Gold World News Flash |
- Special GSR Gold Nugget: Louis Navellier & Chris Waltzek
- Oversold Again
- This Market Panic Needs a Holiday
- On FX Interventions, The Aussie and Gold
- Gold Gets All Political
- Mid-Week Gold, Oil, Dollar and SP500 Report
- FX Interventions, Aussie & Gold
- Video of Gold Cartel Trading Room Later This Year
- Comprehending the Enormity of Derivatives
- Cramer: You Hitting The Pipe Dude?
- Germany's 'desperate' short ban triggers capital flight to Switzerland
- The Government as Identity Thieves
- Stand Your Ground
- In The News Today
- Hourly Action In Gold From Trader Dan
- Trader Dan?s Mailbox
- Jim?s Mailbox
- Gold & Her Friends. Technicals Update
- Lawrence Roulston: Don't Get Hung Up on Headlines
- The End of the Gold Bull Market
- Germany Bans Reason, An Update from China, Fixing Social Security and More!
- Alea Iacta Est... The Die is Cast
- How to Buy Gold, Part I – Famous Dealer Explains
- Psychological Plunge in Oil Prices Makes OPEC Nervous, Official Says
- Deflation and Economic Weakness Are the Best Catalysts for Gold
- You Better Read This, Gold & Greece: Not What You Think
- Gold Rally Fails. Will a Big Drop be Next?
- Inflation vs. Deflation: It’s Been Mighty Quiet
- Jump Back From the Debt Crevasse
- The Price at Which Gold Stocks Strap on a Rocket
- The Potential for Disaster in Denying Clearinghouses Liquidity
- Its A Bogus Recovery With Manufactured "Good News"
- GLD Update
- FBI Mortgage Fraud Investigations Jump 400% in Five Years
- The Fed on Housing
- If the View Is Bad, Don't Look
- Take a Chance on New China
- Gold Seeker Closing Report: Gold and Silver Fall Almost 2% and 4%
- Live from China
- Gold Is In a Classic Cup and Handle Formation Targeting 1,450
- The Unbelievably Rampant Corruption On Wall Street
- Bought Paper Gold Today - Part 2
- Another Trillion Dollar Bailout?
- International Forecaster May 2010 (#6) – Gold, Silver, Economy + More
- International Forecaster May 2010 (#6) – Gold, Silver, Economy + More
- Japanese GDP Deflator Plunges To Multi-Year Low As GDP Comes Below Expectations
- Jeff Nielson: Christian rationalizes what he simultaneously denies
- Economic Headline Doom News With Links
- GLD “Tonnes in the Trust” Keeps on Rising
- Trader Dan's Mailbox
| Special GSR Gold Nugget: Louis Navellier & Chris Waltzek Posted: 19 May 2010 07:00 PM PDT Special GSR Gold Nugget: Louis Navellier & Chris Waltzek
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| Posted: 19 May 2010 06:58 PM PDT Dr. Duru submits: The percentage of stocks trading above their respective 40-day moving averages, T2108, closed at 19%, below the 20% threshold that indicates an oversold stock market. The stock market has reached these levels only one other time since the March, 2009 lows – this was in February when the market last cared about the sovereign debt issues in Europe. There are three main factors supporting a notable rebound within the next few days: Complete Story »
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| This Market Panic Needs a Holiday Posted: 19 May 2010 06:53 PM PDT Chris Damas submits: I used to say you should have these four stocks to be hedged when the stock market panics, as has been the case so far in the month of May. You want a cigarette stock, a liquor stock, a phone stock and a paper stock: I.e. Imasco, Seagrams, Bell and Domtar. That’s because in a panic, you want to light up a smoke, take a stiff drink, and call your broker to inform them you are sending a letter to the manager threatening legal action over the lousy stock picks they bought you. I never liked gold that much in a panic. (Gold and gold equities tanked in the October 1987 panic before rallying). Unless, of course, you wanted to throw a bar of the yellow metal through the Broker’s window with a threatening note attached. The first one of these is no longer politically correct. And Seagram Company is no more, swallowed up in 2000. But you can still buy BCE (BCE) and Domtar (UFS). Arguably you could drop Domtar and just text message the jerk/jerkess. Complete Story »
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| On FX Interventions, The Aussie and Gold Posted: 19 May 2010 06:53 PM PDT Ashraf Laidi submits: Since neither the 750 bln IMF/EU/ECB package nor Germany's announcement to ban naked shorts succeeded in alleviating selling in the euro, coordinated central bank intervention to support the single currency is inevitable. Such action will unlikely reverse the euro's slide, but may help resurrect a 2-way market in the currency and slow down the damage. It took only 2 days for the ECB to make an about-turn on bond-purchases and for Berlin to institute a ban on naked shorts. The authorities are running out of ideas and defences. I noted in the May 4 article "1999 & 2010 similarities in USD" that the euro's woes are very similar to 1999, when the ECB made a series of U-turns regarding monetary policy.The ECB decision to purchase government bonds confirms the striking similarities with 1999 with respect to the obstinate central banks position against quantitative easing. During the first 3 months of 1999, the ECB was persistently harangued by eurozone finance ministers for following its dual pillar policy (CPI and M3 targets) at the expense of sending its economy back into recession following the 1998 Asian crisis. It didn't take long before the ECB made a U-turn in April 1999 to start a series of rate cuts. The euro's losses were accelerated when the Fed began its tightening cycle 2 months later. Complete Story »
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| Posted: 19 May 2010 06:18 PM PDT by Adrian Ash BullionVault Wednesday, 19 May 2010 The Punch-and-Judy distraction of Glenn Beck vs. Brooklyn and Queens' finest... IT WAS CERTAIN to happen at some point. Because we all have a choice – "a choice between the natural stability of gold and the honesty and intelligence of the members of government," as the playwright and early Socialist George Bernard Shaw put it. "With all due respect for those gentlemen, I advise you, as long as the capitalist system lasts, [to] vote for gold." The humor is Shaw's, the italics ours. Because a little over a century later, gold is performing as advertised...surging to untold records as politicians worldwide refuse to be honest or intelligent about anything much. But capitalism – or at least, the right to property, which is where it begins – needs to persist for gold's "natural stability" to retain any use. Hold that thought as we take a trip to the circus... "Goldline formed an unholy alliance with co...
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| Mid-Week Gold, Oil, Dollar and SP500 Report Posted: 19 May 2010 06:18 PM PDT It has been an interesting week in the market as stocks and commodities push to extreme support levels. Below I have posted some charts showing where the market is currently trading at and what I think is likely to unfold. Gold Futures – 4 Hour Candle Stick Chart The price of Gold is testing a key support level. I figure we will see gold try to stabilize over the next week or so as it digests the recent drop in value then start to head back up. US Dollar Index – 60 Minute Candle Stick Chart The US Dollar and gold have been moving together the past few weeks as more countries pop up on the radar for serious financial issues. This is helping to boost both the US Dollar and gold as investors around the world starting buying what seems to be safety. The dollar has had a sizable pullback and is now testing a key support level. This could be the start of a possible Head & Shoulders pattern forming which means the dollar rally could be nearing maturit...
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| FX Interventions, Aussie & Gold Posted: 19 May 2010 06:18 PM PDT Since neither the 750 bln IMF/EU/ECB package nor Germanys announcement to ban naked shorts succeeded in alleviating selling in the euro, coordinated central bank intervention to support the single currency is inevitable. Such action will unlikely reverse the euro's slide, but may help resurrect a 2-way market in the currency and slow down the damage. [COLOR=black][FONT=Arial]It took only 2 days for the ECB to make an about-turn on bond-purchases and for Berlin to institute a ban on naked shorts. The authorities are running out of ideas and defences. I noted in the May 4 article "1999 & 2010 similarities in USD" that the euro's woes are very similar to 1999, when the ECB made a series of U-turns regarding monetary policy.[COLOR=black][FONT=Arial]The ECB decision to purchase government bonds confirms the striking similarities with 1999 with respect to the obstinate central banks position against quantitative easing. During the first 3 months of 1999, the ECB was persisten...
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| Video of Gold Cartel Trading Room Later This Year Posted: 19 May 2010 06:18 PM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here May 19, 2010 06:21 PM Watch [url]http://www.grandich.com/[/url] grandich.com...
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| Comprehending the Enormity of Derivatives Posted: 19 May 2010 06:18 PM PDT I was sitting alone in The Mogambo Bunkeroo (TMB) thinking to myself that it seems unnaturally quiet around here lately, probably as a result of everyone holding their breath in anxious dread and anticipation since the Federal Reserve is not creating money with their habitual insane abandon, and Total Fed Credit was actually down $1.2 billion last week, which, given the total Fed Credit is a staggering $2.310 trillion, is a rounding error. TheInternationalForecaster.com has a different take on this unusual quietude, and refers to "the deafening silence in the media and newsletters concerning the Quadrillion Dollar Derivative Death Star", which references the disgusting, convoluted spider's web of weird derivatives, and derivatives on derivatives, all based on lies and leveraged fraud, as far as I can tell. If you want a way to understand leverage, remember there is only $927.6 billion in actual US coins and paper money in existence. Thanks to the insanity of derivatives like massive ...
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| Cramer: You Hitting The Pipe Dude? Posted: 19 May 2010 06:18 PM PDT Market Ticker - Karl Denninger View original article May 19, 2010 03:04 PM Unbelievable.... You have to be kidding me. If it doesn't blow sky high right now it won't at all? I think this sort of nonsense is amusing. "You're fighting The Fed and Geithner right now if you hate stocks"? "We've seen P/Es come down so much..." Huh? We've sold off ten percent and that's a "big" P/E decrease? You've got to be kidding me. The entirety of the rally off the 2009 lows was predicated on the US borrowing and spending $1.5 trillion a year, or 11% of GDP, for the last two years! The extreme volatility you've seen the last couple of weeks is not about Greece. Nor is it about Merkel, or Sarkozy, or any of the clown car brigade in Washington DC. The volatility is the market debating whether governments worldwide can continue to borrow and spend 10% or so of their GDP on an ongoing, continual and perpetual basis. It's that simple folks, because the underlying economic...
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| Germany's 'desperate' short ban triggers capital flight to Switzerland Posted: 19 May 2010 06:18 PM PDT May 19, 2010 12:50 PM - Investors rush to Switzerland as Germany's long-awaited toxic debt "grenade" explodes causing panic across the markets. Read the full article at the Telegraph......
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| The Government as Identity Thieves Posted: 19 May 2010 06:18 PM PDT The spotlight remains on the Greek sovereign debt crisis as the riots continue. The terms of the Greek bailout from the IMF and Eurozone countries remain contentious with citizens on all sides. Europeans hate having their governments throw public money away as much as Americans do. The Greeks are not happy about having their taxes raised while their pensions and salaries are cut. Meanwhile, it is rumored by the Financial Times, AFP and others that Greece may spend more than it saves from austerity measures on arms deals with Germany, France and the US as a potential condition of receiving bailout funds. If true, it is certainly not unprecedented for the global military industrial complex to benefit from deals made by their friends in the central banking community. After all, war is the health of the state. The last thing big government proponents want is for peace to break out in the world. This free flow of fiat money from around the globe to...
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| Posted: 19 May 2010 06:18 PM PDT View the original post at jsmineset.com... May 19, 2010 06:31 AM Dear Extended Family, We live in market run by hedge funds like all other markets. When momentum of gold appreciation slows the selling starts. When an uptrend line breaks, the slower computers come on with selling. Fundamentally there is no change from the intact Western world economic downward spiral. Technical damage has been done to gold which will work itself out. The reverse is that when the decline’s momentum contracts then the shorts are covered and the computers turn bullish. This is the drama you have seen a million times. Gold is the only insurance that can be purchased that will carry us whole to the other side of this economic madness. Gold is going to $1650 and beyond. Dig a hole and pull a rock over top once again. Look out once a day until you see the downside momentum decelerate or a major bullish formation starting. Stay the course. Respectfully, Jim...
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| Posted: 19 May 2010 06:18 PM PDT View the original post at jsmineset.com... May 19, 2010 08:49 AM Dear CIGAs, Just to make the case that the algorithms are running gold. Euro: High $1.2256 at 06:20 Low $1.2211 at 10:20 Last $1.2311 at 11:40 There is very major resistance at $1.2453 which was the breakdown of the base of a Flat Bottom Triangle reading $0.99 to $1.01 The euro must be trading firm above $1.25 if it is to repair here and prove Volcker wrong. Gold will trade in ranges of $100 to $150 a day in the foreseeable future therefore if you do not have a private wire to God as your advisor, be careful trading. Click image to enlarge today's Historical Synthetic and Real Euro chart Jim Sinclair’s Commentary This is bullsh*t at a spiritual level. The tool of the manipulators has come out today through the media. Is Gold going to $1650 or $5000 in the next year or two is the proper question. The premise of this party line article is all is well, and there is no debt proble...
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| Hourly Action In Gold From Trader Dan Posted: 19 May 2010 06:18 PM PDT View the original post at jsmineset.com... May 19, 2010 10:39 AM Dear CIGAs, Score one for the bullion banks The capping effort at $1250 was enough to stall the upside long enough to get the usual suspects crowing about another top in gold and start selling. That turned the momentum oscillators bearish and out went the hedgies. Based on the huge liquidation seen on the drop in yesterday's open interest ( over 21,000) plus today's exodus of weak-handed longs, the market has seen a rather sizeable drop in the overall long side exposure. Since we are now approaching the rollover period when funds will move out of June and into August and even December gold, we might have to wait another couple of weeks before we get a serious effort to the upside (that is assuming the status quo in Europe does not change – it could worsen). The condition of the world's financial system is so tenuous that it is not beyond the possibility of gold completely putting back on in one day what it took of...
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| Posted: 19 May 2010 06:18 PM PDT View the original post at jsmineset.com... May 19, 2010 11:00 AM Hi Dan, I hope you are well. I am simply writing you today to vent. I own gold. It is insurance. It affords me peace of mind. But I’m also a speculator. I own futures options and mining shares. As of today, I quit. I’ve been a licensed rep for my entire adult life, almost 20 years. I have never, ever witnessed, on a daily basis, a market that is so blatantly manipulated as gold on the Comex. Furthermore, the manipulation takes place so publicly in the clear light of day, agents of the Fed and the Treasury act to systematically blunt all natural market forces. This happens in America, for the love of Pete!! Additionally, willing accomplices in the financial media carry the water for the criminal manipulators with their daily cause-and-effect market musings to the uninformed masses who fail to recognize the obvious verbal contradictions from one report to the next. - 5/11-14: Euro collapse. Buy Gold. (w...
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| Posted: 19 May 2010 06:18 PM PDT View the original post at jsmineset.com... May 19, 2010 11:50 AM Stand Your Ground CIGA Eric I have little time for words today, so I will leave you with some images. This is not the money flow setup of a top! Gold London P.M. Fixed and the Commercial Traders COT Futures and Options Gold Diffusion Index (DI): Anyone panicked out of gold in the near term will be strapping on this boot to kick themselves later during the C-wave of 2010 and 2011 Big Boot: These are the only words you need, We live in market run by hedge funds like all other markets. When momentum of gold appreciation slows the selling starts. When an uptrend line breaks, the slower computers come on with selling. Fundamentally there is no change from the intact Western world economic downward spiral. Technical damage has been done to gold which will work itself out. The reverse is that when the decline’s momentum contracts then the shorts are covered and the computers turn bulli...
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| Gold & Her Friends. Technicals Update Posted: 19 May 2010 06:18 PM PDT Stewart Thomson email: [EMAIL="s2p3t4@sympatico.ca"]s2p3t4@sympatico.ca[/EMAIL] May 18, 2010 1. Where are we now, in the big picture? First off, short term the Gold price hit $1250 last week. That came amid “into the ceiling” short term (daily chart) technical oscillator readings. I spoke of cash register ringing “mayhem” as we booked profit into tremendous strength. 2. This morning as I write, gold has taken out Friday’s $1217.50 lows, and is banging on $1210. Obviously it’s back to the buy. Buying is the never the fun that ringing the cash register is. But, to state the obvious, one can’t happen without the other. For today: You can’t ignore a $40 sale on the price of gold. While the technical indicators went “nosebleed”, particularly RSI, Stochastics, and MACD, the fact is those nosebleed levels were not accompanied by the emotion of greed. 3. I would call the emotion at $1250 more...
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| Lawrence Roulston: Don't Get Hung Up on Headlines Posted: 19 May 2010 06:18 PM PDT Source: Karen Roche of The Gold Report 05/19/2010 One of the first things mainstream journalists in Western media learn is how to tease angles out of stories that play on fear, scandal and disaster. Good news is no news. Bad news sells. If it bleeds, it leads. As historian, political writer and Guardian columnist Timothy Garton Ash observed, "Many Chinese City Dwellers Moderately Content with Rising Standard of Living" isn't a headline that would sell a lot of papers. Resource Opportunities Editor and Publisher Lawrence Roulston would agree. "The media has a huge bias toward the negative side of any story," he tells The Gold Report in this exclusive interview. Investors focusing on scary headlines, he argues, are missing out on phenomenal opportunities developing on the other side of the world—namely Asia and, particularly, China. His advice? "Take a broader, longer-term view of the world." The Gold Report: You wrote about a very interesting concept in your Ma...
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| The End of the Gold Bull Market Posted: 19 May 2010 06:18 PM PDT David Galland, Managing Director of Casey Research, interviews David Galland. Q. With gold and gold stocks on a tear, does Casey Research still recommend holding 1/3 of a portfolio in cash? A. The answer depends, of course, on what country you are currently sitting in. Were I sitting in the eurozone, I would have already moved much of my safe-harbor cash into the "resource" currencies such as Canada and Norway i.e., countries that are rich in the natural resources that the world needs and will always need. If my derri̬re were resting in a seat planted on U.S. soil, as it is, and I didn't plan on doing any significant overseas spending, then I would feel relatively comfortable Рfor the time being, with a larger than usual allocation to the dollar. But I would have been diversifying into the resource currencies as well. Q. Hold the fort, dude Рhow can you write frequently about the demise of the dollar and yet be "relatively comfortable" holding the stuff? A....
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| Germany Bans Reason, An Update from China, Fixing Social Security and More! Posted: 19 May 2010 06:18 PM PDT The 5 min. Forecast May 19, 2010 11:42 AM by Addison Wiggin & Ian Mathias [LIST] [*] Since it worked so well before: Germany bans short selling… what’s to follow [*] SEC, Alan Knuckman assess the aftermath of the recent “flash crash” [*] Bill Bonner on the market that could “lead the world into a return of the Great Correction” [*] And who could have seen this coming? Congress announces possible tax hikes and benefit reductions for Social Security… go, Team America! [/LIST] It’s illegal to get naked in Germany… at least in your shorts… for now. As of midnight last night, “naked short” positions -- in which the seller doesn’t own the underlying security -- in Germany’s 10 largest banks, European government bonds and sovereign credit default swaps have been banned. This is an egregious attempt at a coverup. Something we’re getting used to here in Beijing. The U.S. tried...
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| Alea Iacta Est... The Die is Cast Posted: 19 May 2010 06:18 PM PDT As I mentioned in my closing remarks in yesterday's column... the U.S. bullion banks showed up in the Globex market in Hong Kong's afternoon trading session and did the dirty there for a few hours. Buyers showed up right at the London open and stopped the decline, but then another not-for-profit seller showed up just before lunch time over there... and dropped gold another nine bucks or so. This proved to be the low of the day... around $1,206 spot... and it occurred about an hour before Comex trading began in New York. Gold gained about $14 back between the London low and 12:00 noon in New York... only to roll over into the close of floor trading. But, at precisely 2:00 p.m. Eastern time, a buyer showed up and ran the gold price up almost $20 in the space of an hour. This turned out to be the high of the day at $1,230.40 spot. It would be my bet that this was short covering. After that flurry of excitement, gold closed quietly... down about a dollar from Monday's...
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| How to Buy Gold, Part I – Famous Dealer Explains Posted: 19 May 2010 06:18 PM PDT By Dr. Steve Sjuggerud Wednesday, May 19, 2010 I spoke with Van Simmons today… Van is a legend when it comes to gold and gold coins – and he's one of my good friends. (A few things from his resume… In 1986, Van was a founder of PCGS – the Professional Coin Grading Service – which revolutionized the gold coin industry. As a dealer he's possibly bought and sold more dollars' worth of rare coins than anyone on the planet.) And he doesn't stop with gold. I've written to you about Van's other investment secrets before. Van is a mentor of mine. I give him a call and ask him his opinion when I'm considering buying an alternative investment (even beyond gold and coins). Having collected and bought and sold so many different things over decades, his experience is priceless. Today, we kept it simple… I asked him: What's the best way for the typical American to own gold? "Bullion is where you start – which usually means ...
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| Psychological Plunge in Oil Prices Makes OPEC Nervous, Official Says Posted: 19 May 2010 06:18 PM PDT The plunge in oil prices in the wake of the euro crisis has OPEC worried. Qatar oil minister Abdullah bin Hamad Al Attiyah emerged as an unofficial spokesman for the oil cartel over the weekend in a series of news agency reports from the Gulf that signaled the group's concern. On Monday, as oil futures briefly dipped below $70 a barrel after settling Friday at $71.71, Al Attiyah told reporters that a price below $70 a barrel was too low for companies to maintain investment and expand capacity. Such investment is crucial to avoid a supply shortage in the future, Al Attiyah said. He reiterated that following the lead of Saudi King Abdullah's pronouncement about a "fair" oil price in December, OPEC officials want to see a price between $70 and $80 a barrel. At another industry event on Saturday, Al Attiyah told news agencies that the drop in oil prices was "psychological" and not based on fundamentals. He said the crisis concerning Greece and the euro was ...
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| Deflation and Economic Weakness Are the Best Catalysts for Gold Posted: 19 May 2010 06:18 PM PDT Deflation and Economic Weakness Are the Best Catalysts for Gold Jordan Roy-Byrne, CMT Recently, I had written about how a deflationary impulse in the capital markets would be a catalyst for the gold stocks. This turned out to be accurate as stocks and commodities weakened while treasuries and the US Dollar advanced. Gold and gold stocks also moved higher. Nevermind the comments I received about how we are in an inflationary period and Gold will go down in a deflationary period. The typical mainstream view is that for Gold to do well reflation needs to take hold. Banks need to lend and velocity of money needs to pickup. Gold can’t do well if assets are declining. This is what many were saying back at the end of 2008. Fast forward 18 months and Gold has soared to a new all time high with Silver and the gold stocks close behind. Stocks and commodities have gained but only marginally. The US Dollar is about flat. Bank lending and consumer credit continues ...
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| You Better Read This, Gold & Greece: Not What You Think Posted: 19 May 2010 06:09 PM PDT The economic problems faced by all countries are rooted in paper money systems. In fact, paper money systems are one of the root causes of socialism and socialist thought. Paper money also gives capitalism a bad name. Right now the temporary solutions from bail-outs and printing money will change the short and medium term outlook for many investments.
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| Gold Rally Fails. Will a Big Drop be Next? Posted: 19 May 2010 06:01 PM PDT Daryl Montgomery submits: On May 11th, gold closed at a new all-time high above $1200. I was at the Hard Assets Conference in New York that day and I was probably the only person in attendance that was not enthusiastic about the yellow metals short-term investment potential. Now, only nine days later, it looks like the breakout has failed. Complete Story »
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| Inflation vs. Deflation: It’s Been Mighty Quiet Posted: 19 May 2010 06:01 PM PDT We backed off the inflation/deflation debate a few months ago when we started feeling sorry for the inflationists, who seemed hopelessly out of touch with the real world. As far as we were concerned there was nothing to debate, since, other than what we've referred to as grocery-store inflation, no evidence existed that prices were about to rise, let alone explode. That is still true.
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| Jump Back From the Debt Crevasse Posted: 19 May 2010 05:41 PM PDT
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| The Price at Which Gold Stocks Strap on a Rocket Posted: 19 May 2010 05:38 PM PDT
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| The Potential for Disaster in Denying Clearinghouses Liquidity Posted: 19 May 2010 05:19 PM PDT Craig Pirrong submits: My work on clearing was mentioned in the lead editorial in today’s Wall Street Journal. For the most part, I agree with the editorial. Hell, I could have written most of it. It makes many of the points I’ve been writing about here on SWP, and in working papers and presentations, since the financial crisis began (and even before the crisis). Even the initial sentence, which refers to the widespread belief that clearinghouses are a “miracle cure” echoes the title of my Regulation magazine piece from January, 2009–”The Clearinghouse Cure.” The initial point is the most telling one: if clearinghouses make counterparty risk disappear (as its cheerleaders repeatedly suggest) why is there need for any CCP to have access to the Fed discount window? Complete Story »
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| Its A Bogus Recovery With Manufactured "Good News" Posted: 19 May 2010 05:13 PM PDT Despite a 24/7 campaign of carefully managed "good news," 76% of Americans do not believe the U.S. "recovery." Hmm, I wonder why? A massive outbreak of economic cognitive dissonance is being suppressed with wave after wave of manufactured "good news." Every visibly negative bit of data is run through a media and Central State assembly line to refashion it as "good news" and "evidence" that the "nascent recovery is taking hold." Whatever cannot be rejiggered is simply buried or suppressed.  The fact that five corporations control the the vast majority of the U.S. mainstream media certainly aids that manufacturing process. Let's run through a few of the most blatant examples of suppressed dissonance: 1. If the economy is recovering so strongly ( +3% GDP growth in the first quarter!) then why are tax revenues down? Federal budget deficit hits April record: The April deficit soared to $82.7 billion. Total revenues for April were down 7.9 percent from a year ago. In the seven months of this year, corporate tax receipts are up 8.9% to $77.1 billion. The same cannot be said of individual income tax revenue, which is down 11.6% in the first seven months to $500.8 billion. Through the first seven months of the current budget year, which began on Oct. 1, the deficit totals nearly $800 billion. That is down only slightly from last year's deficit during the same period of $802 billion. Revenues total $1.2 trillion in those seven months, down 4.5 percent from the same period last year. How can tax revenues be falling when the economy is "growing strongly"? As for those corporate profits: corporate profits register biggest year-over-year gain in 25 years.  As this chart from the Federal Reserve shows, non-financial corporate profits were almost 14% of GDP before the global meltdown. In a $13 trillion economy, that's $1.8 trillion. But much of the "good news" in Corporate America is not quite as rosy as presented. More Here.. Superhyperinflation Just Around The Corner 
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| Posted: 19 May 2010 05:12 PM PDT Scott's Investments submits: Two days ago I wrote an article saying Gold (and its proxy GLD) appeared to be getting tired in the short-term. My strategy was inspired in part by Adam Hewison's video on Gold which suggested a stop at 1217.72. Had that strategy been followed an investor would have been stopped out early on May 18th. Complete Story »
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| FBI Mortgage Fraud Investigations Jump 400% in Five Years Posted: 19 May 2010 05:00 PM PDT FBI investigations of mortgage fraud increased 400% in 2009, compared with five years earlier, according to an Office of Thrift Supervision (OTS) report on fraud and insider abuse (download here). The FBI investigated more than 2,100 mortgage fraud cases in 2009. The OTS said at least 63% of all pending FBI mortgage fraud investigations during fiscal year 2008 involved dollar losses of more than $1m each. 
This posting includes an audio/video/photo media file: Download Now |
| Posted: 19 May 2010 04:38 PM PDT Kid Dynamite submits: One thing I found worth mentioning, from yesterday's FOMC's minutes, re: housing, via CalculatedRisk:
Key word: "DESPITE." Just imagine what happens when the "various forms of government support" stop... Complete Story »
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| If the View Is Bad, Don't Look Posted: 19 May 2010 04:15 PM PDT Inflation came in a teensy bit weaker than the consensus expected. Headline inflation fell 0.1% (actually -0.069%) and core CPI was flat (actually +0.047%). Owner’s Equivalent Rent was unchanged, and core inflation ex-shelter actually fell to 2.2% on a year-on-year basis. That may be encouraging (if you are worried about inflation taking off due to the incredible injection of money in 2008-09) or scary (if you look at the current money growth and lending data and are worried about deflation being the phenomenon we ought to worry about). I haven’t been worried about deflation, despite the decline in core, because that decline was almost entirely a shelter phenomenon. It is still, predominantly, a shelter phenomenon but the rapid decline in the money aggregates combined with a slackening in broad price pressures is at least cause for concern. Certainly, it makes a rise in short rates any time this year a distant long shot unless money and credit growth picks up (and I thought it was unlikely rates would be hiked even if money and credit was skating along smoothly). More on that in a moment. Complete Story »
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| Posted: 19 May 2010 04:05 PM PDT Deflation! Yes, dear reader...prices are falling. In April, the US producer price index fell 0.1%. Oil fell to $72 yesterday. The Dow fell 114 points. Copper is down more than 20% from its high. Chinese stocks are down 21% so far this year. The CRB - a measure of commodities prices - is down about 12%. Even gold got whacked yesterday - down $13. What's going on? Well, we're in that long period of adjustment known (to us!) as the Great Correction. In the first stage... .the markets discover that its assets aren't worth as much as investors had thought.... .creditors find that their credits aren't as good as they had believed... .consumers realize that they don't have as much money to spend as they had hoped... .businesses find that they don't have as many sales as they had projected... .and governments wake up to the fact that tax revenues are coming in at less than expected levels. Boo hoo. This leads to all sorts of gnashing of teeth and congressional hearings. But it's just the way the world works. Unfortunately, the way the world works includes a lot of preposterous ideas about the way the world SHOULD work...and a lot of scurrilous efforts pretending to make them work better. So, while the private sector generally de-leverages - with lower prices and lower debt levels - the public sector tends to leverage up. And to hear some economists tell it, if the feds don't come to the rescue with bailouts and boondoggles, the whole world economy will sink into a Dark Age. A few even say the feds have no choice. Richard Koo maintains that if governments stop their stimulus spending - which, of course, adds trillions to the world's public deficits - the deficits will go up! Come again? Yep. Koo's point is pure Keynesianism...probably correct...and completely absurd at the same time: try to cut your deficit by reducing stimulus spending, he says, and you're likely to destroy the economy, and increase the deficit too. More on that later in the week... We're not going to bore you with economics today - not while the world's biggest and most dynamic country lies right outside our hotel. We're staying at the Grand Hyatt. But we could be in any one of dozens of international hotels in Beijing. The city is full of bright, modern, new buildings...bright, modern, new hotels...and bright, modern, new people. "There's a HUGE generation gap in China today," said a dinner companion last night. "People our age [he was about the age of your editor] remember the Cultural Revolution. The only way to survive was to keep your head down. You learned not to stand out in any way. Everyone wore the same clothes. Everyone said the same things. If you didn't you might get sent to a labor camp...or worse. "But the younger generation has grown up in a China that is completely different. All they've seen is progress...spectacular progress...incredible growth. And they know that the way to succeed in this new China is to take chances..." Keep reading... China has become a nation of entrepreneurs...risk takers. It resembles the US in the '20s - before the country was taken over by corporate managers and political mandarins. China is a good place to make money. 'Rags to riches' stories are so common you wonder if there's anyone left to wear rags. One of those stories had an unhappy ending yesterday when one of China's richest men was sentenced to 14 years in jail for corruption. Today, China seems like a more capitalist country than the US. It is full of gamblers and innovators. The pace of change is breathtaking, with construction cranes all over the city. And the buildings themselves are often daring...the roads are straight in Beijing, but the buildings lean. Some walls lean in. Some lean out. Some lean one way and then the next. The city, what we have seen of it, does not seem anything like a 'third world' hive. Instead, it is a giant, modern metropolis. We came prepared to compare it to Managua or Mumbai. Instead, it compares favorably to Chicago or New York. Beijing is not our kind of city. We prefer places where we can walk around - like Paris, Zurich or London. This is more of a car-friendly town, like Amarillo or Brasilia. The streets are wide. The buildings are tall and isolated. You go from one complex of modern high-rises to another. But this city is much more lively than Paris or New York. It is a city still taking shape...a city that is still figuring out its role in the world. It is "making its way across a river by feeling the rocks," as the Chinese say. Beijing is still a city for tomorrow... But is China a buy or a sell? We asked local experts. The answer: it depends. China probably is a bubble economy, in many ways. Property prices soared as people speculated on real estate. Individuals bought apartments and houses as a way to store the money they'd made in business. But unlike the US, they paid cash. Now, prices seem to be going down. Some areas are going 'no bid,' with prices collapsing. But since there is little mortgage debt, it does not seem likely that the residential sector will suffer the same dramatic decline as, say, Las Vegas... The news this morning is that Las Vegas is in the middle of a housing resurgence. More than 1,000 new units are under construction. But wait. The city has some 15,000 empty units still on the market. "My parents bought a house in Las Vegas in 2000," said one of our new friends last night. "They paid $220,000. Then, in the boom, it went up to about $350,000. Now the price of the house is about $190,000. "There's a house I saw the last time I visited. It was on the market in 2006 for $2.9 million. A big house up against the foothills. With a guesthouse and two pools. A really nice place. It was being offered at only $700,000." While the residential market is not highly leveraged in China, the commercial market floats on a sea of debt. "What happens is that local governments get into deals with local developers," our host explained. "Between the two of them, they borrow huge amounts of money from the banks. Then they build something that feels good to everyone associated with it, but that might not have much commercial potential. Nobody wants to see the project fail, so it tends to be refinanced...and refinanced...until it is carrying a mountain of debt. "What we're going to see, I think, is that all that debt will come crashing down. It's going to be a mess for while. Maybe a long while." Does that mean an investor should stay away from Chinese shares? "Not necessarily," says our local expert. "Many of these companies are still growing very fast...and many are not dependent on the building boom. Some of them have nice little niches...like selling beer and soap to a huge population of people whose incomes are rising. And because their prices have been knocked down, you can buy these companies for about 8 times earnings. It could be that they'll go down some more in the coming crisis. Still, they could turn out to be great investments over the long run." Regards, Bill Bonner
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| Gold Seeker Closing Report: Gold and Silver Fall Almost 2% and 4% Posted: 19 May 2010 04:00 PM PDT Gold rose to see a gain of $6.05 at $1220.25 in late Asian trade, but it then fell off rather markedly for most of the rest of trade in London and New York and ended near its late session low of $1187.25 with a loss of 1.77%. Silver fell to as low as $17.929 by early afternoon in New York and ended with a loss of 3.97%.
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| Posted: 19 May 2010 03:48 PM PDT "We are massively underweight Australia, which is perceived as an economy that is geared to China on the commodity side," says CSLA chief equity strategist Chris Wood. Wood says, "The impact of tightening is starting to affect other markets such as commodities. Thus, aluminium for three-month delivery down ten percent this month in London metals markets, with zinc off 16% and nickel 18%. What a great time to introduce a super profits tax, eh? By the way, the miners are advancing the story, via Bloomberg, that the Rudd government has kicked off a global mining tax contagion. Profits normally attract competition. But in this day and age of cash-strapped governments, profits attract mean bearing laws and handcuffs and guns. But back to China. Chris Wood is not alone. Stephen Joske is the Beijing-based director of the Economist Intelligence Unit's China forecasting service. According to today's Australian he's also and a former Australian Treasury representative in China. He says the "The China forecast [in the Rudd government's budget] for 2010 looks about right, but for 2011 looks too optimistic.
He adds that, "Trend growth, while high by global standards, will be slowing significantly from now on. China's growth is now led by the domestic real estate sector, and the cycles are getting shorter, so things may not be clear if we look at China's prospects through annual figures. We are going to see a moderate slowing of growth in China from now on due to tightening measures in place, including withdrawal of the stimulus, which should register on commodity prices in the second half of this year." In point of fact, it looks like its registering on commodity prices and stocks - bar precious metals - right now. But could it accelerate in 2010? "Given a government engineered slowing is already under way, 9.5 per cent is optimistic for 2011," Joske continues. "We are forecasting around 8 per cent, with a recovery in the property cycle in 2011, but not a return to the boom times although it's fair to say there is an upside chance in 2011, given China's propensity to overinvest." It is one thing to make it out of Egypt. It is another thing altogether to make it to the Promised Land. Commodity investors - between the Rudd resource tax, the China bust, and the effect that euro disintegration may have on global growth and resource demand - may feel like they're lost in the desert at the moment. We suggest they follow the golden rule and seek profit in precious metals. Granted, the golden calf of the Old Testament was a false idol. The people, impatient for the return of Moses, invented something else to worship. But switching metaphorical gears, the exodus out of paper money is a wealth destroying even of Biblical proportions. But historically, there HAS been one kind of salvation. You know what we're talking about. And to be fair, gold or precious metals are not mystical saviours of any sort. To the extent that they have intrinsic value it's in the fact that they are hard to find, expensive to produce, but have more or less the same physical qualities everywhere at all times. You cannot print them like bank notes, either. So it is what they're not - unbacked liabilities of bankrupt governments - that matters more than what they are. We say that because resource investors wish to preserve their capital in 2010 AND find leverage to a rising gold price have the vehicles to do it: listed gold stocks. But which ones? That's the question we put to Diggers and Drillers editor Alex Cowie this morning in an hour-long meeting. We'll tell you next week what he said. You can also check out his essay below about his trip the Melbourne Mining Club earlier this week. And what about China? Last night we managed to catch up via Skype with travelling troupe of our former colleagues who are checking out the Middle Kingdom first hand. We recorded the video interview in which we asked them about the property bubble, gold, and Chinese capital markets in general. Look for that soon (probably tomorrow). Until then... Dan Denning
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| Gold Is In a Classic Cup and Handle Formation Targeting 1,450 Posted: 19 May 2010 03:06 PM PDT |
| The Unbelievably Rampant Corruption On Wall Street Posted: 19 May 2010 02:35 PM PDT
Just consider some of the recent revelations of Wall Street corruption that have come out recently.... *Bloomberg is reporting that a massive network of big banks and financial institutions have been involved in blatant bid-rigging fraud that cost taxpayers across the U.S. billions of dollars. The U.S. Justice Department is charging that financial advisers to municipalities colluded with Bank of America, Citigroup, JPMorgan Chase, Lehman Brothers, Wachovia and 11 other banks in a conspiracy to rig bids on municipal financial instruments. Apparently what was going on was that it was decided in advance who would win the auctions of guaranteed investment contracts, which public entities purchase with the proceeds from municipal bond sales, and then other intentionally losing bids were submitted in order to make the process look competitive. The U.S. Justice Department claims that this fraud has been industry-wide and has been going on for years. In fact, at least four financial professionals have already pleaded guilty in this case. *An industry insider has come forward with "smoking gun" evidence that some of the biggest banks have been openly and blatantly manipulating the price of gold and silver. For a time it looked like the federal government was just going to ignore all of this fraud, but after substantial public uproar some action is indeed being taken. In fact, it has been reported that federal agents have launched parallel criminal and civil probes of JPMorgan Chase and its trading activity in the precious metals markets. *New York attorney general Andrew Cuomo is investigating whether eight major Wall Street banks purposely misled the big credit ratings agencies so that they would give their mortgage-backed securities AAA ratings that they did not deserve. *There has been a ton of legal action surrounding mortgage-backed securities lately. For example, the Justice Department and the Securities and Exchange Commission are now investigating Morgan Stanley as part of a probe into whether Wall Street firms deliberately misled investors regarding the sale of mortgage-related securities. *Goldman Sachs is getting most of the press about fraud in the mortgage-backed securities market these days. Of course Goldman is strenuously denying that it "bet against its clients" when it changed its position in the housing market in 2007. But we all know the truth at this point. The truth is that Goldman Sachs clearly bet against its clients and was involved in a whole lot of things that were even worse than that. Many did not think the U.S. government would dare go after Goldman, but that is what we are starting to see. U.S. federal prosecutors have opened a criminal investigation into whether Goldman Sachs or its employees committed securities fraud in connection with its trading of mortgage-backed securities, and it will be very interesting to see if anything comes of that investigation. *But not everyone is being held accountable for their actions. The guy who helped bring down AIG is going to get off scott-free and is going to be able to keep the millions in profits that he made in the process. *Entire U.S. cities have been victims of this rampant Wall Street fraud. In fact, it is now being alleged that the biggest banks on Wall Street are ripping off some of the largest American cities with the same kind of predatory deals that brought down the financial system in Greece. *The really sad thing is that fraud is very, very lucrative. Executives at many of the big banks that received large amounts of money during the Wall Street bailouts are being lavished with record bonuses as millions of other average Americans continue to suffer economically. Even the CEOs of bailed-out regional banks are getting big raises. It must be really nice to be them. So does all of this make you more likely or less likely to invest in the stock market? Do you think that the American people can see all of this and still believe that the financial system is "fair" and "honest"? The truth is that Wall Street is full of rip-off artists and fraudsters who don't even try to hide their greed anymore. It is as if a thousand junior Gordon Gekkos have been unleashed and they are all trying to be masters of the universe at any cost. But what they are doing is ripping the heart out of the U.S. financial system. If people lose faith in the system the system will ultimately fail. A financial system that allows open fraud and manipulation is operating on borrowed time. So will the rampant corruption on Wall Street now be cleaned up? Only time will tell. But one thing is for certain. The American people will be watching.
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| Bought Paper Gold Today - Part 2 Posted: 19 May 2010 01:19 PM PDT
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| Another Trillion Dollar Bailout? Posted: 19 May 2010 01:16 PM PDT
Nicole Bullock and Hal Weitzman of the FT report, US state pensions becoming federal issue:
David Graham of Newsweek's Gaggle asks, Will State Pension Funds Need a $1 Trillion Bailout?: The federal government could face another economic disaster and massive bailouts within a decade if it doesn't force state pension funds to revamp their operations soon, an economist says. Even if they meet "aggressive" 8 percent growth targets, several states will see the reserves in their pension funds dry up by the end of 2020, with many more running out of cash within another decade, says Joshua Rauh, an economist at Northwestern University's Kellogg School of Management. Broke states are likely to go begging to the federal government, which would probably have to bail them out to the tune of more than $1 trillion, he argues in a new paper. The funds are under legal obligation to pay out to state employees, and they're way behind. For example, New Jersey—one of the states in the most trouble—is chipping in only about 6 percent of what it needs to remain solvent. "This is really a problem of promises having been made that cannot be met," Rauh says. "It's less demographics and more just that employees have been compensated using these promises, and these promises have not been adequately funded. Politicians have been able to promise benefits that don't come due until long after their political horizon, beyond their term [in office]." If and when states run out of reserves, they'll have to dip into their annual budgets to pay out benefits. But most states are required by law to have balanced budgets, and pension benefits could equal up to half a state's annual revenues. To reach that mark, they'd have to make cuts as large as the brutal measures California is taking to balance its budget. More likely, they'd ask for a bailout. Letting state governments fail just isn't really an option for the feds. Cash from Washington is already helping to float many states' budgets, but it's likely that state and local governments will be in for more pain over the next few years because their budgets tend to be a lagging indicator. Tax revenues typically slip more than a year after an economic shock, when property values sink and citizens pay taxes on diminshed incomes. Furthermore, the federal government already backs private companies' pension plans through the Pension Benefit Guaranty Corporation, but that fund is running large and growing deficits, and it would likely be forced to back states, as well. Rauh suggests that the government instead offer tax incentives for states to reform their pensions' structures, moving from a system that promises set benefits in the future to a model of giving employees money to invest now, and putting public workers into Social Security. He calculates that the government would end up spending around $75 billion—a far cry from a $1 trillion bailout. But is anyone listening? Rauh is presenting his paper today in Washington, D.C., but the most important audience might be his friend and former colleague Austan Goolsbee. Goolsbee is now a member of President Obama's Council of Economic Advisers, but both were professors at the University of Chicago's Booth School of Business until recently. Rauh decided to write the paper after discussing the looming pension problem with Goolsbee. Rauh said: "He [Goolsbee] said, 'State and local problem,' and I convinced him that we do need to worry about it. So he said, 'OK, you convinced me. So what do we need to do about it?'" I'm not sure how easy it is to shift public workers into Social Security, which has it sown problems, but it's clear that these state pensions are living on borrowed time. Here in Canada, the Canadian Federation of Independent Businesses (CFIB), came out on Tuesday saying public service pensions are too generous: The Canadian Federation of Independent Business says the federal government is too generous in subsidizing public service pensions. The CFIB says federal civil servants only contribute 34 per cent of the cost of their pensions, compared with a target of 50 per cent for many provincial plans. The CFIB says hard-working lower- and middle-class Canadians in the small business sector should not be subsidizing the generous retirements of public servants. Besides raising the pension contributions of federal workers, the federation says Ottawa should be offering incentives to help improve private-sector pensions. You can read CFIB's statement, Unfair federal government pensions detract from small business retirement savings, and their report Securing the Future. I've been talking about securing the future for a long time. Pensions are not a sexy topic, but they're increasingly becoming one as more and more people worry about securing a decent retirement. One last point I do want to make is that everything is related. We can't talk seriously about securing the future without securing the integrity of our capital markets, making sure that all investors - not just large institutions - have a level playing field. As I watch financial oligarchs get richer and richer while pensions get poorer and poorer, I worry that regulations have done little to protect average workers, and ultimately they will pay a heavy price for all the nonsense going on in our capital markets. Casino Capitalism is destroying the integrity of our capital markets, and left unhindered, it will ultimately destroy our pensions and economies.
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| International Forecaster May 2010 (#6) – Gold, Silver, Economy + More Posted: 19 May 2010 12:40 PM PDT By Bob Chapman, The International Forecaster US MARKETS The initial official excuse for such a perceptions drop in the Dow was a wrong keystroke, which is ludicrous. Then there is the almost total control by Goldman Sachs of the market and control via the Supplementary Liquidity Provider. All they have to do is cut off liquidity and the market plunges. Thus, there is no question in our minds that Goldman attacked the market and took it down to let House and Senate members know that they can make the market do whatever they please with the full cooperation of the SEC and CFTC, this convinced lawmakers that the Illuminist threat was very real. There would be no breakup of too big to fail banks and no real audit of the Fed. The public would be thrown a bone. This is a good reason why program trading has to end and why derivatives have to be abolished. This is all a reflection of two sets of justice. One for the elitists and one for us. This also shows us that crime pays. It also proves our country is under the financial control of terrorists. This power has to be taken away from these criminals. The legal way to do that is by throwing most all of Congress and the Senate out of office. Then we will have a chance to save our country. Otherwise you will see this all move into the streets. This same cabal has arranged for Europe's $1 trillion bailout, which will not be successful and they know that. As a result the euro has fallen from $1.50 and is approaching $1.20. Could it be that the euro could go to parity? Yes, of course, it could. Then what or who is next? The pound, yen and then the dollar? Then we ask, "Who will save them?" Who will rescue the world from deflationary depression and another planned world war? You say they actually plan wars? Well, of course, they do. How do you think we were able to predict a 9/11, and the wars and occupations of Iraq and Afghanistan? They were profitable diversions for the Illuminists. They kept the potboiling and sidetracked public thinking away from economic and financial problems. The propagandized and mindless public did not know they were being bamboozled again. In the meantime the Trilateralists tell usIsrael should be attacking Iran, which in part proves our point. It is now just a question of when. Hasn't the world public been deceived enough? When are they going to catch on? Do we have to pound it into their heads with a hammer? Of course, in time this is going to affect the dollar, particularly versus gold, which is the world's ultimate currency. What will the world say when it discovers the UShas little or no gold left? Will by that time 25% to 50% unemployed stand still and tolerate this crime? Will they riot and demand changes? Of course, they will and the elitists won't listen, which will bring about their demise, as masters of the universe. This is why November's election is so important. It is the last hope of changing our country without resorting to protest in the streets, as we are now seeing in the streets of others. What happens when Americans find out we have no gold left? That it was wasted in an attempt to cover up the seriousness of our collapsing economic and financial system that was being systematically looted. America is just as bad off as Europe. How can throwing money and credit at the system solve the problem? How can austerity solve the problem? It has all gone too far. The world has to have depression – there is no other solution. These are all legitimate questions, because no one is safe or exempt. Government cannot and does not even want to protect you. We no longer have a sovereign government; we have an ongoing criminal enterprise controlling our country. What we have seen over the past several years, what could never happen, has already happened. What is to come is going to be a nightmare. World markets are dysfunctional and stability doesn't exist. Man set distortions and economic imbalances – a system that functions without regulation, derivatives and unbridled and unfettered speculation, surrounds us. Leveraged speculation dominates the markets, particularly debt instruments. Unfortunately, this speculation is fostered by government and central banks perpetual willingness to bail out everyone in banking and finance just to keep the system afloat. This brings us to the dilemma of Greece again. Eurozone policymakers, bankers and governments have been caught again perpetuating imprudent lending to a profligate Greece, whose leadership for years lied to the Greeks, kept two sets of books and were aided and abetted by international elitist bankers, such as Goldman Sachs. Those in authority in the eurozone and the bankers knew exactly what was going on. They deceived everyone in the eurozone including the Greeks. They did this because they knew the public would be called upon to bail them out in a European version of TARP, which was used to bailout the American financial community that was elitist connected. Our markets have been dominated by this cabal of crooks for the past 15 years. They held one interest rate for all to the limits, and the result of that is the deplorable financial condition not only inGreece, but in Ireland, Portugal, Spain and Italy as well. This situation was allowed to flourish. The ECB should get no sympathy, because they did what they did knowingly. They have been monetizing just like the Federal Reserve for the past seven years. The creation of money and credit slowed over the past year, but it will have to resume if Europe and the US expect to survive financially and economically. Even with the problems we have seen over the past two years and 10 months, now those in Europe you would think would realize how serious these situations are. Now we have debtors in trouble having to lend to serious debtors in more serious trouble. That surely doesn't make things better; it makes them worse. Incidentally, these are the people who caused the problems in the first place. They knew and we know, no matter what they say that their policies are unsound, unstable and unsustainable. As a result they are faced with a collapsing market for sovereign debt, which is affecting other debt and stocks worldwide. The fact that the Fed failed to solve the credit crisis and affect a recovery tells us that they are ineffective and the ECB is no more competent as well. Debt contagion is on and will sweep the world. Dead beats are dead beats even if they are sovereign nations. – This was a section from the most recent issue of the International Forecaster. You can read the full 29 page issue by using the information below to subscribe. THE INTERNATIONAL FORECASTER P. O. Box 510518, Punta Gorda, FL 33951-0518 Published and Edited by: Bob Chapman CHECK OUT OUR WEBSITE 1-YEAR $159.95 U.S. Funds US AND CANADIAN SUBSCRIBERS: Make check payable to Robert Chapman (NOTInternational Forecaster), and mail to P.O. Box 510518, Punta Gorda, FL 33951-0518. Please include name, address, telephone number and e-mail address. Or: We accept Visa and MasterCard charges. Provide us with your card number and expiration date. We will charge your card US$159.95 for a one-year subscription. You can email us in two separate emails (1- the Credit Card Number with full name, address and your telephone number and (2- the Expiration date on the card.
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Note: We publish twice a month by surface mail or twice a week by E-mail. bob@intforecaster.com RADIO APPEARANCES: To check out all of our radio appearances click on this link below:
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| International Forecaster May 2010 (#6) – Gold, Silver, Economy + More Posted: 19 May 2010 12:40 PM PDT By Bob Chapman, The International Forecaster US MARKETS The initial official excuse for such a perceptions drop in the Dow was a wrong keystroke, which is ludicrous. Then there is the almost total control by Goldman Sachs of the market and control via the Supplementary Liquidity Provider. All they have to do is cut off liquidity and the market plunges. Thus, there is no question in our minds that Goldman attacked the market and took it down to let House and Senate members know that they can make the market do whatever they please with the full cooperation of the SEC and CFTC, this convinced lawmakers that the Illuminist threat was very real. There would be no breakup of too big to fail banks and no real audit of the Fed. The public would be thrown a bone. This is a good reason why program trading has to end and why derivatives have to be abolished. This is all a reflection of two sets of justice. One for the elitists and one for us. This also shows us that crime pays. It also proves our country is under the financial control of terrorists. This power has to be taken away from these criminals. The legal way to do that is by throwing most all of Congress and the Senate out of office. Then we will have a chance to save our country. Otherwise you will see this all move into the streets. This same cabal has arranged for Europe's $1 trillion bailout, which will not be successful and they know that. As a result the euro has fallen from $1.50 and is approaching $1.20. Could it be that the euro could go to parity? Yes, of course, it could. Then what or who is next? The pound, yen and then the dollar? Then we ask, "Who will save them?" Who will rescue the world from deflationary depression and another planned world war? You say they actually plan wars? Well, of course, they do. How do you think we were able to predict a 9/11, and the wars and occupations of Iraq and Afghanistan? They were profitable diversions for the Illuminists. They kept the potboiling and sidetracked public thinking away from economic and financial problems. The propagandized and mindless public did not know they were being bamboozled again. In the meantime the Trilateralists tell usIsrael should be attacking Iran, which in part proves our point. It is now just a question of when. Hasn't the world public been deceived enough? When are they going to catch on? Do we have to pound it into their heads with a hammer? Of course, in time this is going to affect the dollar, particularly versus gold, which is the world's ultimate currency. What will the world say when it discovers the UShas little or no gold left? Will by that time 25% to 50% unemployed stand still and tolerate this crime? Will they riot and demand changes? Of course, they will and the elitists won't listen, which will bring about their demise, as masters of the universe. This is why November's election is so important. It is the last hope of changing our country without resorting to protest in the streets, as we are now seeing in the streets of others. What happens when Americans find out we have no gold left? That it was wasted in an attempt to cover up the seriousness of our collapsing economic and financial system that was being systematically looted. America is just as bad off as Europe. How can throwing money and credit at the system solve the problem? How can austerity solve the problem? It has all gone too far. The world has to have depression – there is no other solution. These are all legitimate questions, because no one is safe or exempt. Government cannot and does not even want to protect you. We no longer have a sovereign government; we have an ongoing criminal enterprise controlling our country. What we have seen over the past several years, what could never happen, has already happened. What is to come is going to be a nightmare. World markets are dysfunctional and stability doesn't exist. Man set distortions and economic imbalances – a system that functions without regulation, derivatives and unbridled and unfettered speculation, surrounds us. Leveraged speculation dominates the markets, particularly debt instruments. Unfortunately, this speculation is fostered by government and central banks perpetual willingness to bail out everyone in banking and finance just to keep the system afloat. This brings us to the dilemma of Greece again. Eurozone policymakers, bankers and governments have been caught again perpetuating imprudent lending to a profligate Greece, whose leadership for years lied to the Greeks, kept two sets of books and were aided and abetted by international elitist bankers, such as Goldman Sachs. Those in authority in the eurozone and the bankers knew exactly what was going on. They deceived everyone in the eurozone including the Greeks. They did this because they knew the public would be called upon to bail them out in a European version of TARP, which was used to bailout the American financial community that was elitist connected. Our markets have been dominated by this cabal of crooks for the past 15 years. They held one interest rate for all to the limits, and the result of that is the deplorable financial condition not only inGreece, but in Ireland, Portugal, Spain and Italy as well. This situation was allowed to flourish. The ECB should get no sympathy, because they did what they did knowingly. They have been monetizing just like the Federal Reserve for the past seven years. The creation of money and credit slowed over the past year, but it will have to resume if Europe and the US expect to survive financially and economically. Even with the problems we have seen over the past two years and 10 months, now those in Europe you would think would realize how serious these situations are. Now we have debtors in trouble having to lend to serious debtors in more serious trouble. That surely doesn't make things better; it makes them worse. Incidentally, these are the people who caused the problems in the first place. They knew and we know, no matter what they say that their policies are unsound, unstable and unsustainable. As a result they are faced with a collapsing market for sovereign debt, which is affecting other debt and stocks worldwide. The fact that the Fed failed to solve the credit crisis and affect a recovery tells us that they are ineffective and the ECB is no more competent as well. Debt contagion is on and will sweep the world. Dead beats are dead beats even if they are sovereign nations. – This was a section from the most recent issue of the International Forecaster. You can read the full 29 page issue by using the information below to subscribe. THE INTERNATIONAL FORECASTER P. O. Box 510518, Punta Gorda, FL 33951-0518 Published and Edited by: Bob Chapman CHECK OUT OUR WEBSITE 1-YEAR $159.95 U.S. Funds US AND CANADIAN SUBSCRIBERS: Make check payable to Robert Chapman (NOTInternational Forecaster), and mail to P.O. Box 510518, Punta Gorda, FL 33951-0518. Please include name, address, telephone number and e-mail address. Or: We accept Visa and MasterCard charges. Provide us with your card number and expiration date. We will charge your card US$159.95 for a one-year subscription. You can email us in two separate emails (1- the Credit Card Number with full name, address and your telephone number and (2- the Expiration date on the card.
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| Japanese GDP Deflator Plunges To Multi-Year Low As GDP Comes Below Expectations Posted: 19 May 2010 12:06 PM PDT
Japan just announced its annualized Q1 GDP, which came in at 4.9%, well below the survey consensus of 5.5%. Yet while the country's subpar economic performance was not too surprising, the deflator came in at a massive -3%, indicating that in the second decade after the country first set off to prove that Keynesianism works when public debt is somewhere north of 100% it still have to find success. Our only concern is that Bernanke is all too aware of this data as well, and he will not stop at anything to reflate, even if that means a $5, $15 or $500 trillion Fed balance sheet.
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| Jeff Nielson: Christian rationalizes what he simultaneously denies Posted: 19 May 2010 12:02 PM PDT 8p ET Wednesday, May 19, 2010 Dear Friend of GATA and Gold: In his second analysis of last weekend's debate on gold market manipulation between GATA Chairman Bill Murphy and CPM group executive Jeffrey M. Christian, Jeff Nielson of Bullion Bulls Canada examines Christian's rationalization of secret manipulation of the currency and gold markets by governments in previous decades, even as Christian denies that the same thing is happening now. Nielson's commentary is headlined "The Great Debate, Part 2: Christian Confesses" and you can find it at Bullion Bulls Canada here: http://www.bullionbullscanada.com/index.php?option=com_content&view=arti... Or try this abbreviated link: 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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| Economic Headline Doom News With Links Posted: 19 May 2010 11:46 AM PDT The Buffalo Sabres Raising Season Ticket Prices Rash of Metro Detroit Fires Torch 13 Homes Financial Reforms 'Cosmetic' , Wont Stop More Crisis : Roubini Report: Increase in Payroll Taxes Needed for Social Security Home Building Gains Likely to Fade with Tax Credit Texas Doctors Opting Out of Medicare at Alarming Rate Federal Agency Chief Admits Lapses in Gulf Oil Spill Oklahoma : $200 Million in Delinquent Taxes Uncollectible Hawaii Foreclosures Filing Soar 115% in April Gov. Paterson NY Threatens Cutting 10,000 Jobs More Store Closing Hit Grand Avenue Downtown Milwaukee Shopping Center Small Businesses not hiring Video: The Growing Gap Between Rich and Poor Albany Oks Raises for 120,000 State Workers up to 7% Tar Balls Found Off Key West Oyster Industry Takes Hit From Oil Spill Why Greece Should Consider Default More Than 1 in 10 L.A City Employees Make $100,000 or More Mayor Bell: Announces City of Birmingham 10% Cut in Workers Pay Yonkers School District NY, Trying to Close $43 Million Deficit Investors Should Avoid Banks at all Cost: Meredith Whitney 
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| GLD “Tonnes in the Trust” Keeps on Rising Posted: 19 May 2010 11:42 AM PDT This could reverse very quickly – certainly if the trend that accelerated today continues – but they're still adding tonnes to the trust over at the SPDR Gold Shares ETF (NYSE:GLD) in spite of a precipitous decline in the gold price in recent days.
After some rather large additions earlier in the month, three tonnes were added on Monday and then another three tonnes today, bringing the grand total to a new all-time high of 1220.15 tonnes, up over 100 tonnes since the last substantive sale in early February.
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| Posted: 19 May 2010 11:36 AM PDT Hi Dan, I hope you are well. I am simply writing you today to vent. I own gold. It is insurance. It affords me peace of mind. But I'm also a speculator. I own futures options and mining shares. As of today, I quit. I've been a licensed rep for my entire adult life, almost 20 years. I have never, ever witnessed, on a daily basis, a market that is so blatantly manipulated as gold on the Comex. Furthermore, the manipulation takes place so publicly in the clear light of day, agents of the Fed and the Treasury act to systematically blunt all natural market forces. This happens in America, for the love of Pete!! Additionally, willing accomplices in the financial media carry the water for the criminal manipulators with their daily cause-and-effect market musings to the uninformed masses who fail to recognize the obvious verbal contradictions from one report to the next. - 5/11-14: Euro collapse. Buy Gold. (while Goldman and JPM sell theirs to dupe algos and hedgies). - 5/17-18: Euro collapse. Sell Gold. (while Goldman and JPM sell more to paint the tape and create "resistance"). Yes, I suppose it is time to quit trying to profit from gold. As Jim consistently maintains, gold is insurance, period. It is not a trading vehicle. For the sake of my sanity, I'm taking his advice. CIGA Craig Hello Craig, Trading any rigged market is almost impossible unless you become a one minute bar chart oriented trader and go with the flow on any given day. The problem becomes that you are then trading purely as a technician and attempting to compete with the algorithm and high frequency trading crowd which own the playing field. You can take a few points out of the market doing that but you are then basically a scalper. I personally do not trade any market based solely on technical indicators because I never made any money doing that my entire career and figure there is no point in trying to start now! The only way to trade gold in my opinion is to buy it on weakness and sell it on strength. You can make money if you do that. You understand the reason why gold will move higher have not changed and that the selling by the banks is merely a gimmick that is used to flush out the spec longs who buy the market while it is making all time highs. Wait for the specs to get flushed, watch for signs of a bottom and then buy it with a definite risk level that you are comfortable with. Again, this is HUGELY different than holding gold as insurance against the depredations of the banking scum and their pals in the monetary sector. That is your insurance and you do not trade it – you accumulate it on bouts of weakness and can then thank the damn fools who are throwing theirs away at the bottom of a price reaction. Gold is becoming the currency of last resort and that it not going to change because a Central Bank floods a system with liquidity and makes money available. The effects of this compounded increase in the amount of money in the system are going to be felt in an inflationary outbreak down the road. You will be glad you own the metal then. I personally think that the more the price riggers jack with the system and play games in the paper market, the higher the price is eventually going to go. The harder you press down on a spring to compress it, the more fiercely it uncoils. Nearly any astute investor OUTSIDE this country now knows that the paper Gold market is being rigged by the US government and its pals at the bullion banks. They are using that to their advantage as the short sighted fools of the West cede any economic advantage to the rising powerhouses of the East. Whoever owns the gold will rule the world. It really is that simple. There really is something about gold that people can understand who are watching their currencies implode. No amount of bullion bank chicanery and official sector theft is going to change that. Gold is real money and always will be in the minds of the public, even though a war against it has been waged for three decades in the West. Best to you,
Hey Craig, I learned an important lesson about gold futures and how to profit from it. Dan's way is perfect in every way. One needs to wait for the flushing before jumping in. It's also a very wise idea to have at least ½ the value of the physical market backing up the play to survive these onslaughts of the anti-gold cabal. Look at all the pull backs over the past 10 years. They are losing the battle more so everyday moving forward. The pullbacks don't last much longer than a few weeks where in the past it would last months (or years) before a new rally started. Point is keep enough money in the account to withstand a 50% pullback and learn to take a position out when the money honeys start preaching gold. We're here to help anyone wanting to be in gold. If you can't afford to hold 50% on a full contract, consider a mini. If that's too much, buy the physical (and get the popcorn out, no one believes the markets are fair anymore). That way you can ride out the storms and still have better odds of coming out on top. Happy Trades To You!! Fort Wealth Trading Co LLC.
Jim Sinclair's Commentary I would like to add my voice to this quote from Trader Dan. It will be the various Goldmans that will make the most money in gold after picking the trader's/scalper's pockets dry. "I personally think that the more the price riggers jack with the system and play games in the paper market, the higher the price is eventually going to go. The harder you press down on a spring to compress it, the more fiercely it uncoils."
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