Gold World News Flash |
- International Forecaster July 2010 (#5) - Gold, Silver, Economy + More
- Is the Gold Trade “Crowded”?
- Last Bull Standing 2011
- The Fed Will Re-Implement 'Quantative Easing' on a Massive Scale: Marc Faber
- Bear Market Race Week 144: Gold & Silver’s Step Sums
- The Debt Supercycle
- Ending The Comex Gold Charade
- General Silver’s Last Stand
- Trading Week Outlook: July 19 -23, 2010
- The Next Leg Of Eurocrisis 2010? The Hungary Wolfpack Cometh As IMF, EU Cancel $25 Billion Rescue Loan Access
- Is The Yo-Yo Market Forewarning Doom?
- Musings on China and Japan
- Debunking Paul Krugman's Icelandic Miracle
- CBO Crows
- Can the Financial Reform Bill Fix the Economy?
- Trapped by Lies
- Silver Weekly Prices Fall with Friday Thumping
- Bullion Prices & Business Weekend Recap – July 17, 2010
- Rare Coins, Exhibits and Education at Boston ANA World’s Fair of Money
- US Inflation Rises 1.1% Over Year, Inflation Calculator Update
- Rust discovered on Bank of Russia-issued ‘gold’ coins
- On King World News, Butler is bullish for precious metals in short term
- Reuters actually puts gold questions to BIS, which clams up
- Commodities: Oil Flat, Copper Down, Natural Gas Rises Despite Bearish Outlook
- Hinde Capital's Ben Davies On The Gold Market
- Gilead Sciences: Time to Take Another Look
- The Euro Rally Is Toast, Next Stop $1.18 - Morgan Stanley
- Phibro Takes On Willy Wonka: Chocolitango In The Futures Market Reeks Of A Physical Squeeze Attempt
- True Lack of Deleveraging in the Housing Market
- Has the Gulf Spill Opened Pandora’s Box for Obama?
- ShadowStats: CPI-Alt Running 4.3%, Gold $2,382, Silver $139
- Britain: Police Could Lose 40% of Police Force Due To Budget Cuts
- A Pocketbook Of Gold
- Endeavour set to become a gold producer
- Debt Overhang Hinders Recovery
- Rust discovered on Bank of Russia-issued 'gold' coins
- Friday Bond Market Recap
| International Forecaster July 2010 (#5) - Gold, Silver, Economy + More Posted: 18 Jul 2010 05:20 AM PDT The crisis affecting Europe is nothing new. It goes back three years and the beginning of the credit crisis, 60% of the subprime CDOs, collateralized debt obligations, had been sold to European institutions. These were the mortgage bonds, which contained a variety of toxic waste, which the rating agencies, S&P, Moody's and Fitch, in collusion with banks and brokerage houses, had sold as AAA bonds, when in fact their ratings should have been considerably lower.
|
| Posted: 18 Jul 2010 05:00 AM PDT It's true that GLD's assets just passed the $50 billion mark, and that it's the second largest U.S. ETF. Yes, mints had difficulty filling orders when the Greek crisis broke. And yes, the gold price is up nine years in a row.
|
| Posted: 18 Jul 2010 02:00 AM PDT One of the most important contributions made in the science of market analysis is the series of equity market rhythms known as the Kress Cycles. The one who discovered these cycles, Samuel J. "Bud" Kress, has done for cycle theory what virtually no one else been able to accomplish, namely discovering a series of inter-related "hard" cycles that are all harmonically related and which provide an accurate context from which to view the past, present and future financial and economic climate.
|
| The Fed Will Re-Implement 'Quantative Easing' on a Massive Scale: Marc Faber Posted: 17 Jul 2010 06:43 PM PDT Please note this link was not working properly in this morning's Gold & Silver Daily. Here is the working link. Click here to learn all about this Special Report. Well, dear reader, we've seen graphs similar to this quite a few times over the past three years... the last being on July 1st. After a yawner of a day in the Far East and early trading in London, the U.S. bullion banks pulled their bids at the Comex open... and that, as they say, was that. And, as per usual, the low of the day [$1,185.20 spot] was at the London p.m. gold fix. The gold price recovered about $8... but JPMorgan et al obviously had it on a short leash after its low was in for the day. Volume was pretty heavy. The silver chart looks no different, of course. This is the metal that JPMorgan in particular is after. Silver's low of the day [$17.73 spot] occurred at precisely 10:00 a.m. in New York. Silver closed thirteen cents higher than its low at $17.86 spot. Silver volume...
|
| Bear Market Race Week 144: Gold & Silver’s Step Sums Posted: 17 Jul 2010 06:43 PM PDT The 1929 & 2007 Bear Market Race to The Bottom Week 144 of 149 Gold & Silver’s Step Sums Step Sum Basics Reviewed BEV Plot Basics Reviewed COMEX Vaults now hold 11 Million Ounces of Gold Mark J. Lundeen [EMAIL="mlundeen2@Comcast.net"]mlundeen2@Comcast.net[/EMAIL] 16 July 2010 Color Key to text below Boiler Plate in Blue Grey New Weekly Commentary in Black Below is my BEV chart for the Bear Race. A year ago, most “Experts” (but not me!) were talking about “Green Shoots”, Economic Recovery, and the little Blue Birds of Happiness. Since late April or May of 2009, I’ve been very consistent in what I thought was happening in the Market: Doctor Bernanke was keeping all the Credit Junkies happy, if not healthy, with his “Liquidity Injections.” Main-lining Cheap Credit is no road to Economic Prosperity, but it does explain all the sightings of Green Shoots and Happy Blue Birds. Since late April, it l...
|
| Posted: 17 Jul 2010 06:43 PM PDT The Debt Supercycle Somewhere Over the Rainbow The Path to Profligacy Things That Cannot Be Vancouver, Maine, and Europe I have been writing about The End Game for some time now. And writing a book of the same title. Consequently, I have been thinking a lot about how the credit crisis evolved into the sovereign debt crisis, and how it all ends. Today we explore a few musings I have had of late, while we look at some very interesting research. What will a world look like as a variety of nations have to deal with the end of their Debt Supercycle. We'll jump right in with no "but first's" this week. Part of this week's writing is colored by my next conference. Next week I go to Vancouver to speak at the Agora Investment Symposium. I have a number of very good friends who will be there, both speaking and attending. This is generally a "hard money," gold-bug-type crowd (and a very large conference). Some (but not all) of the speakers believe that all f...
|
| Posted: 17 Jul 2010 06:42 PM PDT View the original post at jsmineset.com... July 16, 2010 06:29 PM Jim Sinclair’s Commentary Here are words of absolute wisdom from Trader Dan. Dear CIGAs, The only way to end the charade that takes place at the Comex in the gold pit is to do what I have been saying now endlessly for years – STAND FOR DELIVERY OF THE METAL. Until the longs get it into their heads to take the actual metal out of the warehouses and force the bullion banks to come up with the gold that they are selling in unlimited quantities, the farce will continue. It remains a source of continued astonishment to me that the longs, which have it completely in their power to end the price suppression scheme, refuse to do the ONE THING that can end it all almost overnight. That is the Achilles' heel of the bullion banks and until exploited the Comex bears will sell with impunity. Any entity attempting to do in wheat or cattle for example, what the bullion banks are doing in gold, would end up having their he...
|
| Posted: 17 Jul 2010 06:00 PM PDT Gold only fell 1.52% for the week with most of that coming mid-day on Friday. The late week push didn't really do any technical damage with support still lying just above $1,180.
|
| Trading Week Outlook: July 19 -23, 2010 Posted: 17 Jul 2010 05:00 PM PDT All Things Forex submits: The week ahead will bring important housing data from the world’s largest economy coupled with inflation and economic growth reports from major industrialized nations, but all eyes will be focused on the results from the stress tests of EU banks as uncertainty and speculation about the outcome of the tests would be likely to raise the market’s anxiety levels. Complete Story »
|
| Posted: 17 Jul 2010 02:51 PM PDT
In the most surprising news of the weekend (so far), the IMF and the EU effectively suspended Hungary's access to the remaining funds in a $25 billion rescue loan package created in 2008 to prevent a financial meltdown of the country. The timing of this development is most extraordinary, as only a month ago Hungary served as ground zero for yet another scare that pushed European sovereign bond spreads to new records. The reason given for this dramatic, and very destabilizing action is that the nation must "take tough action to meet targets for cutting its budget deficit." Ostensibly Greece continuing to lie about its own economic deterioration is a necessary and sufficient condition for escalating IMF lauding. Yet, with Europe set to announce results of its Stress Test kabuki next week, the last thing the continent needs is a real liquidity crisis (or the threat thereof) to counteract the smooth talking bureaucrats dead set into hypnotizing the union into "all is well" submission ("and when I snap my fingers, the debt-to-GDP ratio will be back to 10%"). To quote Portfolio.hu: "Brace yourself for Monday, folks!"
Hungary's politicians proves once again they are complete dilletantes when it comes to dealing with entrenched status quoers as the IMF - instead of taking Greece's lead and promising they would not only cut pension to zero, but demand the citizens pay for the privilege for working for the government (a stance, which of course will be repealed in 364 days, but by then, the myth goes, the Keynesian ponzi will be back in full swing), Hungary's new political party apparently had the temerity of telling the IMF it can shove its demands.
One thing is certain: the next Hungarian bond auction will fail, as will the HUF on Monday. Look for a plunge in the currency (and a surge in Hungarian, and by implication Romanian and Bulgarian, CDS) when the market opens Monday.
And for the version straight from the horse's mouth, here is the non-hyperbolized perspective straight from portfolio.hu
Brace yourselves for Monday indeed.
|
| Is The Yo-Yo Market Forewarning Doom? Posted: 17 Jul 2010 02:29 PM PDT
Andy Kessler, a former hedge fund manager, wrote an op-ed article in the WSJ, The Yo-Yo Market and You:
Mr. Kessler isn't the only one who thinks we're in for a long tough slug ahead. David Stevenson of MoneyWeek reports that the US banking recovery is a sham:
And Bob Chapman thinks Debt Overhang Hinders the Recovery:
Now, before you go out an sell your equities to invest in long-term bonds, I think you should take these bearish articles with a shaker of salt. Earlier this week, David Spurr of Displaced EMA, sent me an interesting observation, Quarterly Rail Traffic Correlation to GDP = 88%:
I doubt headline GDP will come in 9.3% higher than Q1 2010, but it wouldn't shock me if the headline number handily beats expectations on the upside. But we still need job growth to make this a sustainable recovery, and the jury is still out on that front. I leave you with a couple of interesting Bloomberg interviews, well worth watching (click on hyperlinks below): Seery Sees S&P 500 Falling to 900s; Cites `No Growth': Video Gais Sees `No Doubt' U.S. States Need More Stimulus Aid: Video And one final interview below with Christopher Whalen, managing director at Institutional Risk Analytics who says: "It's hard to build a bull case for banks when their revenues are shrinking and their expenses are going up." Indeed the bull case for banks can't be made until the economic recovery takes hold. And if deflation and deleveraging continue, banks are cooked. But before you jump on the pessimism bandwagon, watch the upcoming US economic releases, especially the next few non-farm payrolls reports. Growth will decelerate, but in my opinion concerns of a double-dip recession are way overblown.
|
| Posted: 17 Jul 2010 11:53 AM PDT
I have not written articles in a few months, except for the one I wrote for the July issue of Institutional Investor magazine, on Japan (I’ll post a link once the magazine comes out).. I am sure Freud, after spending a few minutes in my subconscious, would provide some disturbing explanations. But as Freud said, sometimes a cigar is just a cigar. I've just been enjoying summer with my family. My nine-year-old son Jonah and I have been playing chess a few hours a day. I never thought I'd enjoy playing chess as much, but I do. In fact, over the past year I’ve probably played more chess than in my whole life. I win every game! When I win, I win. When I lose I win – seeing your son (your student) beat gives you an enormous satisfaction as a teacher. In fact, I never thought I'd enjoy losing so much. Jonah has this quality that I need to nurture in him – he never gives up. Even a game that is a clear loser for him, he plays till the end. What a great quality to have in life! I envy my kids; they have the pleasure of spending time with their grandparents. My grandparents lived thousands of miles away from me – I saw them once a year for a few weeks and that was it. My wife's and my own parents live just a few miles from us. My father's house is a block away from my office; I stop by a few times a week for breakfast before I go to work. My father gave Jonah a 50-state quarter collection for his birthday. Now, every day before Jonah goes to sleep, he and his grandfather spend half an hour on Skype learning about each state; and once they are done with a state, Jonah puts the coin at the proper place in the board. They also play a game of chess on Skype chat. I gave a presentation last week at the Value Investment Seminar in Trani, Italy (here is a link to the PDF). I strongly suggest you visit their website in a few weeks, as it will have presentations and videos. It was a terrific event; I learned a lot. I spoke about China, Japan, and our favorite stock idea: eBay. I changed the title of the China presentation to “China, the Mother of all Grey Swans” (instead of “Black Swans”). A while back, when I shared this presentation with my readers, I was corrected: China is not a black swan, because a black swan is a rare, significant, and unpredictable event. However, the consequences of what is transpiring in China and Japan are for the most part predictable (especially if I am writing about it). We don't know when they will play out, but they are predictable. Nassim Taleb, one of my favorite thinkers, who brought the black Swan to life in his books Fooled by Randomness and The Black Swan (I like both books, but Fooled by Randomness is my favorite, plus, it is by far an easier read than Black Swan), solved my dilemma with China by creating a new swan: "grey"– a rare, significant, but predictable event (though the timing is still unknown, or perfectly known only with the benefit of hindsight.) I spent a few days at the seminar discussing and debating China with some very smart folks, who stirred up some random thoughts. What really amazes me is how people who would not trust the US or European governments to do their laundry, have unconditional faith in Chinese government involvement in its very complex economy. The Chinese government brainwashes its people the same way the Russians and Soviets brainwashed theirs: by controlling and censuring media. So I understand when Chinese people who live in China speak highly of their leaders – they are brainwashed (I have experienced this first-hand). However, I am amazed that the Chinese government has been able to brainwash people who reside outside of China. No, an economy in large part controlled by the state is not superior to ours. Greater control over their economy allows the Chinese government to pull the economy out of recession a lot faster than in the democratic countries, but there is no free lunch. Their actions will just lead to greater excesses and imbalances down the road. It seems that as Westerners we have an inferiority complex when it comes to Asian cultures. Chinese uniqueness is praised today the same way Japanese superiority was in the 1980s. I even remember reading Russian newspapers in Russia, in 1989, praising the Japanese work ethic and their unique culture and spouting predictions of the continuance of Japanese dominance. I can only imagine how the mainstream press in the US was caressing Japanese uniqueness in the late ’80s, especially as the Japanese were invading (buying) Times Square and the State of California. What is very interesting about it is that today all those Japanese cultural advantages are looked upon as disadvantages. For instance, “saving face” did not allow Japan to deal sufficiently with failed companies; their economy was full of semi-dead, zombie companies, which did not allow the healthy ones to prosper. Their employment-for-life system that was praised to the heavens during the Japanese golden age is now killing productivity of the economy. I recently read that 17 million people in Japan are employed who should not be employed (for an economy of 120 million people, these are huge numbers). In other words 17 million Japanese show up for work every day and receive a paycheck, but add little or no value to their employers. Back to China. Even if the Chinese are harder-working and more entrepreneurial than Americans and Europeans, that doesn't mean the laws of economics are somehow suspended in China – they are not. The Chinese economy was geared for high global growth, while now much lower growth is in the cards. The excesses created by 14% of GDP being “stimulated” into the economy through a fire hose have led to significant overcapacity. It will take time for these excesses to be dealt with, even in a country full of super-hard-working people. A friend asked, “But what about Singapore; its government plays a significant role in the economy, and Singapore is thriving.” The clear answer: government can only succeed in running very small and relatively simple economies. Let me give you this example. I have a game on my iPad called Flight Controller – my kids love it. The point of the game is simple: you are an air-traffic controller and your job is to land planes. Planes come in three colors, red, yellow, and blue, and each plane has to be landed on the runway matching its color. The objective is not to have mid-air collisions. I can land ten planes no problem, twenty gets more difficult, and forty I cannot handle (Okay, I played the game a few times). The same is true for economies: the more complex the economy the more difficult it is to be centrally planned. Government is not and never will be an efficient allocator of capital. It empowers bureaucrats, which in turn leads to corruption, which further misallocates capital. The size of the bribe or strength of the personal relationship decides the flows of capital instead of the invisible hand that funnels capital from low to high uses. (A side point: Singapore is one of the most uncorrupt countries in the world; this may explain in part the government’s success. China is not Singapore; it is infested with corruption). I often hear that you have to go to China to understand it. But tourists who go to China don't see the real China, the same way that tourists who go to Moscow don't see the real Moscow. I was in Moscow a few years ago, and I was impressed by how clean and beautiful it looked; in fact it didn’t look much different from the center of Brussels. Of course, I was only in the center of the city, where you see fancy restaurants, gift shops, museums, theaters, etc. I went to see my college friend who lives in the real Moscow – I saw a very different picture. The second you veer off the main road, it turns into pothole hell, and the streets are anything but clean. My friend lives in a nine-story apartment building that has not been painted in decades; paint is peeling both inside and outside. Interestingly, most of the sides of the buildings that face large streets in Moscow and in Murmansk (the city where I spent all my Russian life) are usually painted, but the sides that face small streets have not been painted in generations. My friend – a lawyer – and his wife and kid have to live with his mother, as they cannot afford to live on their own. But you won't see this Russia if you are a tourist visiting Moscow. People who visit China even multiple times harbor an illusion that they understand it – they don’t. In fact they so overwhelmed by its grandness that they stop being rational in their analysis. I keep thinking about the possible consequences of the Chinese overcapacity bubble pop. It is relatively easy to understand what will happen in Japan: deflation will quickly turn into hyperinflation as government is forced to print money to service its debt and social obligations. They'll announce and may even execute austerity measures, but those will be a decade or two too late. The Japanese yen will likely decline, though maybe not right away, as Japan owns a lot of US dollars and may be forced to sell them. The Chinese situation is far more complex. China has tremendous overcapacity, but overcapacity is deflationary. It will drive prices for commodities down, and prices of Chinese-made goods will likely decline as well. Demand for industrial goods will collapse, pushing their prices down. But China will also have to deal with a lot of bad debt and will likely have to print money to do so – which is inflationary. The popping of both the Chinese and Japanese bubble economies will lead to higher US, and likely global, interest rates. Japan, as the title of my presentation suggests, is past the point of no return. Internal consumption of its debt will likely turn negative very soon. Its post office, which includes a postal savings system that was historically one of the largest buyers of government debt) announced recently that it will be a net seller this year. The situation is out of the Japanese government’s hands. It will probably not be able to intervene in the economy for much longer, so rates will rise and there will be little they will be able to do about it. China is different from Japan. Its government is trying to slow down lending, but at the same time we have started seeing news of possibly another multi-hundred-billion-dollar stimulus over the next few months. The Chinese government’s actions are the wild card that will determine the duration and the magnitude of the bubble pop – the longer they intervene, the more dire the consequences will be. Vitaliy N. Katsenelson, CFA, is a portfolio manager/director of research at Investment Management Associates in Denver, Colo. He is the author of "Active Value Investing: Making Money in Range-Bound Markets" (Wiley 2007). To receive Vitaliy's future articles my email, click here.
|
| Debunking Paul Krugman's Icelandic Miracle Posted: 17 Jul 2010 09:49 AM PDT
By Dian L. Chu, Economic Forecasts & Opinions
To back it up, Krugman provided a chart (below) comparing the GDP of Iceland to Ireland, Latvia, and Estonia since the 4th quarter of 2007. The chart does seem to support his view, as it illustrates Iceland appears to be enjoying much higher growth rate than the other three European Union (EU) members.  Based on this, Krugman then concluded: While this NYT article probably has recruited a few newbie Keysians, it is totally screaming for a rebuff….considering Iceland pretty much went belly up in 2008 with the collapse of its three largest banks, and has been in crisis mode ever since. As expected, here is a rebuff by Council on Foreign Relations (CFR). CFR finds that Krugman's "Icelandic Miracle" is "an illusion" created by simply choosing a starting date to make it fit into his "debt is good" mantra. CFR generated the same GDP chart, but shifted the starting period by one quarter--from Q4 2007 to Q3 2007--the quarter before Latvia and Estonia’s GDP peak. The result - Iceland’s GDP picture looks a lot less impressive.  Here is another chart by CFR moving the starting date back to the beginning of 2000, which totally crushes the "miracle" story of Iceland.  Part of Iceland’s economic progress may be attributed to a massive currency devaluation and "technical defaults", which seems to be what Krugman is intimating as the “solution” to “a really, really bad crisis.” However, in Iceland’s case, the devaluation and refusal to pay has not resolved its fiscal mess. Now, the island could face a second round of bank failures. The government, already on $4.6 billion life support from the IMF, recently warned that a second bank bailout would be a “severe blow” to its finances. Iceland did secure a $500 million currency swap deal from China in June. However, rather than a vote of confidence for Iceland’s economic recovery, this handout most likely serves as a strategic interest of Beijing amid the ongoing international squabble over the Arctic oil. So, the moral of the story is that anyone —a nation, a state or even an individual—who does not make an effort to get spending and financials in order will face a vicious cycle -- rising borrowing costs, more debt and deficit, and worse credit risk. (Iceland currently ranks ninth in sovereign risk by CMA.) Eventually, beggars can't really be choosers when it comes to lender of last resort. Moreover, currency devaluation and debt default will not absolve all spending sins. Greece vowed not to be the next Iceland, other nations should take notes--including the United States. Economic Forecasts & Opinions
|
| Posted: 17 Jul 2010 09:16 AM PDT
The CBO published a new report (pdf) that gives itself a pat on the back. The analysis looks at the success rate of CBO economist's forecasting of key economic metrics over a long period of time. If you can wade through this beast you will see that the CBO thinks pretty highly of itself. One example: 
|
| Can the Financial Reform Bill Fix the Economy? Posted: 17 Jul 2010 08:56 AM PDT
Preface: If you've been too busy to pay attention to the details, and if you're hoping that the financial reform bill which has just been passed will fix the economy, this essay will bring you up to date. Congress, Federal Reserve chairman Ben Bernanke, Treasury Secretary Timothy Geithner and the rest of the folks who run the economy are patting themselves on the back for passing the financial "reform" legislation. Obama says it was "my policies that got us out of this mess." The new bill is widely described as the biggest change in how the economy is regulated since the Great Depression. Is it true? Unfortunately, as discussed below, none of our real economics problems have been addressed. Consumer confidence is plunging again, and yet little in the legislation really restores trust in the system. The poker game started breaking down because the wealthiest took all of the chips, and most people have no money to play with ... but the bill does nothing to address the ever-widening gap in wealth. The bill does little to restore the rule of law, which - as PhD economist James Galbraith notes - is a necessary ingredient in economic recovery. Unemployment continues to plague the economy, because - even with the new bill- the government is feeding the parasite and killing the patient. Main street continues to bleed because - instead of breaking up the too big to fails so that their dead weight stops suffocating the real economy (virtually all leading independent economists have said that the too big to fails must be broken up, or the economy won't be able to recover, and see this) - the government has allowed them to get even bigger (and see this and this). Indeed, just as BIS warned years ago, bailing out the banks has simply spread their problems into sovereign crises ... and now the banks and governments are broke, and the global strategy of printing obscene quantities of money ("quantitative easing") is debasing currencies worldwide. "Deficit hawks" like top economic historian Niall Ferguson says that America's debt will drive it into a debt crisis, and that any more quantitative easing will lead our creditors to pull the plug. See this, this and this. Indeed, PhD economist Michael Hudson says (starting around 4:00 into video):
Yet the U.S. hasn't reined in its profligate spending. While modern economic theory shows that debts do matter (and see this), the U.S. is spending on guns and butter. On the other hand, "deficit doves" - i.e. Keynesians like Paul Krugman - say that unless we spend much more on stimulus, we'll slide into a depression. And yet the government isn't spending money on the types of stimulus that will have the most bang for the buck: like giving money to the states, extending unemployment benefits or buying more food stamps - let alone rebuilding America's manufacturing base. See this, this and this. Nobel prize winning economist George Akerlof predicted in 1993 that credit default swaps would lead to a major crash, and that future crashes were guaranteed unless the government stopped letting big financial players loot by placing bets they could never pay off when things started to go wrong, and by continuing to bail out the gamblers. (Not only has the government rewarded the gamblers, bailed them out and let them engage in a new round of risky betting, but it hasn't even meaningfully reined in credit default swaps .) Paul Volcker is warning that the watered-down Volcker rule (which won't even kick in for some time) won't prevent the next crisis. Similarly, one of the primary authors of the legislation - Chris Dodd - long ago said the bill wouldn't prevent future crises. Shady accounting is part of what got us into this mess ... but as Citigroup Inc. analyst Keith Horowitz notes, banks are making huge amounts of money from an accounting rule that allows banks to book profits when the value of their own bonds falls. High frequency trading is wrecking the markets ... but isn't addressed in the new legislation. Neither is reforming money pits like Fannie and Freddie The Fed is now warning that it could be 5 to 6 years before the economy recovers, and that there is a "significant downside risks" and a possible slide into deflation. That's not a big surprise ... Ben Bernanke doesn't understand that liquidity was never the problem, and he has continued the same behavior which got us into this mess in the first place. Bernanke and the Fed have caused widespread destruction to the economy (see this, this, this and this). And yet the financial reform bill gives the Fed has more - instead of less - power. Timothy Geithner was largely responsible for the crash and prolonging the crisis (see this, this, this, this, this, this, this, this, this and this) ... and yet Geithner is being given more - instead of less - power by the new legislation. No wonder the American and world economies are falling back into the double dip of a very nasty downturn. And see this.
|
| Posted: 17 Jul 2010 08:27 AM PDT By Jeff Nielson, Bullion Bulls Canada I have received several comments and pieces of personal mail criticizing me for the use of "strong language", most specifically the three words "lie", "lying", and "liars". I am completely unrepentant. I find using this very specific and informative concept serves three, important analytical and/or linguistic purposes.
To begin with, it is an obvious theme of my writing to attempt to "shock the sheep" out of their apathy. You don't accomplish this buy using "nice" words and subtle language. Next, there are clear behavioral patterns associated with habitual lying (and habitual liars). Recognizing such patterns is a valuable analytical tool. Lastly, a concept which we can all understand is that there are consequences to lies. In the real world, while we can sometimes get away with "small" lies, and "white lies", the big ones almost always come back to haunt us.
We have already seen this principle demonstrated in the "European debt crisis", where coordinated "attacks" on European debt markets were orchestrated through more than six months of around-the-clock, U.S. propaganda – accompanied by Wall Street's economic terrorists "blowing up" the CDS ("credit default swaps") markets of these economies, one by one.
An incidental consequence of this economic terrorism is that it tore down the veils on thinly-disguised accounting fraud for several European nations. What was revealed is that for a few of Europe's worst debt-offenders it may already be too late to re-establish solvency – unless and until bond-holders are willing to take a "hit" based upon recklessly extending excessive amounts of credit to debt-addicted governments. Attempting to resolve this situation through only punishing the "user" (through austerity programs), while not penalizing the "pusher" (through waiving/forgiving interest on debt) is virtually guaranteed to push the weakest of these governments into deflationary death-spirals.
While this very serious "drama" plays out in Europe, across the ocean, the greatest debt-liar in a world of debt-liars has not only avoided the consequences (until now) of many decades of past lies, but it has ratcheted-up the magnitude of those lies, exponentially, and then added a plethora of new fabrications. It is truly difficult to know where to begin.
In general terms, regular readers are familiar with my constant attacks at U.S. "economic statistics", which have been perverted by ever-increasing distortions to the point where most are simply uncorrelated to the real world, in any way. For new readers, I will simply say that the respected U.S. economist, John Williams devotes an entire web-site to simply calculating U.S. economic statistics using the same methodology which existed decades earlier, before such statistical exaggerations had begun. The fact that this site continues to gain both stature and popularity should say much to readers.
On top of those "old" lies, the U.S. government has run amok – giving a whole, new meaning to the term "compulsive liar". Here we must begin with Federal Reserve Chairman, Ben Bernanke, whose ridiculous market-pumping has dwarfed the sins of his predecessor, "Easy Al" Greenspan, and his infamous "Greenspan put". More articles from Bullion Bulls Canada….
|
| Silver Weekly Prices Fall with Friday Thumping Posted: 17 Jul 2010 08:26 AM PDT U.S. silver prices were headed for a positive week until tumbling 57.4 cents Friday, tracking other precious metals, commodities and equities losses after sour consumer sentiment data and a flat inflation report unleashed broad selloffs.
|
| Bullion Prices & Business Weekend Recap – July 17, 2010 Posted: 17 Jul 2010 08:26 AM PDT
Other precious metals futures followed gold lower, erasing prior weekly gains. Silver fell 1.6 percent for the week while platinum dipped 1.4 percent and palladium slid 1.8 percent. Sour consumer sentiment, coupled with weaker than expected corporate earnings reports, was also cited for Friday's 61 cent drop in crude oil and sharp declines in U.S. stocks. Earlier gains in the week pared their losses, however. In European stocks, the London FTSE 100 actually managed a 0.5 percent increase for the week — the only major index to register a gain. (…) © CoinNews.net for Coin News, 2010. |
|
| Rare Coins, Exhibits and Education at Boston ANA World’s Fair of Money Posted: 17 Jul 2010 08:26 AM PDT
Held Aug. 10-14 at the Hynes Convention Center, the show features a spectacular Museum Showcase, the famous Ship of Gold display, more than 1,100 dealers and vendors, 18 mints from around the world, and educational programs for experts, casual collectors and numismatic newcomers. (…) © American Numismatic Association for Coin News, 2010. |
|
| US Inflation Rises 1.1% Over Year, Inflation Calculator Update Posted: 17 Jul 2010 08:26 AM PDT
The Consumer Price Index, the most closely watched indicator of inflation, retreated 0.1 percent in June after a 0.2 percent dip in May, the Labor Department said. The monthly decline was led by plummeting energy costs, and assisted by flat food prices.
Over the past year, US inflation rose 1.1 percent following an increase of 2.0 percent in the 12 months ending in May. (…) © CoinNews.net for Coin News, 2010. |
|
| Rust discovered on Bank of Russia-issued ‘gold’ coins Posted: 17 Jul 2010 08:25 AM PDT 11:50p ET Friday, July 16, 2010 Dear Friend of GATA and Gold: Zero Hedge reports tonight about Bank of Russia-issued gold coins that have been found rusting, which gold doesn't do. Zero Hedge concludes: "The Central Bank of Russia has been one of the biggest purchasers of gold in 2010, having bought gold every single month. It would be embarrassing if it were discovered that not only is the bank diluting the gold content with oxidizable materials, but subsequently passing it off for .999-proof precious metal. And if this is happening in Russia, one wonder what trickery other central banks, with a far lower amount of gold in their vaults, resort to." Now that it seems to be in a journalistic mode again, maybe Reuters should ask the Bank for International Settlements if its recent gold swaps have anything to do with those Bank of Russia coins. Another refusal to comment from the BIS would be especially delightful right now. You can find the Zero Hedge report here: http://www.zerohedge.com/article/rust-discovered-bank-russia-issued-999-… CHRIS POWELL, Secretary/Treasurer * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:
|
| On King World News, Butler is bullish for precious metals in short term Posted: 17 Jul 2010 08:25 AM PDT 10:45a ET Saturday, July 17, 2010 Dear Friend of GATA and Gold: Silver market analyst Ted Butler tells Eric King of King World News that he's bullish on the precious metals in the short term now that the technical funds in the futures market have been nearly cleaned out by the big commercial traders. Butler is also encouraged by the financial regulation legislation just passed by Congress, which requires the U.S. Commodity Futures Trading Commission to establish position limits in futures trading in gold and silver. Butler's interview is about nine minutes long and you can find it at King World News here: http://www.kingworldnews.com/kingworldnews/Broadcast_Gold+/Entries/2010/… CHRIS POWELL, Secretary/Treasurer * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:
|
| Reuters actually puts gold questions to BIS, which clams up Posted: 17 Jul 2010 08:25 AM PDT BIS Footnote Unlocks Major Development in Gold Use By Jan Harvey and Veronica Brown http://uk.reuters.com/article/idUKLNE66F03J20100716 LONDON — A small footnote in the Bank of International Settlements' latest annual statement has flagged up a potentially major development in the way the metal can be used as an active financial instrument. But its ultimate impact on the bullion market is dependent on the identity of the counterparty in the swap — a topic still being hotly debated in the gold community in Europe. The BIS noted in Page 163 of its annual report, released in June, that its gold holdings included 346 tonnes of gold "which the bank held in connection with gold swap operations, under which the bank exchanges currencies for physical gold." When analysts picked up on the move, it sparked a flurry of speculation over who the counterparty was, the origin of the gold, the impact on the market and what it said about the extent of bank stress at the height of Europe's sovereign debt crisis. The BIS said the gold in question was used for "pure swap operations with commercial banks" but declined to respond to further questions from Reuters on the transaction. The largest question mark hangs over where commercial banks would have found 346 tonnes of gold — worth around $13.5 billion (8.8 billion pounds) at today's prices — for such an operation. In an interview with Reuters Television this week, GFMS Chairman Philip Klapwijk said commercial banks may have had enough unallocated gold on deposit to make up such a tonnage. But even the largest commercial banks would struggle to trade that amount on an annual basis, and as this would be on behalf of clients, it would be unavailable for swaps. "No commercial bank has ever had 350 tonnes of gold to swap," said Commerzbank analyst Eugen Weinberg. "Even 10 tonnes seems out of range." If the gold were sourced from unallocated gold accounts, that would also raise questions over the viability of the bank effectively pawning its clients' gold to support itself. More likely, analysts say, is that the gold was sourced from the official sector, with a central bank loaning gold to a commercial bank or banks that used it to raise currency. "Just as the bullion banks were the go-betweens between the producer and the bullion market in the days when there was gold hedging being done, in the same way the producer may have now been replaced by the central bank, and the investment bank may be the conduit," said Credit Agricole analyst Robin Bhar. The timing of the swap, which is likely to have taken place in December or January, suggests it may have been done by European commercial banks needing to source liquidity during the sovereign debt crisis of early 2010. Of those countries on the front line of the crisis — Portugal, Greece, and Spain — only Portugal has enough gold to have covered the swap, with 382.5 tonnes in its reserves. Portugal's central bank declined to comment on the deal. But analysts point out that banks in the nations closest to the euro zone sovereign debt crisis are not the only ones exposed to it. Commercial banks elsewhere also have exposure to problems in southern Europe. Until recently the amount of gold that could be used in swap operations by European central banks was limited by the Central Bank Gold Agreement, which was designed to prevent disruption of the gold market by official sector activity. In the first two CBGAs of 1999 and 2004, signatories agreed not to increase their activities in the derivatives and lending markets above the levels of Sept 1999. But the third pact, which came into force in September 2009, included no such commitment. So what does this mean for the gold market? The swap was first seized on as bearish, as some claimed it could lead to the BIS selling the metal on the market in the case of a default. But that the gold was mobilised for temporary financing without being sold was ultimately identified by analysts as positive. "In conversations with clients we are consistently asked why central banks do not sell some or all of their gold to reduce their debt burden," UBS analyst Edel Tully said. "The latest CBGA figures, in addition to wider sovereign activity, indicate that central banks do not want to sell their gold in 2010. The BIS swap operation highlights that central banks can mobilise their gold without selling it." A lot will depend on the risk of default. If the counterparty in the transaction fails to redeem the gold, it could hit the market, with heavy consequences for prices. The thesis that the swaps are connected to the financial crisis is one that can be tested. Analysts will be closely watching the next BIS statement in early August for signs that the swaps are rising, or being closed out. "We can monitor its progress relative to the funding crisis, so if the euro crisis quietens down after the stress tests, it will go away," said Andy Smith, senior metals analyst at Bache Commodities. "If it blows up again, it should expand." * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:
|
| Commodities: Oil Flat, Copper Down, Natural Gas Rises Despite Bearish Outlook Posted: 17 Jul 2010 08:24 AM PDT Sumit Roy submits: Energy What was looking to be another solid up week for crude oil, turned into a flat week, largely due to poor performance on Friday. For much of the period, risk assets, including crude oil, took their cues from U.S. corporate earnings announcements, which were generally seen as favorable. Sellers emerged on Friday, however, after a combination of disappointing revenue figures from a few of the big banks, a weak consumer confidence reading, and higher-than-expected core CPI data were released.
|
| Hinde Capital's Ben Davies On The Gold Market Posted: 17 Jul 2010 08:22 AM PDT
Zero Hedge recently posted several insightful pieces from Hinde Capital, among which the fund's presentation on the ECB's role as the European Commission's whore, and more recently, its presentation on Gold as the "currency of first resort" (recreated below). Last week, fund manager Ben Davies, who previously ran trading for RBS Greenwich Capital in London where he managed a macro portfolio, gave a must hear interview to King World News, in which Ben covers various in depth topics on the gold market and shares his views on "unimaginable price possibilities for the final culmination of the gold bull." Among the things covered are the Andrew Maguire whitsleblower case, David Einhorn's transition from paper to physical gold storage (he notes the storage and indemnification risk), on whether the US government actually owns the hold it represents to holding (noting the demonstrative busting of the very unimpressive Russian spy ring), Russian gold reserve accumulation, where he detours into noting that while gold was 25% of Russian reserve holdings in 2000, it has since plunged to just 5% even as the country has been hoarding gold indicative of the massive currency creation across the world - as currency reserves have grown globally by $7.5 trillion. Ben touches upon the recently popularized concept by Jim Rickards, about an alternative currency basket (aka a new China-Russia-Germany axis) backed by actual physical resources (a modified version of the much dreaded gold standard): "there will be a standardization, a basket of currencies somewhere in the world, that will then become a competing reserve currency very quickly overnight." Most relevantly, Davies answers what he thinks the fair price of gold is: "between $10,000 and $15,000." He continues: "If you took all the global monetary bases, and I take the G-20 in that case, we currently have a currency that is only backed by gold at 0.26%, and if you look back on a historical precedent, back in the '40-'60's, banks typically have a backing of 40%. In the 1980's that backing got back to 120-140%." This indeed shows that in the 1980s gold was overvalued, at least from an M1 standpoint. The same can not be said about our current mad money printing period. So what does Ben think the FV of gold is? "If I said gold is to be at 40% just in terms of US encumberment, you can argue for a case of $70-80 trillion's worth of dollars, then we would have a price of $36,000. And if were to halve that, we would have a price of between $10-15,000." How would the repricing mechanism occur? "If we were not to get a standardization before, I believe like all bull markets, there would be a mania point. There is an eligibility for gold, and it is being considered as money. Gold has really been considered a barbaric relic - I was ridiculed on the floor in 2003, 2004 for even trading gold. When people like Faber asked the question how many actually hold gold, only 2-3% put their hands up. If we see more QE2, if we see more purchases of assets [by the Fed], it would horrendously denigrate the balance sheet of the Fed, which is already not worth the paper it is sitting on, I think in that situation gold is going to be considerably higher." Much more in the full interview. Full interview with Ben Davis can be found here, while below we repost the fund's most recent extended letter on gold, for those who may have missed it the first time around.
|
| Gilead Sciences: Time to Take Another Look Posted: 17 Jul 2010 06:52 AM PDT Bret Jensen submits: Company Overview: Gilead Sciences, Inc. (GILD), a biopharmaceutical company, engages in the discovery, development, and commercialization of therapeutics for the treatment of life threatening diseases worldwide. Its products include Truvada, Atripla, Viread, and Emtriva for the treatment of human immunodeficiency virus infection in adults; Hepsera, an oral formulation for the treatment of chronic hepatitis B; AmBisome, a amphotericin B liposome injection to treat serious invasive fungal infections; Letairis, an endothelin receptor antagonist for the treatment of pulmonary arterial hypertension; Ranexa that is used for the treatment of chronic angina; Vistide, an antiviral medication that targets cytomegalovirus retinitis in patients with AIDS; and Cayston, an inhaled antibiotic used as a treatment to enhance respiratory systems. The company’s products also comprise Tamiflu, an oral antiviral for the treatment and prevention of influenza A and B; Macugen, an intravitreal injection for the treatment of neovascular age-related macular degeneration; and Lexiscan, an injection used as a pharmacologic stress agent in radionuclide myocardial perfusion imaging.  Prognosis: The stock is trading near its 52 week low and is off over 30% from its late February high. The stock has fallen due to concerns on the expiration of its core HIV drugs later in the decade and the fallout from U.S. Healthcare reform. We believe the reaction has been overdone and the stock at this level offers compelling value.Valuation: GILD is selling for approximately 9 times this year’s consensus earnings and only 8 times next year’s projected earnings. It is selling at the low end of its five year range based on Price/Earnings, Price/Book Value, and Price/Cash Flow. It has a solid balance sheet with no net debt Catalysts: There are several factors that we believe should provide support for a higher stock price in the near and medium term: 1. Mid stage HIV pipeline drug data is positive which bodes well for next generation therapies for HIV 2. Growth in revenue outside of core HIV market with recent purchases including Myogen and partnerships including the one with Roche on Tamiflu 3. Company should continue to acquire growth assets outsides it core HIV franchise 4. New stock repurchase plan initiated in January 5. Given attractive stable of drugs and the need for the major pharma companies to acquire pipeline, possible takeover target especially given drop in stock price and reasonable valuations 6. The environment for drug companies should improve markedly after the mid-term elections Recommendation(s): Given its growth prospects, low valuations, and reasonable expectations that it can extend its HIV franchise into the next generation of drugs, GILD is undervalued. In our opinion, the stock should be trading at a more reasonable rate of approximately 13-14 times this year’s projected earnings of around $3.60. Our target Price is $47-$51, up from the current price of $33.50. Disclosure: Long GILD Complete Story »
|
| The Euro Rally Is Toast, Next Stop $1.18 - Morgan Stanley Posted: 17 Jul 2010 06:46 AM PDT The Business Insider submits: Remember when some were calling for the euro to hit parity with the dollar? It wasn't that long ago, back when the euro broke below $1.20. Then in early June, Iran's Mahmoud Ahmadinejad caved in, with his nation announcing they were selling their 45 billion euros for dollars and gold. Whoops. Since then the euro rallied hard, and just broke $1.29. Complete Story »
|
| Phibro Takes On Willy Wonka: Chocolitango In The Futures Market Reeks Of A Physical Squeeze Attempt Posted: 17 Jul 2010 06:21 AM PDT
It appears that a Phibro/Buffett-inspired attempt to corner a commodity market is in progress. Amusingly (or not so much for chocolate mousse cake makers), it is occurring in the relatively compact and illiquid cocoa market, where the WSJ reports ten brokers (mainly BNP Paribas) took possession of more than 240,000 tons of cocoa, valued at as much as $1 billion, leaving just 6,710 tons available for purchase. The Telegraph adds some further color: "The cocoa beans, which are sitting in warehouses either in The Netherlands, Hamburg, or closer to home in London, Liverpool or Humberside is equivalent to the entire supply of the commodity in Europe, and would fill more than five Titanics. They are worth &ound;658 million." This is nothing less than an attempt to squeeze existing shorts, with an emphasis of the on the run, July contract. Indeed, the contango between July and September has surged to 11%, even as the settlement price on the continuous front-month, closing at $3,165, approaches all time highs: "Thursday, cocoa for July delivery settled at &ound;2,732 ($4,221) a metric ton. Friday, the new front-month contract, for September delivery, rose 1% to &ound;2,445 a metric ton." And that's not all: "Already, cocoa for September delivery is trading at a big premium to December cocoa, sparking talk that another run on inventories may occur when the September contract expires." In other words, with half of America beckoning diabetes with open arms, a rather sharp bout of inflation is about to be felt for all those whose daily calorie intake is over 2,000. Incidentally, this is precisely the kind of action that would happen if and when someone had the urge to pull a Buffett and send the price of gold and silver through the roof (and destroy JPM and the LBMA in a matter of hours). From the Telegraph:
All those craving Viennese mocha will likely see a doubling prices imminently:
The WSJ adds:
Of course, this being pure speculative manipulation, only a handful of hedge funds and prop desks will benefit, even as prices go up, without benefit to the end suppliers:
Naturally, the CFTC sees no problem with this, just as it sees no problem with position limits, and the ability of 10 brokers to corner 99% of available physical market.
While the cocoa market is small and relatively unpopular within the speculative community, it is only a matter of time before this action is repeated for increasingly more popular and liquid products, until it finally strikes the tungsten motherload, rusty or not: as Buffet did it successfully in 1997, there is no reason to believe the next generation's physical squeeze play is not already in the works, especially with free money being so much more accessible these days, courtesy of discount window access for everyone.
|
| True Lack of Deleveraging in the Housing Market Posted: 17 Jul 2010 05:00 AM PDT Has there been significant deleveraging in the US housing market? Not really. Instead, with already $7 trillion in home equity lost, mortgages have come down only $270 billion. It's a significant discrepancy that's going to have to come into alignment somehow. Jesse's Café Américain explains: "This debt must be resolved. There are two major ways to do it: repayment and default. "Repayment is probably a fantasy, if not beating a dead horse. The homeowners do not have the money with which to pay the loans given the current state of employment and wage stagnation, and the mortgages are for the most part on houses whose value is significantly under water compared to the debt, as in ' just mail in the keys.' "Straight up default, writing off the debt even through foreclosure, is also probably out of the question, because it would essentially vaporize the balance sheet of the US banking system which is also insolvent, to a greater degree than most understand, and if they understand it, would admit." This is while of "986 bank holding companies in the US, 980 [banks] lost money last year. The lucky six were the TBTF banks on major government subsidy." To support his thinking, Jesse goes on to cite an Automatic Earth piece, Is It Time to Storm the Bastille Again: "That is, what Americans' homes are worth, their equity, decreased by $7 trillion — from $20 trillion to $13 trillion, from spring 2006 to spring 2010. In the same period, mortgage debt, what Americans owe on their homes, went down by only $270 billion. Yes, that's right: US homeowners lost more, by a factor of 26, than they 'gained' through clearing mortgage debt. Thus, if we estimate that there are 75 million homeowners in America, they all, each and every one of them, lost $93,333." The government bailouts, already a failed experiment, didn't help the vast majority of banks get profitable and also aren't going to help homeowners pay mortgages. This debt isn't looking to be liquidated without a prolonged period of tough times. You can read more details in Jesse's Café Américain's coverage of unresolved debt in the US financial system. Best, Rocky Vega, True Lack of Deleveraging in the Housing Market 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."
|
| Has the Gulf Spill Opened Pandora’s Box for Obama? Posted: 17 Jul 2010 04:00 AM PDT The White House might be gaping in shock that the US federal court overturned the six-month drilling moratorium, but it really isn't all that surprising. Amid the finger pointing and political posturing, the Obama administration seems to have missed a vital detail – the US oil industry is in a spot of bother. It's not just America's oil supply and energy security that's in danger after the BP oil spill and the subsequent drilling ban. The Gulf economy is hanging by a thread, and it won't take much to send it over the edge. Thousands upon thousands of rig workers were effectively laid off when the 33 rigs operating in the Gulf stopped drilling. The full economic impact of the ban is still unrealized, with the layoffs just starting, but estimates put the figure for lost wages as high as US$330 million per month. Given the potential economic losses, BP's US$100 million compensation fund for rig workers starts to look rather paltry. It doesn't end there either. There's a domino effect in play as well – each rig job supports up to four additional jobs for cooks, supply-ship operators, and those servicing the industry. And should the drilling ban become permanent, the consequences could be dire. Just like the towns that died in the Upper Midwest after the demise of the auto plants and steel mills, the entire Gulf Coast – where deepwater drilling is crucial to the economy – could fade away. All in all, not the best news for a country whose economy can be best described as fragile at the moment. There's also the question of America's energy security. The Gulf accounts for up to 30% of all the oil produced in the country. Should the Gulf be put off limits, that shortfall has to be made up from somewhere. Obama's renewable energy might be the future, but it's not up to the challenge of meeting the needs of the present. And attractive, viable options are far and few in between. Russia may be a friend now, but its tap-twisting history with gas in Europe does not strike up a positive note. The Middle East is hardly America's best friend, not to mention its royalty structures, which leave much to be desired. And in Venezuela, Hugo Chavez just recently nationalized 11 oil rigs belonging to a US company. In the end, only two real options are left in the hands of the US – the oil sands of Canada or rethinking the drilling ban. A revised drilling ban would still see higher taxes on each barrel produced and tighter regulations for companies coming to the Gulf. Any lease application would come under intense scrutiny and face higher insurance rates. For smaller companies interested in the Gulf, the rising production costs mean that the death knell has been sounded. Option two is the friendly neighbor to the north, Canada. The country already plays a big role in U.S energy. One in every six barrels of oil consumed daily in the US comes from the oil sands in Alberta, Canada. The oil sands are pretty controversial stuff, however, associated with derelict, broken landscapes and carbon emissions. But this is an image that's going to change very soon. The future of oil sands is here: they are cost effective and their face is green. Steam Assisted Gravity Drainage (SAGD) pumps steam into the ground to liquefy the bitumen and stiff crude oil, making it thin enough to be pulled out of the ground. No giant holes or toxic tail-ponds – just two horizontal pipes, one above the other, puffing away efficiently. That the Gulf spill is a game-changer for the US oil industry is yesterday's news. For now, it's about making ends meet. And while we expect the US to shift towards renewable energy, and maybe even rethink its energy use, for now there's an unmet demand that's not going anywhere. As far as an investment portfolio goes, both options bring with them opportunities. If the US federal court allows a somewhat watered-down version of the drilling ban, the long delay means that there's potential to pick up some great stocks at a cheap price. On the Canadian side of things, there are some well-run companies perfectly combining cash-flow and SAGD technology. The Gulf spill might be Obama's Waterloo, but for the careful investor, the winds of change could just blow in a fortune. Regards, Marin Katusa Has the Gulf Spill Opened Pandora's Box for Obama? 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."
|
| ShadowStats: CPI-Alt Running 4.3%, Gold $2,382, Silver $139 Posted: 17 Jul 2010 03:41 AM PDT Something Weimar this way comes? There is almost no doubt in my mind that we will see these prices for gold and silver. I am just not sure exactly how we will get there, and when. But I expect the unexpected, or at least that which is not expected by the many. The gold / silver ratio between those prices is 17, which is close to the historically important ratio of about 16. The legal ratio of gold to silver set in France in 1803 was 15.5, and this was emulated in England and later in the US. Obviously I am thinking of a return to a world bi-metallic 'weak standard' through the inclusion of both gold and silver in the basket of currencies that will be replacing the dollar as a unit of value in international trade. There are also several movements in the developing world to adopt silver for domestic use as a store of value. I think they will gain some traction as the currency wars intensify. The current ratio is about 67. I cannot help but feel that silver is going to be simply amazing when its time comes, in part due to the decades of price suppression by US banking institutions. According to the latest report from Shadowstats: More Here.. 
|
| Britain: Police Could Lose 40% of Police Force Due To Budget Cuts Posted: 17 Jul 2010 03:25 AM PDT Up to 60,000 police officer jobs could be lost in the next five years as the government seeks to eliminate the national debt, according to research published today. The figure is the worst-case scenario in a range of possible outcomes examined by Jane's Police Review magazine after the Treasury told government departments to prepare for cuts of up to 40%. If the police suffer average cuts, predicted to be around 25%, that will lead to the loss of between 11,500 and 17,000 jobs by 2015, said Dr Tim Brain, who recently retired as chief constable of Gloucestershire and Association of Chief Police Officers lead on finance. More Here.. 
|
| Posted: 17 Jul 2010 02:53 AM PDT Dear CIGAs, With the assistance of a good friend and contributor to JSMineset, Mr. Peter Carlin, Jim has co-authored a book on everything you need to know about Gold. If you have ordered the book and not yet received it, please email sales@apocketbookofgold.com. We are switching our shipping provider after a number of slow deliveries. Also, please note Compendium orders do not go through the same shipping company. A limited leather bound edition has been printed on top quality paper for JSMineset readers. Supply of these Pocketbooks are EXTREMELY limited. If you want a copy, this is your chance to order it. The price is $39.99 plus a flat rate shipping cost of $5.00. You can place your order by clicking the button below. You can pay via major credit card or PayPal.
Synopsis: "A Pocketbook of Gold gives you, in one easy handbook, the reasons why you should own Gold, the timing of when you should own Gold, and the types of Gold you should (and shouldn't!) own. A Pocketbook of Gold also explains the true role of Gold in every individual's financial planning as well as Gold's place in the world monetary system. It is an all-in-one Pocketbook that answers your questions and guides you through the world of Gold as a personal form of investment and financial insurance in today's increasingly uncertain financial outlook. A Pocketbook of Gold is a survival manual for monetary mayhem."
|
| Endeavour set to become a gold producer Posted: 17 Jul 2010 01:00 AM PDT
|
| Debt Overhang Hinders Recovery Posted: 16 Jul 2010 08:00 PM PDT Euro and European crises, a stress test, no solution in sight, lenders without sanity, banks nervous, austerity measures could force a depression, stage two of the credit crisis, most debt yet to be written off.
|
| Rust discovered on Bank of Russia-issued 'gold' coins Posted: 16 Jul 2010 03:57 PM PDT 11:50p ET Friday, July 16, 2010 Dear Friend of GATA and Gold: Zero Hedge reports tonight about Bank of Russia-issued gold coins that have been found rusting, which gold doesn't do. Zero Hedge concludes: "The Central Bank of Russia has been one of the biggest purchasers of gold in 2010, having bought gold every single month. It would be embarrassing if it were discovered that not only is the bank diluting the gold content with oxidizable materials, but subsequently passing it off for .999-proof precious metal. And if this is happening in Russia, one wonder what trickery other central banks, with a far lower amount of gold in their vaults, resort to." Now that it seems to be in a journalistic mode again, maybe Reuters should ask the Bank for International Settlements if its recent gold swaps have anything to do with those Bank of Russia coins. Another refusal to comment from the BIS would be especially delightful right now. You can find the Zero Hedge report here: http://www.zerohedge.com/article/rust-discovered-bank-russia-issued-999-... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy to Become Coal Producer This Year Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen. For Prophecy's complete press release about its production plans, please visit: http://www.prophecyresource.com/news_2010_may11.php Join GATA here: New Orleans Investment Conference * * * Support GATA by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Resources Expects Positive Cash Flow from Blackdome, 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
|
| Posted: 16 Jul 2010 03:50 PM PDT Bondsquawk submits: By Rom Badilla Both bond yields and stocks collapsed as economic data, specifically consumer confidence suggests that the recovery is faltering. In addition, the weekly Economic Cycle Research Institute indices tumble further, implying a slowdown at the very least is imminent. Complete Story »
|
A sharp drop in consumer sentiment and falling inflation helped take U.S. gold to its knees on Friday. The yellow metal was hit for its biggest one-day drop since July 1, accounting for nearly all of its 1.8 percent weekly loss.
The American Numismatic Association's 2010 Boston World's Fair of Money offers some of the world's most beautiful and famous coins, the nation's top numismatists and a venue in the heart of one of America's most historic cities.
US inflation over the last 12 months is the lowest since October as consumer prices slid for a third straight month, according to a government report released Friday.
| 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 | |
No comments:
Post a Comment