Gold World News Flash |
- Gold Forecaster – COMEX gold and silver markets do not affect gold and silver prices at all!
- International Forecaster May 2010 (#5) - Gold, Silver, Economy + More
- Euro; the Worst Is Yet To Come
- Barry Allan: Intermediate and Development Plays Are the Golden Ticket
- Why More Investors Like Gold
- European Union in Crisis Mode
- Wheels Falling Off Euro?.. The New Austrian School of Economics
- Got Gold Report - COT Flash May 14
- Europe Throws a Hail Mary Pass
- Gold €1000: Crisis Insurance or Bubble?
- Market Commentary From Monty Guild
- Jim?s Mailbox
- Is The Financial System Corrupt?
- In The News Today
- Silver About To Break $20 and Looking Better Than Gold
- Foreign Policy Magazine: China's Bubble Trouble
- The Rating Agencies Are Dead: Long Live the Rating Agencies
- Gold Commercial Short Positions Hit All Time High, As Gold Spike Protection Team Keeps Very Busy
- Central banks have lost their battle against gold, Sprott tells King World News
- This Past Week in Gold
- SmartKnowledgeU's J.S. Kim concurs with GATA
- SmartKnowledgeU's J.S. Kim concurs with GATA
- Jim's Mailbox
- Gene Arensberg: Comex large commercials break ranks
- Fed Causes Art Auction Binge
- Gold
- The Thread of Historical Metals Prices
- Goldman's Big Picture View On FX, Beyond Just The Topical EURUSD
- Mohamed El-Erian: "You Have To Buy On Both Liquidity And Solvency Solutions"
- COT this week - stress time
- Visualizing An Austere Europe
- 4 Companies Increasing Investor Confidence By Increasing Dividends
- 20 Interesting Articles Brought To You By Oilprice.com
- The Threat of Hyperinflation real or not?
- U.S. Bank Fraud Illegally Hides Write-downs
- Gold €1000: Insurance or Bubble?
- Eurozone Crisis Ignites Gold
- Buying More Gold
- Bullion Prices & Business Weekend Recap – May 15, 2010
| Gold Forecaster – COMEX gold and silver markets do not affect gold and silver prices at all! Posted: 16 May 2010 01:00 PM PDT All of us follow COMEX in New York and assess the 'net speculative long position' there, so as to see the actual weight of opinion on the gold price. It gives us a clear market opinion after all. But many of you out there may believe that COMEX is a very large factor in the gold price. Is it?
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| International Forecaster May 2010 (#5) - Gold, Silver, Economy + More Posted: 16 May 2010 04:00 AM PDT Wednesday was another wild day to the upside in precious metals. Spot gold rose $22.80 to $1,242.70, as June rose $18.00. Spot silver rose $0.37 to $19.64 and June rose $0.23. As you can see after the Comex spot close the shorts went to work on both metals again. It is interesting that the CME traded 241,207 contracts Thus, the late closes of the outside months are becoming more important due to their increasing volume.
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| Euro; the Worst Is Yet To Come Posted: 16 May 2010 03:00 AM PDT I think it is a given that Greece will have to default, everyone knows this, but they are just playing cat and mouse for now. Most Greeks are dead set against the new Austerity measures and they will likely throw this government out of power for the new changes they have instilled. The next government will cater to the people's needs for fear of receiving the same treatment. Change is not wanted in Greece.
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| Barry Allan: Intermediate and Development Plays Are the Golden Ticket Posted: 16 May 2010 02:00 AM PDT In this exclusive and revealing interview with The Gold Report, Mackie Research Capital's Barry Allan, always among Canada's top-ranked mining analysts, says the European currency crisis and crippling debt problems will push gold—and the USD—higher through the rest of 2010. But gold and the greenback may not be the biggest winners as a result of a faltering euro. Allan suggests other currencies could have the most to gain as investors seek other havens.
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| Posted: 15 May 2010 07:31 PM PDT By Frank Holmes, CEO and Chief Investment Officer Gold is charging up to new highs, so it’s no surprise that the level of interest in this financial asset is charging up as well. This week I did interviews on CNN, CNBC, USA Today and Reuters, and in most cases a specific question came up – “Should people be buying or selling gold right now?” That’s a tough one. The monetary turmoil in western Europe and some early signs of inflation create the right conditions for gold to continue its run, and while we see higher prices in the long term, it’s difficult to predict what might happen in the here and now. Sovereign debt is a key driver of the current economic jitters. The chart below shows next year’s sovereign debt estimates for the G-7 and other key global economies – the U.S. debt in 2011 would be about equal to GDP ($15 trillion), while the debt loads carried by Japan, Italy and Greece would exceed GDP. With all tha...
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| Posted: 15 May 2010 07:31 PM PDT Well, the small rally I spoke of in early London trading before I hit the send button yesterday morning, really turned into something. Once the London a.m. gold fix was in at 10:30 a.m. in London, gold took off for the moon and the stars. But the moment it got north of the magic $1,250 spot price... it got immediately hammered into submission. Then, once the [early] London p.m. fix was in at 2:45 p.m. local time [9:45 a.m. in New York], JPMorgan et al, began to sell...then pulled their bids. The low of the day [$1,217.00 spot] came minutes after the London close... which was minutes after 11:00 a.m. Eastern time. But a big buyer [short covering?] showed up and gold rocketed back, regaining half its loses in an hour, before finally settling into an uneasy close... but only down $1.20 from its Thursday close. However, that was more than $20 below its London high... and heaven only knows how high the price would have risen if 'da boyz' hadn't shown up. Silver's ...
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| Wheels Falling Off Euro?.. The New Austrian School of Economics Posted: 15 May 2010 07:31 PM PDT Wheels Falling Off Euro? Saturday, May 15, 2010 – by Staff Report Nicholas Sarkozy Concerns about the sovereign debt difficulties of Greece has raised the market's awareness. If this is a global problem, who is going to be in charge of the bail out? As far as debtors go, Greece is a piker, but look at the problems that bail out is causing. Give them €100B and they riot. Raise the ante to €150B, and tell the Greek bureaucrats they must take a pay cut and they schedule a new riot. As the government borrowing cost soared for Greece and started to work higher in Spain and Portugal, it was obvious more had to be done to defend the euro. The division between the frugal northern Europeans and their spend thrift Mediterranean partners was great. According to Spanish reports Nicholas Sarkozy (left) told Germany's Merkel that she had to get aboard the bailout plan or Sarkozy was going to cash in his euros for French francs and go home. This threat...
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| Got Gold Report - COT Flash May 14 Posted: 15 May 2010 07:31 PM PDT COT report issued today, Friday, May 14, 2010 at 15:30. Bottom line: COT report suggests COMEX commercials NOT – REPEAT NOT aggressive on the sell side for gold and actually covered some shorts on silver! Gold +5.3% and the gold LCNS +4.1%. Silver +8.2% and the silver LCNS actually declined -5.2%. Details just below. ATLANTA – Strong safe haven demand for gold, euro weakness, quantitative easing European style – and the Forex horse race is now down to two “currency” horses racing for the wire: gold (in the lead) and the U.S. dollar. The euro and the pound sterling have both pulled up lame. The jockey riding gold is confident, lean and focused. The jockey on the greenback is bloated, obese and distracted. His horse is winded and sweating blood, but hopped up on all kinds of illegal stimulants. One gets the sense that the winner’s circle is but a few furlongs ahead. Demand for physical metal – the real sh...
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| Europe Throws a Hail Mary Pass Posted: 15 May 2010 07:31 PM PDT Europe Throws a Hail Mary Pass It's More Than Just Government Debt The Grand Misallocation New York, LA, and Italy In a 1975 playoff game, the Dallas Cowboys were nearly out of time and facing elimination from the playoffs, down 14-10 against a very good Minnesota Vikings team. The Cowboys future Hall of Fame quarterback Roger Staubach had no very good options. He later said he dropped back to pass, closed his eyes and, as a good Catholic, said a Hail Mary and threw the ball as far as he could. Wide receiver Drew Pearson had to come back for the ball and, in a very controversial play, managed to catch the ball on his hip and stumble into the end zone. Angry Vikings fans threw trash onto the field, and one threw a whiskey bottle that knocked a referee out. After that play, all last-minute desperation passes became known as Hail Mary passes. (That was a very thrilling game to watch!) And that is what Europe did last weekend. They threw a Hail Mary pass in an attemp...
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| Gold €1000: Crisis Insurance or Bubble? Posted: 15 May 2010 07:31 PM PDT by Adrian Ash BullionVault Friday, 14 May 2010 Rising insurance premiums don't negate the need to insure... IS GOLD in a bubble at €1000 an ounce? Let's hope so. Because if not, it would mean investors are right to keep bidding crisis insurance higher. Buying gold is like buying an option that gives you security, liquidity and diversification when you need it most – which is when other stores of wealth fail. Yes, the cost of insurance – the premium on gold's option – has risen since before the current crisis began. But that doesn't negate the need to insure your savings. "First, security – the absence of any credit risk is an intrinsic quality of gold," as Hervé Hannoun, then of the Banque de France, now of the BIS, said at the FT's Gold Conference in mid-2000. "Second, liquidity – in situations of political turmoil or high global inflation, gold's liquidity is unchallenged. [And third,] diversification – gold has shown a very low and even a negative correl...
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| Market Commentary From Monty Guild Posted: 15 May 2010 07:31 PM PDT View the original post at jsmineset.com... May 14, 2010 02:09 PM THE EUROPEAN ECONOMIC CRISIS Earlier this week, the markets cheered the announcement out of Europe of a bailout package by the European Union nations and the International Monetary Fund, and a decision by the European Central Bank to begin buying sovereign debt of weaker states. This bailout plan protects the sovereign bond markets for the short term, but does not solve any of the longer term problems in European bond, stock, and currency markets. In fact, they allow the problems to grow and fester without being addressed. As we have repeatedly stated, the answer to the European problem is simple. Do not allow any social programs, especially entitlement programs to begin or continue unless there is money in hand to pay for them. The ability to borrow is NOT money in hand. The specifics of the three-year aid package consist of €60 billion of emergency lending available quickly from the European ...
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| Posted: 15 May 2010 07:31 PM PDT View the original post at jsmineset.com... May 14, 2010 02:21 PM Jim, The very temporary MOPE illusion right now is that the most stable base of currencies in the pyramid scheme collapse is the US dollar and therefore where you should flee for safety. Unfortunately the sheeple who fail to study history don’t understand that gold is the only currency that has no liability and cannot be printed by the kingmakers. The writing is on the wall and this is it! Do not trade away your insurance for speculation. Hold your gold in hand and not in paper promises. CIGA "The Gordon" The Road to Default CIGA Eric Follow the capital flows, people. As money flees from the European bond market, it runs to the safety of US debt, stocks, and gold. The race to the fiat bottom, however, ensures that it's only a matter of time before the US devalues again and capital begins to flee the safe haven illusion of the US bond market. Greece needs to borrow from everyone else to cover it budget...
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| Is The Financial System Corrupt? Posted: 15 May 2010 07:31 PM PDT View the original post at jsmineset.com... May 14, 2010 02:36 PM Dear CIGAs, Recent headlines coming out of the financial world have been jaw dropping. Here are a few: US faces same problems as Greece, says Bank of England (The Telegraph), World markets rattled by Goldman fraud (The Economic Times), Goldman Sachs faces criminal investigation (Guardian UK), Government Probe into Wall Street Sales Widening (Fox Business), SEC expects early findings on dramatic, 1,000 point market drop next week (The Hill), Feds probing JPMorgan trades in silver pit (NY Post), Federal Reserve lends bucket to EU bailout (Politico),and NY AG investigates if banks misled ratings agencies (WABC). My favorite headline is Major Wall Street firms face criminal probe (Reuters), because the article goes on to name all of the big players. The Reuters story says, ". . . preliminary criminal probe is being conducted with U.S. securities regulators and involves JPMorgan Chase, Citig...
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| Posted: 15 May 2010 07:31 PM PDT View the original post at jsmineset.com... May 14, 2010 02:53 PM Dear CIGAs, The joke of the day was nailed by Yra Harris when he said: "Trichet said today that the ECB purchasing of European sovereign debt was not quantitative easing. Our only response is similar to Bill Clinton’s indiscretion is not sex." Jim Sinclair's Commentary Please support John’s excellent service. - Retail Gain Statistically Indistinguishable from Contraction - Revisions Enhance Production Reporting - Trade Deficit Remains Economic Negative - Budget Deficit Widens Despite Gimmicks "No. 296: Retail Sales, Production and the Deficits " [URL]http://www.shadowstats.com[/URL] Jim Sinclair’s Commentary Everything will be bailed out. That includes every state and all sovereign debt as quantitative easing goes to infinity. Gold will trade on this leg at a minimum of $1650. More than likely it will reach much higher. Obama Administration Backs $23...
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| Silver About To Break $20 and Looking Better Than Gold Posted: 15 May 2010 07:00 PM PDT Go back to the 1970s and the last precious metals boom. In the late 1970s gold prices rose eight-fold and silver by a factor of 25. Fast forward to today and you have ArabianMoney editor Peter Cooper publishing a book predicting a rise in gold prices to $5,000 as the world goes through something like a re-run of the mid-70s.
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| Foreign Policy Magazine: China's Bubble Trouble Posted: 15 May 2010 06:49 PM PDT Patrick Chovanec submits: Foreign Policy magazine had a good article Thursday on China’s bubbling property market, by Christina Larson. Christina and I met up when she was in Beijing last week, and had a long conversation on this subject. I was quoted a couple times in the piece, offering a diagnosis that already will be familiar to readers of this blog:
Complete Story »
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| The Rating Agencies Are Dead: Long Live the Rating Agencies Posted: 15 May 2010 06:26 PM PDT Andrew Butter submits: Once upon a time, rating agencies were independent research companies advising end-buyers and traders on the fundamental value of securities. They sold opinions of value, i.e. they did valuations – they gave an opinion on how likely it was that projected cash flows would materialize in the future; and once you got a fix on that, working out present value is just arithmetic. The trouble started when regulators decided to hitch a free ride on the backs of the rating agencies; they mandated that capital adequacy was assessed based on ratings provided by approved agencies. Complete Story »
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| Gold Commercial Short Positions Hit All Time High, As Gold Spike Protection Team Keeps Very Busy Posted: 15 May 2010 06:00 PM PDT In addition to the EUR data in today's CFTC Commitment of Traders report, another data point that caught our eye is the record exposure in outright commercial shorts in gold: this week they hit an all time high of 450,950. It appears that last week the desire to suppress any gold breakouts was at historic highs, even as net commercial exposure hit a 2010 low of -282.6, just slightly higher than that seen in the second week of January. If even with this massive onslaught to keep gold low by the LBMA, the precious metal managed to nearly hit $1,250 today, what will happen to gold when the 450k commercial positions are forced to cover?
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| Central banks have lost their battle against gold, Sprott tells King World News Posted: 15 May 2010 03:51 PM PDT 11:46p ET Saturday, May 15, 2010 Dear Friend of GATA and Gold: Interviewed for 10 minutes today by Eric King of King World News, Sprott Asset Management CEO Eric Sprott remarks that the stock market's recent thousand-point slip signals a bear market ahead; that Europe's trillion-euro bailout couldn't be more gold-friendly; that debt isn't producing much economic growth anymore; that people are looking at gold much differently over the last two months, realizing they have to get some amid the financial lunacy of governments; that central banks have lost their battle against gold; that many gold stocks are very undervalued as gold mining profits rise sharply; and that eventually currencies will be backed by gold again. You can listen to the interview at the King World News Internet site here: http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/5/15_E... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT 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. Private Placement Offering for Silver Phoenix Resources Inc. Each flow-through unit consists of one common share in the capital of the corporation (a "flow-through share") and half of one non-flow-through common share purchase warrant (a "warrant"). Each whole warrant shall entitle the holder to acquire one non-flow-through common share in the capital of the corporation (a "warrant share") until 5 p.m. Vancouver time on the date 24 months following the closing date (as defined herein) at a price of $0.70. The proceeds raised from the offering will be used for general exploration and to drill the 100-percent-owned River Jordan Property. This historic property hosts the King Fissure [aka River Jordan] lead, zinc, and silver deposit. 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 For more information about the River Jordan Property, please visit: http://public.iwork.com/document/?a=p1047687515&d=River_Jordan_Property.... Join GATA here: World Resource Investment Conference * * * Support GATA by purchasing a colorful GATA T-shirt: 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: * * * 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: To contribute to GATA, please visit: ADVERTISEMENT Anglo Far-East Bullion Co., the Original Private Bullion Custodian For two decades Anglo Far-East Bullion co. has been providing select international clientele the highest degree of privacy, security, and access to buy, hold, and sell allocated gold and silver bars. -- Allocated gold and silver bars: AFE will not only provide you with the individual bar numbers of the bullion bars you own, but you can also rest safely in the knowledge that each bar is sight-verified by a top Swiss auditor and annually checked off against AFE accounts to ensure that your metal is locked away safely. -- Guaranteed market access and liquidity: AFE buys and sells directly with LBMA-certified metal refineries only. 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Many of AFE's clients choose AFE specifically because their metal is safely vaulted outside the jurisdiction they reside in. -- Iron-clad governance: By contract with AFE's vaulting provider, no access may be made to the vaults without the attendance of an agent of the vault as well as an agent of the third-party signatory trustee, in this case top Swiss auditor Grant Thornton. All metal going into and -- more importantly -- coming out of the vaults requires the approval of a third-party signatory trustee as well as a detailed, sight-verified report of each bar and serial number by the auditor. For more information and a personal consultation with one of our private account liaisons, please contact us: Anglo Far-East Bullion Co.
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| Posted: 15 May 2010 03:47 PM PDT This past week in gold By Jack Chan at www.simplyprofits.org 05/15/2010 GLD – on buy signal. SLV – on buy signal. GDX – on buy signal. XGD.TO – on buy signal Summary Long term – on major buy signal. Short term – on buy signals. We continue to hold our core positions, waiting for a pullback to add to positions. Disclosure We do not offer predictions or forecasts for the markets. What you see here is our simple trading model which provides us the signals and set ups to be either long, short, or in cash at any given time. Entry points and stops are provided in real time to subscribers, therefore, this update may not reflect our current positions in the markets. Trade at your own discretion. We also provide coverage to the major indexes and oil sector.
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| SmartKnowledgeU's J.S. Kim concurs with GATA Posted: 15 May 2010 03:33 PM PDT 11:30p ET Saturday, May 15, 2010 Dear Friend of GATA and Gold: In an interview with Lars Schall for MMNews in Germany, SmartKnowledgeU investment firm proprietor J.S. Kim concurs extensively with GATA's complaint of manipulation of the gold market. The interview is headlined "We Don't Need Central Banks" and you can find it at MMNews here: http://www.mmnews.de/index.php/english-news/5555-we-dont-need-central-ba... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy to Become Coal Producer This Year Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen. For Prophecy's complete press release about its production plans, please visit: http://www.prophecyresource.com/news_2010_may11.php Join GATA here: World Resource Investment Conference * * * Support GATA by purchasing a colorful GATA T-shirt: 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: * * * 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: To contribute to GATA, please visit: ADVERTISEMENT Coming Friday-Sunday, June 11-13, at the Dallas-Fort Worth Airport Marriot: 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. To learn more about and register for the Anglo Far-East Bullion conference, please visit: http://www.anglofareast.com/seminar-registration/
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| SmartKnowledgeU's J.S. Kim concurs with GATA Posted: 15 May 2010 03:33 PM PDT 11:30p ET Saturday, May 15, 2010 Dear Friend of GATA and Gold: In an interview with Lars Schall for MMNews in Germany, SmartKnowledgeU investment firm proprietor J.S. Kim concurs extensively with GATA's complaint of manipulation of the gold market. The interview is headlined "We Don't Need Central Banks" and you can find it at MMNews here: http://www.mmnews.de/index.php/english-news/5555-we-dont-need-central-ba... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy to Become Coal Producer This Year Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen. For Prophecy's complete press release about its production plans, please visit: http://www.prophecyresource.com/news_2010_may11.php Join GATA here: World Resource Investment Conference * * * Support GATA by purchasing a colorful GATA T-shirt: 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: * * * 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: To contribute to GATA, please visit: ADVERTISEMENT Coming Friday-Sunday, June 11-13, at the Dallas-Fort Worth Airport Marriot: 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. To learn more about and register for the Anglo Far-East Bullion conference, please visit: http://www.anglofareast.com/seminar-registration/
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| Posted: 15 May 2010 03:15 PM PDT Greetings Jim, The Gold Currency Index weekly chart closed at another all-time high yesterday, and the rally continues to strengthen as technical indicators such as momentum and oscillators trend higher. Gold in US dollars also moved up to a new all-time high, confirming the long-term breakout that occurred last week. Best, Prometheus Market Insight
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| Gene Arensberg: Comex large commercials break ranks Posted: 15 May 2010 03:11 PM PDT 11:10p ET Saturday, May 15, 2010 Dear Friend of GATA and Gold (and Silver): Gene Arensberg tonight posted the full text of his new Got Gold Report, disclosing that the large commercial dealers have broken ranks in gold, with the usual suspects adding to their short positions but smaller commercials starting to cover. And in silver, Arensberg writes, the largest dealers themselves have begun to cover. Arensberg's GGR is headlined "Comex Large Commercials Break Ranks" and you can find it here: http://treo.typepad.com/got_gold_report/2010/05/comex-large-commercials-... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy to Become Coal Producer This Year Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen. For Prophecy's complete press release about its production plans, please visit: http://www.prophecyresource.com/news_2010_may11.php Join GATA here: World Resource Investment Conference * * * Support GATA by purchasing a colorful GATA T-shirt: 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: * * * 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: To contribute to GATA, please visit: ADVERTISEMENT Coming Friday-Sunday, June 11-13, at the Dallas-Fort Worth Airport Marriot: 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. To learn more about and register for the Anglo Far-East Bullion conference, please visit: http://www.anglofareast.com/seminar-registration/
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| Posted: 15 May 2010 11:22 AM PDT
I know where all those Wall Street bonuses went: contemporary art. The latest auctions from Christie's, Sotheby's, and Phillips de Pury were for the most part blockbuster sales where the works of living and dead Contemporary artists reached new highs. These art auction houses exceeded all of their estimates on sales this week. Tuesday night Christie's sold a mind altering $231.9 million. On Wednesday evening Sotheby's brought in $190 million at their auction. Then Thursday night, Phillips de Pury, the most interesting auction, brought in $37.9 million. Each house exceeded their pre-auction sales estimates. Let me digress a minute on the economics here. If bankers like Goldman Sachs, JP Morgan, Citigroup, and Bank of America have a full quarter of "perfect" trading days, then the huge profits generated find their way into the pockets of those who achieved this investing miracle. But, as readers of The Daily Capitalist know, this was no miracle. It was a gift from the Fed to these bankers. The Fed has created the opportunity of the new decade, a sure thing carry trade. Borrow money from the Fed at next to zero interest rate cost, and reinvest in bonds elsewhere and make a killing. Don't get me wrong; I am sure this is not as easy as it sounds. But ... I mean is there some super-secret high-powered trading formula that has achieved these returns? I don't think so. For every buyer, as we well know, there is a seller. The crash fell on some harder than others: The Phillips' sale was a court ordered sale of the collection of CNET co-founder, Halsey Minor. Minor found himself owing $21.6 million delinquent loan to ML Private Finance L.L.C., an affiliate of Bank of America’s Merrill Lynch. While the sale grossed $37.9 million, there were other collections included in the sale, so it's hard to know from the article if Mr. Minor's creditors were paid. I'll guess that they were. From the NYT article:
It gets better. The Christie's $231.9 million sale included the collection of author Micheal Chrichton who died in 2008. In a ground breaking price for Jasper Johns, he's still alive, his "Flag" painting of the U.S. flag went for $28.6 million, second highest price ever paid for a living artist.
The Crichton sale included pieces by David Hockney, Roy Lichtenstein and Robert Rauschenberg.
Then the Sotheby's auction at $190 million had some amazing prices:
Can you picture this in your foyer? Yikes. One parting shot. Most of this stuff is crap. Maybe Rothko, but the rest ... These newly-minted-alpha-males-now-art-connoisseurs love to show off their wealth to their buddies. I've never heard one of them admit that they do it for investment potential. They blather about how great the art is. Who wouldn't be impressed with this Andy Warhol. I may sound overly arrogant here, so forgive me; I can't help myself. I've been interested in art for many, many years and I have art and I have opinions. Maybe I'll pontificate one of these days, but for now, I'll just be snotty.
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| Posted: 15 May 2010 10:54 AM PDT Gold continues in a sustained uptrend. Note the timid, tentative nature of sentiment & advance - so often found in early stage bull markets. As the adage states 'buy hesitance sell confidence'. Read More...
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| The Thread of Historical Metals Prices Posted: 15 May 2010 10:38 AM PDT I have accumulated into a single file (for your convenience) daily historical prices of gold from 1973 until today (mid-May 2010). The file is attached to this thread. My source: http://www.usagold.com/reference/prices/history.html Do you have access to any more data? I would appreciate it if you could post daily/weekly/monthly gold prices going even earlier than the 1970s. Data about other metals, like silver, platinum, whatnot are also appreciated. Daily prices are preferred, but weekly/monthly are fine too. The farther back in time the better. Thus, how about making this the thread of historical data? Sounds like a good idea that metals junkies also be metals price data junkies. Please provide your sources too if you post some data. Thank you! :)
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| Goldman's Big Picture View On FX, Beyond Just The Topical EURUSD Posted: 15 May 2010 10:29 AM PDT | ||||
| Mohamed El-Erian: "You Have To Buy On Both Liquidity And Solvency Solutions" Posted: 15 May 2010 10:04 AM PDT
Amid last week's whirlwind media tour, in which the PIMCO dynamic duo of Gross and El-Erian were jointly talking up their book and providing useful insights on contagion, was this clip with the former Harvard investment officer from an interview with Bloomberg's Tom Keene. It is by far the most informative of all of El-Erian's recent media guest spots. Below are the highlights. Q. On coordinated fiscal policy in Europe. Europe is buying time. Trying to avoid a very disorderly outcome - doing that by throwing a lot of liquidity at the problem, and hoping that countries can create serious fiscal adjustment. Q. Do we still need a Greek restructuring? "We need to do something about the debt overhang in Greece. John Lipsky correctly said part of the solution are i) first deficit reduction and ii) structural reforms. My sense is that is still incomplete." Q. Where does Euro weakness stop? "It stops when the market is convinced that Europe has a sustainable solution, that Europe is dealing with its debt overhang, and that the good isn't being contaminated by the bad." "The politics of austerity and the politics of bail out are very difficult." Q. Does the tightening Greek spread to Bunds sound the "all clear" No - it is a function of shock and awe. The question that one must ask, is whether the ECB's presence permanent. Are they willing to contaminate their balance sheet by buying Greek bonds, or is it like an FX intervention where they come in, they see if it works, they step back and analyze. Q. Is PIMCO focused on the fiscal issues of the UK? "Yes we are. In 2010 the markets are going to wake up and realize the public finances matter. We are focused not only on the UK, but across the world." Q. What should US investors be watching for in Europe? "The main question for any investors: can Europe stabilize the situation so that the banking system does not get contaminated. The banking system is like the oil in your car: it connects all sorts of things and allows the car to move forward, so you want to make sure that the banking system functions well, which goes back to what we spoke about earlier, you have got to make sure that Europe deals with its debt issues." Q. What do the European banks need to do? "Banks need to raise capital, and "deal" with assets which are facing headwinds. They have to do what the Us did which is bite the bullet and raise capital and deal with these assets. Lots and lots of people bought Greece for their government bucket, thinking it's interest rate risk. Well it turns out Greece is credit and default risk, which means much more volatility, which means that many investors out there, including the banks, are overexposed to Greece and they will take every opportunity they have to reduce their exposure." Q. How much cash will be deployed? "Will not see the full trillion deployed. The IMF part is the least likely part to be used: it can not precommit money for a region. The IMF has two principles which are really important: "uniformity of treatment" and "case by case." So each country will have to come to the IMF on its own and not part of a region. The number's function was shock and awe. People are realizing there is uncertainty about the package over time. " Q. Is PIMCO long European banks, or purchasing European assets on the margin? "We are waiting. Better to wait and see how the solution goes. It is not enough to buy on liquidity. You have to buy on both liquidity and solvency solutions. we know that liquidity solutions can buy you some time, but ultimately you need something that deals with the underlying problem." h/t John
This posting includes an audio/video/photo media file: Download Now | ||||
| Posted: 15 May 2010 09:33 AM PDT Each Friday the Commitment of Traders is released as at the previous Tuesday. This week's one was an eye opener. Usually, as the gold price rises the "commercials" read JPM et amis load on more and more shorts increasing open interest until it cracks and the price tumbles and they close out the shorts at a profit. Of course this is not deemed manipulation because the rating agencies have ruled that the commercials have sufficient strength to meet such financial commitments. No actual gold holdings, however are audited. On this chart, have a look at the green line. It's open interest - number of 500 oz contracts. Looking back, see when it hit 500k contracts? That was a record then and less than a year later we're 15% higher.  The important thing though, is that despite the record number of contracts, the commercials' shorts are net no greater. So, some of the commercials are going long - and in very much greater numbers. now, lookee here:  On an outright basis (not netted against longs) commericals short contracts are at record high numbers. My interpretation of this anomaly is that ranks have broken among the commercials and that as some are going shorter than ever before, others have flipped to the long side. Well, time will tell whose lunch is going to get eaten
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| Posted: 15 May 2010 08:59 AM PDT
With the euro collapsing, all of Europe is on the brink, and as a result, every European country has now instituted some form of austerity measures. Hereby, we summarize what these look like to date. Unfortunately, we are confident the current batch of austerity will be materially insufficient with many more rounds of cutbacks to come. Looking across the Atlantic, the US has yet to initiate any reductions in its gargantuan budget deficit or governmental spending. And as can be seen its metrics are just as bad if not worse than most of Europe. Use this chart to get a sense of what the initial round of US austerity, when it strikes, will look like.
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| 4 Companies Increasing Investor Confidence By Increasing Dividends Posted: 15 May 2010 08:28 AM PDT Dividends4Life submits: It is very easy for a CEO to get on a conference call and talk about confidence in the future while communicating glowing projections. But do they really believe what they are saying? Are there any actions that would make you believe what they are saying? Senior management purchasing company stock is a strong indicator of confidence in the future. Another indicator is sticking with a dividend plan, including regular increases. Complete Story »
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| 20 Interesting Articles Brought To You By Oilprice.com Posted: 15 May 2010 08:02 AM PDT UK Public Debt Spiralling out of Control – Will it Become the Next Greece China's Hydroelectric Sector Crippled by Severe Drought 8 Long Term Economic and Environmental Effects of the Gulf Oil Spill | ||||
| The Threat of Hyperinflation real or not? Posted: 15 May 2010 07:21 AM PDT By Sol Palha, Tactical Investor
Try not to become a man of success but rather to become a man of value.
Higher Gold and Petrol prices are some of the clear signs that inflationary forces are gathering steam. Do not confuse inflationary forces with inflation; inflation is defined as an increase in the supply of money. There are several reasons why inflation could become a threat in the years to come 1) Government spending is going through the roof; they seem to think that we will never have to pay this money back. 2) Unfunded liabilities for Medicare, social security, etc, add up to over $108 trillion. This is a ticking time bomb for everyone claims that our national debt is high but in comparison to the unfunded liabilities, the national debt is child's play. 3) As the Fed has dropped interest rates almost to Zero, it has very little firepower left. It could take rates to the negative level and pay people to borrow money; this will really stimulate the economy in the short run before burning it up completely. However, this option is more of a dream than a reality. The truth is that fed is almost out of options. If the economy should slow down and move back into a recessionary phase, then the only option available would be to print boat loads of money. The net result would be stagflation; higher inflation and slow growth and also the odds of entering a hyperinflationary phase would go up significantly. Look at the price of Petrol; when oil was trading at $140, petrol was selling for 3.30-3.50 a gallon. Oil recently did not even make to $85 but the cost of petrol is already 3 plus dollars a gallon. Based on this it would be fair to state that when oil trades back to the 140 ranges, the price could surge to the $6-$7 ranges. Many point out that we could face deflationary scenario for years to come. Well, this might be true; there is nothing wrong with hedging yourself, that's what investing is all about. One should not bet all of one's money on a single strategy. In an inflationary and hyperinflationary environment, commodities perform very well. Having positions in precious metals, base metals, energy, and select agricultural stocks would be a good way to protect hedge oneself. One should also have some of their assets in pure bullion (Gold, Silver, etc.). For those who are against precious metals, one other option is to invest in TIPS and one of the ways of doing this is through TIP, iShares Barclays TIPS Bond Fund. You cannot have what you do not want. John Acosta, Poet
Disclosure We have positions in Gold and Silver bullion More articles from the Tactical Investor….
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| U.S. Bank Fraud Illegally Hides Write-downs Posted: 15 May 2010 07:20 AM PDT By Jeff Nielson, Bullion Bulls Canada A couple of weeks ago, I checked-in on a site which is my favorite source for U.S. debt information: the "Grandfather Economic Report", published by U.S. economist Michael Hodges. I immediately headed for the section titled "America's Total Debt Report", which is where I have gotten my information on total public and private U.S. debt.
At the end of 2008, U.S. total public/private debts stood at $57 trillion (that does not include any of the federal government's $70 trillion in "unfunded liabilities"). Thus, I was very curious to discover what that total had risen to by the end of 2009. I was utterly flabbergasted to discover the same total for 2009. Let me elaborate.
With U.S. federal debt at over $12 trillion, and total public/private debt at $57 trillion, this implies that the rest of the U.S. economy has been taking on nearly $5 of debt for every $1 dollar of debt taken on by the federal government. This ratio has eased somewhat in recent years – not because the rest of the U.S. economy has been borrowing less, but because the federal government has been borrowing much more.
Even with this reduced ratio, with the U.S. federal government taking on $1.8 trillion of new debt in 2009, I fully expected the new total to soar well above $60 trillion. Keep in mind what the 2009 total directly implies: in order for the total to stay at $57 trillion, this meant that for the rest of the U.S. economy, rather than any new debt being incurred, that $1.8 trillion of debt had been extinguished (on a net basis).
In other words, we know that U.S. state and local governments were taking on huge amounts of debt in 2009. We know that while Wall Street has slashed lending that there is still a considerable amount of "residual" lending taking place. What this means is that for total debt to have stayed the same that a mountain of debt would have had to be extinguished – to negate all this other debt: $1.8 trillion of federal debt, $100's of billions in state/local debt, and (at least) $10's of billions in new private sector debt. That mountain would have totaled well over $2 trillion.
There are only two possible ways to retire debt: to extinguish it through repayment, or to destroy it through default. Given that U.S. default and delinquency rates for all categories of debt are at or near all-time record level, we know that very little U.S. debt is being extinguished through repayment, thus somewhere around $2 trillion of debt was destroyed through default in 2009. More articles from Bullion Bulls Canada….
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| Gold €1000: Insurance or Bubble? Posted: 15 May 2010 07:20 AM PDT Bullion Vault IS GOLD in a bubble at €1000 an ounce? Let's hope so. Because if not, it means investors are right to keep bidding crisis insurance higher. Which means there's an even greater crisis ahead. Buying Gold is like buying an option on safety. It gives you security, liquidity and diversification just when you need it most – which is precisely when other stores of wealth fail. Yes, the cost of insurance – the premium on gold's option – has risen since before the current crisis began. But that doesn't negate the need to insure your wealth, does it? "First, security – the absence of any credit risk is an intrinsic quality of gold," as Hervé Hannoun, then of the Banque de France, now of the BIS, said at the FT's Gold Conference in mid-2000. "Second, liquidity – in situations of political turmoil or high global inflation, gold's liquidity is unchallenged. [And third,] diversification – gold has shown a very low and even a negative correlation with the Dollar and US Treasuries…it enables you to improve your risk/return profile." Now, glancing back across the 10 years (and 590 tonnes of French central-bank gold sales) since Hannoun spoke, that third factor – diversification – might seem the most valuable. After all, Gold has risen 350% vs. the Dollar since June 2000, while the S&P has lost almost one fifth. US Treasury bonds have paid less than half the real yield on average of the preceding two decades (1.8% vs. 4.4% on 10-year Treasuries). But it's the first two attributes – security and liquidity – that make gold's long-term diversification possible. In periods of investment stress, its security and liquidity are unparalleled. They add up to outperformance when other, more normally productive stores of wealth either slump (like today) or deliver grinding losses (as they have over the last decade).
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| Posted: 15 May 2010 07:20 AM PDT Bullion Vault Bludgeoned the credit-default-swap vigilantes who'd pushed the cost of insuring Greek government debt to record highs, he revealed a backroom deal with EU finance ministers, central bankers and the IMF, saying that Eurozone central banks would indeed buy Club-Med government bonds in the open market. This "shock and awe" triggered a massive plunge in Greek and Portuguese bond yields and drove CDS rates sharply lower. For their part, the Eurozone politicians and the IMF upped the bailout fund to a staggering €750 billion, including loan guarantees to be tapped by highly indebted Eurozone governments shut-out of credit markets. Senior IMF official Marek Belka said the emergency package was "morphine for the markets". And like other bailouts before it, this package promises a gigantic transfer of public funds to the big European banks. The biggest winners were major banks in Spain, France, and Italy. Banco Santander, BBVA, Société Générale, BNP Paribas, and Unicredit all saw increases of 20% or more in their stock price. Like the $750 billion TARP bailout fund in the United States, this money is being handed over to the European oligarchic banks with no strings attached. Teetering on the edge of default, the banks holding €650 billion of Club-Med government bonds averted catastrophe again, with €550 billion in funding from European governments, and €200 billion from the IMF. However, EU countries with AAA credit ratings, such as Germany, the Netherlands, or France, would have to borrow hundreds of billions of Euros to fund the bailout, thereby undermining their own creditworthiness. Thus, the next phase of the global debt crisis could be an exodus from AAA-rated sovereign bonds. As for Greece, higher taxes, fewer welfare benefits, 10% salary cuts and no bonuses for public workers could provoke a catastrophic collapse of its economy. The wildfires blazing in the bond markets of Greece, Portugal, and Spain, drove the Euro down sharply to the $1.25-level. ECB chief "Tricky" Trichet came out fighting on its behalf, "I am more than confident than ever in the future of the Euro," he told France's radio one on May 11th. However, by shifting to the radical QE-scheme, Trichet has irrevocably tarnished the ECB's anti-inflation credentials, and set in motion, the eventual disintegration of the Euro. The ECB won't reveal the size of its bond-buying spree, because "the information could assist speculators." However, such secrecy fuels suspicions that the scope of the Euro printing operation is going to be enormous. Speaking to German radio station Deutschlandfunk, Bundesbank hardliner Juergen Stark said the "ECB would hold the Club-Med bonds, until the end of their maturity," indicating that the massive injections of Euros would be very long-term. Trichet also denied suggestions that the ECB has adopted the monetary strategy of Zimbabwe. "We have not changed our monetary policy. All liquidity which being put in through these interventions will be taken back. We are not running money printing presses." But alas, Trichet has already dumped the Euro experiment into the trash heap of history. The only defense for the Euro is a foreign currency swap arrangement with the US Federal Reserve, which can increase the supply of US-Dollars in the short-term, and help the ECB to engineer an orderly devaluation of the Euro, and reduce the risk of a frightful free-fall. "We will mop up this extra liquidity again. We've done this in the past," he said, spewing propaganda about sterilization. As part of its war on the bond vigilantes, the ECB is lending of unlimited amounts of Euros to the banking oligarchs at borrowing rates of 1%, encouraging them to buy Eurozone government bonds – i.e. this is backdoor quantitative easing. However, central bankers holding roughly $2 trillion worth of Euros in their foreign currency reserves can see through the smoke and mirrors, and they're nervous. Already, a massive flight for safety from the Euro and into the king of currencies – Gold Bullion – is underway. Gold has soared in parabolic fashion, up 20% from a month ago, zeroing in on the psychological €1,000 an ounce level. After parabolic rallies, gold becomes subject to minor bouts of profit-taking. However, it's increasingly obvious that all paper currencies are at risk of collapse compared with Gold Bullion, due to the extreme abuses of central bankers worldwide. "What the ECB is doing is a 180-degree about-face," declared Eurosceptic economist Joachim Starbatty on May 12th, noting Greek bonds were already rated at junk level by ratings agency S&P. "If a central bank buys bonds that international ratings agencies have declared are junk, then it should not be surprised that the Euros it produces are quickly seen as junk as well," he said. Starbatty said the ECB is "rewarding speculators who are betting on higher inflation…"
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| Posted: 15 May 2010 07:20 AM PDT Bullion Vault CAN YOU STILL buy a sports car for $10,000? wonders Bill Bonner in his Daily Reckoning. We bought our first real automobile for $78. It was a '37 Plymouth. Beautiful car. All original. And it ran well…for a while. We were only 16. We didn't have a driver's license yet, but we were getting ready. Then, the first real, roadworthy automobile we bought – at 17 years old – was a '61 MGA. Remember those? A little British sports car. A two-seater. What fun we had with that! We would play hooky from school, for example, and drive down to Chesapeake Beach. Or, we drove into Washington, DC, where we claimed to be over the legal drinking age and nobody asked questions anyway. Or, sometimes we just drove around with the top down. Back in those days there was very little traffic on the roads of Southern Maryland. You could drive where you wanted. Then, you could stop by the side of the road and explore the woods…or drive to some empty beach along the Chesapeake… Why are we reminiscing? Well, that little sports car only cost us $200. Too bad we didn't put it in a barn somewhere and hold onto it. Today, it would be worth thousands. You can't buy an MGA for $200 Dollars today, partly because they are collectors' items and partly because the Dollar ain't what it used to be. And why ain't the Dollar what it used to be? Don't ask silly questions. You know perfectly well. The Dollar is just paper. And in The Wall Street Journal yesterday was the harbinger of something big. A guest editorial suggested that the US return to the Gold Standard! And meantime, gold now goes up on 'good' news and on 'bad' news, too. Inflation? Gold goes up. Deflation? Gold goes up. When stocks go up…gold goes up more. When stocks go down, gold goes up anyway. Why? The gold market is anticipating a blow-up in the world's monetary system. We see it coming too. We've already seen what happens when a small country runs up too much debt. Investors get worried. Interest rates rise. The country can no longer borrow to cover its deficits…or to pay its past loans. Disaster. But the Greek situation is not very different from the situation in dozens of other countries – including Portugal, Spain, Italy, Britain and the USA. America is unique…and just the same. It is already so deep in debt that even if you taxed 100% of Americans' income, the resulting take wouldn't be enough to cover the deficit (people would earn less). And if you cut the Pentagon budget by 100%…you'd still have a deficit too. It would take a remarkable act of political courage and discipline to put the US back on the path towards sound public finances. Do you see that happening? We don't. Instead, what we see are more deficits – from here to kingdom come. Already, the US national debt (to say nothing about the unfunded liabilities and future debts already in the pipeline) is approaching 100% of GDP. (Greece is at 120% of GDP…soon to be 150%.) At 100% of GDP, the economy must grow at least at the same rate as the interest charge on the debt – or the debt will get larger and larger. In other words, if you paid 5% on the debt…and the rate of GDP growth were 5%…then, if you devoted all the additional growth to paying the interest on the debt, you'd stay in the same place! The last measure of growth in the US was 3.2%…probably declining. (We'll set aside the important question as to whether this growth is real or fiction.) But long-term borrowing costs for the feds are headed to 5%. And as investors lose confidence in America's ability to pay…or its willingness (or ability) to keep the Dollar from falling in value…the carrying cost on debt grows. It is probably too late already. We are probably past the point of no return, as economists Rogoff and Reinhart insist. In our view, the US could still save itself IF it could make an extraordinary commitment to budget cutting. But we won't hold our breath. Instead, we'll buy more gold. Ready to Buy Gold today…?
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| Bullion Prices & Business Weekend Recap – May 15, 2010 Posted: 15 May 2010 07:19 AM PDT
Other commodities outside of metals declined as well, with crude oil dropping to its lowest price in three months and by nearly 4 percent on Friday alone to under $72 a barrel. In other markets, both European and U.S. stocks broke a two-week losing streak despite hefty losses on Friday. (…) © CoinNews.net for Coin News, 2010. |
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