Gold World News Flash |
- If Currencies ‘Race To The Bottom’ With Competitive Weakening, Will Gold Return To The World Of Money?
- Gold’s Historic Rally Continues
- International Forecaster September 2010 (#8) - Gold, Silver, Economy + More
- Remobilize Gold To Save The World Economy!
- A Red-Alert Threat to the Regime
- One once ounce of gold : one year's wage, One ounce of silver : one month's wage
- Taxes?
- Warning Signs Suggest U.S. Headed for a Complete Societal Collapse!
- America's Artificial Economy Is In Its Final Days – Here's Why!
- Jim?s Mailbox
- Gold ? An 11 Year High For 2010?
- Lundeen’s Market Trends: Gold & Silver Step Sums
- Return of Quantitative Easing Good for Gold
- This Safe Land Investment Can Protect You from the Dollar Crisis
- Gold Briefly Pierces $1,300 Spot
- SILVER to $436/oz and Beyond. Here's Why:
- Why QE2 + QE Lite Mean The Fed Will Purchase Almost $3 Trillion In Treasurys And Set The Stage For The Monetary Endgame
- Is the Bull Market in Gold Over?
- Silver Closes Week at Highest Price, Tops $21
- Rickards sees dollar collapse prompting new gold standard at +$5,000/oz
- Weekly precious metals review at King World News sees rally continuing
- Nepal will put FX reserves into gold and rig domestic market
- Silver ETFs: Poor Man’s Gold Gets Rich
- Cautious Optimism at Denver Gold Forum
- Interview: Dr. Marc Faber on the Federal Reserve and Hyperinflation
| Posted: 26 Sep 2010 01:00 PM PDT In the last two weeks we have seen the U.S. dollar move from $1.2751 to $1.3450 against the Euro. It has also fallen against the Pound, the Yen and the Swiss Franc. The Japanese government via the Bank of Japan is weakening the Yen as we write this.
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| Gold’s Historic Rally Continues Posted: 26 Sep 2010 06:00 AM PDT Gold broke above $1300 an ounce on Friday and silver ended at a new 30-year high. Whether these gains are sustainable over the near term is impossible to comment on. What can be said is that gold is likely to remain in a long-term uptrend so long as the central banks continue to try and manipulate currency and asset prices, and/or the outlook for fiscal deficits remains worrisome. In other words, gold and silver today serve as both a hedge against the downfall of fiat money and the threat of major sovereign default(s).
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| International Forecaster September 2010 (#8) - Gold, Silver, Economy + More Posted: 26 Sep 2010 05:10 AM PDT We recently saw gold at $1,300.00 an ounce. That is a long way from $35.00 an ounce on August 15, 1971, just a year shy of 40 years, from when President Nixon closed the gold window. Over the past ten years gold has been up about 20% a year. Shares and mint state graded numismatic coins have certainly outperformed gold bullion.
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| Remobilize Gold To Save The World Economy! Posted: 26 Sep 2010 05:00 AM PDT An open letter to Paul Volcker, Chairman of the Board of Governors of the Federal Reserve, 1979-1987; Chairman of President Obama's Economic Recovery Advisory Board, presented to him, in person, last year
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| A Red-Alert Threat to the Regime Posted: 26 Sep 2010 03:05 AM PDT In 2011, Congressman Ron Paul will introduce a bill in the House of Representatives calling for an audit of the gold held by the Federal Reserve System on behalf of the United States government. If he can successfully promote this bill by the phrase, "Show us the gold!" he will inflict enormous damage on the American Establishment.
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| One once ounce of gold : one year's wage, One ounce of silver : one month's wage Posted: 26 Sep 2010 02:00 AM PDT You think I am crazy? I have been ridiculed, dismissed, hated and now I am feared, but no one has given me a reason to change my view. I am still listening. Unbacked paper money is fraud. Most of the wealth is the world is an illusion.
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| Posted: 25 Sep 2010 06:52 PM PDT Please chime in on taxes related to selling/trade/re-allocating precious metals... Also if anyone has experience selling to APMEX it's appreciated as well, thanks all in advance!
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| Warning Signs Suggest U.S. Headed for a Complete Societal Collapse! Posted: 25 Sep 2010 06:52 PM PDT There are now countless warning signs all around us on a daily basis that the U.S. is headed for a complete societal collapse. Words: 573
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| America's Artificial Economy Is In Its Final Days – Here's Why! Posted: 25 Sep 2010 06:52 PM PDT Americans are enjoying their final days in an artificial economy that is being propped up by China and Japan... but when the bubble bursts we are going to see a societal collapse in the USA. Words: 694
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| Posted: 25 Sep 2010 06:13 PM PDT View the original post at jsmineset.com... September 25, 2010 10:51 AM Pace of new home sales second slowest on record CIGA Eric New homes sold at the second-slowest pace on record in August, signaling that the housing market will remain a drag on the economy. The second break in the secular downtrend within housing is a big concern for an over-leveraged, consumption-driven economy. The article characterizes this concern as a "drag". I would characterize it as an anchor. The dead-weight of housing ensures more bailouts and "save me" stimuli. New Home Sales And Change YOY, SA Home prices struggle while gold soars. The relative comparison illustrates an anchor-like drop to at least the 1980 lows. U.S. Median Home Price (MHP) to Gold: Source: finance.yahoo.com More… Jim, Here is an interesting commentary on gold from David A. Rosenberg, Chief Economist & Strategist at Gluskin Sheff and Associates in Toronto. Previously he was Chief North America...
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| Gold ? An 11 Year High For 2010? Posted: 25 Sep 2010 06:13 PM PDT View the original post at jsmineset.com... September 25, 2010 10:55 AM Jim Sinclair’s Commentary [*]Armstrong and I disagree on the fundamentals. [*]The fundamentals can be a mixture of what he sees and what I believe as currency induced cost push inflation is inherent in his analysis. [*]That however is not relevant to the trader or investor as it is gold that protects the investor from financial destruction. [*]You will see how $1650 fits into his view which has been my price objective since you first tuned in to JSMineset. [*]The history lessons are extremely interesting. Click image to enlarge Armstrong’s latest in PDF format ...
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| Lundeen’s Market Trends: Gold & Silver Step Sums Posted: 25 Sep 2010 06:13 PM PDT Lundeen's Long Term Market Trends Wk 154 of the 2007-2010 Bear Market Issue ---: 38 Volume: 03 Focus Section The Dow Jones Industrials Volatility Update Real Estate and Interest Rates Mortgage woes for Teacher's Pension Fund Gold and Silver Step Sums Mark J. Lundeen [EMAIL="mlundeen2@Comcast.net"]mlundeen2@Comcast.net[/EMAIL] 24 September 2010 Color Key to text below Boiler Plate in Blue Grey New Weekly Commentary in Black BEV chart for the 1929-32 & 2007-10 DJIA Comparison. We should always keep in mind that the DJIA is only 30 blue chip companies, so it's not the stock market. But the Dow has told the market's story very well for 125 years. The "Experts" are making much of the nice rise in the DJIA this week. But I don't see anything to get excited about. For one thing, the Dow has been stuck between its BEV -20% & -30% lines for almost 11 months now. That is a long time for the DJIA to be stuck in a 10% trading range. This is espe...
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| Return of Quantitative Easing Good for Gold Posted: 25 Sep 2010 06:13 PM PDT By Frank Holmes CEO and Chief Investment Officer The Federal Reserve said two words in its statement this week that should make every gold investor happy: Quantitative Easing. The Fed hinted that we may see additional QE measures as early as November. The news is good for gold investors because it means there could be more dollars chasing a finite amount of resources, further devaluing the U.S. dollar. We’ve already seen an intervention by Japan’s central bank to weaken the yen in an effort to boost the nation’s sagging export sector. Japan is currently the world’s third-largest economy. Another key driver for gold has been diminishing supply from gold mines. This chart from JP Morgan shows the all-in cost to produce and replace an ounce of gold for a handful of miners. Despite $1,300 gold, margins are still relatively modest. The costs vary widely depending on the company, but the peer average is $880 an ounce. Gold miners will be looking for...
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| This Safe Land Investment Can Protect You from the Dollar Crisis Posted: 25 Sep 2010 06:13 PM PDT By Porter Stansberry Saturday, September 25, 2010 As you read this, the precious metals gold and silver are soaring. They're soaring in response to a prediction I've been making for over a year and a half – that the U.S. government will do everything in its power to prevent a deflation in asset prices. This includes the shameless printing of dollars in order to prop up our rotted banking system… which is the plan, according to the Fed's most recent statement, out on Tuesday. As a result, gold – the "real money" wealth hedge – is at an all-time high. And while I'm a proponent of owning gold and silver bullion to protect yourself from a dollar crisis, there's another excellent way to get out of paper dollars and into productive, "real" assets. It's a long-held secret of the world's wealthiest people… Buy timber. Timber has long been a hedge for the wealthy against inflation. In addition to providing good risk-adjusted returns,...
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| Gold Briefly Pierces $1,300 Spot Posted: 25 Sep 2010 06:13 PM PDT Silver ETF SLV hits new high. U.S. Mint stops making 24-K gold buffaloes for 2010. GLD ETF has third withdrawal this week. North and South Korea on the brink of war. Explosive gold and silver short squeeze coming: James Turk... and much more. YESTERDAY IN GOLD AND SILVER Gold didn't do much in Far East trading during their Friday... but the moment that London opened there was a burst of activity to the upside. But it was obvious [at least to me] that every time that gold made a run for $1,300 spot, it got turned back. The biggest hit gold took on Friday started about 10:15 a.m. and ended about 11:15 a.m. The high price tick in New York was $1,301.30 spot, but that price only lasted for a few seconds at most. Volume was pretty decent... but not overly heavy. The silver price also ran up at the same time as gold... and by 9:30 a.m. in London, silver was up to $21.37 spot, then spent the rest of Friday struggling to rise another dime to close the N...
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| SILVER to $436/oz and Beyond. Here's Why: Posted: 25 Sep 2010 05:30 PM PDT |
| Posted: 25 Sep 2010 04:56 PM PDT
Recently the debate over when QE2 will occur has taken a back seat over the question of what the implications of the Fed's latest intervention in monetary policy will be, as it is now certain that Bernanke will attempt a fresh round of monetary stimulus to prevent the recent deceleration in the economy from transforming into outright deflation. Whether or not the Fed will decide to engage in QE2 on its November 3 meeting, or as others have suggested December 14, and maybe even as far out as January 25, the actual event is now a certainty. And while many have discussed this topic in big picture terms, most notably David Tepper, who on Friday stated that no matter what, stocks will benefit from QE2, few if any have actually considered what the impact of QE2 will be on the Fed's balance sheet, and how the change in composition in Fed assets will impact all marketable asset classes. We have conducted a rough analysis on how QE2 will reshape the Fed's balance sheet. We were stunned to realize that over the next 6 months the Fed may be the net buyer of nearly $3 trillion in Treasurys, an action which will likely set off a chain of events which could result in rates dropping all the way to zero, stocks surging, and gold (and other precious metals) going from current price levels to well in the 5 digit range. A Question of Size One of the main open questions on QE2, is how large the Fed's next monetization episode will be. This year's most prescient economists, Jan Hatzius, has predicted that the minimum floor of Bernanke's next intervention will be around $1 trillion, which of course means that he likely expects a materially greater final outcome from a Fed that is known for "forceful" action. Others, such as Bank of America's Priya Misra, have loftier expectations: "We expect the size of QE2 to be at least as much as QE1 in terms of duration demand." As a reminder, QE1, when completed, resulted in the repurchase of roughly $1.7 trillion in Treasury and MBS/Agency securities. It is thus safe to assume that the Fed's QE2 will likely amount to roughly $1.5 trillion in outright security purchases. However, as we will demonstrate, this is far from the whole story, and the actual marginal purchasing impact will be substantially greater. A Question of Composition Probably the most important fact that economists and investors are ignoring is that QE2 will be accompanied by the prerogatives of QE Lite, namely the constant rebalancing the Fed's balance sheet for ongoing and accelerating prepayments of the MBS/Agency portfolio. This is a critical fact, because once it becomes clear that the Fed is indeed commencing on another round of monetization, rates will collapse even more beyond recent all time records (and if we are correct, could plunge all the way to zero). What is very important to note, is that as Bank of America's Jeffrey Rosenberg highlights, a material drop in rates, which is now practically inevitable, is certain to cause a surge in mortgage prepayments of agency securities: "Our mortgage team highlights a 100 basis point decline in rates would raise the agency universe of mortgages refinanciability from currently about half to over 90%."
The fact that declining rates creates a feedback loop on prepayments, which in turn results in more security purchases and even lower rates, is most certainly not lost on the Fed, and is the primary reason for the formulation of QE Lite as it currently exists. Indeed, those who follow the Fed's balance sheet, are aware that the MBS/Agency book has declined from a peak of $1.3 trillion on June 23, to $1.246 trillion most recently, a decline of $53 billion, which has been accompanied by $25 billion in Bond purchases, resulting in such direct FRBNY market involvements as $10 billion weekly POMOs. These, in turn, are nothing less than a daily pump of liquidity into the Primary Dealers (who exchange bonds boughts at auction for outright cash) by the Fed's Open Market Desk, which then liquidity is used to the PD community to bid up risk assets. If we are correct in our assumption that on November 3, the Fed will announce a $1.5 trillion new asset purchase program, the implications of the previous observation will be dramatic. We additionally believe, that unlike QE1, the Fed will be far less specific as to the composition of purchases this time around, specifically for the aforementioned resion. As the Fed adds an additional $1.5 trillion in total assets, and as 10 Year rates, and thus 30 year cash mortgage rates, drop, the prepayment frequency of the Fed's existing MBS/agency book will surge, until it approaches and surpasses BofA's estimated 90% in a very short period of time. And courtesy of its QE Lite mandate, the Fed will purchase not only $1.5 trillion of US Treasurys as part of its new QE2 mandate, but will actively be rolling those MBS and Agencies put to it by the general public. As a result, it is our belief that over the six months beginning on November 3, the Fed will end up purchasing almost $3 trillion in US Treasurys in total. This can be summarized visually as follows:
As the chart shows, while the Fed's balance sheet grows from its current level of $2.3 trillion to $3.8 trillion, it is what happens to the Treasurys held outright by the Fed that is most disturbing: from $800 billion, we expect this number to surge to nearly $3.6 trillion in just over half a year, a massive increase of almost $3 trillion. The implications of this asset "transformation" on the Fed's balance sheet, not to mention those of US retail and foreign investors, and capital markets in general, will be dramatic. Offerless Bonds? One of the main problems facing the Fed in indirectly monetizing US Treasurys (keep in mind the proper definition of monetization is the Fed buying bonds directly from the Treasury, as opposed to using Primary Dealer middlemen, which is how it operates currently), is that there simply are not enough bonds in circulation to be bid, under its current regime of operation! Readers will recall that as part of existing SOMA guidelines, the Fed is limited to holding at most 35% of any specific marketable CUSIP. Furthermore, applying the SOMA limit to the $2 trillion in upcoming next twelve month issuance, means that in the interplay of the prepayment feedback loop coupled with collapsing rates, the Fed will need to either change the cap on the SOMA 35% limit, or the Treasury will need to issue far more debt to keep up with the sudden expansion in the Fed's outright, and not just marginal, capacity for incremental debt. Priya Misra summarizes this conundrum facing the Fed best:
We believe that the resolution to the limited supply question will be found promptly, as the last thing the US government and Treasury need is to be told that they need to issue more debt. We are confident they will obligly handily. From a purely structural perspective, suddenly the entire UST curve, and not just the "belly", will be offerless, as the Fed will now have a mandate of buying up virtually every single bond available in the open market, and then some! What this means is that rates will promptly plunge, and while many have noted the possibility that the 10 Year drops below 1% upon the formal announcement of QE2, we believe there is a very high probability that even the long-end can see rates drop substantially below 1%, while the 10 Year approaches 0%. Keep in mind that this move will not be predicated upon inflation expectations whatsoever (and in fact we believe this is merely the first step to an outright monetary collapse also known in some textbooks as hyperinflation), but merely as a means of frontrunning Ben Bernanke, as the entire bond market goes offerless, knowing full well that the Fed will buy any bond below its theoretical minimum price of 0% implied yield (we leave it to our readers to determine what this means price-wise on the curve). It also means that the Fed will finally cross the boundary into outright monetization, as Bernanke will be forced to directly bid for any new paper emitted by the US Treasury, to maintain the tempo of its purchases. Asset Implications As we have noted above, the immediate implication of the vicious (or virtuous if you are Ben Bernanke) feedback loop of collapsing rates, prepayments, and accelerating UST purchases, is that mid-and long-term rates will likely promptly approach zero, as every UST holder realizes they are now the marginal price setter in a market in which there is a bid for any price. The Fed will merely render the traditional supply/demand curve meaningless, and any bonds offered for sale at any price will be bid up by Brian Sack. The implication on stock prices is comparably obvious: to readers who have been confounded by the impact on stocks when there is $10 billion worth of POMOs in a week, we leave to their imagination what the impact on 4x beta stocks will be once the Fed floods the market with $90 billion worth of weekly liquidity, which is what we calculate to be the peak repurchase activity between the months of January and March, as QE2 ramps up to its full potential. In this vein, analysts such as Deutsche's Joe LaVorgna who this Friday came out with a note advising clients not to "Fight the Fed" (link) may take the message to heart. After all, if this last attempt by the Fed to spur asset price inflation, in which Bernanke is effectively telling the consumer that a house can be had for no money down, and for no interest ever, thereby eliminating the risk of price deprecitation, fails, it is game over. And speaking of game over, we dread to look at a chart of the DXY in early 2011. The dollar will plunge, pure and simple, as the Fed makes it clear that it will not tolerate currency appreciation. Also, don't forget that as a side effect of QE2, another component that will surge in addition to Fed Treasury holdings, will be excess reserves held by the banks. If we are correct in estimating that the Fed's assets will explode to $3.8 trillion, then bank excess reserves will skyrocket by a factor of 150% from the current $1 trillion to well over $2.5 trillion. The immediate casualty of this will be the US Dollar: one needs to look no further than 2009 to see what happened to the DXY when excess reserves increased by $1 trillion, in order to extrapolate what happens when it becomes clear that Bernanke is prepared to put any amount of liabilities on the Fed's balance sheet in its latest reflation attempt. And if anyone had doubts about the Fed being able to successfully absorb $1 trillion in excess reserves accumulated through QE1, all those concerns will be put to rest once the number hits $2.5 trillion, or more. Which brings us to gold. Needless to say, once the full "all in" realization of just what QE2 means for risk assets and capital markets sets in, gold (and other physical commodities) will promptly go from its current price of $1,300 to a number well in the five-digit range. We leave it up to our readers to provide the actual digits. In summary, David Tepper may well be right that stocks will benefit from QE2, as will Bonds and as will commodities. In fact, every asset class will explode in a supernova of endless liquidity. To be sure, all of this will be very short lived. Very soon, all those assets denominated in fiat paper, will promptly collapse in the great black hole of reserve currency devaluation, as it becomes clear that the Fed will stop at nothing to win the race of global currency debasemenet. And of course, none of this is to be confused for an actual improvement in the economy, as QE2 will result in a dramatic and irreversible deterioration in the US, and thus global, economy, which, once the initial euphoria from QE2 recedes, will promptly progress to isolationism, protectionism, currency wars and exponentially accelerating monetization of each and every asset class, thereby rendering price discovery irrelevant, as central banks around the world stampede into irrelevant capital market, each buying up as much of everything as their printing presses will allow them, until the ink runs dry. At this point we refuse to pass ethical judgment on the Fed's actions. The Fed will do this action regardless of what happens on that other fateful event scheduled to take place on November 3. If it does not, asset prices will collapse leading America into a deflationary vortex of deleveraging, and Bernanke is fully aware of this. The only reason the market has found some validation to the September risk asset surge, is the "certainty" of QE2. Were this to be taken away, stocks would plunge, as would all other assets. And since the Fed is uncontrollable, and unaccountable to anyone, it is now impossible to prevent this line of action, whose outcome is what some may be tempted to call, appropriately so, hyperinflation. The direct outcome will be an explosion in all asset prices, although we continue to believe that of all assets, gold will continue to outperform both stocks and bonds, as recently demonstrated. Those who are wishing to front-run the Fed in its latest and probably last action, may be wise to establish a portfolio which has a 2:1:1 (or 3:1:1) distribution between gold, stocks and bonds, as all are now very likely to surge. We would emphasize an overweight position in gold, because if hyperinflation does take hold, and the existing currency system is, to put it mildly, put into question, gold will promptly revert to currency status, and assets denominated in fiat, such as stocks and bonds, will become meaningless. And while Zero Hedge refuses to condemn what is now openly an act of war against the US middle class and the country's holders of dollar-denominated assets, by Ben Bernanke, who is fully aware what the implications of QE2 will be, we were delighted to read a brief note by none other than Bank of America's Jeffrey Rosenberg, who analyzes the costs of QE2, and comes to a politically correct conclusion which recapitulates everything said previously.
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| Is the Bull Market in Gold Over? Posted: 25 Sep 2010 02:08 PM PDT Gold hit three new record highs last week. This week, following the announcement by the US Fed on Tuesday, it is hitting still more highs…closing in on $1,300 as we write. Gold should go up with consumer prices. But, for nearly two decades – from 1980 to 1999 – gold went down while consumer and asset prices rose. Now, consumer prices are stable. Yet gold hits new records. All views on gold are baroque. There's no line of thought on the subject that doesn't have a curve in it. Some buyers are loading up on gold because they see a recovery coming. Others are buying it because they don't. Recovery, say some, will boost consumer appetites, resulting in higher inflation levels and a higher price for gold. The absence of recovery, say others, will cause the Fed to undertake more money printing. Those who have no opinion on the matter are among gold's most aggressive buyers. To them, gold looks like a "can't lose" proposition. If the economy improves, gold rises naturally. If it doesn't improve, the Bernanke team will force it up. And if not Bernanke, the Chinese. Gold makes up only 1.7% of China's foreign exchange reserves. Many analysts believe China is targeting a 10% figure. If so, it would have to buy every ounce the world produces for two and a half years. Or, if it relies on only its own production – China is the world's largest producer – it would take nearly 20 years of steady accumulation to reach the 10% level. The metal holding down the 79th place in the periodic table has many uses. People make spoons, forks and bathroom faucets out of it. It's occasionally used as roofing, or even as a murder weapon; Crassus had molten gold poured down his throat after being captured by the Parthians. And Lenin said he would line the public latrines with it. But the best use ever found for it was as money – as a reliable measure of wealth. Even gold is not perfect as money. During the years following the Spanish conquest of their New World territories, for example, gold flooded back into the Iberian Peninsula. Soon there was much more gold than the other forms of wealth it was meant to represent. Each incremental ounce of gold was disappointing. It bought only a fraction as much as it had before this monetary inflation began. And had you bought it in 1980 you would have seen 90% of your purchasing power disappear before the bottom finally came. Even today, you still would not be back at breakeven. The price of gold will have to almost double from today's level to reach its inflation-adjusted high of 1980. But this is what makes gold very different from other money. If you happen to have a billion-Mark note from the Weimar Republic or a trillion dollar note from Zimbabwe, you can hold onto that paper until hell freezes; its value will never return. Gold, on the other hand, will never go away. And when the post-1971 monetary system cracks up, gold is likely to return to its 1980 high…and keep going. Over the centuries, mankind has often experimented with alternatives to gold. Driven by larceny or desperation, base metal and paper were tried on many occasions. Paper was particularly promising. You could put as many zeros on a piece of paper as you wanted, creating an infinite supply of "money," as Ben Bernanke once noticed, at negligible cost. But the experiments all ended badly. People realized that money gotten at no expense was only gotten rid of at great cost. Given the ability to create "money" at will, a central banker will sooner or later create too much. But one generation learns. The next forgets. By 1971, Americans had forgotten everything they ever knew about money. Richard Nixon cut the final link between the US dollar and gold. At first, it looked as though investors hadn't noticed. But then began a great bull market in gold that took the price from $43 to $850. And just then, when investors were most sure that paper dollars would soon be worthless, a remarkable thing happened. Paul Volcker intervened. He made it clear that if the dollar were to go the way of all paper, it wouldn't be on his watch. Inflation rates fell, along with gold. Whatever shards of monetary wisdom were still lying on the ground intact in 1971 have since been ground to dust. Now, Ben Bernanke strives as diligently to destroy the dollar as Paul Volcker did to protect it. And another generation awaits a whack on the knuckles. Regards, Bill Bonner Is the Bull Market in Gold Over? 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." More articles from The Daily Reckoning….
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| Silver Closes Week at Highest Price, Tops $21 Posted: 25 Sep 2010 02:07 PM PDT U.S. silver prices surged for a second straight week, jumping ahead 58.3 cents from last Friday and topping $21 an ounce for a fresh 30-year high.
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| Rickards sees dollar collapse prompting new gold standard at +$5,000/oz Posted: 25 Sep 2010 02:06 PM PDT 5:43p ET Saturday, September 25, 2010 Dear Friend of GATA and Gold: Omnis Senior Managing Director Jim Rickards was interviewed for six minutes on CNBC a week ago and talked matter-of-factly about the ongoing collapse of the dollar and the likely necessity for the United States to return to a gold standard to support its currency, only this time with convertibility at anywhere from $5,000 to $11,000 per ounce. Gold isn't going up, Rickards observed; rather the dollar is going down, and it is better practice to start pricing everything in terms of gold. Rickards already has been inducted by GATA into the Order of the Tin-Foil Hat so we'll send him his first oak-leaf cluster. The interview starts with comments on the currency valuation controversy between China and the United States and the gold comments begin at 4:10. You can watch it at the CNBC archive here: http://www.cnbc.com/id/15840232/?video=1592641242&lay=1 CHRIS POWELL, Secretary/Treasurer * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:
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| Weekly precious metals review at King World News sees rally continuing Posted: 25 Sep 2010 02:04 PM PDT 10:23a ET Saturday, September 25, 2010 Dear Friend of GATA and Gold (and Silver): The weekly precious metals review at King World News sounds firmly favorable — Bill Haynes of CMI Gold and Silver asserting that the gold and silver bull market has years to run, Dan Norcini of JSMineSet.com noting widespread commodity price increases, and the Got Gold Report's Gene Arensberg reporting that commercial short positions in the precious metals have not yet risen aggressively to defeat the rally. The weekly review is about 23 minutes long and you can listen to it at King World News here: http://kingworldnews.com/kingworldnews/Broadcast/Entries/2010/9/25_KWN_W… CHRIS POWELL, Secretary/Treasurer * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:
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| Nepal will put FX reserves into gold and rig domestic market Posted: 25 Sep 2010 02:04 PM PDT Nepal Government Adopts New Gold Policy From Xinhua News Agency, Beijing http://news.xinhuanet.com/english2010/business/2010-09/25/c_13528683.htm KATHMANDU, Nepal — In a strategic move, Nepal's government has decided to bolster gold reserves to back up macroeconomic stability and manage the market after poor management of the gold trade fueled a balance-of-payments deficit posing challenges to stability for about a year. According to Saturday's Republica daily, Ministry of Finance and Nepal Rastra Bank, the central bank of the country, have endorsed a new policy on gold under which they have converged on maintaining separate reserves of monetary gold and 24-carat pure gold. "We will bolster reserves of monetary gold to back up currency and the additional 24-carat pure gold reserve will be maintained to intervene in the market in case of distortion," said a highly placed source at the Ministry of Finance. Currently, the central bank has more than 6 tons of gold in its reserve. While five tons of the reserve is in Nepal, another 1.2 tons is deposited in Luxemburg against the interest return of 2 percent per annum. The interest is received in gold. "We have set a target to add 3 to 4 tons of yellow metal in the monetary gold reserve every year once we attain balance-of-payment surplus, " said the source. This means that the policy has adopted a strategy of using surplus in balance of payments to procure gold. At present the surplus is maintained in foreign currency. The government decided to adopt the new approach mainly because the rate of return on gold in recent years has remained much higher than the rate of return on currency. The government has banned the import of gold after it failed to re-impose a higher import duty, which was necessary to plug the duty differences on gold between Nepal and India. But that caused supply shortages and sparked illicit inflow of gold from India. Nepal's gold imports in 2009/10 had touched 41.63 billion Nepali rupees ($570 million) as substantial duty differences on gold between Nepal and India spurred smuggling from Nepal to India. * * * 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:
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| Silver ETFs: Poor Man’s Gold Gets Rich Posted: 25 Sep 2010 02:04 PM PDT Tom Lydon submits: Gold might be a record-breaker, but silver exchange traded funds are ones to watch. While gold is up nearly 18% year-to-date, silver is up nearly 25%. Take that. Not only is silver outperforming gold right now, the metal is at 30-year highs, says Pham Duy Nguyen and Nicholas Larkin for BusinesWeek. For its part, gold touched $1,300 today. Both metals are outperforming global equities, Treasuries and most industrial metals, too.
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| Cautious Optimism at Denver Gold Forum Posted: 25 Sep 2010 02:04 PM PDT The Gold Report submits: Optimism is in the air at the Denver Gold Forum (the conference that assembles the world's leading precious metals miners and the global fund managers who invest in them), according to Encompass Fund Founders Malcolm Gissen and Marshall Berol. The Gold Report was on location at the Forum to get the scoop on their "cautiously optimistic" forecast for precious and base metals, as well as rare earths. In this exclusive interview, Gissen and Berol also explain their company-selection process, which appears to be paying off big time. The Gold Report: Malcolm and Marshall, thanks for talking with us here at the Denver Gold Forum. Tell us your impressions of the conference. What's the mood? Do you feel you're going to be coming away with some new ideas?
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| Interview: Dr. Marc Faber on the Federal Reserve and Hyperinflation Posted: 25 Sep 2010 02:03 PM PDT By Ron Hera
The Hera Research Newsletter (HRN) is Born Between Dr. Dr. Hera Research Newsletter (HRN): Dr. Marc Faber: HRN: What would be an example of that? Dr. Marc Faber: HRN: Is there a relationship between monetary expansion and the fact that the US economy depends so heavily on consumption? Dr. Marc Faber: HRN: What would you recommend that the Federal Reserve do differently? Dr. Marc Faber: HRN: With debt levels and liabilities so high, what solution is there for the United States? Dr. Marc Faber: HRN: It seems the US is moving towards more government intervention into the free market rather than less. Dr. Marc Faber: HRN: Given the poor prospects for US economic growth, do you foresee a flight of capital from the United States? Dr. Marc Faber: HRN: Where should American investors put their money? Dr. Marc Faber: HRN: Are you saying you would consider buying gold even at today's prices? Dr. Marc Faber: HRN: You mentioned that cash is not attractive. What are the prospects for the US dollar? Dr. Marc Faber: HRN: Can you comment on inflation versus deflation? Dr. Marc Faber: HRN: Is this an example of why central planning of the economy by the Federal Reserve isn't effective? Dr. Marc Faber: Yes. Exactly. HRN: Do you think hyperinflation in the US is possible? Dr. Marc Faber: It's HRN: Thank you for being so generous with your time. Dr. Marc Faber: Thank you. After Words
Ron Hera
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