Gold World News Flash

---

• GoldSeek.com Radio Gold Nugget: Bill Murphy, Bob Hoye & Chris Waltzek
• Gold and Silver – There’s Bad News and Good News!
• Chen Lin: Gold Stocks Poised for Breakout
• Seriously Underpriced Silver
• Mystery around BIS gold swaps impugns them as market rigging
• ld and Silver – There’s Bad News and Good News!
• Crude Oil Up on API Data, Gold Bounces From Levels Near Support
• Do Bonds Know Something Stocks Don't?
• Recession 2010?
• Loose Ends, Idle Thoughts
• Gold Seeker Closing Report: Gold and Silver Rise With Stocks and Oil
• $600 coin purchase or sale will require tax form in U.S. in 2012
• No wonder even China is trying to talk gold down
• Gold swap mystery deepens as BIS gets correction from Wall Street Journal
• All currencies have depreciated against gold and silver this year
• Global Pension Heat Rising
• IMF Gold Swaps Misrepresented
• Gold and Silver – There’s bad news and good news!
• Gold, Black Gold and Equities Technical Charts
• Guest Post: Sovereign Debt: The Death of Nations vs. the Wealth of Nations
• BIS gold swaps – Bulls and Bears fight out the implications
• Solari Report - Options For Storing Precious Metals
• Gold: Over-Owned or Over-Reported?
• Loose Ends
• China and BIS hit gold when it's down — but nothing's really changed.
• Guest Post: Why Corporations Matter, Part 1
• Time to Buy Gold
• Gold Chart Daily
• In The News Today
• Jim's Mailbox
• ICI Reports Ninth Sequential Equity Fund Outflow In A Row
• Why Are Bubbles Bigger Than Ever? (Part 1)
• WEDNESDAY Market Excerpts
• Gold Thoughts
• BIS gold swap confuses as price rebounds
• Bank Of America Joins Economic Slowdown Chorus, Pushes First Rate Hike Estimate Out To 2012
• China Goes on Japanese Bond Shopping Spree
• China seen letting U.S. down gently as it prepares for dollar's fall
• China seen letting U.S. down gently as it prepares for dollar's fall
• What is the best way to sell Gold?
• Gold 07-07
• Guest Post: Gold, Black Gold and Equities Technical Charts
• China says it won't dump treasuries or pile into gold
• China says it won't dump treasuries or pile into gold
• Greek Lessons for the United States
• Making Sense of China's Future
• This is the terrible future of U.S. healthcare
• Long White Candlesticks On Ever Declining Volume, Or Melt-Ups On Ten Shares Or Less Coming To A Busted Stock Market Near You
• Avoid Banks Stocks
• Don't Forget about Aerospace and Defense

GoldSeek.com Radio Gold Nugget: Bill Murphy, Bob Hoye & Chris Waltzek Posted: 07 Jul 2010 07:00 PM PDT GoldSeek.com Radio Gold Nugget: Bill Murphy, Bob Hoye & Chris Waltzek

Gold and Silver – There’s Bad News and Good News! Posted: 07 Jul 2010 06:09 PM PDT Judging by several E-mails I've received from anxious readers of my articles during the past few days, some of you are wondering if you should have 'sold in May and gone away.' Let's look at a chart from last year and see if that strategy would have worked in 2009.

Chen Lin: Gold Stocks Poised for Breakout Posted: 07 Jul 2010 06:05 PM PDT Chen Lin is an independent investor living the dream. Since December 2002, he's turned slightly more than $5,000 into nearly $1M through value investing and exceptional market timing. Now he believes gold producer shares are poised for a breakout.

Seriously Underpriced Silver Posted: 07 Jul 2010 06:02 PM PDT At breakfast I told the kids that I was instituting some new austerity measures around here, and they became so insistent that I heard all about how this was going to "ruin" them and their stupid social lives that I did not have to tell them that I was going to use the money to buy silver, which would have sent them ballistic.

Mystery around BIS gold swaps impugns them as market rigging Posted: 07 Jul 2010 06:00 PM PDT

ld and Silver – There’s Bad News and Good News! Posted: 07 Jul 2010 05:56 PM PDT

Crude Oil Up on API Data, Gold Bounces From Levels Near Support Posted: 07 Jul 2010 05:53 PM PDT courtesy of DailyFX.com July 07, 2010 07:58 PM A quiet day in terms of economic news propelled crude oil and other risk assets higher in the prior session. With U.S. jobless claims numbers and crude oil inventory data out on Thursday, will the rally continue? The API survey was decidedly bullish, largely due to Hurricane Alex and its impact on production and tanker loadings last week. Commodities - Energy Crude Oil Up on API Data Crude Oil (WTI) $74.75 +$0.68 +0.92% Crude oil rose 2.9% on Wednesday amid improving sentiment among traders. Risk assets across the board rallied; the S&P 500 stock index rose 3.1%. There was no particular news to spark the advance. Instead, the lack of news itself enabled bargain hunters to push up prices early in the day, and the combination of momentum and selling exhaustion enabled prices to drift higher throughout the day. This is contrast to yesterday when a weak ISM Services Index squashed the attempted early morning ral...

Do Bonds Know Something Stocks Don't? Posted: 07 Jul 2010 05:40 PM PDT Graham Summers submits: I’ve noted several times before that US Treasuries are essentially a proxy for risk aversion in the financial markets. Of course, from a fundamental standpoint, the US’s debt situation is just as bad if not worse than the European countries currently coming under fire (the only difference being we have a printing press in the US). Complete Story »

Recession 2010? Posted: 07 Jul 2010 05:07 PM PDT If you watch any mainstream news program these days, it is almost a certainty that someone will mention the word "recession" before a half hour passes.  In fact, it seems like almost everyone is either predicting that we are going into a recession, or they are warning of the need to avoid a recession or they are proclaiming that we are still in a recession.  So will the U.S. economy once again be in recession in 2010?  When you consider all the signs that are pointing that way, the evidence is compelling.  The truth is that there is bad economic news wherever you turn.  There is bad news in the housing industry.  There is bad news in the financial markets.  There is bad news in the banking system.  There is bad news coming out of Europe.  There are even signs that the bubble in China may be about to burst.  Plus, the economic impact of the Gulf of Mexico oil spill could end up being the straw (or the gigantic concrete slab) that really breaks the camel's back.  So there are certainly a lot of pieces of news that "gloom and doom" economists can hang their hats on these days.  There is a very dark mood in world financial markets right now, and it seems like almost everyone is waiting for the other shoe to drop.  But does all of this really mean that we are looking at the start of another recession before the end of 2010?    The truth is that nobody really knows.  Things certainly look very ominous out there.  The dark clouds are gathering and the economic winds are starting to blow in a bad direction.  The following are 24 pieces of evidence that do seem to indicate that very difficult economic times are imminent.... -U.S. Treasury yields have dropped to stunning new lows.  So why are they so low?  Well, it is because so many investors are anticipating that we are headed into a deflationary period.  In fact, many economists are warning that the fact that Treasury yields are so low is one of the clearest signs that economic trouble is ahead. -The Conference Board's Consumer Confidence Index declined sharply to 52.9 in June.  Most economists had expected that the figure for June would be somewhere around 62.  If consumers aren't confident they won't be spending money.  If American consumers don't start spending money soon a lot of American retailers are going to go belly up. -The M3 money supply plunged at a 9.6 percent annual rate during the first quarter of 2010.  If the M3 keeps declining at that kind of a rate it is going to put extreme deflationary pressure on the U.S. economy. -Many economists are now warning that the "China investment bubble" is about to burst.  In fact, Kenneth Rogoff, Harvard University professor and former chief economist of the International Monetary Fund, claims that China's property market is beginning a "collapse" that will send a shockwave across the globe.  One prominent economist that specializes in China is even forecasting that property prices in major Chinese cities are likely to soon experience a drop of up to 30 percent. -Nouriel Roubini is warning that Europe's economy could stop growing as soon as this year.  Back in 2007 and 2008, the U.S. was the epicenter of the financial crisis, but many analysts believe that it will be Europe this time around. -Vacancies and lease rates at U.S. shopping centers continued to get worse during the second quarter of 2010.  If things don't pick up soon will we see half empty shopping malls by the time Christmas rolls around? -CBS News is reporting that the oil spill in the Gulf of Mexico is hurting businesses "from coast to coast".  The longer this oil spill goes on the bigger of an impact it is going to have.  The cost to the American economy from this disaster could ultimately be in the trillions. -Some analysts are warning that if BP goes under as a result of the Gulf of Mexico oil spill that it could cause the total collapse of the worldwide derivatives market and unleash a liquidity crisis unlike anything the world financial system has ever seen. -The state of Illinois has stopped paying most of its bills and yet the flood of red ink continues to get even worse.  Illinois now ranks eighth in the world in possible bond-holder default.  That is even worse than California. -Speaking of California, the Schwarzenegger administration has won an appellate court ruling saying it has the authority to impose the federal minimum wage of $7.25 an hour on more than 200,000 state workers as California wrestles with its latest budget crisis. -Things are so bad at the state level in the U.S. that economist Mark Zandi is projecting that up to 400,000 workers could lose their jobs in the next year as states, counties and cities struggle with lower tax revenues and significantly reduced federal funding. -Two Federal Reserve officials recently said that U.S. unemployment is likely to stay high for a long time.  Normally Fed officials are some of the biggest cheerleaders for the economy.  If they are not optimistic about the employment situation that is a very bad sign. -Analysts are warning that the "death cross" is coming.  The Standard & Poor's 500 50-day moving average is about to cross beneath the 200-day moving average, and many economists say that this is a very strong indication that a new recession is about to begin. -One prominent trader says that the Dow Jones Industrial Average is repeating a pattern that appeared just before financial markets collapsed during the Great Depression. -Ambrose Evans-Pritchard, one of the most respected financial columnists in the world, really raised eyebrows recently when he declared that this "really is starting to feel like 1932". -In the month of May, sales of new homes in the United States dropped to the lowest level on record. -The National Association of Realtors recently announced that its seasonally adjusted index of sales agreements for previously occupied homes dropped 30 percent in May. -It is being reported that sales of foreclosed homes in Florida made up nearly 40 percent of all home purchases in the state during the first part of 2010. -Politicians across Europe have pledged to dramatically cut their national budgets, and many economists are warning that such a dramatic pullback in public sector spending could cause a very significant slowdown of the European economy. -Banks in the U.K. are being instructed to hoard cash in preparation for the next financial crisis. -One recent poll found that 76 percent of Americans believe that the U.S. economy is actually still in a recession. -The average duration of unemployment in the United States has risen to an all-time high.  Millions of unemployed Americans are fighting off deep despair and depression as they find it nearly impossible to find a decent job. -Small and mid-size banks across the United States are failing at a rapidly accelerating pace.  The truth is that the entire U.S. banking system is teetering on the brink of disaster. -At this point just about everyone can see the writing on the wall.  Literally dozens of top economists and world leaders are declaring that we are likely to enter the second leg of a "double-dip recession" at some point over the next twelve months. So yes, things are really, really bad. Those who want to forecast a coming recession don't have to look too far for data that will back them up.  But wait. There is actually one prominent economist who says that it is virtually impossible that the United States will experience a recession in the next six months. Goldman Sachs economist Andrew Tilton says that there is "no way in hell" that the U.S. economy is going into a recession.  To be more precise, Tilton says that there is a 1.6% chance that the U.S. economy will be in a recession six months from now. So according to Tilton, there is a 98.4% chance (and he has computer models that supposedly back him up) that the U.S. economy will be growing when we reach the end of the year. So what is actually going to happen? Who knows. The truth is that so many of these economists are so caught up in what is happening in the short-term that they are missing the bigger picture. The bigger picture is that the U.S. economy is more over-leveraged than it ever has been before, and we are caught in a debt spiral that is basically impossible to unwind. So in the final analysis it really doesn't matter if we are "officially" in a recession by the end of 2010 or not.  The truth is that the United States is headed for a devastating long-term economic collapse and there isn't much that anyone can do to change that reality at this point.

Loose Ends, Idle Thoughts Posted: 07 Jul 2010 05:02 PM PDT Apparently, it was too hot to do anything yesterday but stay at home and put in equity bids, and stocks responded to the recent expression of market-indecision by rallying sharply. It surely didn’t hurt that Kansas City Fed President Hoenig opined that “current Fed policy makes asset bubbles more likely;” of course, equities are priced generously and buyers are seriously desirous of a bubble to jump aboard. I do not disagree with Mr. Hoenig, but in the current circumstance “more” likely is still pretty unlikely while wealth continues to be destroyed by a lengthening recession in employment. When the economy someday recovers and begins to grow, then he will be correct, but that bubble will take time to form. I worry that several markets are priced – as I said – ‘generously,’ but I wouldn’t characterize stocks or bonds or credit or gold as being in “bubble” territory at the moment. For example, while 10-year yields sub-3% represents an investment that is very likely to be quite disappointing over that 10-year horizon, for it to be a true “bubble” I’d want to see near-unanimity of thought that there is nothing else that is a sure thing like owning 10-year Treasuries at 0%. I rather sense that skepticism about the bond market is quite high, and rightly so. Since there weren’t any new economic data of note yesterday, I want to tie up a few loose ends/idle thoughts I have had recently that didn’t necessarily fit at the time I thought of them, or that I recently thought of. Complete Story »

Gold Seeker Closing Report: Gold and Silver Rise With Stocks and Oil Posted: 07 Jul 2010 04:00 PM PDT Gold fell over $10 in London to as low as $1184.90 by about 8:30AM EST, but it then rallied back higher throughout trade in New York and ended near its early afternoon high of $1198.64 with a gain of 0.22%. Silver fell to as low as $17.533 in London before it also climbed back higher in New York and ended near its late session high of $18.053 with a gain of 0.84%. Both metals have continued higher in after hours access trade as well.

$600 coin purchase or sale will require tax form in U.S. in 2012 Posted: 07 Jul 2010 03:26 PM PDT 11:23p ET Wednesday, July 7, 2010 Dear Friend of GATA and Gold: Numismaster reports that starting in 2010 U.S. federal law will require coin and bullion dealers to report to the Internal Revenue Service all gold and silver coin purchases and sales greater than $600. The report is written by David L. Ganz and is headlined "$600 Sale? Get Ready for Tax Form" and you can find it at Numismaster here: http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=118... 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: New Orleans Investment Conference Wednesday-Saturday, October 27-30, 2010 Hilton New Orleans Riverside Hotel http://www.neworleansconference.com/index.html * * * 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 Sona Resources Expects Positive Cash Flow from Blackdome, Plans Aggressive Exploration of Elizabeth Gold Property On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia. Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013." For complete information on Sona Resources Corp. please visit: www.SonaResources.com A Canadian gold opportunity ready for growth

No wonder even China is trying to talk gold down Posted: 07 Jul 2010 03:17 PM PDT There isn't enough for the government AND the people. * * * Gold Demand in China Jumps on Stock Slump, Cooling Measures, Exchange Says By Feiwen Rong Bloomberg News Wednesday, July 7, 2010 http://www.bloomberg.com/news/2010-07-07/gold-demand-in-china-jumps-on-s... BEIJING -- Gold demand in China, the world's second-largest consumer, gained in the first half as government measures to cool the property market and falling equities spurred investment demand, the Shanghai Gold Exchange said. The total volume of gold traded on the exchange jumped 59 percent in the first six months from a year earlier to the equivalent of 3,174.5 metric tons, said Song Yuqin, vice general manager at the exchange. Silver turnover soared more than fivefold, Song told a conference in Beijing today. Gold surged to a record last month as investors sought to protect their wealth against the market turmoil caused by the European sovereign debt crisis, including declining currencies. Song's remarks add to signs that investors worldwide are boosting holdings of the commodity. ... Dispatch continues below ... ADVERTISEMENT Sona Resources Expects Positive Cash Flow from Blackdome, Plans Aggressive Exploration of Elizabeth Gold Property On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia. Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013." For complete information on Sona Resources Corp. please visit: www.SonaResources.com A Canadian gold opportunity ready for growth "Gold- and silver-trading volume expanded sharply in the first half of this year because a declining stock market, the government's efforts to cool the property market, and the general volatility in the global financial market have all fueled the investors' enthusiasm," Song said. Gold for immediate delivery has risen for nine years and touched an all-time high of $1,265.30 an ounce on June 21. The metal, which traded at $1,190.35 today, may surge to more than $1,300 an ounce in the second half, GFMS Ltd. Executive Chairman Philip Klapwijk said in Beijing at the same conference. "I expect China's gold demand to rise by 11 to 12 percent this year to 440 to 450 tons because Chinese investors have shown their willingness to buy more when prices are on the rise," Hou Huimin, deputy secretary-general at the China Gold Association, said today by phone. "I expect prices will rise over the remainder of this year and next year." Chinese authorities intensified a crackdown on property speculation after announcing the economy expanded at an 11.9 percent annual pace in the first quarter, the most since 2007. Measures have included raising minimum mortgage rates and down payment ratios for some home purchases. Officials may also start a trial property tax, according to state media. The efforts have contributed to a slump in Chinese real-estate sales and sent an index tracking 34 Shanghai-listed developers down almost 30 percent in 2010, even as prices kept rising. The Shanghai Composite Index is Asia's worst performer this year, tumbling 26 percent. Sales of gold products such as bars and coins by China National Gold Group Corp., owner of the country's largest gold deposit, jumped as much as 40 percent in the past six months, Song Quanli, deputy party secretary at the company, said today in an interview. "We have witnessed some really good sales in our retail outlets," said Song at China National. China's gold output may rise about 5 percent this year, solidifying the nation's position as the world's largest producer, China National's Song said. China produced 313 tons of gold last year, the executive said. * * * Join GATA here: New Orleans Investment Conference Wednesday-Saturday, October 27-30, 2010 Hilton New Orleans Riverside Hotel http://www.neworleansconference.com/index.html * * * 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 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

Gold swap mystery deepens as BIS gets correction from Wall Street Journal Posted: 07 Jul 2010 02:41 PM PDT 10:47p ET Wednesday, July 7, 2010 Dear Friend of GATA and Gold: The Wall Street Journal this evening updated and corrected its report about the gold swaps undertaken by the Bank for International Settlements, disclosing an e-mailed statement from the BIS stating that the swaps were with commercial banks, not central banks as the newspaper first reported. The updated story suggests that some puzzlement continues about the swaps: "The enormous amount of gold involved, nearly tripling what the BIS itself owns, left many market participants wondering about the nature of the deals. The BIS declined to identify the commercial banks involved. ... It isn't clear what prompted the banks to borrow from the BIS instead of their central banks." ... Dispatch continues below ... 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 Further, without citing authority the paper says "the gold hasn't entered the open market," but "if the banks that loaned the gold are for some reason unable to make good on the loan, the BIS could opt to sell the gold in order to get its money back, which could amount to flooding the market with an unexpected boost to the global supply." But gold being money that for years has been appreciating against nearly all currencies, as noted for you a few minutes ago here -- http://www.gata.org/node/8798 -- why would any institution want to sell gold "to get its money back?" -- unless, of course, "flooding the market" and suppressing the gold price wasn't the real objective? Another unanswered question is where the European commercial banks got all that gold, "349 metric tons ... nearly tripling what the BIS itself owns." The European commercial banks aren't known for holding that much metal on their own account. (If you rent a safe-deposit box at a European commercial bank, you might want to check its contents in the morning.) While the story has changed in an important way, the first principle of journalism hasn't, and journalists here haven't yet demanded information from the primary sources, the BIS and the commercial banks themselves. Nor has there been any change in the conclusion that must be drawn from the story so far. That is, the secrecy and the involvement of the BIS, an admitted gold market rigger, impugn the transaction as part of another gold market rigging scheme. The Wall Street Journal's updated and corrected story is appended. CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. * * * Commercial Banks Used Gold Swaps By Carolyn Cui and Liam Pleven The Wall Street Journal Wednesday, July 7, 2010 http://online.wsj.com/article/SB1000142405274870454500457535340394356077... The Bank for International Settlements said it loaned billions of dollars backed by gold to commercial banks in recent months. Most of the loans -- known as gold swaps -- were conducted with European banks in exchange for foreign currencies, mainly U.S. dollars, according to data released last week in the BIS's annual report. "The operations concerned were purely market operations with commercial banks," the BIS said in an email statement. The statement came in response to a Wall Street Journal article on Wednesday that said the BIS swaps were with central banks. The sheer size of the recent swaps -- involving 349 metric tons of gold, valued at about $14 billion currently -- indicates the stress that the international banking system is under, particularly in European countries facing investor concerns about sovereign-debt woes. The enormous amount of gold involved, nearly tripling what the BIS itself owns, left many market participants wondering about the nature of the deals. The BIS declined to identify the commercial banks involved. The BIS report indicated that all its outstanding gold swaps are set to expire in less than one year, when the borrowers are obliged to repay the loans and repurchase the gold. The swaps are backed by gold held at central banks. The Basel-based international agency is known as a bank for central banks. It takes deposits from central banks but lends to a broader spectrum of financial institutions, including commercial banks and corporations. Through an arrangement called "gold swap," financial institutions exchange gold with the BIS in return for cash, agreeing to buy back the gold at a later date. The practical implications for the gold market are limited, because the gold hasn't entered the open market. By contrast, the BIS reported that it had no gold swaps outstanding at the end of the prior fiscal year. Gold swaps have rarely been used at the BIS in recent years, largely because capital was often readily available in the marketplace. It isn't clear what prompted the banks to borrow from the BIS instead of their central banks. "It's odd, but it could be bad," said Andy Smith, senior metals strategist at Bache Commodities Group in London. Analysts note that the time of the transactions -- mostly taking place in January --coincides with a flare-up in worries about a sovereign-debt crisis in Greece spreading across Europe. If the borrowings were prompted by the need to enhance liquidity, it would have "a greater resonance" in the gold market, said Philip Klapwijk, executive chairman of GFMS Ltd., a London-based metals consultancy. "Whatever your long position was in gold, you would rationally decide there were more risks attached to it," Mr. Smith said. "Something untoward might happen with this gold that was being swapped." If the banks that loaned the gold are for some reason unable to make good on the loan, the BIS could opt to sell the gold in order to get its money back, which could amount to flooding the market with an unexpected boost to the global supply. On Wednesday, the gold contract for July delivery eked out a gain of $3.80 per troy ounce to settle at $1,198.60 on the Comex division of the New York Mercantile Exchange. It is now off 5% from its record hit on June 18. Prices of gold are up 9.4% so far this year, so banks might have to record losses on the swaps and pay more to buy back the gold from the BIS, though they may also have hedged that risk. * * * Join GATA here: New Orleans Investment Conference Wednesday-Saturday, October 27-30, 2010 Hilton New Orleans Riverside Hotel http://www.neworleansconference.com/index.html * * * 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 Sona Resources Expects Positive Cash Flow from Blackdome, Plans Aggressive Exploration of Elizabeth Gold Property On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia. Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013." For complete information on Sona Resources Corp. please visit: www.SonaResources.com A Canadian gold opportunity ready for growth

All currencies have depreciated against gold and silver this year Posted: 07 Jul 2010 01:55 PM PDT 9:55p ET Wednesday, July 7, 2010 Dear Friend of GATA and Gold (and Silver): GoldSilver.com has posted wonderful charts of the gains scored by gold and silver against world currencies so far this year. It appears that not one currency has even kept even with the precious metals. GoldSilver.com calls this "the race to debase." You can find the charts here: http://goldsilver.com/newsletters/newsID/8580/ref/1 CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Sona Resources Expects Positive Cash Flow from Blackdome, Plans Aggressive Exploration of Elizabeth Gold Property On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia. Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013." For complete information on Sona Resources Corp. please visit: www.SonaResources.com A Canadian gold opportunity ready for growth Join GATA here: New Orleans Investment Conference Wednesday-Saturday, October 27-30, 2010 Hilton New Orleans Riverside Hotel http://www.neworleansconference.com/index.html * * * 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 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

Global Pension Heat Rising Posted: 07 Jul 2010 01:27 PM PDT Via Pension Pulse. As the heat wave sizzles North America and Europe, global pension heat is rising. Maria Petrakis of Bloomberg reports, Papandreou Passes Pension Overhaul as Unions Strike in Protest: Greek Prime Minister George Papandreou passed an overhaul of the pension system in a vote that tested the unity of his socialist government and prompted the second national strike in as many weeks.   The plan, which includes lower pension payments and delayed retirements, was carried with 159 votes to 137 against in the Athens parliament. Papandreou, who expelled three members of his Pasok party for defying him in a May vote on austerity measures, managed to secure support from deputies even as some indicated they may oppose various articles that will be voted on individually today. A final vote on the bill will follow today.   “It is not the government or Pasok which will be at risk if things remain the same,” Papandreou told the chamber before the vote. “Those who are at risk are Greek citizens. We are guaranteeing that the 20-year-olds and 30-year-olds of today will get a pension.”   Papandreou committed to the pension overhaul to secure 110 billion euros ($135 billion) in emergency loans from the European Union and the International Monetary Fund that allowed Greece to avert a default on its debt. The pension vote follows passage in May of 30 billion euros in austerity measures, including wage cuts and tax increases, that prompted the defection of the three socialist lawmakers.   Their expulsions left Papandreou with 157 seats in the 300- seat legislature, sparking concern that further defections could threaten his hold on power less than a year after winning elections.   Political Fatigue   “The dissent within the ruling party is increasing and political fatigue is starting to emerge,” Giada Giani, an economist at Citigroup in London, said before the vote. Government spokesman George Petalotis yesterday sidestepped a question on whether dissenters would be expelled, saying “a discussion on party discipline reduces the significance of the huge reform under way.”   The vote prompted unions representing more than 2 million Greek workers to strike. The walkout is set to ground flights, keep ferries docked in port and shut down banks, hospitals and news media. Parliament workers are also striking, with a skeleton staff assisting today’s pension debate.   Papandreou, whose union-backed party won elections last October on pledges of higher wages, has cut state workers’ salaries and raised sales, fuel and alcohol taxes to combat the country’s financial crisis. The 58-year-old leader argues the measures, aimed at reducing a budget deficit of 13.6 percent of economic output, are needed to stave off a default and restore investor confidence in Greece.   Deficit Target   Greece’s central government cash deficit narrowed almost 42 percent in the first six months, Bank of Greece data showed on July 5, prompting Finance Minister George Papaconstantinou to signal the country may even beat a target of bringing the shortfall to 8.1 percent of gross domestic product. The European Commission said in a report yesterday that Greece’s deficit- reduction plan “was broadly on track.”   Overhauling pension rules including curtailing early retirement and calculating payments over a longer period of employment will shore up Greece’s public finances, the European Union has said.   Spending on pensions would reach 24 percent of GDP if left unchecked, twice the level of 2007. Concerns about Greece’s future pension financing have played a part in the surge in the risk premium investors demand to buy Greek 10-year debt over comparable German bonds, the Organization for Economic Cooperation and Development said in a July 2009 report. That spread reached a euro-era record 973 basis points on May 7.   Split Opinions   Greeks are divided over the changes, an opinion poll showed on July 3. More than 35 percent of 1,002 people surveyed by Kapa Research for To Vima newspaper said the bill was unfair, yet necessary and another 14.2 percent fully supported the changes as “imperative.” Nineteen percent called them “catastrophic” and 29.6 percent said the bill should be withdrawn.   Today’s walkout is the sixth general strike this year, and the raft of austerity measures have sparked near-daily protests from groups ranging from lawyers to dockworkers.   Petros Christodoulou, head of Greece’s debt agency, said on June 22 that protests are a good sign because they show people are “feeling the pinch” from the cutbacks. While attendance at marches has dwindled from a peak on May 5 when three people died in a bank fire set by protesters, the strikes are disrupting transport, commerce and tourism, as visitors try to get to Greek islands for summer holidays.   Olympic Airlines will scrap 28 flights today, mainly between Athens and the islands, and reschedule another 23. Aegean Airlines is canceling six. All public transport in the capital will shut down and no ferries will sail as dockworkers and seafarers walk out.   Tourism contributes 16 percent to the country’s GDP, according to the World Travel and Tourism Council, and accounts for one in five Greek jobs. The WTTC expects growth of 0.9 percent in the industry this year. I never agreed with strikes during tourism season, but I understand the frustration of many Greeks who are fed up with the corruption and cronyism that has plagued Greece's public finances through the years (both major parties are guilty of this). In the UK, the BBC reports that a quarter of a million workers at 400 universities, higher education colleges and associated institutions face cuts in their pensions. In fact, the financial crisis has sparked an EU-wide rethink on 'unsustainable' pensions: Europe's low birth rates and ageing population make it imperative for EU member states to overhaul their pension systems, the European Commission says.   A Commission report advocates automatic adjustments to the retirement age as life expectancy increases. Some EU states have adopted such a mechanism.   "The current situation is simply not sustainable," said EU Employment Commissioner Laszlo Andor.   France, Greece, Spain and the UK have plans to raise the retirement age.   But the changes, brought in as governments seek to slash chronic budget deficits, have angered many workers. Thousands have protested in the streets. Pension choice   There are currently four people of working age for each person over 65 in the EU, but by 2060 the ratio will be just two for each pensioner unless pension systems are overhauled, the Commission says.   The Commission - responsible for drafting EU laws - accepts that the governments of the 27 EU member states retain control over national pension systems.   But the EU "green paper" on pensions is aimed at launching a debate involving all stakeholders so that European pension systems are harmonised better. It is inviting contributions to the debate until 15 November.   "The choice we face is poorer pensioners, higher pension contributions or more people working more and longer," Mr Andor said.   The report says "the steep rise in old-age dependency ratios could be largely avoided if people would work longer".   Less than 50% of adult Europeans are still in work by the age of 60, yet member states had pledged in 2002 to push back the retirement age by five years, it says.   The Commission also complains that there are "considerable barriers to cross-border activity" in the area of pensions. Discriminatory tax rules are among the obstacles that many pensioners face when they move to another EU country, it says. In Canada, according to one expert, the federal government could set “an exceptional” precedent if it offers the Canadian Press a 13-year reprieve to pay off its pension plan shortfall: CTV Globemedia, Torstar Corp. and Gesca, the owners of La Presse, are in negotiations with the newswire’s union and hope to firm up plans this fall to take over the co-operative and change it into a for-profit business.   Last year, CP management and its union, the Canadian Media Guild, agreed to ask the federal government for a special permission to repay its $34.4 million pension plan shortfall over 13 years.   Carleton University business professor Ian Lee said he’d “never heard of a 13-year postponement.”   “It seems unusually large,” he said, adding that with so many pension plans in trouble the feds would face tremendous pressure if it granted CP’s request and created a precedent.   Cabinet ministers have only ever approved 10-year extensions, such as Air Canada’s, said Department of Finance Canada spokesman Jack Aubry.   Federal legislation usually only allows companies five years to pay back the money they owe.   Pension lawyer Murray Gold said he thinks the 13-year exemption would “raise some pretty serious red flags.”   “Stretching repayment options is always risky…(the company) would have 13 years during which they could become insolvent,” he said.   Terry Pedwell, president of the Guild’s CP unit, said the union isn’t bargaining to change the 13-year payment schedule, it is more concerned prospective owners want to close down the pension plans.   “They think that closing the plan for new members is a way to dealing with this (shortfall)” he said.   “They are not putting any money at all into paying down the pension deficit.” The reality is prospective or actual owners everywhere are shutting down private pension plans. This is why many concerned groups have been sounding the alarm on pensions. Finally, a four-month pension padding investigation by Attorney General Andrew Cuomo's office found that New York State had the highest pension costs in the United States: Taxpayers pay $10 billion a year for state pensions -- nearly double in the last decade.   One reason costing millions: In their last year of work, many state employees compile hundreds of hours of overtime in order to increase their salary. Lifelong state pensions are based on the last few years of salary.   "Our ongoing investigation into pension padding has so far identified problems that transcend occupation, region, or job title," Cuomo said. "More critically, we have developed solutions and tactics that, if implemented, can reduce the abuses of the pension system. While we expand the scope of our probe, I urge all public employers to closely examine how they can improve the way they do business for the sake of the state and taxpayers."   Cuomo said that widespread abuse of labor agreements is occurring.   His reported cited an example a firefighter who worked 2,004 hours of overtime, a police officer with 823 hours, and a highway maintenance worker who compiled 539 hours near the end of their respective careers.   Cuomo, who is running for governor, said that most counties allow this padding practice.   His running mate, Robert Duffy, collects a pension as a former police chief and earns a salary as mayor of Rochester. But Cuomo said that case is different because Duffy retired as a chief and did not make overtime.   The pension-padding investigation did not include New York City employees, but may in the future. Cuomo said that criminal charges may be filed in the most egregious cases. Watch the clip below. Pension heat is rising everywhere, and when I see outrageous pension spiking taking place in the public sector, my blood boils. Private sector workers are getting poorer and are asked to subsidize balooning public pension costs. Let's hope stock markets keep sizzling instead of fizzling because at this rate, it won't take long before we reach the pensions boiling point.

IMF Gold Swaps Misrepresented Posted: 07 Jul 2010 12:21 PM PDT From Jim Sinclair: Dear Friends, Reports about a large gold swap done by the IMF are being colored by a glib analysis of what a swap is as compared to a lease. If the IMF was legally able to and leased this gold, I would agree with the fear of market sales as a means of bailing out euro banks or other entities. Gold swaps are done with monetary authorities. Gold leases are done with "for profit entities" such as gold banks. Gold Swaps are usually undertaken by monetary authorities. The gold is exchanged for foreign exchange deposits with an agreement that the transaction be unwound at a future time at an agreed upon price. The IMF will pay interest on the foreign exchange received. Historically swaps occur when entities like the IMF have a need for foreign exchange, but do not wish to sell the gold. In this case gold is a leveraging device for needed currency to meet requirements. Conclusion: The many reports today that characterize the large IMF gold swap as a sale of gold into the markets do not understand the difference between a swap and a lease as defined by with whom it is done and why. All that scary crap written today is just that, crap. The IMF swap so talked about today is not a threat to the gold price. In retrospect neither was the gold leasing as it was happening $1000 points lower. Certainly the swap is not and the various commentators today are not familiar with the differences. Respectfully, Jim

Gold and Silver – There’s bad news and good news! Posted: 07 Jul 2010 12:20 PM PDT “The future ain’t what it used to be”. …..Yogi Berra Judging by several E-mails I’ve received from anxious readers of my articles during the past few days, some of you are wondering if you should have ‘sold in May and gone away.’ Let’s look at a chart from last year and see if that strategy would have worked in 2009. (Charts in this report are courtesy Stockcharts.com unless indicated). Here is the daily bar chart for gold from last year. Selling in May (green rectangle) and going away would not have been a good idea in 2009. The good news is that the best buying opportunities for buying gold and silver usually come in May – June – July. “There can be no other criterion, no other standard than gold. Yes, gold which never changes, which can be turned into ingots bars, coins, which has no nationality and which is eternally and universally accepted as the unalterable fidu...

Gold, Black Gold and Equities Technical Charts Posted: 07 Jul 2010 12:16 PM PDT It’s been a short but exciting week so far. Investors and traders are have been scratching their heads the past few days as stocks continued to bounce around giving mixed signals. But today was a clear day of short covering from this much oversold market condition. Below are a few charts showing what I’m currently thinking will unfold in the near future. [B]Gold Futures Trading – 2 Hour Chart[/B] In the past couple weeks we sold our position in gold at $1255-60 area in anticipation for this sharp drop. The market was kind enough to show us though its price and volume action that a nasty drop was just around the corner. Currently we are in cash waiting for the down trend momentum to stall and reverse before taking another long position in gold. I feel it could still drop one more time, but the chart is giving mixed signals when reviewing the short term charts. [B]Crude Oil Futures – Daily Trading Chart[/B] Crude has seen a shift in the trend o...

Guest Post: Sovereign Debt: The Death of Nations vs. the Wealth of Nations Posted: 07 Jul 2010 11:53 AM PDT Submitted By Damon Vrabel Sovereign Debt: The Death of Nations vs. the Wealth of Nations The gap between the truth vs. the lies that pass for truth in the media has never been so wide. But living a lie is very destructive, so it’s important to cross this gap. Today I want to clear up one of the most important lies reinforced by the media–the idea that we have sovereign countries. No doubt most of you have heard of the sovereign debt crisis that so many countries are facing. We hear endless economists, reporters, and billionaire hedge fund raiders talk about it. But the phrase they use is fictitious. It is a fabrication of the Ivy League, Wall Street, and erudite periodicals like the Financial Times of London. Sovereign debt is an impossibility. It cannot exist. It seems ridiculous to point this out, but sovereign debt implies sovereignty. Right? Well, if countries are sovereign, then how could they be required to be in debt to private banking institutions? How could they be so easily attacked by the likes of George Soros, JP Morgan Chase, and Goldman Sachs? Why would they be subjugated to the whims of auctions and traders? A true sovereign is in debt to nobody and is not traded in the public markets. For example, how would George Soros attack, say, the British royal family? It’s not possible. They are sovereign. Their stock isn’t traded on the NYSE. He can’t orchestrate a naked short sell strategy to destroy their credit and force them to restructure their assets. But he can do that to most of the other 6.7 billion people of the world by designing attack strategies against the companies they work for and the governments they depend on. The fact is that most countries are not sovereign (the few that are are being attacked by CIA/MI6/Mossad or the military). Instead they are administrative districts or customers of the global banking establishment whose power has grown steadily over time based on the math of the bond market, currently ruled by the US dollar, and the expansionary nature of fractional lending. Their cult of economists from places like Harvard, Chicago, and the London School have steadily eroded national sovereignty by forcing debt-based, floating currencies on countries. So let’s start being honest and stop describing their debt instruments as sovereign. We long ago lost the free market envisioned by Adam Smith in the “Wealth of Nations.” Such a world would require sovereign currencies, i.e. currencies that are well-regulated rather than floating, and an asset rather than an interest-bearing debt. Only then could there be a “wealth of nations.” But now we have nothing but the “debt of nations.” The exponential math of debt by definition meant that countries would only lose their wealth over time and become increasingly indebted to the global central banking network. So thanks to debt-based, free-floating currencies, the “wealth of nations” transitioned to the “debt of nations” which is now transitioning to the “death of nations.” The new world economic order with one currency, one banking system, one government, and one integrated corporate empire is on the horizon. Perhaps that’s a good thing, but if it were, why would the establishment concoct oxymorons like “sovereign debt” instead of telling the truth? That’s my only goal here–I think people can be trusted with the truth. Lies harm not only the population hearing them, but also the powerful people telling them. Those powers have the best salesmen in the world, so why don’t they just sell the population on the truth? Apparently they don’t think you’d like it. Well now you have it. And it’s coming unless countries follow Iceland’s lead and recover their sovereignty. The choice is ours.

BIS gold swaps – Bulls and Bears fight out the implications Posted: 07 Jul 2010 11:39 AM PDT Rhona O'Connell 08 Jul 2010 (Mineweb) LONDON — The excellent detective work by Matthew Turner of Virtual Metals has turned up the news that the Bank for International Settlements had effected gold swaps of 346t with other counterparties by the end of March and it would appear that the figure had reached 382t by the end of April. This amounts to roughly 3% of the gold held by the signatories to the Central Bank Gold Agreement — although it should not, necessarily, be assumed that all of those swaps were with ECB members (although they probably were). Bulls and bears can both chew on the fodder provided by this development… [continued here] RS View: The BULL & BEAR labels as presented make a clever and well-defined two-sided demonstration out of what might otherwise have been put forth as part of a more nebulous internal round-about assessment that a rational person automatically does as a normal part of digesting new information.

Solari Report - Options For Storing Precious Metals Posted: 07 Jul 2010 11:36 AM PDT Excerpts from "Options For Storing Precious Metals" By Catherine Austin Fitts and Carolyn Betts "With prices for gold denominated in US dollars at record high levels, increasing discomfort with prolonged global financial market uncertainties and increasing recognition of the risks inherent in investment in precious metals ETFs, the demand for precious metals storage services is growing…" While [...]

Gold: Over-Owned or Over-Reported? Posted: 07 Jul 2010 11:26 AM PDT

Loose Ends Posted: 07 Jul 2010 11:15 AM PDT Apparently, it was too hot to do anything today but stay at home and put in equity bids, and stocks responded to the recent expression of market-indecision by rallying sharply. It surely didn't hurt that Kansas City Fed ... Read More...

China and BIS hit gold when it's down — but nothing's really changed. Posted: 07 Jul 2010 11:14 AM PDT by Lawrence Williams Wednesday, 07 Jul 2010 (Mineweb) — While there was a minor recovery over the U.S. holiday weekend in very thin trading, the gold price remained weak Tuesday and was then hit with a couple of pieces of seemingly adverse news which caused it to stutter yet again… The first was that a London analyst, Matthew Turner of Virtual Metals, noticed that the Bank for International Settlements (BIS) — the bankers banker — had 346 tonnes of gold on its books which it had acquired through gold swaps with Central Banks. …. But, as Jim Sinclair quickly pointed out on JSmineset.com "Gold Swaps are usually undertaken by monetary authorities. The gold is exchanged for foreign exchange deposits with an agreement that the transaction be unwound at a future time at an agreed upon price." … The second piece of news to knock the market was a note by China's foreign exchange regulator that gold will not be a key investment for China's foreign exchange reserves. This can be taken several ways, but a nervous market feared the worst… But if one analyses the comment, given that the gold component of China's massive reserves is so tiny, it is likely to remain a relatively insignificant part of its reserves taken as a whole almost regardless of how much gold it takes into them! China is an expert at playing the markets in any way which suits it. At the moment the Middle Kingdom is unlikely to disrupt the global foreign exchange status quo. It is not in its financial interests to talk down the dollar given its huge dollar denominated holdings, but it probably is in its interest to appear disinterested in gold even if, in reality, it is not. A top Chinese official has already noted that China has been buying gold on the dips, but as long as this is all it is doing it should not impact the gold price too positively (and de facto diminish the value against gold of the U.S. dollar), but does provide a stabilising influence which will suit its gold-oriented, and rapidly growing, investment public… [China] waited six years last time to uprate its official gold reserves by over 450 tonnes. It is probably in no hurry now to do the same for another five or six years and may only do so when it is deemed propitious either economically or politically to do so. Thus neither of these pieces of seemingly adverse news for gold should in reality have much adverse impact on the market. The former should be positive for gold and the latter taken with a pinch of salt. [source]

Guest Post: Why Corporations Matter, Part 1 Posted: 07 Jul 2010 11:12 AM PDT Submitted by Gonzalo Lira Why Corporations Matter, Part I   The Antikythera clockwork was a mechanical device, made of bronze and iron gears, that was manufactured by the ancient Greeks in the second century B.C. It was lost in a shipwreck around 150 B.C., and recovered from the bottom of the Mediterranean in 1900. But it was only in the last couple of decades, with the help of sophisticated imaging equipment, that scientists have realized what the rusted hunk of metal actually is: The Antikythera clockwork is a computer. And a very sophisticated and exact one at that. It was used to predict eclipses and other astronomical events. Because of its complexity and design sophistication, it probably wasn’t a one-off: The Antikythera clockwork was likely the culmination of at least a few decades’ worth of development by the ancient Greeks—which means that whoever made the Antikythera clockwork had the knowledge to make other, exceedingly useful devices, including clocks and calculators, with a myriad of practical applications. Nevertheless, the technology that made the Antikythera clockwork possible was lost—it was only in the XIII century that mechanical clockworks were developed in Europe once again. Something to compare to the Antikythera clockwork in complexity, sophistication, compactness and accuracy did not come to be until roughly the XVI or XVII century, depending on your metrics—1,700 years after the ship carrying the Antikythera clockwork went down. Why was the technology lost? Actually, that’s the wrong question: Vital bits of knowledge and technology have been getting lost all the time, ever since human beings figured out how to make their own food. The real question is, Why has technology been preserved and accumulated so effectively over the last four centuries of our current civilization? Why now, and not before? Think about it: Human beings developed agriculture roughly 10,000 years ago, which created the possibility of settlements and therefore a civilization. Yet every civilization has risen, plateaued, and then fallen, and ultimately their technology and culture have been for the most part lost. Even exceedingly practical bits of knowledge have disappeared, not to mention great art and literature. The Antikythera clockwork is just one of countless examples, large and small, of lost technology and culture. The development—and just as importantly the maintenance—of technology and culture have been literally Sisyphean tasks. Ziggurats were built in Mesopotamia some 7,000 years ago—then all that knowledge that went into their construction was lost. A thousand years later, ancient Egyptian engineers had to start from scratch when they decided to build their pyramids—then their insights and expertise were lost too, by the time the French got around to building that canker sore in front of the Louvre. The fact that technology and culture have been constantly lost hasn’t meant that there haven’t been efforts to preserve them. On the contrary, there have been constant efforts. Libraries have been built to preserve art and literature—but then they burned. Guilds have been created to protect crafts and sciences—but then they fell apart. In fact, when you look at it from this perspective of knowledge preservation, since A.D. 387, the Catholic Church is the only institution which has systematically preserved knowledge across borders and time—but that preservation was of necessity piecemeal; static; and excluded any bit of technology, culture or knowledge that contradicted the Church’s teachings. That’s why, for instance, so many of the racier plays of Sophocles were lost. That’s also why pure science didn’t progress very much, between A.D. 387 and A.D. 1602. Apart from technology related to warfare, trade and other practical affairs, the Church was a stopper on pure scientific development. Just ask Galileo. Nevertheless, our current civilization owes a tremendous debt to the Catholic Church. Were it not for the Church, after the fall of Rome, Europe would have descended even further into barbarism than it did. Without the Church, nothing of the Greek and Roman civilisations would have been preserved. But the Church’s cosmopolitanism, coupled with its monasticism, created an archipelago of knowledge across a uniformly ignorant Europe between A.D. 387 (the Gauls’ sacking of Rome) and A.D. 1317 (the likely publication date of Dante’s Inferno), when the Renaissance began. However, it’s with the Enlightenment starting in 1602 that, suddenly, we have had a geometric progression of technological development: Technology building on technology slowly at first, but then accelerating in a smooth, uninterrupted curve. Indeed, the very idea of “progress”, so reflexively familiar to us today, so never-ending in our imagination, didn’t even exist until the Enlightenment. This notion of open-ended, never-ending progress has only been possible because there has not been significant loss of technology since the start of the Enlightenment. People might object and say that technology was lost before the Enlightenment because there was war, disease and famine—but there’s been plenty of war, disease and famine since the start of the Enlightenment. Yet we’ve somehow managed to hang on to our progress. The question is, Why? Why has there not been a substantial loss of technology and culture over the last 400 years? It’s happened in every other period of history, in every other culture in history—except in Europe, starting about 400 years ago, and spreading out of Europe to eventually encompass the world. Why? I’ve been bitching about corporations as of late—I’ve been bemoaning the current era of corporate anarchy and “street-gang corporatism” that seems to have enveloped our society. I’ve been openly wondering whether the United States is descending into a fascist police-state ruled by corporate interests. But that doesn’t mean I think corporations are the root of all evil. Quite the contrary: I posit that the invention of the corporation made the progress of our civilization—and the explosion of humanity’s numbers—possible. I would argue that without corporations, the Enlightenment would not have happened, and the civilization we currently enjoy would not have come into existence. I would further argue that, without the concept and practice of the corporation, today we would be living the bad bits of the Middle Ages. (And you thought I was a tree-hugging, Birkenstock-wearing foo-foo Alterna-geek loser who ends every statement with an interrogative: “It’s 50 degrees Celsius in the shade? So I think it’s hot? But I’m not really sure? It’s just my opinion?”) Though I think the idea of the corporation was a necessary condition for the development of our civilization, it wasn’t a sufficient condition. In other epochs and cultures, versions of what we could consider corporations have existed—but those civilizations weren’t able to parlay their versions of corporation into what Europeans and the West did: Corporations as a knowledge and technology preserver and aggregator. Before continuing, let me define what I mean by “corporation”: I am not referring to mere “companies”—that is, partnerships or syndicates of merchants or adventurers who band together to pursue a common enterprise, an enterprise which they lack the means to pursue individually. Partnerships have existed since forever, syndicates since the Roman times (if not earlier). Chartered companies began roughly in the mid-XVI C. in England and Holland, though of course there were random examples in isolated spots in the centuries before that. But corporations began in 1602, with the Dutch East India Company (Vereenigde Oost-Indische Compagnie, or VOC; literally “United East India Company”). The VOC was established in 1602, as a competitor to the British East India Company, which had been chartered in 1600. Both companies were spice trading syndicates which had received government monopolies to trade in the Far East. The Dutch East India Company, however, is the first true corporation because of two key difference from its British counterpart: One, the VOC was the first limited-liability corporation; that is, its financial exposure was limited to the capital contributed to the company, and no more. And two, the VOC was the first company where the participanten (non-managing partners) could sell their participation in the company by way of their anonymous stock. The Amsterdam stock exchange—the first and oldest in the world—was founded specifically so as to trade in those VOC stock. VOC’s organisational model became the template for all future corporations—and to my way of thinking, this development was the starting date of the Enlightenment, and a turning point in world history. (Parenthetically, when I speak of “corporations”, I am not referring to giant multi-nationals exclusively, or even implicitly. I’m simply referring to any company whose owners have a limited liability, and whose stock can be traded. In my own mind, I’m imagining a small glass factory which employs about a hundred people, whose penny-stock is publicly traded. Furthermore, when I speak of “company”, I’m referring to any organization of more than one individual, coming together in pursuit of a business or other venture; by this definition, a corporation, a syndicate and a partnership are each a different type of company.) Cynics view corporations as money-making machines. But that’s just stupid. Corporations—of whatever size—should be viewed as two things: One, productivity engines, designed to produce a specific good or service, while disregarding anything and everything else, so as to satisfy a demand in the society. And two, as repositories of assets, both tangible and intangible. It’s the second issue which interests me right now: Corporations as repositories of assets. Before the VOC, commercial enterprises depended on particular people—the cobbler’s business depended on the cobbler himself, and his actual work, and the work of the apprentice cobblers he might have working for him. A partnership depended on specific people working together for a common goal. If one of those people left or died, the partnership was dissolved, or at least had to be severely restructured. It was quite normal, before the VOC and corporations, for a business to rise, plateau, then decline, and then ultimately vanish—along with all of the business’s accumulated expertise. That is, presumably, what happened to the makers of the Antikythera clockwork. Ambitious men have been forever trying to get their sons to follow the family business they spent so much time, effort and tears nurturing and growing—only to have their hopes dashed when their sons turned out to be uninterested, or even worse, incompetent. But starting with the Dutch East India Company’s stock, people could take an active interest in a company for a limited time, before passing on the ownership of the corporation to someone else by way of the sale of stock. Who would take over the corporate entity? Obvious: Someone who was interested in building it up. People are not single-minded. People like to talk, hang out, fuck, laugh, play, read a book, etc. But corporations are productivity engines. They are supposed to do one thing: Carry out the business of the corporation. When people are interested in the business of a corporation, they participate in it via stock ownership. The corporation’s interests and the stock owner’s interests align, and both benefit. When the stock owner’s interest flags for whatever reason, they can sell off their ownership in the corporation to someone else. Thus the corporation and the owners are meeting each other at the moment when they are of most use to one another. And when the owner leaves the business (ie., sells his stock shares), it’s not just that the owner is “cashing out” when he’s no longer interested in the business: It’s that the corporation is continuing on with a new and interested owner, who will use his best efforts to maximise the business of the corporation. The benefit of the stock sale is not only to the stockholder, but also to the corporation. Because the corporation is leaving behind an uninterested owner, and continuing on with a new stockholder—a new owner—catching this individual at the peak of his interest in the business of the corporation. A good way to think of this is, the founder of a corporation is like a man who builds a cart, out of scrap metal and wooden planks. He pulls the cart forward, loading it up with whatever he finds along the way, constantly improving his cart, until he reaches a point where he is either too old or too exhausted or simply too uninterested to continue pulling the cart—so he sells it to someone else. This new owner also improves the cart—she puts new wheels on it, maybe she installs an engine so she can drive it instead of pull it, and so on. Maybe she comes up with ideas to improve the cart that the previous owner could never have imagined—say she replaces the wheels with rockets, and attaches wings to the cart. But then finally, she too is no longer interested in riding the cart—so she sells it on to someone else. The successive owners have benefitted from the cart—they’ve sold it at a profit to each new owner. But then, the cart itself has also benefited from each sale. Every new owner has improved the cart in some way or another. And human ingenuity being what it is, these improvements have often been in radically unexpected ways. Since the cart—the corporation—is in a practical sense immortal, in theory it can be improved upon infinitely, as it is passed along from owner to owner. Unlike a pre-modern partnership or any other sort of company lacking in a simple ownership transfer mechanism, a corporation is never dissolved or wound down when an owner decides to exit the property: Rather, the corporation is merely passed from owner to owner by way of its stock sale. Some owners might decide to break off productive units of a corporation and sell them off—maybe the corporation is a conglomerate, and the new owners decide to break it apart until there’s nothing left. The conglomerate itself might disappear completely—but those productive units that made it up live on with new owners. Gulf + Western would be an example. A corporation might even go bankrupt—in fact many small corporations do. But if the corporation is of a size where its productive units are individually viable—say one of its factories that produces doo-dads is still a money-making venture—then the corporation’s owners’ stock will be wiped out in a bankruptcy, but the corporation’s productive units will be sold off to pay its creditors. Those productive units will continue to exist through time, with new owners who will improve them. So then what are these “productive units” that I’m speaking of? The productive units are what carry out the business of the corporation—but that’s no help at all. Let me rephrase the question: What does a productive unit have that makes it worth keeping, as opposed to dismantling it into its component parts—tools, trucks, desks, chairs, etc.—in a bankruptcy? To rephrase again: What is the thing that holds all the assets of a company together, and makes it worth more whole than dissolved? Or to rephrase yet again: What is the soul of a company? An apocryphal story: Sir Walter Raleigh bet Queen Elizabeth that he could measure the weight of smoke from a cigar—a seemingly impossible feat. He took a fresh cigar, carefully weighed it, then smoked it, making sure to tap all his ash on the scale. When the cigar was consumed, he weighed the ash and the remains of the cigar—the difference between that weight and the weight of the fresh cigar was, he claimed, the weight of smoke. He was right, too. Just because you can’t catch it, doesn’t mean it’s weightless, or immaterial, or nonexistent. I said before that a company is a repository of assets, both tangible and intangible. The concept of tangible assets is pretty obvious and straightforward. The company accumulates and owns buildings, trucks, chairs, desks, tools, paperclips, whathaveyou. Those things are the tangible assets of any company. The intangible assets, however, are trickier. On the one hand, there are monetizable intangible assets, such as patents and copyrights, or specific permits or warrants, and of course professional services. There are also stocks and bonds and other financial assets. These are all intangible assets which can be bought or sold or hired; hence they are monetizable. But then there is another intangible asset which cannot be quantified or monetized, yet which undoubtably exists, and has real value—like Raleigh’s smoke. This non-monetizable, intangible asset is accumulated through the ordinary activities of the company, and is essential to the company’s existence through time. It is the way in which the component elements of a company are arranged between one another—the way in which tangible and intangible assets are arranged and interact. This seemingly weightless smoke—which is essential—I will call the structural asset of the company. The structural asset of the company refers to the way that the company is internally organized, in order to pursue its business and satisfy the demand by society for its products. It is the thing that makes a company worth more than the sum of all its tangible and intangible assets. To make this concept clear: A human body is made up of 43 kg of oxygen, 16 kg of carbon, 7 kg of hydrogen, 2.8 kg of nitrogen, 1 kg of calcium, 780 g of phosphorus, and about a kilo of various other elements. If I gather these elements together, and then dump them all in a tub, do I wind up with a 70 kg person? I should, shouldn’t I? After all, those elements I just mentioned are what make up a human being’s body, in those amounts that I just listed. If I gather them in a tub, and mix them up, a fully formed person ought to pop out, shake my hand, and join me for lunch at the restaurant down the street—right? Of course not—what’s lacking here is the structure of the body: The way those elements are arranged internally. I can have all the elements that make up a human body—but not have a human body. Similarly with a company: The machine tools, the trucks, the patents, the services of various workers, the copyrights, the paperclips—those are the component elements that make up a company. But they are not the company. What they need is the structural asset of the company, to arrange those component elements into a viable business. It cannot be monetized or measured, and it cannot be transferred—it is inherent to the company. The structural asset of a company is constantly being accumulated and expanded through the business activity of the company. It is the thing whose decay leads to the entropy of the company. It is the thing which makes the company worth more than its constituent assets. The structural asset of a company makes it possible to replace one tangible or intangible asset for another, without losing the company’s identity. That is, it allows a company to swap an old machine on the factory floor for a new one, a new worker for a worker who has left, and still remain what it was. Just as, say, a lung transplant for John does not mean that John ceases to be John and is now Frank, the structural asset allows a company to change machinery and people and locations and even businesses, while maintaining its identity through time. The structural asset of a company is the mechanism that allows it to accumulate knowledge. But up until 1602, companies whose owners died or lost interest were dissolved or wound down—thus was the structural asset of a company lost. Which meant that the accumulated knowledge was lost too. That’s why the technology behind the Antikythera clockwork was lost for 1700 years—since there was no mechanism to pass on the accumulated knowledge inherent in the structural asset of their company, once the owners lost interest in the business or died, all the accumulated technologies they had developed were lost. However, I argue that with the founding of the Dutch East India Company in 1602, such loss of technology stopped happening. Owners who lost interest in the business for whatever reason could sell their stock in the corporation—and thus the corporation lived on, continuing to preserve and accumulate knowledge through time with other, more interested owners. Thus was technological development out of Europe a geometric progression. This also explains why other cultures and empires, more civilized and advanced than Europe in 1602, were left in the dust a mere two hundred years later, and have been struggling to catch up to the West ever since. Think Japan, China, and the Ottoman Empire in 1602: Far superior to Europe, one and all. Now think Japan, China, the Ottoman Empire in 1850: Far behi

Time to Buy Gold Posted: 07 Jul 2010 10:59 AM PDT Gold Price Close Today : 1198.60Change : 3.80 or 0.3%Silver Price Close Today : 17.979Change : 0.146 cents or 0.8%Platinum Price Close Today : 1523.40Change : 16.80 or 1.1%Palladium... This is a summary only. Visit GOLDPRICE.ORG for the full article, gold price charts in ounces grams and kilos in 23 national currencies, and more!

Gold Chart Daily Posted: 07 Jul 2010 10:53 AM PDT This posting includes an audio/video/photo media file: Download Now

In The News Today Posted: 07 Jul 2010 10:43 AM PDT Note To Readers: An article appeared on Kitco saying that I have predicted $17,000 for gold in 2012. That writer is clearly smoking something funny.   Jim Sinclair's Commentary Here is your perfect example of the Ski Jump recovery. The Self-Inflicted Insanity of American Unemployment News that the unemployment rate has fallen to a "mere" 9.5% seems to suggest an improvement in our dire economic prospects. The reality, however, is far grimmer, as the latest US Bureau of Labor statistics indicate. On balance, it would seem that the apparent "ignition" to the economy achieved in March and April through expanding employment, income, spending and production has somehow "sputtered" in May and June. This is indeed disturbing, since such sustained "ignition" is now necessary since fiscal policy is about to go into reverse. There are many costs associated with high unemployment, both economic and social. They include not only daily income losses, which are catastrophic for most Americans, but also increased crime rates, family breakdown, increased incidence of mental and physical health disorders, increased alcohol and substance abuse and a generalized misery (See Bill Mitchell). Yet despite the obvious pathologies created by long-term unemployment, bad policy continues to drive the Obama administration to perpetuate these trends. Worse, with polls indicating rising discontent with Democrat incumbents in the House and Senate, the President's political advisors appear to be recommending that the President ignore the advice of his economic team and press forward with deficit reduction ahead of job creation spending. More… Jim Sinclair's Commentary Actually, in Mandarin that could be a threat. China Says It Won't Use U.S. Debt as Threat BY AARON BACK BEIJING—China's foreign-exchange agency sought to ease concerns about how it uses its huge currency reserves, saying it operates on market principles and would never wield its holdings of U.S. government debt as a threat. The statement Wednesday by the State Administration of Foreign Exchange was the latest in a series of moves by the agency aimed at addressing concerns about its influence. Presented in question-and-answer form, the statement, posted on the agency's website, rebutted what it portrayed as misconceptions about its management of China's $2.4 trillion in foreign-exchange reserves, the world's largest. The statement rejected the notion posited by some … More…

Jim's Mailbox Posted: 07 Jul 2010 10:40 AM PDT Dear CIGAs, Please read this outstanding article provided by CIGA Richard B. so that you can see behind the opaque curtain of management of news in finance Dear Jim, Since May 22, 2010, the FDIC has announced the closings of 14 more banks, bringing the total so far this year to 86. Collectively, they had assets of $6.86 billion and deposits of $5.92 billion. The FDIC's estimate of the cost of closing these 14 banks is $1.16 billion, about 20% of deposits. 11 of the 14 failures were accomplished by way of the FDIC entering into loss-share agreements covering a high percentage of the assets taken over by the successor banks. In connection with these closings, the FDIC entered into new loss-share agreements covering an additional $4.82 billion. That brings the FDIC's total losses for 2010 up to $17.62 billion. The total face value of assets now guaranteed under FDIC loss share agreements has grown to $176.74 billion. Releases Provide Insight Into FASB-Blessed Over-Valuations The FDIC's Press Releases issued in connection with bank closings provide a basis for evaluating the extent to which each failed bank's management may have been exaggerating the value of its assets. These facts are important to discover in light of the Financial Accounting Standards Board ("FASB") having last year rolled back fair value accounting requirements, giving bank management tremendous leeway to assign unrealisticly high values to the institutions' least liquid, most difficult to value assets. In connection with each closure, the FDIC obtains competing bids from parties who are interested in taking over the failed bank's deposits and assets. The FDIC's estimated loss is basically the difference between the bank's deposits and the value of the assets agreed upon between the FDIC and the successful bidder. Since about the first quarter of 2009, this price discovery mechanism has been muddied by the FDIC's extensive use of loss-share agreements in resolving bank failures. Loss share agreements increase the value buyers are willing to assign to failed banks' assets in exchange for the FDIC indemnifying them against future losses resulting from the assets turning out to be worth less than the value agreed to. Still, each bank closing announcement provides a basis for comparing the stated value of the failed bank's assets against the market value agreed to in connection with the loss share agreement, and therefore understanding the extent to which FASB's capitulation may be affecting bank values across the board. Applying this analysis to the largest eight of the 14 banks that failed over the past six weeks leads to the following figures. The highest of the over-valuations was 84%. The lowest was 20% — a still worrisome number. Over-Valuations Range From 84% to 20% Washington First International Bank of Seattle, WA, had stated assets of $520.9 million and deposits of $441.4 million. The FDIC estimated it closing cost $158.4 million. Based on that estimate, the bank's assets were really only worth about $283 million, and had been over-valued by 84%. Peninsula Bank of Englewood, FL, had stated assets of $644.3 million and deposits of $580.1 million. The FDIC estimated its closing cost $198.4 million. Based on that estimate, the bank's assets were really only worth about $385.3 million, and had been over-valued by 67%. First National Bank of Savannah, GA, had stated assets of $252.5 million and deposits of $231.9million. The FDIC estimated it closing cost $68.9million. Based on that estimate, the bank's assets were really only worth about $163 million, and had been over-valued by 55%. TierOne Bank of Lincoln, NB, had stated assets of $2.8 billion and deposits of $2.2 billion. The FDIC estimated it closing cost $297.8 million. Based on that estimate, the bank's assets were really only worth about $1.9 billion, and had been over-valued by 47%. Sun West Bank of Las Vegas, NV, had stated assets of $360.7 million and deposits of $353.9 million. The FDIC estimated it closing cost $96.7 million. Based on that estimate, the bank's assets were really only worth about $257 million, and had been over-valued by 40%. Bank of Florida – Southwest, of Naples, FL, had stated assets of $640.9 million and deposits of $559.5 million. The FDIC estimated it closing cost $91.3 million. Based on that estimate, the bank's assets were really only worth about $468.2 million, and had been over-valued by 37%. Bank of Florida – Southeast, of Fort Lauderdale, FL, had stated assets of $595.3 million and deposits of $531.7 million. The FDIC estimated it closing cost $71.4 million. Based on that estimate, the bank's assets were really only worth about $460.3 million, and had been over-valued by 30%. Nevada Security Bank of Reno, NV, had stated assets of $480.3 million and deposits of $479.8 million. The FDIC estimated it closing cost $80.9 million. Based on that estimate, the bank's assets were really only worth about $399 million, and had been over-valued by 20%. Slow Pace of Closings Not Encouraging Given Backlog Over the past six weeks the pace of announced bank closings has been quite slow compared to the rest of the year. This might be an encouraging sign were it not for the known backlog of seriously under-capitalized banks, known to number more than 425. Given this backlog, a slowing pace of closures implies little more than Manipulation of Perspective Economics ("MOPE") and Pretend and Extend being put into overdrive. In the updated study of key FDIC enforcement actions last month, I pointed out there were at least 425 banks currently operating under serious FDIC enforcement orders that only issue when banks are found to be seriously under-capitalized. Since then, the FDIC announced its May enforcement actions. A total of 26 new banks became subject to a serious enforcement order for the first time, while only 5 had their orders lifted. Meanwhile, over the past six weeks 39 new banks became subject to serious Federal Reserve System Enforcement Actions – 35 Written Agreements ("WAs") and 4 Prompt Corrective Action Directives ("PCADs"). WAs have to be read on a case-by-case basis, but at the very least, their issuance indicates the bank fared very poorly in its last inspection. PCADs indicate a bank is seriously under-capitalized and at imminent risk of failure. With this serious a backlog overhanging regulators, it does not inspire confidence to see them resolving so few troubled institutions over time. MOPE-inspired pronouncements of a recovering economy are looking thinner by the minute. An honest look at the facts makes a ski jump-shaped renewal of the economic downturn look very likely. The pace of new bank closing announcements can be expected to pick up dramatically in the near future. There is no basis to believe the number of troubled institutions is decreasing or the serious problems threatening the banking sector are improving. Respectfully yours, CIGA Richard B.   Unemployment Is No Longer A Lagging Indicator: El-Erian CIGA Eric It is the shift from expansion to contraction of credit that has appeared to change economic indicators from lagging to leading. The leading indicator is not employment but rather access to easy credit. When access to easy credit is removed, a nation's standard of living will revert towards its productive and intellectual capacity. Employment is but one component of this combined capacity. The price of gold is rising, because confidence in the U.S.'s ability to maintain its current standard of living without debasing its currency is declining. Employment will rebound when investment increases demand for the U.S.'s productive and intellectual capacity. This is why stimuli orientated toward increasing consumption rather than investment, like the programs in the Great Depression, are doomed for failure. Unemployment has shifted from a lagging indicator to a leading one and is warning government policymakers to confront problems in an economy mired in slow growth, Pimco co-CEO Mohamed El-Erian told CNBC. The consideration of unemployment as a lagging indicator is a favorite mantra among economists who believe the rate primarily looks at the past rather than what is to come. Source: finance.yahoo.com More…   Gold slips as dollar firms, and after China report CIGA Eric Who's more foolish, the fool or the fool who follows him?, Obi-Wan Kenobi Star Wars: Episode IV – A New Hope Strange how these reports, the dollar and by extension US debt is good and gold is bad, tend to coincide with paper attacks against gold. Several months ago, Chinese officials stated interest in diversification away from the dollar and chastised the U.S.'s chronic spending, debt, and devaluation habits. The precious metal slipped to a session low of $1,186.95, its weakest since late May, in earlier trade after China's State Administration of Foreign Exchange said gold will not become a major component of the central bank's portfolio. Source: reuters.com More… Dear Eric, Nobody but the Chinese understands the minds of the Chinese. They are aggressive risk takers and successful. Like the masters of markets they are, the use of the media has not passed their attention. I wager they are buyers right now. Regards, Jim

ICI Reports Ninth Sequential Equity Fund Outflow In A Row Posted: 07 Jul 2010 10:39 AM PDT ICI reports that topping off the underperforming H1 market action was yet another equity market outflow, this one to the tune of ($227) million. This represented the ninth sequential domestic equity mutual fund outflow in a row, and accounts for fund flows of over ($30) billion YTD. This follows on the heels of last week's once again deteriorating AMG/Lipper HY fund outflow report. Retail investors are not only not participating in the market, but are actively continuing to redeem capital out of any form of equity, transferring it into taxable bond funds. Mutual funds continue to not only be low on cash, but facing ongoing redemptions. Luckily, HFTs have none of these problems: all they need is to sniff out a major block bid from a dealer with discount window access, front run it while blowing up the NBBO via subpennying, accelerate the momentum, without needing any actual material capital, and end flat on the day. Mutual Funds will of course take the pick up in price levels and thank HFTs kindly, knowing full well they are unable to be marginal price setters any longer. So aside from the logistics of ramping the market on capital liquidations and margin calls, 4% market surges such as those seen in the past two days make perfect sense.

Why Are Bubbles Bigger Than Ever? (Part 1) Posted: 07 Jul 2010 10:31 AM PDT Gene Phillips submits: At a “Street Meet” I attended recently, the macroeconomic question was once again put forth: why more bubbles now than before? More interesting (for me) is the follow up question: and why are our bubble-bursting-crises so much bigger? Many thoughtful suggestions were put forth. Complete Story »

WEDNESDAY Market Excerpts Posted: 07 Jul 2010 10:29 AM PDT Gold reverses higher on bargain hunting The COMEX August gold futures contract closed up $3.80 Wednesday at $1198.90, trading between $1185.00 and $1199.30 July 7, p.m. excerpts: (from Marketwatch) Gold futures edged up as investors took an opportunity to buy bullion after prices fell to their lowest point since late May. Sentiment was earlier dampened by news that China would not increase its gold holdings and a separate report detailing central-bank gold sales. Central banks have entered into swaps with the Bank for International Settlements, in which they take out loans that would allow them to repurchase gold at a later date…more (from TheStreet) The fact that banks might have been forced to swap gold for cash highlights the lack of liquidity and economic hardship facing a global recovery while also making gold a real form of money. Philip Klapwijk, executive chairman of GFMS Research Group, commented that "Any use of gold by the official sector, as opposed to just straightforward selling, rather enhances gold's monetary role and financial status."…more (from Reuters) Gold slipped in earlier trade after China's State Administration of Foreign Exchange said gold will not become a major component of the central bank's portfolio. However, analysts said that given the size of China's currency reserves, it was unsurprising gold would play only a relatively minor role in its portfolio, and that the news was unlikely to detract from central bank interest in gold if prices fell…more (from Bloomberg) The metal makes up about 1.6% of the foreign reserves in China, which purchased 454 tons from 2003 to 2009, according to the World Gold Council. China held 1,054.1 metric tons of gold last month, ranking sixth in the world. Song Yuqin, a vice general manager at the Shanghai Gold Exchange, said that gold demand in China gained in the first half as government measures to cool the property market and falling equities spurred purchases…more (from Xinhua) Gold dropped as low as $1185.00 but recovered during mid-session, as many traders found that the lowest price in six weeks suggested that the selling was overdone and took the chance to re-enter the gold market. The most active gold contract for August delivery rose 0.3%. The weaker dollar and the strong rally in the stock market Wednesday both added upward pressure on gold…more see full news, 24-hr newswire… July 7th's audio MarketMinute

Gold Thoughts Posted: 07 Jul 2010 10:20 AM PDT While planning the wake would certainly be premature, perhaps some funeral plans could be considered. Could we possibly be witnessing the impending death of Keynesian ideology? For more than 70 years governments have ... Read More...

BIS gold swap confuses as price rebounds Posted: 07 Jul 2010 10:09 AM PDT By Jack Farchy July 7, 2010 (Financial Times) — Gold prices dropped to a six-week low on Wednesday as traders puzzled over the news that the Bank for International Settlements had received 346 tonnes of gold in "swap operations". But prices rebounded in the afternoon as Asian consumers of the metal saw the correction as a long-awaited buying opportunity. According to a note in its latest annual report, in the financial year to March 31 the BIS took 346 tonnes of gold in exchange for foreign currency in gold swap operations – an action that surprised markets and left traders bemused about what the motives behind the swap might be… Tom Kendall, precious metals analyst at Credit Suisse, said: "There were probably some hedge funds out there who thought somehow this was bearish because the gold could potentially be liquidated by the BIS into the market." But he added: "Even if that were possible under the terms of the swap, I cannot conceive of a situation where it might happen." In its annual report – which was released last week – the BIS said that, under the swap operations, it exchanged currencies for physical gold. But it noted: "The Bank [for International Settlements] has an obligation to return the gold at the end of the contract." Spot gold dropped to an intraday low of $1,185.05 a troy ounce early in the day before recovering to $1,198.55 by midday… Edel Tully, precious metals strategist at UBS in London, said: "From the lows we've seen today, gold has recovered impressively. Physical buying has been quite visible, particularly from Asia." GFMS, the precious metals consultancy, reiterated its forecast for gold to touch $1,300 an ounce before the end of the year, adding that physical demand should prevent prices falling below $1,150. [source]

Bank Of America Joins Economic Slowdown Chorus, Pushes First Rate Hike Estimate Out To 2012 Posted: 07 Jul 2010 10:09 AM PDT Bank of America, via economist Ethan Harris, has joined the chorus of large banks reducing economic forecasts, and as a result has reduced its GDP projections for 2010 and 2011 to 3.0% and 2.6%, from 3.2% and 3.3% respectively. The inflection in 2011 is notable as now the bank sees a material slow down in the economy where before it saw growth. Also, BofA is now expecting that the Fed will leave the Fed Fund language unchanged unchanged for 18 months, until March 2012. This is not surprising: with QE2.0 around the corner, it means that the Fed will soon be implicitly lowering rates. Of course, should the Fed find some naughty pictures of Barney and Chris, it may soon pass laws that allow negative interest rates for the first time. Of course, nothing at this point would be surprising. Ethan Harris note summary: Cautiously pessimistic Switching sides In the face of weak data and tighter financial conditions, we are switching sides in the growth debate: we now expect GDP growth to fall short of consensus expectations both this year and next. Our biggest cuts are to: Consumption – assumed to growth about 2% this year and next Housing – anemic 5% growth over the next six quarters, with a real recovery delayed until 2012 Inventories – a slower rebound, adding 0.2 pp to GDP growth over the next six quarters.   Our biggest downward revision is to employment Perhaps our biggest revision is to job growth. Back in May, when the payroll numbers were steadily accelerating, we bumped up payroll growth. We expected monthly private job gains to hit 275,000 by Q4 (up from the old forecast of 200,000). With both payrolls and jobless claims slipping rather than rising further, we are beginning to regret that decision! We now assume private payrolls accelerate to 190,000 by year-end. Pushing out the first Fed rate hike to March 2012 A few months ago, the Fed call was interesting, with a fairly even split between economists who expected rate hikes before year end and those looking for hikes in 2011. We were firmly in the latter camp. We have already moved the first hike from March 2011 to August 2011 and now, we are moving it further out into  the hinterland—March 2012. Of course, there is a very flat distribution around the Fed call and we think reasonable any time from the middle of next year to the end of 2012 makes sense. In conjunction with our Interest Rate Committee, we are also cutting our 10-year rate call: we expect bond yields to be essentially flat. Ongoing disinflationary pressure Our new forecast increases the risk of a recession in the next several years. As we have argued for some time, the US will remain vulnerable to external shocks until there is substantial healing in the labor, housing and banking industries. Our new forecast means an even slower healing process. The unemployment rate falls only 0.1% per quarter and remains well above our 6.3% estimate of the inflation neutral unemployment rate for years to come. This, in turn, means ongoing disinflationary pressure, a slow healing in bank balance sheets and an even longer period of very high home foreclosures.

China Goes on Japanese Bond Shopping Spree Posted: 07 Jul 2010 10:00 AM PDT China continues to be vocal about its reserves diversification and still mum on the details. Its State Administration of Foreign Exchange (SAFE) is now posting soothing Q&As on its website in order to calm fears about its $2.4 trillion cash mountain without actually offering any specifics about recent changes in its allocation. However, at least one detail has come to the fore. China has markedly increased its purchases of Japanese bonds… to the tune of about $6.2 billion in the first quarter of 2010. From today's Wall Street Journal: "The statement reiterated China's rationale for diversifying its reserves, long dominated by dollar assets, saying it can help control risk and maintain the stability of the 'overall value' of reserves. "China, the biggest holder of U.S. government debt, has ramped up purchases of Japanese government bonds this year, apparently part of its diversification effort. China bought some $6.17 billion in Japanese government bonds in the first four months of the year, more than double the full-year record it set in 2005. "The statement said that China's investment in U.S. debt 'is a market investment action' and that 'whether to increase or reduce holdings of U.S. sovereign debt is entirely a normal investment operation.'" Speculation China's SAFE reserves abounds, especially given its recent comments about decreased investment in US and euro-zone debt as well as its insistent dismissal of gold as a useful reserves asset despite speculation that the country is already buying gold directly from its domestic producers on an ongoing basis. Yesterday, the WSJ also noted that the spiking Japanese bond purchases are a dramatic departure from last year. During 2009, China net sold roughly 80 billion yen (nearly $1 billion) in Japanese securities. The SAFE reserves guessing game will continue and the stakes remain high. You can read more details in The Wall Street Journal's coverage of China pouring into Japanese bonds and saying it won't threaten with US debt. Best, Rocky Vega, The Daily Reckoning China Goes on Japanese Bond Shopping Spree 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."

China seen letting U.S. down gently as it prepares for dollar's fall Posted: 07 Jul 2010 09:57 AM PDT 5:41p ET Wednesday, July 7, 2010 Dear Friend of GATA and Gold: For an appraisal of China's likely intentions with the U.S. dollar and gold that is more candid than the one proclaimed today by China's State Administration for Foreign Exchange, check out the interview done by Chris Whalen of The Institutional Risk Analyst with James G. Rickards, senior managing director for Market Intelligence at the Omnis Inc. consulting firm in McLean, Virginia. Rickards sees China letting the United States down gently while preparing for the dollar's demise. The interview is headlined "Paper Gold vs. the Dollar? Interview with Jim Rickards" and you can find it at the Institutional Risk Analyst's Internet site here: http://us1.institutionalriskanalytics.com/pub/IRAMain.asp 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: New Orleans Investment Conference Wednesday-Saturday, October 27-30, 2010 Hilton New Orleans Riverside Hotel http://www.neworleansconference.com/index.html * * * 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 Sona Resources Expects Positive Cash Flow from Blackdome, Plans Aggressive Exploration of Elizabeth Gold Property On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia. Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013." For complete information on Sona Resources Corp. please visit: www.SonaResources.com A Canadian gold opportunity ready for growth

China seen letting U.S. down gently as it prepares for dollar's fall Posted: 07 Jul 2010 09:57 AM PDT 5:41p ET Wednesday, July 7, 2010 Dear Friend of GATA and Gold: For an appraisal of China's likely intentions with the U.S. dollar and gold that is more candid than the one proclaimed today by China's State Administration for Foreign Exchange, check out the interview done by Chris Whalen of The Institutional Risk Analyst with James G. Rickards, senior managing director for Market Intelligence at the Omnis Inc. consulting firm in McLean, Virginia. Rickards sees China letting the United States down gently while preparing for the dollar's demise. The interview is headlined "Paper Gold vs. the Dollar? Interview with Jim Rickards" and you can find it at the Institutional Risk Analyst's Internet site here: http://us1.institutionalriskanalytics.com/pub/IRAMain.asp 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: New Orleans Investment Conference Wednesday-Saturday, October 27-30, 2010 Hilton New Orleans Riverside Hotel http://www.neworleansconference.com/index.html * * * 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 Sona Resources Expects Positive Cash Flow from Blackdome, Plans Aggressive Exploration of Elizabeth Gold Property On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia. Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013." For complete information on Sona Resources Corp. please visit: www.SonaResources.com A Canadian gold opportunity ready for growth

What is the best way to sell Gold? Posted: 07 Jul 2010 09:57 AM PDT Please list how you think its best done. What is the best way to sell Gold? Thank you, The Goldies.

Gold 07-07 Posted: 07 Jul 2010 09:53 AM PDT courtesy of DailyFX.com July 07, 2010 06:17 AM Gold has topped. Please see the latest special report for details. Near term, gold is making its way lower and most likely in an impulsive fashion. From a trading standpoint, the next opportunity will come from the short side on completion of wave iv of 3 – which may be underway now. 1215 (former 4th wave extreme) is potential resistance. The level intersects Elliott channel resistance next Wednesday. Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Friday evenings), technical analysis of currency crosses on Monday, Wednesday, and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates at the DailyFX Forum. He is the author of Sentiment in the Forex Market. Follow his intraday market commentary and trades at DailyFX Forex Stream. Send requests to receive his reports via email to [EMAIL="jsaettele@dailyfx.com"]jsaettele@dailyfx.com[/EMAIL]....

Guest Post: Gold, Black Gold and Equities Technical Charts Posted: 07 Jul 2010 09:52 AM PDT Submitted by Chris Vermeulen of www.TheGoldAndOilGuy.com Guest Post: Gold, Black Gold and Equities Technical Charts July 7th, 2010 It’s been a short but exciting week so far. Investors and traders are have been scratching their heads the past few days as stocks continued to bounce around giving mixed signals. But today was a clear day of short covering from this much oversold market condition. Below are a few charts showing what I’m currently thinking will unfold in the near future. Gold Futures Trading – 2 Hour Chart In the past couple weeks we sold our position in gold at $1255-60 area in anticipation for this sharp drop. The market was kind enough to show us though its price and volume action that a nasty drop was just around the corner. Currently we are in cash waiting for the down trend momentum to stall and reverse before taking another long position in gold. I feel it could still drop one more time, but the chart is giving mixed signals when reviewing the short term charts. Crude Oil Futures – Daily Trading Chart Crude has seen a shift in the trend over the past 2-3 months. Selling volume over took the buyers and are now pulling prices down into bear flag pattern which means lower prices still. SP500 Futures – 60 Minute Trading Chart SP500 and other major indexes have been selling down the past couple weeks. Tuesday we saw the market gap up very big then sell off. But that surge higher was an early warning sign that the selling momentum was slowing for the time being. 1075 on the SP500 is a key resistance level and a point which many traders will be taking profits and trying to short the market. That will create a lot of selling pressure at that level and only time will tell if we can clear it. Mid-Week Commodity and Index Trading Conclusion: It looks as though we are getting the over due bounce in the stock market everyone has been anticipating. The large rally today (Wednesday) has covered most of the ground as it has moved up over 3% today. Overhead resistance looks to be only 2% away before sellers step back in and try to pull the market back down. If the market goes up for another couple days then gold should have a small pullback to test support. When the equities market starts to drop again money should flow back into gold and send it higher as the safe haven of choice. Crude oil broke down late last week and this week it bounced back up to retest the breakdown level. This is common and once complete oil should continue to drop. The market is still in a strong down trend on an intermediate basis so be sure to lock in profits once your investments reach key resistance levels. If you don’t the market has a way of taking back those gains very quickly in the current market condition.

China says it won't dump treasuries or pile into gold Posted: 07 Jul 2010 09:38 AM PDT Now why would anyone ever suspect such an option? * * * China Won't Dump Treasuries or Pile into Gold By Zhou Xin and Alan Wheatley Reuters Wednesday, July 7, 2010 http://www.reuters.com/article/idUSTOE66604R20100707 BEIJING -- China on Wednesday ruled out the "nuclear" option of dumping its vast holdings of U.S. Treasury securities but called on Washington to be a responsible guardian of the dollar. In the third in a series of statements explaining its work to the Chinese public, the State Administration of Foreign Exchange sought to allay concerns in the outside world that arise whenever Beijing shifts its holdings of U.S. government debt. "Any increase or decrease in our holdings of U.S. Treasuries is a normal investment operation," SAFE, the arm of the central bank that manages China's official currency reserves, said. ... Dispatch continues below ... ADVERTISEMENT Sona Resources Expects Positive Cash Flow from Blackdome, Plans Aggressive Exploration of Elizabeth Gold Property On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia. Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013." For complete information on Sona Resources Corp. please visit: www.SonaResources.com A Canadian gold opportunity ready for growth It said it constantly adjusts its portfolio to maximimise returns, and any changes to its U.S. Treasury portfolio should be seen in that light and not interpreted politically. In a series of questions and answers posted on its website, www.safe.gov.cn, SAFE asked rhetorically whether China would use its $2.45 trillion stockpile of reserves, the world's largest, as a "nuclear weapon". SAFE said such concerns were completely unwarranted. "The U.S. Treasury market is the world's largest government bond market, and U.S Treasury bonds deliver fair good security, liquidity and market depth with low transaction costs. "The U.S. Treasury market is a very important market for China," the agency said. China held $900.2 billion in U.S. Treasuries at the end of April, according to U.S. Treasury data released on June 15. Bankers say China's total holdings of dollar-denominated assets are much greater, accounting for perhaps two-thirds of its reserves. SAFE also gave a qualified vote of confidence to the dollar. The agency acknowledged that financial markets were very concerned at one point that massive U.S. government borrowing would drive the U.S. currency lower. But it said economic conditions elsewhere were also a factor in determining the dollar's trend. The euro zone, for instance, was struggling with high government debt levels. "We must recognise that any depreciation of the dollar is relative to other countries, and other countries or regions also have this or that problem," SAFE said. One of the prime concerns of Chinese Internet commentators is that a long-term decline in the dollar or euro will erode the value of SAFE's portfolio. To that end, SAFE called on the United States and other major countries to take "responsible measures" to maintain the value of their currencies. This meant withdrawing monetary stimulus in a reasonable manner and relying less on deficit spending. SAFE was lukewarm about gold as an investment. "It cannot become a main channel for investing our foreign exchange reserves," the agency said, noting the size of the gold market was limited and prices were volatile. Buying more gold would also not help much in diversifying China's reserves. China has increased its gold holdings by more than 400 tonnes in the past few years to 1,054 tonnes. Even if it doubled that amount gold's share of SAFE's portfolio would increase by only one or two percentage points. SAFE is an easy target for domestic critics who question why China has amassed a mountain of reserves instead of investing more at home. The elucidations on its website appear primarily aimed at disarming those critics. "SAFE will never be a speculator. It mainly seeks to protect the safety of China's FX reserves and ensure a stable investment return," it said. The agency said it was a financial investor and did not seek management control when it made equity investments. Answering its own question on whether it has bought into stocks, private equity funds or any other higher-risk instruments, SAFE said its never excludes any investment. "It depends on whether a product meets SAFE's demand for safety, liquidity and a stable yield for its FX reserves, and whether it can help SAFE diversify risks," the agency said. * * * China Spells Out Gold Reserve Policy From Reuters Wednesday, July 7, 2010 http://www.reuters.com/article/idAFTOE66606Z20100707?rpc=44 BEIJING -- Following is a translation of a statement on gold reserves by China's State Administration of Foreign Exchange on Wednesday. Q: Is China planning to further increase its gold reserves? When? A: Gold is globally recognised, is a store of value and can be used for urgent payment. However, there are some limits to investing in gold and it cannot become a main channel for investing our foreign exchange reserves. First, the size of the gold market is limited. Annual global gold output is about 2,400 tonnes and there is a basic balance between its supply and demand now. If we buy a large amount of gold, it will surely push up the global gold price. China's gold price basically matches the global level, so when Chinese people go to buy gold jewellery in shopping centres, they face surging prices. That will eventually hurt the interest of Chinese consumers. Second, the gold price is very volatile. The global gold price is much affected by currency rates, geopolitical changes, supply-demand relations and speculation. It often fluctuates. In addition, gold investment does not generate interest returns, but investors have to bear warehouse, transportation and insurance costs. Looking back at its performance over the past 30 years, the risk-return balance of gold is not very good. Gold can help counter inflation, but quite a few other assets can too. Finally, increasing the gold reserve will not help much in diversifying China's foreign exchange reserves. In the past few years, we increased the gold reserve by more than 400 tonnes. Our country's gold reserve has already reached 1,054 tonnes. Even if we double the amount, it can only diversify between $30 billion to $40 billion of the foreign exchange reserves, and the proportion of gold reserve in our foreign exchange reserve will only increase by one or two percentage points. In conclusion, we will take careful consideration of our demand and the market situation when reducing or increasing our gold reserves. * * * Join GATA here: New Orleans Investment Conference Wednesday-Saturday, October 27-30, 2010 Hilton New Orleans Riverside Hotel http://www.neworleansconference.com/index.html * * * 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 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

China says it won't dump treasuries or pile into gold Posted: 07 Jul 2010 09:38 AM PDT Now why would anyone ever suspect such an option? * * * China Won't Dump Treasuries or Pile into Gold By Zhou Xin and Alan Wheatley Reuters Wednesday, July 7, 2010 http://www.reuters.com/article/idUSTOE66604R20100707 BEIJING -- China on Wednesday ruled out the "nuclear" option of dumping its vast holdings of U.S. Treasury securities but called on Washington to be a responsible guardian of the dollar. In the third in a series of statements explaining its work to the Chinese public, the State Administration of Foreign Exchange sought to allay concerns in the outside world that arise whenever Beijing shifts its holdings of U.S. government debt. "Any increase or decrease in our holdings of U.S. Treasuries is a normal investment operation," SAFE, the arm of the central bank that manages China's official currency reserves, said. ... Dispatch continues below ... ADVERTISEMENT Sona Resources Expects Positive Cash Flow from Blackdome, Plans Aggressive Exploration of Elizabeth Gold Property On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia. Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013." For complete information on Sona Resources Corp. please visit: www.SonaResources.com A Canadian gold opportunity ready for growth It said it constantly adjusts its portfolio to maximimise returns, and any changes to its U.S. Treasury portfolio should be seen in that light and not interpreted politically. In a series of questions and answers posted on its website, www.safe.gov.cn, SAFE asked rhetorically whether China would use its $2.45 trillion stockpile of reserves, the world's largest, as a "nuclear weapon". SAFE said such concerns were completely unwarranted. "The U.S. Treasury market is the world's largest government bond market, and U.S Treasury bonds deliver fair good security, liquidity and market depth with low transaction costs. "The U.S. Treasury market is a very important market for China," the agency said. China held $900.2 billion in U.S. Treasuries at the end of April, according to U.S. Treasury data released on June 15. Bankers say China's total holdings of dollar-denominated assets are much greater, accounting for perhaps two-thirds of its reserves. SAFE also gave a qualified vote of confidence to the dollar. The agency acknowledged that financial markets were very concerned at one point that massive U.S. government borrowing would drive the U.S. currency lower. But it said economic conditions elsewhere were also a factor in determining the dollar's trend. The euro zone, for instance, was struggling with high government debt levels. "We must recognise that any depreciation of the dollar is relative to other countries, and other countries or regions also have this or that problem," SAFE said. One of the prime concerns of Chinese Internet commentators is that a long-term decline in the dollar or euro will erode the value of SAFE's portfolio. To that end, SAFE called on the United States and other major countries to take "responsible measures" to maintain the value of their currencies. This meant withdrawing monetary stimulus in a reasonable manner and relying less on deficit spending. SAFE was lukewarm about gold as an investment. "It cannot become a main channel for investing our foreign exchange reserves," the agency said, noting the size of the gold market was limited and prices were volatile. Buying more gold would also not help much in diversifying China's reserves. China has increased its gold holdings by more than 400 tonnes in the past few years to 1,054 tonnes. Even if it doubled that amount gold's share of SAFE's portfolio would increase by only one or two percentage points. SAFE is an easy target for domestic critics who question why China has amassed a mountain of reserves instead of investing more at home. The elucidations on its website appear primarily aimed at disarming those critics. "SAFE will never be a speculator. It mainly seeks to protect the safety of China's FX reserves and ensure a stable investment return," it said. The agency said it was a financial investor and did not seek management control when it made equity investments. Answering its own question on whether it has bought into stocks, private equity funds or any other higher-risk instruments, SAFE said its never excludes any investment. "It depends on whether a product meets SAFE's demand for safety, liquidity and a stable yield for its FX reserves, and whether it can help SAFE diversify risks," the agency said. * * * China Spells Out Gold Reserve Policy From Reuters Wednesday, July 7, 2010 http://www.reuters.com/article/idAFTOE66606Z20100707?rpc=44 BEIJING -- Following is a translation of a statement on gold reserves by China's State Administration of Foreign Exchange on Wednesday. Q: Is China planning to further increase its gold reserves? When? A: Gold is globally recognised, is a store of value and can be used for urgent payment. However, there are some limits to investing in gold and it cannot become a main channel for investing our foreign exchange reserves. First, the size of the gold market is limited. Annual global gold output is about 2,400 tonnes and there is a basic balance between its supply and demand now. If we buy a large amount of gold, it will surely push up the global gold price. China's gold price basically matches the global level, so when Chinese people go to buy gold jewellery in shopping centres, they face surging prices. That will eventually hurt the interest of Chinese consumers. Second, the gold price is very volatile. The global gold price is much affected by currency rates, geopolitical changes, supply-demand relations and speculation. It often fluctuates. In addition, gold investment does not generate interest returns, but investors have to bear warehouse, transportation and insurance costs. Looking back at its performance over the past 30 years, the risk-return balance of gold is not very good. Gold can help counter inflation, but quite a few other assets can too. Finally, increasing the gold reserve will not help much in diversifying China's foreign exchange reserves. In the past few years, we increased the gold reserve by more than 400 tonnes. Our country's gold reserve has already reached 1,054 tonnes. Even if we double the amount, it can only diversify between $30 billion to $40 billion of the foreign exchange reserves, and the proportion of gold reserve in our foreign exchange reserve will only increase by one or two percentage points. In conclusion, we will take careful consideration of our demand and the market situation when reducing or increasing our gold reserves. * * * Join GATA here: New Orleans Investment Conference Wednesday-Saturday, October 27-30, 2010 Hilton New Orleans Riverside Hotel http://www.neworleansconference.com/index.html * * * 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 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

Greek Lessons for the United States Posted: 07 Jul 2010 09:35 AM PDT Axel Merk submits: By William Poole, Senior Economic Adviser, Merk Investments The Greek sovereign debt crisis has grabbed global headlines over recent weeks, and has prompted the market to scrutinize other European sovereign debt situations more closely, especially those of Portugal, Spain, Ireland and Italy. Hungarian debt, too, has been a focus of attention. In such an environment, the U.S. debt markets have benefited, as has the U.S. dollar, as investors fled the perceived higher risk European sovereign nations for the perceived safety of the U.S. But does this dynamic reflect the underlying safety of the U.S.? Commentators have noted that the U.S. has a fiscal situation that could become critical in a few years. The Greek situation may not be so much different from what lies ahead for the U.S. if nothing is done to rectify the fiscal train wreck we appear to be heading on. Complete Story »

Making Sense of China's Future Posted: 07 Jul 2010 09:33 AM PDT David Sterman submits: Sometimes, investors just need an excuse to sell. If they feel like worrying, there are always an ample amount of things to worry about. A few months ago, Greece was the concern du jour. Even though it's a tiny economy, and has almost zero trade with the U.S. outside of tourism and feta cheese, it still became the catalyst for billions in lost market value. Now, the world's fastest-growing (and likely eventually largest) economy, China, is spooking the market down to further lows. The S&P 500 hovers perilously above 1,000, right where it sat 10 months ago. The concern: An overheated Chinese economy is set to slow -- sharply. But it's hard to see how China can come in for a hard landing with so many positive drivers still in place. Complete Story »

This is the terrible future of U.S. healthcare Posted: 07 Jul 2010 09:24 AM PDT By Daily Crux Editor Tom Washington: When the healthcare bill was passed earlier this year, the White House said it was "essentially identical" to the Massachusetts universal coverage plan. Let's hope they're wrong. As you'll read, the Massachusetts plan - long held up as an example of success - is becoming an utter disaster. Littered with phrases like "price controls," "runaway spending," and "train wreck," the article describes what happens when healthcare becomes a political decision. Read full article... More government stupidity: This could be the greatest tragedy of the 21st century Solid insight on the General McChrystal/Obama scandal CRAZY video shows the biggest lie Nancy Pelosi ever told

Long White Candlesticks On Ever Declining Volume, Or Melt-Ups On Ten Shares Or Less Coming To A Busted Stock Market Near You Posted: 07 Jul 2010 09:20 AM PDT As the chart below indicates, the past two months have seen some dramatic moves in the market, beginning obviously with May 6, and continuing through today. As the highlighted long white candlesticks demonstrate, which are basically the 4 huge meltup days in the last 45 days, the volume associated with said melt ups has been occurring on increasingly lower volume. Of course, this is not surprising, and is occurring as a consequence of two trends i) ever fewer stocks determining the general direction of the market as pointed out yesterday, ii) implied correlation and stock dispersion at all time records or the "no alpha all beta" trade and, iii) generally declining volume with the bulk of it driven by HFT-dominated positive gamma ETFs such as top market volume SPY. As for those interested the actual numbers, the volume associated with the candlesticks left to right was 500.9 million, 395.5 million, 240 million and 248 million today. At this rate the next 300 move in the administration favorite Dow, or the next 40 moves in the ES will be on half the last melt up, then half of that, etc. Of course, all this means that very few if any retail investors benefited from today's move which, as always, was purely beta, and thus leverage, driven. h/t credittrader

Avoid Banks Stocks Posted: 07 Jul 2010 09:00 AM PDT Credit risk always seems to come out of nowhere. But usually it comes out of somewhere…like the dirty, little recesses of a bank's balance sheet – the places where bankers hide all their unrecognized losses. Ever since the suspension of rigorous mark-to-market accounting rules one year ago, banks have gained the ability to "time" their credit losses. This development does not feel like progress. Banks now possess the ability to defer embedded credit losses for a very long time, in the hopes that a "typical" postwar rebound in house prices and employment comes to fruition. But that's not happening. In fact, housing and employment conditions are worsening. As a result, the US banking sector has been piling up an enormous stash of unrecognized credit losses. Banks may be able to play their games of "make-believe" for a while longer, but they cannot get away with completely ignoring their losses, especially when the evidence is overwhelming that these losses are real and irreversible. Going forward, increased foreclosure activity and mortgage losses will become a growing problem for bank stocks. We could soon see a reacceleration of credit provisioning in the banking sector, which might weigh heavily on bank stocks. Mark Hanson of M. Hanson Advisors does great work on the details behind the headline foreclosure and housing price statistics – the kind of granular research that's scarce on Wall Street. Hanson estimates, using data from the Mortgage Bankers Association, that there are 8 million mortgage loans in the "distressed" category, with and estimated 6.4 million headed for liquidation (foreclosure, short sale, or deed-in-lieu). April saw a record 92,500 foreclosures. At that pace, it would take the market over 8 years to work through the estimated foreclosure backlog. This is much too long if the US housing market is going to return to anything resembling a free market over the next decade. So instead of a continuation of slow foreclosure processing, Hanson believes foreclosure activity will accelerate. In a recent missive, Hanson writes: When factoring in April's 92.5k record Foreclosures (not including short sales), the distressed pool shrank by only 63.1k units… At this pace, it will take 101 months to clear the pool of 6.4 million loans headed for liquidation. At a pace of 180k Foreclosures per month, twice April's record high, it will take 42 months to clear the existing distressed inventory. On the bright side, based upon the default and Foreclosure pipe action, which I track in real-time daily in aggregate and on an originator and servicer-specific basis, it seems that over the past few months the banks have regained a mind of their own. Unlike action I tracked as early as January 10 when all the big servicer's [notice of default] through foreclosure charts looked the same, most have diverged. In fact, two of the nation's top four servicers…have opened the flood gates beginning in March. And the GSEs, who led the Foreclosure charge higher beginning in Feb, are in property liquidation mode, which could force all the big GSE servicers to quickly follow suit on their own portfolios – none expected the GSEs to blink first and do not want to get left in the liquidation dust. Perhaps this is the first sign in almost two years of an efficient default and Foreclosure process poking its head out. Time will tell. I've read Hanson's updates for years. You won't find a more thorough, independent (conflict-free) analysis of the foreclosure statistics. It's fairly obvious that the backlog of foreclosures has built up like water behind a dam. The feds are trying to control the amount of water flowing through the dam. But it remains to be seen if they can keep controlling it to the degree that they have. Once the dam gives way, the market may be shocked at how quickly the headline foreclosure numbers accelerate. A saying you often hear in the banking business is: "the first loss is the best loss." (The same saying will eventually apply when banks as a group rush resolve their zombie commercial real estate mortgages). Hanson highlights that Fannie Mae and Freddie Mac have recently accelerated their foreclosure activity. So the big banks, which service most of the GSE mortgages, can't be far behind. If banks become convinced that housing prices will take another dip, they'll look to liquidate their housing inventory ASAP. The likelihood of this development argues for continuation of the "deflation," or risk-averse, trade – basically, short stocks, long Treasuries. Dan Amoss for The Daily Reckoning Avoid Banks Stocks 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."

Don't Forget about Aerospace and Defense Posted: 07 Jul 2010 08:55 AM PDT Scott Sacknoff (SPADE Investor) submits: More than 60% of companies have a price-to-sales ratio under 1.0. More than 60% have a price-to-equity ratio well under 14 and many under 10. Even in the worst recession in decades, the sector contributes a positive trade balance and produces billions in net exports. The sector has declined from its April 2010 peak by 18.06% and is 33.48% from its all-time close (tracking the market's decline) --but this after a gain of 166.81% over the past decade If you had invested $10,000 in 2000 in the A&D sector you’d still have $17,749 today vs. just $7,011 if you invested in a fund tracking the S&P 500 (ex dividends). Customers around the globe continue to need and desire its product. Considering the sector generates roughly 5% of U.S. GDP, investors are significantly underweight If we weren’t talking about aerospace and defense and this was any other sector, CNBC’s analysts on Fast Money would be hyping the sector and Jim Cramer would be pushing the companies day after day. The reality, though, is that the sector continues to be largely ignored by the financial press. When it is mentioned, the focus has been on the cost savings efforts by the Pentagon and potential budget cuts. However as most analysts will tell you, the impact of these is an unknown and the impact on any individual companies is even more unknown. It is why companies have spent the past several years planning for what is to come -- building cash reserves, making acquisitions, cutting internal costs, reorganizing operations, promoting foreign sales, and targeting adjacent markets -- all designed to make them healthier and positioned to grow regardless of any changes to the Pentagon’s plans. In spite of this environment and the global economic troubles, companies operating in the sector have thrived compared to the troubles faced by firms in other sectors. As Antonie Boessenkool said in the June 28, 2010 Defense News: “For years defense contractors girded for military spending cuts that largely failed to materialize.” For the most part, companies in the sector continue to report robust revenues with stable profit margins, have paid their dividends without interruptions; and generally equalling or bettering the performance of the broader stock market for more than a decade. If you had invested $10,000 at the turn of the century in the defense sector you’d still have $17,749 today vs. just $7,011 if you invested in a fund tracking the S&P 500 (ex dividends). After a cycle which saw the benchmark SPADE Defense Index (licensed for the Powershares Aerospace & Defense ETF - [[PPA]]) beat the S&P500 by more than 10% in 6 of 8 years, growth has slowed, but investors still remain significantly underweight in a sector that represents an estimated 5% of U.S. GDP. It is a sector whose “product” continues to see growth internationally -- both from commercial and government customers. One of the hardest things to do as an investor, and I speak from personal experience, is separate the facts from the market reaction. Positive developments sometimes are met with market dips against all rational wisdom. In the short-term, sometimes the chart-action is more important than the underlying fundamentals. For investors, at the end of the day, it's performance that should matter and the noise (blogs, speculations, opinions) should be just noise and work itself out over time. Even after five years of what will happen “after we pull out of Iraq; when budgets get cut; when (fill in the blank with your own worries)”, the Aerospace & Defense sector has held-up remarkably well to the negative speculation. As the media focuses on the latest restructuring plans and potential cuts, the impact of which remains unknown but not necessarily a negative, here are some things to consider. Turmoil around the globe continues to present an obstacle to world stability and presents opportunities for investors. Global defense spending continues to rise (as do U.S. exports) reaching $1.53 Trillion in 2009, up 6% in real terms and 49% higher than 2000, as 14 of the 15 largest buyers increasing spending in 2009 according to SIPRI. Overall, there were 17 major armed conflicts including Columbia, the Congo, Philippines, and Somalia. As the report indicated: “While some greater stability came to Iraq, conditions worsened in Afghanistan and violence in Pakistan’s Swat Valley region escalated.” Increased M&A activity continued with the Boeing (BA) acquisition of SPADE Defense Index constituent Argon ST (STST) on June 30th for approximately $775 million in cash. Boeing’s offer of $34.50 was a 41% premium to the previous closing price. The deal is expected to close in the third quarter and Argon will operate as a standalone subsidiary. In addition, investors in index constituent DynCorp (DCP) approved its acquisition by Cerberus Capital Management, a private equity firm, for $1.5 billion including debt. Closing is expected July 7th. A private equity investment is usually a sign that the firm and/or a sector is undervalued. Acquisition reform by the Pentagon is being undertaken to save an estimated $100 billion over the next several years -- money the agency wants to appropriate toward investments in equipment and services INCREASING the total market available for organizations to bid on. Additional efforts by the Pentagon may eliminate programs and contracts to reduce the procurement waste that currently exists. A separate proposal for 10% declines in defense-related spending is likely to be fought furiously by Congressional members who for the most part support the sector, the jobs it brings to their states, and forget soccer moms, retired military is the largest voting demographic in the U.S. Aerospace Expansion -- The Boeing 787 will make an appearance at the Farnborough Air Show and is on schedule for its first deliveries by year-end. Aerospace firms including Moog, Precision Castparts, and Honeywell among them will be ramping up to meet production quotas by year-end. Meanwhile, Boeing has also increased production of the 737, a second time since May to meet demand; its 747-8 freighter has been approved for test flights by the FAA; and its 747-8 Intercontinental, a new version of the jumbo jet began assembly of its fuselage, with Air China buying 20 of the planes for $1.4 billion. The World Trade Organization rules that European governments were providing improper subsidies to Airbus, Boeing’s main competitor, in the form of government loans and below market interest rates. (Are any of us surprised that government’s intervene in this manner or that it got caught?) Anyway, although it is likely the EU will appeal this decision, it could provide the means to sway the Pentagon toward giving the $35B - $40B contract for refueling tankers to Boeing after a multi-year battle. (to be decided in November). As European nations focus on resolving budget issues, declines in defense spending are likely to increased purchases from their U.S. allies instead of pursuing expensive development efforts. Cybersecurity - The Chicago Tribune reported that the Pentagon faces as many as 250,000 efforts per hour to attack its systems... any wonder why this is such a hot topic at DoD? The Farborough Air Show - Late in July, a number of press releases will hit the wires detailing contracts and agreements signed by companies at this major, bi-annual global event. Valuations - Powershares Aerospace & Defense ETF (PPA) holdings P/S: 35 companies less than 1.0 with 13 less than 0.5 P/E: 33 companies less than 13 P/B: 7 companies less than 1.0 and an additional 33 less than 2.0 PEG: 18 companies less than 1.0 with 38 less than 1.50 Disclosure: No positions. Complete Story »

You are subscribed to email updates from Gold World News Flash To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 20 West Kinzie, Chicago IL USA 60610