Gold World News Flash |
- Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Roughly 1% and 5% on the Week
- Daily Dispatch: A Redistribution of Time
- Adrian Day: Buy Gold Bullion, Royalties and Juniors
- Recipe for Economic Catastrophes
- Midas Letter Submission for Week 139
- Beginning of the “Keynesian Endpoint”
- In-Disposable Income and The Long Road out of Debt
- Jim?s Mailbox
- Hourly Action In Gold From Trader Dan
- Endeavour Adds Heavy Hitters to Crew Gold's Board of Directors
- Gold Stock Fundamentals Now versus 2008
- NSU Buyout?
- Why Won't You Die, Damn it!
- GLD Adds Another 296,693 Ounces of Gold to its Stockpile
- LGMR: Gold Undoes Weekly Drop as US Retail Sales & UK Manufacturing Fall
- U.S. Stock Market and Gold Update 9:00AM EST
- Q1 2010 Flow of Funds
- Gold Daily Chart
- Is Gold In A Bubble? No Way! Classic Cup and Handle Pattern
- Japan PM: 'Risk of Collapse' from Debt Mountain
- Ferdinand Lips Institute preserves gold advocate's work on the Internet
- Ferdinand Lips Institute preserves gold advocate's work on the Internet
- Why is China promoting Gold Investments, if the Yuan is going to appreciate?
- John Embry: 17 reasons to own gold
- Senator Kaufman Blasts SEC And Getco For Latest Episode Of Glaring Regulatory Capture
- John Embry's 17 Reasons To Own Gold
- Have We Just Seen a Major Top In Gold?
- Weekly Credit Summary: June 11 - Look Behind The Curtain This Week In Credit
- Rising Private Sector Leverage
- Continued Strength for U.S. Export Activity
- Banks set new store on building gold vaults
- Compendium 3 Available Monday!
- FRIDAY Market Excerpts
- Jim's Mailbox
- New CFTC Silver Round
- $34 Billion Asset Manager Says Market Prices Are Manipulated, Accuses NYSE Of Intellectual Property Theft, Debunks HFT "Liquidity Provider" Lies
- GOLD: Opportunities + Threats = Opportunities
- An important trend is developing in the gold market
- Bear ETFs: Winning in an Uncertain Market
- Australia: The Land Down Under(water in Mortgage Debt), Part 2
- Recovery Flops!
- New Japanese Prime Minister warns country is at "risk of collapse"
- Gold futures make up 80 percent of ETF's - head of commodities research at Deutsche
- Shooting for Riches at World Cup: The Case for Platinum
- The Bottom Line for Retail Sales and Talbots, Express and Nordstrom
- Anyone hear about $2 drop rumor?
- With Volume 40% Below Average, Closing Market Commentary
| Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Roughly 1% and 5% on the Week Posted: 11 Jun 2010 04:00 PM PDT Gold rose to as high as $1228.55 at 9AM EST before it fell back to $1220 an hour later, but it then climbed back higher for most of the rest of trade and ended near its late session high of $1229.55 with a gain of 0.69%. Silver climbed to as high as $18.52 at 8:30 before it dropped back to as low as $18.05 at about 9:45 and then bounced back higher into the close, but it still ended with a loss of 0.27%.
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| Daily Dispatch: A Redistribution of Time Posted: 11 Jun 2010 03:56 PM PDT June 11, 2010 | www.CaseyResearch.com A Redistribution of Time Dear Reader, Chris and David are both occupied today. Hence, the reins of Casey’s Daily Dispatch have been handed over to me. I hope that you enjoy our short time together. It’s nearly 10 AM, and I haven’t started complaining about the government yet. Well, it’s about time, don’t you think? But first, I wanted to expand on David Galland’s great post on time from Wednesday… A Redistribution of Time By Vedran Vuk At all moments, we must choose what to do with our limited time. Should we play golf or read up on our investments? Even more importantly, should we read about investments now so that we may play more golf in the future? This is an essential life question. Foregoing current enjoyment for future leisure is a theme beyond investing. In youth, we all face a trade-off between amounting human capital and enjoying ...
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| Adrian Day: Buy Gold Bullion, Royalties and Juniors Posted: 11 Jun 2010 03:56 PM PDT Source: Brian Sylvester and Karen Roche of The Gold Report 06/11/2010 Chairman and CEO of his namesake company, Adrian Day Asset Management and Author of the Adrian Day's Global Analyst newsletter, Adrian Day is frequent contributor to The Gold Report because he never fails to deliver keen market insight or offer ways to safely grow your money—typically through value investing. Many of his firm's biggest holdings involve gold, where he sees plenty of opportunities in light of current market trends. Adrian holds bullion and "loves" gold royalties. But if you're not into royalties, he also offers promising names in the junior gold space in this exclusive interview. The Gold Report: Earnings numbers are up for U.S. companies, the U.S. dollar is gaining strength, unemployment numbers are improving; yet, as you said in a recent newsletter, you remain cautious on the market and are generally looking for opportunities to sell. What do you see in the economy that mak...
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| Recipe for Economic Catastrophes Posted: 11 Jun 2010 03:56 PM PDT [LIST] [*]Recipe for Economic Catastrophes Gold is not a bubble Wolf Wave Black Swans and Fat ladies [/LIST] The “When hope turns to Fear” moment (See 2010 Outlook “When hope turns to Fear” in Tedbits archives) is unfolding as we speak, as the tides of insolvency sweep over the social welfare states and financial systems of the developed world. It is the next leg down in the global financial crisis and what will come to be known as the greatest depression ever is commencing -- we are fascinated and astonished at what the main stream media is reporting and failing to report. No amount of PONZI finance or money printing will rescue the Western world from its immorality masquerading as morality. SOCIALISM is IMMORAL and that is why it always FALLS into BANKRUPTCY. As Margaret Thatcher once said: [LIST] [*]“The problem with socialism is that eventually you run out of OTHER PEOPLE’S MONEY” - Margaret Thatcher [/...
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| Midas Letter Submission for Week 139 Posted: 11 Jun 2010 03:56 PM PDT Hi Bill In your 09 June Midas Commentaries you quoted Dennis Gartman on Mining Stocks. "This morning the influential Gartman Letter expresses dismay at the failure of gold to hold above $1,250 yesterday, and alarm that the gold shares are so sluggish: 'We wonder why "informed capital" refuses to make its way into the mining companies. Does that "informed capital" know something we do not know? It is reticent about investing in miners for a reason? If so, what's that reason?" I think Mr. Gartman, & "informed capitals" difficulty in seeing how superbly the Mining Shares have performed since 2001, can traced back to who "We" are. Now if Mr Gartman's "We" included contributors of the various tables in Le Metropole Café, he might have seen charts similar to the one below, that will be found in my next Bear Market Race to the Bottom Report, Wk 139. The Red Plot is Barron's Gold Mining Index (BGMI), a weekly series published by Barron's since 1938. I know Mr. Gartman i...
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| Beginning of the “Keynesian Endpoint” Posted: 11 Jun 2010 03:56 PM PDT The 5 min. Forecast June 11, 2010 12:18 PM by Addison Wiggin & Ian Mathias June 11, 2010 [LIST] [*] The “Keynesian endpoint” where debt can no longer be cured with more debt [*] Bipolar market exhibits more mood swings… Rob Parenteau on where we go from here [*] Labor getting restive in China… Growing pains of a healthy economy or an ill omen? [*] Oil slips below $75… Two factors to drive it higher from here [*] The bitter fruits of our experience with the civil “justice” system [/LIST] "We need to slash debt,” declared our friend Nassim Taleb this week on CNBC. Government debt, that is. “Unfortunately, that's the only solution.” And the most unlikely. The Federal Reserve’s quarterly Flow of Funds report shows households trimmed their debt 2.4% during the first quarter. Business debt was flat. But local and state government debt grew 4.3%. And federal government debt ballooned another 18.5%. ...
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| In-Disposable Income and The Long Road out of Debt Posted: 11 Jun 2010 03:56 PM PDT From the June 2010 HRA Journal David Coffin & Eric Coffin, HRA Advisories The Bank of Canada just doubled its overnight lending rate, to 0.5%, and became the first G8 country to do so since the Crunch. That came after a +6% growth rate in Q1 that brings Canada’s GDP to within 0.4% of its peak valuation, and strong employment gains in April. Of course the loonie dropped nearly a cent against the US$ after the rate hike was announced. The rate hike wasn’t a surprise given the BoC had picked June as the likely point to reduce stimulus at the beginning of the year. Strong economic stats reinforced that likelihood for months. The bigger surprise was that very strong Q1 growth number, which is the largest quarterly jump in several decades. A big rebound quarter or two after a recession is normal, but is it sustainable? Markets don’t seem to think so. One specific change is a slowing of the Canadian housing market which is focused in the most expens...
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| Posted: 11 Jun 2010 03:56 PM PDT View the original post at jsmineset.com... June 11, 2010 07:01 AM Dear Eric, The 80 percent of gold futures are NOT listed futures but rather predominately OTC derivative gold. Jim Deutsche Bank's Lewis Says Gold May Rally Past Record on Crisis CIGA Eric We already know that gold is headed higher – much higher. Lewis suggested that ETF have and will play an important role in fueling the gold. What I found interesting about the article was not that gold ETF will play important role in fueling demand (no doubt) but rather composition of them. This comment is highlighted below. Exchange-Traded Funds, known as ETFs, where gold futures make up 80 percent, are also having an "enormous impact," he said. Source: businessweek.com More… Japan PM warns of Greece-like debt crisis CIGA Eric The Japanese PM is alluding to confidence; Confidence in the currency that denominates their debt. Since gold is rising in all global currencies, it suggests that confiden...
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| Hourly Action In Gold From Trader Dan Posted: 11 Jun 2010 03:56 PM PDT View the original post at jsmineset.com... June 11, 2010 09:58 AM Dear Friends, Dismal retail sales were apparently shrugged off by the equity markets today as they seem reluctant to move much lower after yesterday's decent performance. What is happening is that would-be short sellers in the equities are coming in on weakness expecting follow through to the downside and instead are getting squeezed out and shredded to pieces in the process. There is just enough wavering of conviction among these shorts that the market will not take out downside support below 1050 in the S&P. They are sick and tired of getting burned and having to cover as they watch profits turn into losses. I find the inability of the S&P to break down mighty suspicious I might add. Either way, that is bringing a bit of selling into gold as safe haven allure dims a bit; however, the fact that the Euro is weak alongside the other major currencies, is lending support to gold on dips. What we have is a classic setup f...
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| Endeavour Adds Heavy Hitters to Crew Gold's Board of Directors Posted: 11 Jun 2010 03:56 PM PDT By Guy Bennett MidasLetter.com Friday, June 11, 2010 The rise in share price of Crew Gold (TSX:CRU), a West African gold producer, was a gift to many investors earlier in 2010 as it rose 500%, from 10 cents to 50 cents on huge volume – the result of a takeover battle between Canada’s Endeavour Financial (TSX:EDV) and Russian steel giant Severstal (LSE:SVST). But now that the two groups have kissed and made up, agreeing to restructure Crew’s board of directors, the stock has dropped in half to 25 cents. So much for the peace time dividend. What should investors be thinking now about Crew? A key sign of the future could be in the makeup of the board. Endeavour’s significant board appointees Frank Giustra and Michael Beckett signal its lofty ambitions for Crew Gold. "Endeavour and Severstal share a common goal of ma...
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| Gold Stock Fundamentals Now versus 2008 Posted: 11 Jun 2010 03:56 PM PDT Escalating sovereign debt problems in Europe has prompted some to wonder if another “Lehman” type collapse is on the horizon. As a result, some precious metals observers have grown cautious, fearing a replay of the events of two years ago. While it is always prudent to be cautious with an extremely volatile sector like the gold stocks, the facts illustrate major differences between their fundamentals now and in 2008. Most notably, the real price of Gold is rising. The real price of gold tends to lead the HUI/Gold ratio and it also provides a positive omen for the gold stocks. We’ve noted in past missives how a simple analysis of Gold/Oil and Gold/Industrial Metals can provide an indication of the future direction in HUI/Gold. As you can see from the chart, the recent soft panic has spurred Gold much higher against both Oil and Industrial Metals. What is intriguing is that deflation is the catalyst for gold stocks while inflation is actually not a po...
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| Posted: 11 Jun 2010 03:56 PM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here June 11, 2010 09:24 AM Nevsun Resources (a model portfolio selection) is up sharply today on takeover rumors. I’ve speculated on this in the past. I can’t find any special recommendations or comments attributed to NSU to suggest that’s behind the very large bump on in volume and share price. And with it happening on a Friday??? Fingers and toes crossed. Management has just issued this I do like to make a commercial out of this by suggesting speculators look at Grandich Client Sunridge Gold. If NSU is a takeover, I think SGC can draw a lot of new attention. [url]http://www.grandich.com/[/url] grandich.com...
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| Posted: 11 Jun 2010 03:56 PM PDT By David Galland, Managing Director, Casey Research Back when I had more time, I would occasionally play Oblivion, a video game. A game so addictive, it's been known to contribute to flunking out of colleges and the failure of marriages. When persevering in a sword fight, your computerized opponents were prone to angrily muttering the phrase "Why won't you die, damn it!" That phrase pops to mind as I watch the global stock market continue to get hammered, as gold continues to battle the headwinds with impressive tenacity. So why won't the damn crisis just die – and with it, gold? It's not my intention to rehash the details of the events leading so many economies to this challenging place. Instead, I'll cut right to the chase by stating my firm opinion that the reason this crisis is so persistent – why it won't die anytime soon, and not without a lot of thrashing about – has to do with the debt at its core. Earlier today, I was trying to explain the situ...
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| GLD Adds Another 296,693 Ounces of Gold to its Stockpile Posted: 11 Jun 2010 03:56 PM PDT Gold was under pressure most of Thursday's trading session... and both rally attempts [one in London... and the other in New York after the London p.m. gold fix at 10:00 a.m. Eastern time] ran into not-for-profit sellers. Gold's high price for Thursday was pretty much its closing price on Wednesday in New York... which was $1,233.10 spot. The low of $1,214.30 spot [when you look at the graph below] looked like it occurred in New York electronic trading about 3:45 p.m. Eastern time... but, in actual fact, if you look at the New York trading graph on its own... the low was at the London p.m. gold fix at 10:00 a.m. Eastern. Silver blazed its own trail yesterday... with its low [somewhere below $17.90 spot] coming in early London trading. From there it gained back some of its Thursday's losses... but it really took off into the London p.m. gold fix... and then hit its high of the day [$18.46 spot] about 11:30 a.m. in New York. It got sold off from that point, but s...
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| LGMR: Gold Undoes Weekly Drop as US Retail Sales & UK Manufacturing Fall Posted: 11 Jun 2010 03:56 PM PDT London Gold Market Report from Adrian Ash BullionVault 10:00 ET, Fri 11 June Gold Undoes Weekly Drop as US Retail Sales & UK Manufacturing Fall THE PRICE OF GOLD jumped out of a tight trading range at the start of New York dealing on Friday, rising to show a 0.5% weekly gain at $1227 an ounce as investment capital moved into "safe haven" assets on news of a sharp drop in US retail sales. Falling by 1.2% in May – the fastest pace since Sept. – the headline retail figures sent the Dollar and Treasury bonds higher while stock markets gave back an earlier rise. US crude oil contracts lost 1.8% on the news, falling below $74.50 a barrel. Gold priced in Euros and Sterling reversed the week's near-2% drop, jumping above €32,600 per kilo and £844 an ounce respectively. "The gold market [was] very quiet after profit-taking" mid-week, says a note from Walter de Wet at Standard Bank. "However, there is buying interest on dips," he says, pegging support for g...
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| U.S. Stock Market and Gold Update 9:00AM EST Posted: 11 Jun 2010 03:56 PM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here June 11, 2010 05:07 AM U.S. Stock Market – I have said on several occasions you can’t count out the “Happy” people until at least two closes below 1,040 on the S & P 500. I previously noted that the first test would hold, be followed by a bounce, and then we would have to measure the retest and any bounce after that (we’re there now). I believe the S & P 500 has now set us up for either a very good buy or sell signal. If the index can rally above its 200-Day MA and close above 1,110, I think we could see a summer rally that could set up a right shoulder to a significant Head and Shoulders top formation. And if we reverse here and get two closes below 1,040, the final nail in the coffin will have been hammered. Stay tuned Gold -It seems like a day doesn’t go by without some article, report or email claiming the end of gold’s rise is over. ...
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| Posted: 11 Jun 2010 02:09 PM PDT I'll be the first to admit that analyzing the Fed's Z.1 "flow of funds" data offered more fascinating detail and nuance back during the Wall Street/mortgage finance Bubble period. All the same, dissecting Credit and financial flow ...
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| Is Gold In A Bubble? No Way! Classic Cup and Handle Pattern Posted: 11 Jun 2010 01:26 PM PDT On the front page of all the media outlets is the question if gold is in a bubble ... Bubbles are irrational, but there is an old saying that markets are irrational a lot longer than one can stay solvent.
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| Japan PM: 'Risk of Collapse' from Debt Mountain Posted: 11 Jun 2010 01:08 PM PDT Japan's new Prime Minister Naoto Kan on Friday pledged a fiscal policy overhaul to reduce the country's massive public debt mountain, warning of a Greece-style meltdown.Skip related content RELATED PHOTOS / VIDEOS"Our country's outstanding public debt is huge," the centre-left leader said in his first policy address since taking office Tuesday. "Our public finances have become the worst of any developed country." After decades of stimulus spending and feeble tax receipts, Japan's public debt is now nearly double its gross domestic product, forcing the government to issue ever more bonds to pay for hefty outlays. "It is difficult to continue our fiscal policies by heavily relying on the issuance of government bonds," said Kan, the former finance minister. "Like the confusion in the eurozone triggered by Greece, there is a risk of collapse if we leave the increase of the public debt untouched and then lose the trust of the bond markets." 
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| Ferdinand Lips Institute preserves gold advocate's work on the Internet Posted: 11 Jun 2010 01:04 PM PDT 9p ET Friday, June 11, 2010 Dear Friend of GATA and Gold: The work of the late Swiss gold advocate, banker, economist, and philosopher Ferdinand Lips has been preserved by his daughter Barbara and his friends and students at the Lips Institute, whose Internet site has just become operational. Barbara writes that the Lips Institute hopes to make its Internet site a meeting place for "investors, mining companies, market specialists, journalists, opinion leaders, and institutions of learning from around the world that devote their attention to the most precious of metals." While Lips' health prevented him from attending GATA's Gold Rush 21 conference in Dawson City, Yukon Territory, in August 2005, the speech he prepared for the conference, "Three Revolutions," was delivered by his business partner, J.P. Schumacher, and its text is among the documents archived at the Lips Institute site. The speech can be found here: http://lips-institute.ch/en/wp-content/uploads/file/speeches_pdf/Three_R... Lips' 2001 book "Gold Wars" mentions GATA's work prominently and information about it can be found here: http://lips-institute.ch/en/books/?thumbpage=1 The Lips Institute site is posted in English and German and you can find its home page here: 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 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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| Ferdinand Lips Institute preserves gold advocate's work on the Internet Posted: 11 Jun 2010 01:04 PM PDT 9p ET Friday, June 11, 2010 Dear Friend of GATA and Gold: The work of the late Swiss gold advocate, banker, economist, and philosopher Ferdinand Lips has been preserved by his daughter Barbara and his friends and students at the Lips Institute, whose Internet site has just become operational. Barbara writes that the Lips Institute hopes to make its Internet site a meeting place for "investors, mining companies, market specialists, journalists, opinion leaders, and institutions of learning from around the world that devote their attention to the most precious of metals." While Lips' health prevented him from attending GATA's Gold Rush 21 conference in Dawson City, Yukon Territory, in August 2005, the speech he prepared for the conference, "Three Revolutions," was delivered by his business partner, J.P. Schumacher, and its text is among the documents archived at the Lips Institute site. The speech can be found here: http://lips-institute.ch/en/wp-content/uploads/file/speeches_pdf/Three_R... Lips' 2001 book "Gold Wars" mentions GATA's work prominently and information about it can be found here: http://lips-institute.ch/en/books/?thumbpage=1 The Lips Institute site is posted in English and German and you can find its home page here: 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 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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| Why is China promoting Gold Investments, if the Yuan is going to appreciate? Posted: 11 Jun 2010 01:00 PM PDT The Chinese government is encouraging investments in gold and is working to expand the range of gold investments there. But the U.S. and others believe that the Yuan is going to appreciate. Surely the Chinese investor will be hurt if this happens?
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| John Embry: 17 reasons to own gold Posted: 11 Jun 2010 12:38 PM PDT 8:40p ET Friday, June 11, 2010 Dear Friend of GATA and Gold: Sprott Asset Management in Toronto has put together an attractive two-page brochure with text written by Chief Investment Strategist John Embry outlining 17 reasons to own gold. It's in PDF form at the Sprott Internet site here: http://www.sprott.com/docs/Reports/reasons_to_own_gold.pdf 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 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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| Senator Kaufman Blasts SEC And Getco For Latest Episode Of Glaring Regulatory Capture Posted: 11 Jun 2010 11:22 AM PDT
Senator Ted Kaufman's statement on Getco hire of SEC staffer with knowledge of "Flash Crash" and High Frequency Trading Review - please read this in conjunction with "$34 Billion Asset Manager Says Market Prices Are Manipulated, Accuses NYSE Of Intellectual Property Theft, Debunks HFT "Liquidity Provider" Lies"
WASHINGTON, DC – Senator Ted Kaufman (D-DE) issued the following statement after learning that electronic trading firm Getco LLC has hired Elizabeth King – an associate director of the Securities and Exchange Commission’s (SEC) division of trading and markets during the Commission’s ongoing review of market structure and high frequency trading issues — as a member of its regulatory affairs team.
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| John Embry's 17 Reasons To Own Gold Posted: 11 Jun 2010 11:09 AM PDT
John Embry:Reasons to Own Gold
H/t Jing
This posting includes an audio/video/photo media file: Download Now | ||||
| Have We Just Seen a Major Top In Gold? Posted: 11 Jun 2010 10:53 AM PDT
This essay is based on the Premium Update posted on June 11st, 2010
In our previous essay we have emphasized the importance of the analysis of the Euro Index, while evaluating recent performance of gold. We have also featured a gold chart that included a resistance level which gold has just approached. Since that was the case, you might be wondering if the final top is in or not. Consequently, this essay is going to feature the updated version of the previous gold chart (charts courtesy by http://stockcharts.com), with an additional important factor – areas marked on the below chart with blue ellipses.
Please note how the recent local tops for gold coincide with the stochastic indicator above the 80 level. In other words, in the previous 18 months there was no significant top that was not heralded by Stochastic trading visibly above the 80 level. Today we do not see an extended (more than a few days) above the 80 level, which indicates an additional rally period is likely before the top is reached. It seems that the first thing to take place is the Stochastic indicator moving visibly above 80 and the rally then runs out of steam.
Consequently, based on this single factor, gold does not appear to have topped at this point. Let's take a look at the HUI Index for more details.
This week's HUI mining stocks chart is basically unchanged since the last week. Although it had appeared to be the case until about two weeks ago, there are virtually no similarities with recent trends and that which was seen in the November 2009 when a strong rally took hold and lasted for several weeks. The lack of strength in the mining stocks could mean that the rally in gold does not have much further to go from here.
There's one more thing that we would like to comment on this week before moving on to the short-term chart analysis. One of the messages that we've received recently included a question about the possibility of existence of the cup-and-handle formation with the cup being formed between Dec 2009 and May 2010. The implications of this would be bullish, because it would mean that we are right now in the "handle" stage, which – when completed – marks a beginning of a strong rally. This situation is even more visible on the short-term GDX ETF chart below.
Generally, we don't consider this to be the cup-and-handle pattern because of two important reasons. First of them is the shape of what would be perceived as "cup". It should be almost ideally U-shaped, and as we see the bottom was quite sharp. The second – and the key one here – is the non-confirmation form the volume. The corresponding volume should also be U-shaped, which means that the bottom of the cup should have been formed on the lowest volume in the Dec 2009 – May 2010 time-frame. The reality is that the bottom took place on huge volume, which is exactly the opposite of what one would expect from the "cup" pattern.
So, the HUI Index chart does not provide us with clear medium-term bullish signals at this point.
A closer inspection of the above chart shows a slightly higher volume daily decline followed by a lower volume rise on a recent trading day. This is normally a bearish sign but may also simply be attributed to consolidation.
Although a slight increase may be seen for the precious metal sector soon, this will likely be offset by any downward movement in the general stock market. This negative influence could more than negate any minor rally for precious metals. However, when the general stock market bottoms out, the negative correlation of the PM sectors could possibly result in a huge catch up rally for silver and mining stocks. This may mean a smaller decline instead of a bigger rally, but it's too early to say at this point.
At this writing, gold and silver stocks continue to be slightly positively correlated with the general stock market. The situation on the latter is slightly bearish, and at the same time we have bullish signals from gold.
Another confirmation comes from the analysis of the GDX:SPY ratio.
The GDX:SPY helps us to analyze the precious metals stocks' performance relative to the general stock market. The ratio in the above chart actually provides us with top calls, which is another word for sell signals for the whole precious metals market.
Ideally, the volume would reach exceptionally high levels (resistance level) and some kind of resistance would be encountered, thus forming the top also in this particular ratio. Recently, however, neither is yet the case. We have not seen high volume levels and we are presently close to the month-to-month 0.5 support level. This means that when this level is reached one share of the SPY ETF is equal to two shares GDX. When gold and silver stocks are this high – relative to other stocks, it used to be advisable to get out of the market as the top was very close.
Still, we have not seen the ratio reach the 0.5 level yet, and it did not provide us with a sell signal in the form of very high volume. Therefore, the analysis of the GDX:SPY ratio suggests that the final top has not yet been reached for the precious metals sector
Summing up, due to numerous unclear signals and lack of clarity with respect to the general stock market (slightly bearish sentiment), we conclude that the risk/reward ratio for mining stocks is not favorable enough to enter speculative trades at this point.
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| Weekly Credit Summary: June 11 - Look Behind The Curtain This Week In Credit Posted: 11 Jun 2010 10:51 AM PDT
Commentary courtesy of www.creditresearch.com Spreads were mixed this week with indices modestly tighter but intrinsics notable wider as our view of the overlay unwinds into idiosyncratic derisking appears to be playing out in cash and synthetic credit. Europe outperformed US this week with help broadly from FINLs and Sovereigns but the same theme of underlying name underperformance against index outperformance was evident everywhere (especially at the HY/XOver end of the credit spectrum).
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| Rising Private Sector Leverage Posted: 11 Jun 2010 10:09 AM PDT What changed over the last century? One hundred years ago government was small, money was hard, and leverage could be found and used, but it was costly in real terms since there was deflation most times. Then came the Fed: Money was cheap. Although there were slumps, asset values, unlike trees, actually did grow to the sky. In the 19th century you might not be a loser if you waited to buy a house, horse, or commodity. In the 20th century, if you didn't buy it fast, and even use debt to do it, your relative position weakened. In the former, one was free. In the latter one was forced to act, or else. At some point the buildup of credit would bring on a complete, utter collapse. It happened in the early 1930s, causing misery after debt rose to 185 percent of GDP by 1929 (to be increased by government borrowing to finance a recovery that wasn't). In 2008, debt hit 364 percent of GDP. Might not the practice of having an expansive central bank be like loading up one round in a revolver's cylinder, say one with 50 or so holes, and pulling the trigger once per year while pointing it to the cranium of the banking system? Eventually too much debt will wreak havoc, whether or not inflation is evident in the years close to the day of reckoning. (In fact, there was deflation in the 1920s.) And like the legendarily lethal game of chance played by Russian soldiers or their prisoners, fatality would be inevitable. Although the Austrian view of credit explains the above perfectly, it does little to address the moral shortcoming of having imposed such a system upon the entire population, and especially the baby boomers who accumulated their life savings only to see them wiped out as they enter retirement age. True, everyone should have seen this coming and refused to leverage up their balance sheet. But most instead took out mortgages on the right hand side and accumulated mutual funds on the left hand side, assuming they would save at all with the complimentary moral hazard of reliance upon state services from Medicare to Social Security. Extremely strong and persistent incentives were codified into law that undermined any attempt by the citizenry to avoid debt, stocks, or real estate. The result is that out of a sense of equity we now find ourselves in the messy predicament of engaging in wholesale printing of money directly and outside the banking sector, which favors statist interests over the private sector, and further erodes any wealth left in the upper-middle class among those who were prudent in the face of central bank seduction. Contrary to the Austrian orthodoxy, it may be necessary to favor debtors over creditors slightly in acknowledgment of the perversity imposed on the American people, which was perpetuated through economic ignorance. But ultimately the entire system must be dismantled and replaced with a gold-backed currency, because two wrongs do not make a right. Otherwise, the heavy handed actions of the Fed and the Treasury in this cycle will send a clear message that reckless financial institutions and borrowers alike will never have cause to avoid risk. Regards, Bill Baker, [Editor's note: This passage is reprinted from William W. Baker's book, Endless Money: The Moral Hazards of Socialism, with the permission of John Wiley & Sons, Inc (©2010). You can get your own copy here.] Rising Private Sector Leverage originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."
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| Continued Strength for U.S. Export Activity Posted: 11 Jun 2010 10:05 AM PDT Calafia Beach Pundit submits:  (Click to enlarge) Outbound container traffic from the Ports of Los Angeles and Long Beach (which account for about 40% of U.S. container traffic) continue to reflect a significant rebound in U.S. goods exports. Indeed, outbound containers shipped from Los Angeles last May were only a few thousand shy of their level of May '08—almost a complete recovery (container traffic is not seasonally adjusted) from the global trade collapse of late 2008. Complete Story »
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| Banks set new store on building gold vaults Posted: 11 Jun 2010 09:57 AM PDT By Javier Blas The growing interest in gold among investors worried about the global economy and Europe's sovereign debt crisis has led to a shortage of long-term storage space… "Physical gold is being sought more than ever and that is causing all sorts of strains," said Peter Hambro, chairman of Petropavlovsk, the gold miner. While some banks said they had space, others said their vaults were nearly full. Several said they were building or planning new vaults. JPMorgan recently opened a new gold vault in Singapore… Deutsche Bank is mulling a new vault, bankers said. [source]
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| Compendium 3 Available Monday! Posted: 11 Jun 2010 09:43 AM PDT Dear CIGAs, We are happy to announce the release of our third Compendium, available this coming Monday. As many of you know, Compendium sales help us keep the site free for you to enjoy without the clutter of advertisements. If you find JSMineset useful, please purchase a copy. Included in this two DVD set is a DVD Rom (accessible by computer DVD drive only) that is a searchable database of nearly two thousand articles over the last two years from Jim Sinclair, Trader Dan, Monty Guild and a collection of other JSMineset contributors. This is one of the largest collections of articles related to the Gold market available today on DVD and includes all charts we have posted over the last year and a half. The second DVD is the much anticipated CIGA Meeting in Toronto from February 2010. This DVD includes over 3 hours of discussions with Jim Sinclair himself and is playable in any DVD player. Compendium 3 will be available Monday, June 14th for the price of $80. This price once again includes shipping and relative taxes. If you are on our free email list, you will have the opportunity to purchase the set tomorrow on Saturday, June 14th. You can sign up for our free email list by typing your email address in the box on the top right corner of JSMineset's homepage. There will be an EXTREMELY limited number of Compendium 1s and 2s available as well. Once they are gone we will not be reprinting them so if you think you may want a copy, click "Buy Compendiums" at the top of our homepage now before it is too late! From all of us here at JSMineset, thanks for your continued support! Dan Duval
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| Posted: 11 Jun 2010 09:39 AM PDT Gold finishes record setting week up 1% The COMEX August gold futures contract closed up $8.00 Friday at $1230.20, trading between $1218.10 and $1231.50 June 11, p.m. excerpts: see full news, 24-hr newswire… June 11th's audio MarketMinute
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| Posted: 11 Jun 2010 09:36 AM PDT Hello Mr. Sinclair, This article is about Lynn, MA City Council's approval of a plan to collect donations to keep the police on the beat. Your Formula is right on! Kindest Regards, Lynn councilors back plan to solicit donations for cops Desperate Lynn city officials are ready to pass a tin cup among local merchants – and even career criminals – to raise dough to keep cops on the street, even as store owners in this hardscrabble burg complain times are already tough enough. At least two city councilors want to put the touch on shopkeepers to scrape together $210,000 for gang patrols to keep a lid on violence this summer. Mayor Judith Flanagan Kennedy is on the fence, but the idea has passed muster with the city's legal department, according to City Councilor Stephen Duffy, who cooked up the scheme. "We have a lot of issues in Lynn. We need to get out there as a community and get everyone to kick in," said Duffy. And that includes the civic-minded crooks. "If they feel they want to donate, we appreciate it," Duffy added. "It doesn't cut them any slack if they do something wrong." "I like it," City Councilor Rick Ford said of Duffy's brainstorm. "I think he's thinking outside the box. I'd do anything for the police. One place I don't want to cut is public safety."
Weimar Model Continues to Unfold Dow Jones World Index 1995-2004: An quick Internet search of May 2004 stock market crash or variation reveals the many calls for lower stock prices at the time. Dow Jones World Index 2001-2010: The similarities both in time and sentiment between 2010 and 2004 are obvious. The resolution of today's uncertainly will follow Weimar model of devaluation like 1932, 2002, and 2009 until confidence deteriorates to the point of panic. Capital flows seeking safety from devaluation will push up gold, stocks, and eventually interest rates. The fact that gold will continue to outperform all assets reflects true nature of this economic recovery. The illusion of the nominal (u.s. dollar) recovery is illustrated below. U.S. Large Cap Stocks Capital Appreciation Index (LCSCAI); S&P 500 to Gold Ratio:
In jail for being in debt Debtors prison (tactics) is a bad solution for a public burdened by heavy debts, high unemployment, elected leadership that employs taxpayer-backed stimulus funded by debt issuance. You committed no crime, but an officer is knocking on your door. More Minnesotans are surprised to find themselves being locked up over debts. Consumer attorneys say such arrests are increasing in many states, including Arkansas, Arizona and Washington, driven by a bad economy, high consumer debt and a growing industry that buys bad debts and employs every means available to collect. Source: startribune.com
Dear Eric, The 80 percent of gold futures are NOT listed futures but rather predominately OTC derivative gold. Jim Deutsche Bank's Lewis Says Gold May Rally Past Record on Crisis We already know that gold is headed higher – much higher. Lewis suggested that ETF have and will play an important role in fueling the gold. What I found interesting about the article was not that gold ETF will play important role in fueling demand (no doubt) but rather composition of them. This comment is highlighted below. Exchange-Traded Funds, known as ETFs, where gold futures make up 80 percent, are also having an "enormous impact," he said. Source: businessweek.com
Japan PM warns of Greece-like debt crisis The Japanese PM is alluding to confidence; Confidence in the currency that denominates their debt. Since gold is rising in all global currencies, it suggests that confidence in those managing the existing fiat system is beginning to fray. Once confidence reaches critical mass, there is no stopping the deterioration. Japan could face a financial mess like the one that has crippled Greece if it does not deal urgently with its swelling national debt, the new prime minister warned Friday. "It is difficult to sustain a policy that relies too heavily on issuing debt. As we have seen with the financial confusion in the European community stemming from Greece, our finances could collapse if trust in national bonds is lost and growing national debt is left alone," he said. Source: finance.yahoo.com
Gold – Looks Good Paper gold, GLD ETF, sits above major gap resistance (12/4 breakdown gap). The importance of this price zone, highlighted below by the green box, is revealed by the number of price gaps within it. For now price remains contained within the 5/12 swing high and highlighted support zone. A retest of this zone on light volume will be a bullish setup. That which cannot go down with force will reverse and go up with force when time is right. The window of time is approaching. Gold ETF (GLD):
Retail sales drop 1.2 percent in May Retail sales plunged in May by the largest amount in eight months as consumers slashed spending on everything from cars to clothing. The big drop raises new worries about the durability of the economic recovery. A sharp decline in retail sales is concerning for an economy in which consumption accounts for more than 70% of GDP. Personal Consumption Expenditures (PCE) As A %GDP and Personal Consumption Expenditures As A %GDP Average from 1947: The 2009-2010 year-over-year, or velocity trend line, a measure of acceleration, has failed. Consumer spending, regardless of the headline reports, is losing energy. Don't be surprised to see increased discussions and a hasty passing of an Economic Recovery Act part II from Washington. Confidence, gold, is already discounting the possibility. Gold-Adjusted Retail Sales (RSGLDR) and YOY Change:
Debt Spreading 'Like a Cancer': Black Swan Author The market will force some difficult decisions soon. Prosperity cannot be achieved through devaluation, leverage, and and more debt issuance into a system saturated with debt. The root of the crisis over the past couple of years wasn't recession, but debt, which has spread "like a cancer," according to Taleb, who is now relived that public attention has shifted to debt, instead of growth. Source: cnbc.com
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| Posted: 11 Jun 2010 09:20 AM PDT
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| Posted: 11 Jun 2010 09:12 AM PDT
As part of the SEC's process to fix the broken market, it is currently soliciting public feedback on a variety of issues. Why it is doing so, we don't know - after all anything that does not conform to the SEC's preconception of what the most lucrative market to the SEC's recent batch of clients (see earlier news about an SEC director going to HFT specialist Getco) is, just ends up in the shredder anyway. At this point to believe that the SEC will do anything remotely in the interest of investors instead of millisecond speculators, is naive beyond compare. Nonetheless, while combing through some of the recent public responses on the topic of market structure, we came across the following presentation by $34 billion Southeastern Asset Management (SAM), titled "Comment & Analysis on Equity Market Structure" which must be brought to the attention of all those who have the temerity to defend HFT as an altruistic source of liquidity provisioning. SAM's 4 points are simple, and laid out very easily so that even the mildly retarded public, pardon, GETCO servants at the SEC can understand it: "1) The intent of the Securities Exchange Act of 1934 as provided for in its preamble is being twisted and abused for the benefit of gamblers and to the detriment of investors. 2) The markets are not "fair and honest", 3) Securities prices are presently "susceptible to manipulation and control, and the dissemination of such prices gives rise to excessive speculation, resulting in sudden and unreasonable fluctuations in the prices of securities. 4) The preceding three issues are fixable by the SEC." Let's dig in. Before we get into the meat of the complaint, one of SAM's primary concerns, is that the US stock market has become the functional equivalent of China: trading intellectual property is routinely abused, stolen and used against its very creator.
And while these are rather philosophical concepts which will stump the SEC for years, and even then Mary Schapiro's lack of brain trust will still say evidence is inconclusive and the IP theft, as established, will continue indefinitely, SAM's disclosure about the true nature of HFT should be read by everyone, especially by the industry increasingly more conflicted defenders (why else would a firm like Getco go out and hire a pathologically "confused" person from the SEC if not for the fringe benefits of regulatory capture):
The traditional defense that HFT provides "liquidity" was completely disproven on May 6. Yet for those who still believe this naive argument, here is a more extended analysis.
and more:
Some undisputed facts for the novices in the HFT arena, such as the SEC:
As to what SAM requests of the SEC in order to take the first proper steps of correcting the busted market, here is the summary:
In light of the events of May 6, SAM provides the following very useful cheat sheet for the SEC on what Fat Tail events are, and what the proper questions to ask of those who derelicted their duties to preserve and orderly market structure:
Yet most interestingly is the direct attack at exchanges who provide enough information to those willing to pay millions of dollars for what in any other practice would be considered an unfair advantage. SAM provides an overview of just the kind of unfair advantage HFT's get when paying for preferential treatment by exchanges. Armed with the following information even computers with half a blown CPU will be able to legally front-run the entire market and make a killing. And people wonder why Goldman never loses money any more...
In the regard, we were very happy to learn that SAM has sent a letter to our old, opaque friends at the NYSE, which has recently been losing gobs of revenue to dark venues and as such has taken the war against dark pools into the open, even as it itself allegedly engages in precisely the type of IP theft defined above. To wit:
We hope that now that SAM's response has received far more public scrutiny, the SEC will no longer hide behind the "we didn't see it, so it doesn't exist excuse" - the invesros of America are disgusted with how the SEC has allowed what was once an efficient market to degenrate into a manipulated, broken and inefficient casino, which only generates benefits for a select few, and in which "trading has now become an end in and of itself" but is only profitable for those who, through kickbacks, are part of the "captured" regulatory club that knows the SEC will never touch them for endless market frontrunning and manipulation. In conclusion it is almost with shame that one has to be reminded about the very charter of the Securities Exchange Act of 1934, which described the requirement for regulation, and which was the very bedrock of what was once supposed to be an agency serving the public, and instead is now as worthless as US Treasuries will be in a few years:
Appendix: in order to demonstrate conclusively the false liquidity argument, SAM provides this additional Addendum which explains why "counter to the argument that investors save money by paying smaller spreads, true investors actually lose money because they are front-run" and also how retail investors keep getting consistently ripped off: "Retail investors once displayed the smallest public bids and offers. Unfortunately, retail investors have not changed their tactics to account for HFT rovers and are now displaying larger orders relative to other market participants on average."
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| GOLD: Opportunities + Threats = Opportunities Posted: 11 Jun 2010 09:12 AM PDT
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| An important trend is developing in the gold market Posted: 11 Jun 2010 09:11 AM PDT From Mineweb: If one looks at the gold price pattern in recent months it is apparent the metal price has been advancing in a stair step sequence. Successive upswings get higher before resistance and profit taking drives the price back down to a support level, but on each occasion that support level also seems to be advancing. The net result is that the gold price trend continues to be upwards, although if this pattern can survive... Read full article... More on gold: Gold mining insider: Gold is nearing a "boiling point" Top U.S. asset managers fear Obama could confiscate gold Doug Casey's "indicator" says gold could be entering mania soon
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| Bear ETFs: Winning in an Uncertain Market Posted: 11 Jun 2010 09:07 AM PDT Tom Lydon submits: Investors have long been told the advantages of taking a long-term view with their investments – to buy-and-hold, in other words. But the volume and assets trickling into bearish exchange traded funds signal that there are many investors not content to take this bear market lying down. Risk-averse investors have been taking haven in Treasuries and gold, but those who want to capitalize on the market’s negative direction these days and don’t mind risk are willingly taking on bearish ETFs. Complete Story »
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| Australia: The Land Down Under(water in Mortgage Debt), Part 2 Posted: 11 Jun 2010 09:00 AM PDT Reggie Middleton submits: As a follow-up to our piece on the Australian macro outlook (Australia: The Land Down Under(water in Mortgage Debt), we looked into the four largest Australian banks: Australia and New Zealand Banking Group Limited (ANZBY.PK), Commonwealth Bank of Australia (CMWAY.PK), National Australia Bank Limited (NABZY.PK), and Westpac Banking Corporation (WBK). All of these banks except Commonwealth Bank of Australia have ADRs. Complete Story »
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| Posted: 11 Jun 2010 09:00 AM PDT In the reign of Emperor Zhao, in 81 BC, 60 Confucian scholars were asked to consider the effect of government meddling in the economy. The Middle Kingdom was in a fix. Mongol raiders were pressing it from the East; the government was going broke. Taking the advice of Sang Hongyang, the feds of that era had put in place various state monopolies and price controls. The result? "People live in houses with badly-made beams and shoddy thatched roofs. They wear clothes of rough fabric and eat out of bowls made of dirt," the sages explained. "We waste our time on vain efforts…and lack the essentials, food and clothing." The scholars gave their advice in moral terms: "Above all, emphasize virtue and suppress get-rich-quick speculations." Too bad they didn't have The Financial Times or The New York Times to guide them! These journals offer a world without wickedness or moral lessons. Economy in a funk? Forget the real cause. Stimulate it! We can worry about the real problem "after the economy has recovered," writes Paul Krugman in The New York Times. "Only those who believe the economy is a morality play," would want to suffer the pain of a correction, adds Martin Wolf at the FT. Readers are urged to focus on the hilarity of the scene rather than on its gravity. It is as if a fat man were bending over. The further over he goes, the more his seams split. First to go was the subprime seam in the back…then the Greek seam on the side. But no one wants to say the obvious thing: that he should stand up straight and lose weight. Instead, the FT and the NYT want the government to buy him a larger pair of pants. You have read a number of unpopular views in our Daily Reckonings… That this was not a typical post-war recession; it is a Great Correction. Over-indebted American and British economies need to de-leverage. …That no recovery is possible, because the preceding model of debt-fueled consumption was unsustainable. …That 'stimulus' efforts were not only a waste of time and money, but also harmful; people who made bad bets should take their losses with dignity instead of trying to get others to pay. In the 10 million or so years since our ancestors have walked on two feet, many were the challenges that arose. We learned to hunt and gather…to build shelter…to clothe our bodies and to kill each other. We made tools and were able even to split atoms and remove body tattoos. We evolved into a practical, problem-solving race. But never could we solve the problem of an economic downturn. Why? Because the Confucian scholars were right. A properly functioning market economy gives people neither what they want nor what they expect, but what they deserve. In that sense it is 'moral' not mechanical. You can't pull levers nor turn screws to stop a correction. Like old age, the best you can do is to endure it with good grace; the alternative is worse. Central planners don't create wealth. They can only move it around, robbing Peter to pay Paul. This only 'stimulates' an economy if Paul uses the resources better than Peter. Don't make us laugh. In most cases, Paul is the same clown who made the bad bets in the first place. In the present instance, instead of robbing Peter to pay Paul, the feds judged it prudent to borrow from Peter. But Peter is no dope. First, he turned his eyes on Greece. Then, he noticed all the other peripheral players in the Eurozone… Then, he put his wallet back in his pocket. It became obvious that the jig was up. As Nouriel Roubini put it, we reached the point where "austerity is not optional." Stoicism went out of style in the economics profession 100 years ago. Activism paid. Stoicism did not. Since then, busybodies have advised presidents, headed central banks, run multi-national agencies, appeared on covers of TIME magazine, won the Legion d'Honneur and the Enron Prize…and run billion-dollar hedge funds. And now, after 18 months…and approximately $12 trillion worth of stimulus, bailouts and debt guarantees…we see the results of a live test. Have our modern economists done better than Sang Hongyang? The latest evidence came in last week, from the US. The biggest source of employment lately is the US government itself, which has hired hundreds of thousands of census takers. Obviously, if you could make people better off by having them count things, why not hire more of them and have them count the hairs on our heads? Employment in the private sector is still going down. One in ten Americans is officially unemployed…one is six is working at less than capacity. Twice as many people have been out of work for more than 27 weeks this year than the year before. Not surprisingly, real incomes are going down too. Meanwhile, one of every 8 houses is delinquent or in default on its mortgage. Statistically, 7.2 million of them will be foreclosed, most likely leading to another drop in housing prices…and a drop in household wealth. Prices are falling too. M3 fell at a 5% rate in May. Consumer prices, officially, are increasing at the slowest pace since 1966. Unofficially, adjusting for the real cost of housing, the actual cost of living is in outright deflation. In short, the 'recovery' is a flop. Bill Bonner Recovery Flops! originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."
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| New Japanese Prime Minister warns country is at "risk of collapse" Posted: 11 Jun 2010 08:58 AM PDT From Zero Hedge: A week ago Hungary had the unfortunate mishap of telling the truth when it compared itself to Greece, resulting in a massive selloff of the Forint and leading to fresh lows for the euro. Today, it is Japan which is using the very same strategy in an attempt to devalue its own currency. So far it's working... Read full article... More on Japan: Global debt crisis builds The small stocks you should buy immediately These charts suggest stocks could fall another 60%
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| Gold futures make up 80 percent of ETF's - head of commodities research at Deutsche Posted: 11 Jun 2010 08:58 AM PDT All I can say is wow. Here is the confirmation I have been waiting for, leading to a paradigm change in "investor" attitudes twords PM's. http://www.businessweek.com/news/201...on-crisis.html Quote: Deutsche Bank's Lewis Says Gold May Rally Past Record on Crisis June 04, 2010, 2:02 PM EDT By Alex Emery June 4 (Bloomberg) -- Gold, which touched a record of $1,249.70 last month, may rally another 36 percent as Asian central banks buy for the first time in two decades, said Michael Lewis, head of commodities research at Deutsche Bank AG. The precious metal may rise to as much as $1,700 an ounce over the next year on concerns that budget deficits will weaken major currencies, Lewis said in an interview yesterday in Lima. Exchange-Traded Funds, known as ETFs, where gold futures make up 80 percent, are also having an "enormous impact," he said. Gold rose to an all-time high of $1,249.70 on May 14 as investors sought an alternative to the euro, which today fell to a four-year low versus the dollar on concern that Europe's sovereign-debt crisis will damage the region's banks. Bullion usually gains when major currencies drop and crude rises. It's rising as some banks buy for the first time since 1988, he said. "Prices can still go up a lot further from here," said London-based Lewis who was attending a conference in Lima. "We have new sources of demand with central banks and ETF flows still very strong." The 16-nation euro fell 1.2 percent to $1.2018 at 1:10 p.m. in New York after earlier falling below $1.20 for the first time since 2006. Crude oil for July delivery fell $2.46, or 3.3 percent, to $72.15 a barrel on the New York Mercantile Exchange. Gold futures for delivery in August rose $8.70, or 0.7 percent, to $1,218.70 an ounce at 12:45 p.m. on the Comex in New York. Earlier, the price dropped as much as 1 percent to $1,198.10, the lowest level since May 25. Oil Below $80 Oil is unlikely to rise above $80 per barrel in the short term as increased global inventories outpace market demand, Lewis said. Agricultural commodities such as corn may rise in price this year as the U.S. raises ethanol mix requirements in gasoline from current levels of 10 percent, Lewis said. Commodities including gold will also see higher prices as supply fails to match demand, according to Lewis. Companies such as Newmont Mining Corp. and AngloGold Ashanti Ltd. have delayed development of new gold mines in Peru and Colombia on environmental disputes. --Editors: Dale Crofts, Robin Saponar To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net. To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net
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| Shooting for Riches at World Cup: The Case for Platinum Posted: 11 Jun 2010 08:43 AM PDT Wall Street Strategies submits: By David Urani The World Cup has officially kicked off, and what a spectacle it's going to be. The world could use this next month of competition to relax and take its mind off from some of the malarkey in the economic world over the past couple of months. In particular, Europe's debt problems have taken center stage. Not only have the prospects of big government budget cuts around the world hurt outlooks for growth, but dwindling faith in the euro (and currencies in general for that matter) currently have investors running away from debt and equity and into safe, tangible assets. Complete Story »
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| The Bottom Line for Retail Sales and Talbots, Express and Nordstrom Posted: 11 Jun 2010 08:32 AM PDT Wall Street Cheat Sheet submits: By Carolyn Austin With retails sales driving 70 percent of the economy, it’s no wonder that retail spending and consumer confidence are watched closely for signals to our economic future. Today’s reports give contrasting views. Complete Story »
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| Anyone hear about $2 drop rumor? Posted: 11 Jun 2010 08:31 AM PDT I'm starting to hear it again.. whispers of $2 Silver drops.
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| With Volume 40% Below Average, Closing Market Commentary Posted: 11 Jun 2010 08:09 AM PDT
A perfectly efficient market, confirming the EMT day after day...
...On massive volume
Our sincerest condolences to any idiot who still trades stocks.
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"Most people still want to hold gold as a risk hedge," said Marty McNeill, trader at R.F. Lafferty Inc. "Gold hasn't broken down in a big way like other assets because of the situation in Europe." Gold has gained 12% this year, with the metal denominated in sterling, euros and Swiss francs also rising to all-time highs. "We've seen gold reassert itself as an alternative currency," said Evy Hambro, manager of Blackrock Investment Management Ltd.'s World Mining Fund. "You only really get a true bull market for gold when gold is rising in all currencies, and that's exactly what we're seeing."…![clip_image001[1]](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHvAO6l5y6eil8tNI-N-d2xG0m26xf4zOdqjUMxdMmAy8zngZk0I7qu5nqazV8fwMIHvTsmoNPLtooG9E69rF4yrDWL2uIs6VPIuXjLJHUPztOUhef9dfCJM8Q-Sb1wNGACI6ZI4q9-GrU/s1600/DJW+1995-2004.JPG "clip_image001[1]")
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![clip_image003[1]](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnRW1IQF-Xc4Ik-dB37BSE8g9v3ssnDPivv6F5-RFNeOZOW15vAzCshnjV5UMlaI5c7ireE70grKSdrTrcjwcpbefBs7UvrbvsSrGItJ4GIq3qjxpjR5UYgiBUg8DxyUnuxoVpZERVcebW/s1600/LCSCAGOLDR.JPG "clip_image003[1]")
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