A unique and safe way to buy gold and silver 2013 Passport To Freedom Residency Kit
Buy Gold & Silver With Bitcoins!

Sunday, September 12, 2010

Gold World News Flash

Gold World News Flash

A Global Yuan is a Threat to the Dollar but good for Gold!

Posted: 12 Sep 2010 01:00 PM PDT

We have written many times about the need for the Yuan to be a global currency and eventually a global reserve currency [one of several]. We have talked of how it had to develop its banking system before it could take such a journey. We highlighted the experiments that the Chinese were making first in Hong Kong then in Guanchow in using the Yuan in international dealings.


Nine Bullish Arguments for Gold

Posted: 12 Sep 2010 04:00 AM PDT

Dr. Martin Murenbeeld, chief economist for Dundee Wealth Economics and one of the smartest gold minds around, recently released his latest chart book – hundreds of useful visuals to help him tell the gold and commodity stories.


International Forecaster September 2010 (#4) - Gold, Silver, Economy + More

Posted: 12 Sep 2010 03:30 AM PDT

There is no question the US monetary system is in serious trouble and the situation continues to deteriorate. The smug elitist owners of the system are not getting the desired results and there is great consternation among the players. Since 1913 in running US monetary policy the Fed has had one recession after another and two depressions. The second one is the one we are now in.


Railroads: Where Buffett Went Right

Posted: 11 Sep 2010 06:42 PM PDT

Wall Street Post Game submits:

Warren Buffett, famous for his value investing approach to the global equity markets, hit the jackpot after his bullish take on railroads. Buffett has always been a fan of the industry, but last year he decided to go all in and increase his position size. In early November 2009, when the market was rallying off the March lows, the value investor agreed to make a $34 billion investment into Burlington Northern Sante Fe Corp (BNI). What was Buffett thinking?

BNSF, the world’s second largest railroad, is engaged in the freight rail transportation business, vital to the transport of consumer goods, food products, and coal. Investing in railroads is essentially the equivalent to placing a bullish bet on the economy. After the announcement, Buffett stated, “it’s an all-in wager on the economic future of the United States.” This acquisition was the biggest ever for Berkshire Hathaway (BRK.A), just to show you how serious Buffett was. Prior to the acquisition, Berkshire Hathaway owned 22% of the company, and paid $100 a share, a healthy 31.5% premium.


Complete Story »


Home Equity Lines of Credit: The Next Looming Disaster?

Posted: 11 Sep 2010 06:25 PM PDT

Keith Jurow submits:

A previous article of mine briefly discussed the madness of borrowing through home equity lines of credit (HELOC) during the bubble years. Now is a good time to take an in-depth look at these second liens and the dangers they pose for the housing market and the large banks.


Complete Story »


Trading Week Outlook: September 13 - 17, 2010

Posted: 11 Sep 2010 06:23 PM PDT

All Things Forex submits:

The consumer spending, industrial activity and inflation data from the world’s largest economy will guide the direction for equities, commodities and currencies in the week ahead.

In preparation for the new trading week, here is a list of the Top 10 spotlight economic events that every currency trader should pay attention to.


Complete Story »


Gold's Telling Us Something - As Usual

Posted: 11 Sep 2010 06:13 PM PDT

Black Swan Capital submits:

In our webinar last week, we showed a chart comparing gold and the US dollar index, as you can see below (click to enlarge images):


Complete Story »


Aluminum Content of Infant Formula Remains a Challenge for Pfizer

Posted: 11 Sep 2010 06:07 PM PDT

Pharmalot submits:

sma-toddler-milkA new study finds that the aluminum content of infant formula remains unacceptably high and one of the manufacturers cited is SMA Nutrition, a company based in the UK and owned by Pfizer (PFE). The issue is significant, of course, for public health reasons, but also for Pfizer, which Wall Street projects will derive a growing proportion of revenue from its nutrition business over the next few years.

The study (pdf), which was published in BMC Pediatrics, examined 15 infant formulas, including powered and ready-made liquid formulas based on cow’s milk and a soy-based product, for babies at various ages. The researchers found that concentrations of aluminum in the milk formulas varied from 200 to 700 micrograms per liter and would cause up to 600 ug of aluminum to be ingested per day. Put another way, the aluminum content was between 10 and 40 times higher than the aluminum content of breast milk, which is usually 15 to 30 microgram per liter.


Complete Story »


Synovus Financial: Regional Bank Stock on Steroids

Posted: 11 Sep 2010 06:05 PM PDT

tom brownTom Brown submits:

We’re back from a visit to Columbus, Georgia last week, where we spent time with the management of Synovus Financial (SNV). We are very bullish on Synovus, you may recall; the stock is one of the largest positions in the fund we manage. Our bottom line after our meetings: the Synovus story is still very much on track. Credit is improving on schedule, and the company is set to return to profitability in the first quarter of next year, and can generate “normalized” earnings within 18 months after that. If everything goes according to plan, we expect the stock to double over the next twelve months.

I’ve said in the past that I believe that in March of last year the bank stocks began what will turn out to be an extended, three-stage bull market. Phase 1 happened in 2009 as the stocks jumped on investor recognition of the fact that, no, the largest banks weren’t going to fail, after all, and would live to see another cycle.


Complete Story »


What's the Duration of Gold?

Posted: 11 Sep 2010 05:59 PM PDT

On Friday, the U.S. inflation market rallied further. Inflation-linked bonds were well-bid as zero-coupon inflation swaps rose 5-7bps across the board. Considering that nominal yields rose only 1-3bps, this is a noticeable outperformance: TIPS went up; nominal bonds went down.

Equities did their by-now-usual afternoon squirt higher. All of this occurred in a veritable news vacuum. Next week sees Retail Sales, Empire Manufacturing, Industrial Production, PPI, an updated Initial Claims number, and CPI. We will see how strong these hands are then.


Complete Story »


JPMorgan Adds to Their Silver Short Position

Posted: 11 Sep 2010 04:29 PM PDT

The gold price gained about five bucks in Far East trading on Friday... and then basically flat-lined for four and a half hours between the London open and the New York open. The moment that trading began on the Comex, a big not-for-profit seller showed up... and gold was sold down to its low of the day of $1,235.70 within the next thirty minutes. Then the selling stopped... the gold price turned on a dime... and around 11:15 a.m. gold hit its high of the day at $1,252.30 spot. From there it got sold off once again and closed the Friday session up $2.70 from Thursday's spot close. The silver price, as they say, was more 'volatile' yesterday. Starting around lunchtime in Hong Kong, silver rallied to its London high around 11:30 a.m. their time. From that point, silver got sold off into the New York open where the not-for-profit seller took it even lower, with silver's low price [$19.71 spot] coming at precisely the same instant as gold's low price...


China Real Estate Glut Widens... Afghanistan End Game

Posted: 11 Sep 2010 04:29 PM PDT

China Real Estate Glut Widens Friday, September 10, 2010 – by Staff Report US & China China `Sweet Spot' Is Returning for Investors: To understand what is going on with China's economy, just look at wheel loaders. They are tractors with a big shovel on the front to pick up and move earth or coal. Such machines are used to build roads and railways or to dig black stuff out of shallow mines. China is, as we all know, an investment-heavy economy, so wheel-loader sales are a pretty good leading indicator: Companies only buy them if they plan to use one over the next 24 months. In July, 15,823 new loaders rolled out of the showrooms. That represented a 50 percent increase in seasonally adjusted sales compared with a year earlier. This is hardly the kind of number that one would expect from an economy on the verge of collapse. Instead it is just one of many signs that Chinese gross domestic product is steadily expanding while inflationary pressures have ...


COT And Silver Charts From Trader Dan Norcini

Posted: 11 Sep 2010 04:29 PM PDT

View the original post at jsmineset.com... September 10, 2010 03:56 PM Dear Friends, The Commitment of Traders report for this week reveals pretty much the norm for both the gold and silver markets that we have seen over the past 9 years or so.  Speculators consisting mainly of the big funds and the smaller public were buying while the commercial category was selling. First for gold – managed money flows remain in gold through Tuesday of last week which was countered by bullion bank and swap dealer selling (those two categories can sometimes include the same entity). While the commercial position is not the largest on record, the swap dealer is just shy of a record by some 3,000 contracts. That sets up a situation where we have a large number of speculative longs sitting in the gold market with prices stalling out near $1,260. The potential for some stale long liquidation is definitely there as a result of the loss of upside momentum so we will want to see how price acts shou...


Long Term Silver Chart From Trader Dan

Posted: 11 Sep 2010 04:29 PM PDT

View the original post at jsmineset.com... September 10, 2010 09:16 PM Dear CIGAs, Click chart to enlarge in PDF format with commentary from Trader Dan Norcini ...


On Safari for Trades in South Africa

Posted: 11 Sep 2010 04:25 PM PDT


When I first visited South Africa (EZW) as a journalist in 1979, I was stuffed into the trunk of a car and smuggled into Soweto, a fenced off  “township”, so I could write about the appalling living conditions there. Six ANC bodyguards accompanied my every move, as to venture out alone amidst 100,000 oppressed blacks would have been suicidal. The preferred means of execution then was to jam a sharpened bicycle spoke into your lower back and sever your spinal cord. 

Bringing along my non-white Japanese wife to the land of apartheid didn’t exactly go down well with the white locals either. There was only one hotel in the country that would accommodate us, the elegant Carlton in Johannesburg, the same one that put up John and Yoko Lennon.

The bottom line: everyone hated us. We were lucky to get out alive. Is those days, when long lines of Afrikaners snaked out of coin dealers selling their krugerrands for $900/ounce, everyone was convinced the country would soon blow up in a gigantic, bloody racial war. You could buy a beautiful four bedroom house there on an acre of land for $25,000, servants included.

It never happened. Everyone collectively looked into the abyss and decided to pull back. The Afrikaners made peace with the ANC, an incredible reconciliation process ensued, and by 2010 the country had healed enough to host the World Cup. It’s all proof that if you live long enough, you see everything.

Now South Africa is popping up on the radars of several big hedge funds as one of a handful of frontier emerging markets ready to make the move to prime time. Of course we already know about world class companies like De Beers, Standard Bank, and Sasol, which give it enough muscle to stand out from the rest of the Dark Continent.

But did you know about alternative energy and venture capital? Local entrepreneurs report that South Africa is among the best countries to start a new company these days, with top rate universities, a plentiful, well educated professional class, a trained work force, generous government subsidies for key industries, and a healthy local market. Despite its well earned reputation as the premier source for the world’s gold and diamonds, 50% of the country’s exports were manufactured goods.

This dynamic mix enabled South Africa’s GDP to hold up well during the financial crisis. Analysts are expecting a 3.3% growth rate this year and acceleration to 5% or more next year.

But this all misses the really big play in EWZ, whose ticket to prosperity will get punched by selling into fast growing markets  and a rapidly rising standards of living in the rest of Africa. The entire region has enjoyed accelerating GDP growth rates since 2002. This has been partly fueled by soaring commodity prices where Africa has a lock on the market, such as for cobalt and iridium, crucial elements for advanced electronics and cell phones.

There have been a number of new oil discoveries in Nigeria and Sudan. The Chinese are pouring tens of billions of dollars there into gigantic farms in Africa to feed its own hungry masses. Mass distribution of free anti retrovirals and malaria drugs by the likes of billionaire Bill Gates and the US government has also stopped the AIDS epidemic in its tracks.

The more work I do on Africa generally (AFK), (GAF), the more I like (click here for “Feel Like Investing in a State Sponsor of Terrorism” at http://www.madhedgefundtrader.com/july-30-2010-3.html ). Africa has a population that approaches India and China’s, possibly making it the next cheap labor market. Some 60% of the planet’s remaining uncultivated land is there, which is why China, Libya, and Saudi Arabia have been pouring billions into agriculture there. Africa has 40% of the world’s gold reserves and 10% of its oil reserves, with massive deposits of coal and other key resources.

If you have any doubts, take a look at the direct investment that has been pouring into the banking sector in South Africa in recent years, the most stable and best capitalized industry on the continent. HSBC has gobbled up Ned Bank, Barclays has swallowed ABSA Bank, and China has taken a 20% stake in Standard Bank, probably the best run institution on the continent. Having been a four decade observer of the global financial system, I can tell you from experience that the changing of the guard in the banking system often presages major long term bull markets. You want to follow the smart money here.

Despite all this, only 3% of global direct investment finds there way to Africa. Prices are so low and earnings leverage so great that any dire political risks you can come up with, and there are definitely some out there, have got to already be priced in. It’s just a matter of time before the markets address this imbalance.

Mind you, this is not a country without challenges. The unemployment rate is stuck at a daunting 24.5%, crime is rampant, income disparities are vast, and inter racial strife still percolates under the surface. Pessimists say Armageddon hasn’t been avoided, only postponed. However, when the world’s investors flip back to risk accumulation mode, this is a new country you should consider. High risk can bring in high returns.

To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.

United States Joint Forces Command Warns that Huge U.S. Debt Might Lead to Military Impotence, Default or Revolution

Posted: 11 Sep 2010 02:58 PM PDT


→ Washington’s Blog

As I have repeatedly pointed out, the American military and intelligence leaders say that debt is the main national security threat to the U.S.

As I noted in February 2009 and again last December, a number of high-level officials and experts are warning of financial crisis-induced violence ... even in developed countries such as the U.S.

And as I pointed out in February of this year, the U.S. runs the risk of going the way of the Habsburg, British or French empires:

Leading economic historian Niall Ferguson recently wrote in Newsweek:

 

Call the United States what you like—superpower, hegemon, or empire—but its ability to manage its finances is closely tied to its ability to remain the predominant global military power...

This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy, and Air Force...

If the United States doesn't come up soon with a credible plan to restore the federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power.

 

The precedents are certainly there. Habsburg Spain defaulted on all or part of its debt 14 times between 1557 and 1696 and also succumbed to inflation due to a surfeit of New World silver. Prerevolutionary France was spending 62 percent of royal revenue on debt service by 1788. The Ottoman Empire went the same way: interest payments and amortization rose from 15 percent of the budget in 1860 to 50 percent in 1875. And don't forget the last great English-speaking empire. By the interwar years, interest payments were consuming 44 percent of the British budget, making it intensely difficult to rearm in the face of a new German threat.

 

Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next.

And William R. Hawkins (formerly an economics professor at Appalachian State University, the University of North Carolina-Asheville, and Radford University) fills in some details on the fall of the Hapsburg empire:

Spain was the first global Superpower...With Spain as its political base, and gold and silver flowing in from its American colonies, the Hapsburg dynasty became the dominant power in Europe. It controlled rich parts of Italy through Naples and Milan, and Central Europe from the Netherlands through the Holy Roman Empire to Austria. In the 16th century it added the far distant Philippine islands to its empire. The Hapsburgs held off the Ottoman Turks, whose resurgent wave of Islamic conquest in the 16th century swept across the Balkans and nearly captured Vienna.

The Hapsburgs went into decline in the 17th century, and while any such momentous event has many causes, for our purposes the focus will be on the economic collapse of Spain, which not only sapped the empire of strength but served to build up the power of its rivals.

The demands of empire required a strong and growing economy, but Spain did not keep up with the economic expansion that was taking place in other parts of Europe. Madrid’s financial base fell out from under its empire. Spain could continue to consume in the short term because of the flow of precious metals from American mines, but it could not produce the goods it needed at home, which in the long-run proved fatal to its standing as a Great Power and as an advanced society.

Spanish imports were double exports and the precious metals became scarce within weeks of the arrival of the American treasure fleets as the money flowed to Spain's many creditors. What industry there was, along with banking and shipping, was in the hands of foreign owners. As a modern historian, Jaime Vicens Vives, has concluded, “This was one of the fundamental causes of the Spanish economy's profound decline in the seventeenth century, maritime trade had fallen into the hands of foreigners.” This, plus the “opening of the internal market to foreign goods,” produced a “fatal result.” Spain's exports were at the same time under heavy pressure by competitors in third country markets. A nation that cannot control its domestic market will seldom be able to sustain itself in foreign markets, which are inherently less accessible and more unstable.

Yet, Spanish leaders were deluded by a sense of false prosperity. This is testified by the statement of a prominent official, Alfonso Nunez de Castro in 1675: “Let London manufacture those fine fabrics of hers to her heart's content; let Holland her chambrays; Florence her cloth; the Indies their beaver and vicuna; Milan her brocade, Italy and Flanders their linens...so long as our capital can enjoy them; the only thing it proves is that all nations train their journeymen for Madrid, and that Madrid is the queen of Parliaments, for all the world serves her and she serves nobody.” A few years later, the Madrid government was bankrupt. The Spanish nobleman had foolishly elevated consumption, a use for wealth, above production, the creation of wealth.

Historians have traced the flow of Spanish gold and silver across the markets of Europe. Those who “served” Spain by establishing industries to manufacture goods for the Spanish market gained the money. Spain’s rivals, France, Holland (which started a successful revolt in 1568) and England, prospered by their trade surpluses, and reinvested the money to expand their own capabilities. Another modern expert on Hapsburg history, Henry Kamen, has cited contemporary sources who referred to 17th century Spain as “the Indies for the foreigner.” The military empire of the Hapsburgs became the economic colony of other powers, or, to use a current phrase, Spain was the “engine of growth” for the rest of the continent.

Where there were jobs and prosperity, there was also rapid population growth, and rising tax revenue. Rival powers were able to field and finance military forces that could defeat the once superior Spanish forces both on land and at sea. The irony of this is that Spain was ruled by a warrior aristocracy tempered by centuries of constant warfare against Islamic hordes and Christian heretics. These nobles looked down on merchants and manufacturers and disparaged their mundane professions only to find that without a strong domestic business class they could not afford the fleets and armies that guarded the empire they had built.

Today, the American “empire” is also trying to consume more than it produces. The U.S. trade deficit is nearing Spain’s nadir of imports being double exports. Both government spending and private consumption are financed heavily by debt. Washington is printing money, the modern equivalent of digging gold out of the ground, rather than earning the means to pay its bills. And the political and military elites are apparently indifferent to the fate of domestic business and industry. Americans must learn ... from the Spanish experience ... and take corrective action while they still can.

 

The United States Joint Forces Command - which oversees military operations in the North Atlantic geographic area and supports the other commanders-in-chief in their geographic regions around the world - is now echoing all of these themes.

As World Net Daily reported Thursday:

The Joint Operating Environment 2010 report, or JOE 2010, released March 15 by the United States Joint Forces Command, or USJFCOM, warned that "even the most optimistic economic projections suggest that the U.S. will add $9 trillion to the [national] debt over the next decade, outstripping even the most optimistic predictions for economic growth upon which the federal government relies for increased tax revenue."

 

The USJFCOM expressed concerns that the burgeoning U.S. national debt represented a threat to U.S. national security.

 

"Rising debt and deficit financing of government operations will require ever-larger portions of government outlays for interest payments to service the debt," the JOE 2010 cautioned. "Indeed, if current trends continue, the U.S. will be transferring approximately 7 percent of its total economic output abroad simply to service its foreign debt."

 

To underscore its concern, the USJFCOM cited an alarming litany of historic examples, including the following:

  • Habsburg Spain defaulted on its debt 14 times in 150 years and was staggered by high inflation until its overseas empire collapsed;

  • Bourbon France became so beset by debt due to its many wars and extravagances that by 1788 the contributing social stresses resulted in its overthrow by revolution;

  • Interest ate up 44 percent of the British government budget during the interwar years 1919-1930, inhibiting its ability to rearm against Germany.

"Unless current trends are reversed, the U.S. will face similar challenges, anticipating an ever-growing percentage of the U.S. government budget going to pay interest on the money borrowed to finance our deficit spending," the JOE 2010 concluded.

Of course, debt is not the only threat to empire ... or the only indicator of a nation's economic malaise.  In that regard, the crash in Italy in the 1340s and the hyperinflation in Hungary in 1946 are instructive.

Gold Thoughts

Posted: 11 Sep 2010 01:18 PM PDT

Market metrics, like a thermometer, simply reflect the conditions in a market. They do so without opinion or emotion. Metrics such as valuation do not cause market prices to change. Valuation, however, is often a precursor of change ... Read More...



Is Gold Getting Too Much Media Attention?

Posted: 11 Sep 2010 01:16 PM PDT

Crowd sentiment on gold and the gold stocks is obviously running high but I don't get the sense it has reached the dangerously high proportions seen at major tops. The number of articles dedicated to the yellow metal in mainstream news ... Read More...



Pretty good interview, talks about gold and silver.

Posted: 11 Sep 2010 11:20 AM PDT

The Deflation vs Hyperinflation Debate On Steroids, Or Mish vs Gonzalo Lira In The Octagon

Posted: 11 Sep 2010 11:01 AM PDT


A recent guest post by Gonzalo Lira on Zero Hedge, providing a theoretical framework for the arrival of hyperinflation, went viral, generating over 75k views and over 1,000 comments, further confirming that the biggest and most confounding debate in all of finance is what will the final outcome of the Fed's market manipulative actions be: deflation, inflation or, and not really comparable, hyperinflation (which is a distinctly different phenomenon from either of the above). The post infuriated some hard core deflationists who continue to refuse to acknowledge the possibility that in its attempt to inspire inflation at all costs, the Fed may just push beyond the tipping point of monetary imprudence away from mere target 2-3% inflation, and create an outright debasement of the world's reserve currency. One among these was none other than Mish himself, who a week ago recorded a podcast on Global Edge with Eric Townsend and Michael Hampton (link here), in which his conclusion was that Hyperinflation is the endgame, "so it is unlikely." Of course, the very premise of this statement argues that even in a monetary collapse the Fed will retain control over the flow of money, which of course is unlikely, and thus makes us very skeptical that such a simplistic and solipsistic argument is enough to resolve the debate. Since one of the items covered in the Mish podcast was Lira's argument, it was only fair that Gonzalo himself should be heard.

So a few days ago Global Edge ran a follow up podcast with just Gonzalo Lira, in which the Chilean was given the opportunity to defend himself and to further validate his argument. In a very lively and heated discussion, which teaches the amateurs at CNBC just how one should run a financial debate, Lira and host Hamtpon agree that hyperinflation may play out differently than many expect. Among the questions probed are whether property will be a good investment in a hyperinflation scenario, and what may happen to all other key asset classes once the Fed finally loses control of everything. Still, the best outcome would be to give Lira and Mish a one to one venue in which the two can battle it out: surely it would have no actual impact as the deflationists and hyperinflationists of the world tend to be among some of the most dogmatic individuals in the world, but it sure makes for much more entertaining theater than watching those idiots in Congress pretend they are in control of the financial destruction currently going on in America.

45 minutes of excellent financial debate follow after the jump (and the original Mish interview can be found here).

Silver Is The Perfect Bartering Currency For Food

Posted: 11 Sep 2010 10:39 AM PDT

The big news in the financial mainstream media during the past week has been JP Morgan's announcement that they will be closing their proprietary trading desks. JP Morgan is in the process of winding down their proprietary trading operations and will be laying off their 20 proprietary commodities traders, who NIA believes could be responsible for the current concentrated short position in silver. NIA has been receiving countless emails from members asking us if this means the silver manipulation is coming to an end and what this means for the price of silver.


One thing is for sure, this news from JP Morgan can't be a bad thing. NIA has long held the belief that JP Morgan's manipulation of the silver market is the sole reason for the artificially high gold/silver ratio of recent years, which currently stands at 63. Silver possesses all of the same monetary qualities as gold. There is no rational reason for gold to be 63 times more expensive than silver when only 10 times more silver has been produced in world history than gold.


The main thing Americans will need to barter for during hyperinflation is food, but gold is too expensive to be good for bartering for food. Silver is the perfect bartering currency for food. Assuming the gold/silver ratio returns to 16 during hyperinflation and food prices increase at the same rate as gold, it will be possible to feed a family of four with only 2 to 3 ounces of silver per week. However, just 1 ounce of gold will buy 6 to 7 weeks worth of food for a family of four, and most perishable food items go bad in just a week or two.


The only advantage of owning gold over silver during hyperinflation will be having the ability to pick up and leave with your entire net worth in hand. The average American currently has their entire net worth tied up in their house. There is already a 12.5 month supply of Real Estate on the market. During U.S. hyperinflation, the U.S. mortgage market will come to a complete halt and it will become nearly impossible to sell your house unless you are willing to lower the price to a level where buyers can afford it without a mortgage. With the U.S. unemployment rate likely to rise above Great Depression levels, the last thing you will want during the upcoming currency crisis and societal collapse is to have your wealth stuck in Real Estate. Americans will desire the freedom and flexibility that comes with owning precious metals.
More Here..


Buy Silver And Gold Safely Online:
Scottsdale Silver

Obama Is Clueless on the Economy

Posted: 11 Sep 2010 09:16 AM PDT


By Dian L. Chu, Economic Forecasts & Opinions

On Labor Day, President Obama announced a new $50-billion infrastructure plan next year as a way of a second stimulus for job creations as well as for the faltering economic recovery. However, the plan is expected to be met with strong opposition in the midst of a mid-term election, while many economists are skeptical as to any swift effect it could have on America's $14.3 trillion economy, as well as the troubling labor market. 

So, in light of the fact that the Democrats are losing a bunch of congressional seats, and their majority, this new plan would seem more of a last-ditch effort with little substance.   

Clueless on the Economy

So far, the Obama administration has demonstrated very little understanding of the economy, markets, and business. In fact, one could say that the policies the Administration implemented are probably close to the worst medicines to help a sick economy recover from a devastating illness.

Much of the legislation passed by the Administration is essentially anti-business, while painting a negative image of corporations. This is further playing a debilitating role for stalling an economic recovery due to the added uncertainty for businesses--“What is coming at us next, cap and trade, drilling ban?" All this does is further undermining the business confidence that is needed to start hiring again on a large enough scale to really make a dent in the unemployment rate.

Hierarchy of Needs

During the passing of the first $800 billion stimulus plan, many recommended that a larger percentage needed to be allocated to infrastructure projects due to the add-on effect of job creation. But they fell on deaf ears of the Administration and the Democratic Party.


Now all of a sudden, they finally came to realize what’s really important-- having a job and a roof over your head, whereas healthcare and financial reforms are on the next level up the hierarchy of needs. So, here comes a new infrastructure spending plan to create jobs, taking a page from President Roosevelt’s New Deal and China’s infrastructure-focused 2-year, $586 billion stimulus package started in 2008.

No Second Chance

Unfortunately, the Administration basically messed up and squandered away the first stimulus package--the only chance to get it right with a proper infrastructure package and real job creation. Cue to the Greek and European debt crisis, there’s no second chance.

Although President Obama indicated the plan would not add to the budget deficit, senior administration officials suggest it could come from closing tax credits used by oil and gas companies and multi-national corporations. So, it is just robbing Peter to pay Paul—a zero-sum game. And 50 billion dollars?? It is definitely a case of too little and too late.

Debunk the Policy-Induced Recovery

The Administration also has pointed to the fact that when they took office we were losing 750,000 jobs a month, vs. the current loss of 100,000 jobs a month, and things would be much worse without their creative solutions.

Well, the numbers were greatly skewed with companies running scared and cutting costs to the bone in the middle of the financial crisis. However, almost 2 years since the Great Recession, most companies have reached a point where they can no longer cut costs and/or personnel. Moreover, if the economy stabilizes due to an inventory rebuilding cycle, and the world isn`t coming to an end, then there will be a natural reduction in the rate of job loss, which has nothing to do with the Obama Administration`s legislative policies.

So, yes, things are better, attributed partly to the natural business cycle, but also because the worst didn`t come to fruition, the stock market assets needed to be reacquired by fund managers who over liquidated their portfolios. In addition, manufacturing was also boosted by the inventory restocking phase, and even failed stimulus packages would provide some sort of floor for the economy.

Nevertheless, none of this can be taken credit for by the Obama administration. It is a natural law of economics, and relative preparedness. That is, if everyone is prepared for the sky to fall off, and the sun still comes out the next morning, the economy will experience a slight recovery all on its own, relatively speaking. But this is nothing to write home about.

Legislative Wins – Don’t Mean Much

One thing that President Obama and the Democratic Party has accomplished is that they have gotten more legislation through Congress, and passed into law than most administrations ever dream of accomplishing.

However, it is more emblematic of having a complete majority in the legislative branch--Republicans were emasculated due to the economic crash happening during their watch, and a literal blank check of unprecedented nature to just fix things that went wrong.

As we have witnessed in the past two years, achieving a lot of legislative wins has not done a whole lot of good for the nation.

On Health Care & Financial Reform 

I agree that the health care system in the US needs some major overhauling, but was this accomplished with the latest health care legislation? No, I do not believe this to be the case. But one thing I do know is that it is entirely counterproductive to push through a health care reform bill that is going to create more costs for business coming out of a recession. 

Adding more costs is bad for business even in a booming economy (that`s why it has been so hard to get passed all these years,) but it is a complete suicide mission during a tentative recovery phase.

I also agree that to some degree there needs to be some regulatory changes to the banking system, and how Wall Street and the SEC operate. But all this financial regulation, post financial crisis, will only cause major disruptions to the financial industry, and hinder any type of job creation, at a time when the industry is still on shaky ground and worried about building up their capital reserves.

And you see what happened to the financial stocks since the passing of the financial regulation bill after investors realize the implications of this policy change. If financial stock prices are going down, then so are the number of financial jobs, in a sector that is one of the major employers in the economy.

Again, an argument may be made for financial reform, but there is a time and place for this type of sweeping legislation, and it is after the economy has recovered, when unemployment is under 6%, and business confidence has returned enough to sustain this type of exhaustive financial overhaul.

Markets and Business Tend to Self-Correct

I actually think legislation to address problems which already occurred is a little backward looking, and gets you all the extra costs, but little, real bang for your buck. Businesses and markets tend to be self-correcting as nothing hurts business and professionals more and changes behavior faster than losing money.

Nobody, be it bank, insurer, mortgage underwriter, or rating agency is going to continue the same business practices such as sub-prime after losing that type of capital during the financial crisis. 

Changes in business practices are already taking place without the business-disrupting new regulations. After all, companies are in the business of making money first and foremost, and nothing changes behavior faster than losing 15 billion in a quarter.

Political Irony

The funny thing is that President Obama`s policies were better suited for the good times, as they might have actually tempered some of the growth enthusiasm, and help check and balance some of the insane leverage utilized by businesses during the Bush era.

Nevertheless, when a country is trying to works its way out of a recession, policy makers need to be pro business to foster a strong business climate, instills business certainty and confidence, and leads to large scale job creation. In the end, the last two administrations were better suited for each other`s tenure, and if we could just go back and switch the two, we would be so much better off today.

Dian L. Chu, Sep. 11, 2010

Video: Is Greenspan actually going back to his gold-en roots?

Posted: 11 Sep 2010 09:07 AM PDT

Gold falters just under all time high

Posted: 11 Sep 2010 09:00 AM PDT

Why The Real, Not Nominal, Consumer Debt Burden Will Push The US Economy Lower And Force The Fed To Accelerate Its Monetary Intervention

Posted: 11 Sep 2010 08:46 AM PDT


It is no secret that both the household debt/income ratio, as well as the debt service ratio (interest expense as a % of disposable income) continue to be near all time high levels, albeit slightly lower than recent all time records. In fact, the debt service ratio has declined more in real terms than in nominal terms, making the argument that the consumer deleveraging process might not be as dramatic as some expect. Yet it is precisely when looking at the real, and not nominal, value of a projected debt service burden, that explains why consumers will continue to be faced with a crippling debt regime, why deleveraging will continue, and why the economy will be far weaker than the Fed expects for years to come. Goldman's Jan Hatzius, who continues to be more bearish on the future prospects for the economy than ever before, explains.

One important reason why we expect the economy to remain weak is that the household sector is likely to deleverage its balance sheet further. This will require households ?and the private sector more broadly? to run a large financial surplus, which will keep demand weak unless offset by substantial fiscal (and monetary) stimulus.

Once again, the Fed is caught with its pants down as it is faced with no options of how to extract an economy continuing to plunge into a deflationary abyss. And it is not so much the overleveraged mega-corporations that are hurting as a result of massive debt load, as at least they can refinance into lower interest rates: it is mostly consumers - that driving force behing the US economy - who are unable to take advantage of refinanci g opportunities on their underwater assets, that will further retrench, causing further economic stress and increasing declines in GDP.

Tangentially, and a topic that needs to be investigated in depth here and elsewhere as it has gotten virtually no coverage in the media, is what will happen to the tax shield that interest payments provide. Assume a scenario where a company with $X in debt manages to refiance all of it at near-zero interest rates. This will simply make pretax net income jump substantially, and provide for a much greater tax provision owed to the government. As everyone is aware, the number one prerogative before CFOs and corporate strategists, is how to minimize tax payments, which, in our opinion, means that soon companies, even Investment Grade, will lever over and above the level of debt suitable for their business model, with dividend recap deals coming down the line, all in the pursuit of recapturing an debt interest-based tax shield. After all, a company (and most definitely its Board of Directors) would certainly prefer to pay a dividend to its shareholders, than to give away 40% of its profits to the government, even if this means a sudden and abrupt deterioration of debt ratios across levered corporate America. And once interest rates do pick up, and the next refi/maturity wave hits in 5-7 years, then it will be really game over. But that is a topic for another day. (We are also confident that the tax code's Section 382 NOL Limitations will also soon have to be adjusted to facilitate the M&A boom which everyone expects yet never happen, as there are thousands of companies with huge NOL "assets" that could be acquired if Sec. 382 were to be changed... and it will be).

But back to the consumer, and why the expectation (and reality) of deflation will keep US buyers subdued, and continue to make the US economy ever more reliant on the government's transfer payment, aka welfare, program.

A very simple illustration of the challenge is provided in Exhibit 1, which shows that the ratio of household debt to disposable income remains far above levels prevailing prior to the asset price and credit boom that started in the late 1990s. This suggests that the deleveraging of household balance sheets still has much further to go.

But while the ratio of household debt remains exceptionally high, the ratio of household debt service?interest and scheduled principal repayments?to disposable income looks less out of line with longer-term norms. This is shown in Exhibit 2, which plots the household debt service ratio as calculated by the Federal Reserve Board.1 Although it is still above its long-term average, the gap was never as big as in the case of the debt ratio and has declined substantially since 2007. What should we make of this?

And here is the kicker, explaining why once again the Fed has misunderestimated American consumers:

While the debt/income ratio shown in Exhibit 1 is hardly the end of the story, we believe that Exhibit 2 leaves out an important factor, namely that debt service is defined in nominal rather than real terms. The calculation does not take into account the rate at which inflation erodes the real value of household debt over time. This erosion will confer a bigger benefit on indebted households in a high-inflation environment such as the early 1980s than in a low inflation environment such as now.

Hatzius is kind enough to provide a simplistic example of the impossible task facing the US consumer of deleveraging into a deflationary environment, especially when the primary debt burden is in a 100%+ LTV position, and therefore unrefinanceable.

It is easiest to explain this point by means of a simple example. Suppose a consumer with a $50,000 annual income holds debt of $100,000 on which he pays a 10% interest rate. Ignoring any principal repayment, this implies a debt service ratio of 20%, i.e. 10% of $100,000 divided by $50,000.

Now imagine two separate cases. In the first case, inflation is 8% per year. This means that the real value of the consumer?s debt is reduced by $8,000. So the inflation-adjusted debt service burden is only equal to $2,000. In the second case, inflation is 1% per year. This means that the real value of the consumer?s debt is reduced by $1,000 and the inflation-adjusted debt service burden is equal to $9,000.

It is therefore useful to adjust the debt service ratio for inflation. We calculate the ?inflation gain? of households as the level of debt a year earlier multiplied by the year-on-year core PCE inflation rate, and then subtract this number from nominal debt service to obtain an inflation-adjusted figure. This inflation adjustment shows the real debt service ratio to be much more clearly above the long-term average than the nominal ratio. In fact, it has trended down only very slightly over the past few years. This suggests that the deleveraging of household balance sheets?and private-sector balance sheets more broadly? still has a fairly long ways to go.

Further inflation declines would increase the challenge. We expect core inflation to decline to ½% by the end of 2011, which would reduce the inflation benefit that indebted households receive yet further. In theory, lower inflation should be matched by lower nominal interest rates. But many households are unable to refiance their mortgages to take advantage of the declines in primary mortgage rates because they are in or near negative equity. Therefore, it is unclear to what extent the household sector will be able to reduce its average effective nominal interest rate much further from here, even in a declining inflation environment.

And this is precisely the issue: while companies would in theory refinance all the way to a cost of capital just about the Fed Funds rate, US consumers don't have that luxury. Which means that the government will be forced to extract increasingly more "capital" out of the US corporate system, whether via tax code changes or some other yet unthought of way. Yet the far greater implication is that the Fed continues to be stuck with no recourse of how to fix the system in the long-run, once the toxic spiral of deflationary deleveraging accelerates. And yes, the only option will soon be the nuclear one, which is QE on top of QE on top of QE, all with the hope of spurring inflation, yet leading to the unfortunate outcome of loss in the US reserve currency.

Hatzius' conclusion, which pretty much the same, is somewhat more diplomatic:

The still-high ratios of debt and debt service to disposable income suggest that the household sector? and the private sector more broadly?will need to continue running financial surpluses in coming years. Unless fiscal and monetary policy provide a strong counterweight, this is likely to imply only sluggish growth, with risks tilted to the downside.

As more and more pundits realize that looking at debt burdens in nominal terms is erroneous, and that one has to apply deflation expectations to projections of real debt burdens, look for the feedback loop of lack of confidence in the economy to become ever more acute, as consumers further retrench in the saving mode so very abhorred by the Fed. And as more and more money finds its way to the mattress and precious metals, look for some incendiary decisions out of the government that seek nothing less than to devalue the dollar directly.


Big Autumn Gold Rally

Posted: 11 Sep 2010 08:38 AM PDT

what do you use to keep track of your PM's?

Posted: 11 Sep 2010 07:58 AM PDT

ive been looking for some kind of free spreadsheet or database to keep track of my metals and stumbled on this

http://bullion.nwtmint.com/mybulliontracker.php

it doesnt have all the bells and wistles but i cant complain for the price. is there anything else out there that i can get for free?

Book Review: 'Fault Lines: How Hidden Fractures Still Threaten the World Economy,' by Raghuram G. Rajan

Posted: 11 Sep 2010 07:15 AM PDT

John M. Mason submits:

Raghuram Rajan, in his book Fault Lines: How Hidden Fractures Still Threaten the World Economy (Princeton University Press: 2010), develops a comprehensive explanation for the 2008-2010 financial crises and then presents his ideas on how the economic and financial system of the United States needs to change in order to avoid similar severe outcomes in the future. Rajan is a professor of finance at the University of Chicago’s Booth School of Business and a former chief economist at the International Monetary Fund.

Rajan uses a geographic metaphor, fault lines, to put the current financial crisis in perspective. He argues that there is no single explanation for what happened: consequently, the crisis developed along many fault lines where enormous stresses arose. The world then split along these fault lines causing tremendous dislocations to emerge in economic and financial markets.


Complete Story »


Michael Pento Explains The CNBC Incident, Shares His Other Concerns (Uninterrupted And GE-Commercial Free)

Posted: 11 Sep 2010 06:23 AM PDT


For some, this week's incident on CNBC where Michael Pento was kicked off CNBC for daring to question the basic assumption that his host Erin Burnett presented as fact, was perplexing (to others, who are well aware of the modus operandi of the TV station is, not so much). In a follow up interview that was uninterrupted by commercial breaks and octoboxes, with King World News, Michael Pento gives a post-mortem of just what transpired: "I looked at it 4 times and I don't when I went off the rails, I thoughty it was a bit unwarranted. All I was doing was being very passionate about an issue I feel very strongly about." The core of the disagreement of course, is the underlying assumption which CNBC takes as gospel, which is that no matter what, interest rates will not, are not allowed to rise (which together with a failed treasury auction, will be the key indicators of the "beginning of the end"). And Pento is completely right to question this as the underlying "factual basis" of any rhetorical question: "We as Americans have no right to believe that interest rates on the 10 year, which are far below their historic 49 year average, 7.31%, are now on 2.7%, so the onus is not on me that interest rates will rise. The onus is on other people to convince me and the investing public that the US bond market will always be in a perpetual bubble that will never burst. And if you look at the data, it shows that this can not be a sustainable situation." Pento then goes on to highlight all the facts that certainly make his case, but that ultimately all collapse into one thing: that the Fed will be able to continue to control, and frankly, manipulate the rate market for perpetuity. This is a flawed assumption and sooner or later Ben Bernanke will lose control as with every system which is in disequilibrium, the snapback to a sustainable balance will occur, and the longer it is kept away from its natural state, the more violent the snapback will be.

One point that Pento discusses that bears further attention, is his argument that governmental investment in the economy should decline and the private sector should be encouraged to pick up the slack. Of course, with the Balance of Payments equation which is now on the forefront of public attention, this means that unless the Current Account goes positive, the private sector is unlikely to be able to pick up the slack from a collapse in endless governmental stimulus (and thus constant debt creation). Which goes to the crux of the Keynesian-Austrian debate. Many would say here that instead of having funded the government apparatus, which as even Mort Zuckerman points out is beyond unwieldy and has grown excessively, the government should have instead have focused on making the US competitive from an international trade standpoint, a topic even Warren Buffett lamented in his non-corrupt days, when he was actually a voice of reason, and not just unbridled, government captured greed. Alas, that would mean a total break from the current Chinese trade surplus hegemony and realigning the US economy in a way that would result in a dramatic shock to millions of people who realize they are simply uncompetitive in the global picture (and thus redundant in the job market) but which would serve as another much needed reset to get America off on a way to long-lost prosperity with an attempt to reincarnate the American manufacturing sector while gradually phasing out the service sector (and especially its "financial innovation" component) . Yet as Gorgon T. Long also pointed out a few days ago, America is now dead set on repeating the destructive Keynesian mistakes of the past, and will continue to fund a broken model until one day, as Michael Pento all too correctly points out, it all snaps, and the "shocking" death of Keynesianism, as described a month ago by Eric Sprott, catches all so many completely unaware.

Of course to explain all this to Erin Burnett, who still believes that the government has done a great job with the "fastest" recovery in the past 20 years, which would be correct if one could eliminate those little pesky things known as "facts", is beyond folly. All those who are invited to CNBC, and dare to explain the truth: you have been warned.

Llink to Pento post-mortem on King World News.

 

Working for a Living: A Report on Emerging Market Productivity

Posted: 11 Sep 2010 06:22 AM PDT

"If I have a handful of silver it is because I work and my wife works, and we do not, as some do, sit idling over a gambling table or gossiping on doorsteps never swept, letting the fields grow to weeds and our children go half fed!"

– Pearl S. Buck (from the character Wang Lung in Buck's novel The Good Earth)

Arriving in Argentina's capital city after a month-long journey across the United States, we are once again reminded of perhaps the most thrilling aspect of a developing market: that it is, indeed, developing. This, for value-seeking investors and gypsy newsletter writers alike, is a source of excitement one simply wouldn't be without.

Much has been written on the subject of emerging vs. submerging markets, and with increasingly good reason. According to Goldman Sachs strategist, Timothy Moe, the market value of emerging market stocks is set to quintuple over the coming two decades, reaching some $80 trillion (with a "T") by 2030. China, by this time, will have eclipsed the United States as the world's largest market.

"The primary drivers are rapid economic growth and the maturing of equity markets that are at earlier stages of development," Moe, as quoted in The Financial Times, wrote in a report Friday. "Developed-market institutional asset management pools will need to increase their holdings of emerging-market equities."

Investors with an eye to the future, therefore, will want to be in the pool when the big money pours in. The ride will be rough, no doubt, but the waterline is most definitely rising. According to figures released by research firm EPFR Global, investors added money to emerging-market equity funds for a 14th straight week last week, even as they pulled $6.87 billion from global stock funds. The driver, it is clear, is the upward and ongoing growth, both registered and forecast, in emerging markets. The IMF expects the emerging economies to grow by 6.4% collectively next year, almost three times faster than developed nations which, reckons the fund, will likely dawdle along at a paltry 2.4%.

How do these nations achieve such veracious growth rates, puzzled politicians in the west want to know. Pearl Buck's character, Wang Lung, answered the question in the quote above, but for the slow-minded policy wonk, we'll simplify: They work. Moreover, their toils are of the productive kind – making cars, toothbrushes and belt sanders – as opposed to what the west counts as productivity – counting people, writing laws and tasering grandma at the airport. Put another way, producers outnumber parasites and factory floor hands outnumber Congress floor copouts.

Such a divergence in productivity is, of course, not lost on Mr. Market. Over the past decade the MSCI Emerging Markets Index has more than doubled. During the same period, the MSCI World Index of advanced nations has slumped nearly 21%. This worrying (for developed nations) trend expresses itself in entirely unsurprising forms:

Household Disposable Income

For economists fretting about "unfair trade imbalances" who have their knickers in a knot now, just wait until they see what's coming down the pipes. When we attended the screening of Addison and Kate's movie, I.O.U.S.A., in our then home country of Taiwan, we took the opportunity to quiz a few of the local audience members after the screening. One woman, clearly shaken by the movie's warning against (ironically, unsustainable levels of American debt), winced: "I am scared. I don't even save 50% of my income!"

Eventually, however, savers turn into spenders. Keeping up with the Changs or the Patels is just as much a part of human nature as is keeping up with the Joneses. At first it's just a night out at the movies or a new handbag, then, before you know it, Mr. and Mrs. Chang are splashing out on a new ride.

Auto Unit Sales

Clearly, the winds of economic change are at the emerging markets' backs. Yet, despite their uncompromising capacity for – and incredible track record of – growth, many stocks in developing economies trade at very competitive valuations. The MSCI Emerging Market Index is valued at 14.2 times reported profits, according to data compiled by Bloomberg. The MSCI World Index, meanwhile, trades for 15.1 times earnings. That may not seem like much of a difference, but remember that those are very broad measures. Drill down into individual markets and you'll find that Russia, for example, trades for just 6 times earnings, as does the Middle East's abandoned wonder, Dubai. Dig further and find individual Chinese, Indian and other emerging market companies, with impressive, double-digit growth rates, solid cash holdings and little debt, trading at even steeper discounts.

The rough and tumble, dog-eat-dog capitalistic initiatives coloring the emerging nations' economic landscape harkens back to the "good old days" of the world's developed economies; when entrepreneurial endeavourers were rewarded by the market, rather than punished by the state, when profit was a goal for which to strive in earnest, not a dirty word emblazoning the protest sign of a state-dependant layabout looking to borrow somebody else's axe to grind.

So buy the Cash for Clunker economies if it helps you sleep at night…but don't expect the hard workers in developing economies to share their handful of silver with you if you do.

Joel Bowman
for The Daily Reckoning

Working for a Living: A Report on Emerging Market Productivity 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."


Fake gold bars vid

Posted: 11 Sep 2010 05:56 AM PDT

http://www.youtube.com/watch?v=ZKczs-7BFRI

Also see...

http://www.marketoracle.co.uk/Article14996.html

Says tungsten is exact weight of gold. If that is true, fake gold plated coins may measure and weigh like real ones? Although tungsten may be hard to stamp out like gold. What do you think?

What Is The Duration Of Gold?

Posted: 11 Sep 2010 04:19 AM PDT

You might think I would learn my lesson about writing columns concerning the barbarous relic after my experience last month. But today I wanted to consider briefly not the level of gold nor the value of gold, but rather a secondary ... Read More...



Goldman Does It Again: Firm Top Ticks Record Gold Price To The Penny

Posted: 11 Sep 2010 02:58 AM PDT

See graph:
http://www.zerohedge.com/article/gol...ld-price-penny

If only Goldman clients could receive a penny for every time the firm's sellside advice top ticked the market (to the dot), they would actually be in the green despite following said advice... The most recent blatant example of a concerted sell off following a Goldman "buy" note, occurred at the very peak of the gold move, when the yellow metal had just hit a new all time record high. Sure enough, Goldman, which now apparently caters only to the momentum crowd, decided to use that catalyst as a reason for a note (dated 8:18 am on September 8, note the time relative to the gold price below) to send the signal it was once again in the outright dumping mode.
-------------------------A little silver action:
Silver

1m 26.75/28.25
2m 28.25/29.75
3m 30.50/31.50
6m 32.50/33.50
1yr 35.00/36.00

Claim Jumper Restaurants Files for Bankruptcy With Plan to Sell Business

Posted: 11 Sep 2010 02:57 AM PDT


Claim Jumper Restaurants LLC, the operator of a restaurant chain in California and seven other states, sought bankruptcy protection with a plan to sell the business to one of its investors.
The Irvine, California-based company listed assets of as much as $100 million and debt of as much as $500 million in Chapter 11 documents filed today in U.S. Bankruptcy Court in Wilmington, Delaware. Private Capital Partners, an affiliate of Los Angeles-based Canyon Capital Advisors LLC, agreed to buy virtually all of the assets, Claim Jumper said today in a statement. Claim Jumper expects to leave bankruptcy in 60 to 75 days with no debt. The company said it filed a motion to set up an asset auction.

More Here..
Up To 40,000 Front-line Police Jobs 'At Risk' (UK) 

Time to Add some Corn to Your Diet.

Posted: 11 Sep 2010 02:53 AM PDT


I have been waiting for a substantial dip in the grains to add to a position in corn, and it is clear from the chart below that we are just not getting it. While the US crop seems to be in good condition, with 70% rated “good/excellent”, the global picture continues to move from bad to worse.

In just a few days, torrential rains wiped out Pakistan’s entire crop for the year, which historically has been a regional net supplier, and they have destroyed much of the storage as well. Russia and the Ukraine have completely withdrawn from the export market, husbanding what meager harvests they can now expect to feed their own people, forcing several international suppliers to declare a  force majeur on their contracts. It’s looking like Canada can expect an early winter, as frosts have already appeared in some of the northernmost fields. Cold, dry weather is also forcing major supplier, Argentina, to pare back forecasts.

I caught a double in wheat a few months ago (click here for “Going Back into the Ags” at http://www.madhedgefundtrader.com/june-24-2010.html ) during its parabolic move from $4/bushel to $8 and quickly cashed out at the top (click here for “My Best Trade of the Year” at http://www.madhedgefundtrader.com/august-10-2010.html ). It is still rich at $7.40. Corn has been a laggard, up only 25% from its May low, and clearly looks like it has broken out to the upside. It also offers individuals a new, easily tradable, liquid ETF (CORN).

Mother Nature is not the only factor boosting grain prices. There is a ton of cash sitting on the sidelines because so many investors are afraid of an Autumn stock market crash, and are loathe to buy the top of the greatest bond bubble in history. Given the strong fundamentals (click here for “The Bull Market in Food is Only Just Starting” at http://www.madhedgefundtrader.com/august-10-2010-2.html ) and the historically low prices, the grains look pretty good right now on a risk/reward basis in the global scheme of things.

And if the trade doesn’t work out, you can always take delivery and eat your long. It’s great for the digestion. Believe me, I know!

To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.

Jimmie Dines: "GOLD IS MONEY. GOLD IS ESSENTIAL MONEY!", Rare Earth Stocks

Posted: 11 Sep 2010 02:34 AM PDT

Excellent interview. with Eric King.

http://www.kingworldnews.com/kingwor...mes_Dines.html

Dines is still super-bulish on Rare Earth, Gold, Silver.and Uranium.

The Rare Earth stocks are just starting to heat up. I've got a 11-bagger in REE, and I'm still holding. Much much more to go. I ain't selling until Jimmie Cramer recommends the stock or until the Rare Earth story is on the cover of Newsweek. JMHO DYODD

Haynes and Arensberg review metals' week at King World News

Posted: 11 Sep 2010 02:29 AM PDT

10:30a ET Saturday, September 11, 2010

Dear Friend of GATA and Gold (and Silver):

Reviewing the week in precious metals at King World News, CMI Gold and Silver's Bill Haynes says the public is "nowhere near" the market yet, while Gene Arensberg of the Got Gold Report says the large commercial traders in the New York futures market are not yet aggressively shorting the precious metals. You can listen to the interviews at the King World News Internet site here:

http://www.kingworldnews.com/kingworldnews/Broadcast_Gold+/Entries/2010/...

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:

Toronto Resource Investment Conference
Saturday-Sunday, September 25-26, 2010
Metro Toronto Convention Center, Toronto, Ontario, Canada
http://www.cambridgeconferences.com/index.php/toronto-resource-investmen...

The Silver Summit
Thursday-Friday, October 21-22, 2010
Davenport Hotel, Spokane, Washington
http://www.silversummit.com/

New Orleans Investment Conference
Wednesday-Saturday, October 27-30, 2010
Hilton New Orleans Riverside Hotel
http://www.neworleansconference.com/redirect.php?page=index.html&source_...

* * *

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

Haynes and Arensberg review metals' week at King World News

Posted: 11 Sep 2010 02:29 AM PDT

10:30a ET Saturday, September 11, 2010

Dear Friend of GATA and Gold (and Silver):

Reviewing the week in precious metals at King World News, CMI Gold and Silver's Bill Haynes says the public is "nowhere near" the market yet, while Gene Arensberg of the Got Gold Report says the large commercial traders in the New York futures market are not yet aggressively shorting the precious metals. You can listen to the interviews at the King World News Internet site here:

http://www.kingworldnews.com/kingworldnews/Broadcast_Gold+/Entries/2010/...

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:

Toronto Resource Investment Conference
Saturday-Sunday, September 25-26, 2010
Metro Toronto Convention Center, Toronto, Ontario, Canada
http://www.cambridgeconferences.com/index.php/toronto-resource-investmen...

The Silver Summit
Thursday-Friday, October 21-22, 2010
Davenport Hotel, Spokane, Washington
http://www.silversummit.com/

New Orleans Investment Conference
Wednesday-Saturday, October 27-30, 2010
Hilton New Orleans Riverside Hotel
http://www.neworleansconference.com/redirect.php?page=index.html&source_...

* * *

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
at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)