Gold World News Flash |
- September 24, 2010 – Peak Gold Is Upon Us: The Mad Hedge Fund Trader
- Foreign Central Banks Net Sellers Of US Agency Debt Posted: By Dan Norcini
- $5,000 Gold Bandwagon Now Includes These 57 Analysts – Got Gold?
- 10 Radical Proposals to Save America
- Market Commentary From Monty Guild
- Jim?s Mailbox
- Hourly Action In Gold From Trader Dan
- Permanent 0% On Road To Ruin
- Grandich Client Update – Sunridge Gold, The Sun May Be Rising
- Undervalued Silver in a Government Spending Frenzy
- Daily Dispatch: Buying Gold at a Discount
- Mining News Review: Week of September 13th
- Beware the Forbidden Fruit of Dividend Miners
- $30 Silver is Possible in the Near Future: James Turk
- The US dollar is ready to plummet
- Gold Trendline above 1300
- LGMR: Gold "Steady" vs. Dollar Rally as US Leads Global "Race to Debase"
- Mining Shares Lag Compared To Precious Metals, Perform Admirably Versus Broader Marke
- Why The Irish Debt Crisis Could Be Worse Than Spain, England, And Even Iceland
- European Debt Worries Resurface
- BOJ Intervenes For Second Time In A Week, Fails
- Why a Weaker U.S. Dollar Became a Little More Likely
- Nevada Sunrise Gold Increases Size of Golden Arrow Property
- M2 Growth Rate: Nothing Strange or Foreboding
- The Goldsmiths—Part CLX
- Selling Gold That Grows on Trees
- Sept 24, 1869 : How Jim Fisk and Jay Gould profited handsomely from a massive short squeeze in Gold
- Contrary to Hank Greenberg, ETF Mechanics are NOT Beyond Comprehension
- Fleckenstein: 'Why Would I Want to Hedge Gold?'
- Fleckenstein: 'Why Would I Want to Hedge Gold?'
- Quick Thoughts on Irish Sovereign Debt Crisis
- China’s Rise Curbs US Influence in Australia
- Gold "Steady" vs. Dollar Rally as US Leads Global "Race to Debase"
- Gold "Steady" vs. Dollar Rally as US Leads Global "Race to Debase"
- How High Could Gold Go, The Next Few Months?
- How High Will Gold Go This Fall?
| September 24, 2010 – Peak Gold Is Upon Us: The Mad Hedge Fund Trader Posted: 24 Sep 2010 12:28 AM PDT Talk about getting a camel through the eye of a needle! We may well see the bull market end only when those two asset classes, government bonds and gold, see outstanding values reach parity, implying a sixfold increase in gold prices from here to $7,800 an ounce.
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| Foreign Central Banks Net Sellers Of US Agency Debt Posted: By Dan Norcini Posted: 23 Sep 2010 09:24 PM PDT If the US cannot sell this type of debt to foreign central banks, then the only alternative is for the Fed to print fresh money and buy that debt itself. Call it whatever you want – monetizing debt, QEII, etc., it still amounts to the same thing – a suicidal debasement of the currency – which is bullish for gold.
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| $5,000 Gold Bandwagon Now Includes These 57 Analysts – Got Gold? Posted: 23 Sep 2010 08:12 PM PDT This little band of gold enthusiatists started out few in numbers a few years back but has made a parabolic move over the past year or so much like their projections for the future price of gold. They now number an unbelieveable 98 who have stated, with sound reasons in their opinions, why gold could quite possibly go to a parabolic top of at least $2,500 an ounce - to even as much as an unimaginable $15,000 - before the bubble finally pops! In fact, the majority (57) maintain that $5,000 or more for gold is likely. Words: 764
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| 10 Radical Proposals to Save America Posted: 23 Sep 2010 08:12 PM PDT While most investors are rightfully focused on the economic ills in the U.S. they are missing the big picture: America faces a debt disaster of untold proportions, the fatal blows of which are now arriving. The [very] survival of the U.S. and our way of life, not to mention many of our liberties, are at stake, which is precisely what gold's recent rally to new record highs is telling you. The dollar - and debt-based monetary system - is irretrievably broken, and its demise is the real reason behind the soaring price of gold. As such, it's now time for the U.S. to rise to the occasion ... to rise above the mistakes of the past — and usher in a new era of monetary stability and I have some radical proposals to do just that. Words: 2287
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| Market Commentary From Monty Guild Posted: 23 Sep 2010 08:11 PM PDT View the original post at jsmineset.com... September 23, 2010 08:50 AM Dear CIGAs, THE U.S. STOCK MARKET The U.S. stock market is rallying, and the U.S. dollar is slowly declining in value relative to a basket of other currencies. Although inflation may not occur for another six to twelve months, an oncoming inflation will cause demand for assets that can grow, such as: income-producing real estate, gold, global growth stocks, and the world's better managed currencies. THE POLITICAL INFRASTRUCTURE OF THE U.S. AND EUROPE WILL CHANGE The recent primary election season in the U.S. has given full voice to the forces of change in the U.S. political system. We believe the current wave of fiscal conservatism will make itself felt in government. Many Americans are tired of a government run by lobbyists for big business, big labor, big military, big environmental activism, and big government. If the new representatives, who will be carried into office in November 2...
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| Posted: 23 Sep 2010 08:11 PM PDT View the original post at jsmineset.com... September 23, 2010 09:24 AM Jim, Taibbi has done another great piece. CIGA Ursel BP’s Shock Waves How the oil giant’s catastrophic spill in the Gulf could trigger another financial meltdown By Matt Taibbi Sep 16, 2010 11:30 AM EDT It was sickening enough when British oil giant BP set new standards for corporate scumbaggery in the Deepwater Horizon oil spill, turning the Gulf of Mexico into its own personal toilet and imperiling entire species of wildlife in an attempt to save a few nickels. But with the Gulf geyser finally capped, there’s still a way for BP to cause an even more unthinkable disaster: an AIG-style, derivative-fueled financial shitstorm. If the company decides to declare bankruptcy — a very real possibility with these bastards — it could trigger chaos in our casino system of finance, underscoring the insane levels of leverage and systemic risk we have left in place, even after the glo...
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| Hourly Action In Gold From Trader Dan Posted: 23 Sep 2010 08:11 PM PDT View the original post at jsmineset.com... September 23, 2010 02:17 PM Dear Friends, Considering the various crosswinds blowing in today's session, gold performed admirably, shrugging off Dollar strength and a bout of general commodity sector selling by the hedgies and their infernal algorithms. While it did not set another all time record high, it did manage a record CLOSING PRICE. Similarly, silver's performance was impressive as it scored another new high for the year posting a print of $21.265 before settling down a bit from that level. Later on in the afternoon electronic session, weakness in the broader stock market pulled the HUI down into negative territory and that had the effect of engendering some selling in both of the metals. The HUI is butting up against sellers near the 512 level who are attempting to hold it back from reaching the critical resistance level of 520. It continues to stair step up nicely and if the pattern is consistent, could set back down towards 496...
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| Posted: 23 Sep 2010 08:11 PM PDT by Jim Willie CB September 22, 2010 home: Golden Jackass website subscribe: Hat Trick Letter Jim Willie CB, editor of the “HAT TRICK LETTER” Use the above link to subscribe to the paid research reports, which include coverage of critically important factors at work during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy. Japan has proved without confusion that 0% is a permanent stuck position. The United States will repeat the path, but with a va...
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| Grandich Client Update – Sunridge Gold, The Sun May Be Rising Posted: 23 Sep 2010 08:11 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 23, 2010 04:15 PM Sunridge Gold, along with other mining companies in Eritrea, have not been on many radars the last several years. This has created an attractive speculative opportunity as Eritrea is emerging as a new world class gold and vms mining district. Sunridge has 4 advanced projects in Eritrea containing a total in-situ metal value of over $8billion. In addition, Sunridge continues to explore for new discoveries and is funded by copper giant Antofagasta plc. As the world takes notice of mining in Eritrea thanks in part to Nevsun Resources, I believe the company can command increased awareness. Nevsun's Bisha mine is expected to be commissioned by year end and fully operating in Q1 of 2011, which should be a major catalyst for all involved in mining in Eritrea. In addition Sunridge has several near term events that could en...
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| Undervalued Silver in a Government Spending Frenzy Posted: 23 Sep 2010 08:11 PM PDT To prove that all my yelling, "Buy silver now, or you're a moron!" has paid off, silver is getting a lot more press coverage lately, like the headline "Silver Hits '80 Level; Gold Sets Fresh High," which appeared on the front page of The Wall Street Journal's "Money and Investing" section. The reason that gold at $1,271 was hitting new record-highs, but not silver, is that silver, at $20.74 per ounce, is only at the highest price since October 1980, which is almost exactly 30 years ago. Suddenly, I feel myself wanting to launch into some hyperventilating, rabid recommendation to buy silver, waxing overly-enthusiastic about silver as some "bargain investment of the century" because of any of a dozen reasons right off the top of my head, and probably many, many more if I were smart enough to understand their significance, which I can only barely sense, even though people are screaming at me, "What is it that you don't understand, you moron? We're been over this a dozen times!" All ...
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| Daily Dispatch: Buying Gold at a Discount Posted: 23 Sep 2010 08:11 PM PDT September 23, 2010 | www.CaseyResearch.com Buying Gold at a Discount Dear Reader, With the pressure building to wrap things up here before heading off to our Gold & Resource Summit next week (“the hottest ticket in the world,” writes one well-regarded gold fund manager), my contribution to today’s edition will be somewhat brief. Catching my attention this morning is China’s decision to make an aggressive move in its latest dust-up with Japan, caused by the latter’s detention of a determined fishing captain. China’s action highlights the alacrity with which a dictatorship can move when threatened. No big debate, just call the boys in for a quick chat, maybe a bit of table pounding, followed by the issuance of orders to stop the flow of China’s much coveted rare earths toward the Land of the Setting Sun. Why, you can almost hear Ch...
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| Mining News Review: Week of September 13th Posted: 23 Sep 2010 08:11 PM PDT It is typical for me (aka Zurbo) and my business partner Tom (aka Silverax) to discuss the latest news and developments from explorers and mining companies for several hours each day. Rather than having the results of these discussions remain as a pile of notes on our desk, often never to be revisited, we’re going to make an effort to transcribe our thoughts in a weekly Mining News Review. These news reviews will be updated on a daily basis at Metal Augmentor, and at the end of each week we’ll spotlight one of the companies in an expanded analysis. In this inaugural edition of the Metal Augmentor’s Mining News Review we’ve chosen to spotlight Silver Standard Resources (NASDAQ: SSRI). This past Monday Silver Standard announced the results of a preliminary economic assessment combining its Snowfield and Brucejack projects. Although the net present value and production profile of the combined mining operation is still not very large relative to t...
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| Beware the Forbidden Fruit of Dividend Miners Posted: 23 Sep 2010 08:11 PM PDT Beware the forbidden fruit. As precious metals begin to see vast improvement in the prices of gold and silver across the board, greed is setting in. Why should you hold physical metals when stock miners provide the same upside potential as miners – and pay a dividend? Dividends and Securities When you purchase a share of stock, even in a gold miner, you're buying a company more so than the assets. This means you're buying the collective value of the employees, the capital equipment, the debt and assets, including the land and the precious metals still in the ground. Keen businessmen, not investors, are seeing an opportunity to increase their shareholder value (read: increase the price of their stock relative to assets) by increasing their annual dividend yields. Investors often consider the dividend yield when purchasing a security. A high dividend yield means the stock will face less downward pressure since investors can get higher yields with their di...
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| $30 Silver is Possible in the Near Future: James Turk Posted: 23 Sep 2010 08:11 PM PDT Dollar Decline is Imminent: James Turk. Central Banks are a 'barbarous relic'... not gold. $30 Silver Coming? "Gotta Buy Gold". Will the PM stocks break out? And much more. YESTERDAY IN GOLD AND SILVER Gold traded flat through morning trading in the Far East yesterday, before turning gently higher around 2:00 p.m. Hong Kong time. That upward trend ended shortly after 9:00 a.m. in New York eight hour later, when gold topped out at $1,297.40 spot before getting sold off ten bucks going into its New York low, which was minutes after twelve noon. From that low, gold recovered somewhat before the 5:15 p.m. close. The gold price got perilously close to the magic $1,300 spot price yesterday morning... and I'm wondering if that might have been the reason why it ran into a willing seller early in the New York trading session. Silver's path was very similar to gold's. The only difference being that silver got sold off from its high [$21.17 spot] ...
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| The US dollar is ready to plummet Posted: 23 Sep 2010 08:11 PM PDT FGMR - Free Gold Money Report September 22, 2010 – The US dollar is staring over the edge of the precipice and is ready to plummet. Rather than hand the dollar a lifeline, the FOMC in its announcement yesterday pushed the dollar further over the edge. The FOMC made clear that it is only a matter of time before the Federal Reserve starts pumping again. So immediately after the FOMC announcement, the dollar fell and the precious metals rose in anticipation of the next round(s) of dollar debasement to come from the Fed’s “quantitative easing” policy. On June 7th the US Dollar Index’s bear market rally stopped at 88.41. It closed yesterday in New York at 80.44, a 9.0% decline in less than four months. Yesterday’s decline also put the Dollar Index below its 200-day moving average, another important indication that the trend for the dollar has turned lower. The dollar is renewing its long-term downtrend, as we see in the following c...
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| Posted: 23 Sep 2010 08:11 PM PDT courtesy of DailyFX.com September 23, 2010 06:49 AM Daily Bars Prepared by Jamie Saettele Sights remains on round figures such as 1300, 1400, 1500, etc. Watch channel resistance going forward. The line is at 1312 today and increases about $3 a day....
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| LGMR: Gold "Steady" vs. Dollar Rally as US Leads Global "Race to Debase" Posted: 23 Sep 2010 08:11 PM PDT London Gold Market Report from Adrian Ash BullionVault 09:20 ET, Thurs 23 Sept. Gold "Steady" vs. Dollar Rally as US Leads Global "Race to Debase" THE PRICE OF GOLD sat tight above $1290 an ounce in London on Thursday morning, holding 1.4% above last week's close as European stock markets extended their losses to 1.2% and crude oil dropped below $74 per barrel. "Gold has remained fairly steady around yesterday's closing level, in spite of a stronger Dollar," says one London dealer in a note. "A quiet session overnight," says another, with gold "basically tracking the Euro" against the US Dollar as Tokyo and Hong Kong joined Shanghai in closing for a holiday.The Dollar today knocked the Euro 0.5¢ off Wednesday's 24-week high above $1.34, but it fell back against the Japanese Yen.New data meantime revealed a downturn in European services and manufacturing output, a further decline in UK mortgage and business lending, plus higher-than-expected US jobless claims for la...
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| Mining Shares Lag Compared To Precious Metals, Perform Admirably Versus Broader Marke Posted: 23 Sep 2010 08:11 PM PDT View the original post at jsmineset.com... September 22, 2010 08:59 PM Dear CIGAs, Click either chart to enlarge today's HUI-Gold Ratio and HUI/S&P 500 Ratio action in PDF format with commentary from Trader Dan Norcini ...
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| Why The Irish Debt Crisis Could Be Worse Than Spain, England, And Even Iceland Posted: 23 Sep 2010 07:59 PM PDT
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| European Debt Worries Resurface Posted: 23 Sep 2010 07:25 PM PDT The Fed must have been all smiles yesterday as the dollar stabilized thanks to yesterday's news out of Europe:
Complete Story »
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| BOJ Intervenes For Second Time In A Week, Fails Posted: 23 Sep 2010 06:18 PM PDT
The half-life of central bank interventions is getting shorter and shorter. After Shirakawa decided to show the Fed who is boss, only to be met with the biggest beatdown the dollar has experienced since March, tonight the BOJ decided to show Bernanke how it's done. Too bad the idiots at the BOJ have learned nothing from the SNB's Hildebrand, who was last seen cowering in a fetal positions, underneath his desk. After surging by 100 pips post the second intervention in a row, the "wolfpack" is back, and the yen has retraced more than half it losses in under 2 hours. This pathetic attempt to weaken its currency has just cost the BOJ another few trillions yen, while the end result is the same: a Japan whose export economy is about to be crushed, and a central bank president who will now be forced to join the ranks of the unemployed within a month.
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| Why a Weaker U.S. Dollar Became a Little More Likely Posted: 23 Sep 2010 06:05 PM PDT SL Advisors submits: By Simon Lack The case for having some fixed income exposure outside the U.S. just became a little bit stronger. The U.S. House of Representatives is contemplating a new approach to the Chinese manipulation of their currency by proposing legislation that would define a low currency as an unfair export subsidy. While this may or may not become law, it does raise the temperature of this particular bi-lateral issue. It’s a curious way to deal with your most important creditor, and based on past history it’s unlikely that China will simply acquiesce to a stronger Renminbi. The Chinese premier responded to the news by worrying about the effect on domestic employment of an export sector confronted with a rising domestic currency (although in the 90s Japan was continually finding ways to cut the costs of their exports as the US$ depreciated against the Yen). Complete Story »
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| Nevada Sunrise Gold Increases Size of Golden Arrow Property Posted: 23 Sep 2010 06:04 PM PDT Vancouver, B.C. - Nevada Sunrise Gold Corp. ("Nevada Sunrise", or the "Company") is pleased to announce that the Company, on behalf of the earn-in joint venture with Animas Resources Ltd., has increased the size of its Golden Arrow property in Nevada by staking a total of 84 additional claims along the north and south boundary of the current block. The estimated area of land covered by these claims is just over 1,500 acres (about 607 hectares).
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| M2 Growth Rate: Nothing Strange or Foreboding Posted: 23 Sep 2010 06:03 PM PDT Calafia Beach Pundit submits:   Ever since late 2008 I have been making the point that whatever is wrong with the economy, it's not a shortage of money that is problem. That remains the case today. There are no signs that money is in short supply, either nominally or relative to the demand for money. Therefore there is no reason to worry about deflation or a deflation-induced slump in demand. The best measure of money is M2, because its definition hasn't changed much over time and for decades it has had a relatively stable relationship to GDP. I think most economists would agree on this. The first chart above shows the level of M2 over the past 16 years. As should be evident, M2 has grown on average about 6% a year. Sometimes faster, sometimes slower, but it always seems to revert to something like 6% a year, which also happens to be very close to the annualized growth rate of nominal GDP over the past 20 years or so. The slower growth of M2 in the past year or so is simply "payback" for very rapid growth in 2008, when a surge in money demand pushed up all monetary aggregates. It was therefore not a coincidence that the the peak in M2 growth coincided almost exactly with the bottom of the stock market (March 2009). That was a big turning point, because what occurred was a rise in confidence accompanied by a decline in the demand for money. Money velocity picked up as people started spending the money they had hoarded, and that process continues to this day. Meanwhile, the Fed force-fed $1 trillion to the banking system, swelling the monetary base and bank reserves by an unimaginable amount. Most of the extra reserves are still sitting idle at the Fed, though, since the world's demand for dollars remains elevated. (When demand for money is high, the demand for loans is weak. That's another way of saying that the world is still trying to deleverage, so demand for bank loans is not very strong.) The recent increase in the M2 growth rate (M2 is up at 4.6% annualized rate in the past three months reflects a bit of an increase in money demand over that period, and that is likely a reflection of the confidence shock that resulted from concerns over the possible collapse of the european banking system. It is also the case that renewed concern over the health of the economy helped drive yields lower, and that in turn resulted in a surge of refinancing activity, which in turn has a strong tendency to increase money in circulation temporarily.  In short, I see nothing in the money numbers that is strange or foreboding—except, of course for the massive amount of bank reserves that lie in waiting to accommodate renewed loan demand. They haven't presented a problem so far, but at some point they could result in a significant expansion of bank lending which in turn could feed the fires of inflation if the Fed doesn't react in a timely fashion to drain those reserves. That's been a big worry for a long time, but so far nothing untoward has happened.  Complete Story »
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| Posted: 23 Sep 2010 06:03 PM PDT First, if you are a passionate and strong gold and silver money advocate in opposition to the Rothschild created Fed and the Fed's fiat money system, you run the risk of being defined by the Rothschild Cabal and Rothschild run US establishment as politically incorrect and an enemy of the government. You can bank on it that both the feds and the ADL have or will have files on you.
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| Selling Gold That Grows on Trees Posted: 23 Sep 2010 06:00 PM PDT There's a good reason why bullion traders and investors have nicknamed the COMEX the CRIMEX. Read Robert Moore's essay below to see why. Moore, a frequent contributor to the Rick's Picks forum, says bullion bankers have leveraged the commodity exchange's liberal rules to perpetrate a fraud that would land you or me in jail
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| Sept 24, 1869 : How Jim Fisk and Jay Gould profited handsomely from a massive short squeeze in Gold Posted: 23 Sep 2010 06:00 PM PDT
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| Contrary to Hank Greenberg, ETF Mechanics are NOT Beyond Comprehension Posted: 23 Sep 2010 05:57 PM PDT Kid Dynamite submits: Herb Greenberg did a segment on CNBC yesterday about Bogan's "Can ETFs Collapse Piece." I used to read Greenberg 10 years ago when he was the voice of reason in finding overvalued internet stocks, and found him to be intelligent, informed, and useful. I guess times have changed. In this segment, he talks about ETFs like he has absolutely no knowledge of stocks, markets, or mechanics whatsoever and ascribes to them a complexity that would be more aptly associated with particle physics. If you watch this piece, you'll shake your head in awe that a guy like Herb Greenberg, who should know better, describes hysterically the "complicated" creation units. Greenberg repeats the hysterical plea of "WHO WILL BE LEFT HOLDING THE BAG?" Which, of course, we already went over in my earlier piece. Bogan, in the video, even bites my "fractional reserve lending" analogy, but puts a pejorative spin on it. It happens to be how all stock lending works, not just ETFs. Greenberg has an article on the subject too, but frankly, when a guy who has been writing about stocks in depth for as long as Greenberg has writes this paragraph, it makes me, simply, sad, and it's an indication that you'll be doing yourself a disservice by reading his article:
Ok kids - it's time to dump Herb Greenberg as your source for lessons on market mechanics. Instead, come to Kid Dynamite's World, because, you see, these "creation units" are such a simple concept that I could explain it to your grandmother in 5 minutes. In fact, of course, I already did. Here's what I wrote:
Complete Story »
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| Fleckenstein: 'Why Would I Want to Hedge Gold?' Posted: 23 Sep 2010 05:51 PM PDT Dr. Duru submits: Bill Fleckenstein, President of Fleckenstein Capital and one of my favorite money managers, was on CNBC’s Fast Money Wednesday night giving his typical, colorful commentary on gold. I am posting an approximate transcript to his brief interview because it included what I think should be a classic moment in gold commentary. Toward the end of the interview, host Melissa Lee asked Fleck: “When you hold gold in your portfolio, how are you hedging that.” Fleck plainly responded: “Why would I want to hedge it?” It left Ms. Lee nearly speechless for a few seconds (or several minutes in TV broadcast time). She clearly does not yet understand the man or the reasons for his years-long stubborn bullishness on gold. Complete Story »
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| Fleckenstein: 'Why Would I Want to Hedge Gold?' Posted: 23 Sep 2010 05:51 PM PDT Dr. Duru submits: Bill Fleckenstein, President of Fleckenstein Capital and one of my favorite money managers, was on CNBC’s Fast Money Wednesday night giving his typical, colorful commentary on gold. I am posting an approximate transcript to his brief interview because it included what I think should be a classic moment in gold commentary. Toward the end of the interview, host Melissa Lee asked Fleck: “When you hold gold in your portfolio, how are you hedging that.” Fleck plainly responded: “Why would I want to hedge it?” It left Ms. Lee nearly speechless for a few seconds (or several minutes in TV broadcast time). She clearly does not yet understand the man or the reasons for his years-long stubborn bullishness on gold. Complete Story »
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| Quick Thoughts on Irish Sovereign Debt Crisis Posted: 23 Sep 2010 05:36 PM PDT Edward Harrison submits: Here are some quick thoughts on what’s happening in Ireland. The Irish situation is mostly about the collapse in the economy due to a huge run-up in private sector debts. This has been complicated by Iceland-style bailouts for an outsized banking sector. As a result of this socialization of banking sector losses, Ireland is facing a sovereign debt crisis since the eurozone framework has eliminated Irish currency sovereignty. As background, read Ambrose Evans-Pritchard’s post Ireland faces double dip, mulls restructuring of junior bank debt and the links post from yesterday morning. Complete Story »
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| China’s Rise Curbs US Influence in Australia Posted: 23 Sep 2010 05:35 PM PDT Michael Pascoe, writing for Australia's The Age, argues the US has nowhere near the potent influence on China many assume, despite that idea's widespread belief. He tackles in particular the unassailable concept of the US consumer, suggesting this group not only fails to support practically all of China's expansion, as is so often implied by the media, but is in fact only responsible for a measly-sounding 0.3 percent of China's often double-digit GDP growth. From The Age: "Spare me the usual myopic line born of American xenophobia and ignorance about China being dependent on exports to the USA [...] net exports' contribution to China's growth over the past decade has averaged just 1.5 per cent. And the United States' share of China's exports is 20 per cent so the much ballyhooed American consumer is only good for 0.3 per cent of China's GDP growth – growth that runs along in double digits or close to it even in the Great Recession. "That's only part of it. The stuff China exports to the US is mainly low value-added – clothing, toys, electronic gadgets. About half of China's exports now go to the developing world and that half has higher value-added content – power stations, mining machinery and the like." (Emphasis added.) To add additional heft to his views, Pascoe often turns to previous comments from strategist Michael Power of Investec Asset Management… "An example of [Michael Power's] examples: if you've been half tuned-in to the state of the world, you'd know that more cars are sold in China now than the US. That's already history. The insight that's worth thinking about is that car ownership penetration in China is only 3 per cent, 80 per cent of buyers are purchasing their first-ever car and 90 per cent pay cash. Not only is it a massive market, it's ungeared and untapped." (Emphasis added.) By "ungeared," Power means unleveraged, and is referring to the fact that the Chinese still do not have widely-available credit. Therefore, the typical shopper has precious few financing options available, aside from tapping personal savings, when looking to buy higher-priced durable goods, like cars. When China's typical wage earner gains access to debt as a form of purchasing power there's likely to be marked rise in the strength of its domestic consumer base. Pascoe goes on to again briefly cite Power in describing what these changes have come to mean for Australia: "'…A decade or so ago, we spent a lot of time puzzling over why quarterly movements in Australian GDP were so highly correlated with quarterly movements in US GDP. We don't puzzle over this anymore – not because we solved the puzzle, but because the correlation has fallen. At the same time, the correlation between quarterly movements in Australian and Chinese GDP has steadily increased. Clearly what happens in the Australian economy is now more dependent upon what happens in China than has been the case at any time in our past.' "Emerging Asia is our economy now and will continue to be [...] But on top of the changing relative importance of the US to us is the declining absolute importance of the US. (This is me postulating now, echoing some of Power, not the more circumspect RBA.) Wall Street still calls the sentiment tune, but with the threat of more quantitative easing (ie printing money), the US is undermining its claim to the baseline of global capitalism – the "risk free" US government bond. It's not risk free when its value is being eroded. The idea of the greenback being the safe haven currency is simply bemusing, it's so last century." (Emphasis added.) The cat's out of the bag… the US is failing not only as the engine of the entire world economy, but is even sputtering out relative to an English-speaking brethren that previously took its main cues from American financial markets. Specifically, Australia is picking up on the not-so-subtle hints from the Fed that it has little interest in a strong dollar or, for that matter, the feds any interest in a manageable national debt. The notion gaining steam is the American century is becoming an old story… one that's already been written. You can visit The Age to read more details in its coverage of how you ain't seen nuthin' yet from Chindia. Best, Rocky Vega, China's Rise Curbs US Influence in Australia originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."
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| Gold "Steady" vs. Dollar Rally as US Leads Global "Race to Debase" Posted: 23 Sep 2010 05:30 PM PDT
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| Gold "Steady" vs. Dollar Rally as US Leads Global "Race to Debase" Posted: 23 Sep 2010 05:30 PM PDT
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| How High Could Gold Go, The Next Few Months? Posted: 23 Sep 2010 05:11 PM PDT (snippet) Note that there were always small pullbacks in the time periods I looked at; it was never a straight line. So the recent minor drawdown was typical of what occurred during these surges. Also, there were always corrections or at least periods of consolidation after the surge and before the next big upswing. Regardless of what gold does over the next few months, I think 20%+ surges will continue throughout this bull market, with the occasional 30% punch. And a doubling of the gold price in a matter of months is also likely in our future, a sure sign of the Mania phase. Gold surged 128.5% from October 8, 1979, to January 21, 1980. A similar vault today would have the price jumping from, say, $2,400, to $5,484 in less than four months. Yes, I think that's entirely possible and perhaps probable. How high will gold ultimately go? I look at it this way. The sovereign debt crisis in Europe isn't over. The sovereign debt crisis in the U.S. hasn't started. We will almost certainly see more quantitative easing (i.e., money printing). We have artificially low interest rates. The U.S. dollar is basically at the same level it was two years ago. We have no official inflation and certainly no big inflation. Less than 5% of U.S. citizens own any form of gold. Central banks are widely expected to be net buyers of gold again this year. Investment demand for gold is still only 32% of all uses of gold, a far cry from the 54% level reached in 1979. I could go on, but you get the idea. The only way you can benefit from these surges is to be long gold. If you haven't been a part of one, I guarantee you it's a lot of fun. Gold is more important than that, of course; it's your personal safe-haven asset. Buy on pullbacks, slowly increasing your holdings so that what you own makes a difference in your portfolio, both for asset protection and profit potential. And then, hang on. More Here 
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| How High Will Gold Go This Fall? Posted: 23 Sep 2010 05:01 PM PDT By Jeff Clark, Senior Editor, Casey's Gold & Resource Report The gold price has been hitting ever-new records over the past couple weeks, now closing in on the $1,300 mark. Some gold followers are saying this is extremely bullish for the near-term price since it broke so decisively through its June 28th high of $1,261. If [...]
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