Gold World News Flash |
- Why EVERYTHING Is Up and Will Go Higher Still
- May I Put You On Hold?
- Daily Dispatch: Weekend Edition - Oct 09, 2010
- Lundeen's Market Trends: Be a “Jerk” and Buy Gold and Silver!
- Currency wars are necessary if all else fails
- Doug Casey on the Violence of the Storm, the Destruction of the Middle Class
- Precious Metals Market Report - 14 Oct 2010
- Jim's Mailbox
- Economic Update: Market tells the economy "we don't need no stinking jobs"
- FORECLOSUREGATE AND OBAMA'S 'POCKET VETO'
- Coal as Growth
- Joe Weisenthal: The Week Starts Out With… The Yen Surging And The Dollar Diving
- A Different Direction for the Foreclosure Mess?
- Get Gold While You Can
- Here Is Why The Fed's Strategy Of Getting Retail Investors Into Stocks Via QE2 Will Fail
- Silver Devestates Pitiful Gold Performance again and again ...
- Easing Into a Phony Boom
- Guest Post: A Modest Proposal
- 10 Reasons to Buy Gold at $1,300.00 an Ounce
- Silver: The House Always Wins, Until Now
- [Audio] Financial Sense Newshour: Big Picture A Conversation with Richard Russell
- How The ECB Directly And Indirectly Monetized All Irish September Treasury Auctions
- James Turk still looking for $8,000 gold
- Weekly Review And Upcoming Weekly Events Calendar
| Why EVERYTHING Is Up and Will Go Higher Still Posted: 10 Oct 2010 06:58 PM PDT By Dr. Steve Sjuggerud Saturday, October 9, 2010 EVERYTHING is up! Gold is hitting all-time highs. Stocks just their best September since the Great Depression. Oil is near two-year highs. Everything is up. But why? Today, I'll tell you why in simple terms… and I'll share with you why the fun should continue. The story in the investment world today is this: We have two possible economic scenarios, and both are bullish for all investments… The first situation is simple: The economy recovers, and all investments go up… Corporate earnings grow, and that pushes up stock prices. Commodity prices go up, too, as a growing economy increases demand for commodities. The second situation is also simple: The economy falters, so the government pulls out all the stops to "ignite" it. The popular term for it today is "quantitative easing," which is everything from "printing money" to buying investments with the goal of propping up their prices. Under the...
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 10 Oct 2010 06:58 PM PDT [U]www.preciousmetalstockreview.com October 9, 2010[/U] The metals corrected slightly this past week and look about ready to put on hold, their runs higher. Don’t worry though, it won’t last long. They always do that about halfway through their moves higher, and strangely enough, it’s always about this time of year. Once we resume the move higher though it will likely last until almost Christmas before we pause again. Then we should perhaps even resume moving higher after the New Year. After all, the world is in shambles economically speaking. Let’s get right into the charts and see what kind of damage, if any was done on Thursday. Metals review Gold rose 2.14% for the week and moved above and out of the channel it’s been in since late July. That along with a few other indications told me to get out of my trading positions which subscribers did early on Thursday. Friday saw a quick snap back to...
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Daily Dispatch: Weekend Edition - Oct 09, 2010 Posted: 10 Oct 2010 06:58 PM PDT October 09, 2010 | www.CaseyResearch.com Weekend Edition Dear Reader, Welcome to the weekend edition of Casey's Daily Dispatch, a compilation of our favorite stories from the week for the time-stressed readers. Of course, if you want to read all of the Daily Dispatches from the week, you may do so in the archives at CaseyResearch.com. Uncharted Waters, the Future of U.S. Interest Rates By Vedran Vuk With the dollar collapsing to nearly $1.38 for a euro, many have been left asking, “What happened?” One month we’re doing great and talking down to Europe; the next, the dollar is back to pre-Greek crisis levels. While many factors are responsible, I wanted to touch on just one, expectations of long-term U.S. rates. In the financial news, central bank watchers seem to divide themselves into three groups: those who follow economic textbooks, those who study Bernanke, and those who view the central bank as ...
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lundeen's Market Trends: Be a “Jerk” and Buy Gold and Silver! Posted: 10 Oct 2010 06:58 PM PDT Lundeen’s Long Term Market Trends Wk 156 of the 2007-2010 Bear Market Issue ---: 40 Volume: 03 Focus Section Be a “Jerk” and Buy Gold and Silver! Gold and Silver in 1969 Dollars Gold & Silver’s Step Sums Mark J. Lundeen [EMAIL="mlundeen2@Comcast.net"]mlundeen2@Comcast.net[/EMAIL] 08 October 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. The day is coming when my weekly report will not include this chart. That will be when our current bear market has bottomed and we once again see the stock-market bulls running wild and free. Hopefully my work during this bear market, has found its way into the weekly reading habits of enough people to let me go professional one of these days, and allow me to start charging a reasonable fee for my work. So far I’ve received nothing but the satisfaction of helping people who are looking...
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Currency wars are necessary if all else fails Posted: 10 Oct 2010 06:58 PM PDT October 10, 2010 11:09 AM - The overwhelming fact of the global currency system is that America needs a much weaker dollar to bring its economy back into kilter and avoid slow ruin, yet the rest of the world cannot easily handle the consequences of such a wrenching adjustment. There is not enough demand to go around. Read the full article at the Telegraph......
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doug Casey on the Violence of the Storm, the Destruction of the Middle Class Posted: 10 Oct 2010 06:58 PM PDT ... and the Coming Gold Standard Sunday, October 10, 2010 – with Ron Holland Doug Casey The Daily Bell is pleased to present an exclusive interview with Doug Casey (left). Introduction: Doug Casey has appeared on hundreds of radio and TV shows, and has been the subject of articles in People, US, Time, Forbes, The Washington Post, and numerous other publications. For nearly three decades, Doug Casey and his team have been correctly predicting major budding trends in the overall economy and commodity markets. Daily Bell: Have things improved with the economy since this summer? Doug Casey: No, not fundamentally. The money they threw at the auto industry with the Cash for Clunkers program just stole sales from the future, and destroyed hundreds of thousands of serviceable vehicles. The tax rebates they offered to the people buying houses also stole sales from the future, but more importantly induced a bunch of people who couldn't really afford hou...
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Precious Metals Market Report - 14 Oct 2010 Posted: 10 Oct 2010 06:00 PM PDT By Catherine Austin Fitts I'm in Silicon Valley for the month of October. So I will be joining Franklin Sanders of The Moneychanger by phone for the Precious Metals Market Report this Thursday night. At the beginning of 2010, I predicted that the high for the gold price this year would be 1350. WelI, the price is through that [...]
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 10 Oct 2010 05:50 PM PDT Jim, You were right again. CIGA Fran End to currency dispute eludes finance ministers WASHINGTON (AP) — Differences that threaten the outbreak of a currency war persisted after a weekend meeting of global finance ministers, who left without resolving what to do. They did agree, however, that the 187-nation International Monetary Fund was the organization best suited to deal with rising global currency tensions that risk overshadowing next month's summit meeting of the Group of 20 nations in South Korea. The G-20 includes traditional economic powers such as the United States and Europe along with fast-growing economies such as China, Brazil and India. Various nations are seeking to devalue their currencies as a way to increase exports and jobs during hard economic times. The concern is that such efforts could trigger a repeat of the trade wars that contributed to the Great Depression of the 1930s as country after country raises protectionist barriers to imported goods. "Currency disputes can easily become trade disputes," cautioned Canadian Finance Minister Jim Flaherty.
The Footprint Of Control Has Changed For Gold & Silver In my commentary entitled Money Flow Footprint For Silver Has Changed I revealed how the "normal" money flow footprint of control had been smashed. Commercial traders, or connected money, has been buying strength rather than selling as silver has risen to levels not seen since 1980. This subtle yet highly significant change in money flow likely reflects the increasing influence of the spot market (physical) on the paper price. Silver London P.M Fixed and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest: The change in money flow relative to price, or shift in control, is beginning to show in the gold market as well. The chart below illustrates the emergence of buying rather than selling strength. This subtle change of money flows within the gold market, similar to silver, suggests stress to the mechanism of paper control. Gold London P.M Fixed and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest: These subtle changes in money flow in silver and gold likely reflect the growing stress within the financial universe. While the media focuses on the importance of Dow 11,000, they have almost entirely ignored what can only be characterized the nation's top story. The class action suits under RICO statue filed against mortgage services that those that securitized them into pools for international sale raised serious questions to status or value of the collateral behind these loans; Loans that were already gifted an illusionary value by mark-to-model rather than mark-to-market accounting. Jim Sinclair's latest commentary explains it as follows, I told you about this last week as a class action with a RICO statue was filed against servicers acting for international investment banks to foreclose on loans that represent the collateral for securitized mortgage debt, a fraudulent OTC derivative. The banksters tried to sneak through a bill that would make their criminal actions legal. The screams were heard in the White House and before the bill passed and all its requirement the President vetoed it. That occurred even before the bill had completed it required procedures. We are now in Crisis #2 which can eclipse anything you have seen yet because of the size of the creation of this pariah in the OTC derivative disaster. This will not pass quietly. It is going to tear the dickens out of what is left on the financial firms that brought the horror to the Western world. It will be orders of magnitude uglier than anything you have seen so far. There are no coincidences in the financial world. When unusual changes in the money flows lead and/or coincide with important real-time event, they tend to foreshadow significant financial and social changes. While the headlines urge complacency and reinforce the old paradigm to comfort those that abhor change, they tend to do so at great expense to those that follow them. Source: jsmineset.com
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Economic Update: Market tells the economy "we don't need no stinking jobs" Posted: 10 Oct 2010 05:46 PM PDT
To the tick tock and the market doesn't stop, as even though the jobs report continued to color the economy bad, the shit awful numbers signal that Benny B is going to come in and sex the market up with QE2, so rally on my friends, rally fucking on (and yes, the rally makes about as much sense as Money McBags' using a shitacular 1990s song for an extended metaphor, but alas, not every Money McBags analogy can end with Taylor Rain going 5-hole, or can it?).
The point is that taking the promise of QE2 out of the equation, the jobs report was not just worse than analysts guessed (and as always, Money McBags cares what analysts guess about as much as he cares about the Tony Awards, Kathy Griffin's sex life, or the 69th decimal of pi (which for the record is 6) because their models are fatter tailed and more outdated than Jessica Simpson's jeans), and didn't just feature another revised worse number from last month (53k job losses are now 57k), but in absolute terms it was about as positive as a Bea Arthur pregnancy test (and not because she is dead and thus has no uterus, but because she was a man).
Some of the high/lowlights include:
1. Only 64k private sector jobs were created, of which 17k were temporary.
2. 159k government jobs were lost and while people may want to ignore the 77k lost census jobs (though as far as Money McBags can tell, that does mean 77k more people will be looking for work, but whatever), they can't ignore that 76k+ job losses were full time teachers, meter maids, and glory hole procurers. Look, this is a big fucking problem that we have seen for 3 months now as state and local governments are starting to go more bankrupt than John Edwards' morals. As the lovely Meredith Whitney recently warned (and Meredith, when you read this, just know that Money McBags would be happy to get you in a reverse power bomb if that is what you are in to because as always he finds you delightful), the federal government may need to bail out state and local governments in the next twelve months which is really going to be some shit.
3. The unemployment rate fell by .1% to 9.6% as a result of the usual funky math, but the more important rate, which includes people who have stopped looking for work as they have become more discouraged than Gilgamesh or Tina Yother's agent (which is 1.2MM people, up 500k from last year) and people who have taken part-time jobs as filing clerks, tour guides, and jizz moppers because they can't find full time work, rose to 17.1% from 16.7%. So look to the house on your right, look to the one on your left, and then look to the ones in front of and behind you and if they are not all vacant due to having been foreclosed upon, statistically one of them (including you) has an unemployed/underemployed person in it.
4. Along those same lines, part time workers were up 612k to 9.5MM and are now up 943k in the last two months because people either had their hours cut back, couldn't find full time jobs and had to settle, or decided they would rather work fewer hours so they could have enough time at home to fully digest the Karissa Shannon sex tape.
5. The B(L)S (and as regular readers know, the L is in parentheses because it is silent) birth/death model which is a bigger black box than that of Nyomi Banxxx surprisingly only somehow added 11k jobs to the numbers (and the B(L)S says that number isn't additive, but know that it does something to make the numbers look slightly better, like putting lipstick on a pig or a piece of lettuce on a shit sandwich).
To spare you the boredom, Money McBags went through the actual jobs report release, including the detailed B(L)S Table B, and broke out the data:
So in September, 95k+ jobs were destroyed (depending on how you want to handle the birth/death model) and Money McBags just checked his long run Phillips Curve (which was nowhere near as interesting as Tara Phillips' curves) and determined that we only need another negative 70 months like this (because multiplying a negative by a negative gets us a positive) before we are back to some Milton Friedman-esque acceptable Keynesian NAIRU for a healthy economy so as soon as we get that fucking flux capacitor fixed in the DeLorean and transport everyone back to 2004, everything will be ok.
The most troubling part of all of this is that even if one wants to discount government job losses (though why one would want to do that is as confusing to Money McBags as the existence of dark matter, Thomas Pynchon novels, or mullets), the economy needs to add ~110k private sector jobs per month just to handle all of the illegal immigrants and snotty college kids joining the labor force so at the current pace of 64k jobs added per month (-11kish for the birth/death model plug), the economy is as fucked as Larry Craig in a bathroom stall (both literally and figuratively).
But hey, the market and all of the HFTs who provide >50% of the liquidity don't give a shit about any of that because now QE2 is as certain as death or taxes (well at least for 53% of Americans on the last one) and as long as the US keeps devaluing the dollar and buying assets, nothing bad can happen, just ask Japan (but make sure you don't bring an interpreter because you may not want to hear the answer).
For more daily insight and the occasional Jayde Nicole sighting, visit Money McBags at the award winning When Genius Prevailed.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FORECLOSUREGATE AND OBAMA'S 'POCKET VETO' Posted: 10 Oct 2010 04:09 PM PDT
FORECLOSUREGATE AND OBAMA'S 'POCKET VETO'Courtesy of ELLEN BROWN at Web of Debt
The bill, titled The Interstate Recognition of Notarizations Act of 2009, passed the Senate with unanimous consent and with no scrutiny by the DC media. In a maneuver known as a "pocket veto," President Obama indirectly vetoed the legislation by declining to sign the bill passed by Congress while legislators are on recess. The swift passage and the President's subsequent veto of this bill come on the heels of an announcement that Wall Street banks are voluntarily suspending foreclosure proceedings in 23 states. By most reports, it would appear that the voluntary suspension of foreclosures is underway to review simple, careless procedural errors. Errors which the conscientious banks are hastening to correct. Even Gretchen Morgenson in the New York Times characterizes the problem as “flawed paperwork.” But those errors go far deeper than mere sloppiness. They are concealing a massive fraud. They cannot be corrected with legitimate paperwork, and that was the reason the servicers had to hire “foreclosure mills” to fabricate the documents. These errors involve perjury and forgery -- fabricating documents that never existed and swearing to the accuracy of facts not known. Karl Denninger at MarketTicker is calling it “Foreclosuregate.” Diana Ollick of CNBC calls it “the RoboSigning Scandal.” On Monday, Ollick reported rumors that the government is planning a 90-day foreclosure moratorium to deal with the problem. Three large mortgage issuers – JPMorgan Chase, Bank of America and GMAC -- have voluntarily suspended thousands of foreclosures, and a number of calls have been made for investigations. Ohio Attorney General Richard Cordray announced on Wednesday that he is filing suit against Ally Financial and GMAC for civil penalties up to $25,000 per violation for fraud in hundreds of foreclosure suits. These problems cannot be swept under the rug as mere technicalities. They go to the heart of the securitization process itself. The snowball has just started to roll. You Can’t Recover What Doesn’t Exist Yves Smith of Naked Capitalism has uncovered a price list from a company called DocX that specializes in “document recovery solutions.” DocX is the technology platform used by Lender Processing Services to manage a national network of foreclosure mills. The price list includes such things as “Create Missing Intervening Assignment,” $35; “Cure Defective Assignment,” $12.95; “Recreate Entire Collateral File,” $95. Notes Smith:
How do you recreate the original note if you don’t have it? And all for a flat fee, regardless of the particular facts or the supposed difficulty of digging them up. All of the mortgages in question were “securitized” – turned into Mortgage Backed Securities (MBS) and sold off to investors. MBS are typically pooled through a type of “special purpose vehicle” called a Real Estate Mortgage Investment Conduit or “REMIC”, which has strict requirements defined under the U.S. Internal Revenue Code (the Tax Reform Act of 1986). The REMIC holds the mortgages in trust and issues securities representing an undivided interest in them. Denninger explains that mortgages are pooled into REMIC Trusts as a tax avoidance measure, and that to qualify, the properties must be properly conveyed to the trustee of the REMIC in the year the MBS is set up, with all the paperwork necessary to show a complete chain of title. For some reason, however, that was not done; and there is no legitimate way to create those conveyances now, because the time limit allowed under the Tax Code has passed. The question is, why weren’t they done properly in the first place? Was it just haste and sloppiness as alleged? Or was there some reason that these mortgages could NOT be assigned when the MBS were formed? Denninger argues that it would not have been difficult to do it right from the beginning. His theory is that documents were “lost” to avoid an audit, which would have revealed to investors that they had been sold a bill of goods -- a package of toxic subprime loans very prone to default. The Tranche Problem Here is another possible explanation, constructed from an illuminating CNBC clip dated June 29, 2007. In it, Steve Liesman describes how Wall Street turned bundles of subprime mortgages into triple-A investments, using the device called “tranches.” It’s easier to follow if you watch the clip (here), but this is an excerpt:
The top tranche is triple A because it includes the mortgages that did NOT default; but no one could know which those were until the defaults occurred, when the defaulting mortgages got assigned to the lower tranches and foreclosure went forward. That could explain why the mortgages could not be assigned to the proper group of investors immediately: the homes only fell into their designated tranches when they went into default. The clever designers of these vehicles tried to have it both ways by conveying the properties to an electronic dummy conduit called MERS (an acronym for Mortgage Electronic Registration Systems), which would hold them in the meantime. MERS would then assign them to the proper tranche as the defaults occurred. But the rating agencies required that the conduit be “bankruptcy remote,” which meant it could hold title to nothing; and courts have started to take notice of this defect. They are concluding that if MERS owns nothing, it can assign nothing, and the chain of title has been irretrievably broken. As foreclosure expert Neil Garfield traces these developments:
My answer is really simple. The lender/creditor is the one who advanced cash to the borrower. . . . The use of nominees or straw men doesn’t mean they can be considered principals in the transaction any more than your depository bank is a principal to a transaction in which you buy and pay for something with a check. So What’s to Be Done? Garfield’s proposed solution is for the borrowers to track down the real lenders -- the investors. He says:
Karl Denninger concurs. He writes:
The resolution authority Denninger is referring to is in the new Banking Reform Bill, which gives federal regulators the power and responsibility to break up big banks when they pose a “grave risk” to the financial system – which is what we have here. CNBC’s Larry Kudlow calls it “the housing equivalent of the credit financial meltdown,” something he says could “go on forever.” Financial analyst Marshall Auerback suggests calling a bank holiday. He writes:
What we need to avoid at all costs is “TARP II” – another bank bailout by the taxpayers. No bank is too big to fail. The giant banks can be broken up and replaced with a network of publicly-owned banks and community banks, which could do a substantially better job of serving consumers and businesses than Wall Street is doing now. Ellen Brown is the author of Web of Debt: the Shocking Truth About Our Money System and How We Can Break Free. She can be reached through her website. Picture credit: The WilliamBanzai7 Blog
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 10 Oct 2010 03:53 PM PDT Today is the last day you can get an early-bird discount for next month's Gold Symposium in Sydney. The first day of the show features a whole slew of Aussie gold exploration and production companies. Days two and three have speakers from Australia and beyond talking about where gold goes from here. Remember, we've arranged for a discount from the full three-day price of $962 for Daily Reckoning readers. You can have a look at the full program for days two and three here. But why would you want to buy gold now anyway? Or just gold? Why not buy copper? And bonds? And vodka? And cigarettes? Why not trade your paper money for virtually anything else? That's what you do when paper money slides in value against real things. With markets pricing in more Quantitative Easing from the Federal Reserve, pretty much everything is going up, up, and away! For example, the Dow Jones Industrials closed up over 11,000 in Friday's New York trading. And this was despite a jobs report from the U.S. Labour Department which showed the economy had "lost" another 95,000 jobs in September. You don't find "lost" jobs in your sofa cushions the way you find "lost" spare change. It's beginning to dawn on angry French workers and American voters that the rise of emerging markets has led to a shift of certain jobs overseas, probably for good. The great sofa of globalisation has many deep crevices. Now, there aren't enough good paying jobs to pay the taxes that fund the pensions are retirement plans of public and private sector workers. But such is the fraudulent and deceptive nature of money printing that you can get higher asset prices even as the "fundamentals" in the underlying economy are horrible. That's what makes this experiment in global quantitative easing so potentially wealth destructive: it could lure investors into buying shares from insiders right before they bail. In fact, a cynical person might say this is the largest organised exercise in "pump and dump" ever perpetuated on the investing public. The bankers and money shufflers on the inside are using the hijacked monetary system to pump the value of their investments before they bail (selling into the rally) and buy gold and real estate. Speaking of which, gold and silver were both up last week, two percent and five percent respectively. But you know that the great reflationary melt up is upon us when people start stealing copper again. A Florida paper reports that thieves busted into an idle processing plant and stole $45,000 worth of copper coils by stripping them from several 40-tonne commercial air conditioning units. It would have been easier for them to just buy copper stocks in Shanghai. Chinese investors came back from the National Day holiday and went limit up on shares of Jiangxi Copper and Yunan Copper. Maybe this is why Alex loaded up on copper stocks a few months ago in Diggers and Drillers. Hmm. Stocks are probably a much better bet than bonds in a QE melt up. Right now, investors are anticipating bigger asset buys by central banks. There's always the chance that if those buys don't come, or aren't convincing in their size and scope, the current rally in everything will correct. But that is also the time you'd look to add to your precious metals positions. But what about coal and coal stocks? The prospectus for QR was revealed over the weekend. WE haven't dug into it yet. But some eye-catching numbers are the expected 75% increase in earnings from $628 million this year to $1.1 billion in two year's time. That's why the directors are pitching the share as a growth stock. In fact, the stock would trade at 21.1 times expected earnings given the lowest retail share price you could pay of $2.50. The more you pay in the initial offer, the higher the P/E goes. And all of that without much of a dividend yield for what is traditionally a conservative business that needs to pay dividends to attract shareholders. But hey, when you're hitching a ride on the great coal boom and the even greater commodities boom, do you really need income? It's all about growth baby! Of course, it's also possible the float of QR is a kind of high-water market for the post March 2009 reflationary melt-up. More on the share this week. Until then! Dan Denning
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Joe Weisenthal: The Week Starts Out With… The Yen Surging And The Dollar Diving Posted: 10 Oct 2010 03:39 PM PDT
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| A Different Direction for the Foreclosure Mess? Posted: 10 Oct 2010 03:36 PM PDT
I keep thinking of the mortgage foreclosure story and wondering, “Where will this go?” The problem is that this question is very hard to answer. One possible direction. In an effort minimize losses Federal Agencies relied on improperly documented foreclosure procedures. Thousands may be affected. FHFA to issue apology. Or it could look like this:
Federal Agencies Sold Loans to Scheisters
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 10 Oct 2010 03:26 PM PDT We've got it easy right now. Click or call, and you can quickly and conveniently own a gold coin or bar. But if global concerns cause another panic or the dollar breaks down, you could find yourself standing in a line at the local coin shop or getting a busy signal. Simply, for reasons I’ll discuss here, you may find it very difficult to get your hands on physical gold when that time comes. It's happened before. Though there were no precious metal ETFs in 1980, the demand for physical gold was so great that you literally had to wait in line at a coin shop to buy, with plenty of occasions when you would have been turned away due to lack of inventory. And you'll recall we saw serious shortages, unexpected delays, and soaring premiums in late 2008. Complete Story »
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Here Is Why The Fed's Strategy Of Getting Retail Investors Into Stocks Via QE2 Will Fail Posted: 10 Oct 2010 03:07 PM PDT
One of the more obvious side-effects of Ben Bernanke's simplistic QE 2 plan is to force retail investors out of their existing trajectory directed at fixed income products, and back into stocks, so that retail can once again occupy it long-coveted (by the bankers) position of buying Apple and Amazon at triple digit forward multiples. Unfortunately, as JPM's Nikolaos Panigirtzoglou explains, all that QE's lowering of bond yields will do (in addition to sending soybeans limit up every day for the balance of 2010, despite what others claim is merely a hallucination) is "reinforcing retail investors' flows into bonds." The biggest problem with the secular shift away from equities, and into bonds, is that the very mindset that the banking cartel loved for so long: retail buying stocks high, buying even more higher, has now translated completely into bonds. As JPM says: "The more bonds rally, the stronger the buying of bond funds by retail investors." In addition to the daily flash crashes in now countless names, surely this phenomenon explains why retail investors have taken money out of stocks for 23 weeks now (leaving many mutual funds running on fumes and a prayer) and put it into the best performing asset category (after precious metals of course). And QE2 will cement not only retail, but institutional demand for bonds as well: "lower bond yields are widening the deficits of pension funds in both the US and Europe inducing them to move further into fixed income to reduce the mismatch between assets and liabilities... This raises the risk that these institutional investors will move more towards corporate bonds in search for yield. So a potential aggressive move away form government into corporate bonds could exert strong downward pressure on credit spreads." Suddenly the world will realize that the average duration on rate-based exposure is 10+ (especially if Mexico issues a few more 100 Year bonds). And when rates creep up even a tiny little bit, it is game over as the next negative convexity event will be the (credit) market itself. Which is why we have long said that the black swan is not a failed auction, but the merest hint that rates are finally starting to creep up. More from JPM on this psychological quandary, so very troubling for the Federal Reserve, as well as on other "unexpected" consequences of QE2. Pay close attention to where JP Morgan spits in the face of so many CNBC idiots, and flatly ridicules the whole money on the sidelines bullshit:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silver Devestates Pitiful Gold Performance again and again ... Posted: 10 Oct 2010 02:30 PM PDT Year to Date Yields (10/10/10) Silver: +37.16 :banana::banana::banana: Gold: +22.72 :bawling:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 10 Oct 2010 01:37 PM PDT Our goal every day in these Daily Reckonings is to give you your money's worth. That's not hard to do, since this service is free. But our daily commentaries take time to read. And it can be very annoying - with starkly unpopular points of view...long, rambling, philosophical perambulations...personal notes of no particular interest to anyone except the author...and aggravating reflections of no interest to no one at all, including the author. So, what makes it worthwhile? Well, occasionally we have an insight...a little soupcon...a suspicion that turns out to be right. Do we have one now? Don't know. But after much thought, light meditation, praying and heavy drinking...we at least have a hunch. Here it is: these clowns are going to screw up big time... We're talking about the world's central planners and central bankers and central financial authorities. They are laying the track...they are building the train...they are about to take off...right over a cliff! There's a "growing consensus on the need for a new round of buying assets," says a report in The Financial Times. The idea behind this "consensus" is breathtakingly absurd:
Do you believe it works like that, dear reader? If you do, you should be an economist. Or a doorstop. There's no doubt that printing money can create a boom. But it's a phony boom, not a real one. And when it blows up...which it inevitably does...people are worse off than they were before. It's one thing to introduce small amounts of extra "money" into a growing, prosperous economy. It's a fraud. It's a mistake. But it doesn't blow-up the system. It's petty larceny; nobody cares. It's another thing to introduce large amounts of new currency into a funky, struggling economy. But that's what the markets seem to be reacting to - at least, the anticipation of QE - quantitative easing. Some investors have bought stocks. Some have bought gold. Some have bought Treasury bonds. Those buying stocks and gold are focusing on the inflationary effects of QE. Those buying bonds are focusing on the Fed's asset purchases themselves; after all, they're going to be the biggest, flushest, most inebriated buyer at the auction. But they can't all be right. Gold buyers expect the dollar to crash. Bond buyers expect it to hold up. It can't do both. So who's right? Ah...if we knew that...we'd have to charge you for your Daily Reckoning subscription. Nobody knows the answer. But we'll take a guess. Stocks headed down yesterday. The Dow lost a modest 19 points. But gold lost $12. Gold is overbought, in our opinion. The dollar is oversold. And the idea of a "recovery" is oversubscribed. We expect a correction. A great correction. The economy is weaker and more vulnerable than people think. It is not going to bounce back. So, stock market P/Es are too high. They should sell off. The Fed's new money will be too timid, at first, to turn it around. As stocks fall, Treasury prices should go up. Yes, buying bonds - that is, lending to the world's biggest debtor, who is printing money to buy his own IOUs - seems like a crazy thing to do with your money. But our guess is that crazy will get even crazier before it goes completely mad. Gold, meanwhile, is probably not going to enter its final rocket stage until this correction is further advanced. Puffing up asset prices alone probably won't do it. That said, we confess...we're no good at short-term timing. So, you want to buy gold now? Go right ahead. Our suggestion: buy coins. Not ETFs. Not gold stocks. Why coins? Because then you won't be tempted to sell them when the price of gold goes down. Analysts are talking about a 10% decline over several months. It could be much worse...say 20% over several years. Ten years ago, we urged dear readers to buy gold. The yellow metal was low-hanging fruit at $290 an ounce. But now it's $1,335. It's higher up on the tree. You've got to get on a ladder to get it. Ladders always mean risk. Is gold going higher? Probably. Much higher. But not necessarily tomorrow, next week, or even next year. Best advice. If you want to buy more gold, buy coins. Bury them. Forget about them. Just don't forget where you buried them! More, after today's column... 2010. It is the Final Struggle of the welfare states...the Zombie War. "Greece paralyzed as workers strike again," reports The Wall Street Journal. In France, the zombies are on the attack too: "Sarkozy's pension tweak fails to appease unions," the WSJ continues... Le Figaro tells us, meanwhile, that the "unions are going to prove their point by force." They're planning a huge strike beginning next Tuesday...and have pledged to keep at it until the government backs down. The zombies always want more money from the government...more benefits...more privileges...more make-work... They want something for nothing. They want to continue draining out the blood from the active, wealth-producing economy... And they have the heavy artillery, because they usually control the legislature, the army and the police forces. The wealth creators are outnumbered. Pushed back. Voted down and hunted down. Exterminated. But the more of them that are eliminated, the fewer resources the zombies have to support themselves. Eventually, complex systems always blow up... They become harder and harder to support...and less and less efficient. Near the end, they are value-subtracting systems, like the old Soviet Union or perhaps the Roman Empire in its final days, consuming more than they produce...until, finally, they can't go on. All empires collapse. Usually, they are taken over by zombies...little by little. Gradually, they become degenerate, wealth destroying societies. Then, they are vulnerable - either to barbarians from the outside...or the zombies on the inside. Or both. Either way, zombie wars always result in the death of the zombie culture itself. Complex zombie-ridden systems are replaced by simpler systems with fewer parasites. The barbarians don't necessarily brush their teeth. But at least they don't make you fill out a lot of paperwork. Enjoy your weekend, Bill Bonner,
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 10 Oct 2010 01:36 PM PDT
Submitted by Jim Quinn of The Burning Platform A Modest Proposal As we have debated various issues on this site for the last couple years my understanding of our economic system has changed. I’ve come to the conclusion that the middle class of this country has been caught in a pincer movement by two armies. My definition of the Middle Class is households making between $50,000 and $150,000 per year. The Free Shit Army is attacking us on the left. The middle class has been the backbone of the country, doing the heavy lifting in this country. They get up every morning and trudge off to work to support their families. The Free Shit Army sleeps in. They have chosen to not educate themselves in order to advance in our society. Politicians have enabled them to stay in poverty by providing welfare, disability, food stamps, and tax incentives that make their lives just comfortable enough to not work. If you provide money to people who are classified as disabled, you get more disabled. The Free Shit Army has 50% more disabled than the general population. If you pay people for not working, why should they work? The middle class works and pays their taxes. These taxes are then redistributed to the Free Shit Army. The second pincer movement on the middle class has been conducted by a stealthier army. This army has experts in propaganda, misinformation, and obfuscation. I call them the Ruling Elite Army. The generals are the ultra-wealthy CEOs of Wall Street banks and mega-corporations. Their armor divisions are manned by the corporate mainstream media. They are excellent at laying down a great smoke screen before blasting away. The infantry is manned by 535 Congressional officers with thousands of corporate lobbyist foot soldiers. This army has been given the mission to capture the supplies of the middle class. The middle class were not prepared for the assaults they have been fending off. They became soft and satisfied. They stopped training. They became distracted by their gadgets, delusions of home wealth, and fear of phantom terrorist enemies behind every bush. The propaganda machine of their true enemies has convinced the middle class that foreign enemies are massing. The enemy is within. The middle class will need to sacrifice and go to war against two enemies. Are they up to the task? I’m not sure. In my opinion the following platform is the only way to save this middle class country. Liberals and supposed Conservatives will be outraged. No one will be happy with my solutions. So be it. MY TEA PARTY PLATFORMPolitical System
Economic Policy
Education Policy
Energy Policy
National Defense/Foreign Policy
Immigration
Social Issues
The mainstream media would classify me as an extremist with the views I’ve detailed above. I find that laughable. The current administration is running annual $1.6 trillion deficits, the Federal Reserve has 0% interest rates and is about to monetize another $1 trillion of debt after already monetizing $2 trillion of debt, Wall Street has been handed $2 trillion of taxpayer money, our National Debt is up from $5.7 trillion in 2000 to $13.5 trillion in 2010, and peak cheap oil is on the verge of shocking our system AND MY PROPOSALS WOULD BE CONSIDERED EXTREMIST. This country is on the precipice of collapse. I truly believe that. Republicans winning seats in November will bring about gridlock in Washington DC. That is better than the alternative, but it will do nothing to save the country. Dramatic measures are required to avert financial collapse. I do not see anyone honestly telling the American people the truth. Our future as a country is at stake. Do enough people care? I fear not.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10 Reasons to Buy Gold at $1,300.00 an Ounce Posted: 10 Oct 2010 01:24 PM PDT Marvin Clark submits: 1. Technical Breakout From a technical analysis perspective, there has never been a better time to own or purchase gold. Every tradable asset has what is known as support and resistance. Support is the value by which any asset is assumed safe for buying. This is determined by previous price levels. Complete Story »
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silver: The House Always Wins, Until Now Posted: 10 Oct 2010 01:24 PM PDT Chris Mack submits: Anyone following the futures market for silver know that the large commercial traders, banks such as JP Morgan Chase (JPM), always win. That is until now. Complete Story »
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| [Audio] Financial Sense Newshour: Big Picture A Conversation with Richard Russell Posted: 10 Oct 2010 01:21 PM PDT Federal Government Receipts, Expenditures and Deficits; market appears to be in a topping process; Richard Russell's long career, the markets and what he sees ahead for gold in @ 40:21 http://www.netcastdaily.com/broadcast/fsn2010-1009-1.mp3
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| How The ECB Directly And Indirectly Monetized All Irish September Treasury Auctions Posted: 10 Oct 2010 01:19 PM PDT
One of the most bullish stories coming out of Europe last month was that Ireland, despite a drunk and disorderly finmin, and banks either increasingly more nationalized or on the verge of full scale restructuring, managed to fund its €25 billion in sovereign debt maturities. Of course, the European media took that as a sign of strength and from that point on it was off to the races for the EUR. Yet it appears the celebration was just a little premature. We learn today that virtually all of the maturities were funding indirectly by the ECB: in other words the monetization shell game so well mastered by the Fed is now being conducted by European banks everywhere. In September Irish bank borrowings surged from €95 billion to €119 billion, a €24 billion increase, and virtually a euro-for-euro match for all the new Treasury issuance. And since no demented monetization ploy goes unpunished, the action raised Irish ECB borrowings to 9% of liabilities, the same as Portuguese banks. As for the balance, as readers will recall we highlighted that last week the ECB purchased €1.4 billion of government bonds directly, therefore confirming that every single Irish bond auction would have been a 100% failure had it not been for Jean Claude Trichet's direct and indirect monetization scheme. But yes, somehow the euro is considered more viable than the dollar. One day Germany will say "monetize away, Weimar be damned." That day will be very memorable for the dollar which has now become the funding currency of choice. That is the day when Europe will officially retaliate against endless US FX aggression, and the currency war will be really on.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| James Turk still looking for $8,000 gold Posted: 10 Oct 2010 01:14 PM PDT James Turk reiterated his opinion that gold could climb as high as $8,000 - based on simple mathematics. In the 1970s, he pointed out, gold rose from $35 to $800 at its peak and he sees no reason why in the current period history shouldn't repeat itself by taking it from around $350, as it was in 2003, to around $8,000 by perhaps 2013-2015 in the current bull run, which many observers feel is only in its mid-stages.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weekly Review And Upcoming Weekly Events Calendar Posted: 10 Oct 2010 12:59 PM PDT
Goldman's weekly review and outlook for the upcoming week. Week in Review Payrolls and QE2 US payrolls on Friday came in rather mixed with softer guts as seen in the rise in the U-6 rate and hours worked stagnating. The November FOMC meeting remains very much the likely expected commencement date of Fed QE2. Stocks received a slight boost from this and the Dollar was slightly weaker, with $/JPY notably dipping below the 82 level.
|
Amid a snowballing foreclosure fraud 
| You are subscribed to email updates from Gold World News Flash To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment