhanced selling" HSR $29 area, most of you are back in refill mode now. Click here now to view the enhanced buy zones, current and prospective: GDXJ Daily Chart [*]The one thing nobody wants to talk about, here and now, is…silver. The industrial component of silver made itself apparent yesterday. Weakness must be bought, and the best traders I know prefer buying silver to gold now, in terms of possible intermediate term upside reward. Think about my words very carefully. Silver is a no-time-limit call option on gold. I own silver. Silver is not a replacement for gold. The 1970s were the time of silver. This is the Era of Gold. [*] Here's a look at...

Follow-Up on Continental Minerals Posted: 07 May 2010 06:04 PM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here May 07, 2010 07:27 AM Yesterday I noted an advisory service had put out a buy recommendation on KMK. The publisher gave me permission to note a couple of paragraphs from their report. “…The mine will cost about $600 million to build and around $3 per ton to mine. Right now, the mine is worth at least $620 million (based on the highly conservative baseline of $1.80 per pound copper and $750 per ounce gold). That's twice the company's current market value… “…The project looks fantastic, and Chinese national companies took notice. Zijin Mining owns 13.8% of Continental. And Jinchuan Group, China's largest nickel miner, owns 11.8%. That's an enormous vote of confidence from the Chinese government. These are exactly the kind of partnerships we want to see. The company currently trades around half of the net present value of its asset… without giving any...

ECB paralysis rattles markets as debt costs hit new highs Posted: 07 May 2010 06:04 PM PDT May 06, 2010 12:40 PM - Debt costs surged across the eurozone periphery after the European Central Bank ruled out using "nuclear option" to stabilise the bond markets. Read the full article at the Telegraph......

Jim Sinclair: Dow Falls 1,000 Points Intra-Day Posted: 07 May 2010 06:04 PM PDT View the original post at jsmineset.com... May 06, 2010 05:42 PM Dear CIGAs, Breaking Interview: On a day when the DOW closed down 430 points after falling 1,000 points and gold closed up $33 to roughly $1,210, Jim Sinclair was kind enough to spend some time making sense out of what is happening in the gold and equity markets for King World News listeners. Legendary Jim Sinclair known as Mr. Gold for his remarkably accurate timing regarding the gold bull market of the 70's is the Founder of JSMineset.com. Click here to listen to the interview… Regards, Eric King www.KingWorldNews.com...

Eldorado Gold Q1 2010 Earnings Call Transcript Posted: 07 May 2010 05:55 PM PDT Eldorado Gold (ELD) Q1 2010 Earnings Call May 07, 2010 11:30 am ET Complete Story »

The German Hyperinflation, 1923 Posted: 07 May 2010 05:30 PM PDT

David Morgan: Update on Gold & Silver Posted: 07 May 2010 04:24 PM PDT Dave Morgan of Silver-Investor.com and the Morgan Report updates us on the metals and the short-term outlook. This is via Thestreet.tv. Excellent analysis as always from Dave.

Silver - The Retaking of Twenty Posted: 07 May 2010 04:14 PM PDT At a certain point $20 becomes a floor. The magic trick of fiat money is to create it and spend it. Why would you not want to have and spend more money? Those who create money always win in such a game. The cycle of ups and down never hurt those in charge of the money. They print it, they spend it. 18 dollars was taken out in no time at all. At a certain point $20 will too. Sooner or later? Looks like sooner to me....

Gold Seeker Weekly Wrap-Up: Gold and Silver End Mixed on the Week Posted: 07 May 2010 04:00 PM PDT Gold fell to as low as $1192.52 in late morning New York trade before it jumped to as high as $1212.93 by early afternoon and ended with a gain of 0.97%. Silver fell to as low as $17.445 in late morning New York trade before it jumped to as high as $18.647 by early afternoon and ended with a gain of 5.04%.

20 Things You Will Need To Survive When The Economy Collapses And The Next Great Depression Begins Posted: 07 May 2010 03:41 PM PDT Today, millions of Americans say that they believe that the United States is on the verge of a major economic collapse and will soon be entering another Great Depression.  But only a small percentage of those same people are prepared for that to happen.  The sad truth is that the vast majority of Americans would last little more than a month on what they have stored up in their homes.  Click here to see what you need >  Most of us are so used to running out to the supermarket or to Wal-Mart for whatever we need that we never even stop to consider what would happen if suddenly we were not able to do that.  Already the U.S. economy is starting to stumble about like a drunken frat boy.  All it would take for the entire U.S. to resemble New Orleans after Hurricane Katrina would be for a major war, a terror attack, a deadly pandemic or a massive natural disaster to strike at just the right time and push the teetering U.S. economy over the edge.  So just how would you survive if you suddenly could not rely on the huge international corporate giants to feed, clothe and supply you and your family?  Do you have a plan? Unless you already live in a cave or you are a complete and total mindless follower of the establishment media, you should be able to see very clearly that our society is more vulnerable now than it ever has been.  This year there have been an unprecedented number of large earthquakes around the world and volcanoes all over the globe are awakening.  You can just take a look at what has happened in Haiti and in Iceland to see how devastating a natural disaster can be.  Not only that, but we have a world that is full of lunatics in positions of power, and if one of them decides to set off a nuclear, chemical or biological weapon in a major city it could paralyze an entire region.  War could erupt in the Middle East at literally any moment, and if it does the price of oil will double or triple (at least) and there is the possibility that much of the entire world could be drawn into the conflict.  Scientists tell us that a massive high-altitude EMP (electromagnetic pulse) blast could send large portions of the United States back to the stone age in an instant.  In addition, there is the constant threat that the outbreak of a major viral pandemic (such as what happened with the 1918 Spanish Flu) could kill tens of millions of people around the globe and paralyze the economies of the world.  Has Gold Become A New Reserve Currency? 8 Theories For Why The Stock Market Plunged Almost 1000 Points In A Matter Of Minutes On May 6th Will The Gulf Of Mexico Oil Spill Be An Economic Disaster That The Gulf Coast Will Never Recover From? But even without all of that, the truth is that the U.S. economy is going to collapse.  So just think of what will happen if one (or more) of those things does happen on top of all the economic problems that we are having. More Here

Following the ’03-’07 Template? Posted: 07 May 2010 03:33 PM PDT By Toby Connor, GoldScents History says we should test the lows at some point in the next few weeks. The fact that we ended well off the lows does muddy the picture at bit, as most "crash" days have ended at or close to the lows of the day. So perhaps this time will be different. I'm going to point to an interesting parallel that I've been watching. I've noted that the first and second leg of this bull roughly followed the same pattern as the '03-'07 market. The correction following the second leg copied the '04 correction if not in duration in magnitude. I've speculated that this bull would bypass the middle phase of a "normal" bull and move straight into the final phase. In '06 the final phase began with a 7 month runaway move. We certainly saw a runaway move out of the February 5th bottom. I must admit I thought it would last a bit longer than 2 1/2 months but I guess we shouldn't be surprised as everything has been unfolding much faster during this bull. In '07 the runaway move ended with the mini-crash in February. Yesterday certainly qualifies as a mini-crash. So we are still following the '03-'07 template. If the pattern holds then we should expect a recovery soon and a final surge higher into an ending blow off top. From there we should roll over into the next leg down in the secular bear market. Not that I want to buy into a secular bear market, but sometime in the next couple of weeks we should get a intermediate buying opportunity…unless this time is different and we just continue lower from here. GoldScents is a financial blog focused on the analysis of the stock market and the secular gold bull market. Subscriptions to the premium service includes a daily and weekend market update emailed to subscribers. If you would like to be added to the email list that receives notice of new posts to GoldScents, or have questions,email Toby.

Jim Cramer: The One Gold Stock to Own? Posted: 07 May 2010 03:29 PM PDT From Mad Money:

U.S. gold coin sales surge as investors flee risk Posted: 07 May 2010 03:20 PM PDT By Frank Tang Reuters Friday, May 7, 2010 http://www.reuters.com/article/idUSN0762739220100507 NEW YORK -- U.S. gold coin sales surged this week as the anxiety over a euro-zone debt crisis spilled over into the United States and as Thursday's sudden Wall Street collapse shook investors. The U.S. Mint sold gold coins this week at twice its normal pace, and a leading retailer said Thursday was a record day. Physical gold products such as coins and bars are traditionally a safe haven for anxious investors in times of economic and geopolitical crises. On Friday, U.S. stocks turned negative for the year on fears of another credit crisis. Gold coin and bar dealers also said investors are turning to gold coins to protect their nest eggs from financial market turmoil. "Yesterday was our biggest day of the year in terms of investors buying gold," said David Beahm, vice president of marketing at top U.S. retail gold coins dealer Blanchard & Co. "There is no question that the meltdown in the paper assets yesterday was a huge case for diversification." Beahm said he suggested investors buy more liquid 1-ounce coins, particularly the American Eagles, South Africa's Krugerrands, and the Canadian Maple Leaf gold coins. "As long as it's physical gold in your portfolio, you are protected," he added. On Friday, the U.S. Mint said sales of the most popular American Eagle 1-ounce gold coins totaled 41,500 ounces so far in the first week of May, compared to 60,500 ounces in the entire month of April. Investors also piled into gold exchange-traded funds, which back their shares by buying physical bullion and keeping them in their vaults. Bullion holdings in the SPDR Gold Trust (GLD), the world's biggest gold ETF, said its holdings rose nearly 20 tonnes on Thursday, the biggest one-day gain since February 2009. ADVERTISEMENT Coming Friday-Sunday, June 11-13, at the Dallas-Fort Worth Airport Marriot: The Anglo Far-East Bullion Co.'s Gold and Silver Conference The conference will explore the dangers and opportunities in today's bullion markets and the need for investors to diversify bullion holdings outside of bullion banking and commodities markets. Speakers will include David Morgan of Silver-Investor.com, Gold Anti-Trust Action Committee Chairman Bill Murphy, and Duncan Cameron and Philip Judge of Anglo Far-East Bullion Co. The earliest conference attendees on Saturday will be able to schedule one-on-one interviews for personal consultation with Anglo-Far East's experts on Sunday. Watch future GATA Dispatches for registration information. To learn more about the Anglo Far-East Bullion Co., please visit http://www.anglofareast.com/ 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT The Silver Saver Program A unique silver savings program has been developed by trusted friends of Silver-Investor.com founder David Morgan, perhaps the world's best-known silver market commentator. In the Silver Saver Program you buy silver in select increments and at competitive prices. You enter the market through dollar cost averaging. The program is easy to start and is automatic but also easily modified if you wish. Your silver can be delivered to your door. If the program no longer meets your needs, you can stop at any time. "This program," Morgan says, "not only receives my full endorsement but also adheres to the tenets I set forth in 'The 10 Rules of Silver Investing' -- dollar cost averaging and putting real silver into your savings plan. "As an introductory promotion, if you decide participate in the Silver Saver Program, I will send you a free copy of 'Silver in the Next Decade,' one of the most important Morgan Reports I have written. And you will have the opportunity to read the Morgan Report free for 30 days. "Now more than ever it is important to accumulate physical silver and to stay informed on major economic developments. My reports cover money, metals, and mining, but I have always stressed the need to have physical metal. The Silver Saver Program will help you achieve a solid position in silver." For more information, please visit www.Silver123.net. If you would like to talk to someone about the Silver Saver Program, telephone our team at 785-727-2277.

Silver’s Plunge – Last Chance to Sell or Buying Opportunity? Posted: 07 May 2010 03:20 PM PDT This essay is based on the Premium Update posted on May 7th, 2010 Thursday saw a huge reversal in the general stock market accompanied by huge volume. There seemed to be a selling mood, which accelerated for several hours though the mid-day period. Is this a beginning of a severe plunge or are we likely to see at least a small move higher – and what does this mean for silver? These are the questions that we will deal with in the following part of this essay. Let's begin with the long-term SPY ETF chart (chart courtesy by http://stockcharts.com), which serves as a proxy for the general stock market. It seems that we have seen the end of the last rally in a big way. But all is not negative when we look a little deeper. Even though the market's close was significantly lower than the prior day, a look at the intra-day activity shows that there was actually a substantial recovery from today's low point and it is quite likely we will see this bounce continue at least in the short term. Many factors point to this coming trend. Today's SPY chart yields three positive signs that support a bullish sentiment for the short term. The closing price around 113 is above the multi-year support/resistance level – the declining black line. It is also above the 200-day moving average and above the rising support line created by previous months' lows. The true confirmation comes from the volume levels which were profound. The RSI has not been this low in months and when we saw a similar level last year, it corresponded to the final low of a previous decline. An RSI level this low most likely signifies a buy zone. The negative momentum of the RSI index is also profound, especially given the fact that it was just above the 70 level. Moreover, in 2009, the RSI rarely fell below 50 and this week's downturn indicates a strong possibility of this decline being over as well. Please note that the RSI indicator on the above chart is based on daily closing prices and therefore it didn't take Thursday's huge intra-day reversal into account. Should that be the case, it would provide us with even more bullish reading. The amount of capital which left and entered the market was huge. Support levels work or have merit because of people's beliefs, stop/loss orders, buy/orders and the like. The automatic buy/sell orders have already significantly come into play. The strong reversal late in the session indicates many of these orders have been triggered already. Those wishing to exit the market, in all likelihood have already done so, or will do so very soon. That is to say, there are not many sellers left, and the buying power was strong enough to push prices up several hundred points in the DJIA. All of these factors suggest that at least a small rally is likely in the following days/weeks. Let's take a look at the correlation matrix to find out what does the above analysis mean for gold, silver and mining stocks. The correlation matrix this week is very interesting. The 30-trading-day column indicates that the correlation between gold, silver and HUI with the USD is quite weak, which is a quantitative representation of the fact that precious metals held or even rose slightly in spite of the USD strength this week. PMs are still rather correlated with the general stock market, but the strength of the correlation appears to have weakened significantly. This reflects the fact that gold and gold stocks have held up relatively well when the main stock indices plunged. Silver's performance on Thursday also suggests that it may not follow main stock indices much lower. The 750-trading-day- and 1500-trading-day columns explain why silver and precious metals have been a bit weak during the past few days. Their long term correlation with the general stock market is higher than that of gold. For the very long term, which can be seen in the 750 day and 1500 day columns, gold has a negative correlation with the general stock market while silver and mining stocks do not. In the long run gold generally moves in the opposite direction of the general stock market, but silver and precious metal stocks generally often move in the same direction as other stocks. The soft bounce seen late this week in stocks may lead to silver and precious metals moving much higher. Speaking of silver, let's take a look how it performed recently. Silver appears to have bottomed out this week. This is in line with what we have stated earlier with regards to gold and the general stock market. The reason behind silver's weakness this week is it's correlation with the general stock market due to multiple industrial uses. Being a precious metal, silver sometimes follows the trends set by gold. However, silver has more industrial uses than gold and therefore may, at times, more closely follow the trends set by the general stock market. Supply and demand situation for silver is still favorable. Emerging economies such as China and India are likely to continue to positively impact the direction of silver's price. Still, this week silver moved sharply lower. In our May 4th alert, we stated the downside appeared to be $17.30 ($17 for the SLV ETF). This level was breached intra-day but the closing price was higher. Silver is now at its 50-day moving average level which should provide support as was the case many times in the past. Higher volume has accompanied bottoms in the past and we have seen such levels this week. Silver did not plunge at all on Thursday, actually rising about 1%. This is in spite of a day where the general stock market was severely down in the range of 5%. Indicators which normally are useful have little benefit this week due to the huge impact felt from the general stock market. The RSI level and stochastic indicator point towards a period of sideways price movement or a slight downturn, but these signals don't seem to be reliable at this point. Moving to the short-term chart, cyclical tendencies appear to be in place. These are valid to use in projecting future price levels. The indications are we are close to if not at a bottom today. Although silver has moved lower this week, it stopped at the multi-month support level, which is in tune with normal cyclical tendencies. Silver's price may move higher, especially if the general stock market rallies even slightly. In short, this is what we expect sooner rather than later given all of the above factors. Summing up, silver has continued to show weakness but has probably reached its bottom, and higher prices are coming. The general stock market did not cause a severe downturn this week and for both these reasons we expect silver to move upwards fairly soon. More detailed analysis – including short-term targets / probable scenarios is available to our Subscribers. To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, I urge you to sign up for my free e-mail list. Sign up today and you'll also get free, 7-day access to the Premium Sections on my website, including valuable tools and charts dedicated to serious PM Investors and Speculators. It's free and you may unsubscribe at any time. Thank you for reading. Have a great weekend and profitable week! P. 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Gene Arensberg is surprised large commercials didn't get shorter Posted: 07 May 2010 03:13 PM PDT 11p ET Friday, May 7, 2010 Dear Friend of GATA and Gold (and Silver): In his "Got Gold Report COT Flash" tonight, Gene Arensberg expresses surprise that the large commercial traders did not get much shorter in gold and silver as the metals soared this week. Arensberg is watching for a breakout in silver. You can find the "Got Gold Report" flash here: http://treo.typepad.com/got_gold_report/2010/05/cot-flash-may-7.html#tp CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Prophecy Resource Corp. Appoints Rob McEwen to Advisory Board Prophecy Resource Corp. (TSX.V: PCY, OTC: PCYRF) is pleased to announce the appointment of Rob McEwen to the company's Advisory Board. McEwen is a leading Canadian mining industry entrepreneur. He is the chairman and CEO of U.S. Gold Corp. and Minera Andes Inc. McEwen was the founder and former chairman and CEO of Goldcorp Inc., whose Red Lake Mine in northwestern Ontario, Canada, is considered to be the richest gold mine in the world. During his tenure at Goldcorp, McEwen transformed the company from a collection of small companies into a mining powerhouse, growing its market capitalization from $50 million to approximately $8 billion. For Prophecy Resource Corp.'s complete statement: http://www.prophecyresource.com/news_2010_mar11b.php 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Preliminary Feasibility Study Completed for Seabridge Gold's KSM Project Study Reports Reserves of 30.2 Million Oz. Gold, 7 Billion Lbs. Copper, 133 Million Oz Silver, 210 Million Lbs. Molybdenum Base Case Life of Mine Cash Operating Costs Estimated at $144/oz. Gold Produced (Net of Base Metal Credits) Toronto -- Seabridge Gold Inc. has announced results from a National Instrument 43-101 compliant preliminary feasibility study of its 100-percent owned KSM project in northern British Columbia, Canada. The study was prepared by Wardrop, a Tetra Tech company, a major international engineering and consulting firm. Seabridge President and CEO Rudi Fronk says, "The study confirms that the KSM project now hosts the largest gold reserve in Canada and one of the largest in the world. KSM is projected to provide an extraordinary mine life of more than 35 years with estimated cash operating costs well below the current average of the major gold producers. Estimated capital costs are in line with those of comparable, large-scale, undeveloped gold-copper projects and KSM has the advantage of being located in a low-risk jurisdiction." For the complete Seabridge Gold statement: http://www.seabridgegold.net/readmore.php?newsid=283

Gene Arensberg is surprised large commercials didn't get shorter Posted: 07 May 2010 03:13 PM PDT 11p ET Friday, May 7, 2010 Dear Friend of GATA and Gold (and Silver): In his "Got Gold Report COT Flash" tonight, Gene Arensberg expresses surprise that the large commercial traders did not get much shorter in gold and silver as the metals soared this week. Arensberg is watching for a breakout in silver. You can find the "Got Gold Report" flash here: http://treo.typepad.com/got_gold_report/2010/05/cot-flash-may-7.html#tp CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Prophecy Resource Corp. Appoints Rob McEwen to Advisory Board Prophecy Resource Corp. (TSX.V: PCY, OTC: PCYRF) is pleased to announce the appointment of Rob McEwen to the company's Advisory Board. McEwen is a leading Canadian mining industry entrepreneur. He is the chairman and CEO of U.S. Gold Corp. and Minera Andes Inc. McEwen was the founder and former chairman and CEO of Goldcorp Inc., whose Red Lake Mine in northwestern Ontario, Canada, is considered to be the richest gold mine in the world. During his tenure at Goldcorp, McEwen transformed the company from a collection of small companies into a mining powerhouse, growing its market capitalization from $50 million to approximately $8 billion. For Prophecy Resource Corp.'s complete statement: http://www.prophecyresource.com/news_2010_mar11b.php 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Preliminary Feasibility Study Completed for Seabridge Gold's KSM Project Study Reports Reserves of 30.2 Million Oz. Gold, 7 Billion Lbs. Copper, 133 Million Oz Silver, 210 Million Lbs. Molybdenum Base Case Life of Mine Cash Operating Costs Estimated at $144/oz. Gold Produced (Net of Base Metal Credits) Toronto -- Seabridge Gold Inc. has announced results from a National Instrument 43-101 compliant preliminary feasibility study of its 100-percent owned KSM project in northern British Columbia, Canada. The study was prepared by Wardrop, a Tetra Tech company, a major international engineering and consulting firm. Seabridge President and CEO Rudi Fronk says, "The study confirms that the KSM project now hosts the largest gold reserve in Canada and one of the largest in the world. KSM is projected to provide an extraordinary mine life of more than 35 years with estimated cash operating costs well below the current average of the major gold producers. Estimated capital costs are in line with those of comparable, large-scale, undeveloped gold-copper projects and KSM has the advantage of being located in a low-risk jurisdiction." For the complete Seabridge Gold statement: http://www.seabridgegold.net/readmore.php?newsid=283

Stocks Plunge: What is Going On? Posted: 07 May 2010 02:55 PM PDT Gold is inches away from setting an all-time new high. We have a substantial position in Gold in our conservative portfolio. What we are now seeing, which is fascinating, is Gold is beginning to replace fiat currencies around the globe ... Read More...

Will China’s Bubble Implode and Bring the U.S. Down with It? Posted: 07 May 2010 02:42 PM PDT Source: Clif Droke for The Gold Report 5/7/10 http://www.theaureport.com/pub/na/6223 It's the world's biggest and fastest-growing economic powerhouse, the subject of countless daily discussions and conjectures in the news media and an endless source of controversy, fear and confusion among investors, businessmen, politicians, bankers and bureaucrats. For those who follow the global economic outlook, it's probably the single-most important focus in trying to solve the global financial crisis. And answers to the questions surrounding this country's near-term future will undoubtedly have a momentous impact on your own financial future. It's also the subject of our commentary today: The China outlook. If you're like me, you've followed the China musings of many analysts and commentators over the years and you've probably been perplexed at how there can be so much disparity among what these analysts are claiming about China's financial and economic outlook. It would seem that the China observers are evenly divided into two camps: those embracing a bullish "the sky is the limit" outlook and those who say that China is merely a "paper tiger" just waiting to burn. Their statements are often diametrically opposed on the issues under discussion, leading one to ask, "How can so many China observers be so completely at odds with each other over a country so vast and important to the global economy?" Part of this reason, one can easily surmise, is due to the proverbial "iron curtain" that surrounds Chinese media and internal communications. China is still ruled by a Communist government and its rulers are known for having an almost paranoid desire to control internal and external communications among its people. It's sometimes difficult for those living in China to always get the scoop on what's going on within the country, let alone those living outside it. Another reason for the divergence of opinions regarding China's economic outlook is due to the country's vast size. Back in the 1990s, you couldn't attend a business meeting or investment conference without hearing some enthusiast talk about the boundless economic possibilities for U.S. businesses in the years ahead based on the soon-to-be-tapped consumer market in China. "A billion new potential customers" was an oft-repeated mantra among businessmen of those days in reference to China. I suspect this ingrained bullish belief in China's economic possibilities has left a lingering (and unreasonable) pro-China bias among American investors ever since. Due to these factors and others, it's hard separating the wheat from the chaff when it comes to analyzing China's economic outlook. Will China continue its stellar rates of industrial production of recent years or will the lingering impact of the global credit crisis dampen its economy? Will the yuan someday eclipse the dollar as the most dominant currency or not? Will China surpass the U.S. as the world's leading global superpower or won't it? Basing our economic arguments for or against China based on fundamental data (which can admittedly be deceiving) and relying on our limited capacity for sorting through the many complex variables involved would make a decisive answer on the China question virtually impossible to attain. Yet there is one source of knowledge that we can go to that will give us a surprisingly accurate answer as it concerns the interim economic and financial outlook for China. That source is none other than the stock market, the ultimate barometer of business conditions. There seems to be an emerging consensus among investors that China is "decoupling" from the West and has developing its own domestic markets to the point where it needs no longer to rely on export growth to the U.S. for its economy strength. As debatable as this prospect is (and there are valid arguments on both sides), our main focus is on the financial outlook for China. Two things stand out. The first is that the iShares China 25 Index Fund (FXI), our proxy for the China stock market, has been notably lagging the recovery in the U.S. broad market S&P 500 index in the past few months. While the U.S. stock market has recently made an 18-month recovery high, shares of Chinese companies as measured by FXI are still below their previous high from November 2009. Another observation is that the China stock internal momentum indicator series (CHINAMO) is showing far less internal strength than it did in 2009. Indeed, the dominant interim momentum indicators for the China stocks have been rolling over of late and the short-term indicators have been in decline for some time. This is reminiscent of what the long-term NYSE hi-lo momentum index looked like in 2007 heading into the credit crisis. Beyond the possibility of a short-term rally, the longer-term momentum structure for Chinese stocks is troubling. Unless it shows substantial improvement in the weeks immediately ahead, this troubling internal pattern could set the stage for bigger financial troubles ahead for China. These indicators are a reflection of the incremental demand for the leading U.S.-listed China stocks; and, with demand clearly slowing and even turning downward, it doesn't bode well for China's stock market outlook, which, in turn, is a "heads up" for that country's economic outlook. There has been growing talk of an unsustainable building boom taking place across major Chinese cities. Indeed, many mainstream financial publications have taken to using the word "bubble" to describe what is happening in China's real estate sector. As financial analyst Dr. David Eifrig has recently observed, "The Chinese built infrastructure, real estate, factories, and even stockpiled commodities as if the world would grow to the sky. Throw an Olympics in the middle of the global boom, and you have a tremendous bubble." Dr. Eifrig's conclusion is a sobering one: "Now that the borrowing of cheap money has ended, China has no more buyers. As borrowers default and declining asset values collapse balance sheets of corporations and consumers in Europe, the U.S., and Japan, demand has dried up. The money China gets from the world's profligate spending has ended. . ." Gold investors would do well to take note in the latest development in China as well. What's interesting to note is that not only has there been a decoupling from the U.S. stock market, but the China stock market has been closely correlated to movements in the price of gold, especially in the last several months. Comparing the FXI to the SPDR Gold Trust ETF (GLD), a proxy for the gold price, the similar trajectories can be easily seen. China's appetite for gold is well known and until its near-term financial condition improves, it's likely that the gold price will move more or less in harmony with China's stock market, as has been the case in recent months. Another expert who believes China's free ride at the expense of America's thirst for foreign imports has ended is the Grameen Foundation. One factor that has helped create a reversal of China's longstanding dominance in the U.S. as a net exporter is the continued weakness of the dollar. The weak dollar has helped to bolster America's trade balance at the expense of China. In an article by the Grameen Foundation it was observed, "The sliding dollar has already begun swelling the total new manufacturing orders." Grameen asks rhetorically, "Will manufacturing jobs shipped overseas due to cheap labor come back to the United States due to the current financial crisis?" Grameen goes on to point out that a large number of Chinese factories are closed there due to the scaled back spending by American consumers. Grameen asks further, "Now what effect does this have in bringing manufacturing back to the United States?" Grameen continues: "The primary reason manufacturers move overseas is purely cost savings. Companies do not move to China for any reasons other than cheap labor. So cheap labor drove manufacturing companies overseas. But America's cost structure was not rising—it was falling. Meanwhile, China's costs were rising fast. All of this could bring a massive readjustment in currency values. What would that mean? First, a reduction in the value of the USD. What would a weak dollar really do? A low value dollar, along with a rising yuan (China's currency) could make any manufacturing overseas commercial unfeasible. That is, the American companies would see no reason to set up factories in China to export to the U.S." All of this leads us to ask, if in fact U.S. firms begin a mass exodus out of China and back to the homeland, and if current U.S. export and consumption trends continue, what impact will all of this have on U.S.-China relations? Or more to the point of this analysis, how will China's economy withstand the shock this would almost certainly create? Already, according to Grameen and other sources, there are telltale signs that China is heading down the same primrose path that was trod by America not many years ago—the path that leads to economic perdition. Grameen explains: "The latest data from Red China [shows] State-owned banks have been throwing cash at any communist party member who wants cash to buy. It is all part of a plan to replace consumer sales to Americans. The trouble is that this fast spread of easy money has already begun producing a giant expansion of bad debts in China." Another seasoned China observer, Adrian Van Eck, in a recent edition of the Money Forecast Letter, observed: "But there is one nation that is riding a bubble right now and that nation is the People's Republic of China. Henry Kissinger once told President Nixon that the Chinese people are the smartest on Earth. Yet there is a defect in their official national character that has brought them from very high levels of achievement to very low levels of failure a dozen times over the past 4,000 years. They would build dynasties and conquer nations on all sides, forcing these captive people to pay tribute to the Chinese Imperial Court. "But then pride turned to arrogance and arrogance caused them to make mistakes—big mistakes and a lot of them. . .Each time that one of their dozen rich dynasties fell, China endured long periods of awful poverty. I suspect that will happen again. . .The Chinese State Bank is spreading billions of dollars in loans around to encourage wild consumer spending by communist party members. . .all to replace lost sales resulting from the sharp drop off in American consumer products important from China. China's money has been pushed up in value 20% since Bernanke took over the Fed. Greenspan allowed them to cut the value of their Yuan by a lot (the higher the number per dollar the cheaper the yuan) and then freeze it." Van Eck concluded, "Because of strong domestic inflation, China can no longer afford the kind of cheap prices they have offered [in the past]. The game is about over for them. And at the same time I expect manufacturing plants to begin coming back to America." Is China's economy setting up for its first major debacle since its aggressive growth spurt began? If so, it will almost certainly be preceded by a pronounced decline in China share prices, which appears to be already underway. To that end, we'll be focusing our attention closely on the Shanghai Composite stock index as well as our favorite proxy for U.S. listed China shares, the China 25 Index Fund (FXI). The next question that logically follows this is, "If China implodes, what will happen to the U.S. economy?" There are a couple of cyclical considerations that can be addressed in this regard. The first is that while the famous 4-year "business cycle" is scheduled to bottom later this year, around late September/early October, once the cyclical pressure from this lifts the U.S. financial market should be in a position to resume its leadership position among the major countries, including China. If we assume China is well into a decline by that time, we can project a scenario in which the U.S. shrugs off this external divergence, much as it did when Japan's stock market and economy collapsed in 1990. That leaves the last of the long-term yearly cycles, the 6-year cycle, to push the U.S. stock market into one final growth spurt into 2011 before it peaks next year. It would be easy, and perhaps tempting, to come to the conclusion that "as goes China, so goes the U.S." Yet in spite of attempts of connecting both economies in recent years, the internal dynamics of both countries are quite pronounced and dissimilar. The U.S. still has recovery potential and has already proven its resilience in the wake of an unparalleled credit disaster. It's still too early to count the United States out completely, and with the yearly cycles still favorable for the U.S. business outlook for at least one more year, the guess here is that the U.S. will trump China in 2010–2011 as the most favored destination for investment capital. Cycles Over the years, I've been asked by many readers what I consider to be the best books on stock market cycles that I can recommend. While there are many excellent works out there on the subject of technical and fundamental analysis, chart reading, etc., precious few have addressed the subject of market cycles. Of the relatively few books on cycles that are available, most don't even merit mentioning. I've read only one book in the genre that I can recommend—The K Wave by David Knox Barker—but even that one doesn't deal directly with stock market cycles but instead with the economic long wave. I'm pleased to announce, however, that after nearly 10 years of research and one year of writing, I've completed a book on the subject that I believe will meet the critical demands of most cycle students. It's entitled, The Stock Market Cycles, and is available for sale at http://clifdroke.com/books/Stock_Market.html. Clif Droke is the editor of the three times weekly Momentum Strategies Report newsletter, published since 1997, which covers U.S. equity markets and various stock sectors, natural resources, money supply and bank credit trends, the dollar and the U.S. economy. The forecasts are made using a unique proprietary blend of analytical methods involving cycles, internal momentum and moving average systems, as well as investor sentiment. He is also the author of numerous books, including the recently published volume, The Stock Market Cycles. For more information visit www.clifdroke.com.

Silver's Plunge - Last Chance to Sell or Buying Opportunity? Posted: 07 May 2010 02:18 PM PDT Thursday saw a huge reversal in the general stock market accompanied by huge volume. There seemed to be a selling mood, which accelerated for several hours though the mid-day period. Is this a beginning of a severe plunge or are we ... Read More...

America is Wall Street's Sucker Posted: 07 May 2010 01:59 PM PDT Rep. Alan Grayson: You Own the Red Roof Inn, Thanks to the Fed; Why the Fed Does Not Want an Audit; America is Wall Street's Sucker Read More...

Global Investors Turning to Physical Gold… Posted: 07 May 2010 01:57 PM PDT UBS comments on the very heavy demand from European investors for physical bars and coins (from JB's dialy gold market commentary, which can be read every evening at http://www.lemetropolecafe.com/: "…our Zurich and Geneva sales desk experienced exceptionally strong demand for small bars and coins. All size bars up to 1kg are wanted by retail investors. Buying has been evident all week, but demand yesterday was the greatest that we have experienced since 2008…Coin demand is so intense that supply is struggling to match, even as premiums rise. Capacity constraints, greatly evident last year, are once again a feature. We saw particularly strong demand for Kruggerands, but all coins are being sought right now….Physical demand has been most obvious in Germany this week. Considering their primary role in the Greek bail out and the near borderless European debt problem, with few viable investment alternatives Germany investors have turned to gold." UBS officially raised precious metals to overweight this morning.  In the surprising – perhaps Freudian? – words of Larry Kudlow - the interminable CNBC defender/apologist of fiat currency and the U.S. financial system – "GOLD IS THE NEW RESERVE CURRENCY…"

Gold at $1,200 Why and Will It Hold and Rise? Posted: 07 May 2010 01:43 PM PDT Chest beating. That's what we, at the Gold Forecaster, are doing. After alerting our subscribers at $1,050, and $1,150 with another in between, that gold was turning up while others were pointing to a downturn we feel it is deserved? Read More...

Has Gold Become A New Reserve Currency? Posted: 07 May 2010 12:50 PM PDT For decades, the U.S. dollar has been the reserve currency of the world.  This has given the United States an extraordinary amount of economic power, but as the U.S. economy has started to come apart over the past decade, other nations have increasingly sought to move away from the U.S. dollar and find other alternatives.  For a long time it was thought that the Euro would become the next great reserve currency of the world.  However, the recent Greek debt crisis, along with massive financial instability in nations such as Portugal, Spain and Italy, has caused investors to rapidly lose confidence in the Euro.  In fact there are even some whispers that the Euro may not even survive the sovereign debt crisis as it sweeps across Europe.  With both the U.S. dollar and the Euro looking shaky, investors have been searching somewhere safe to put their money.  Increasingly, they have been turning to gold.  So has gold now become a new reserve currency?  Will all of this new demand drive the price of gold into unprecedented territory? Well, the truth is that as long as paper currencies around the world continue to show instability, gold will continue to be a preferred choice.  Nations all over the world are looking for ways to diversify their very large foreign exchange reserves.  For example, China now has approximately $2 trillion in foreign exchange reserves, and has been wanting to reduce its position in U.S. dollars for quite some time now. But where should they put their money? The Euro is coming apart like a 20 dollar suit.  There is a very real fear that Greece is only the first domino to fall and that soon nations like Italy, Spain and Portugal will be begging the IMF for assistance as the sovereign debt crisis sweeps across Europe.  Well, what about the British pound?  The truth is that the pound is not very appealing right now because the U.K. is facing a massive government debt crisis as well.  In fact, Bank of England governor Mervyn King recently warned that public anger over the "austerity measures" that soon must be implemented in the U.K. will be so intense that whatever party wins this election will be out of power for a generation.   Well, how about the Japanese yen?  Ironically, there has been a move towards the Japanese yen in recent days, but the truth is that the Japanese debt situation is one of the worst in the world.  Japan's gross public debt has reached 201 percent of GDP and  Japan's battle with deflation dragged into its 13th straight month in March.  No, the yen is not safe at all. So does that bring us back to the U.S. dollar?  No.  There is a reason why nations all over the world have been wanting to get out of the U.S. dollar.  The United States has piled up the biggest mountain of debt in the history of the world, and even official U.S. government reports admit that the U.S. government is on a financial path that is not even close to sustainable.  The U.S. economy is caught in a death spiral, and that makes the U.S. dollar very unsafe. So, what is safe at this point? Well, gold is. The price of gold rose to $1,210 an ounce on Friday.  The terms "flight to quality" and "safe haven" are increasingly being used for the precious metal as investors flee all of the major global paper currencies. Just consider some of the recent comments about gold by financial experts that have shown up in the news.... Stephen Platt, a commodity analyst at Archer Financial Services Inc. in Chicago: "The sovereign-debt panic is spreading and forcing a flight to quality into gold." Citigroup analyst David Thurtell: "Gold is now enjoying safe haven status, partly because bonds, particularly peripheral euro zone government and bank paper, is no longer a safe haven." Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter: "There is a clear flight into quality to the gold market as frightened capital seeks a haven of any sort while confusion reigns." So will this move towards gold continue? Sure. Although anyone who follows the gold market knows that big financial institutions regularly work to suppress the price of gold.  In fact, one industry insider recently decided to be a whistleblower and came forward with "smoking gun" evidence of price manipulation in the precious metals markets, but the CFTC didn't do a thing about it. Fortunately, the overwhelming demand for gold is now pushing the price up despite efforts to suppress it.  In addition, once it becomes apparent that most of the "gold" that is traded in the world is not backed by the actual metal itself, the price of gold will go even higher. For years, almost everyone has assumed that the London Bullion Market Association (LBMA), the world's largest gold market, had actual gold to back up the massive "gold deposits" at the major LBMA banks. But that is just not the case. People are now starting to realize that there is very little actual gold in the LBMA system. When most people think they are buying "gold", what they are actually buying are just pieces of paper that say they own gold. Egon von Greyerz of Matterhorn Asset Management in Switzerland recently elaborated on this point.  He says that "a lot of people who have studied it closely are convinced that there is a major shortage in physical gold at LBMA. LBMA trades around 700 tons net of gold daily. That is 25% of world annual production and around $6 trillion annually. To back that amount of trading on a 100% reserve ratio basis, it would need several year's production of physical gold, which they definitively haven't got." So what is going to happen when investors start demanding physical delivery of the gold that they purchase? It is going to create a huge mess. Needless to say, if you are investing in gold make sure that you take physical delivery of the gold. As the paper currenices all over the globe continue to unravel (as all debt-based paper currencies always do), all precious metals, including gold, will be increasingly in demand.  In fact, the idea of gold being a "reserve currency" is not anything new.  Gold has been a "reserve currency" for thousands of years, and those who understand history know that it will always remain one.

Any Higher Gold Price Close Now Will Send The Gold Price Shooting Toward $1,300 Fast Posted: 07 May 2010 12:33 PM PDT Gold Price Close Today : 1,210.00Gold Price Close 22nd April: 1,180.10Change: 29.90 or 2.5%Silver Price Close Today : 18.429Silver Price Close 30th of April: 18.611Change -18.20 cents or... This is a summary only. Visit GOLDPRICE.ORG for the full article, gold price charts in ounces grams and kilos in 23 national currencies, and more!

Graceland Updates 4am-7am Posted: 07 May 2010 12:16 PM PDT I believe "the great stk mkt crash" the gold community wants to see in the stock market, WILL happen. But it will probably be from tens of thousands of Dow points higher than where the Dow is today. The question is: Are You Prepared? Read More...

Masterpieces Are Recession-Proof Posted: 07 May 2010 11:00 AM PDT Recession-Proof? So proclaimed New York art dealer, Guy Bennett, after a work by Picasso set the new bar for most paid for a piece of art at auction: $106.48 million. That's on the same day that stocks enjoyed their biggest one-day correction since February (only to outdone later in the week). This bidding war at Christie's took nine minutes. Seven suitors lost out to an unidentified phone buyer. Tell him what he's won: "Nude, Green Leaves and Bust." Picasso painted it back in 1932. The nude woman: Marie-Therese Walter. The green leaves: a philodendron. The bust: Picasso's profile looking down on his mistress, who's radiant, reclined and ripe, like a fat fish ready to be slit open and fried. (Or, as Alastair Sooke, of the Telegraph calls her: "a passive, pneumatic sex doll.") Is she worth what the buyer paid? Okay, so the rapturous dame is five feet tall and four feet wide. That's impressive. She's a nice, surreal shade of lilac — in contrast to everything we've ever learned about Picasso's love life. In fact, at the time the middle-aged Picasso painted this, he was married to Olga, whom he depicted as toothy, jagged and spiky… a perfect middle-aged Harpy. Quell relief! According to a 1968 Life magazine story, the seventeen-year-old Marie Therese met Picasso as she was coming out of the metro after a little shopping. He grabs her by the arm, "I'm Picasso," he boasts, "You and I are going to do great things together." Great things, so says the auctioneer's gavel. Even Christie's wasn't ready to break out champagne in this climate… the low-end estimate was a mere $70 million. The first bid was $58 million, and ratcheted up in one million dollar increments. From $86 million on, just two phone bidders fought for ownership. A $95 million bid clinched it — plus the Christie's sales charge. Dealer Richard Feigin chalks it up to "a lot of money going around. It doesn't want to sit in currencies so it goes into art." As for the seller, how'd she do? While, she's not around to reap the profits, Frances Brody estate scored a coup. Back in 1951, Brody paid $17,000 for the Picasso. In 2010's weak dollar terms that's about $146,845. Not bad to multiply your money 725 times. A Lesson In What Won't Sell What not to buy? Take a gander at the work that garnered not a single suitor in Christie's auction: Edvard Munch's "Fertility." The Expressionist pioneer's painting left auctioneer, Christopher Burge crying "$23 million" in vain. The high-end estimate was $35 million — too much to pay? Well, consider who Edvard Munch is. He put Scandinavia on the art world's map. You know him from his famous painting "The Scream." Like the Picasso, this was the first time "Fertility" was ever offered at auction. It's one of the most important works of Munch's remaining in private hands. I saw it most recently when it was on loan for a special Munch retrospective at the prestigious Art Institute of Chicago. This painting opened a new stage in his career. Why do people buy paintings? Mistresses and gossip. Or a nude women to hang over the bar. Perhaps Fertility should have been less subtle and taken off her clothes, rather than suggestively offering her bowl of bright red cherries. But we do have a mistress here… The subject is Tulla Larson, a bourgeois daughter of a wine merchant with whom Munch had a fiery affair. No exaggeration. The final act saw Munch shoot off a part of the finger on his left hand in an argument with Tulla. (I'm guessing the ring finger.) In the 1899-1900 painting, we see all the signs of what will befall the couple by 1902 — in addition to Munch's crippling issues with women. Literally. See that cane sitting next to the good peasant man on the right? That's Munch. The woman, Tulla, visibly pregnant, is luminous and laden. Between the man and the woman stands a tree. Call it the tree of life, or, just a cherry tree. The important symbol is the fresh wound in the tree trunk. A newly cut bough's nakedness shines a brilliant orange — like the cherries and the woman's dress. Does the wound spell disaster or new regeneration? And this painting found no art lovers to take it home and polish its frame. Not even a single dealer thought she could turn it around for a big enough profit. (Gee, maybe because it's only four feet by four and a half). Does Fertility suffer because it isn't full of simple, fat pleasing shapes, sweet curves and pastel colors? In fact, it is replete with curves; they just aren't highlighted by black grade-school lines. Like today's market data, they are a little harder to read. The insinuations are dark and murky. What Picasso Tells Us About the Market Earnings season is upon us and even the borderline sectors, like REITs and car rental stocks, finesse earnings into pleasing numbers. Investors seemed as eager as Picasso's easy teen Marie Therese. Everyone, from the Treasury to CEOs and CFOs, wants to treat us like dumb, pneumatic sex dolls. We'll deflate when they say, inflate when they say, and open our wallets for them at the slightest blip on the Street. But consumer-investors show signs of wakening conscience. This week's market flirts dangerously with correction. While we've enjoyed the upswing, we've known a cooling down is in order. People want simple, fat returns. A down market should only turn up in a gentle U or a stellar V. The truth of the matter is, as a national economy, we're more like Picasso, the entrepreneur-dreamer sitting at home with the middle-age harpy: national deficit, Greek contagion, costly wars. etc. etc. Reality nags, ever ruining the fun of a good run up. A painting of the true market picture would look more like Munch's "Fertility" — sure, there's a lot of green, but it's not in the obvious sexy stuff. And, like Munch's tree of life, a big cut could be a wound, or it could mean new life. I think the sellers and buyers saw that on Thursday, May 6 — a frenzied half-hour for the Dow record books. A 997-point drop saw a new crew come right back in. For now, they almost balanced each other out. Good for a 348-point correction. When it comes to markets, whom would we rather trust: the moody Norwegian ready for disaster at every corner, with a plump oil and gas-fueled government pension fund… and a member of the richest economy in the world? Or would you trust the philandering Francophile Spaniard who enjoys his present, at the expense of his future… not giving a damn about those he trod down as he sowed success? I don't know about you, but I'm looking at buying a few paintings… and checking out the best ways to get in on the petrokroner. Samantha Buker for The Daily Reckoning Masterpieces Are Recession-Proof 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

FRIDAY Market Excerpts Posted: 07 May 2010 10:03 AM PDT Gold price nears December's record high The COMEX June gold futures contract closed up $13.10 Friday at $1210.40, trading between $1193.00 and $1214.90 May 7, p.m. excerpts: (from Dow Jones) Gold ended above $1,200 for the first time in five months, reprising its role as a retainer of value in turbulent times. The last time gold futures settled above this level was the same day the yellow metal hit an all-time high of $1,227.50 an ounce. Gold has gained more than 2.5% in a week marked by Thursday's stunning freefall in U.S. stocks, deadly riots in Greece and continued unease over European financial institutions' exposure to euro-zone sovereign debt. And buying in gold accelerated ahead of Friday's close. "Nobody wants to be short gold over the weekend," said Michael Gross, futures analyst with OptionSellers.com…more (from Reuters) U.S. stocks turned negative for the year on Friday on fears of another credit crisis stemming from Greece's souring finances and lingering questions about what triggered the previous session's dramatic plunge. The major stock indexes finished Friday's volatile session from 1% to 2% lower. "Europe's debt crisis is a big issue that won't go away any time soon. But with what happened yesterday, investors have grown more concerned that the environment just isn't safe, period," said Stephen Massocca, managing director at Wedbush Morgan…more (from Marketwatch) "Fear is the thing driving gold," said Darin Newsom, senior analyst at Telvent DTN. People realize that Europe could bring the economic recovery to its knees, he added. "Everything is linked, we cannot say the ocean protects us." Gold started the day lower, but quickly resumed its move upward as the bit of profit-taking was tempered by the ongoing worries. "The only place traders feel comfortable parking their money for the weekend is gold," said Adam Klopfenstein, senior market strategist at Lind-Waldock. "Gold is going to be the reserve currency of choice until the next shoe drops" in Europe…more (from Bloomberg) "People are nervous about what's going on in the rest of the world," said Michael Cuggino, who manages $6 billion in the Permanent Portfolio fund, which includes a 20% holding in bullion. "It's a safe bet that the bigger the problem is in Europe, the larger the impact it will be on the U.S. economy." Demand for gold bars and coins was "exceptionally strong" yesterday, UBS AG said in a report. "It's a flight to safety against these wild currencies," said Frank Lesh, trader at FuturePath Trading LLC. "Gold being the international currency is the most stable environment now."…more see full news, 24-hr newswire…

Treasury Redeems $144 Billion In Bills In First Four Days Of May Posted: 07 May 2010 09:55 AM PDT A few days ago we reported, quite stunned, that the US Treasury had redeemed nearly $600 billion in Bills in the month of April. Alas, the side-effects of an massively short-maturity heavy bond curve will be here to haunts us for a long time: according to today's DTS, in the first 4 business days of May alone, the UST has redeemed $144 billion in Bills. Annualized this number is surely something that even Richard Feynman would not joke about. We have gotten to the point where the roll issue is not a monthly concern, but is becoming a weekly funding threat, and even daily. Of course, as we speculated in December, what better way to raise demand for Treasuries than to stage an equity selloff. Well, we got our selloff, and the 10 Year was trading in the lower 3% range today. However, the risk now is how the sovereign fire will spread through the periphery and into the core. Already, we are seeing that CDS traders are massively betting on a collapse of the UK as the next bastion of sovereign spending lunacy. And when the UK goes, Germany is next, shortly to be followed by Japan and the US. At that point the only buyer of US debt will be the US itself. Which will lead to the final outcome of massive consumer deflation as economic collapse finally strikes home, coupled with asset price hyperinflation, as a gallon of oil hits $10 (and helping the Dow hit 36,000). And as this is not an equilibrium state, the outcome will be, as it always is in these situations, war. Hopefully the US is good as it historically has been at finding its "deserving" opponent, WMDs aside. Otherwise, things may be a little rough for the great declining American civilization after the next 5 years.

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