Gold World News Flash |
- Soros Explains His Comments on Gold as the Ultimate Bubble
- Wednesday ETF Wrap-Up: BWX Sinks, UNG Soars
- GoldSeek.com Radio Gold Nugget: Dr. Stephen Leeb & Chris Waltzek
- Shiller: There Will Be More Bubbles
- Jobs, Inflation, Business Data on Tap
- Preserve Your Capital with Gold, Silver
- The Woeful Results of Raising Taxes
- China’s War Uses U.S. Debt Against U.S. Dollar
- Hourly Action In Gold From Trader Dan
- If You Own These Popular Income Investments, Watch Out
- Daily Dispatch: Three Dominoes
- Hyperinflation Watch - September 15, 2010
- Bob Chapman: Preserve Your Capital with Gold, Silver
- What’s Behind Gold’s Latest Record
- Gold Consolidates Gains
- AngloGold Ashanti To Eliminate Its Hedge Book
- Quick Update
- Donner-Xstrata Mine Shows Increased Upside
- LGMR: Gold "Very Impulsive" at New USD Record as Tokyo Starts "Race to the Bottom"
- Ahead of The Herd Likes Donner Metals
- Grandich Client Update – Silver Quest Resources
- Crude Oil Falls as Momentum Wanes, Gold Soars to New Heights
- Silver Bull Seasonals
- When Is the Gold Bubble Going to Burst?
- Mounting Tension
- In The News Today
- International Demand For Gold Evident
- The Losing Battle to Fix Gold at $35, Part II
- Gold a Defense for Fatal Conceit
- THE OUTLOOK FOR GOLD AND SILVER
- Nothing Will Beat Gold (Except Silver), No Matter What the Professor Says
- 8 Million Foreclosures Are About To Hit The Market
- The Economics of Mass Destruction - Part I
- The CBO Attends a Tea Party Rally
- How I generate 'slipstream' trades
- Jim's Mailbox
- GATA participates in Toronto conference Sept. 25-26
- Hyperinflation and Unemployment Two Signs of Serious Trouble
- Gold Seeker Closing Report: Gold and Silver End Mixed
| Soros Explains His Comments on Gold as the Ultimate Bubble Posted: 15 Sep 2010 07:15 PM PDT Edward Harrison submits: George Soros has finally come out and said what he meant by his comments about gold being the "ultimate bubble." The National Post reports the following exchange from a Reuters interview.
Complete Story »
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| Wednesday ETF Wrap-Up: BWX Sinks, UNG Soars Posted: 15 Sep 2010 07:02 PM PDT ETF Database submits: Equity markets were off to a rough start in Wednesday morning trading, but within an hour rose into a more positive mood that helped major indexes finish the day in positive territory. The Dow and Nasdaq both finished the day ahead by half a percent while the broad S&P 500 finished up by a more modest 0.4%. While it was a good day for equities, the other asset classes were not as fortunate; oil lost more than $1/bbl. in today’s trading and gold retreating by 0.2% off of its record highs as safe-haven demand waned. This trend carried over into the bond markets, which saw longer-term issues fall as yields on the 10 year note rose up to 2.72% while 2 year notes stayed firm and saw their yields drop below the 0.5% mark. The big news in today’s session was Japan’s intervention into the currency markets in an attempt to halt the dramatic rise of the nation’s currency against the dollar. This sent the yen tumbling against the greenback by more than 3%, much to the delight of the large Japanese exporters that had been crushed by the runaway yen. While the mini-rally has left some optimistic on the outlook for global equity markets in the fall quarter, others are not so bullish and have pointed out how low volume continues to reign over the markets after the Labor Day break. “The summer malaise has turned into the fall malaise, and investors as a whole don’t seem too excited about the markets,” said Paul Nolte, managing director at Dearborn Partners. Markets seem stuck in a 5% range and it doesn’t appear as if anything in the short-term will pull them out of this choppy trading. Complete Story »
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| GoldSeek.com Radio Gold Nugget: Dr. Stephen Leeb & Chris Waltzek Posted: 15 Sep 2010 07:00 PM PDT GoldSeek.com Radio Gold Nugget: Dr. Stephen Leeb & Chris Waltzek
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| Shiller: There Will Be More Bubbles Posted: 15 Sep 2010 06:58 PM PDT Cullen Roche submits: It’s amazing how much money and effort the government has thrown at the financial crisis over the last few years and yet it’s looking more and more like they’ve accomplished very little. The stimulus was a short-term fix, the housing stimulus has simply propped up prices, and the financial regulatory reform bill is unlikely to prevent future crises. In the following segment Robert Shiller discusses how the government actions have failed us. He believes the economy remains very weak and that the government has not done enough to target the right areas of the economy. He is worried that house prices could decline further and that we’re entering a soft patch that could reveal underlying private sector weakness: Complete Story »
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| Jobs, Inflation, Business Data on Tap Posted: 15 Sep 2010 06:37 PM PDT optionMONSTER submits: By Bryan McCormick There are three major reports for today, covering employment, the inflation outlook, and business activity. If each aligns bullishly, we might have enough of a catalyst for the major indexes to break through resistance and their multi-month trading ranges. Complete Story »
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| Preserve Your Capital with Gold, Silver Posted: 15 Sep 2010 06:07 PM PDT International Forecaster Editor Bob Chapman believes the world is headed for a single governing structure where gold and silver are commonly traded currencies. In this exclusive interview with The Gold Report, Bob tells you why he thinks gold could still hit $1,600 this year despite the government's efforts to smother the gold price.
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| The Woeful Results of Raising Taxes Posted: 15 Sep 2010 06:02 PM PDT I wearily wrote, "Dear Diary, I am even more convinced that we are freaking doomed because the Federal Reserve has created So Freaking Much Money (SFMM) when it allowed the creation of So Freaking Much Debt (SFMD) to finance So Freaking Much Consumption (SFMC), both public and private" whereupon I stopped, demoralized after realizing that there was nothing else to write that didn't seem so, you know, anticlimactic.
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| China’s War Uses U.S. Debt Against U.S. Dollar Posted: 15 Sep 2010 06:01 PM PDT Recently, the U.S. Treasury Department released data showing an 11% decline in official Chinese holdings of U.S. government bonds during the past year. The Chinese government isn't adding to its U.S. bond position. Nor is it rolling over its previous purchases. Instead, between September 2009–June 2010, Chinese holdings of U.S. bonds fell from $938.1 billion to $843.7. That's a drop of over $94 billion over nine months. The Chinese are backing away from U.S. debt. They're reducing their exposure to the U.S. dollar, and by extension their vulnerability to a declining U.S. economy. What's going on? Is the decline in Chinese holdings of U.S. bonds strictly an economic assessment? Or is there something else afoot? What factions are driving this decision? And what does all of this mean for precious metals? China's Growing Confidence, and U.S. Decline First let's note how, in recent years, China has exhibited a newfound measure of international confidence, if not swagger. It's easy to u...
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| Hourly Action In Gold From Trader Dan Posted: 15 Sep 2010 06:01 PM PDT View the original post at jsmineset.com... September 15, 2010 09:45 AM Dear CIGAs, As many of you are no doubt already aware, the Bank of Japan finally, finally, intervened after several weeks of increased hand-wringing regarding the extremely high level of the Yen. They have not done this since 2004 ( I might add I was on the receiving end of that 'whoopin' at the time). Quite frankly I am surprised it took them this long although the recent elections probably had a great deal to do with delaying the onset of what nearly every Forex trader on the planet has been expecting for some time now. The reason – once they start ratcheting up the rhetoric, especially if those pesky speculators do not turn tail and run over verbal threats, their credibility is on the line and act they must if they are to maintain the respect of the speculative community. They mauled the Yen overnight with the result that the Dollar managed to move up and away from the 81 level. The key now will be to see how e...
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| If You Own These Popular Income Investments, Watch Out Posted: 15 Sep 2010 06:01 PM PDT By Tom Dyson Wednesday, September 15, 2010 Income investments are on fire right now… Take the MLP sector as an example. MLP stands for "master limited partnership." It's a special corporate structure used by about 100 small companies – mostly natural gas pipelines. MLPs can make excellent dividend investments. You can usually expect to earn around 9% a year in dividends from them. But over the last 16 months, Wall Street has introduced six new funds focusing on MLPs. Investors have poured billions into them. Kinder Morgan and Enterprise Products – the two largest MLPs – now yield only 6%. Emerging market bonds are another popular income investment. Because these "developing" countries often have high inflation rates, weak currencies, and poor credit histories, investors can earn double-digit yields buying emerging market bonds. But right now, Brazil's 10-year bond yields just 3.59%. Mexico's 10-year yields 3.63%. Columbia's 10-yea...
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| Daily Dispatch: Three Dominoes Posted: 15 Sep 2010 06:01 PM PDT September 15, 2010 | www.CaseyResearch.com Three Dominoes Dear Reader, Can anyone out there suggest a reasonable way for Japan’s massive debt, now 200% of GDP, to be resolved without a lot of people getting gutted? (Unfortunately, it is the millions of Japanese savers and pensioners – holders of most of the unpayable debt – who are the most likely candidates for the inevitable societal seppuku.) Considered from another angle, is it conceivable that the world will ignore Japan’s impossible situation… indefinitely? I think not. But just because something can’t last, that doesn’t mean it can’t last longer than one expects. Ditto, the massive misallocation of capital in these United States. Just because returning to a robust economy requires first navigating a minefield littered with bad loans, that doesn’t mean the fatal misstep will come tomorrow. As a consequence, ...
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| Hyperinflation Watch - September 15, 2010 Posted: 15 Sep 2010 06:01 PM PDT [/LEFT] [/LEFT] [/LEFT] Inflationary pressures are about to hit hard because all the money printing for bailouts and stimulus programs has done little to stimulate the economy. As a consequence, instead of being used in economic activity, all this money printed over the past few years is now heading for safety - tangible assets. And gold and silver are the safest and most liquid tangible assets....
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| Bob Chapman: Preserve Your Capital with Gold, Silver Posted: 15 Sep 2010 06:01 PM PDT Source: Brian Sylvester of The Gold Report 09/15/2010 International Forecaster Editor Bob Chapman believes the world is headed for a single governing structure where gold and silver are commonly traded currencies. In this exclusive interview with The Gold Report, Bob tells you why he thinks gold could still hit $1,600 this year despite the government's efforts to smother the gold price. He also offers a handful of equities he believes are worthwhile investments in such a price environment. The Gold Report: Bob, you are the editor of The International Forecaster now, but you have about 50 years of investment experience behind you. Tell us about yourself. Bob Chapman: The International Forecaster has been in production for over 20 years. It came about because I retired at 52 and being a "Type A" personality I found I couldn't live life without doing something with my mind. Playing golf and tennis everyday was a bore, so I started The International Forecaster. I had sp...
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| What’s Behind Gold’s Latest Record Posted: 15 Sep 2010 06:01 PM PDT The 5 min. Forecast September 15, 2010 12:02 PM by Addison Wiggin [LIST] [*] Gold reaches a record as trend that dominated 2010 finally falls apart [*] Gold’s next drivers: Obama and the Fed “doubling down” [*] Bank of Japan big-foots the forex markets… Chuck Butler on whether it can last [*] Chris Mayer on why natural gas is down, but not out [*] Update from Washington: Your retirement accounts are safe… for now [/LIST] No, it wasn’t a one-day wonder. Gold is holding its own after reaching a record high. The yellow metal’s spot price jumped $25 an ounce yesterday, topping out near $1,275 before pulling back -- but not much. This morning, it sits at $1,268. The immediate catalyst appears to have been some conference call chatter by Jan Hatzius, the chief U.S. economist at Goldman Sachs. He speculated another round of quantitative easing is on the way, with the Federal Reserve buying up more T...
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| Posted: 15 Sep 2010 06:01 PM PDT courtesy of DailyFX.com September 15, 2010 05:48 AM Daily Bars Prepared by Jamie Saettele Gold has traded to a new high, which negates the bearish implications and sets sights on round figures such as 1300, 1400, 1500, etc. Last week’s breakdown was of the false variety. Watch channel resistance going forward. The line is at 1292 today and increases about $3 a day....
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| AngloGold Ashanti To Eliminate Its Hedge Book Posted: 15 Sep 2010 06:01 PM PDT Gold Hits New Record High Price! Hyperinflation coming soon? The Vote on 'Form 1099' Hits the Senate Today. AngloGold Ashanti Rushes to Pay Out its Hedgebook. A 'Call to Arms' by Silver Analyst Ted Butler... and much more. YESTERDAY IN GOLD AND SILVER Well, Far East and early London trading were but a harbinger of things to come during the rest of the Tuesday trading day... as gold took off around noon in London... and really accelerated about 9:30 a.m. in New York. This party lasted until precisely noon Eastern time, before either the buyer disappeared. or a seller of some substance arrived on the scene. The equity markets took a header in the last half-hour of trading, and that may have been a contributing factor to gold's decline shortly before 4:00 p.m. yesterday afternoon. Gold's high was reported as $1,275.70 spot Silver showed a similar pattern, but its impressive advance got sold off shortly after London trading began yesterday morning a...
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| Posted: 15 Sep 2010 06:01 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 15, 2010 07:51 AM U.S. Stock Market - Sideways to higher appears the case for the very near term. I continue to look for the market to begin worrying about the November elections as they draw closer. I like to note that I said almost a year ago the surprise will be how many incumbents get voted out. Last night Tea Party results only make me feel better about that prediction. Gold and Silver – A pause that refreshes is my wish near term. I like to get off the front pages of the financial media. $1,300 gold and $21+ silver looks good for sometime in October (if not sooner). U.S. Dollar - It’s long term future. Continental Minerals – As I write this post, I’m unaware of the specific reason for the halt. Could I speculate? Yes – no Canucks jersey for me please. Silver Quest Resources – Despite what s...
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| Donner-Xstrata Mine Shows Increased Upside Posted: 15 Sep 2010 06:01 PM PDT Richard (Rick) Mills Ahead of the Herd As a general rule, the most successful man in life is the man who has the best information In July 2010, Xstrata (XTA-L) and Donner Metals (DON-TSX) began construction of a joint venture zinc mine on the Bracemac-McLeod deposit in Quebec. They started without a completed feasibility study. Since neither company has a reputation for impulsive behaviour, industry observers assumed that the early (unpublished) geological data was positive. That assumption was confirmed on Sept 3, 2010 with the late release of the feasibility report which revealed a magnified resource base and significant upside to the original economic projections. According to the International Zinc and Metal Study Group, global zinc consumption is due to rise 740 tonnes (7%) in 2010 while mine production is predicted to rise only 623 tonnes (5.5%). Zinc is a required ingredient in galvanized steel. Demand is tied closely to the construction indust...
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| Posted: 15 Sep 2010 06:01 PM PDT London Gold Market Report from Adrian Ash BullionVault 08:50 ET, Weds 15 Sept. Gold "Very Impulsive" at New USD Record as Tokyo Fires Starting-Gun in FX "Race to the Bottom" THE PRICE OF GOLD in wholesale dealing held tight some $5 below yesterday's new Dollar high of $1275 an ounce in Asia and London on Wednesday, slipping back against all other major currencies bar the Japanese Yen, which fell on news that the Tokyo authorities are actively selling their own currency to depress its value. "The race to the bottom in the FX markets is now on," says a note from Mitsui's metal dealing team in London. "Price action [in gold] is very impulsive," says bullion bank Scotia Mocatta, "suggesting the metal will move higher before we see a retracement." Finance minister Yoshihiko Noda today confirmed the Yen intervention – Tokyo's first in six years – but said he's still seeking joint action with the United States. The Dollar/Yen exchange rate jumped 2% as news of...
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| Ahead of The Herd Likes Donner Metals Posted: 15 Sep 2010 06:01 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 15, 2010 04:17 AM Read [url]http://www.grandich.com/[/url] grandich.com...
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| Grandich Client Update – Silver Quest Resources Posted: 15 Sep 2010 06:01 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 15, 2010 04:27 AM Silver Quest has released its first assay results from its Yukon exploration program on the Boulevard project.* These results are from the Vegas Zone, one of 3 anomalous zone previously defined on Boulevard.* The six drill holes released this morning are the first drill holes to be drilled by Silver Quest on the Boulevard project and they struck gold!* This is a real accomplishment, as most other company's working in the Yukon have spent their time trenching and re-trenching.* Silver Quest decided to take a different approach and test for bedrock mineralization by drilling and have hit gold. This program would have been a success if only sniffs of gold were encountered, but they managed to find some fairly significant drill intercepts including 23.90 m of 0.79 g/t gold and 6.26 m of 2.11 g/t gold. *We need more than ...
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| Crude Oil Falls as Momentum Wanes, Gold Soars to New Heights Posted: 15 Sep 2010 06:01 PM PDT courtesy of DailyFX.com September 14, 2010 10:51 PM Crude oil dipped as traders re-focus their attention on elevated U.S. inventory levels as the government gets set to release the latest figures on Wednesday. The gold trend can only be described as a “raging bull market.” Commodities – Energy Crude Oil Falls as Momentum Wanes Crude Oil (WTI) - $76.18 // $0.62 // 0.81% Commentary: Crude oil is down in overnight trade after falling $0.39, or 0.51%, on Tuesday. It looks like the momentum that built up on the back of China growth optimism and the Enbridge pipeline leak is fading now that the latter is being resolved. Traders are also anticipating tomorrow’s government inventory figures, which have been horrible in recent weeks. Recall that U.S. petroleum inventories are 110 million, or 10.7%, above the 5-year average. The less authoritative API survey (an industry source) showed that crude oil inventories rose 3.3 million barrels last week, ...
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| Posted: 15 Sep 2010 06:00 PM PDT
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| When Is the Gold Bubble Going to Burst? Posted: 15 Sep 2010 06:00 PM PDT
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| Posted: 15 Sep 2010 05:54 PM PDT There was more odd market behavior yesterday, but at least it was odd in a different way. Stocks rallied 0.4% while Treasury yields backed up to 2.72% (10y note), so the normal relationship resumed for at least a day. Moreover, the dollar rallied – sort of. It was unchanged against the Euro, but 2 big figures weaker against the Yen as the Bank of Japan intervened to buy as much as $20bln versus yen (Reuters story here). Japan has become concerned at the increasing strength of its currency against the dollar (near all-time highs), partly since a strengthening domestic currency helps to lower domestic inflation…which is just about the last thing that Japan needs. Word was that the sale of yen wasn’t sterilized, implying that the BOJ also was adding to its money supply. I don’t know a lot about currency intervention, but here is what I do know and I think it’s pretty close to all that I need to know: intervention tends to work only when the market was overextended anyway relative to the fundamentals, not merely because it is inconvenient for the central bankers. If Japan’s currency is strengthening relative to the dollar, it is partly because the US appears to be moving towards quantitative easing with much more determination than Japan ever showed. If the BOJ wants to weaken the yen, it should print a lot more of them. If the U.S. increases the supply of dollars, relative to other currencies, appreciably, then its relative price will decrease (this is one reason that we ought to be wary of concerted QE, since not many countries likely want to see their currencies strengthen a whole lot against the buck…especially when they own trillions of dollars). Complete Story »
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| Posted: 15 Sep 2010 05:50 PM PDT Jim Sinclair's Commentary Just an observation – my email inbox has exceeded 20,100 for 2010
Jim Sinclair's Commentary They know the problem but still have no answers. EU Proposes Legislation To Reduce Risks In Derivatives Trading BRUSSELS (Dow Jones)–The European Commission Wednesday proposed two pieces of legislation aimed at limiting risky trading in financial markets, part of its effort to improve regulation in the wake of the financial crisis. One proposal would require most derivatives trades to be routed through centralized clearing houses, which are entities that ensure companies can cover their losses if their trades go awry. The other would force investors to disclose more information about the bets they make against companies or the debt of governments, with European regulators given the power to ban these trades temporarily in a period of market turmoil.
Jim Sinclair's Commentary China looks ahead. They will tie up all the critical materials they feel they need for their own consumption, not necessarily for market pricing reasons as the mining majors do. That is what is called a plan. The West just sits and watches, not realizing what is happening. The consequences for the West are long term and devastating Jinchuan Group to increase output through overseas acquisitions Shanghai. September 8. INTERFAX-CHINA – General Manager of Chinese nickel producer Jinchuan Group Ltd., Wang Haizhou, said on Sept. 6 that the company is actively seeking overseas mineral resource acquisitions in order to increase its nickel and copper output, state media reported the next day.
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| International Demand For Gold Evident Posted: 15 Sep 2010 05:50 PM PDT Dear CIGAs, I just arrived in Dubai and am expecting to attend a meeting later today only one inviting hour from Oman. It is 7am and already the gold store here is three deep with clients. The demand for gold is international with a superior understanding of its status as the currency of last resort. The ability of the paper gold exchanges to be the playground of gold banks is now quite limited in time. Gold's break to a new high, regardless of the machinations of the manipulators, indicates that ballistic move to $1650 is now within easy reach, as was $887.50, the true high for gold in 1980. Those persistent little buggers short of gold shares are about to have the spiritual payback experience for what they gave us. It is time when fabrication, manipulation, and pretend and extend no longer control markets and influence economics. Confidence in an all powerful Federal Reserve is about to implode. I sent you a message to strap yourself in as this repeat of 1979 is about to take gold to $1650 and beyond. Respectfully,
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| The Losing Battle to Fix Gold at $35, Part II Posted: 15 Sep 2010 05:45 PM PDT
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| Gold a Defense for Fatal Conceit Posted: 15 Sep 2010 05:37 PM PDT
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| THE OUTLOOK FOR GOLD AND SILVER Posted: 15 Sep 2010 05:35 PM PDT
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| Nothing Will Beat Gold (Except Silver), No Matter What the Professor Says Posted: 15 Sep 2010 05:30 PM PDT
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| 8 Million Foreclosures Are About To Hit The Market Posted: 15 Sep 2010 05:29 PM PDT 
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| The Economics of Mass Destruction - Part I Posted: 15 Sep 2010 04:57 PM PDT
From The Daily CapitalistThe Power of CapitalThe most valuable economic substance in the world is capital. It is not “money” if we define money as pieces of green paper. Governments cannot create wealth by printing money. If they could we wouldn’t have to work. The formation of capital plus a culture of entrepreneurship is the only way to create economic well being. When government policies destroy capital it diminishes everyone’s economic well being. Capital is saved wealth. If you produce goods and you make a profit and save the profit, then you have created capital. Ditto with your labor. If you spend all of your wages, you’ve saved none of the wealth created from the goods you made and you have no capital. It takes societies a long time to create and amass capital. In the U.S. we have a dynamic financial infrastructure to generate wealth/capital. It started with the rights guaranteed by the Constitution, but it took about a century to create our wealth-creating financial infrastructure. While you can criticize it all you want, wealth is widely distributed in America when one compares our standard of living to elsewhere. This financial infrastructure is called capitalism. Our current economic policies are destroying capital and our well being. These policies are now globalized. They are the Economics of Mass Destruction. International Coordination of Economic PolicyI have a folder entitled “Supranational” in which I keep research related to international regulation of the world’s economy. As I anticipated, after the Crash nations joined together to coordinate economic policies and the regulation of financial activities. The conformance of economic policies was rather automatic. Most of the world’s economic ministers, especially those of the G-20 countries, have adopted familiar Neo-Keynesian/Neoclassical policies of fiscal and monetary stimulus. In most countries the results of these policies have been as disappointing as ours. Monetary Stimulus Look at monetary stimulus. It is no coincidence that central bank interest rates of advanced economies are historically low; they all are trying to create massive monetary stimulus to revive their economies. Higher interest rate countries such as the BRICs with less stable economies either have more trouble selling sovereign bonds on the international markets or are attempting to thwart rising prices. Central Bank Interest Rates Fiscal Stimulus Almost all these countries engaged in fiscal stimulus as well. The Bush Administration committed about $700 billion to the various bailout schemes. Then the Obama Administration came up with a massive Keynesian spending program (initially $787 billion). Other countries followed: Type of Stimulus as a Percentage of GDP
Note this subsidies chart doesn’t reflect the U.S. TARP and related bailouts. Source the OECD Financial Regulation The last piece of the globalization of economic policy was to increase regulation over financial activities. The post-Crash drive to coordinate financial regulation was unified by the theory that the cause of the Crash was Wall Street: the investment banks, investment companies, hedge funds, the big “banksters,” and insurance companies. Not to mention greed and overpaid executives. If governments admit any fault it is that they failed to adequately exercise their existing regulatory powers. Which means that many of the laws passed here are or will be similar to those enacted in other major countries. For example, the Dodd-Frank financial overhaul act contains many rules that had been discussed with G-20 counterparts. “Forum shopping” or the “you can run but you can’t hide” policy, was a major factor. The new bank capitalization rules of Basel III are an outcome of the Crash. No treaties are required to accomplish most of this legal conformation; meetings between economics ministers and their regulatory staffs were all that was needed and individual governments did the rest. The Failure of Regulation Unfortunately our new laws (Dodd-Frank) fail to address the primary cause of the Crash: the Federal Reserve itself. Its years of easy money policy kicked off the massive credit boom that landed on the housing market because of U.S. government policies that encouraged capital to flow into residential real estate. The boom ended when the Fed raised rates. I don’t mean to spare Wall Street in my criticism; they failed in many ways, primarily their faulty risk models. But, while they pushed the scheme forward, they didn’t cause the boom or the bust. History shows us that cheap money from central banks, or from banks or sovereigns pre-existing central banks, always have caused these boom-bust cycles. Just because the Fed took over doesn’t mean that bad banking theories changed. The Globalization of Failed Economic PoliciesThe purpose of this article is not meant to be an exposé of an international conspiracy or secret cabal to control the world. These policies are the logical conclusion of theories of economics and political organization that have been taught in our universities before our oldest citizens were college freshmen. Some of these ideas even trace back to Ancient Rome. Sub sole nihil novi est.* These ideas were developed in Europe, but took root and flowered in our best universities. Because of the stature of America’s academic institutions, which stature is founded on capitalism’s prosperity, it is no surprise that these Neo-Keynesian ideas have spread throughout the world. You may believe this regulatory coordination and conformation is a good thing because it gives enterprise a more stable regulatory foundation in which to operate. Or that it is necessary to prevent another crash. Or that regulators have superior knowledge and can be trusted to properly guide economies. But that is not the case. The serious economic problems we have are the direct outcome of mainstream economic thought and these ideas now operate worldwide. If one studies economics in London, or Paris, or Rome, or Beijing, the lessons are very much the same. If one examines the policies of the EU and its member states or China or Japan, they are remarkably similar. Perhaps the term the “Economics of Mass Destruction” is a bit of hyperbole, but I am giving fair warning that we Americans, the most dynamic capitalists and the primary drivers of the world economy, are heading for long-term economic decline if we continue with the same Keynesian doctrine that got us into the current historically big mess. While it is nice to believe that emerging economies such as Brazil, Russia, India, and China will take up the slack, I am not convinced they yet have in place the cultural and financial resources that have made America the world’s leader. Because of the globalization of these ideas, it now appears that the whole world will rise or fall on these policies. Tomorrow, Part II of II: The fallout of the globalization of failed economic policies.
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| The CBO Attends a Tea Party Rally Posted: 15 Sep 2010 04:54 PM PDT The upcoming mid-term elections are getting more and more interesting after the primary results from last night and it's getting more and more difficult for voters to figure out who's crazy and who's not, though they seem to be making some progress.
From the Lisa Benson archive at the Washington Post Writers Group.
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| How I generate 'slipstream' trades Posted: 15 Sep 2010 04:48 PM PDT 'Slipstreaming' is a cycling metaphor that fits perfectly with what I do in the markets. If you've ever watched a big cycle race, like the Tour de France, you'll know that the key to winning a stage is timing: knowing when to sit in the 'slipstream' of the rider in front of you (letting them do the hard work) and knowing which points in the race to attack. It's exactly the same with trading. You should never enter a trade until all the moons are aligned. I will wait, sometimes days or even weeks until all of my trading rules have been fulfilled before I enter a position. This ensures that my probability of success is as high as possible. Slipstreaming works with ANY kind of stock, but my trading service focuses mainly on taking trading profits from some of the biggest and most stable stocks on the ASX: blue chips that investors would normally just buy and hold (oblivious to the short-term potential of trading these stocks). These stocks are easy targets for me as huge volumes of shares are traded in them every day. This makes it easier for me to line up my sights and pick the best entry (and exit) point for our limited-risk trade. And in case you were wondering, I take long AND short trading positions on these big stocks depending on how the market is looking - which means I'm able to help my readers make gains when the market takes a turn for the worst. I'll have charts two trading screens while the markets are open. First thing I do is check the fundamentals of my targets. Other purely technical traders may disagree, but I believe it's important to have a deeper understanding of the underlying fundamentals of a stock before you trade it. It's also useful to take account of the bigger, 'macro' picture when deciding what - and how - to trade. I usually have an idea of what sectors I want to trade from what's going on in the news. Then it's just a question of timing. My trading system tells me very quickly if I'm wrong or if my timing is out. It's taken me over 15 years to develop my risk management system and it ensures that the volatility in my account is kept to a minimum. Stop loss management is another area that's important to the overall return on trades. Stocks are incredibly volatile - most people's stop losses don't take account of this effectively. You should always keep a close watch on your stop loss level on every open trade you have, and be prepared to act if the market moves against you quickly. Listen, most of the time, if the trade doesn't gap on you, your stop will get executed at or close to the level you had in mind and your risk control strategy will work as designed. No worries. But sometimes the market does open sharply up or down. And that's why trading with stop-losses is always recommended - and why this is a really important part of my strategy for Slipstream Trader. My method has a very tight stop loss initially, but once my initial target is reached, the stop loss is actually quite a distance away from where the stock is trading. This ensures you're not quickly whipped out of your position by any sudden volatility. The key for any trader is to be consistently profitable with little risk and to - hopefully - take some big wins along the way. My method strikes a good balance between protecting your cash, taking some profit when you have the opportunity and still giving yourself the chance to hit a home run. Look, if you've ever thought of giving trading a try - why not put my Slipstream Trader service to the test for the next 60 days, risk free? It's an email alert service. I do all the research and provide my trading recommendations to you in a short email. It's your choice whether you use my emails to trade or not. My advice is merely a tool for you to incorporate into your own financial plan if you want to. My proposition is simple: If you're interested, I can start emailing you details of all the ASX/200 trading opportunities my system flags up, along with the action I think you should take... I'll send you the name of the stock to buy (or sell), when to buy, at what price, and what stop loss level to set... I'll shoot you another email when I think you should take profits - including what percentage of your holding to take off the table. In that email I'll also tell you where to move your stop loss to so that you 'lock-in' gains whatever happens to the trade... I'll continue to update you by email - with detailed action to take - for as long as the position is open. Then, when the time is right, I'll send you an email with a very simple instruction: "SELL"... To find out more about Slipstream Trader, go here Murray Dawes,
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| Posted: 15 Sep 2010 04:46 PM PDT Jim Sinclair's Commentary China is in charge of rare earths, strategic metals and materials. They have a 100 year economic plan. The West does not have a viable economic plan for tomorrow. Jim, Here is a chart on rare earth elements and gold. Check out the trend energy surge CIGA Eric
Jim, The US dollar can certainly hit .72 by January. In fact .76 by October would not be out of the question, followed by a bounce, then a downward move toward 72. There is an immediate death cross in play with the 50 day moving average about to cross the 200 day to the downside. Hope you are enjoying your trip. CIGA Dr. Bob
Jim, Can you believe AngloGold is just now getting around to cancelling their gold hedges at a cost of $1.37 billion! Their hedging contracts were set at an average gold price of less than $450 an ounce!! UNBELIEVABLE!! Best regards, Dear Black Swan, I can believe it. I spent six figures between 2000 and 2002 advertising in the London Mining Journal and Mining Monthly plus a South African publication telling them that this was going to happen. The master dumbbells in the price of gold are those egomaniacs that call themselves MAJORS. Major what? Regards,
Gold Miners ETF – Breakout Breakout! Rising trend energy has been forecasting a breakout since May 2010. The chart below illustrates the minimum measured move of the cup and handle formation. Gold Miners ETF (GDX):
Retirement on Hold: American Workers $6 Trillion Short This required a study? The American household is over leveraged to USA, Inc. USA, Inc is currently being debased to protect interests other than American households. The study, conducted by Boston College's Center for Retirement Research, says savings have been squeezed by declines in stock and housing values. Source: finance.yahoo.com
States cutting benefits for public-sector retirees An outcome that will be replayed in nearly all States across the U.S. After telegraphing his intentions for months, Christie spelled out the details of his proposal Tuesday. They include: repealing an increase in benefits approved years ago; eliminating automatic cost-of-living adjustments; raising the retirement age to 65 from 60 in many cases; reducing pension payouts for many future retirees; and requiring some employees to contribute more to their pensions. "We must reverse the damage caused by fairy-tale promises that have fattened benefits and pensions to unsustainable levels," the governor said. Source: finance.yahoo.com
Jim, Forget your $1650 gold target! Fire, fire, fire… Soros is again moping on TV and the financial headlines are about gold being in a bubble! Maybe he should take you up on that old million dollar bet and donate his winnings to charity. Oh wait a minute, what's that? Last time he was warning about a gold bubble he had actually doubled up his bet on gold! Like I said, forget $1650 gold because you will be right as you were in 1980 and gold will be looking further beyond to numbers more in Alf and Armstrong's territory. CIGA "The Gordon" Dear CIGA "The Gordon:" Bubble? My behind! Soros should take a side trip to Dubai and make his statement at the gold store as he is trampled by those that want a currency devoid of liabilities. Soros warns on gold rally, says nothing safe NEW YORK (Reuters) – Billionaire financier George Soros said on Wednesday that gold prices might continue to rise after hitting record highs this week but he renewed a warning that gold is the "ultimate bubble." Soros said that with economic and fiscal weakness crimping the developed world all investments are at risk because "this is a period of great uncertainty so nothing is very safe." Soros also said that after asset classes set new highs there are almost always immediate reversals that disappoint investors. Soros' hedge fund, Soros Fund Management LLC, has been heavily invested in gold and gold-mining companies. George Soros buys gold despite dubbing it 'ultimate bubble' Mr Soros – a legend in investing circles for his $10bn (£6.37bn) bet against the pound in 1992 which forced sterling out of the European exchange rate mechanism – increased his stake in the SPDR Gold Trust in the last quarter of 2009. Regulatory filings show that his $8.8bn investment vehicle, Soros Fund Management, raised its stake in exchange-traded fund SPDR by 3.7m shares to 6.2m shares in the three months ending December 31, 2009. The new shares were bought at a price of $421m, taking his total holding in the fund to $663m at the end of December.
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| GATA participates in Toronto conference Sept. 25-26 Posted: 15 Sep 2010 04:34 PM PDT 12:30a ET Thursday, September 16, 2010 Dear Friend of GATA and Gold (and Silver): Cambridge House's Toronto Resource Investment Conference is only a week away, to be held Saturday and Sunday, September 25 and 26, at the Metro Toronto Convention Centre in beautiful downtown Toronto. Dozens of resource companies will be exhibiting and the speakers will include not just GATA Chairman Bill Murphy and your secretary/treasurer but GATA favorites Al Korelin of the Korelin Economics Report, David Morgan of Silver-Investor.com, U.S. Global Investors CEO Frank Holmes, Peter Grandich of the Grandich Letter, David Franklin of Sprott Asset Management, John Lee of Mau Capital, Roger Wiegand of the Trader Trax letter, and Kitco Senior Market Analyst Jon Nadler. Toronto is especially beautiful this time of year -- it will remain above ground for a few more weeks -- and there's plenty to do in the neighborhood if you ever get tired of hearing about all the money you're likely to make as an investor in resources and their producers. You can learn all about the conference and register for it here: http://cambridgehouse3.com/conference-details/toronto-resource-investmen... GATA hopes to see many friends there. CHRIS POWELL, Secretary/Treasurer 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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| Hyperinflation and Unemployment Two Signs of Serious Trouble Posted: 15 Sep 2010 04:01 PM PDT No time to write a short Daily Reckoning today... So we wrote a long one... "Mother of a whorehouse of sh**!" "Ah... What an a******! This morning is sh****." Our taxi driver was breaking down. The main road into Paris was blocked. Even at 6 AM, there was a traffic jam. Nothing moved. Except our cab. After addressing himself vigorously and colorfully to no one in particular, he took matters into his own hands. With a few more expletives, he pushed his way onto the shoulder...and excited from the freeway. The next hour and a half were spent in more jam-ups, more cussing, and some death-defying highway stunts. "I don't know how this city stays alive. Who would want to work or do business here? You can't get anywhere. This is unusual. But everyday there's a traffic jam. And I always seem to find it. "Whore of sh**!" We finally arrived at our office...at 8 AM. Checking the news... The big news from yesterday was the rise in the price of gold. It went up $24 to a new all-time high. The stock market was just about flat. What does it mean? Well, the dollar is going down, for one thing. Bonds too. Has the long- awaited turnaround in the bond market finally begun? We don't know. We really didn't expect it so soon. John Williams, who keeps track of what is really going on in the economy at his "ShadowStats" outfit, says to expect hyperinflation within 6 to 9 months. Seems too early to us. But a major turn in the bond market...and much higher inflation rates...are coming. And you don't want to be holding US bonds...or muni bonds...or any kind of bonds when they arrive. What then? Cash and gold. Those are the only reasonably safe positions now. Your gold will go up. Your cash will go down. You'll come out even. That will be a lot better than most people. One thing John Williams is probably right about is that when it comes, it probably won't be led by a gradual, orderly increase in consumer prices. We're still in a de-leveraging cycle - with plenty of spare capacity and little excess purchasing power. Which means, normal demand will not push up prices. Take the labor market, for example. There are millions of idle hands available... Labor is a big part of business costs. Until unemployment goes down and employees have some bargaining power, there shouldn't be any inflation coming from that front. This will be a different kind of inflation...much more violent and dangerous. Prices will shoot up suddenly, quickly - as people lose confidence in the dollar. It will not be gradual, but shocking...turbulent...unexpected. Gold will hit $1,500...then, $2,000 just a few weeks later. This hyperinflation, along with high, long-term unemployment rates, will set the stage for serious trouble. Unemployment peaked out in the recession of the early '80s with the average jobless person out of work for a little more than 20 weeks. Today, the average jobless person is out of work for more than 35 weeks. We haven't seen anything like this since the Great Depression. But our message today is that this is actually worse than in the Great Depression. In the words of Dominique Strauss Kahn, who heads the IMF: "We are not safe." What haunts DSK, as he is known in France, is the French Revolution. People like DSK lost not only their jobs...but their heads. Here's the report from The Telegraph:
And more thoughts... We listen to CNN in Spanish on the radio while driving to work. If we listen to it long enough, we figure, maybe we'll understand what they're talking about. On the radio Friday was an interview with Carmen Reinhardt. We didn't know she was a Spanish speaker. She wrote, along with Ken Rogoff, the book on sovereign bankruptcies. "What should be done?" came the inevitable question. "Well, I am actually in favor of stimulus," said the University of Maryland economist. "But the real problem is confidence. You can't stimulate effectively unless you also address long term, structural problems. Deficits need to be brought down. Investors need to see a good plan. Otherwise, the stimulus efforts will just lead to bubbles and more debt." *** Cut the deficits? Not in Zombie Nation. As we mentioned last week, zombies took over the nation in 2008, with the election of Barack Obama. He was the zombie candidate. Now comes word, from The Washington Post, that there's been a sharp rise in disability filings at the Social Security Administration. People who were perfectly capable of doing their work before the financial crisis hit in '07 have been thrown onto the unemployment roles. Desperate for income, they find they have not just lost their jobs. They've been disabled. That gives them a way to get money from the taxpayer even after their unemployment benefits have run out. They become not just temporary zombies, in other words, but permanent ones. The trouble with zombies is that they're expensive to maintain...and inherently dangerous. Which is to say, the welfare state works fine as long as there's enough money to keep the zombies happy. But when you get too many zombies...and not enough money to feed them properly...you're in danger. Well, the welfare state itself is in danger. Imagine. More than 200 million zombies. If each one ate two eggs a day it would take 400 million chickens to keep the zombies supplied. "But wait...hold on there, Bill...you're not seriously saying that every unemployed person is a zombie. Many people lose jobs through no fault of their own. They live on savings...then go back to work. That is hardly the mark of a zombie." Yes, of course...Mr. Compassion and Sensibility... Don't get us wrong. We love zombies. Some of our best friends are zombies...and a lot of our relatives! Heck, we might be one too if they paid us better. We're not saying that everyone who loses his job becomes a zombie. But that's what makes this Great Correction actually worse than the Great Depression of the '30s. There were fewer zombie supports back then. So people HAD to work. And they did. They worked on farms. And then, when the war started, they worked in factories. The point is, they couldn't become zombies because - even with all Roosevelt's efforts to create a zombie economy - there just wasn't enough money to support them. This is, of course, why there are so few zombies in the emerging markets too. Not that there aren't a lot of people who would like to zombies...and they'll get their turn!...but right now, the emerging markets are still too poor to be able to afford a large class of leeches. In the '30s in America, as in most of the emerging economies today, people had to work. They might have worked cheap. They might have done work they didn't want to do. They might have had bad backs and weak knees...but they went to work anyway. They couldn't afford to be disabled. If you go to China or Vietnam or one of the industrious emerging markets...you won't even see people sit down. They don't have time. Work...work...work...work for wages...work for relatives...work for food...work for fun... ..it's what you do, when you have no choice. Regards, Bill Bonner
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| Gold Seeker Closing Report: Gold and Silver End Mixed Posted: 15 Sep 2010 04:00 PM PDT Gold saw a slight gain at $1271.75 in Asia before it chopped back lower in London and New York to as low as $1262.97 by about 11:40AM EST and then bounced back higher into the close, but it still ended with a loss of 0.23%. Silver fell to as low as $20.295 by about 8:30AM EST and rose to as high as $20.61 by about 11AM before it fell back off into the close, but it still ended at a new 30 month high with a gain of 0.64%. 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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