Gold World News Flash |
- Dollar-Neutral Gold
- British Gold Sovereigns - The Preserve of Collectors, Savers and Smart Investors
- Where do you keep your Gold ?
- Quote of the Day - October 22, 2010
- In The News Today
- Hourly Action In Gold From Trader Dan
- Jim?s Mailbox
- Will Geithner's plan at G20 hit the spot?
- Gold Seeker Weekly Wrap-Up: Gold and Silver Fall Over 3% and 4% on the Week
- The October 22, 2010 edition of Casey's Daily Dispatch, now available
- WORLD FOREX: Dollar Moderates Losses; Pre-G-20 Safety Sought
- Gold Action Knocks Out Weak Hands: Richard Russell
- Richard Russell - Gold Action Knocks Out Weak Hands
- No Bulbous as Gold, Silver rise on U.S. dollars woes: John Embry
- DXZ Flash Crash Detonates Entire Currency Complex
- Capital Controls or Chaos?
- Daily Dispatch: The Almighty Dollar
- What’s Not To Like?
- Don't Fear the Euro
- Bob Moriarty: Hold on to Gold
- California Is Broke – 19 Reasons Why It May Be Time For Everyone To Leave The State Of California For Good
- Gold Daily and Silver Weekly Chart
- Gary Shilling On Why Underwater Homeowners Will Double From 23% to 40% Shortly
- The Embargo
- FRIDAY Market Excerpts
- Silver shortage looms, mining stockbroker Rick Rule tells King World News
- Gold Price to Reach $1,600 at the End of This Move
- Default or Hyperinflation: The US’s Only Two Options
- Default or Hyperinflation: The US's Only Two Options
- Gold Forecaster Capital Controls or Chaos?
- Be Careful What Geithner Wishes For...
- What Geithner Wants & What Geithner Gets
| Posted: 22 Oct 2010 06:34 PM PDT
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| British Gold Sovereigns - The Preserve of Collectors, Savers and Smart Investors Posted: 22 Oct 2010 05:45 PM PDT
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| Posted: 22 Oct 2010 05:30 PM PDT
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| Quote of the Day - October 22, 2010 Posted: 22 Oct 2010 05:26 PM PDT Gold, silver, the dollar, the HUI and the Dow all turned on a dime at precisely 2:00 p.m. yesterday. There are no markets anymore... only interventions. Is a CFTC judge stacking the deck against investors? Indian traders bet big time on gold prices. John Embry speaks... and much more.
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| Posted: 22 Oct 2010 05:21 PM PDT View the original post at jsmineset.com... October 22, 2010 06:22 PM Jim Sinclair's Commentary Four so far today. Bank Closing Information – October 22, 2010 These links contain useful information for the customers and vendors of these closed banks. The First National Bank of Barnesville, Barnesville, GA The Gordon Bank, Gordon, GA Progress Bank of Florida, Tampa, FL First Bank of Jacksonville, Jacksonville, FL [URL]http://www.fdic.gov/[/URL] Jim Sinclair's Commentary Really, what are you worried about? Enjoy your weekend. Gold may hit $1,850 by Dec 2011 Last updated on: October 22, 2010 13:09 IST BS Reporter in Mumbai Gold prices are likely to hit $1850 an ounce by the end of next year on strong demand from emerging economies and supply side constraints, Paul Horsnell, managing director of Barclays Capital said in a media briefing in Mumbai on Thursday. Gold will first slide to $1,310-1,325 early next year on p...
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| Hourly Action In Gold From Trader Dan Posted: 22 Oct 2010 05:21 PM PDT View the original post at jsmineset.com... October 22, 2010 09:58 AM Dear CIGAs, Click chart to enlarge today's hourly action in Gold in PDF format with commentary from Trader Dan Norcini ...
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| Posted: 22 Oct 2010 05:21 PM PDT View the original post at jsmineset.com... October 22, 2010 09:42 AM Capital Already ‘Knows’ CIGA Eric Bloomberg had an interview this afternoon with Professor Black who is the author of " The Best Way to Rob a Bank is to Own a Bank." He could not be silenced. Professor Black said, among other javelins in the heart of MOPE, the following: 1/ The Securitized Mortgage instruments are all frauds. 2/ The Fed is holding a huge amount of these as collateral. 3/ They are valueless. 4/ The manufacturers of these are, under commercial and criminal statute and law, criminals. The interview almost swallowed her tongue. Gold will trade at and above $1650. QE to Infinity is not a choice among alternatives. It is all that is left. Jim Jim, Gold, following its historical role, has become the last safe haven. Those that believe that capital is unaware of Professor Black's assertions are not listening to the messages of the market. That is,...
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| Will Geithner's plan at G20 hit the spot? Posted: 22 Oct 2010 04:30 PM PDT
The market was mixed today as fears of currency wars formed the yin to earnings beats' yang (or the teeth to earnings beats' hummer if you will) and with macro data more non-existent than Mel Gibson's career, there wasn't much for the Street to manipulate. That said, a number of US officials were in the spotlight today sharing their views on the economy.
First of all, Tim Geithner wrote a letter to fellow finance ministers at the G20 meetings (though unclear if it was SWAK) where he urged countries to keep their current account balances below 4% of GDP and stay the fuck off of his front lawn. The idea was Geithner's way of trying to find a backdoor solution (other than more lube or an extra pillow to bite) to try to avoid the wave of global currency manipulation, especially with the dollars' upcoming plunge with QE2 on the way. Unfortunately, his suggestion was met with a more tepid response than Jaleel White's comeback as countries with large trade surpluses like Germany and Japan don't want to be held to any kind of hard targets.
Elsewhere, the president of the Fed Bank of Dallas, the honorable Dick Fisher (which sounds like the name of an Atlantis cruise ship) told Bloomberg that the Fed needs to be mindful of the impact that their decisions have on the dollar while also maintaining that no decisions have been formally made about more quantitative easing. He then informed the interviewer that he had to go as his unicorn was impatiently waiting outside to take him back to the land of "you're so fucking gullible."
In addition to Dick Fisher getting a bit flaccid on QE2, noted Fed turd in the punch bowl Thomas "T. Ho" Hoenig got his gangsta on and told an audience in Albequerque, New Mexico that the Fed needs to be wary of excess liquidity because it can fuck a market worse than he fucks his bottom bitch. T Ho opined "My experience tells me that if you wait until you’re absolutely certain that everything is fine, you waited too long" and followed with "My experience also tells me that "no" don't always mean "no," and most Fed Bankers ain't shit but hoes and tricks. You hear that Benny?"
And kind readers, on Wednesday (also known as hump day or as we call it in the offices of the award winning When Genius Prevailed, Spankwire.com day) you should recall that Money McBags commented on the fantastic returns the government made on their bank and insurance TARP spend. Well today, data was out about the toxic mortgages the Treasury has been buying and the data is even fucking better. The Treasury so far has had a 36% return on their purchases of toxic mortgages in their Public-Private Investment Program (PPIP) which gives Money McBags' newly established party, Bail Outs Get Us Savings (BOGUS for short), even more fucking street cred. Money McBags' new party boasts the greatest idea for the government to get out of debt since hyperinflation and selling pet rocks.
What Money McBags proposes to do is to first cut off all unemployment insurance thus killing mortgage payments, strangling consumer spend, and crippling companies. Then he will tax the shit out of exports in order to make US businesses even less competitive. While this all sounds as dumb as giving a shit about finding a more humane way to kill chickens or an episode of "Are You Smarter than a Christine O'Donnell Supporter" (where the questions will range from "name a current Senator," to "the First Amendment calls for the separation of Church and State per the Supreme Court's ruling: True or definitely true?," to "name a color that rhymes with nurple?"), but stick with Money McBags here for a second. Using the current fiscal system that relies on borrowing from China, increasing the spiraling debt, and "printing money" to continually add juice to the market, the country is destined to continue to flounder as that has proven to be more of a losing strategy than challenging George Michael to a game of gay chicken.
So what Money McBags is proposing is for the government to do what it does best: Step one: Ruin the economy. And we're not going beat around the bush about it this time, we're going all out. No financial regulation, no safety nets, and the fewer documents the better. Step 2. Bail companies the fuck out. Step 3. Profit. It's much more sensible than stealing underpants and as we've seen from the TARP and PPIP returns, it works a fuckload better as well.
Sure it might not do much for main street in the short term (or the long term), and sure there is a little something called moral hazard, and yeah the FNM and FRE bail outs may cost taxpayers $300B which outweigh the gains from the other bailouts, but those are just shortsighted details. Come on, we're talking about a 35% fucking return on troubled assets and an 8% return on bailed out banks. So suck on that Warren Buffett. Those type of earnings can put plenty of pork on the table so next time you go to vote, don't vote for the status quo, vote "none of the above" and write in Money McBags from the BOGUS party as he promises to restore prosperity one bailed out company at a time. That said, Money McBags could use some help on his campaign slogans, he is deciding between: "Bail outs we can believe in," "To let interest accrue and transfer it too," or "Ma Ma, where's the law? Gone to bail outs ha ha ha."
In stock news, AMZN was up after the company beat guesses yesterday and analysts upgraded the stock from "really fucking overvalued" to "really fucking overvalued but you should buy even more of it." The company grew top line 39% as sales of the Kindle continue to rise as Americans grow tired of having to lug both People magazine and US Weekly around on their staycations.
Elsewhere BIDU jumped ~5% after another strong quarter as Chinese people increasingly search the fuck out of shit. AXP charged off by ~2% as even though they beat analyst guesses thanks to a huge reserve release (where they followed the rest of the financial sector's lead in manipulating earnings on weak revenues and now won't be ready for the next round of defaults). That said, the stock traded down as investors worry about the anti-trust suit filed by the federal government against the company for what Money McBags is told is technically being called: "running your network like a bunch of douchnozzles." Finally, Schlumberger served up some turdburgers to anyone who was short the company by rising ~5% on the strength of a solid Q (and yeah, that joked sucked, but you got anything better for Schlumberger?).
As always, Money McBags has more analysis and a few more dick jokes at the award winning When Genius Prevailed.
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| Gold Seeker Weekly Wrap-Up: Gold and Silver Fall Over 3% and 4% on the Week Posted: 22 Oct 2010 04:00 PM PDT Gold fell over $10 in late Asian trade to as low as $1314.53 before it rallied back higher in London and saw a $3.55 gain at $1328.35 by about 9AM EST, but it then fell back off a bit in New York and ended with a loss of 0.02%. Silver fell to as low as $22.80 in late Asian trade before it also climbed back higher, but it still ended with a loss of 0.52%.
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| The October 22, 2010 edition of Casey's Daily Dispatch, now available Posted: 22 Oct 2010 03:56 PM PDT The Almighty Dollar
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| WORLD FOREX: Dollar Moderates Losses; Pre-G-20 Safety Sought Posted: 22 Oct 2010 02:51 PM PDT NEW YORK (Dow Jones)--The dollar erased earlier losses against most of its major rivals Friday as investors took a cautious stance ahead of weekend meetings of the Group of 20 leading industrialized and developing nations.
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| Gold Action Knocks Out Weak Hands: Richard Russell Posted: 22 Oct 2010 02:31 PM PDT "Gold, silver, the dollar, the HUI and the Dow all turned on a dime at precisely 2:00 p.m. yesterday. There are no markets anymore... only interventions. Is a CFTC judge stacking the deck against investors? Indian traders bet big time on gold prices. John Embry speaks... and much more. " Yesterday in Gold and Silver Gold didn't do a whole heck of a lot in Far East trading during their Thursday... and that lack of enthusiasm continued through the first half of the London trading day. However, about an hour before New York opened [half past lunchtime in London], the selling pressure began... and by 9:00 a.m. in New York, gold was down about fourteen bucks. The gold price gained about ten dollars of that back going into the London p.m. gold fix at 10:00 a.m. Eastern time, before the really serious selling began. Between the p.m. fix [gold's high of the day at $1,347.80 spot] and gold's low of the day in New York at 2:00 p.m. Eastern time, gold sold off $30......
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| Richard Russell - Gold Action Knocks Out Weak Hands Posted: 22 Oct 2010 01:40 PM PDT "No tree grows to the sky." Gold has risen an astounding ten out of the last eleven weeks. Therefore, it's only natural that traders are betting for a correction. For this reason, gold is down almost every night in the after-market as traders ready themselves for the long expected correction -- the correction that never seemed to come.
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| No Bulbous as Gold, Silver rise on U.S. dollars woes: John Embry Posted: 22 Oct 2010 01:30 PM PDT
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| DXZ Flash Crash Detonates Entire Currency Complex Posted: 22 Oct 2010 01:26 PM PDT
And now, for that Friday night bomb, when nuking stocks has a tad too much of a Waddell and Reed 'amateur hour' aftertaste, the only alternative - destroy the entire currency market. If this crash in the DXY (seen below) had happened during regular hours, apparently driven not by the dollar but by DXY component EUR (there was no comparable move in other USD pairs), it would have created a complete market collapse. Luckily it happened an hour after close. Weekend collapse averted. And a quick glance at the other pairs shows that the GBP and CHF were solidly impacted as well.
EURUSD:
EURCHF:
And apparently the crash metastasized to the GBP as well.
At this point, who really cares anymore?
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| Posted: 22 Oct 2010 01:00 PM PDT Gold dropped to $1,314.5 before recovering to $1.325. It seems that this was due to the G-20 proposals from the U.S. indicating a possible attempt at calming currency markets. This weekend the G-20 is meeting to discuss the current currency turmoil in the markets. Usually this is a meeting where little happens, but this time the U.S. has proposed that countries in the Group of 20 limit current-account surpluses or deficits to no more than 4% of each nation's gross domestic product by 2015.
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| Daily Dispatch: The Almighty Dollar Posted: 22 Oct 2010 12:34 PM PDT October 22, 2010 | www.CaseyResearch.com The Almighty Dollar (Vedran Vuk filling in for David Galland) Dear Reader, Let me first update you on David Galland’s and Chris Wood’s status. Chris should be back on Monday, and he’ll take over writing the Daily Dispatch for most of the week. David should be back stateside from Argentina next Thursday. However, I’m not positive if he’ll put pen to paper immediately that day. First up, Doug Hornig will share some thoughts on Geithner’s “strong dollar” proclamation. Personally, I’m really concerned for Geithner and Bernanke lately. Someone needs to get them to a shrink, and soon – because these two seem to be suffering from delusional schizophrenia. One moment Geithner wants stronger exports and the next he wants a stronger dollar. The Fed engages in Money Printing II while Geithner promises to avoid dollar devaluation. ...
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| Posted: 22 Oct 2010 12:27 PM PDT From the October 2010Hard Rock Analyst Journal David Coffin & Eric Coffin, HRA Advisories [Journal Preface] The last month was one of those classic speculative runs that makes everyone who trades resource stocks feel pretty smart. We’re feeling kind of clever ourselves but we have been through enough markets to view self-congratulatory impulses with great suspicion. Mr Market loves hubris. The current run has been strong enough to start bringing the bears out of their short hibernation with warnings about near term collapse of markets and especially resource markets. We don’t see the backdrop for that sort of event though we do acknowledge the juniors have had it all their way for few months now. There is growing room for consolidation. On that basis alone it makes sense to be looking for opportunities to harvest some profits. Things could still move higher for a while but it’s rarely a bad idea to bring down your average costs and position yourse...
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| Posted: 22 Oct 2010 12:24 PM PDT When the euro hit a low of $1.1917 against the US dollar on June 7th, 2010, the airwaves crackled with assertions that the European common currency, beset by Greek debt problems and intra-union discord, was destined to trade at parity ... Read More...
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| Posted: 22 Oct 2010 12:02 PM PDT Source: Karen Roche of The Gold Report 10/22/2010 Predicting ongoing waves of mortgage delinquency, illiquidity and bank insolvency, 321gold's Bob Moriarty envisions a temporary financial holiday followed by a return to the gold standard. While he finds several solid investment opportunities among mining equities, he says the safest strategy is having "a $20 U.S. gold piece in your right hand and a 1 oz. gold bar in your left." In this exclusive interview with The Gold Report, Bob explains how the U.S. government "is lying" about unemployment figures and banks "are lying" about supposed mortgage reviews that find no fraud involved and recommends investors have "a triangle of investments"—the most important of which are physical precious metals. The Gold Report: Bob, give us your perspective on what's happened since we last talked with you in July. First off is the announcement last month that the U.S. 'officially' emerged from the recession in August 2009. Bob Mo...
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| Posted: 22 Oct 2010 11:56 AM PDT 
Sadly, the state of California is facing such a wide array of social, economic, and political problems that it is hard to even document them all. It is really one huge gigantic mess at this point. Just consider the following facts about what life is like in the state of California today.... #1 Unemployment in the state of California was 12.4% in September - one of the highest rates in the nation. #2 The number of people unemployed in the state of California is approximately equivalent to the populations of Nevada, New Hampshire and Vermont combined. #3 Not even state government jobs are safe in California these days. Last month, government agencies in California slashed a total of 37,300 jobs. #4 California has the third highest state income tax in the nation: a 9.55% tax bracket at $47,055 and a 10.55% bracket at $1,000,000. #5 California has the highest state sales tax rate in the nation by far at 8.25%. Indiana has the next highest at 7%. #6 Residents of California pay the highest gasoline taxes (over 67 cents per gallon) in the United States. #7 Even with all of the taxes, the budget deficit for the California state government for the current year is approximately 19 billion dollars. #8 According to an article in the Wall Street Journal, California's unfunded pension liability is estimated to be somewhere between $120 billion and $500 billion. #9 20 percent of the residents of Los Angeles County are now receiving public aid. #10 Budget cuts are making life very difficult in many California cities. For example, Oakland, California Police Chief Anthony Batts says that due to severe budget cuts there are a number of crimes that his department will simply not be able to respond to any longer. The crimes that the Oakland police will no longer be responding to include grand theft, burglary, car wrecks, identity theft and vandalism. Things have gotten so bad in Stockton, California that the police union put up a billboard with the following message: "Welcome to the 2nd most dangerous city in California. Stop laying off cops." #11 According to one survey, approximately 1 in 4 Californians under the age of 65 had absolutely no health insurance last year. #12 California's poverty rate soared to 15.3 percent in 2009, which was the highest in 11 years. #13 California's overstretched health care system is also on the verge of collapse. Dozens of California hospitals and emergency rooms have shut down over the last decade because they could not afford to stay open after being endlessly swamped by illegal immigrants and poor Californians who were simply not able to pay for the services they were receiving. As a result, the remainder of the health care system in the state of California is now beyond overloaded. This had led to brutally long waits, diverted ambulances and even unnecessary patient deaths. #14 California home builders began construction on 1,811 homes during the month of August, which was down 77% from August 2006. #15 Earlier this year, it was reported that in the area around Sacramento, California there was one closed business for every six that were still open. #16 The "lawsuit climate" in California is ranked number 46 out of all 50 states. #17 Residents of California pay some of the highest electricity prices in the entire nation. #18 Over 20 percent of California homeowners are now underwater on their mortgages. #19 Large tent cities have been springing up all over the state of California. Just check out the following shocking video news report.... http://www.youtube.com/watch?v=cRLupIRhrmg So why doesn't the state government of California just fix many of these problems? Well, the truth is that it simply cannot. The state government is flat broke. Earlier this year, Bob Herbert of the New York Times described California's massive budget problems this way....
So is there any hope that all this can be turned around? Is there any hope that the economy of California will recover? Or will California continue to experience a rapid decline? Please feel free to leave a comment with your opinion....
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| Gold Daily and Silver Weekly Chart Posted: 22 Oct 2010 11:40 AM PDT | ||||
| Gary Shilling On Why Underwater Homeowners Will Double From 23% to 40% Shortly Posted: 22 Oct 2010 11:24 AM PDT
Arguably nothing can ever be quite as amusing as the Michael Pento-Simon Hobbs incident from July in which the now brainwashed Brit told the recent EuroPac addition that he was just "peddling the power of nightmares" (not even Pento getting booted off by Erin Burnett, although the fact that some idiot uttered the now legendary phrase "nothing is in a bubble when people want to buy it" certainly gives the clip brownie point for retention in the annals of CNBC's worst all time bloopers) when all the outspoken critic of the . Alas, today's interview of Gary Schilling by the same British H1-B/Green card holder comes nowhere close, however it certainly should be highlighted. Following up on Diana Olick's presentation of Clear Capital surprising announcement that home prices had dipped 6% in just two months (we can't wait for Cramer's take on this development even as housing "bottom" last June), and warning that fraudclosure will certainly cause prices to dip even more, it is Gary's turn to "peddle some nightmare powers" to Hobbs. To wit: the CEO of Gary Shilling & Co. sees home prices tumbling another 20% over the next few years, and the number of underwater mortgages nearly doubling from 23% to 40% (meaning nearly half of America will likely strategically default as nobody has any initiative to pay down their mortgage when they know there is no equity value left). And even when Hobbs tries to pull the old Pento one-two, and tells Shilling that "you do admit in your own writing that very few people would agree with you" to which the old fox answers: "what forecast is really worth much if everybody agrees with a consensus: it doesn't add much value..." Sorry, Gary, you are preaching to the wrong propaganda station: this is easily the first time they have ever encountered such a radical and subversive idea. Luckily, Simon for the first time reads the counter bullet points that anchors over at Comcast (or is that still NBC?) are fed: "The problem with what you are describing is if you have prices falling by that degree, you get some very bad negative feedback loops that are set up in the economy about the number of people that therefore go underwater and the grinding down of confidence that moves on and on and has serious repercussion in the economy overall." Spot on old chap. It is far better if the vast majority is lied to using manipulated data day in and out, so that when the inevitable collapse finally does occur nobody is prepared for it. And Americans wonder why they are broadly viewed as sheep being led to the slaughted not only by their own government, but their media too. Of course, when one dares to question anything, the response if that one is a traitor, and either puts troops in harms' way, or is a conspiracy theorist, no matter how many times said theories are proben to be fact, or best of all, is disappeared on grounds of the greater good. Good thing the TV helps us clarify it was the USSR Ronald Reagan was talking about when he mentioned the "Evil Empire"... cause one sure could get confused. Anyway, Shilling also says some more things about deflation, and bonds going to zero which readers have heard or read about a million times so no point in rehashing boring details. Full clip which confirms that anyone buying a home and putting any equity down, is mentally challenged.
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| Posted: 22 Oct 2010 10:44 AM PDT
 It's been another dizzying 24 hours in the scintillating world of rare earths. To recap: A week ago today, the U.S. complained about "green energy" subsidies given to Chinese companies, undercutting the U.S.' competitive advantage in that industry. Wednesday, China retaliated by embargoing exports of rare earth minerals to the United States. China denies the whole thing... repeating the official line that reports of another 30% cut in worldwide exports of rare earths next year are "false." Germany says they've been inadvertently smeared by the Chinese campaign. The Japanese, having already been cut off, are making plans elsewhere. If you haven't had the chance to keep up with it all, we don't blame you. We've condensed the essential news into a fact-packed 1 minute and 35 seconds in this Speed Brief...
 Overnight, we saw these new developments:
One company far away from the hullabaloo is about to get the "official" green light to develop a potential $1.3 trillion deposit in the ground. The story has been 42 years in the making -- replete with Cold War political machinations and present-day capital cronyism -- our managing editor, Mr. Chris Mayer, uncovers all the intrigue in this presentation... right here.  If the United States needs Chinese rare earths, China needs American soybeans. Through Wednesday of this week, China bought U.S. soybeans for six consecutive trading days... enough to push bean prices to their highest levels since summer 2009.China needs beans for cooking oil and livestock feed. During the week ending Oct. 14, China snapped up 72% of U.S. soybean exports. [Ed note: If you've got a penchant for the quick adrenal trade, you'll want to know Alan Knuckman's Resource Traders laid on a soy meal play this week. They're also still holding out for maximum gains on a silver play that's currently up 204%. Volatility makes for interesting times in the "Millionaire's Market" -- check it out here.  And... McDonald's customers, you've just been put on notice: In the tug-of-war between rising meat and wheat prices on the one hand... and you, the cash-strapped customer, on the other... rising commodity prices are winning out. Again.
Two years ago, in the midst of a financial panic and mass layoffs, Mickey D's decided to remove a slice of cheese from its dollar-menu double cheeseburger and rename it the "McDouble." If you still wanted that second slice, it'd set you back $1.19. The company's CEO let drop during a conference call yesterday prices are about to go up again. Exactly what's going up this time around, and by how much, has yet to be revealed.  Likewise, you'd better stock up on your Cheerios, Chex and Wheaties before Nov. 15. General Mills is raising prices by what a spokeswoman innocently described as "low single-digit percentages." On Jan. 3, 2011, slightly bigger price increases kick in for Pillsbury and Betty Crocker baking mixes."While General Mills may be the first of the large food companies to really press higher on pricing," says Stifel Nicolaus analyst Christopher Growe, "we believe many others may follow. "[The price hikes are] just a matter of time, given what is coming down the pike in the way of inflation."  If you have any doubts about significantly higher food prices on the way, this chart should put them to rest...
The jagged line shooting up 50% since June of this year is the UBS Bloomberg Constant Maturity Commodity Index for farm products. The smooth, gently accelerating line is the food component of the consumer price index. The latter is lagging the former -- a situation that can't last. And won't.  "If Paul Revere were around," muses Chris Mayer this morning, "he'd be riding through the streets of lower Manhattan yelling, 'Inflation is coming! Inflation is coming!'"In many ways, it's already here, just not yet widely recognized. "Deflationists argue that the dollar will buy more tomorrow than it does today. Although that definition would pain the old economists, today's deflationists still hold sway in the bond market, where investors happily accept puny yields." Still, companies are facing rising costs from everywhere. Today's Wall Street Journal cites these examples: corn up 44% from a year ago, milk up 6.5%, hot rolled coil steel is up 4%, copper is up 29% and oil is up 14% from a year ago. "The Journal's article had no discernible effect on bondholders," writes Chris, "Or I should I write 'bag holders'? For it is they who'll be left holding the bag when inflation kicks in." The bond market opened bored and laconic. Yields inched up just a touch. The 10-year note pays a whopping 2.506%.  Elsewhere in the markets, it's quiet. The Dow and the S&P opened flat. Gold is drifting not far from where it was yesterday, at $1,325. The dollar index isn't moving much either; as of this writing, it's at 77.3.There are no data coming out today, so traders are biding their time, waiting for any shoes to drop at a meeting of G-20 finance ministers in South Korea. If this one's anything like the meeting of the International Monetary Fund (IMF) in Washington a couple of weeks ago, there will be little news of note. But that won't stop Treasury Secretary Tim Geithner from trying to make some anyway...  Geithner is proposing that G-20 members agree to limit their trade surpluses and deficits to 4% of GDP. Virtually every other member of the G-20 thinks this is a terrible idea.Japan's finance minister calls it "unrealistic." Germany's economy minister rejects it as "command economy" thinking. "Totally condescending," I, our inimitable David Gonigam, agreed, "yet without a trace of self-awareness."
In the BRIC bloc, Russia and India are also in opposition. Brazil's finance minister isn't even attending -- he stayed home to implement new capital controls aimed at keeping the real from appreciating more than it already has this year. China is keeping its silence, and no doubt that's who Geithner has in mind with this harebrained scheme. China's trade surplus in the first half of 2010 amounted to 4.9% of GDP.  "We own and operate an industrial construction company in North Texas," writes a reader with his take on the perennial question, "How's business?""During the last recession, our industry went into the recession early and emerged early. The same thing seems to be happening now. For 10 weeks now, we have been busier than the last 30 months combined. "We service manufacturing companies. Maybe they have a stockpile of money and are spending it on new conveyors, and new production lines, and gearing up for the future. Half of our work is now maintenance of existing industrial machinery and half is installing new lines and new equipment. "In addition to a dozen of our regular customers, we are getting calls from many potential (and secured) new customers. And it's not just us. The subcontractors we use are really busy with work from other industrial contractors. Work is coming from everywhere. "I don't know if this recovery is regional, but after 10 weeks straight and broad-based from all kinds of manufacturers, I believe it is real! Hallelujah!" The 5: Nothing like boots on the ground like these. So how about it? Is our friend from Texas in the throes of a regional recovery? Or is it widespread? Let us have it.  "Tut-tut," a confused Canadian reader admonishes us in reaction to the rare earth news this week. "Where is the mighty 'invisible hand'? Isn't it supposed to foresee these events and prepare for them, perhaps by setting up mining ventures in our corporate-run nations?"I believe government has a role and should be filling it better. Perhaps there could be a happy mix of corporate ventures that do not control liberty and equality and government ventures to plan for the necessities of successful nations and their people. "Enjoy reading your stuff, even though there is much I disagree with." The 5: Hmmn. China is using more of what it produces... prices are going up... and rare earth mines that couldn't generate a profit at lower prices are coming into production at higher prices. The price mechanism is doing exactly what it should... and it'll hand a select group of smart people a small fortune. You can start yours here. Or you can lobby your local representatives to ensure government fills its role better. Frankly, it's up to you.  "The investors with Bernie Madoff should not be getting one dime," writes a reader outraged at the U.S. Marshals' auction of Madoff's slippers and other effects -- the proceeds going to his investors."They ALL knew that if it's too good to be true, then it is too good to be true. They wanted the higher yields he promised, and should have known the risks involved. Now that government waste will be (hopefully) slowed, the proceeds of the sale should go to pay off the U.S. debt." The 5: Well, let's do some math. A previous auction of Madoff's belongings brought in $1 million. If this next one does roughly the same, that'd be good for 0.0017% of the debt that Uncle Sam ran up last Friday. Another reader reminded us on the blog site this morning that Madoff once admitted he got the idea for his Ponzi scheme by studying how the Social Security Fund operates. Have a good weekend, Addison Wiggin The 5 Min. Forecast P.S.: "Nothing, nothing at this moment. Nothing," says Shigeo Nakamura, president of Advanced Material Japan Corp. -- describing the rare earth shipments he's not getting from China. The Chinese can play coy over whether they're embargoing rare earths to Japan and the United States, but the businesses that need them know the score. The scramble is on to find new sources and reopen old ones in Australia, the United States and Canada... Vietnam...even in one of the most "remote corners" of the earth... where one very large and lucrative deposit could deliver quadruple- digit gains for early investors. It's a "Special Situation" in the classic sense of the word and right up Chris Mayer's alley. Get the full story here.
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| Posted: 22 Oct 2010 10:32 AM PDT Gold futures steady as G20 meets The COMEX December gold futures contract closed down $0.50 Friday at $1325.10, trading between $1315.60 and $1328.80 October 22, p.m. excerpts: see full news, 24-hr newswire…
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| Silver shortage looms, mining stockbroker Rick Rule tells King World News Posted: 22 Oct 2010 10:16 AM PDT 6:12p ET Friday, October 22, 2010 Dear Friend of GATA and Gold (and Silver): Mining stock broker Rick Rule today tells Eric King of King World News that shortages of silver may be developing. An excerpt from the interview can be found at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/10/22_R... Or try this abbreviated link: CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Resource Goes Into Production A commission appointed by Mongolia's Ministry of Mineral Resources and Energy has conducted the final permit inspection at Prophecy Resource Corp.'s Ulaan Ovoo mine site and has instructed the company to begin coal production. Prophecy Resource (TSX.V: PCY) has begun production of its first 10,000 tonnes of coal as a trial run of supply to be taken by rail to electric power stations in Darkhan and Erdenet, Mongolia's second and third largest cities after the capital, Ulaanbaatar. The company is the second-ever Canadian mining company to get a permit to mine in Mongolia and start production there. For the company's complete announcement, please visit: http://www.prophecyresource.com/news_2010_oct14.php Join GATA here: 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 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:
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| Gold Price to Reach $1,600 at the End of This Move Posted: 22 Oct 2010 10:01 AM PDT Gold Price Close Today : 1,324.40 Gold Price Close 15-Oct : 1,371.10 Change : -46.70 or -3.4% Silver Price Close Today : 2312.5 Silver Price Close 15-Oct : 2427.2 Change : -114.70 or... This is a summary only. Visit GOLDPRICE.ORG for the full article, gold price charts in ounces grams and kilos in 23 national currencies, and more!
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| Default or Hyperinflation: The US’s Only Two Options Posted: 22 Oct 2010 10:00 AM PDT I thought I had seen and heard it all after the ludicrous Ben Bernanke, asinine chairman of the Federal Reserve, announced that the official (and thus a lie!) 2% inflation in prices was too, too low, and he wanted higher inflation because, somehow, in some weird little fantasy world that only he and other neo-Keynesian econometric cyber-nerds can see, higher inflation is "consistent with the mandate of the Fed" to achieve stable prices (zero inflation)! Hahahaha! This is so bizarre that I had a hard time dealing with it, as I have enough problems of my own in distinguishing reality from my own weird little mental world without this dimwit forcing his schizophrenia on me. So I cleverly doubled up on some of my medications, which didn't help much, although I finally did relax enough to unclench one fist. Of course, the other mandate of the Fed came in the '70s when Hubert Humphrey and other leftist weirdo morons changed the Fed's charter to include a mission to, somehow, with magic perhaps but certainly with creating more and more money and driving interest rates down and down, always maximize employment. Maximize employment! How convenient an excuse for the Fed to create more money! And speaking of maximizing, I thought I had, with this one statement by the chairman of the Federal Reserve to purposely create the horror of higher inflation, maximally achieved a state of complete loathing for the Federal Reserve. With my newfound Maximum Mogambo Contempt (MMC) for Ben Bernanke and the Federal Reserve, you can imagine that I was not very surprised to see an essay with the title "Three Horrifying Facts About the US Debt Situation" by Graham Summers of gainspainscapital.com. Initially, I was "ho-hum" mostly because I can, offhand, think of about a thousand horrifying facts about the US debt situation, and that is all without even touching upon the inflationary horror of the federal government deficit-spending untold trillions of dollars per year, year after year, increasing the national debt by borrowing an avalanche of money that the foul Federal Reserve magically creates out of thin air, and that the Federal Reserve will itself use, in an outrageous episode of historically treacherous monetary infamy known as "monetizing the debt," to buy the trillions and trillions of T-bonds, a terrifying example of fiscal and monetary insanity that will, to wax poetic, reverberate through the ages. You can tell by the way I ended that paragraph with a mere period instead of an exclamation point to denote horror and terror that I was pretty bored. Well, I was, until he went on that, firstly, "The US Fed is now the second largest owner of US Treasuries" after just recently overtaking the stash of US bonds owned by Japan, "leaving China as the only country with greater ownership of US Debt." To his credit, he went on that the horror is that "we're printing money to buy it. Setting aside the fact that this is abject lunacy, this policy is trashing our currency which has fallen 13% since June…as in four months ago. Want an explanation for why stocks, commodities, and gold are exploding higher?" I raised my hand to make a comment about how, "We're Freaking Doomed!" but before I could interrupt, he went on that, secondly, "There are only about $550 billion of Treasuries outstanding with a remaining maturity of greater than 10 years." Out of all this, he deduces the third point, which is that "The US will Default on its Debt." Apparently, he had a second thought about that "will default" thing, as he says, correctly, "either that or experience hyperinflation. There is simply no other option." I am happy to see that Mr. Summers still maintains some of that sunny optimism of youth, a quality that I completely lost years ago when the realization of the immense degree of stupidity and corruption in the world crushed my hopes, when he says that there are no other options except default or hyperinflation. I say, ominously, which explains the scary and ominous soundtrack, that the other option is (pause for effect) "both." And speaking of "both" if ever there was a time when you should buy both gold and silver, this is it! And the fact that you can get them by merely plunking down depreciating Federal Reserve Notes in payment should make you giddy with delight, so that you giggle as you say, "Whee! This investing stuff is easy!" The Mogambo Guru Default or Hyperinflation: The US's Only Two Options originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."
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| Default or Hyperinflation: The US's Only Two Options Posted: 22 Oct 2010 10:00 AM PDT I thought I had seen and heard it all after the ludicrous Ben Bernanke, asinine chairman of the Federal Reserve, announced that the official (and thus a lie!) 2% inflation in prices was too, too low, and he wanted higher inflation because, somehow, in some weird little fantasy world that only he and other neo-Keynesian econometric cyber-nerds can see, higher inflation is "consistent with the mandate of the Fed" to achieve stable prices (zero inflation)! Hahahaha! This is so bizarre that I had a hard time dealing with it, as I have enough problems of my own in distinguishing reality from my own weird little mental world without this dimwit forcing his schizophrenia on me. So I cleverly doubled up on some of my medications, which didn't help much, although I finally did relax enough to unclench one fist. Of course, the other mandate of the Fed came in the '70s when Hubert Humphrey and other leftist weirdo morons changed the Fed's charter to include a mission to, somehow, with magic perhaps but certainly with creating more and more money and driving interest rates down and down, always maximize employment. Maximize employment! How convenient an excuse for the Fed to create more money! And speaking of maximizing, I thought I had, with this one statement by the chairman of the Federal Reserve to purposely create the horror of higher inflation, maximally achieved a state of complete loathing for the Federal Reserve. With my newfound Maximum Mogambo Contempt (MMC) for Ben Bernanke and the Federal Reserve, you can imagine that I was not very surprised to see an essay with the title "Three Horrifying Facts About the US Debt Situation" by Graham Summers of gainspainscapital.com. Initially, I was "ho-hum" mostly because I can, offhand, think of about a thousand horrifying facts about the US debt situation, and that is all without even touching upon the inflationary horror of the federal government deficit-spending untold trillions of dollars per year, year after year, increasing the national debt by borrowing an avalanche of money that the foul Federal Reserve magically creates out of thin air, and that the Federal Reserve will itself use, in an outrageous episode of historically treacherous monetary infamy known as "monetizing the debt," to buy the trillions and trillions of T-bonds, a terrifying example of fiscal and monetary insanity that will, to wax poetic, reverberate through the ages. You can tell by the way I ended that paragraph with a mere period instead of an exclamation point to denote horror and terror that I was pretty bored. Well, I was, until he went on that, firstly, "The US Fed is now the second largest owner of US Treasuries" after just recently overtaking the stash of US bonds owned by Japan, "leaving China as the only country with greater ownership of US Debt." To his credit, he went on that the horror is that "we're printing money to buy it. Setting aside the fact that this is abject lunacy, this policy is trashing our currency which has fallen 13% since June…as in four months ago. Want an explanation for why stocks, commodities, and gold are exploding higher?" I raised my hand to make a comment about how, "We're Freaking Doomed!" but before I could interrupt, he went on that, secondly, "There are only about $550 billion of Treasuries outstanding with a remaining maturity of greater than 10 years." Out of all this, he deduces the third point, which is that "The US will Default on its Debt." Apparently, he had a second thought about that "will default" thing, as he says, correctly, "either that or experience hyperinflation. There is simply no other option." I am happy to see that Mr. Summers still maintains some of that sunny optimism of youth, a quality that I completely lost years ago when the realization of the immense degree of stupidity and corruption in the world crushed my hopes, when he says that there are no other options except default or hyperinflation. I say, ominously, which explains the scary and ominous soundtrack, that the other option is (pause for effect) "both." And speaking of "both" if ever there was a time when you should buy both gold and silver, this is it! And the fact that you can get them by merely plunking down depreciating Federal Reserve Notes in payment should make you giddy with delight, so that you giggle as you say, "Whee! This investing stuff is easy!" The Mogambo Guru Default or Hyperinflation: The US's Only Two Options originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."
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| Gold Forecaster Capital Controls or Chaos? Posted: 22 Oct 2010 09:51 AM PDT Gold dropped too $1,314.5 before recovering to $1.325. It seems that this was due to the G-20 proposals from the U.S. indicating a possible attempt at calming currency markets. This weekend the G-20 is meeting to discuss the current ... Read More...
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| Be Careful What Geithner Wishes For... Posted: 22 Oct 2010 09:24 AM PDT It's five years and $1.7 trillion of Chinese foreign reserves since the People's Bank of China ended its decade-long peg to the Dollar - the one at CNY8.3 which it had defended through the late '90s Asian Crisis and again as the Dollar ... Read More...
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| What Geithner Wants & What Geithner Gets Posted: 22 Oct 2010 08:21 AM PDT Living standards in the West are certain to fall as Asian wealth grows... "There are more tears shed over answered prayers than over unanswered prayers..."IT'S NOW five years and $1.7 trillion of Chinese foreign-currency reserves since the People's Bank ended a decade-long peg to the Dollar, writes Adrian Ash of BullionVault. Throughout the mid-to-late 1990s' Asian Crisis, and again as the US currency first began its long decline in the early Noughties, Beijing had defended 8.3 per Dollar. Its rising power – plus grumblings from trade partners – made some level of appreciation inevitable, but only if Beijing kept it strictly controlled. So back then, as today, China refused to even begin making the Yuan freely convertible – and thus accessible to foreign investment – but for very different reasons. The fear when China carefully recalibrated its Dollar peg in 2005 was of foreign speculators driving the Yuan lower. Whereas in 2010, it's got the opposite problem. Grabbing export share (and that mountain of foreign-exchange reserves) by suppressing its currency way below any measure of "fair value", Beijing clearly fears a repeat of the Japanese bubble-and-bust that followed 1985's Dollar-weakening Plaza Accord. Because since first loosening the Yuan's Dollar peg (if only a little) half-a-decade ago, China has overtaken Japan as the world's No.2 economy, and become the world's top importer of copper, biggest user of cement, No.1 consumer of energy, edible oils, soybeans, rice and wheat, and the No.2 destination for physical Gold Bullion. Yes, China's currency should reflect this growth, at least according to non-Confucian theories of floating currencies and trade rebalancing. No doubt it will in due course, too. But if US Treasury Secretary Tim Geithner were to get his wish at the G20 meeting this weekend – which he won't, not yet – and the Chinese Yuan did bear a greater share of the Dollar's global devaluation, Beijing's impact purchasing power in the food, energy and mineral markets would only grow greater. So where Timmy might want to watch out is that the appreciation in China's purchasing power must come at the expense of today's freely convertible currencies.  First, Beijing likely holds some $2 trillion or more of the "big four" reserve currencies – Dollars, Euros, Sterling and Yen. Gresham's Law says it's more likely to spend those holdings ahead of its own, increasingly valuable money, as it buys ever-more food, energy and mineral resources to meet its surging domestic demand for a better standard of living. Second, and should the Yuan extend its global usage from this year's McDonalds' bond float to central-banking reserves, the relative loss of purchasing power in Dollars, Euros, Sterling and Yen will only accelerate further. Together, the Big Four account for 96% of forex reserves according to the IMF, but that's the lowest proportion since before the late '90s Asian Crisis – a crisis which Beijing managed to avoid but remembers all too well.  Third, and most critically amid the global currency war – a war which will not be settled over the conference table for as long as Western central-bank policy remains fixated on currency inflation – flows of "hot money" are rightly expected, not least from US, UK and Japanese wealth fleeing zero-per-cent rates at home. As it is, China is gently loosening controls on money outflows, but only a little, and actual outflows of Yuan remain blocked. So trying to preserve its global value, retained wealth in the West cannot get direct exposure to the currency (nor the equities at present) which will increasingly put a price on the biggest trend of the 21st century – the Eastward shift of global demand and consumption. Even if China does liberalize (which it won't any time soon) retail investors will be last in the queue. So a fair proxy, meantime, remains buying hard assets and natural resources. It also gets to the heart of the problem, because living standards in the West (by way of our global purchasing power) are certain to fall long-term. Asia's growing use of world resources must come at our expense, in just the same way as the Pound Sterling's first fall from top-dog currency status – starting some seven decades ago, and running pretty much ever since – made for a relative loss of wealth to the United States. Most clearly amid the currency turmoil only just getting started, China's ever-growing demand for Physical Gold and silver highlight that big, fat 21st century trend in action. By the time (if ever) that Yuan deposits become widely available through retail banking in the US, Eurozone, UK or Japan, this morning's $1319 price-tag on gold might look a great bargain. Buying Gold today...?
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EverBank World Markets' assistant vice president Mike Meyer noted that Brazil's finance minister had claimed he had spoken to U.S. Treasury Secretary Timothy Geithner over the phone about working out an agreement to prevent the dollar from falling. Meyer echoed the thoughts of many investors when he said, "I just don't understand how proclamations of a strong dollar, or at least one that isn't weakening, can even be discussed at a time when the Fed is talking about adding quantitative easing."…| 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 |
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