Gold World News Flash |
- $5,000 Gold Bandwagon Now Includes These 60 Analysts – Got Gold?
- 'Don't Fight the Fed' but What About the BOJ?
- The 'Less Bad' Rally Is Finding New Fuel
- First Trust to Cut Expenses on BICK ETF
- Andy Xie Is Much Less Bearish on Chinese Housing
- The World Is Enraged in One Big Trade War
- Return of Quantitative Easing Good for Gold
- Charting New Space
- SP500 Internals, Dollar & Gold Pre-Week Analysis
- Jim?s Mailbox
- Gold an 11 Year High for 2010
- Jim Sinclair's Christmas Message: Keep your Gold Insurance & Be Happy
- Gold is the final refuge against universal currency debasement
- Argentina edges ahead in devaluation race; capital controls next
- SP500 Internals, Dollar and Gold Pre-Week Analysis
- You're a Free Man
- When SHTF Will Gold Be Worth Anything?
- Outlook for $5,000 Gold PricesRob McEwen, CEO of U.S. Gold
- Central Banks No Longer Selling Gold (Duh Factor: 10/10)
- An Insider’s Review of Wall Street: Money Never Sleeps
- Gold and Silver, The Mass Public Dont Care.
| $5,000 Gold Bandwagon Now Includes These 60 Analysts – Got Gold? Posted: 26 Sep 2010 07:33 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 102 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 (60) maintain that $5,000 or more for gold is likely. Words: 777
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| 'Don't Fight the Fed' but What About the BOJ? Posted: 26 Sep 2010 07:15 PM PDT Clive Corcoran submits: David Tepper, founder of the multi-billion dollar hedge fund Appaloosa Management, who normally adopts a rather low profile may have discovered a new career as a broadcaster when he was interviewed on CNBC last Friday morning (24th). His manner was attention grabbing in the same way that could be said of a loose cannon, and his enthusiastically bullish outlook, which may have helped to light the fire under US markets that sustained for the rest of the day, is likely to have appealed to CNBC viewers and equity bulls alike. Moreover his reasoning was profoundly simple and seemed to have only one real underpinning - amounting to the simple notion "Don't Fight the Fed". Complete Story »
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| The 'Less Bad' Rally Is Finding New Fuel Posted: 26 Sep 2010 07:12 PM PDT Aigail Doolittle submits: The S&P 500 soared on Friday and most media reports are attributing this move to better-than-expected or “less bad” durable goods orders riding off of better data out of Europe. I respectfully beg to differ. The “less bad” rally was the first leg of the rally that we’ve been watching for the last month that has taken the S&P 500 to its current 1,149 from 1,040. This has made for a 10.5% move in less than a month. The second leg appears to be on the cusp of taking form now and I’m coming to believe that it’s going to be about something other than what I’ve thought it was going to be about or objectively good economic data. Rather, I think the second leg of the bear market rally is going to be all about Fed talk. The Fed’s recent communication through its FOMC statement has had the effect of causing investors to believe that the Fed will be injecting fresh liquidity into the system via QE2 or the purchase of Treasury and/or other fixed-income securities at some point later this year. As a result, Treasurys have strengthened and the dollar has weakened in anticipation of the Fed undermining the currency via those purchases. In turn, the Fed has steered investors toward riskier asset classes as would have been a conceivable goal of actual quantitative easing. In short, investors are doing the Fed's bidding as they seem to fear that large purchases of Treasurys by the government will undermine the dollar, and thus are undermining it themselves ahead of any formal undermining. However, this Fed-mastered but investor-created undermining of the dollar could have a similar effect to the decline seen in 2009 that started in early March. It could drive investors toward another weak dollar trade and toward all of the riskier assets that were bid up then too. We saw evidence of this on Friday with further weakness in the dollar and a breach of the key level of support found at 79.507 and that on decent economic data, equity indices shot up as did many other investment classes – and putting aside the issue of safe or risky asset classes – as happened in 2009. Now one day another leg of a rally does not make, but I continue to believe the Fed knew exactly what it was doing with its September statement. It was the policy response. And if the Fed gets really lucky, and this would be luck beyond luck, this next phase of the rally could perhaps be the thing to somehow increase the velocity of money so that money starts circulating a bit more quickly again. For an economy that runs on money and credit, this is a rather important goal. Slightly better M2 and bank credit numbers from the summer actually create a platform for this possibility and should that happen especially if there is some sort of extension of the Bush tax cuts as there may be and there should be and perhaps the White House’s bungling around the matter will help, we may just have reason to believe there will be yet another leg to this rally. Such a third leg to this bear market rally could be driven by something that would be good for sure or that increase in the velocity of money with cash changing hands more quickly and especially from banks to businesses and individuals alike. In turn, this should have the effect of helping with hiring and the housing market and the mopping up of all of that slack. What makes this so interesting is regardless of this dynamic’s potential depth and duration the Fed’s done nothing but communicate the fact that it will “provide additional accommodation” to support its inflation mandate and the economic recovery if needed. Investors are doing the rest. Disclosure: Long [[BGU]] and [[SSO]] Complete Story »
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| First Trust to Cut Expenses on BICK ETF Posted: 26 Sep 2010 06:32 PM PDT Jarred Cummans submits: With nearly nine months in the books, 2010 is shaping up to be the year of price wars in the ETF industry. In the past several months, a number of big names have slashed expense ratios on some of their most popular products, in an effort to attract cost-conscious investors. Charles Schwab and Vanguard have gone back and forth in cutting prices on popular broad-based funds, while iShares recently made a splash in the precious metals space by lowering the expense ratio on its gold fund from 40 basis points to 0.25%. Smaller ETF shops have added downward pressure to ETF costs, with Van Eck and GlobalShares among those reducing expense ratios in recent months. Now add First Trust to that list; the Lisle, Illinois-based firm recently announced that it too would be cutting the expense ratio on one of its emerging market ETFs [see ETF Price Wars Escalate]. Complete Story »
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| Andy Xie Is Much Less Bearish on Chinese Housing Posted: 26 Sep 2010 06:23 PM PDT Edward Harrison submits: Recently I pointed to some comments by Andy Xie which indicated he was taking a less apocalyptic stance toward the Chinese property market. It was difficult to discern how much of a climb down this was for the China bear. But, judging from an article just published in Bloomberg, Xie has not recanted entirely; he is still bearish on the Chinese property market. He just expects the timing of the collapse to be different and the effect on the real economy to be less severe. Xie writes: Complete Story »
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| The World Is Enraged in One Big Trade War Posted: 26 Sep 2010 06:18 PM PDT Tom Lindmark submits: Liam Halligan and Ambrose Evans-Pritchard have two provocative columns this weekend that actually tie together quite nicely. The overall theme is governments debasement of their various currencies as they desperately try to reflate their economies. The lesson might well be buy gold and any other hard asset you can lay your hands on. Halligan takes the position that having exhausted other options QE is the only option left to policymakers: Complete Story »
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| Return of Quantitative Easing Good for Gold Posted: 26 Sep 2010 06:12 PM PDT 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.
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| Posted: 26 Sep 2010 06:00 PM PDT www.preciousmetalstockreview.com September 26, 2010 Resistance is futile. Gold is charting into new frontiers. We’re now on the road towards $1,500 Gold and $30 silver. Both targets should be reached with this move which should last until perhaps spring. There will be consolidations and corrections along the way, but it really doesn’t get much better than this. Let’s get right into the fantastic looking charts this week. Metals review Gold rose nicely, by 1.73% on the week and butted up against the psychological resistance at $1,300 early Friday before falling due to profit taking the rest of the day. The $1,300 level may take a bit of time to clear, but then again maybe not. When something is in all-time high territory there is no telling what can happen and when. What I can say is that I’m very, very impressed with Golds move so far. It’s moved up slowly and steadily, backing and fi...
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| SP500 Internals, Dollar & Gold Pre-Week Analysis Posted: 26 Sep 2010 05:55 PM PDT After a fierce equities rally on Friday, which I figured would happen, just not that strong; I have to wonder if there is some event or major decision in the works we don’t know about? Friday’s rally could be something simpler like window dressing by the funds. This is when the funds buy up all the top performing stocks for month end reporting. They do this so that their investors think they are on the ball and know what they are doing. Window dressing will end Monday and from there we could see some profit taking (selling) start. But for all we know Obama could be extending the tax cuts for everyone or cutting payroll taxes etc… It would only take one of these events to trigger a sharp up move in the market and that could be what Friday’s move was anticipating. That being said volume has remained light and during low volume session the market has a tendency to move higher. Sell offs in the market require strong volume to pull the market down, so...
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| Posted: 26 Sep 2010 05:55 PM PDT View the original post at jsmineset.com... September 26, 2010 09:41 AM US Long Bonds Remain An "Enron-like" Train Wreck Sunday, September 26, 2010 Surging trend energy in bonds continues unabated since April 2010. REV(E), or trend energy, illustrates the strength of the surge. Trend energy as of August 2010 is approaching the all-time high in December 2008. This has been achieved while price remains roughly 20% below the all-time high. The divergence of trend energy with price only reinforces the power of the trend. US Long Bonds ETF (TLT) At some point capital flows based on reality economics will override the short-term illusion. The unusual change in the distribution of buyers at the Treasury auctions some developing cracks in the global economic facade. Besides, technical analysis based solely on nominal (US dollar) trends is extremely myopic and largely useless during periods of aggressive currency debasement. The real or unbiased currency adjusted trend in US long ...
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| Posted: 26 Sep 2010 05:55 PM PDT ...
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| Jim Sinclair's Christmas Message: Keep your Gold Insurance & Be Happy Posted: 26 Sep 2010 05:55 PM PDT This is from the Jim Sinclair section. I thought I'd copy into here for your edification. Hold tight. We've got a long way to go before the top in gold. Its going to be one wild ride. Merry Christmas everyone & Happy Birthday Jesus! View the original post at jsmineset.com... December 25, 2009 06:18 PM My Dear Extended Family, For the Grace of God there go we. Give thanks for what we have. God helps those that help themselves. Take a moment of silence for those suffering this Christmas, for there are many. It was all unnecessary. This could have been a normal, tolerable and actually good for the system 4 year recession of modest proportions. Their pain, even if they do not know it, came from others becoming trillionaires on Federal funds. Their sworn enemy, although they do not know it, is OTC derivatives. Since no intervention has been aimed at the cause, no solution to the problem is possible. Do not give up your insurance, no matter how hard F-TV tries to convince you to. Whe...
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| Gold is the final refuge against universal currency debasement Posted: 26 Sep 2010 05:55 PM PDT September 26, 2010 09:01 AM - States accounting for two-thirds of the global economy are either holding down their exchange rates by direct intervention or steering currencies lower in an attempt to shift problems on to somebody else, each with their own plausible justification. Nothing like this has been seen since the 1930s. Read the full article at the Telegraph......
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| Argentina edges ahead in devaluation race; capital controls next Posted: 26 Sep 2010 05:51 PM PDT Fernandez Buys Dollars in 'Draconian' Bid to Weaken Argentine Peso By Drew Benson and Ben Bain http://www.bloomberg.com/news/2010-09-27/fernandez-buys-dollars-in-draco... Argentine President Cristina Fernandez de Kirchner's efforts to weaken the peso are working, while policy makers in emerging markets from Brazil to South Africa fail to curb currency rallies. The peso has declined 0.8 percent in the past three months against the dollar, the only retreat among 25 emerging-market currencies tracked by Bloomberg. South Africa's rand gained 8.4 percent and Brazil's real rose 4.3 percent even as their central banks stepped up dollar purchases to stem the appreciation. Argentine central bank President Mercedes Marco del Pont said Sept. 2 that the institution seeks to maintain a "competitive" exchange rate after dollar inflows climbed to a two-year high of $392 million in the second quarter, the second time since 2008 that flows were positive. The bank, which doesn't target a benchmark lending rate, buys dollars in the local foreign exchange market and limits appreciation by requiring investors deposit 30 percent of the funds brought into the country for one year. ... Dispatch continues below ... ADVERTISEMENT Prophecy to Become Coal Producer This Year Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen. For Prophecy's complete press release about its production plans, please visit: http://www.prophecyresource.com/news_2010_may11.php Argentina is "definitely bucking the trend because they're able to intervene aggressively," said Aryam Vazquez, an economist with Wells Fargo in New York. "It's a little bit more challenging for a country like Brazil, for example, which attracts a heavy amount of capital." The dollar inflows followed Fernandez's completion of a $12.9 billion defaulted debt swap in June and after grain exporters began selling a record 55 million metric ton soybean harvest. Argentina's peso dropped 0.2 percent on Sept. 24, the most in five weeks, to 3.9601 per dollar, extending its decline this year to 4.1 percent. The currency touched 3.9602 per dollar, the weakest level since its inception in 1992. The central bank said in its daily e-mail statement that it last bought dollars on Sept. 23, when reserves reached a record $51.3 billion. Fernandez last week nominated Marco del Pont, who backed the government's use of $6.6 billion in international reserves to pay debt this year, to remain in her post after it was set to expire Sept. 23. Economy Minister Amado Boudou presented lawmakers with a plan on Sept. 16 to tap another $7.5 billion in reserves to make debt payments next year. Paying debt with reserves fuels inflation by freeing up budget money for other uses, said Claudio Loser, a former International Monetary Fund official, in a Sept. 22 interview. Consumer prices will rise 25 percent this year, more than double the official rate of 11.1 percent and the most in the world after Venezuela, former central bank President Alfonso Prat-Gayestimated in a Sept. 16 interview. Brazil's increased dollar purchases have failed to halt the real's six-week advance, while South Africa has "no easy" solution to the rand's gain, the nation's central bank chief said Sept. 22. Brazilian central bank President Henrique Meirelles stepped up dollar purchases to the highest in almost a year this month to temper gains in the real. The central bank bought $5.9 billion in the first 12 business days of September, Altamir Lopes, head of the bank's economic department, said Sept. 21. The purchases are the biggest for the period since October 2009, when policy makers bought $6.3 billion. South Africa faces "hugely costly" options to stem the rand's gain as its 34 percent rally against the dollar this year curbs exports, Central Bank Governor Gill Marcus said Sept. 22. Central banks in developed nations are also struggling as their currencies strengthen against the dollar. The Swiss National Bank lost 14 billion francs ($13 billion) in the first half of the year in currency intervention to stem the franc's rally. The franc has climbed 9.6 percent against the dollar in the second half and jumped to a record 97.8 centimes per dollar on Sept. 24. The yen has recouped half its losses since Sept. 15, when Japan sold it for the first time since 2004 after the yen jumped to a 15-year high. The yen has climbed 10 percent against the dollar this year, the most among 16 major currencies tracked by Bloomberg. Argentina's peso has weakened 28 percent since Fernandez's husband and predecessor, Nestor Kirchner, began his four-year term in May 2003, as each sought a weaker currency to bolster domestic industries and export revenue. In addition to requiring investors to deposit cash at the central bank, the government has also limited gains by maintaining caps on utility prices and taking over companies and private pension funds. Foreign direct investment in Argentina totaled $4.9 billion in 2009, compared with $26 billion in Brazil and $17 billion in Chile, according to the United Nations Economic Commission for Latin America. Brazil is the largest economy in South America followed by Argentina, Venezuela, Colombia, and Chile, according to data compiled by Bloomberg. Argentina has been "rational" in its use of reserves to make debt payments this year and won't sell bonds overseas at 8 percent or above, Fernandez said Sept. 24. "Today rates are in the single digits, but we aren't interested in taking on debt that could be at 8 or 8.75 percent," Fernandez told reporters in New York. An Argentina central bank official in Buenos Aires declined to comment and asked not to be identified by name in accordance with official policy. Among other debt sales, Buenos Aires province officials met with investors in Europe and the U.S. last week about plans to sell about $500 million, according to a ministry official who declined to be identified because the terms haven't been completed. Shareholders of Aeropuertos Argentinas 2000 SA, the country's main airport operator, earlier this month approved plans to sell as much as $300 million in bonds. Five-year credit-default swaps tied to Argentine debt fell eight basis points to 762 at the end of last week. A basis point equals $1,000 annually on a contract protecting $10 million of debt. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to debt agreements. The extra yield investors demand to own Argentine bonds instead of U.S. Treasuries dropped 20 basis points, or 0.2 percentage point, to 680 last week, according to JPMorgan. Warrants linked to growth in South America's second-biggest economy rose 0.02 cent to 11.8 cents, according to data compiled by Bloomberg. Countries such as Brazil and Peru, which have "imposed some mild capital controls on short-term inflows," are less likely to turn to stronger limits, said Daniel Volberg, an economist with Morgan Stanley in New York. Peruvian policy makers have raised reserve requirements four times since June as they seek to avert inflationary pressures and prevent foreign inflows from destabilizing the local currency. "If they were to follow the footsteps of Argentina, they'd have to impose much more Draconian capital controls," Volberg said in a Sept. 24 telephone interview. "That would sort of prejudice FDI inflow and longer-term capital inflow, which would be sort of antithetical to the fundamental economic policy in those countries." * * * The Silver Summit New Orleans Investment Conference * * * Support GATA by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Resources Expects Positive Cash Flow from Blackdome, On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia. Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013." For complete information on Sona Resources Corp. please visit: www.SonaResources.com A Canadian gold opportunity ready for growth
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| SP500 Internals, Dollar and Gold Pre-Week Analysis Posted: 26 Sep 2010 05:36 PM PDT
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| Posted: 26 Sep 2010 04:56 PM PDT Alright, what's going on around here? After two weeks back in the country of his birth, your editor hopped off an airplane, dashed home in a taxi, showered, and is now sitting down trying to figure out what has changed in Australia since we left. For one thing, it seems warmer and the trees are budding. So is the Aussie dollar. Today's Daily Reckoning will be a bit of a cautious and casual affair. Jet lag is supposed to have the same effect on the human body as drinking three beers. We're opposed to drinking and reckoning. So today's task is to survey the territory and compare it to what we thought about while out of the country for two weeks. The first obvious sign, when converting the currency, is that it now takes 96 U.S. cents to buy one Australian dollar. The Aussie hasn't been this high, so to speak, since the heady days of 2008 - before the plunge. The RBA meets next week. Some of this recent strength could be traders betting on a rate rise. Are things in Australia so awesome that the RBA is justified in moving rates higher? Well, to be honest, we don't think the folks at the RBA - even if they were mind-reading rocket surgeons or brain scientists - know what the price of money should be. They'd like you to believe they are wise money mavens. But a bunch of charts and spreadsheets can't disguise the fact that they're really just guessing and hoping you take them seriously. Still, there is probably some data set that came out in the last two weeks (like trade figures) which suggests the Aussie economy is chugging along with vigour and in danger of "overheating". Blah blah blah. All those attempts to correlate current economic events with the case for a higher price for capital ignore the central lesson of the last ten years: central banks screwed up royally and it had real world (wealth destroying consequences) for investors. One big question now is if they have screwed up again with reflationary interest rates that stabilised markets after the 2008 meltdown. Ben Bernanke and his global cronies probably feel pretty good about themselves at the moment, at least as far as stock prices are concerned. But at least in America, the labour market continues to tell a different story. And then there's gold. In U.S. dollar terms it's telling you something. But in value terms, is it speaking the truth like an Old Testament prophet, or is it lying like a 1999 tech stock? If it's telling you the truth, then the U.S. dollar is being exposed for the deeply flawed currency that it is. Gold at $1,300 is not the end of the gold bull market then, although it could be the end of the beginning. If gold is lying, then its current run is a portent of things to come. But those are pretty big things. And we're not going to go into them today. The brain is starting to fade. But speaking of brain fades...how about a quick story about the Transportation Security Agency screeners in Baltimore? We were leaving the airport in Baltimore for Denver, fully prepared to surrender a bit of dignity in the screening process to board the plane. The Baltimore-Washington airport is especially thorough and draconian because it's so close to DC. As we snaked through line we noticed a giant metal and plastic cylinder making a humming noise. "What's that?" we asked the TSA agent. "It's a body scanner," the TSA agent replied. "Is the body scan compulsory?" "Are you refusing the body scan sir?" "Yes." The agent than called over another agent for a "manual" inspection. Manual, having to do with the hands, meant hands on. Quite literally. "Sir, because you have refused the body scanner I will be giving you a through manual pat down. Please spread your arms and turn around." "But my computer and wallet are in the x-ray machine. I won't be able to see them if I turn around." "They'll be fine sir." "I'm sure they will. But I won't be able to see them if I turn my back. I would like to keep them in sight." "Someone in a blue shirt will be watching them. They'll be fine." "I'm sure they will. I'd like to keep them in sight." "Fine. Step over here." He moved the items and to where we could see them and then described what he was about to do. "I will pat down your entire body using my gloved hands. On your legs and buttons I will lightly cup your jeans. If you prefer a private inspection one can be arranged. For your front I will be using the back of my hand to pat down the zipper area." Then he started. And frankly, we haven't received that much thorough attention from a stranger in quite some time. Other passengers passed by, some averting their eyes and others grinning (either out of sympathy or lechery, it was hard to tell). It took about five minutes of careful, gentle, comprehensive molestation by a public servant. And then at the end, apparently without any sense of irony, he finished his lingering inspection of your editor and said, "That's it. You can go now. You're a free man." Dan Dennning
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| When SHTF Will Gold Be Worth Anything? Posted: 26 Sep 2010 04:41 PM PDT (snippet) Despite Fed actions that will clearly devalue the dollar, billionaire investor George Soros keeps telling the public that "nothing is safe" and gold is the "ultimate bubble." (Click here to see the most recent Soros interview on gold.) I am puzzled why Soros says negative things about the precious metal when the biggest holding in his $25 billion hedge fund is GOLD! Jim Willie from the "Hat Trick" newsletter said this week, "Calls of a gold bubble are shallow moronic pontifications, since the sanctioned asset bubble is the mammoth USTreasury variety. It is the last bubble before systemic failure. . . . The Gold bull will continue as long as the cost of money is negative. Investors flee the conventional paper vehicles like stocks, bonds, and housing since the system is failing and paper money in which values are denominated is fast becoming meaningless. The food prices are the big alarm bell in addition to the Gold price. Both are canaries in the coal mine. The canary is dead or dying." (Click here for the complete Jim Willie post.) Famed gold investor Jim Sinclair has been calling for gold to hit "$1,650 per ounce on or before January 14, 2011" for several years. Now others are making similar calls such as Deutsche Bank. In a recent report titled "Why the Gold Price Rally Will Continue," the mega bank said it would not consider gold to be in a bubble until it reached "$2,000" per ounce. (Click here to find the Deutsche Bank report on JSMineset.com.) According to John Williams at shadowstats.com, in order for gold to equal its 1980 true inflation adjusted $850 price, the yellow metal would have to sell for more than $7,000 per ounce. But don't expect gold to go up in a straight line. Governments, manipulators on Wall Street and market forces can knock gold down at anytime. Price fluctuations can and will be volatile according to gold experts like Sinclair, but the overall trend is decidedly up. A very good friend of mine recently wrote me and said, "If there is total collapse of the economy and ultimately – God forbid – the nation, then I doubt that Gold will be worth anything. Bullets and canned food will. They will be very valuable. Bullets will protect you from those who would steal your canned food. Simple, but sadly – true." To that I wrote back and said, "To say gold will not be worth anything is to ignore a 5,000 year track record of gold being a store of value and MONEY. Why do you think all central banks hold gold? Yes, ALL hold gold and are buying more. . . The people who have protected their wealth with SOME gold and silver will get through it a lot better than the people who don't. Good luck with holding only beanie weenies and bullets." Don't take my word that gold is NOT in a bubble. Even former Fed Chairman Alan Greenspan warned recently that "fiat money has no place to go but gold." (Click here for the complete story from the NY Sun.) The value of gold should not be in question. The U.S. dollar is what is overvalued, and the rising price of gold is simply sounding an alarm that the world's reserve currency is in deep trouble. More Here.. 
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| Outlook for $5,000 Gold PricesRob McEwen, CEO of U.S. Gold Posted: 26 Sep 2010 04:26 PM PDT
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| Central Banks No Longer Selling Gold (Duh Factor: 10/10) Posted: 26 Sep 2010 04:24 PM PDT
Something funny (and quite revolutionary) happened during the CBGA's (Central Bank Gold Agreement) year ending this Sunday - the group of 15 signatory banks sold a mere 6.2 tonnes of gold, a massive 96% decline from the year earlier, according to provisional data.This means that unlike in the past, when it was central banker prerogative #1 to sell some gold and every year just to keep all the longs on their toes, this year the trend has finally changed. As the FT reports, "the sales are the lowest since the agreement was signed in 1999 and well below the peak of 497 tonnes in 2004-05." And yes, we do love the FT's brilliant summation of the change in mindset: "In the 1990s and 2000s, central banks swapped their non-yielding bullion for sovereign debt, which gives a steady annual return. But now, central banks and investors are seeking the security of gold." Hm, when all of Europe (as well as America) is a smoldering heap of bearer bonds that will never get paid, and China is putting up a building today, only to blow it up yesterday, and boast a GDP growth rate of one gajillion, the FT may want to change the bolded assumption. Back to the Captain Obvious narrative of the original article: "The lack of heavy selling is important for gold prices both because a significant source of supply has been withdrawn from the market, and because it has given psychological support to the gold price. On Friday, bullion hit a record of $1,300 an ounce." So market zero supply, and demand that is growing exponentially, means higher prices, eh? All those Voodoo 101 classes, and Poison Ivy college loans sure are paying off in droves... More from the FT, on why CB sales are now and will be, a thing of the past:
And here is a purdy pretty chart that confirms what every regular reader of this hyperventilating website has known for almost two years now. Also it turns out "fettle" does not mean 'exponentially surging prices' in UKish, even though it should.
h/t JBH
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| An Insider’s Review of Wall Street: Money Never Sleeps Posted: 26 Sep 2010 04:20 PM PDT
One of the great things about flying first class is that you often get to meet some interesting people. During the early eighties, I found myself on a flight from Los Angles to New York sitting next to an unknown, aspiring, young director named Oliver Stone, who was on his way to pitch a new film idea to potential investors. Over six hours I enjoyed one of the most interesting conversations of my career, covering jungle combat in Vietnam, the ins and outs of movie making, and the harsh realities of Hollywood style accounting. The movie he was pitching turned out to be the 1987 industry cult classic, Wall Street. The film sparked one of the greatest guessing games of all time, with everyone attempting to identify the real people behind the fictional characters. The villain, Gordon Gekko, was easy. That was Ivan Boesky, a risk arbitrageur who became the target of one of the first high profile insider trading case. Other links with reality were more obscure, and many real life traders on the floor of the NYSE simply played themselves as extras. In the sequel, it is much easier to play who’s who, thanks to the financial crash that seems like was happening only yesterday. Gordon Gekko, released from federal prison, this time turns into legendary hedge fund manager John Paulson, whose character turns $100 million into $1.2 billion in a matter of months through buying up cheap credit default swaps on subprime debt. Hank Paulson and Tim Geithner are easy to pick out in a crucial meeting at the New York Fed. The chairman of “Keller Zabel” (Bear Stearns), one “Louis Zabel” (Ace Greenberg), throws himself in front of a train on the Lexington line. Well, this is fiction, after all. The $2 dollar/share sale price gave it all away. Many people played themselves. The whole CNBC crowd was there, their descriptions of the crash so realistic that I thought it might be archival footage. So were Warren Buffet, Nouriel Roubini, Jim Chanos, and other notables. In fact, Chanos managed to get Stone to change the original script, switching the bad guy role from a hedge fund to Goldman Sachs (GS), known as “Churchill Schwartz,” as it should be. They are easily identified as the Wall Street firm that took out a big short in housing debt just before the crash. Shia Labeouf does an outstanding job playing Jake Moore, an aggressive, razor sharp, earnest young investment banker. I have known so many like him over the years, both working for me and at competitors, that his performance really rung true. Michael Douglas, who has aged dramatically, seemed to be simply replaying the same role that he has in countless earlier films. To understand their characters, several actors opened up online trading accounts and did quite well in the market, with Shia alone reportedly booking some $20,000 in profits. There are a few minor flaws in the film. It could have used more editing. There is a mention of “50% leverage” of subprime debt, when the correct figure was 50 times. The Chinese government investor doesn’t act like a real person from the People’s Republic, but as an American with a bad accent. No one has yet figures out the true meaning of Eli Wallach’s repeated bird calls. In this incredibly target rich environment, Stone seems to take aim at so many enemies, That even an insider myself got confused. However, these are trivial complaints. If you want to have a hoot, go see the film, but expect to provide a simultaneous translation about all of the different instruments and strategies if you bring any non financial types with you. Not wanting to spoil the ending, I’ll say no more, except that you can buy the original wall Street movie from Amazon by clicking here at http://www.amazon.com/Wall-Street-Charlie-Sheen/dp/B00003CXDB/ref=sr_1_2?s=dvd&ie=UTF8&qid=1285432060&sr=1-2 And thanks to Oliver’s advice, I never got involved in financially backing a film project, despite countless invitations to do. It was the best trade I never did. To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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| Gold and Silver, The Mass Public Dont Care. Posted: 26 Sep 2010 04:16 PM PDT I've only just recently started buying PM's and very new to all this but the general feeling I get is people don't seem to care. Family members and friends have no idea and very few seem the least bit interested when I try to explain to them why they should buy right now. I don't know if people are too dumb and brainwashed right now but very few people seem to think outside the box. The facts are figures are right in front of there noses but they just don't seem to care. In the short time I have been buying I have gained a lot from this site and books. The last book I read was a very simple read for a novice "Rich Dad's Advisors: Guide to Investing In Gold and Silver: Protect Your Financial Future" but taught me a lot about the history of gold and silver and what we can expect in the future. Do many of you guys see the same thing when trying to talk to people about PM's?
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