Gold World News Flash |
- Gold Confiscation: Straws in the Wind
- Betting against Gold, by De Gaulle
- Gold Prices Breaking Upwards Again
- Negative Yields, Inflation, And the Bernanke Put
- Ira Epstein's Weekly Metal Report
- Precious Metals: Your Game Plan Going Forward
- Gold Never Gets Old
- Bullion Soars Despite Cramer’s Endorsement
- New Highs for Gold and Silver
- The Losing Battle to Fix Gold at $ 35
- QE2 Drawing Nearer?
- Will the Chinese Yuan Rise – What of Chinese Gold Investors?
- Gold Rises on Northern Rock, Lehmans Anniversaries…
- Whether You Like It Or Not, It Is Happening
- Jim?s Mailbox
- Hourly Action In Gold From Trader Dan
- Coming With Lightning Speed
- Gold Rallies to a Record High and Crude Retreats, but Not Due to Risk Appetite
- Quick Comment
- The “Forever War” Edition
- B-B-B-Breakout!
- Gold Update - Sept 15, 2010
- The Gold Controllers Want Price Higher
- Open Letter
- Gold Breaks to a New High
- Silver Market Update - Sept 14, 2010
- Gold Market Update - Sept 14, 2010
- Is Thailand's Central Bank Buying Gold?
- LGMR: Gold Rises on Northern Rock, Lehmans' Anniversaries
- Exclusive Video
- The Only Party
- Moral Condemnation for Traders
- Myths, Human Psychology and Trading
- Rising Debt and the Great Market Waiting Game
- Jan Hatzius Q&A On QE2
- Gold Seeker Closing Report: Gold Makes New All-Time Highs While Silver Closes At A New 30-Month High
- Currency Intervention, Bitches
- Sure beats currency market rigging fever
- Japan intervenes in currency market to suppress yen
- Market Commentary From Monty Guild
- Silver still rules, Gold is envious ...
| Gold Confiscation: Straws in the Wind Posted: 14 Sep 2010 07:20 PM PDT by David Galland, Managing Director, Casey Research In the emails that our readers at Casey Research send our way, questions and concerns about the possibility of gold confiscation rank high. My somewhat standard response is that, yes, it's possible, but that we should see straws in the wind well before it happened… allowing us to take measures [...]
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| Betting against Gold, by De Gaulle Posted: 14 Sep 2010 06:30 PM PDT
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| Gold Prices Breaking Upwards Again Posted: 14 Sep 2010 06:29 PM PDT
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| Negative Yields, Inflation, And the Bernanke Put Posted: 14 Sep 2010 06:14 PM PDT Vega submits: We’ve had mixed economic data for the last couple months, early hints of inflation, severely negative real yields, and a promise from Ben Bernanke to do whatever it takes to keep the US growing. Mea Culpa and an Agro Bull Complete Story »
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| Ira Epstein's Weekly Metal Report Posted: 14 Sep 2010 06:06 PM PDT When looking at the Monthly Chart of the CRB Index I've inserted above, you can see that prices have a way to go to reach the 2008 high. Maybe that why the Fed says they're not overly concerned at this time with inflationary pressure. However, it's hard to deny that prices have and are continuing to climb rather sharply, which is something that markets like gold pay attention to.
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| Precious Metals: Your Game Plan Going Forward Posted: 14 Sep 2010 06:04 PM PDT In our last commentary we quickly covered the current outlook of Gold, Silver, the mining shares and the juniors. The breakout in the sector continued today as Gold reached a new high and the mining shares (as per the HUI or GDX) closed near a nine or ten month high.
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| Posted: 14 Sep 2010 06:02 PM PDT Wall Street Post Game submits: In a previous post on August 12, Gold Hits Fibonacci Level, I discussed a potential break out in gold if the asset were to spring through the golden ratio level, or 61.8% in the Fibonacci pattern. If gold were to escalate through that level, we could see it trade around the June highs, which recently happened. As the dollar weakened, gold shot up. Let’s take a brief look. Gold futures skyrocketed yesterday over 2% to 1273.15. I believe one reason for the move is based on Goldman’s speculation that the Fed may announce new asset purchases later on this year, perhaps November. This report hit the markets right away as Goldman’s chief economist, Jan Hatzius, stated that the Fed may buy U.S. Treasuries worth $1 trillion in November or December to stimulate the economy. The Fed’s policy-setting committee meeting is next week, September 21, however, we are unlikely to hear about asset purchases then. However, we may hear such news at the upcoming meetings on November 2 or December 14. Complete Story »
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| Bullion Soars Despite Cramer’s Endorsement Posted: 14 Sep 2010 06:01 PM PDT We should know soon whether the animal spirits that pushed gold and silver sharply higher yesterday can withstand the endorsement of James Cramer. Although we seldom watch his show – even with the TV off, you can practically hear him shouting within a ten-mile radius of CNBC's Fort Lee studio — someone mentioned in the Rick's Picks chat room yesterday that he's hot to acquire gold and precious-metal shares.
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| Posted: 14 Sep 2010 06:00 PM PDT
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| The Losing Battle to Fix Gold at $ 35 Posted: 14 Sep 2010 05:45 PM PDT
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| Posted: 14 Sep 2010 05:44 PM PDT Bonds rallied again yesterday, with the 10y note yield down to 2.66%. Stocks were higher for most of the day – again, at the same time as bonds – although they settled back to be mixed at the close. Commodities rallied again and gold set another record as the dollar dropped again. The greenback now has seen its worst 2-day decline in over a year. Inflation swaps were down a smidge (when yields fall, it is hard for inflation breakevens to head aggressively the other way repeatedly), but otherwise it sounds very similar to Monday’s price action. And my suspicions from yesterday, that this might be related to market intuition about the increasing likelihood of QE2, were partly confirmed. Goldman Sachs’ Jan Hatzius (who is really good, and regular readers will know I rarely say that about an economist or strategies) said in a customer note that he sees QE2 coming, probably in November or December. I’ve said the same thing for a month or so. While the Fed doesn’t care what I say, however, the fact that Goldman is projecting quantitative easing actually makes it marginally more difficult for it to happen since the Fed would prefer not to look like Goldman’s lackeys (like, for example, the Treasury often does). Complete Story »
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| Will the Chinese Yuan Rise – What of Chinese Gold Investors? Posted: 14 Sep 2010 05:37 PM PDT
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| Gold Rises on Northern Rock, Lehmans Anniversaries… Posted: 14 Sep 2010 05:30 PM PDT
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| Whether You Like It Or Not, It Is Happening Posted: 14 Sep 2010 05:05 PM PDT View the original post at jsmineset.com... September 14, 2010 07:52 AM Dear Extended Family, Many emails have come in saying there is no way gold can go to $1650 by January. My response to those people is you are WRONG, it can. Many emails have come in saying the dollar is a safe haven and that I am wrong, it will never see .7200 and lower. My response to those people is you are WRONG, it can. Many were offended for some reason when I drew the comparison between now and 1979. My response to those people is you are WRONG, the comparison is valid. I am on my way to the Middle East and Africa, but will not be out of contact. Respectfully, Jim...
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| Posted: 14 Sep 2010 05:04 PM PDT View the original post at jsmineset.com... September 14, 2010 09:37 AM Gold Prices Surge, Top $1,270 CIGA Eric Gold prices were popping Tuesday as investors turned to gold as safe-haven asset after a slew of disappointing economic data. What about the dollar’s safe haven status? This gold hype will attacked by the spinsters, agnostic about gold at much lower prices, through the use of labels, fear, and misdirection. Meanwhile, the secular trend continues to plow ahead without or without the spinsters support. Jim is right, gold doesn’t need consensus approval to run. Many emails have come in saying there is no way gold can go to $1650 by January. My response to those people is you are WRONG, it can. Many emails have come in saying the dollar is a safe haven and that I am wrong, it will never see .7200 and lower. My response to those people is you are WRONG, it can. Many were offended for some reason when I drew the comparison between now and 1979. My response t...
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| Hourly Action In Gold From Trader Dan Posted: 14 Sep 2010 05:04 PM PDT View the original post at jsmineset.com... September 14, 2010 10:10 AM Dear Friends, Today is a case of being careful what you wish for – the Fed has pulled out all the stops in an attempt to avoid a deflationary trap tied to the inception of the credit crisis that broke loose in the summer of 2008. Since then they have flooded the system with liquidity through a process dubiously referred to as Quantitative Easing. They have also loaded their balance sheet with worthless loan paper and shoved interest rates practically to zero. Not to be outdone, our illustrious administration has saddled us with enough debt at the federal level to last three generations all in the name of "stimulus". The result – they have gotten their wish – sadly for all of us, who actually have to live with their damn stupidity, they have let slip the dogs of inflation who have bared their fangs and are now ravenously devouring the hopes and dreams of the middle class in this nation. The funny money has ma...
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| Posted: 14 Sep 2010 05:04 PM PDT View the original post at jsmineset.com... September 14, 2010 11:17 AM My Dear Friends, As I depart I would ask you to review the three illustrations done in a continuing effort to communicate to you the why of Currency Induced Cost Push Inflation. Following this I am posting a note from Eric and theAustralian.com on currency market potential. Something also to consider is the fact that John at Shadow Stats sees the Currency Induced Cost Push Inflation happening in 6 to 9 months. When it comes my friends, it will come with lightning speed. Regards, Jim Currency wars set to break out as volatility grows CIGA Eric The global economic battle which ignores the calendar is omnipresent. The race to the bottom in fiat, or battle to own the weakest currency while still being able to issue debt is not a new trend. Beggar thy neighbor was used to describe policies where one country benefited at the expense of another. The use of tariff or quotas on imports or currency devaluat...
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| Gold Rallies to a Record High and Crude Retreats, but Not Due to Risk Appetite Posted: 14 Sep 2010 05:04 PM PDT courtesy of DailyFX.com September 14, 2010 03:08 PM Cross market correlations have significantly eased Tuesday. While investor sentiment would keep many of the traditional capital markets anchored to breakeven or modest losses; gold would shake the markets with its biggest rally in months to a record high. North American Commodity Update Commodities - Energy Oil Loses Momentum Despite a Sharp Drop in the US Dollar Crude Oil (LS Nymex) - $76.32 // -$0.39 // -0.51% Splashy financial headlines would denote a highly active market Tuesday. And, indeed, a rise in US retail sales, growing concern over further Fed easing and a plunging dollar would encourage significant activity from specific markets. For the energy market, however, the day’s news would do little for price action when it comes down to direction and volatility. For US-based oil, bulls would not be able to keep up the pace of the previous two sessions and would ultimately stall before retesting...
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| Posted: 14 Sep 2010 05:04 PM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! September 14, 2010 02:53 PM While it’s most enjoyable to see gold and silver doing so well, I would prefer some consolidation versus getting over extended. One factor to keep a close eye on is the terminally ill U.S. Dollar. We’re close to testing 200-Day M.A. Don’t expect a break the first or even second test but an eventual break below it and then 80 could really add fuel to the gold and silver fire. Stay tuned! [url]http://www.grandich.com/[/url] grandich.com...
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| Posted: 14 Sep 2010 05:04 PM PDT The 5 min. Forecast September 14, 2010 12:55 PM by Addison Wiggin [LIST] [*] Dollar’s doom: “War on terror” drags, “war on poverty” fails [*] IMF warning: “An explosion of social unrest”... without more stimulus [*] Breaking News: Gold touches all-time record [*] The No. 1 worry of small-business owners (and it’s not access to credit) [*] Business booming for Boeing, Airbus... But here’s an even smarter play [/LIST] You’ll have to forgive us, O Reader, for three events have put us in an Orwellian mood this morning. Welcome to the “forever war” episode of The 5... Three days after Sept. 11, 2001, President Bush invoked the National Emergencies Act of 1976 and declared a state of national emergency in the U.S. — granting himself additional powers, including the authority to suspend the right of habeas corpus. That state of national emergency enters its 10th year today. Ironically, ...
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| Posted: 14 Sep 2010 05:04 PM PDT www.preciousmetalstockreview.com September 14, 2010 Gold broke out today. I have my very long term-positions in place with physical Gold and Silver. I also have my longer-term trading positions in place. Now it’s time to have some fun and put on some short-term positions and, as I like to say, put that oh so sweet icing on the cake. Before I do that though I’d like to see a few more pieces to the puzzle fall into place. Right now Gold broke above all resistance, and did it convincingly in the futures market, as well as the GLD ETF. Gold must stay above support near $1,263. It must also do so during Asian and European trading before we open again in North America tomorrow AM. If the above condition can be satisfied, I will be satisfied that the chance we are at the very early stage of a major upwards move is greater than 50%. That will warrant a trading position. If a second day of the same conditi...
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| Posted: 14 Sep 2010 05:04 PM PDT DAILY REPORT September 15, 2010 "Anyone who has proclaimed violence his method inexorably must choose lying as his principle" --- Aleksandr Solzhenitsyn Here’s the game for anyone who doesn’t have the time or inclination to follow the markets, and you won’t hear this on TV either. The US Federal Reserve is acting as the buyer of last resort in the bond market in an effort to give the appearance that demand for US debt exists. They print dollars to do this. In supporting the bond, and stocks to a lesser degree, they will destroy the US dollar. Yesterday the greenback took a big hit and today it is getting walloped again. Sooner or later this will spill over into bonds and stocks, and I am convinced it will be sooner. In fact I believe it will happen now! Everyone talks about buying blue chip stocks with good dividends, or bonds as a “safe haven” investment, but the smart money won&#...
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| The Gold Controllers Want Price Higher Posted: 14 Sep 2010 05:04 PM PDT Stewart Thomson email: [EMAIL="s2p3t4@sympatico.ca"]s2p3t4@sympatico.ca[/EMAIL] Sep 14, 2010 1. Gold Juniors Geyser! Gold is spurting higher this morning as I write this at 4am from Vancouver, the Gold Juniors headquarters of the world! At 630am Vancouver time, you may see your accounts get a substantial injection of black ink, as the North American stock markets open up. Hands up anyone who doesn't want to see that action! 2. I want to emphasize, in neon, the critical importance of both components that all investors must operate with, in all markets. The trading and core positions. When markets move sideways, or down, for a time, those holding only long term core positions can get disheartened or even mentally broken. 3. Price can gyrate sideways not just for weeks or months, but for many years. When you are underwater for years, or worse, underwater while being diluted by management, it is extremely difficult to maintain a posi...
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| Posted: 14 Sep 2010 05:04 PM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! September 14, 2010 09:04 AM Dear Financial Media, Instead of making fun of the very small majority of us who for almost a decade have been very bullish and correct on the price of gold (call us gold bugs, doomsayers, etc), how about just once you go back to the thousands of articles you wrote calling gold a top, bubble, useless relic, ready to collapse, etc, and asked those so-called authorities you quoted time and time again to* explain how they were wrong -* yet again? Sincerely, Peter Grandich, author of the claim “We’re in the mother of all gold bull markets” and sole member of the Tokyo Rose fan club. [url]http://www.grandich.com/[/url] grandich.com...
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| Posted: 14 Sep 2010 05:04 PM PDT courtesy of DailyFX.com September 14, 2010 06:13 AM Daily Bars Prepared by Jamie Saettele Gold is closing in on its all-time high. A move to a new high would negate the bearish implications from the impulsive decline and set sights on round figures such as 1300, 1400, 1500, etc. Last week’s breakdown was of the false variety. Watch channel resistance on a move to a new high. The line is at 1289 today and increases about $3 a day....
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| Silver Market Update - Sept 14, 2010 Posted: 14 Sep 2010 05:04 PM PDT Clive Maund The outlook for silver has brightened considerably in recent weeks due to its breaking out upside from the tight Triangle pattern that had developed through the Summer months, although it has yet to break out above its 2008 highs, which is a one crumb of comfort for bears, along with the latest COT figures. Many of the arguments set out in the Gold Market update are equally applicable to silver, to which readers are referred. While it is true that silver has not confirmed gold's successive breakouts to new highs, it is also a fact that silver tends to lag gold and to do best towards the end of gold's major uplegs. Thus, if gold continues to advance it is reasonable to expect some fireworks in silver before much longer. Both metals tend to be weak and flaccid during the Summer doldrums period, and while this year was no exception, they ended the Summer, meaning the period to the end of August, looking firm, and with the seasonally most positive time of year ha...
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| Gold Market Update - Sept 14, 2010 Posted: 14 Sep 2010 05:04 PM PDT Clive Maund Some years ago I remember watching a retrospective documentary about life in Florida in the heady days of the Apollo moon program. In one bit of old film was one of those VW camper vans, of the type favored by freewheeling hippies, which had heavily darkened windows on one of which was scrawled the simple message "Don`t laugh - your daughter may be in here". I share this priceless memory with you in order to illustrate the crucial point that the way we perceive situations depends on how they affect us personally. Thus, the way you perceive the Precious Metals market at this time may largely depend on your orientation towards it, and your existing commitments in this market, if any - for as we will see, being entirely objective, there are good reasons to expect the market to go up, and good reasons to expect the market to go down, and the way you see it will depend on whether you see the glass as being half empty or half full. Does this mean that we are sat on ...
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| Is Thailand's Central Bank Buying Gold? Posted: 14 Sep 2010 05:04 PM PDT Is Thailand's Central Bank buying gold? Gold Dinar Sells Out in Malaysia. Silver soars in early Tuesday trading in London. John Hathaway says that the bull market in gold has barely started... and the truth about gold and silver ETFs. YESTERDAY IN GOLD AND SILVER I wouldn't read a whole heck of a lot into yesterday's gold price activity on any market yesterday... even New York. Even though the dollar swooned, it didn't make one bit of difference to the gold traders on Monday. Both the high and low in Monday's trading action came during the New York session... with the low [$1,240.10] spot coming at 8:35 a.m. shortly after the Comex open... and the high [$1,429.90 spot] was minutes before 10:30 a.m. Eastern time. I wasn't entirely surprised to see the U.S. bullion banks turn the gold price back at the $1,250 spot level once again. This has been a line in the sand for the last week or so. Here's the New York spot gold chart. It shows Monday's ...
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| LGMR: Gold Rises on Northern Rock, Lehmans' Anniversaries Posted: 14 Sep 2010 05:04 PM PDT London Gold Market Report from Adrian Ash BullionVault 08:20 ET, Tues 14 Sept. Gold Rises on Northern Rock, Lehmans' Anniversaries; Silver Hits Highest Price Since Bear Stearns' Collapse THE PRICE OF GOLD rose as the Euro fell from near 5-week highs to the Dollar and world stock markets also slipped early Tuesday. Rising to a four-session high of $1257 an ounce for US investors, the gold price in Euros jumped 1.5% from yesterday's low to touch €31,480 per kilo. G7 government bonds rose, depressing the yield offered to new buyers, while commodity prices ticked back. "Traders were pre-occupied with [platinum-group metals] in the morning," said one Hong Kong dealer of Tuesday's Asian trade. "Gold and silver were left on the sidelines" until London opened, when platinum and palladium – used primarily in auto-catalysts, and so dependent on new vehicle demand – rose 1.4% to reach new six-week highs. Silver prices also rose once again, recording a London F...
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| Posted: 14 Sep 2010 05:04 PM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! September 14, 2010 07:49 AM This is the gold perma-bears, bubble callers, and the media that supports them after seeing latest quote on gold [url]http://www.grandich.com/[/url] grandich.com...
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| Posted: 14 Sep 2010 05:04 PM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! September 14, 2010 06:42 AM While I correctly foresaw a bear market rally in the U.S. Dollar, my long-term opinion hasn’t changed in a few years. I’ve said since before the financial crisis began that the only party that didn’t know the U.S. Dollar is dead is the U.S. Dollar. (Chart courtesy of Bill Murphy) I’ve said a test of critical support in the 80 area was anticipated by the 4th quarter of 2010. I’m looking for a break below that level and for us to make a significant move lower for the next couple of years back to the 70 area. All systems remain go on these beliefs. The “Mother” of all gold bull markets continues it’s march and in its wake the gold perma-bears and the media that continues to provide these false prophets a forum are being rolled over yet again. Only a handful of people...
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| Moral Condemnation for Traders Posted: 14 Sep 2010 04:42 PM PDT In the recent copy of Golf Digest, sitting on the coffee table in your editor's hotel room, we happened on a two page ad for the SPDR Gold Exchange Traded Fund. It's a pretty add, with lots of gold in it. The headline says, "Gold has a reputation for preserving wealth. Then again, we're only going back 5,000 years." There must be a lot of rich golfers out there. Gold made a new high when the December futures contract traded at $1,273.20. Maybe more investors are using gold as a hedge against bad monetary policy. Or maybe they just like bright shiny things. It will take a weaker Aussie dollar for the Aussie gold price to match the move in USD gold. But in the latest issue of Australian Wealth Gameplan we published last week, Murray wrote an article on the strength of the Aussie dollar and the future of the gold price. He said that he was, "Skeptical of this strength continuing in the short term and am waiting for a failure under 89c to return to a bearish stance on the AUD. If this were to occur then we would see the AUD price of gold rallying. "Therefore we seem to be approaching a time when all the moons are aligning for a sustained move higher in the AUD price of gold. Even if the AUD continues to trade higher we could still see the USD price of gold breakout to the upside." "Australian gold stocks seem to be sensing this state of affairs and have been rallying strongly for the past month. Perhaps the huge bull market in gold stocks that we have been waiting an eternity for has finally arrived." We concurred and in the same report recommended an Aussie gold producer. It's a household name and not an undiscovered junior explorer. But that's because our strategy in the Gameplan is fundamentally conservative. We wanted some exposure to the rising gold price, but not a huge amount of risk. Of course there are many other ways to play the rising gold. It depends on your style and tolerance for risk and appetite for excitement. Being a dullard, we prefer relatively safe and boring ways to make money - or not lose it. Murray, on the other hand, is a trader. That brings us to some feedback we've received on a note sent out earlier in the week. You may have received it yourself. It's about how Murray is using his proprietary trading method to try and wring more profits out of blue chip stocks. It's ruffled a few feathers. Dear Dan.... You said... "Just a quick note." "Listen, I don't want to ramble on and on here". Bull@#$&...... Just look at how many words you typed...Even more than that goose politician taking 17 minutes to say he was going with Labor. Love your pitch and happy to test out the offer.... Thank you. But don't go on for so long that it takes forever to get to the pitch....I have seen this before in your letters to us. It doesn't do your image good. You are really above this sort of thing. Or... get someone else to sub edit your work if you can't, so we get a clean neat pitch on just what the deal is and you won't grow old typing. Bruce Thanks for taking a punt Bruce. It's not the first time we've been told our letters too long. But maybe we should explain (without droning on). We've often been told our letters are condescending and insulting to the intelligence of our readers so it's probably time we say why we write long letters like that. In this case, the subscription price for the Slipstream Trader is not trivial. Before asking you to make a financial commitment like that, we want you to be sure of exactly what we're trying to do, why we're trying to do it, and what we think you could gain if we're successful. It takes a while to tell all that. But we'd rather be thorough than omit something you might later find important. The more you know ahead of time, the more you know what you're getting into. The other reason is that we want to do business with the sort of customer who's comfortable with unconventional and sometimes controversial ideas. As an investor, you have to find some kind of advantage over everyone else. We try and find ideas on the margins…before they reach a tipping point and become conventional wisdom. That's how you buy a stock cheap and watch it go up. The idea of doing something you've never heard or something that seems to contradict everything you've been told to id understandably terrifying for most people, although some people naturally are addicted to it. You could say the long letters have a way of sorting out which sort of person you are (or want to be): the kind that's willing to take a punt and look at things from a different perspective, or the kind that bins the letter because we're obviously blowhard steak knife salesman. By the way, your knives are on the way. More seriously we're also trying to show you is how we think. Hopefully each long letter has at least one useful or interesting idea that you get for free even if you don't want the end product. That's our goal anyone, to make the letters useful by giving you an insight or strategy you might not have had before. That's why it doesn't bother us when people guess the name of stocks we might be writing about in our promotions and then send us triumphant "Gotcha!" emails. Those people are missing the point. Anyone with a modem and a brain can figure out the stocks we're writing about. But figuring out how to find those stocks in the first place, become a better and more profitable investor, and be aware of threats and opportunities ahead of others….those are the real benefits of the newsletters we publish. Or at least that's our goal. And we want customers who are after more than just a stock tip. Thus, the longer letters. But we will have a look around for a sub editor. Not impressed with this promotion. Thought you were a small stocks advisory. I pay for your recommendations and advise, information and reports ,not to be touted with promotion products to buy something else. I've not been impressed for a few months and have been deciding whether to pay for another year. This is definitely not in your favour. Tasma It sounds like you should ask for your money back Tasma. We're not publishing ideas because we think they will make you happy. We're publishing ideas we think you should know about if you want to save or make more money. Honestly, if you don't like reading about other ideas or ways to make money in the market, then you're definitely not going to like being a long term customer of our business. We have no idea who's going to be right or wrong about investment ideas. So we hire researchers who work their tail off to find the best ideas in their chosen field. We tell our customers about those ideas. If you're not the type of person that's interested in them, that's fine. But you'd probably be happier with a much more traditional advisory service. Mr. Denning. Thank you for honouring me with your offer that I read with interest, but in all fairness to what you have read from Murray Dawes and his advice, with the results as claimed, it is made apparent that the real truth of the matter is not mentioned once. Nowhere is the truth told of the fact that although there are some who may be the winners if the prices continue to rise and fall, only to rise and then fall again, so that the buying can be achieved by some who then may sell to others who then must make a loss in their case, if there is then to be the opportunity for Murray's followers to be able to make the capital Profit that you would aptly describe as Wringing More Money from the Stocks You Own. What you surely fail to describe correctly, is that the ownership of shares can respectfully achieve a rightful profit through the dividends that the Owners at the right time should then earn as their rightful form of gain from their investments. In fact there is only one truth in what your Wringing will squeeze from the Stocks in the ASX market and that is the fact that for every gain there must be a loss by another investor who might be you if you have to sell when the market is down, but that is never mentioned. If you want to ruin others for your personal gain in the selling of your Wringing Scheme, rather than your ownership of shares; or if you want to buy shares when all investors have lost their faith in the Market, then you will be recognised, and as many may say in St Kilda, 'God help you' as you will get only what you deserve. So I write to honestly ask that you reconsider your suggested release in 48 hours time (that will be less that 36 by the time you read this) and then you will be able to explain 'why', so that the share market may be able to help everyone to be legitimately involved in the developing of our Country through their holding of shares. One that I appreciate might not be yours if the truth were to be found out. Please see if you can be honest or if it might be that you are simply replaying the story in the Bible, of Christ's entry into the Market Place. And I am sure that you are fully aware of that moment through your education as a child. With kind regards TBC, Sorry mate. You have us confused and mildly offended. To say that trading stocks is "ruining others for personal gains" is bizarre. Trading is not investing, and that's made clear in the letter we've written. But that doesn't make it immoral or unethical. It's not for everyone. Clearly it's not for you. But you are not everyone. And everyone is not like you. You're right to point out that there are two sides to every trade and for every winner there is a loser. But you seem to think the share market should not have winners and losers. We think the better strategy is not to be the loser. In Murray's work, he's helping people identify selling points in stocks they may own or buying points in stocks that may want to own. It may not be God's work, but we never said it was. We said it might be something you should look at if you own blue chip stocks. You do raise an interesting point, indirectly, about whether the capital markets exist to allocate capital to businesses or whether they've become a casino. Debating that point, while being philosophically and theoretically interesting, won't determine whether you make or lose money this year on your portfolio. Murray's objective is to help you not lose it and then to add to it. By the way, it also sounded like you made a veiled suggestion that if we published the letter, we'd be recognized on the street and eventually get what we deserve, which we're assuming is not an ice cream sundae. To be honest, it doesn't seem like a very Christian sentiment or suggestion. But just as Jesus kicked the moneychangers out of the Temple, let us not bring Jesus into the trading pits. Trading on faith is not likely to be a successfully strategy anyway, although someone somewhere is probably selling a hedge fund with that premise. Thanks for your long note. But we're going to publish the letter anyway, assuming that while it may not be for everyone, some people may actually like the idea and give it a shot. If you haven't read the letter, by the way, look for it later today. More comments welcome. Send them to dr@dailyreckoning.com.au Dan Denning
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| Myths, Human Psychology and Trading Posted: 14 Sep 2010 04:25 PM PDT I used to get incredibly frustrated by the scepticism I would get from people in relation to technical analysis. I would try to make them understand how it was possible to make good returns from using a technical approach and the steam would come out of my ears if they didn't come around to my point of view! I no longer get caught up in these arguments because I've finally realised that you can't change people's "world view". Once someone has created a set of beliefs about something they will continue to filter all information in relation to that worldview. I could never convince a devout Muslim that being a Jain monk is the way they should live their life - or vice versa. It just doesn't fit into their world view. There are many myths about the stock market. No one is exactly sure what the stock market is or how to make money from it consistently. We all have to come to our own understanding of what it is and do the best we can from there. My own journey into understanding markets was from standing in the futures pit on the Sydney Futures Exchange in the early 90's trying to listen intently to the action in the pits and constantly relaying hand signals to the brokers on the phones to let them know how many were left on the bid and offer and whether or not their orders were filled. Standing in the pit with a hundred screaming men fighting to be heard is a unique experience and I am sure that it has shaped my approach to markets in the ensuing years. This is because you are forced to watch the action at the coalface day after day. You begin to see the waves of emotion that run through the crowd and also the moments of downright panic that set in when something unexpected happens. You also have to wait through the seemingly endless hours when nothing is happening and the price action moves in rhythmic motion searching for stop losses. My interest in technical analysis spawned from this experience and when I graduated to the phones talking to institutional clients, I would have a huge roll of charting paper sprawled across my tiny workstation and would religiously mark every tick in the market on my point and figure charts in an effort to increase my understanding of why the markets moved in the way that they did. I always find it amusing when people make sweeping statements about technical analysis as if it is one thing and one thing only. Like a hot dog. We all know what a hot dog is and what it looks like. You either like hot dogs or you don't. It's as if people think there is a book of technical analysis that exists and if you just read that book you will know all there is to know about technical analysis. Nothing could be further from the truth. We are not fixing washing machines. There is no instruction manual. I am personally very sceptical myself of most mainstream technical analysis (i.e Edwards and McGee etc.). I find it far too linear in its interpretation of market price action and also bereft of any strict risk/reward criteria. When all eyes are looking at the same obvious structure (eg. Head and Shoulders) the chances of that structure being a money spinner are very remote. The chart is not a predictor of the future. It is not a crystal ball. It is just a map of human psychology and I can assure you that most humans do fairly stupid things over and over. I will then try and use this knowledge of the irrational behaviour of the herd to find good risk/reward entry points into the market. Places where I can be proven wrong very quickly. If I know I am wrong after losing only a very small percentage of my capital, and I have a high confidence that I will reach my initial target more often than not, then I have a recipe for trading the market that involves the least amount of psychological pressure. After all it's the way we behave under pressure that will decide if we make money or not. By ensuring you have a distinct set of rules to manage your behaviour in the sea of grey that is the markets you are on your way to being in control rather than letting the markets control you. I am sure there are a million different ways to make money in the markets than the way that I have found, but I also know there are far more ways to lose money! With 90% of people 'doing their dough' in the markets it is quite clear that if you have found a way to beat the market consistently then you are seeing something that others aren't. Anyway, you'll read more about my approach to trading the markets later this afternoon, in a special note from Dan. It's created quite a stir so far, as you'll see from the comments in Dan's essay above - but we've had way more positive feedback than negative, so far! I hope you have a good read and decide - if it's something you're interested in - to give my approach a trial run. That's what it's all about at the end of the day. If it's not for you - fine. You may have gathered that I'm not the most comfortable talking my own book. That's why, after much to-ing and fro-ing over the past few months, I've left it to Dan to explain to you what my trading service can help you achieve. Be sure to look out for his note this afternoon... Murray Dawes
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| Rising Debt and the Great Market Waiting Game Posted: 14 Sep 2010 04:17 PM PDT The Zombie Triumph of 2008... We're writing ahead of the close on Monday...stocks are up, but we'll have to wait to find out how it turns out. We're writing earlier than usual because we have to head back to France, to a funeral, alas. The burial will take place in Pere Lachaise cemetery...which we'll tell you about. In the meantime... Wait...wait...wait... That's probably the hardest part of this business...waiting for something you know SHOULD happen... It can take years. We remember waiting for the dot.com bubble to pop. People thought we were just "out of it." We just didn't "get it," they said. They said new technology had changed the rules of the game forever. Previously - that is, in the world B.I. (Before Internet), which was to them equivalent to the time when pre-humans walked on four legs - the value of stocks was limited to the value that could be added by PHYSICAL processes. You could build more factories. You could sell more widgets. But you were up against physical limits. There was only so much energy...so much labor...so many trucks...and so many people who wanted to buy your widget. So, you could anticipate growth. But within limits. If you paid more than 30 times earnings, you'd have to be out of your mind...because, come on, things just don't grow that fast and the faster they grew the more likely they were to crash into something. In this new electronic age, the sky was the limit. Because information flew around the Internet at the speed of light - and at practically no cost. There was no limit on how much human life could be improved with this new, free, information...so there was no limit on how much you should pay for one of the companies that was pushing electrons around. In practice, free information turned out to be worth no more than people paid for it...and the dot.com revolution blew up in January 2000...leaving only a handful of survivors (who have done very well, thank you.) In our view, the stock market has been in a bear trend ever since (even though the Dow rose after the initial downturn, at least in nominal terms, until 2007). But we waited three years before the blowout...with people laughing at us the whole time. They were getting rich on dot.com stocks...while we didn't get it. And it looked like we'd never get it. But then, guess who got it? They did. Good and hard, as we like to point out. Next, we waited three years - at least - for the housing/consumer credit/derivatives bubble to blow up. We saw it coming. We warned our dear readers. But for what seemed like an eternity, it looked like we were wrong. Houses just kept going up and up and up. Wall Street just kept making more and more money. It looked like it would never end...until 2007, that is. Waiting is hard. You begin to have doubts. Maybe you're wrong. Yes, it OUGHT to happen the way you imagine. But maybe you missed something. Maybe this really is something new and different. And so we wait again. What for? Three things... For the next leg down of the bear market... For the inevitable heavy-handed and disastrous intervention by the authorities... And for the final collapse of the dollar and the US bond market. We might also say we're waiting for the end of the welfare state...for the end of the dollar-based money system...for the end of the American imperium... But those things may be even farther into the future... So let's stick with those things that are closer to hand. Wait...the markets have closed. The Dow rose 81 points. Oil closed over $77. Bond yields are headed up. Gold was flat. Hey...the economy doesn't seem to be sinking towards deflation and a bear market today. Well, we'll just wait until tomorrow... And more thoughts... Meanwhile, we've been tracking the zombification of the US. The zombies are becoming more numerous, more parasitic, and bolder. From food stamps to bank bailouts everybody wants to live at someone else's expense. We hadn't thought of it this way before but the election of Barack Obama to the White House was not exactly what it seemed. It was not a triumph of light over darkness, nor right-thinking over neo-con devilry. Still, compared to George W. Bush, it seemed like even electing a half- wit would be an improvement. And Barack Obama is no half-wit. He has all his wits about him. Trouble is, he was also the candidate of choice for the zombies. And his election marks a major milestone; the zombies now control the White House and Congress. They control America. Obama won 28 states. John McCain won 22. The Obama states are full of debt-fattened zombies - with an average per-capita state debt of $1,728. The McCain states are relatively solvent, with an average per- capita debt of only $749. In the states that went most heavily for Obama - Hawaii, Vermont, New York, Rhode Island, Massachusetts and dear ol' Maryland - the average state debt per capita was even higher, at $4,606. We don't need to make too much of this. It's pretty obvious what was going on. The zombies saw one of their own. They wanted someone who would give them something for nothing. In Barack Obama, they got it...maybe even more than they bargained for. Here's the latest news: The Treasury Department says that through August, the deficit totaled $1.26 trillion. That's down 8.1 percent from the same period in 2009, when the government recorded a record $1.4 trillion deficit. But it is on pace to total $1.3 trillion - the second-largest deficit on record. Soaring deficits have become a major issue with voters heading into the midterm elections. Republicans have highlighted the deficits to illustrate how government spending is on the rise under Democrats. So you see. It just proves our whole point. Nature abhors a vacuum and detests a monopoly. After the fall of the Berlin Wall, America had a monopoly on force. No nation...nor even all the world's other nations put together...posed a serious military threat. Nature couldn't stand it. She got to work. If America could not be brought down a peg by other nations, she would have to bring herself down. How? The typical ways...spending too much money...getting into expensive wars with nobodies...wasting her resources overseas while letting the zombies take over at home. First nature needed a stooge - a willing dupe - to implement the program. George W. Bush was perfect in the role. He never met a spending bill he didn't want to sign or a war he didn't want to join. And then came the decisive election campaign of 2008. Nature must have been worried. What if a real reformer came up? What if he cut the budget, brought home the troops and threw out the zombies? Ron Paul did present himself. And yes, his program would have meant a big reform. But no...the American people - bless their greedy little hearts - wanted nothing to do with it. They had become accustomed to living in a style they couldn't afford. They wanted more of it. They turned their back on Ron Paul and voted instead for Barack Obama. Yes, dear reader, it was the Zombie Triumph of 2008. It kept America on track - on the road to perdition. Regards, Bill Bonner,
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| Posted: 14 Sep 2010 04:01 PM PDT
Q&A on QE2 (Hatzius), (via Tungstenman Sachs)
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| Gold Seeker Closing Report: Gold Makes New All-Time Highs While Silver Closes At A New 30-Month High Posted: 14 Sep 2010 04:00 PM PDT Gold climbed almost 1% higher in Asia and London and surged even more in early New York trade to a new record intraday high at $1274.60 by about noon EST before it fell back off a bit into the close, but it still ended at a new all-time closing high with a gain of 1.95%. Silver climbed to as high as $20.492 before it also fell back off a bit in afternoon trade, but it still ended at a new 30 month high with a gain of 1.34%. Silver needs only to close above its March 5th 2008 mark of $20.64 before achieving a new 30 year closing high.
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| Currency Intervention, Bitches Posted: 14 Sep 2010 02:26 PM PDT
After a six year wait, the BoJ has finally had enough of the Federal Reserve's endless manipulation and has itself intervened in the currency market. The USDJPY jumps over 150 bps, the Nikkei surges 250 pts (that ES-Nikkei convergence or whatever the hell it was is closing soon) as the BOJ sells between 200 and 300 billion worth of yen. Yes, this is the time to short, short, short because if the now useless SNB interventions have taught is anything it is that central banks are populated by pompous morons who believe they can control the world, when the best thing they can do is hope for the last Viagra shot to result in priapism. For those who have taken Psych 101 - look up learned helplessnes. Next up - the SNB, and after that the Fed once again, and after that, the slow but sure end of fiat. The race to the currency devaluation bottom is now in the third and last lap. And incidentally, for all those who missed it, the BOJ's intervention is a symbolic capitulation, and the beginning of the end for the Keynesian system. Rejoice.
And here is what can only be classified as the funniest self-propagating, feedback-looping, confused fractal tick chart seen in a long, long time:
And here is the thingy from Reuters, confirming the BoJ's penis envy: Japan intervened in the currency market on Wednesday for the first time in six years, selling yen to stem a rise in the currency that is threatening a fragile economic recovery. Finance Minister Yoshihiko Noda confirmed the intervention in a news conference, saying Tokyo was also communicating with authorities overseas but indicating that Japan acted alone. Noda declined to comment on whether the intervention, the first since March 2004, was to buy dollars for yen, but two traders said the Bank of Japan appeared to have bought dollars around 83 yen. "We will take decisive steps if necessary, including intervention, while continuing to closely watch currency market moves from now on," Noda told reporters at a hastily arranged news conference. The dollar, which had hit a 15-year-low at 82.87 yen Prime Minister Naoto Kan's government has been trying to talk down the yen but until Wednesday had stopped short of intervening in the markets, apparently worried that acting without Group of Seven partners would not be very effective. Kan was re-elected ruling party leader on Tuesday, decisively fending off a challenge from powerbroker Ichiro Ozawa, an outspoken advocate of intervention. 15-YEAR HIGH "There were views in the market that Kan was more tolerant of a higher yen and the yen rose after he won the ruling party leadership vote yesterday," said Yasuo Yamamoto, senior economist at Mizuho Research Institute. "The government probably wanted to stamp out those views. But the question is: Will the yen stop rising from here? It's not clear." But the yen has surged to its highest against the dollar since 1995, as low U.S. interest rates have made the dollar cheap to borrow and sell for higher-yielding assets, bringing the Japanese currency closer and closer to its record peak of 79.75 per dollar set in 1995. The yen's rise has weighed on the Tokyo stock market's Nikkei average <.N225>, which climbed 1.8 percent on the day as news of the intervention spread. The euro rose 1.5 percent to 109.65 yen. The Bank of Japan acts on behalf of the Ministry of Finance in currency intervention. Japan is not the only developed economy to have intervened to weaken its currency in the past year.
And amusingly, here is what BofA had to say on the topic of the USDYEN and intervention in the hours just before the BOJ threw in the towel.
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| Sure beats currency market rigging fever Posted: 14 Sep 2010 02:23 PM PDT Gold Fever Strikes Mom and Pop Prospectors in the West By Laura Zuckerman http://www.reuters.com/article/idUSTRE68D5ON20100914 SALMON, Idaho -- When John Brewer's construction business soured along with the U.S. economy, he sought to replace lost income by prospecting for gold from the river valleys of central Idaho to the wilds of Alaska. Armed with the tools of the trade -- a metal detector, gold pan, and sluice box, a series of screens that sort gold from alluvial material like sand and gravel -- the Montana man represents the new face of a pursuit that once paved the way for settlement of the Western frontier. The poor economy and a record price of gold have renewed interest in prospecting in Western states where public lands are rich with deposits and small-scale operators are all but free from government regulation. ... Dispatch continues below ... 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 What Brewer has in common with 19th-century prospectors is a drive for gold equaled in intensity only by the instinct to keep quiet about its location and volume. "Asking a miner where they found it and what they found is like asking an angler about his secret fishing hole," said Brewer. "We're not going to tell anybody. As soon as you tell anybody, there will be a crowd -- and that would be counterproductive." Gold prices hit a record $1,275.20 per ounce on Tuesday. Some gold mining sites economically feasible for the first time in years, prompting mid- and large-scale operators to apply to mine on national forests and on acreage overseen by the U.S. Bureau of Land Management in the Rocky Mountains. "When gold goes over $1,000 an ounce, everybody becomes a miner," said Russ Bjorklund, minerals manager with Salmon-Challis National Forest in Idaho. He is among federal land managers reporting a marked resurgence in gold mining, from amateurs armed with pans to corporations working hardrock mines. Susan Elliott, geologist with Humboldt-Toiyabe National Forest in Nevada, said the rush is on in a state that is the fourth largest producer of gold in the world. Elliott linked a 75 percent increase in mining activity on the 6.3 million-acre (2.5 million-hectare) forest to the rise in gold prices in recent years. "We've got all types: individuals out there with pick and shovel and companies with heavy equipment," she said. Jon Cummings, who promotes gold-mining adventures at his Idaho resort, says finding what prospectors call "color" in the pan ignites a passion. "You start finding a little gold in the pan -- that's when gold fever kicks in. It's like a drug and you're ready to work all night," he said. International gold-mining giant Barrick Gold Corp. in February gained approval from the federal Bureau of Land Management to expand its Bald Mountain mine in northeastern Nevada. Bald Mountain represents one of the company's 25 operating mines, eight of which are in the western United States. Large-scale operators like Barrick must clear a number of hurdles in advance of gold mining, often a years-long process. But Ray TeSoro, minerals specialist for the U.S. Forest Service region that includes Montana, also described an influx of "mom and pop operations." Those small-time prospectors, like Brewer, mostly engage in low-impact, stream-side mining like gold panning and sluicing, techniques which rely on gravity to separate heavy gold from sediment. In the mountains of central Idaho, gold fever is behind trespassing incidents. Beverly Cockrell, a rancher near Salmon, Idaho, has confronted strangers with "sticky fingers" on her creek-side land, including one who reportedly raided a sluice box. "We're having to run people off," Cockrell said. And some economists take a dim view of the gold rush. "You've got this pretty metal -- what does it do?" said James Hamilton, economics professor at University of California, San Diego. "It doesn't create dividends, it doesn't create more productivity; it's a hedge against certain kinds of risks." But it will take more than discouraging words to dampen the enthusiasm of gold hunters like Brewer, who declined to say what profit he turns from prospecting. "It doesn't replace a full-time job with benefits, but you work hard enough at it, you might get lucky," he said. Join GATA here: Toronto Resource Investment Conference The Silver Summit 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
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| Japan intervenes in currency market to suppress yen Posted: 14 Sep 2010 02:15 PM PDT The currency devaluation race is on. Gold wins it standing still. * * * Japan Intervenes in Forex Market, 1st Time in 6 Years From Reuters http://www.reuters.com/article/idUSTRE68E0AE20100915 TOKYO -- Japan intervened in the currency market on Wednesday for the first time in six years, buying the dollar to stem a rise in the yen that is threatening a fragile economic recovery. Finance Minister Yoshihiko Noda confirmed the intervention at a news conference. The Bank of Japan appeared to have bought dollars at around 83 yen, two traders said. The dollar, which had hit a new 15-year-low against the yen earlier in the morning, spiked higher. Prime Minister Naoto Kan's government has been trying to talk down the yen but until Wednesday had stopped short of intervening in the markets, apparently worried that acting without Group of Seven partners would not be very effective. 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 Join GATA here: Toronto Resource Investment Conference The Silver Summit 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 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
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| Market Commentary From Monty Guild Posted: 14 Sep 2010 12:41 PM PDT Dear CIGAs, SOMETIMES WE GET LUCKY Privately we have been increasingly bearish on the prospects for long-term bonds for many months. We waited until August 27, 2010 to put out our first strong recommendation that readers sell their long-term bonds in the U.S. Clearly we were lucky with our timing. Almost immediately long-term U.S. government bonds began to fall in price and rise in yield, and since that time investors have lost 2.5 percent of the value in their 30 year U.S. government bonds. When you consider that at the price peak of long-term U.S. government bonds only paid 3.6 percent per annum, 2.5 percent equals 8 months of interest income. In the three letters since that time, we have reiterated our sell opinion on long-term bonds. As of today, we are recommending that investors sell long and intermediate-term bonds with maturities of 10 to 15 years or greater. It is our strong recommendation that investors sell long and intermediate term U.S. bonds including U.S. treasuries, U.S. government agencies, municipal bonds, or corporate bonds. In our opinion, it is a very unwise bet to gamble that interest rates will stay down. DO NOT FIGHT THE LAST WAR… INFLATION IS THE RISK, NOT DEFLATION Remember the Maginot Line? Fighting the last war is almost always a mistake in the investment world. Between WWI and WWII, during the period 1930-1935, the Maginot line defense system was constructed by the French at the huge cost of about seven billion francs. The line extended between Luxembourg and Switzerland along the French/German border, and was widely thought to be impregnable by tanks. The French knew the Germans had expansionary plans and they figured they would use the tank weapon, so they used the logic of the last major war to determine where the invasion might take place. When Hitler ordered an offensive in early 1940, the German army invaded France through Luxembourg and Belgium through the somewhat mountainous Ardennes; around the northern flank of the Maginot line. The French military had reasoned that because the Ardennes region was heavily wooded and somewhat mountainous, the Germans would not send tanks from that direction. When seven tank divisions reached Dinant, Belguim on May 12, 1940 the French Government abandoned Paris. Why do we mention this historical event? The last successful stock or bond market investment strategy is much the same as the Maginot line. In our opinion, believing that disinflation or deflation will continue, and inflation will not return is fighting the last war. Inflation in the emerging world is a demand pull and it is a force to be reckoned with. Please see the following article: New York Times "Inflation in China Is Rising at a Fast Pace" 09/11/2010 Inflation will soon arrive in the developed world in the form of cost push inflation. Key sources of this inflation will be the rising costs of imported goods and services, and the rising cost of raw materials. Cheap labor and land found in the developing economies have been a source of disinflation for manufactured goods for nearly a generation. The tide is changing and these developing economies will begin to export higher costs instead. The inflation figures coming out of the developing world are key numbers that investors should watch. For example, China's recently released data can be found here: Yahoo Finance "China's inflation edges up, driven by food costs" 09/11/2010
MEXICO Many months after we warned the investment world that a war is going on in Mexico, the Secretary of State mentions the problem. To quote an article by Paul Richter and Ken Dilanian in the Los Angeles Times about Secretary Clinton's talk on the subject of Mexico last Wednesday: " Clinton's comments reflected a striking shift in the public tome of the Obama administration on the bloodshed that has cost 28,000 lives in Mexico since December 2006." In less than four years, the Mexican drug war has seen more than six times as many deaths as U.S. Military casualties in Iraq since March 2003. The U.S. has a huge problem and most Americans are not yet aware of the magnitude of the issue. As war for the control of Mexico is taking place on the U.S.'s southern border, the U.S. must take action to defend its territory and to stop the war and bloodshed from moving into the U.S. Currently, the drug cartels' strategy is to buy police forces and politicians that will not prosecute the murder, kidnapping, intimidation, brutality, corruption, and drug trafficking. The problem looks to be accelerating and is going to spill over into U.S. border territories. We believe that the major narcotics-smuggling cartels are opening a new strategy. It appears that their new strategy will be to continue their old style of functioning while expanding their influence by pretending to be revolutionaries and working to undermine the political framework of the Mexican government. We have no doubt that their ultimate goal is to gain control of the entire governmental apparatus of Mexico and to extend their power from control over numerous corrupt police forces and local politicians to control of the very highest levers of power in Mexico. Stay tuned. This will be a battle of substantial size and duration. JAPAN HAS TO DO SOMETHING ABOUT THE STRONG YEN Japan must do something to stop the continued devastating rise of their currency. It is damaging their export machine and is currently contributing to the Japanese economic stagnation which has lasted for much of the last 20 years. What they will do we do not know, but we expect that the pain threshold has been realized and Japan will do something to devalue the Yen. GOLD Gold has broken out above the highs of June 2010. We remain very bullish on gold and gold shares. Some hedge funds have been long gold bullion and short gold shares. We believe this to be a big mistake. SUMMARY OF OUR INVESTMENT VIEWS • Bullish on gold and silver bullion and shares. We still remain bearish on long-term bonds, and especially many municipal bonds in the U.S. We will be happy to look at your municipal bond portfolio and offer our suggestions for free. Please do not hesitate to contact Aubrey Ford or Anthony Danaher at 310-826-8600. We look forward to hearing your thoughts or comments. Thanks for listening. Monty Guild and Tony Danaher
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| Silver still rules, Gold is envious ... Posted: 14 Sep 2010 12:38 PM PDT YTD gains, performance per dollar invested 9/14/10 ; Silver - 20.13% :banana: Gold - 14.24% :haha:
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