Gold World News Flash

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• Canada Commences Monetary Policy Normalization
• 'Disdeflation' Revisited
• Roche Leads the Way in Personalized Medicine
• A Different Way to Find Value
• Is Massive Refinancing During Bubble Years a Ticking Bomb?
• 'Inflation Protection' That Isn't
• Suggested Portfolio to Safeguard Against Runaway Inflation, Higher Interest Rates
• Special GSR Gold Nugget: James Turk & Chris Waltzek
• More Money to Be Made in Four U.S. Oil Majors
• In The News Today
• Return Of The Hedgies And Dirty Tricksters
• Peter Schiff: The wrong way to buy gold
• Interesting Gold Chart
• Tasman Metals Ltd: The Euro Down-Under REE Connection
• Regulation Era – The 60’s Return
• On the Verge of Implosion
• Inflation Still a Problem, Despite “Evidence” to the Contrary
• Uncertainty Will Support Gold
• Grandich Interview On World Markets Media
• ZipCar Files for an IPO
• Is the World Broke? FoxBusiness interviews Axel Merk
• Jim?s Mailbox
• $3,000/ounce Gold 'Conservative Estimate' - David Rosenberg
• China Blows Up?.. US Diverts Flight to Capture 'Muslim'
• LGMR: Gold "Well Positioned" as New Risks Whack the Euro, Stocks, Silver and PGM
• Grandich Client Update – A Q & A With Rodinia Minerals New Executive Chairman
• Monthly Action In Gold From Trader Dan
• Data That Indicates U.S. Economy Is Headed for a 2010 Double Dip
• Czech Republic President Says 'The Euro Zone Has Failed'
• Why Moral Hazard Is Not the Answer
• What Do Large Profit Margins Mean for Stocks?
• Not All Metals Firms Are Interested in Your Success
• Gold To Hold Well Even If Stocks Plunge Like In 2008
• Inflation Still a Problem, Despite “Evidence” to the Contrary
• Good News for the Grandchildren
• Consumers Saving to Save the US Economy
• Quick Position Updates
• Futures Red As Time For Another ECB/SNB Intervention Approaches
• Did The Computers Blow A Fuse?
• Gold Seeker Closing Report: Gold and Silver Gain Over 1%
• BP Disaster Sinks British Pensions
• UK Continues To Be A Top Sovereign CDS Derisker
• A Contrarian Oil Play
• Gold Daily Chart: Cup and Handle Set
• A Series Of Lucky Coincidences Involving Goldman Sachs And BP plc
• “When Will Euro Zone Fall?”
• What effect will High Prices have on Demand?
• Coin Update News uncovers U.S. Mint's secret gold pricing policy
• Coin Update News uncovers U.S. Mint's secret gold pricing policy
• James Turk: Gold hurdles to new record highs

Canada Commences Monetary Policy Normalization Posted: 01 Jun 2010 07:51 PM PDT Econ Grapher submits: The Bank of Canada became the first G7 country to raise rates, lifting the target for the overnight rate 25bps to 0.50%, a move widely expected. The bank, however, did note the considerable risks to domestic and global growth, and noting the quote below, the path back to neutral may not be clear cut: This decision still leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in light of the significant excess supply in Canada, the strength of domestic spending, and the uneven global recovery. Complete Story »

'Disdeflation' Revisited Posted: 01 Jun 2010 07:33 PM PDT Symmetry Capital Mgmt submits: Some recent crosscurrents on debt, financial crisis, policy responses, and money / inflation / deflation: A short UniCredit piece on the inflation-disinflation-deflation debate that (1) overlooks "disdeflation" and (2) finds little likelihood of either inflation or deflation An interview with Felix Zulauf in which he predicts eventual debt monetization that will cause a global currency crisis (TOH Ed Harrison) A David Rosenberg interview in which he argues that gold could eventually reach $3,000 Emerging controversy over the 'natural' or 'non-accelerating inflation rate of unemployment' ((NAIRU() The UniCredit piece does a nice job parsing current and expected data, arguing that short term disinflation will be followed by (very) mildly accelerating core inflation in 2011. While we view that as a possibility, we still believe that prevailing global policy hawkishness -- against a historically fragile background in terms of debt, deleveraging, stagnant incomes, and demographic 'internals' (.pdf) -- means that deflation continues to be a serious threat, at least until the end of this decade. Complete Story »

Roche Leads the Way in Personalized Medicine Posted: 01 Jun 2010 07:28 PM PDT Jason Chew submits: This Swiss pharma is the third largest pharmaceutical company both by revenue and market cap. It is one of the fastest growing companies in its peer group, with sales growth of 7% in 2009. This compares to approximately 4% YoY growth for Pfizer (PFE), Sanofi-Aventis (SNY), and Johnson & Johnson (JNJ). With the purchase of the 44% of Genentech (DNA) it didn’t already own in March '09, Roche gained full control of some of the world’s top selling biologics and at the same time transformed itself into an oncology focused company, with greater than 50% of its drug sales for oncology indications. One could say Roche is now the world’s largest biotech company. It sports a forward PE of 15, a premium to its peers. This is due in large part to its young and robust pipeline. Patents for its major drugs Rituxin and Herceptin do not expire until 2015. Even then, the path to approval for biosimilars in the US is still uncertain. With profits so big in biologics drugs, every large Big Pharma has now turned their focus on biotechnology. It is quite possible Roche will face competition for its drugs from branded biologics before biosimilars are approved. What sets Roche apart from the rest of Big Pharma is its unique integration of drug discovery along with its less heralded diagnostics division. While the Diagnostics division makes up only 20% of total sales, its contribution to the company is considerably larger. Combining a Diagnostics division allows easy access by drug researchers to the latest and most advanced equipment and analysis tools for performing experiments. Feedback between the two groups allows for the creation of tools that fit the need of researchers within and outside the company. More importantly, within the last decade, the pharmaceutical industry has made real advances toward the delivery of personalized medicine based on the use of biomarkers. True, biomarkers have been used in medicine for quite some time now; in particular, measurements of PSA levels for detection of Prostate cancer, HbA1c levels for diabetes, and triglycerides for heart disease. These, however, were not definitive measurements for the detection of disease. More recently in oncology, biomarkers have become commonly used throughout the drug development process due to the advent of highly targeted therapies. A highly cited case is the development of Herceptin (trastuzumab), a HER2 targeted antibody, by Genentech. Beginning with patient recruitment, Genentech used HER2 gene amplification as a main criterion in entry into the clinical trials. Without this, Genentech would not have been able to see the effect of its drug on breast cancer patients in the trials it conducted. Working with the FDA, Genentech partnered with privately held diagnostics firm Dako to have a HER2 companion diagnostic kit approved at the same time as Herceptin. Together, the drug and the companion diagnostic changed the face of breast cancer treatment. Today, the co-development of targeted drugs along with companion diagnostics is a very hot area of development. The FDA released a draft concept paper in 2005 which would require sponsoring drug companies to commit to the co-development of companion diagnostics “very early in the drug development process”, though it received considerable push-back from industry, claiming such a process would be too costly. A new, refined draft is expected from the FDA. In a 2007 paper from a workshop held between the FDA and industry, FDA officials continued to throw their weight behind drug-diagnostic co-development, illuminating some possible paths for such an approval. In one case, a company working on a project discovers a clinically relevent mutation in Phase II trials. It then discusses with the FDA a method to proceed with a prospective Phase III using a laboratory diagnostic test, with the clinically validated test ready upon drug approval. A second case is similar to the one in the 2005 concept paper. It involves early identification of a relevent biomarker and co-development of diagnostic tests along with the drug from early stage to post-approval. Whichever the case may be, Roche is perfectly situated to benefit from these developments. It has the in-house expertise to develop diagnostics from start to finish. A case in point is its B-RAF compound, PLX4032 from Plexxikon, now in pivotal trials. This is a specific inhibitor of the mutant B-RAF V600E and is currently being tested in melanoma. B-RAF V600E is found in approximately 60% of this very deadly form of skin cancer. From the start, Roche has used diagnostic testing to select patients for its clinical trial. In a Phase I trial, patients without the V600E mutation treated with PLX4032 had no response while 70% of those with that mutation experienced tumor shrinkage. To this end, Roche is planning on launching PLX4032 along with its companion diagnostic. The beauty of a companion diagnostic is its predictive value. Knowing which patients are most likely to benefit from a drug allows smaller clinical trials to be conducted. And though smaller, these trials are likely to have a better chance of success. The trials are also more humane, excluding patients who are unlikely to benefit and are better off trying other treatments. Healthcare providers - the payers - are certain to embrace companion diagnostics in the quest for personalized medicine. No longer will they have to pay for drugs that only work on a random number of patients. Now, the drugs they pay for are very likely to benefit the patient. It’s a win-win for all involved. It may seem that drug companies will lose money as the increased use of biomarkers slices up their target population. I do not believe this will be the case. The advantages afforded by personalized medicine will allow these highly targeted and efficacious drugs to command a premium in the market; in addition, revenue will come from the use of diagnostic tests. Roche has embraced the personalized medicine paradigm. The future is here. Disclosure: Long RHHBY.PK Complete Story »

A Different Way to Find Value Posted: 01 Jun 2010 07:23 PM PDT John Reese submits: The stock investing world is filled with well-known valuation metrics -- the price/earnings ratio, price/book ratio, free cash flow yield, price/sales ratio, and numerous other variables have been used by successful investors to find winning stocks. A new study shows, however, that a much less popular valuation metric -- the gross profits-to-assets ratio -- may be one of the better predictors of future stock performance. Complete Story »

Is Massive Refinancing During Bubble Years a Ticking Bomb? Posted: 01 Jun 2010 07:15 PM PDT Keith Jurow submits: During the four key years of the housing bubble – 2003-2006 – an incredible number of mortgages were refinanced. In an earlier Real Estate Channel article, “Investors Played a Key Role in Creating Housing Bubble,” I pointed out that homeowners “cashed out” a total of $820 billion while refinancing their mortgages in 2005-2007 according to Freddie Mac figures. This refinancing frenzy needs to be examined in more depth including the danger it might pose for the housing market down the road. Complete Story »

'Inflation Protection' That Isn't Posted: 01 Jun 2010 07:10 PM PDT We had a lethargic start to the week, which is not surprising: a long Memorial Day weekend that segues into a short week at the end of which the Employment data is released – that is a prescription for quiet trading. True, over the weekend the President of Germany (Koehler) resigned, a fact which seems to have escaped most Americans; while ostensibly the trigger for his resignation was remarks made about Afghanistan, it is hard to imagine the growing Continental turmoil played no role. When times are good, one tries to ride out inconvenient political tempests. When times are not so good, well…"it may be time to write my memoirs!" Complete Story »

Suggested Portfolio to Safeguard Against Runaway Inflation, Higher Interest Rates Posted: 01 Jun 2010 07:01 PM PDT Stockerblog submits: Bailouts, TARP funds, funding of government programs, money printing. When is the day of reckoning? I don't know when the day of reckoning will take place, but I know what the day of reckoning will be: higher interest rates. There are a lot of investments you can put in your portfolio to safeguard it from runaway inflation and higher rates. You probably don't want your whole portfolio in catastrophe protection investments, but it's a good idea to have a little to give your overall portfolio some protection. Here are some suggestions. Complete Story »

Special GSR Gold Nugget: James Turk & Chris Waltzek Posted: 01 Jun 2010 07:00 PM PDT Special GSR Gold Nugget: James Turk & Chris Waltzek

More Money to Be Made in Four U.S. Oil Majors Posted: 01 Jun 2010 06:51 PM PDT Kurt Wulff (McDep Associates) submits: Buy recommendations ExxonMobil (XOM), Chevron (CVX), ConocoPhillips (COP) and Marathon Oil (MRO) at McDep Ratios of 0.76, 0.76, 0.71 and 0.69, are attractive investments, we believe, in the upswing of a new cycle of industry and economic growth. The largest profits flow from upstream oil production where global demand pushes up long-term oil price measured by six-year futures currently at $90 a barrel and above the 40-week average of $86. More rapidly growing natural gas, the next largest source of future profits, may enter a price uptrend in the next few months should abundant supply find more demand in summer heat, winter cold and/or growing commercial and industrial activity. Though the downstream refining and chemicals businesses are diminishing in share of long-term profits, they are recovering from decade lows and may be on the way to decade highs. Complete Story »

In The News Today Posted: 01 Jun 2010 06:50 PM PDT View the original post at jsmineset.com... June 01, 2010 06:02 PM Dear CIGAs, David Rosenberg is correct. Let the hedgies and currency intervention play their game. There is no question in my mind that they are totally wrong and gold will trade at $1650 and beyond Gold $2,500 Looks More Likely Than Ever – DailyFinance By DAN BURROWS Posted 4:42 PM 06/01/10 Investing Gold added another $11.30 Tuesday to hit $1,226 an ounce, and although the yellow metal is still well off its nominal all-time high of about $1,240 set just a few weeks ago, you don’t have to be a member of the build-a-bunker-in-Montana crowd to believe gold could hit $2,500 an ounce in the next couple of years. David Rosenberg, chief economist and strategist at Canada’s Gluskin Sheff, tends to be pretty bearish, but he’s also about as dispassionate and data-driven a guy as you can find. In other words, he’s hardly some kooky gold bug. And if past relationships among data sets ...

Return Of The Hedgies And Dirty Tricksters Posted: 01 Jun 2010 06:50 PM PDT View the original post at jsmineset.com... June 01, 2010 06:10 PM Dear CIGAs, The hedgies and dirty tricksters are back. Frustration goes both ways. The price of gold has been a disappointment to the gold bears. The action in the HUI (AMEX Gold Bug Index) has posed a threat to the short on gold share hedgies and dirty tricksters. This morning’s pop up on the euro was accepted by this mangy group as the forth entry of emergency money into the currency market in the form of intervention. That message was taken by this group as confirmation to hold the euro at $1.2150 Gold’s failure to hold the highs of this morning has been taken by the discouraged gold and gold share shorts as courage to try one more time. Discouragement goes both ways. The gold share longs have felt it for a long time. The gold share shorts cannot be too happy either. So in rolled the short of gold, gold share hedgies and dirty tricksters to re-establish closed short positions and add to old ones...

Peter Schiff: The wrong way to buy gold Posted: 01 Jun 2010 06:50 PM PDT ...

Interesting Gold Chart Posted: 01 Jun 2010 06:50 PM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here June 01, 2010 03:41 PM This is not a chart to look for short-term direction in gold but rather to show a very bullish technical formation that in my book confirms my long-term outlook. [url]http://www.grandich.com/[/url] grandich.com...

Tasman Metals Ltd: The Euro Down-Under REE Connection Posted: 01 Jun 2010 06:50 PM PDT A Monday Morning Musing from Mickey the Mercenary Geologist [EMAIL="Contact@MercenaryGeologist.com"]Contact@MercenaryGeologist.com[/EMAIL] May 31, 2010 Abel Janszoon Tasman was a middle 17th Century Dutch seafarer in the South Pacific and the European discoverer of New Zealand, the Fiji Islands, the Tongan archipelago, and the eponymous Tasmania in 1642. In a second voyage from Batavia, Java in 1643, he mapped the north coast of Australia. Because Tasman found no trading opportunities or new shipping routes for the Dutch East India Company, the importance of his expeditions was not recognized for over 100 years. Tasman Metals Ltd (TSM.V) takes its name from the Dutch explorer. Not surprisingly, the principals of the company are Australian. I first met these geologists during one of the infamous "Beer Nights" at the Irish Pub in Miraflores, Peru in 1997 or 1998. Time and drink obscure the details but if you've ever been at one of these monthly fiestas, you'll u...

Regulation Era – The 60’s Return Posted: 01 Jun 2010 06:50 PM PDT The decade of the 1960s stood orthodoxy on its head. It was a time when alternative everything got a hearing. Expertise came into doubt; the phrase "some decisions are too important to be left to the experts" was heard everywhere. The seer of the day was Ralph Nader. Government was only trusted as a regulator. So it regulated: the environment, the schools, the workplace, the airline industry, the communications industry, and new industries like nuclear power. Anything that had escaped regulation in the 1930s got swept up in new regulations. And those 1930s regulations for banks and utilities were applauded. Well, this decade is beginning to emulate the anti-establishment passion of 50 years ago. In particular, a despised government is being asked to regulate. Make no mistake, regulation is in the air. Even Republican free-marketeers are blaming a lack of regulatory oversight for the environmental disaster in the Gulf of Mexico and the collapse of mortgage fin...

On the Verge of Implosion Posted: 01 Jun 2010 06:50 PM PDT The 5 min. Forecast June 01, 2010 01:24 PM by Addison Wiggin & Ian Mathias [LIST] [*] Eurozone “on verge of implosion”… our macroadviser’s take on the latest developments [*] Markets of the world react: euro, stocks -- even Brazil -- miredwith debt woes [*] Chris Mayer offers one funny anecdote to sum up the China investmentconundrum [*] Plus, readers pile in… more of your thoughts on the BP oilspill [/LIST] “We are now on the verge of declaring the eurozoneimplosion,” Rob Parenteau wrote Richebacher Society memberslate Friday. Rob was the last to publish before the holiday… andafter this three-day weekend, the implosion is upon us. First, Fitch stripped Spain of its AAA credit ratingFriday. We’re a bit surprised the stock market sank 1% inresponse… Fitch seemed to be the last group of ivy MBAs in the worldthat still saw Spain as AAA. Then, ove...

Inflation Still a Problem, Despite “Evidence” to the Contrary Posted: 01 Jun 2010 06:50 PM PDT I was as surprised, as many were, to see that the Consumer Price Index (CPI) actually declined in April, dropping to 2.2% inflation from March's 2.3% inflation. My family seemed to be endlessly delighted that inflation seems to be going is down, which is because I have been yammering about how inflation in prices going up will always be the result of a money supply that goes up, and I have been saying it for so long that they are sick, sick, sick of hearing that inflation is prices will follow inflation in the money supply, they are sick, sick, sick of hearing my voice telling them that ruinous inflation in prices will always follow ruinous inflations in the money supply, and they are happy, happy, happy that I am wrong! You can imagine my response to this arrogance. Finally, once again, having had it Up To Here (UTH) with their insults and rude laughter, I explode in their faces "Inflation is still going up, you morons! Prices are still increasing! Watch my lips, morons! Prices are ...

Uncertainty Will Support Gold Posted: 01 Jun 2010 06:50 PM PDT By Neil Charnock www.goldoz.com.au News is out that European banks will have to write off 20% of their loan books. The full news on Spain is not out yet, their banks cannot get reasonably priced funding. How can we get growth under these conditions? Despite all this the appetite for risk is apparently returning at least for now. This increasing appetite could last for anything between 1 day and a few months. Local news Down Under, news flash the Government has invoked a state of emergency over their super tax’s opposition by the mining industry. They have decided to advertise to inform us how “right” they are. It just gets better and better doesn’t it? Governments are all the same, in the absence of total understanding, facing the self induced need to do something; they interfere with market forces making things worse in the process. The AUD is falling again tonight as predicted and gold is going up as predicted. This has taken the AU...

Grandich Interview On World Markets Media Posted: 01 Jun 2010 06:50 PM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here June 01, 2010 10:27 AM “The only asset worth buying is gold.” This was recorded Friday afternoon, May 28, 2010 [url]http://www.grandich.com/[/url] grandich.com...

ZipCar Files for an IPO Posted: 01 Jun 2010 06:50 PM PDT Kid Dynamite submits: ZipCar, the metropolitan car sharing service, has filed for an IPO. I've never used ZipCar, but as a former NYC resident, I've seen them frequently, and I get the impression that their user base loves the product. In case you're unaware, from the filing: Zipcar operates the world’s leading car sharing network. Founded in 2000, Zipcar provides the freedom of “wheels when you want them” to members in major metropolitan areas and on university campuses. We provide over 400,000 members, also known as “Zipsters”, with self-service vehicles that are conveniently located in reserved parking spaces throughout the neighborhoods where they live and work. Our vehicles are available for use by the hour or by the day through our easy-to-use reservation system, which is available by phone, internet or wireless mobile devices. Once the vehicle is reserved, a Zipster simply unlocks the vehicle with his or her keyless entry card (called a “Zipcard”), and drives away. Our all-inclusive rates include gas and insurance so Zipsters can easily estimate the total cost of their trips. Zipsters choose the make, model, type and even the color of the Zipcar they want based on their specific needs and desires for each trip. Upon returning the Zipcar, the member locks the vehicle and walks away, free from the costs and hassles of car ownership. Zipcar provides its members a convenient, cost-effective and enjoyable alternative to car ownership. I found it interesting that Zipcar later says, "We target large, densely populated markets with high parking costs and strong public transportation systems." Now, large densely populated markets: that I understand. Why strong public transportation systems? If you have a strong public transportation system, don't you need cars less? The filing mentions many times how public transportation is not suited to many uses that suit the Zipcar well, but then why target markets with strong public transportation? Similarly, they target high cost of parking markets, because those markets make it harder for individuals to justify buying a car, and thus easier to justify Zipcar. However, it makes it difficult to park your Zipcar somewhere while you're using it (Zipcars have reserved parking spaces, but if you want to drive to a friend's house in the city, obviously, you still need to find a space to park when you get there). I am guessing that Zipcar's target market in these tough parking areas is "errand-runners," ie, people who don't need to park the Zipcar in front of their apartment when they get back, but rather just need to unload the bounty they just picked up at Costco in the Zipcar. This brings me to the part of Zipcar's business model I never understood, and couldn't gain much insight into from reading their IPO filing: THEIR parking costs. In NYC, it can easily cost $400/month or more to park a car. Does Zipcar get discounts from the parking lots? Or do they just rely on the assumption that they'll bring in revenue that will allow them to shell out massive parking costs? Anyway, it's an interesting company, with what I think is a fanatical, loyal user base. Of course, the company cautions in a disclaimer: We have experienced net losses in each year since our inception, and we expect to incur net losses in 2010. We do not know if our business operations will become profitable or if we will continue to incur net losses in 2011 and beyond. We expect to incur significant future expenses as we develop and expand our business, which will make it harder for us to achieve and maintain future profitability. We may incur significant losses in the future for a number of reasons, including the other risks described in this prospectus, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown events. Accordingly, we may not be able to achieve or maintain profitability. Complete Story »

Is the World Broke? FoxBusiness interviews Axel Merk Posted: 01 Jun 2010 06:50 PM PDT Sustainable Wealth - Axel Merk June 01, 2010 05:46 AM FoxBusiness asks me whether the world is broke. Taken together, industrialized countries now have a debt-to-GDP ratio exceeding 100%; this has never happened in history during peacetime. Watch the video: In my book (order now), SustainableWealth: Achieve Financial Security in a Volatile World of Debt and Consumption, I dive into the dynamics that drive this world before discussing how you can invest in a boom, in a bust, in a personal or economic crisis. Make sure you follow the blog. Axel Axel Merk Author of Sustainable Wealth – order now. President and Chief Investment Officer, Merk Investments This report was prepared by SustainableWealth.org, and reflects the current opinion of the contributor. It is based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to bu...

Jim?s Mailbox Posted: 01 Jun 2010 06:50 PM PDT View the original post at jsmineset.com... June 01, 2010 08:55 AM Dear CIGAs, CIGA Harris offers the final solution to the COMEX.   Jim Sinclair’s Commentary Please know that I have no financial connection directly or indirectly with this business endeavor. I did contribute, with no repayment required, the first set of technological equipment as I believe this is a useful service for the community and wanted it to be field tested. Since the profit on counterfeit coins is minimal, it seems to me that all bars, taels and various other forms of processed gold prior are those most prone to adulteration. Dear Jim, I wanted to give you and all the CIGAs an update on the interesting work we’re doing over at BullionAnalysis.com . As you know, we have developed a sophisticated digital analysis technology that is able to conduct various modes of penetration scanning on even the largest gold and silver major exchange bars, to determine if the bullion has been forged t...

$3,000/ounce Gold 'Conservative Estimate' - David Rosenberg Posted: 01 Jun 2010 06:50 PM PDT With virtually no trading activity by the U.S. bullion banks on Monday... the gold and silver markets existed in name only. Volume was invisible... with only 12,000 contracts in gold and about 2,500 in silver traded... and I wouldn't read a thing into the price activity in either metal. As Ted Butler said in our daily phone conversation yesterday... this is proof positive that the gold and silver markets basically revolve around what the New York players do. Silver was a bit more interesting... but only just. The dollar traded in a 20 basis point range from the open of Monday trading in the Far East... which started at 6:00 p.m. Eastern time on Sunday evening... and it's still in that price range as I write this. This chart starts at 5:00 p.m. Central time on Monday [6:00 p.m. Eastern]... because it originates in Chicago. The Toronto Stock Exchange was open yesterday... and the TSX Gold Index closed down a hair. The was no Delivery Report from the ...

China Blows Up?.. US Diverts Flight to Capture 'Muslim' Posted: 01 Jun 2010 06:50 PM PDT China Blows Up? Tuesday, June 01, 2010 – by Staff Report Wen Jiabao Beijing in a sweat as China's economy overheats ... China is struggling to contain the threat of an overheating economy in the face of rising house prices, inflationary wage increases and a continuing surge in money supply, the head of the country's second-largest bank has warned. Guo Shuqing, chairman of China Construction Bank, said that the latest figures for China's M1 money supply – a key predictor of inflation – had raised concerns that the country's vast stimulus and bank-lending was running too hot. "I saw the figures for last month and M1 is still very high, increasing 31 percent from last year, which is one per cent higher than last month," he said in an interview with The Daily Telegraph. "We are seeing a lot of money coming to China which is creating a current and capital account surpluses." China's regulators have introduced a raft of measures in recent weeks in ...

LGMR: Gold "Well Positioned" as New Risks Whack the Euro, Stocks, Silver and PGM Posted: 01 Jun 2010 06:50 PM PDT London Gold Market Report from Adrian Ash BullionVault 08:50 ET, Tues 1 June Gold "Well Positioned" as New Risks Whack the Euro, Stocks, Silver and PGM THE PRICE OF GOLD in wholesale dealing rose against all major currencies early Tuesday, hitting two-week highs against the Dollar above $1224 an ounce as world stock markets slumped almost 2%. The Euro dropped nearly 2¢, hitting a new four-year low on the currency markets, after the European Central Bank warned that Eurozone banks face €195 billion in bad debts. Gold priced in Euros rose within 0.4% of mid-May's all-time record highs, trading back above €32000 per kilo. "Gold's uptrend still look intact despite being over-bought short-term," reckons one Hong Kong dealer in a note. "The fear factor is still in the marketplace...which makes gold investment a reasonable alternative to equities," says a Swiss commodity analyst, speaking to Bloomberg. "Gold remains well positioned to benefit from risk a...

Grandich Client Update – A Q & A With Rodinia Minerals New Executive Chairman Posted: 01 Jun 2010 06:50 PM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here June 01, 2010 04:57 AM Rodinia Minerals: Lithium for a Green Future and Potential for a Share Price with a Green Future As I always do, I want to start by reminding everyone of the potential biases and conflicts of interest that can arise when I am writing about client companies such as Rodinia Minerals. The market being what it is, I didn't push the panic bottom when Rodinia (RM-TSX-V $.32) slid from a base in the mid-to-high $.50s.* But when I saw that Rodinia was bringing in a new Executive Chairman in Farhad Abasov, I figured it was time to schedule an update call.* It became clear to me early in the discussion that it might be beneficial to have the comments go on the record.* Farhad agreed. Q: Farhad, tell me why you and the Forbes & Manhattan Group like Rodinia so much? A: Peter, Rodinia is a typical example of an F&M portfolio company as it fits perfectly within our discipl...

Monthly Action In Gold From Trader Dan Posted: 01 Jun 2010 06:46 PM PDT Dear CIGAs, Click charts to enlarge in PDF format

Data That Indicates U.S. Economy Is Headed for a 2010 Double Dip Posted: 01 Jun 2010 06:45 PM PDT Edward Harrison submits: I have been talking about "recovery fading" and the economy "rolling over" in the second half of this year. What I have been suggesting is that we will experience a slowing of growth to 1 or 2% in the second half of the year, much as we did in 1985 or 1994 or 1998. It is not necessarily the case that we will see a double dip recession if job growth picks up by the end of the year. Given the anti-growth austerity measures now coming online in US states and municipalities and in European countries, the chances of a double dip are indeed high. However, I see even odds for a multi-year recovery, which is the norm for any business cycle. Complete Story »

Czech Republic President Says 'The Euro Zone Has Failed' Posted: 01 Jun 2010 06:40 PM PDT Michael Shedlock submits: Has the Euro Zone "project" been a success or a failure? V&cute;clav Klaus, president of Czech Republic, makes a solid case in 'The Euro Zone Has Failed': As a long-standing critic of the idea of a European single currency, I have not rejoiced at the current problems in the euro zone because their consequences could be serious for all of us in Europe—for members and non-members of the euro zone, for its supporters and opponents. Even the enthusiastic propagandists of the euro suddenly speak about the potential collapse of the whole project now, and it is us critics who say we have to look at it in a more structured way. Complete Story »

Why Moral Hazard Is Not the Answer Posted: 01 Jun 2010 06:34 PM PDT Eric Falkenstein submits: HL Mencken noted that 'for every human problem there is a neat simple solution and it is always wrong'. Such simple solutions includes the idea that 'moral hazard' by bank executives largely contributed to the 2008 financial crisis. The examples given are always INVESTMENT bankers, who make great bonuses when they do deals, and then leave large liabilities that are toxic. Also, one can point to rich guys like Bear Stearns CEO Jimmy Cayne, who lost over one billion dollars but still walked away rich, worth over $500MM. It was heads they win, tails taxpayers lose, a game maximized at infinite variance. This narrative is pretty ubiquitous, so I'll give just two references: Russ Roberts in his paper "Gambling with Other People's Money: How Perverted Incentives Caused the Financial Crisis" (.pdf) (he podcasts on it here), or Barry Ritholtz's book Bailout Nation. Complete Story »

What Do Large Profit Margins Mean for Stocks? Posted: 01 Jun 2010 06:20 PM PDT Edward Harrison submits: US corporate profit margins reached a half-century peak with the housing bubble. As in most recessions, margins fell. But, this time they fell precipitously, only to snap back to near that 50-year peak. The chart above from David Rosenberg’s latest daily research shows the details. What kind of takeaways can we derive from these facts? Complete Story »

Not All Metals Firms Are Interested in Your Success Posted: 01 Jun 2010 06:08 PM PDT Thanks to the surge in precious metals prices, we've seen quite a few new businesses enter the scene to either buy your gold or silver, or to sell you gold or silver. Some are reputable, honest, and actually care about what you get for your precious metals. Others are sly, overpriced, and likely riddled with salespeople far too interested in their own commission.

Gold To Hold Well Even If Stocks Plunge Like In 2008 Posted: 01 Jun 2010 06:06 PM PDT In our previous essay we've commented on the precious metals stocks, and since that time we've received many questions about the yellow metal itself, we would like to provide you with a more information regarding that particular topic.

Inflation Still a Problem, Despite “Evidence” to the Contrary Posted: 01 Jun 2010 06:02 PM PDT I was as surprised, as many were, to see that the Consumer Price Index (CPI) actually declined in April, dropping to 2.2% inflation from March's 2.3% inflation.

Good News for the Grandchildren Posted: 01 Jun 2010 05:42 PM PDT Excerpted from his presentation to the Ira Sohn Investment Research Conference on May 26, 2010 I have titled today's talk Good News for the Grandchildren. By that, I mean that I do not believe that there is a need to worry that today's debts will be passed on to our current youth...I believe the government response to the recession has created budgetary stress sufficient to bring about the crisis much sooner. Our generation - not our grandchildren's - will have to deal with the consequences. If we do one thing, let's stop bemoaning the fate of our grandchildren on this topic. We might take the issue more seriously if we realize that our own future is at risk. According to the Bank for International Settlements, the US's structural deficit - the amount of our deficit adjusted for the economic cycle - has increased from 3.1% of GDP in 2007 to 9.2% in 2010. This does not take into account very large liabilities the government has accepted by socializing losses in the housing market. We have not seen the bills for bailing out Fannie Mae and Freddie Mac and even more so the Federal Housing Administration, which is issuing government guaranteed loans to non-creditworthy borrowers on terms easier than anything offered during the housing bubble. Government accounting is done on a cash basis, so promises to pay in the future - whether they are social security benefits or loan guarantees - do not count in the budget until the money goes out the door. A good percent of the structural increase in the deficit is because last year's "stimulus" was not stimulus in the traditional sense. Rather than a one-time injection of spending to replace a cyclical reduction in private demand, the vast majority of the stimulus has permanently increased the base level of government spending. A very large amount was dedicated to preserving government jobs. How different is the government today from where General Motors was a decade ago? Government employees are high cost and difficult to fire. Bloomberg reported that from the last peak businesses have let go 8.5 million people or 7.4% of the workforce while the government has only cut 141 thousand workers, or less than 1%. Public sector jobs used to offer greater job security but lower pay. Not anymore. According to a 2009 CATO Institute study the average federal civilian salary with benefits totals $119,982 compared to $59,909 for the average private sector worker and the disparity has grown enormously over the last decade. The situation at the state and local levels is no more comforting. The excellent superintendent of the public school in the town next to mine just "retired" at age 58. He had a fully vested public pension but was not interested in quitting work. So, in addition to beginning to collect his pension, he moved to New Jersey to take a similar job and to begin earning a second public pension in that state. While there is no reason to begrudge him for operating within the system, there are consequences to arrangements such as this. His is not an isolated story - articles describing "retire and rehire" of public officials can be found in many local newspapers around the country. There has been a lot of scoffing in financial circles about Greek civil servants earning 14 months of pay for 12 months of work. While the details are different, civil servant pay appears to be as big a problem here as well. I doubt it will be easier to reform this than other government entitlements. And, there are so many government workers that they are an important voting block that helps elect officials who won't challenge the current arrangement. The question is how long can we travel down this path without either changing direction or having a crisis. The answer lies in two critical issues; first, how long will the capital markets continue to fund government borrowings that may be refinanced but never repaid on reasonable terms, and second, to what extent can obligations that are not funded through traditional fiscal means be satisfied through central bank monetization of debts - that is, by the printing of money? The recent US credit crisis came in large part due to capital requirements and risk models that incorrectly assumed AAA rated securities were exempt from default risk. We learned the hard way that when the market ignores credit risk, the behaviors of borrowers and lenders become distorted. It was once unthinkable that "risk-free" AAA rated institutions could fail, as they recently have. Their CEOs probably didn't realize when they crossed the line from highly creditworthy to eventual insolvency. Surely, had they seen where the line was, they would to-a-man have stopped on the solvent side. Our government leaders are faced with the same risk today. What is the level of government debt and future commitments where government default goes from being unthinkable to inevitable, and how does our government think about that risk? I recently posed this question to one of the President's senior economic advisors. He answered that the government is different from financial institutions because it can print money and statistically the United States is not as bad-off as some other countries. As an investor, these responses do not inspire confidence... Modern Keynesianism works great until it doesn't. No one really knows where the line is. The government doesn't know, nor do the credit rating agencies. One obvious lesson from the crisis should be that we get rid of official credit ratings that inspire false confidence and, worse, are pro-cyclical. Congress has a unique opportunity in the current effort of regulatory reform to eliminate the credit rating system. For now, it does not appear interested in taking sufficiently aggressive action. The big banks and the big bond buyers have told Congress they want to continue the current ratings system. As Bill Gross put it in his last newsletter: Firms such as PIMCO with large credit staffs of their own can bypass, anticipate and front run all three [rating agencies], benefiting from their timidity and lack of common sense. Given how sophisticated bond buyers use the credit rating system to take advantage of more passive market participants, it is no wonder they stress the continued need to preserve the Status Quo. It would be better to have each market participant individually assess credit-seeking entities. Certainly, the creditworthiness of governments should not be centralized in the hands of a couple of rating agency committees. Consider this description about the sovereign rating process an S&P analyst offered in an interview aired by the National Public Radio Morning Edition earlier this month: S&P analyst: For any country we have two analysts who go to a country for that rating. Never send just one person because you need a second pair of eyes. NPR interviewer: I think there are people listening to this who would say "just two?" Shouldn't you be sending seventy to rate a country's government? S&P analyst: To be fair, what we are looking at is fairly narrow. Can you pay your debt fully and on time? What is your ability and willingness to do so? You know, I think two people...this has been our practice. It has worked well. NPR reported that after interviewing some government officials, business people and journalists for a few days, the S&P analysts fly home and write a report. A five person rating committee debates the issue and holds a vote of hands. S&P analyst: We always want an odd number because we don't want to have a tie and do the whole thing again. NPR interviewer: How long does that take? S&P analyst: Even if you are doing like a Canada which is [a] relatively boring rated AAA, you still have to go through all the steps. So two hours is sort of average. That is about as long as it takes to watch a hockey game. We have just watched the pro-cyclical behavior of the ratings agencies foster a private sector credit crisis. By continuing the official use of this system, public sector borrowers will experience the instability caused by rating agencies at the worst possible moment. Now, European leaders are learning the hard way that it isn't a good thing to have rating agencies declare that things are stable even as risks build and then, as problems reach a critical stage, accelerate the loss of confidence by declaring that things are not so good after all. When Secretary Geithner promises that the US will never lose its AAA rating, he chooses to become dependent - effectively putting all of his eggs in one basket - on the whims of the S&P ratings' committee rather than the diverse views of the many participants in the capital markets. It is not hard to imagine a future crisis where just as the Treasury Secretary seeks buyers of government debt in the face of deteriorating market confidence, a rating agency exacerbates the problem with an untimely downgrade, triggering massive additional sales by existing bondholders. This has been the experience of many troubled corporations, where rating agency downgrades served as the coup-de-grace. The current upset in the European sovereign debt market is a prequel to what might happen here. Banks can hold government debt with a so-called zero risk weighting, which means holding it requires no capital. As a result, European banks loaded-up with Greek debt and sold sovereign CDS and now need to be bailed-out to avoid another banking crisis. As we first saw in Dubai and now Greece, it appears that the response to Lehman's failure is to use any means necessary to avoid another Lehman- like event. This policy transfers risks from the weak to the strong - or at least the less weak - setting up the possibility of the crisis ultimately spreading from the "Too-Small-to-Fails" like Greece to "Too- Big-to-Bails" including members of the G7. David Einhorn for The Daily Reckoning Australia Similar Posts: Australia to Borrow as Much as $300 billion Ratings Agencies Picking on the Greeks More Extend and Pretend For the GSEs the Rest Has Been History Investors Teased and Tickled by Waves of Good News

Consumers Saving to Save the US Economy Posted: 01 Jun 2010 05:31 PM PDT Markets were closed in America yesterday. But there's still reckoning to do. So, we're on the job as usual. As predicted in this space, Americans have gone back to saving. You'll recall that household spending increased earlier this year despite flat or falling income. Top economic pundits hallucinated that the correction was over. They said the private sector was not de- leveraging after all. Instead, households were going back to their own spendthrift habits. But it couldn't last. Because households 1) don't have any money, and 2) don't have anything to borrow against. Unless there's a surprise boom in real estate, households will have to get back on the wagon. They need to de-leverage. And they know it. The latest from Bloomberg: US Economy: Spending Pauses as Households Rebuild Savings "Consumer spending paused in April after growing in the first quarter at the fastest pace in three years as Americans used gains in wages to rebuild savings. "The savings rate climbed to 3.6 percent last month, the highest level since January, from 3.1 percent in March as incomes increased and purchases cooled." What happens when households pay down debt rather than borrow more? Business sales and profits go down. The economy slows. Corporate stocks are worth less than they were before...at least, those who make their living selling stuff to domestic households, which is most of them. Makes sense too. Households had been fattening business profits by buying things they didn't need with money they didn't have. Now, they're doing the opposite. Business profits are going down because households are not buying stuff - even when they have the money to buy it. What did they expect? You can't spend more than you make forever. But what's all this bellyaching about? Saving money is a good thing. It makes you richer. And it gives the economy the capital it needs to build new things. In China, for example, they've got a train that goes more than 400 kilometers an hour. At least, that's what they tell us. China can build things like that because it has savings. (Among other things...) America can't do it. It doesn't have the money. It's tapped out. Up to its neck in debt. And trying to fight the correction by going in deeper. By the way, you don't get real economic growth by passing money around. Transfer payments reduce growth rates. You get growth by letting people earn money, keep it, and invest it. India's savings rate has moved up recently - to 40%! China's too. And the US? Well...3.6% is not going to set the world on fire. But at least it is positive! And if you think people are bellyaching now...just wait until savings rates get back up to 10%! That will be equivalent to taking 7% of GDP out of the consumer economy. Meanwhile, de-leveraging is beginning in the public sector too. Well, on the whole, governments are still adding debt. But at least they're talking about de-leveraging. Stocks fell on Friday, with the Dow down more than 100 points. Why? The papers reported that investors were worried about Europe. The rating agencies were taking a look at Spain's debt; they are going to downgrade it. At least, that was the story. Meanwhile, there was a rumor that China was going to stop doing business in euros. The China rumor turned out to be totally unfounded. As for Spain's debt, again, what else would you expect? Let's see, Spain owes a lot of money all over town. It falls on hard times - with 20% unemployment - so its revenues go down. Hmmm...it's going to have trouble. It will have to make deep budget cuts in order to reassure lenders. But that is what is happening...or should happen...everywhere. Debt is like chocolate sundaes. One is a treat. Two are a challenge. Three are a menace. Four will make you sick. (More below...) Throughout the developed world, countries are still adding to their debt. But the Europeans are beginning to push back from the table. At least, they are pretending to have had enough: "No... I couldn't possibly... Oh...well...maybe just a bite..." Practically every one of them has promised to begin a new diet. After the holidays! And more thoughts... Back in the USA, it's still fat city. Thanks to fear of European debt, the waiters are bringing the sundaes to the US. And here's our own Number One ice cream salesman - Tim Geithner - in Europe. He was in Berlin on Thursday. What flavor was he pushing onto the Germans? Tutti Frutti! He told the Germans that the US was "totally behind a cooperative, worldwide approach." In other words, instead of letting bad debt go bad on a case by case basis...as it should...the idea is to put it all together...get the whole world in on it...so then the whole world's credit will go bad! But make no mistake. As the quantity of debt increases, the quality of the credits falls. It doesn't matter if you spread it out...or concentrate it...or put it off...or put on a fruit topping. You eat too much of this rich dessert and you're going to throw up. Europe is reluctantly still adding debt... America is eagerly adding debt. And all the debt is becoming less effective and less valuable. Sooner or later, lenders will cut off the ice cream sundaes to all of them.... Yes, dear reader, this Great Correction has a long way to go and a lot of work to do. But at least it is underway... Now that we see the savings rate move up again, there's not much doubt left. There is no recovery...and no going back to the bad habits of the Bubble Epoch... So forget the bailouts, boondoggles, and transfer payments... Pay no attention to Wall Street or Tim Geithner. Don't bother to listen to CNBC... You already know what is going on. It's the de-leveraging, stupid! - We spent last week in Europe - at various training programs. In the evening, we drank...we played music...and shot some pool. One of the games proposed by our Irish colleagues was diabolical. They put glasses of "eau de vie" - a powerful, distilled alcohol - on the pool table. The idea was to sink a ball, without touching the glasses. If you touched a glass, you had to drink the alcohol. We are not very good at pool. But at least we are pretty good at drinking. What's happening to Harley Davidson? The reason we ask is that we must have seen 1,000 Harleys this weekend. Every slob over the age 50 seems to have a Harley that he brings out on sunny weekends. They were everywhere this weekend. So many that it's hard to imagine that Harley Davidson could sell anymore machines. There seems to be something that comes over a man after he reaches the age of 50. He wants to be a Hell's Angel. Where did that idea come from? Maybe from the film Easy Rider. We don't know. But it really caught on. At least with riders of a certain generation. The trouble for Harley is that its buyers are dying. Young riders don't ride hogs. They ride a whole different style of bike. And when they get older, they're not likely to dream of being Hell's Angels. They'll have their own dreams and icons. Whatever people pay for HOG, Harley Davidson's stock, it's probably too much. Regards, Bill Bonner for The Daily Reckoning Australia Similar Posts: Saving Money, Not Spending it, is the Key to Getting Wealthier Can a Consumer Economy Boom If Consumers Have Less Money? U.S. Economy is Still Growing but GDP Growth Rates Are Mostly Fraud Consumer Economy Not Going to Return to Robust Growth Anytime Soon Normally Small Businesses Lead the Economy Out of Recession

Quick Position Updates Posted: 01 Jun 2010 05:14 PM PDT Took partial profits on paper Gold long position (via the double bullish UGL ETF) today.

Futures Red As Time For Another ECB/SNB Intervention Approaches Posted: 01 Jun 2010 04:40 PM PDT The euro is now back to the level it was when the ECB/SNB or Liberty 33 decided to crank the living daylight out of it around 12 hours ago. Time for another intervention. In other news, the half life of central bank market intermediation is now down to about half a day. There was a time when today's action would have kept the EURUSD propped up for days. Central banks are quickly becoming the laughingstock of the marketplace. And yes, futures are now red.

Did The Computers Blow A Fuse? Posted: 01 Jun 2010 04:05 PM PDT Something odd happened in the last half an hour of trading today: after the EURJPY had been keeping in intraday lockstep with stocks, which has been the case everyday for the past roughly 7 months now as ZH regulars know all too well, it appears this pair suffered massive decoupling failure once the market plunged on the BP news. This sudden plunge in stocks was not followed by the EURJPY pair, which in turn has opened a massive gap, with neither mutually dependent variable wishing to close. This is as close to a risk-free pick up of 70 bps as one exists: buy the ES and sell the EURJPY. Of course, this is all too glaringly obvious to the millions in SPARC stations operating thousands of gigaflops of correlation arbitrage market scans every millisecond. The fact that they have not closed the gap yet is very concerning, and points to some troubling undercurrents in the quant side of the market that we can not determine as of yet. h/t credit trader

Gold Seeker Closing Report: Gold and Silver Gain Over 1% Posted: 01 Jun 2010 04:00 PM PDT Gold traded mostly slightly higher over the Memorial Day holiday and climbed in London and New York today to as high as $1228.82 by a little before noon EST before it fell back off a bit, but it still ended with a gain of 1.06% from Friday afternoon's close. Silver climbed to as high as $18.667 before it also fell back off in the last couple hours of trade, but it still ended with a gain of 1.04%.

BP Disaster Sinks British Pensions Posted: 01 Jun 2010 03:41 PM PDT Via Pension Pulse. Mark Reynolds of the UK Express reports, BP OIL DISASTER SINKS OUR PENSIONS: Billions of pounds were wiped off the value of pension funds yesterday as shares in BP slumped dramatically because of the Gulf of Mexico oil spill.   One of Britain’s biggest companies and a key indicator of its economy, the oil giant suffered its worst one-day share fall for 18 years.   At its lowest point, the company’s share price was nearly 17 per cent down, although it recovered slightly by the close of trading. Even so, &ound;12billion had been wiped off its market value.   Last night experts were warning that the company had “the smell of death about it” as fears grew that the disastrous leak off the Louisiana coast could continue for another two months after the latest attempt to stem it failed.   Market experts warned that the extraordinary decline of the City heavyweight – a key stock for many UK pension fund investments – would inevitably leave British pensioners poorer.   Pensions expert Alan Smith, chief executive of financial planning firm Capital Asset Management, said: “This is a disaster for BP and most pension funds will undoubtedly have exposure to BP and will be affected. If BP were to halve in value this could lead to pension values going down one or two per cent.   “Pretty much every pension fund in the country owns a bit of BP and it has now fallen some &ound;45billion in value.” Mr Smith added that with the markets expected to struggle, pension funds were likely to sink even further.   “In times like these, with the continuing European debt crisis, there is a lot of nervousness on the markets,” he added. The share collapse means a &ound;15,000-a-year pension will be cut by about &ound;300 to &ound;400 a year, with possibly worse to come.   The BBC’s business editor Robert Peston said: “Given that BP is a core holding of most British pension funds, that’s tens of billions of pounds off the wealth of millions of British people saving for a pension.   “With BP dividends representing about 8 per cent of all income going into those pension funds, and a considerably higher proportion of all corporate dividends received by those funds, if BP’s oil spill causes collateral damage to its dividend-paying capacity, many of us will be feeling a bit poorer.”   Other experts warned that BP could collapse altogether, a fear that sent shock waves through world markets.   Dougie Youngson, oil analyst at banking group Arbuthnot, said: “This situation has gone far beyond concerns of BP’s chief executive Tony Hayward being fired, or shareholder dividend payouts being cut. It’s got the smell of death. This could break BP.” He added: “Given the collapse in the share price and the potential for it to fall further, we expect that it could become a takeover target, particularly if its operating position in the US becomes untenable.”   BP’s dramatic shares slump sparked a wider plunge on the FTSE 100 Index of leading shares, which dropped more than 2 per cent before recovering slightly. BP accounts for about 7 per cent of the FTSE 100, meaning each 10p change in its price moves the index by nearly 9 points.   BP’s share price lost around 80p at one stage, taking it to its lowest level since last March. Attempts to cap the leaking well with mud and debris were unsuccessful at the weekend and the company is using remote-controlled submarines to carry equipment and cut small pipes 5,000ft below the surface before placing a containment cap over the leak.   The attempt, which began on Sunday, should take four days to complete. But BP’s chief operating officer, Doug Suttles, warned: “We’re confident the job will work but obviously we can’t guarantee success.”   The spill has dumped between 18 and 40 million gallons of oil into the sea since the Deepwater Horizon rig exploded and sank on April 20, killing 11 of its crew. Ian Cowie of the Telegraph writes, BP-bashing Americans could jeopardise British pensions. They should remember 1988: The next time Barack Obama places heavy emphasis on the first word in British Petroleum or another American politician boasts about having his “boot on the neck of British Petroleum” just remember it’s your pension that’s taking a kicking.   This is not just a problem for City fat cats or a big bad oil company everyone loves to hate. BP paid &ound;6.6bn in dividends last year – equal to &ound;1 in every &ound;7 paid out by all the companies in the FTSE 100 – and remains a major holding in most income-hungry pension funds.   That seemed a reasonable strategy while returns on cash deposits were negligible but BP’s share price has now plunged by 33 per cent since the disaster in the Gulf of Mexico. It stood at 646p in April but traded around 433p today.   Independent statisticians Bloomberg list household name fund managers including BlackRock, Legal & General, Barclays, M&G, Scottish Widows, Threadneedle and AXA among major shareholders in BP. Some may have bought since the share price began to slide but most are sitting on massive losses.   You could even argue that BP’s survival – and the beleaguered giant is now being talked of as a takeover target – is vital to the British Government’s plans to cut budget deficits and balance its books. BP paid &ound;5bn tax in 2009 and &ound;10bn tax the year before when oil prices were higher.   At the most microscopic end of this macro economic disaster, I had better declare an interest here; like hundreds of thousands of small investors, I hold BP shares and hope to continue doing so.   Nobody should belittle the scale of the disaster in the Gulf of Mexico. 11 workers died when the Deepwater Horizon rig exploded, incalculable environmental damage has been done to more than 70 miles of Louisiana’s coastline and tens of thousands of people’s livelihoods have been threatened.   No wonder nearly 250,000 people appear to have joined a Facebook group called “Boycott BP” and American politicians including Interior Secretary Ken Salazar seem to be competing to see who can vilify the oil giant in the most lurid language.   Now the latest bad news from America is that CBS News and the Washington Post are reporting that the government may be preparing to prosecute BP, alleging criminal negligence. BP denies it took any safety shortcuts – despite the shameful history of its Texas City refinery explosion in which 15 workers died – and insists it is doing everything possible to put things right in the Gulf of Mexico.   But the American government and media seem to have decided the oil company put profits above safety in its list of priorities. Nor is there any reason to suppose British politicians and journalists would behave any differently if it was an American company that suffered similar setbacks here.   Or is there? When the Piper Alpha rig exploded in the North Sea in July, 1988, no fewer than 167 workers died and environmental damage pushed insured losses to &ound;1.7bn. It was the worst offshore oil disaster in the world at that time and feelings ran high in Aberdeen, where many families suffered bereavement and financial loss.   But I do not recall Margaret Thatcher seeking to make political capital out of that tragedy by using inflammatory language about having her boot on the throat of Occidental Petroleum, the American oil giant which operated Piper Alpha. Oxy, as it was known because of the Los Angeles-based company’s New York Stock Exchange ticker, did not become the target of any government-sponsored hate campaigns in Britain.   By coincidence, I happened to be in Aberdeen at the time of the Piper Alpha tragedy and remember an uncle who worked on the rigs pointing out that drilling for oil deep below the sea is a dangerous business. Perhaps intelligent American politicians and journalists ought to remember that fact. Finally, Robert Preston of the BBC asks, Will BP be forced out of the US?: There's another &ound;13bn off BP's market value today, taking the cumulative loss since the company sprung its hideous leak to well over &ound;40bn.   Given that BP is a core holding of most British pension funds, that's tens of billions of pounds off the wealth of millions of British people saving for a pension.   And with BP dividends representing around 8% of all income going into those pension funds (and a considerably higher proportion of all corporate dividends received by those funds), if BP's oil spill in the Gulf of Mexico causes collateral damage to its dividend-paying capacity, well, many of us will be feeling a bit poorer.   As I've written here before, it's certainly not ludicrous to assume that the final cost for BP of this mess could wipe out at least an entire year's profit (which for the past three years was just over &ound;13bn on average) - once compensation and possible fines have been paid.   Perhaps more damagingly, the debacle is doing considerable harm to the value of its brand in the US - with what looks like every US citizen, from President Obama down, equating BP with the sullying of one of America's most cherished coastlines.   The talk among BP oil executives is that the company's reputation in the US may have been so tarnished that the board will conclude that an orderly withdrawal from America - with the sale of its massive US assets - may be necessary (it's widely thought, for example, that Chevron would be an enthusiastic buyer of those assets).   Were that exit to occur, it would represent one of the great corporate humiliations of all time, a reversal of those mega-bids of Amoco and Arco by BP - when under the sway of Lord Browne - which transformed a division-two British player into one of the global giants only a decade or so ago.   And what of Lord Browne's successor as chief exec, Tony Hayward?   It would be challenging to identify any specific decision or lapse by him as the cause of what is now seen as the worst oil spill in US history.   But some argue that BP was slow in recognising the gravity of the debacle after the explosion in April.   And then there's the boringly obvious point that angry shareholders, angry Gulf coast fisherman and angry US citizens have a very human need to blame someone - and if not the BP boss, then who?   It's difficult to see how Mr Hayward's tenure at BP can extend beyond his immediate management of this remarkable crisis. I'm not sure what to make out of the precipitous slide in BP's share. There is no doubt in my mind that some big hedge funds are making a killing on BP's CDS, and stand to make even more if they're loading up at these levels and BP shares snap back. But for large British pension funds, this BP oil disaster is also a financial disaster. They're going to have a tougher time making up for these losses, and it will take time to repair the damage they sustained.

UK Continues To Be A Top Sovereign CDS Derisker Posted: 01 Jun 2010 03:01 PM PDT After taking a brief break last week, the UK is once again firmly in the top sovereign deriskers: a place it has held with pride for almost two months now. Summing up cumulative net notional exposure on the UK based on just the last several weeks results in a net short exposure of well over $3 billion. Someone has now amassed a huge short on the British Isles. Curiously, the country that was actually the top derisker in the past week, with $420 million in net notional change, was Brazil, the same Brazil which today decided to not lift any offers in its 2021 Fixed Coupon Bond auction. Is this the next hotbed of instability? Look for at least one more week of aggressive derisking before confirming this trend. Turkey completes the trio of top deriskers, with $172 billion in CDS. Surely with the prior week ending on May 28, there is no way anyone could have hedged for an Israeli incursion of Turkish ships ahead of time. On the other end, some of the names that have been making the news recently, have seen some material rerisking, probably based on short positional unwinds: the top five were the US, Japan, Austria, France and China. After tonight's news out of Tokyo, look for Japan to take its rightful place at the top of this table.

A Contrarian Oil Play Posted: 01 Jun 2010 02:37 PM PDT It was always assumed that when the resource wars began the shots would be fired by armies and or navies or air forces against one another, not by a government at its own private sector. But if you're mobilising for a war over scarce resources and capital, maybe it makes sense that the first thing you do is nationalise the means of production and the resources within your own industrial base. That's what we're thinking today about Australia's resource super profits tax (RSPT). But before the big picture, what about the market? Even the most grizzled bear would have to be impressed if stock markets can rally right now. But is it possible? It IS possible. Our technical guru Murray Dawes says the U.S. action is poised on a key level. He believes that will determine what happens here in Australia. It WOULD be impressive if stocks can hold the line now. It doesn't get much more negative, at least in terms of events. Geopolitically, you have a low-level crisis on the Korean peninsula. Over in the Middle East, you have an escalating crisis off the coast of Israel. Whether those two problems amount to anything more, they've already contributed to a very nervous marketplace. And then? And then you have the fact that stocks seem to have exhausted all the optimism and momentum they've built up since the lows of 2009. U.S. pundit Richard Russell are predicted a "major crash" if the Dow Jones took out its May 7th lows. It's already done that. And now it's knocking on the door of 10,000. Is there something self-fulfilling about negative sentiment and the stock market? Well, of course. That's why being a contrarian is fundamentally unnatural, or really difficult. In a 24/7 media market where everyone tries to digest what every piece of news means at every second, only a very courageous man would claim that the market efficiently prices every single security on a continuous basis. Instead, we'd make the claim that more than ever the market is driven by marginal fear and marginal greed. Speculators in the futures markets and program traders can influence index levels dramatically. But what influences them? Hunches? Experience? Indigestion? Bad models? Bad shrimp? Where are we going with this? It probably pays to force yourself to point yourself in the exact opposite direction of prevailing sentiment and spend a few minutes thinking of the other possibilities. Don't be a lookie-loo! Or as Indiana Jones send to Marion when the Ark was opened by the Nazis, "Marion, don't look at it. Shut your eyes Marion!" For example, if stocks don't break key levels from here—with such a heavy burden of bad news—you'd think it could lead to an explosive short-term rally. That's a tradable event, and thus what we discussed with Murray this morning. That's a possibility you want to consider. Mind you we remain fully convinced that the lows will be tested and taken out. But it may not be just yet. Or take another slightly more complicated example; oil. In the recently published edition of the Australian Wealth Gameplan we speculated that the full consequences of the BP oil spill haven't yet been factored into energy markets or oil stocks. Let's assume that no public company with shareholders can run the legal risk of drilling off-shore after the BP affair. Of course, we're assuming BP will see a lot of shareholder value destroyed and will not survive in its present form. That's a big assumption. But even so, what would happen to off-shore drilling and exploration if BP is socked with a multi-billion fine for its role in the explosion of the Deepwater Horizon drilling platform? What will happen to global oil supply? This, by the way, has always been the core contention of the Peak Oilers. It's not that the world is literally running out of oil. It's that the cost of finding it and producing it is going up. That cost includes, now, the legal risk of operating an off-shore rig. We'd be willing to bet that for most public oil companies, that risk is now unacceptably high. So what? The market has just begun to re-rate the oil companies based on the BP example. If publicly traded oil companies can't or won't expand reserves by exploring and drilling offshore, what then? You're left with national oil companies who presumably bear a lot less legal risk, considering they are owned by the State. And there are still places in the world, like Africa, where you can imagine that governments are happy to sell off-shore drilling permits for the right price. It's conceivable, then, that oil stocks are not priced for the litigation risk they face in the future. But it's also conceivable that the stocks are not priced for a world with lower oil production resulting from the death of off-shore drilling (if that's what happens). Even if it doesn't, it's clear that drilling in the Gulf of Mexico is going to be an iffy proposition. That will affect some companies more than others. But our main point is that every crisis has consequences. For starters, the Gulf crisis is an ecological disaster. It makes you wonder why we're still burning oil as a transportation fuel instead of using it as a construction material. But from an investment perspective, there are short-term losers and long-term winners. We'd suggest taking that analytical perspective at times like this, and tuning out the noise on TV. But what about this resource war we talked about at the start of today's' notes. Is it real? Well, it DOES sound a bit conspiratorial. The simplest explanation for the Rudd government's resource tax proposal is that it has a budget deficit of its own making that it needs to turn into a surplus to win an election. The mining companies have big profits. It's a logical place to look if you're an acquisitive, grasping, and mildly panicked politician. The miners, through a new report commissioned by the Minerals Council of Australia, are no claiming that the RSPT makes many new projects "unviable." The main issue is the ability to get debt financing. This would, by the way, be complicated by that $5 trillion of other corporate debt that needs refinancing in the next 36 months. Good luck getting project finance in a market like that with an opaque law on top of you. According to today's Financial Review, "The KPMG report found that the resource tax would discourage financiers from backing new projects despite the government offer of tax refunds on 40 percent of past losses or capital investment. While all new mining projects would lose value from the tax, the impact was the greatest in gold, nickel, and copper where some projects would be economically unviable." Is the mining industry talking its own book? You bet. Is the government talking its own book? You bet. Which book are you buying? And which books are we buying? Well, if it helps, we can let you know that Diggers and Drillers editor Alex Cowie is getting ready to head over to Africa himself to research some opportunities first hand. We'll keep you posted. Dan Denning for The Daily Reckoning Australia Similar Posts: BHP Billiton: The Oil Company That is Not an Oil Company Buy Oil Stocks… No Matter What Latest Energy Bull Market Won't Be Confined to Crude Oil Oil Was Down and the Banks Were Up A Deep-water Oil Find Off the Coast of West Africa

Gold Daily Chart: Cup and Handle Set Posted: 01 Jun 2010 02:37 PM PDT This posting includes an audio/video/photo media file: Download Now

A Series Of Lucky Coincidences Involving Goldman Sachs And BP plc Posted: 01 Jun 2010 01:54 PM PDT Earlier, when observing the US AG disclosure of a civil and criminal investigation into BP plc, we noted in passing that BP's former Chairman, Peter Sutherland, who left the firm is a Chairman of Goldman Sachs International. Mr. Sutherland holds some other interesting titles, including a position on the Trilateral Commission, he was a chairman of the London School of Economics in 2008, he is a UN special representative for migration and development; he was the founding director-general of the World Trade Organisation, he had previously served as director general of GATT since July 1993 and was instrumental in concluding the Uruguay GATT Round Negotiations. Needless to say, we focused on the Goldman relationship. When digging deeper, we uncovered some amusing correlations, most notably between the BP plc sellside ratings by Goldman BP analyst Michelle della Vigna and the Goldman Sachs Asset Management holdings of BP plc. These are summarized on the attached chart. And in case this is not enough, another way to visualize Goldman's rating history, together with price targets on BP is presented below, straight from GS itself: As the first chart above demonstrates, there is an "odd" correlation between Goldman's sellside sentiment on the stock, and the amount of stock held by Goldman's asset management arm, especially evident in the days between December 31, 2009 and March 31, 2010, when despite a recent Buy rating attached to the firm, GSAM sold off more than 40% of its stake in the name. On December 31, Goldman held 71 million BP shares, and three months later this number went down 42.5 million. Another oddity is that back in 2008, when GS had the stock at Neutral, GSAM doubled its stake in the firm from 28.8 million shares to 57.3 million days before Ms. della Vigna raised the stock to a Buy, albeit if only for just over a month. Oddly enough, in the half year period when Goldman was telling its clients to Sell the stock, between 3/31/2009 and 10/28/2009, GSAM holdings declined by a whopping -3.9%. Yet while the fact that GSAM did not follow the recommendations of its very own analyst is not peculiar. We have long pointed out that Goldman does precisely the opposite of what it advises its "clients" to do. What is slightly more troubling is the combination of Mr. Sutherland's departure from BP effective January 1, the release of his fiduciary obligations to BP shareholders, the upgrade of BP by Goldman from Neutral to Buy 4 days before Sutherland's full, and non-conflicted return to the GSI Chairmanship, and last but not least, the dumping of 28 million BP shares by GSAM in the next three months, an act which has saved the asset manager roughly GBP50 million. We are confident that all of the above is purely coincidental.

“When Will Euro Zone Fall?” Posted: 01 Jun 2010 01:04 PM PDT Read PDF By Stephen Fidler Václav Klaus, president of the Czech Republic, has never been too worried about upsetting his European Union partners. He risks doing so again with a piece just written for the libertarian Cato Institute's Center for Global Liberty & Prosperity provocatively entitled "When Will the Euro Zone Collapse?" His main conclusions are [...]

What effect will High Prices have on Demand? Posted: 01 Jun 2010 01:00 PM PDT Traditional thinking has a pat answer for this question, "High prices cut demand!" This doesn't seem to be working in the gold market. At the turn of the century, in the days when gold was a 'barbarous relic' the gold price stood at just under $300 an ounce. Since then there has been an increase in barbarians, or the market doesn't share that view? What has happened since then has been a major, revolutionary change in the structure of the gold and silver markets.

Coin Update News uncovers U.S. Mint's secret gold pricing policy Posted: 01 Jun 2010 12:59 PM PDT 8:50p ET Tuesday, June 1, 2010 Dear Friend of GATA and Gold: Michael Zielinski, editor of Coin Update News, last week noticed that the U.S. Mint seemed not to have followed its policy for adjusting the prices of its numismatic coins. Calling the mint about it, Zielinski uncovered a secret codicil in the policy that prevented what ordinarily would have been a reduction in prices. Writing about it today, Zielinski concludes with polite understatement: "When the new pricing policy was introduced, the U.S. Mint Deputy Director stated, 'Transparency, agility, and customer service are the catalysts for our new pricing method.' Having an unrevealed internal policy which can override the published policy doesn't seem consistent with the claim of transparency." If you think the Mint has some shortcomings with transparency on gold, GATA could tell you, over a beer or two, about the secrecy tightly woven around gold by the Federal Reserve and Treasury Department, but we might not finish by closing time. At least Coin Update News didn't have to sue the mint to get an answer. The Coin Update News disclosure about the mint's secret pricing policy is headlined "U.S. Mint Responds on Numismatic Gold Coin Pricing Policy" and you can find it here: http://news.coinupdate.com/us-mint-responds-on-numismatic-gold-coin-pric... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Prophecy to Become Coal Producer This Year with 1.5 Billion Tonnes of Resource 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 Sunday and Monday, June 6 and 7, 2010 Vancouver Convention Centre Vancouver, British Columbia, Canada http://www.cambridgehouse.ca/index.php/world-resource-investment-confere... * * * Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Coming Friday-Sunday, June 11-13, at the Dallas-Fort Worth Airport Marriot: The Anglo Far-East Bullion Co.'s Gold and Silver Conference The conference will explore the dangers and opportunities in today's bullion markets and the need for investors to diversify bullion holdings outside of bullion banking and commodities markets. Speakers will include David Morgan of Silver-Investor.com, Gold Anti-Trust Action Committee Chairman Bill Murphy, and Duncan Cameron and Philip Judge of Anglo Far-East Bullion Co. The earliest conference attendees on Saturday will be able to schedule one-on-one interviews for personal consultation with Anglo-Far East's experts on Sunday. To learn more about and register for the Anglo Far-East Bullion conference, please visit: http://www.anglofareast.com/seminar-registration/

Coin Update News uncovers U.S. Mint's secret gold pricing policy Posted: 01 Jun 2010 12:59 PM PDT 8:50p ET Tuesday, June 1, 2010 Dear Friend of GATA and Gold: Michael Zielinski, editor of Coin Update News, last week noticed that the U.S. Mint seemed not to have followed its policy for adjusting the prices of its numismatic coins. Calling the mint about it, Zielinski uncovered a secret codicil in the policy that prevented what ordinarily would have been a reduction in prices. Writing about it today, Zielinski concludes with polite understatement: "When the new pricing policy was introduced, the U.S. Mint Deputy Director stated, 'Transparency, agility, and customer service are the catalysts for our new pricing method.' Having an unrevealed internal policy which can override the published policy doesn't seem consistent with the claim of transparency." If you think the Mint has some shortcomings with transparency on gold, GATA could tell you, over a beer or two, about the secrecy tightly woven around gold by the Federal Reserve and Treasury Department, but we might not finish by closing time. At least Coin Update News didn't have to sue the mint to get an answer. The Coin Update News disclosure about the mint's secret pricing policy is headlined "U.S. Mint Responds on Numismatic Gold Coin Pricing Policy" and you can find it here: http://news.coinupdate.com/us-mint-responds-on-numismatic-gold-coin-pric... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Prophecy to Become Coal Producer This Year with 1.5 Billion Tonnes of Resource 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 Sunday and Monday, June 6 and 7, 2010 Vancouver Convention Centre Vancouver, British Columbia, Canada http://www.cambridgehouse.ca/index.php/world-resource-investment-confere... * * * Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Coming Friday-Sunday, June 11-13, at the Dallas-Fort Worth Airport Marriot: The Anglo Far-East Bullion Co.'s Gold and Silver Conference The conference will explore the dangers and opportunities in today's bullion markets and the need for investors to diversify bullion holdings outside of bullion banking and commodities markets. Speakers will include David Morgan of Silver-Investor.com, Gold Anti-Trust Action Committee Chairman Bill Murphy, and Duncan Cameron and Philip Judge of Anglo Far-East Bullion Co. The earliest conference attendees on Saturday will be able to schedule one-on-one interviews for personal consultation with Anglo-Far East's experts on Sunday. To learn more about and register for the Anglo Far-East Bullion conference, please visit: http://www.anglofareast.com/seminar-registration/

James Turk: Gold hurdles to new record highs Posted: 01 Jun 2010 12:45 PM PDT 8:40p ET Tuesday, June 1, 2010 Dear Friend of GATA and Gold: "Gold Hurdles to New Record Highs" is the headline on tonight's commentary by James Turk, editor of the Freemarket Gold & Money Report, founder of GoldMoney, and consultant to GATA. You can find it at the FGMR Internet site here: http://www.fgmr.com/gold-hurdles-to-new-record-highs.html CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Prophecy to Become Coal Producer This Year with 1.5 Billion Tonnes of Resource 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 Sunday and Monday, June 6 and 7, 2010 Vancouver Convention Centre Vancouver, British Columbia, Canada http://www.cambridgehouse.ca/index.php/world-resource-investment-confere... * * * Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Coming Friday-Sunday, June 11-13, at the Dallas-Fort Worth Airport Marriot: The Anglo Far-East Bullion Co.'s Gold and Silver Conference The conference will explore the dangers and opportunities in today's bullion markets and the need for investors to diversify bullion holdings outside of bullion banking and commodities markets. Speakers will include David Morgan of Silver-Investor.com, Gold Anti-Trust Action Committee Chairman Bill Murphy, and Duncan Cameron and Philip Judge of Anglo Far-East Bullion Co. The earliest conference attendees on Saturday will be able to schedule one-on-one interviews for personal consultation with Anglo-Far East's experts on Sunday. 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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