Gold World News Flash |
- Lear Capital: Could An Ounce Of Gold Be Worth Trillions One Day?
- George Soros - Conditions Ideal for Gold to Rise
- James Turk - Developing Banking Crisis Bullish For Gold
- A cautionary tale for gold and silver buyers
- IMF Proposing New World Currency to Replace U.S. Dollar and Other National Currencies!
- David Morgan on the gold/silver ratio
- Episode 97
- Gold Resource Corporation Commences Mining Arista Vein System; Hires Mexico Country Manager
- Gold, Weaker Dollar, and US Exports
- We Are Now Faced With the Two Paths of Fiat Evolution - Part 1
- The Robert Zoellick-Gold Standard Affair
- Why Inflation Isn't Affecting Gold Prices
- China allows yuan to start trading against ruble
- Crude Oil Rises then Falls as Irish Worries Linger, Gold Fluctuates with the U.S. Dol
- Crude Recovery Cools but Gold Continues Advance on Ireland Bailout
- Gold Seeker Closing Report: Gold and Silver Gain With Dollar
- Is A Dropping VIX Masking Rising "Fear" In Most Other Asset Classes... And Does Hedge Fund SPY Pair-Hedging Explain The Market Melt Up?
- In The News Today
- Irish Government Is Dissolving
- #1) We begin by highlighting our friend Max Keiser. His Buy Silver, Crash JP Morgan campaign
- Graham Summers’ Weekly Market Forecast (Risk Back On? Edition)
- US FEDERAL RESERVE STEALS 700 BILLION FROM TAIWAN
- One of the growing industrial uses for silver is photovoltaic cells in solar panels
- No wonder Murenbeeld could never see gold price manipulation
- It Appears That the Gold Price Correction From the 9 November Peak Has Ended and Reversed For Confirmation Gold Needs To Close Over $1,365
- Busting a Market Myth
- Market Recap: 11.22.2010
- MONDAY Market Excerpts
- Chris Powell and GATA: Throwing gasoline onto the fire
- Don't Take or Touch my Junk!
- James West: Monetary Policy—Negligence, Ignorance or Fraud?
- Take all the metal you can, but it won't break Morgan Chase
- Global Monetary Policy - Negligence, Ignorance or Fraud?
- Is It Time to Buy Chinese Yuan?
- Take a Look Inside the Federal “Credit Card Machine”
- Gold Daily and Silver Weekly Charts
- When Irish Banks are Ailing
- Gold 20 day Average is Resistance at 1370
- Gold vs. The Fed: The Record Is Clear
- The Gold & Silver Play Has Gone To Greed?
- Silver Bounces, Gold Doesn't
- Quote of the Decade?
- Caza Gold
- Barney Frank Resumes His Extremely Hypocritial Ways By Calling All Fed Attacks "Extreme Hypocrisy"
- Take all the metal you can, but it won't break Morgan Chase
- The Bad Luck Of The Irish
- LGMR: Gold Traders "Torn" as Ireland Takes Bail-Out But Euro Falls
- Gasparino On The Implications Of The Latest Insider Trading Spectacle
- Hollow Economy Recipe For Hyperinflation
- A Word of Caution for Gold Investors: Jewelry vs. Investment Demand
| Lear Capital: Could An Ounce Of Gold Be Worth Trillions One Day? Posted: 23 Nov 2010 02:35 AM PST Could our once-mighty dollar suffer the hyperinflation humiliation of the German mark? Could an ounce of gold be worth millions, billions, even trillions in world currencies someday soon? Could gold be the last money standing?
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| George Soros - Conditions Ideal for Gold to Rise Posted: 23 Nov 2010 02:08 AM PST George Soros is at it again with more comments on the gold market. This time he admits that conditions are ideal for gold to rise. He claims that the actual deflationary pressures combined with fears of inflation will continue to propel gold higher. He also claims that gold will go parabolic before the bull market ends.
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| James Turk - Developing Banking Crisis Bullish For Gold Posted: 23 Nov 2010 02:00 AM PST With gold and silver consolidating recent gains, King World News interviewed James Tur out of Spain. When asked about the action in both gold and silver Turk stated, "The speed at which the sovereign debt crisis in Europe is accelerating is truly staggering. The insolvent European governments are causing problems for many banks because of all of the government debt that they own. So, what we really have developing here is a banking crisis which is always bullish for gold."
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| A cautionary tale for gold and silver buyers Posted: 23 Nov 2010 01:55 AM PST Some Monex customers allege that they were misled and even lied to by the Newport Beach firm and lost thousands of dollars on their precious metal investments, despite the bull market in gold and silver.
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| IMF Proposing New World Currency to Replace U.S. Dollar and Other National Currencies! Posted: 23 Nov 2010 01:52 AM PST The IMF recommended on April 13, 2010 that the world adopt a global currency called the "Bancor" and that a global central bank be established to administer that currency. This is not hype and it is not a rumor. This is a very serious proposal in an official document from one of the mega-powerful institutions that is actually running the world economy. Anyone who follows the IMF knows that what the IMF wants, the IMF usually gets. So could a global currency known as the "Bancor" be on the horizon? That is now a legitimate question.
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| David Morgan on the gold/silver ratio Posted: 22 Nov 2010 11:00 PM PST
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| Posted: 22 Nov 2010 07:27 PM PST Every week Max Keiser looks at all the scandal behind the financial news headlines. This week Max Keiser and co-host Stacy Herbert look at videos from the "Crash JP Morgan, Buy Silver" viral campaign. They also...
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| Gold Resource Corporation Commences Mining Arista Vein System; Hires Mexico Country Manager Posted: 22 Nov 2010 06:13 PM PST Gold Resource Corporation (GORO) (NYSE Amex: GORO) is pleased to announce the commencement of underground mining and stockpiling of its La Arista deposit ore at the Company's El Aguila Project.. The Company is also pleased to announce the hiring of Mr. Juan Manuel Flores as Mexico Country Manager. Gold Resource Corporation is a low-cost gold producer with operations in the southern state of Oaxaca, Mexico.
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| Gold, Weaker Dollar, and US Exports Posted: 22 Nov 2010 06:04 PM PST With the Chinese yuan and Brazilian reals off-limits to most retail investors, turning to gold may be the best bet. Even with the gold hitting the $1,400 an ounce mark, it's still a good idea to allocate around 20% of your portfolio to this precious metal. Consider that over the last decade, gold is up by 17%. Compare this to stocks over the same period and you'll see the difference. Stocks were up by only 1%.
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| We Are Now Faced With the Two Paths of Fiat Evolution - Part 1 Posted: 22 Nov 2010 06:03 PM PST  Intro We are entering an historic phase of the evolution of fiat money. This will be a three part series describing that evolution, and it's likely outcome. I'm not going to reiterate what is transpiring in Ireland, or Greece, or Portugal. I think readers of this blog are pretty well read on current events and I'm not going to repeat what countless bloggers are covering in this series of posts. Let's step back and see the big picture. We need to see what other nations are doing, we need to see what current super-sovereign institutions (IMF and G20) are doing, we need to see how the world's largest banks and central banks are doing. Only then can we see the big picture, that is, how all these systems are interacting with each other. What we are witnessing is the final stage of post Bretton Woods fiat evolution. There are two choices in this final stage, and the EU and US are examples of it. I am only focusing on the EU and the US for a reason. The rest of the world (minus Japan) has only recently entered the fiat modeled global economy in a meaningful way. The BRICS and other emerging markets have either already gone thru default while the rest of the financial world continued to function, so their defaults did not create severe contagion, or like China and India - they didn't really exist as meaningful economies to the rest of the world. These are new economies with low wages, and are basically infants when it comes to debt accumulation. The EU and US, on the other hand, best illustrate mature economies that have functioned under the post Bretton Woods fiat model the longest and have thus accumulated debt the most under the current global monetary regime. Path One: The US emerging fiat model It is obvious now that the US does not collect nearly enough in tax revenues to finance its spending:  This will continue for the foreseeable future, unless you think the economy will miraculously recover. But how can the US run such large deficits for so long? Well, the Federal Reserve will continue to be the primary buyer of Treasuries - that's what QE2 is all about. The Federal Reserve is now the largest holder of US Debt. From Zero Hedge:  I know that many people immediately go into hysterics about China no longer financing our debt, and that the US will subsequently go bankrupt. But that's not true. China never financed US debt. The US can never go bankrupt (officially/legally) so long as it prints its own free floating currency. Yes, China and others purchase US Government debt, but that does not finance US spending. Modern Monetary Theory best describes this process. Under a fiat model, money is created by Government Spending and the Federal Reserve. Money is also created thru the private sector with the creation of loans. Lending creates money that did not exist before. But private sector loan creation, in this balance sheet recession, is not growing fast enough to keep the economy and ongoing debt servicing from collapsing. Enter the Fed. The Fed has taken over this role and is creating money from nothing. And you know what else? The interest that is "owed" to the Fed is returned to the US Treasury minus costs. It's basically a free loan to the US Government. Modern Monetary Theorists love to point this out, that we are not facing a solvency crisis on the federal level. They are right, but they ignore something else, which I will cover later in Part 3. So you're probably thinking: Why the hell do I pay taxes if we can create free money? Why the hell do we sell government debt to nations that collect interest off that debt? Those are good questions. Tax collection is used to control the money supply and inflation. It's not a coincidence that the Federal Reserve and the Internal Revenue Service (Federal Income Tax) were created within a year of each other. One (the IRS) sops up the money the other (the Fed) creates. That's how it works. The EU doesn't have this feature. There is no EU income tax or EU Treasury. But I'll cover that in Part 2. The US, by selling Treasuries abroad, also accomplishes the same thing: it controls the global dollar supply. Why do others buy it? Nations trade with each other, and as local corporations exchange their dollars for their local currency, the dollars ultimately end up in the local central bank. That central bank now owns these dollars and wants a return on them, so it buys US debt. That is changing somewhat, however. China is using dollars now to buy up resources, which I will cover later in Part 3. Earlier, I called this Path One for a reason. The private markets are not working as they used to. I don't see an end to this anytime soon. We have entered a new period where the central bank - the Federal Reserve, will be creating money from nothing so the government can spend it as it wishes. Fiat money has changed, it has evolved. All insolvencies, state budget crises, pension shortfalls, federal budget gaps, etc... will now be addressed indirectly by the Federal Reserve. The US economy is now officially on life support. In this analogy, the EU is not running all the machines to keep the patient alive, only a few of them. It has structural differences that does not allow it to do so. But that's will be addressed in my conclusion. For now, I just want to explain that we have entered a new era. The Modern Monetary Theorists are claiming this as a victory. They say that interest free money from the government is our cure. They are terribly misguided and ignore other variables. In Part 2 I will address the EU model, and compare it to the US in depth. In my conclusion, I will describe how I believe fiat money, post Bretton Woods, will end under the two scenarios - the US path, and the (current) EU path. 
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| The Robert Zoellick-Gold Standard Affair Posted: 22 Nov 2010 06:02 PM PST It was with regret that I read in Reuters that "World Bank President Robert Zoellick said on Wednesday he was not advocating a return to a gold standard for exchange rates, but described the metal as 'the elephant in the room' that policymakers needed to acknowledge."
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| Why Inflation Isn't Affecting Gold Prices Posted: 22 Nov 2010 05:51 PM PST ChartProphet submit: The often-used argument by Gold Bugs has been that the Gold price, if adjusted for inflation, is still considerably below the highs of the early 1980s. And since we are still below the early 1980s prices, we should not be concerned about a gold bubble. Even more, the argument claims that since we are well below inflation-adjusted record prices in gold, we can expect gold prices to continue to run up significantly before a peak is in place. In other words, they claim that $1400 gold is still not expensive because $1400 in 2010 is worth less than $700 in the early 1980s. Take a look at the following chart: Complete Story »
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| China allows yuan to start trading against ruble Posted: 22 Nov 2010 04:47 PM PST By Judy Chen http://www.bloomberg.com/news/2010-11-22/china-allows-yuan-to-start-trad... SHANGHAI -- China started allowing the yuan to trade against the Russian ruble from today in the interbank market as policy makers promote the currency's use in global trade and finance. The move will help "facilitate bilateral trade between China and Russia and help develop yuan trade settlements," said a statement published on the website of the China Foreign Exchange Trade System, a subsidiary of the People's Bank of China. The ruble traded at 4.6711 per yuan as of 5:30 p.m. in Shanghai, according to CFETS data. It was little changed from yesterday at 4.6712, according to data compiled by Bloomberg. "The pace of internationalizing yuan is accelerating," said Zhao Qingming, a senior analyst in Beijing at China Construction Bank Corp., the country's second-largest lender. "The direct trading between yuan and ruble will help expand trade settlements in the two currencies." ... Dispatch continues below ... ADVERTISEMENT Prophecy Receives Permit To Mine at Ulaan Ovoo in Mongolia VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY, OTCQX: PRPCF, Frankfurt: 1P2) announces that on November 9, 2010, it received the final permit to commence mining operations at its Ulaan Ovoo coal project in Mongolia. Prophecy is one of few international mining companies to achieve such a milestone. The mine is production-ready, with a mine opening ceremony scheduled for November 20. Prophecy CEO John Lee said: "I thank the government of Mongolia for the expeditious way this permit was issued. The opening of Ulaan Ovoo is a testament to the industrious and skilled workforce in Mongolia. Prophecy directly and indirectly (through Leighton Asia) employs more than 65 competent Mongolian nationals and four expatriots. The company also reaffirms its commitment to deliver coal to the local Edernet and Darkhan power plants in Mongolia." The Ulaan Ovoo open pit mine is 10 kilometers from the Russian border and within 120km of the Nauski TransSiberian railway station, enabling transportation of coal to Russia and its eastern seaports. Thermal coal prices are trading at two-year highs at Russian seaports due to strong demand from Asian economies. For the complete press release, please visit: http://prophecyresource.com/news_2010_nov11.php China is allowing greater use of its currency for cross-border transactions to reduce reliance on the U.S. dollar, after Premier Wen Jiabao said in March he is "worried" about holdings of assets denominated in the greenback. Purchases of U.S. currency to contain yuan gains contributed to a $194 billion increase in the nation's foreign-exchange reserves in the third quarter, boosting the total to a record $2.65 trillion. Industrial & Commercial Bank of China Ltd. and Bank of China Ltd. completed the first trade between the two currencies, CFETS said in a separate statement issued later today. The transaction amount was 1 million yuan ($151,000), it said. There was one trade today, according to Bloomberg data obtained from CFETS. The reference rate, which is published at around 9:15 a.m. every day, was set at 4.6711 per yuan. The currency is allowed to trade up to 5 percent on either side of the fixing, according to the CFETS statement. China started permitting the Malaysian ringgit to trade against the yuan on Aug. 19. Traders can also buy and sell the yuan against the dollar, the euro, the yen, the Hong Kong dollar and the British pound. The yuan declined 0.03 percent to 6.6416 per dollar. The ruble gained 0.1 percent to 31.006. The value of international trade transactions settled in the Chinese currency totaled 126.5 billion yuan in the third quarter, 160 percent more than in the three months through June, the People's Bank of China reported on Nov. 2. China first approved yuan use for trade settlement in July 2009 and Zheng Yang, an official at the People's Bank of China's Shanghai branch, said on Sept. 27 that the value of such transactions may reach 200 billion yuan by the end of this year. The total for the first nine months was 197.1 billion yuan. CFETS also said it will consider allowing trading in forwards and swaps between the yuan and the ruble. China's Premier Wen Jiabao will visit Russia and Tajikistan from Nov. 22-25, Foreign Ministry spokesman Hong Lei said Nov. 16. Support GATA by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf
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| Crude Oil Rises then Falls as Irish Worries Linger, Gold Fluctuates with the U.S. Dol Posted: 22 Nov 2010 04:00 PM PST courtesy of DailyFX.com November 22, 2010 10:51 PM The first session in a holiday-shortened trading week proved to be more volatile than expected, but prices have yet to violate any key technical levels. Volume should continue to decline as we get further into the week. Commodities – Energy Crude Oil Rises then Falls as Irish Worries Linger Crude Oil (WTI) - $81.42 // $0.32 // 0.39% Commentary: Crude oil rose slightly on Monday, adding $0.26, or 0.28%, to settle at $81.74. Prices are giving back all of those gains and then some in overnight trade, however, as concerns related to Ireland linger. The new fear is that upcoming elections will make it harder for the country to come to terms with the EU and IMF on the aid that was requested. Our take is that crude and equities are merely biding time as prices consolidate this year’s gains. Both equities and crude hit two-year highs only a couple weeks ago. The global economic recovery remains on track and negative news ...
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| Crude Recovery Cools but Gold Continues Advance on Ireland Bailout Posted: 22 Nov 2010 04:00 PM PST courtesy of DailyFX.com November 22, 2010 04:16 PM What does an Irish bailout have to do with the more actively traded commodities? Speculative interest behind these markets have been heavily responsible in driving crude and gold to recent highs; which exposes both to fluctuations in underlying risk appetite. North American Commodity Update Commodities - Energy A Volatile Session for Crude Mimics the S&P 500’s Reaction to News of Ireland’s Bailout Crude Oil (LS Nymex) - $81.74 // $0.23 // 0.28% The expiration of the Nymex December crude oil futures contract presents an unusual picture when reconciling the rollover. However, should we look at a continuous contract, we would see that the commodity has in fact put in for a modest improvement over Friday’s close. However, this was not a slow shift by any means. A wide range bar with relatively narrow close between open and close suggests there was a lot going on in the background. For the astute funda...
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| Gold Seeker Closing Report: Gold and Silver Gain With Dollar Posted: 22 Nov 2010 04:00 PM PST Gold climbed almost 1% to as high as $1364.85 in Asia before it fell back off in London to see a $4.72 loss at as low as $1348.28 by about 10:30AM EST, but it then rallied back higher in the last few of hours of trade and ended with a gain of 0.38%. Silver fell to as low as $27.105 before it also rallied back higher and ended with a gain of 1.44%. Both metals are rising in afterhours access trade as well.
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| Posted: 22 Nov 2010 02:59 PM PST
As the trading year draws to a close, and as the QE2 driven melt up shows little sign of relenting (or breaching the 1,200 S&P level), the ever popular VIX, or "fear index" continues to plumb new depths. For many this is a superficial sign of complacency and lack of risk of any major moves within stocks. However, as BNY's Nicholas Colas demonstrates, this is far from the truth as to what is happening below the surface. While highlighting the grind lower in the VIX, Colas observes that "the options market has been busy pricing in higher levels of perceived risk across a variety of asset classes, most notably investment grade bonds, silver, and emerging markets. In fact, of the 20 asset classes and industrial sectors for which we track risk pricing in the options market, 15 show heightened levels of investor concern for the upcoming 30 day period." How does Colas explain this remarkable divergence? "I am tempted to say that the sector IVs are actually better representatives of the market’s take on future volatility, and the lower expected volatility of the market as a whole comes from macro investors who think the next month will be smooth sailing. Conversely, those traders who use sector ETFs and their options to hedge specific single stock positions see a different and potentially more volatile story developing." We tend to agree with the second explanation, which also leads to another surprising conclusion... As most hedge funds now tend to hedge idiosyncratic risk using broad systemic hedges, most notably the SPY, which continues to be the most shorted (and "longed") hedge fund ETF, which, due to its being the most actively traded (or, some would say, churned) security by volume on US capital markets, in turn feeds the HFT relay to force robots to believe that due to daily pressure pushing the key market ETF higher or lower, the prevailing move in stocks should be higher (via forward feedback loops), when in fact hedge funds are shifting increasingly more bearish (short individual stocks, and net SPY buying) thereby explaining the constant move higher in stocks, and lower in teh VIX. Is hedge fund pair trade hedging (now that everyone is terrified of shorting individual stocks as pair trade hedges) with ETFs solely responsible for the daily move higher? We will likely not know with certainty until a forensic analysis of the market can be conducted after the next mega-crash, although recent observations of market moves lead us to believe that this could be one possible explanation. Then again with all modern-day feedback loops which have no formal start or end, in a market in which one wing-flipping butterfly can cause a market flash crash, who really knows... We hope to revisit this most fascinating emerging feedback loop theory at a later date, but for now, here are Colas' complete observations on why anyone trading purely on a dropping VIX may be in for a rude awakening. If the Boys Want to Fight, You’d Better Let Em Only 36 shopping days left until Christmas, and 29 more trading days left in 2010. The S&P 500 is up some 7.5% year to date, and the most recent prices on the CBOE VIX Index come in just shy of 20. The options specialists at ConvergEx don’t like it when I call that the “Fear Index,” but since that’s the shorthand many on the Street use to describe the VIX we’ll use it here. Just for today – I promise. I will go back to “Expected price volatility/cost of insurance” with the next installment of these monthly assessments of the options market and risk pricing. The bottom line on the VIX is that both in terms of its absolute level and general trend, there just doesn’t seem to be any real fear in the U.S. equity markets. If the market is metaphorically a gathering place of buyers and sellers, then the current environment resembles a Seattle coffee shop. A quiet murmuring crowd. The low hiss of the milk foamer. Maybe someone playing Jewel covers on an acoustic guitar in the corner. The VIX is below 20 and has been moving lower in a calm collected manner since May. Over the last month, for example, the Fear Index (sorry, options guys) has come in from 20.6 to less than 19 yesterday. Other parts of the options market, however, look more like a roadside bar on Hells Angels initiation night. The VIX is down over the last month, yes, but just look at our accompanying graph with 19 other industrial sectors and asset classes. That exhibit shows what is essentially the “VIX of…” these groups. You will notice that expected volatility in large cap U.S. stocks (S&P 500) is in the distinct minority when it comes to declining levels of fear. Here are a few examples of where the options market clearly sees more reason for near term concern: Among asset classes outside of stocks, the options market has seen incremental concern in Investment Grade Bonds, Silver, Emerging Markets, Junk Bonds, International Stocks, and Gold. You might at this point ask how we calculate these changes. The answer is that the proliferation of Exchange Traded Funds tracking diverse asset classes has led to an active listed options market for these securities and the asset types they track. From there you simply calculate the Implied Volatility for the options associated with the ETF in question. We use www.ivolatility.com as our source for the data presented here. Most of the sectors within the S&P 500 are seeing higher levels of expected near term volatility, even though the VIX itself is down. This includes Energy, Consumer Staples, Materials, Tech, Health Care and Consumer Discretionary. When you think about it, this is an oddball observation. How can the expected volatility of the index decline if the individual sector IVs are increasing? Low price correlations might explain the difference, except correlations are quite high at the moment. I am tempted to say that the sector IVs are actually better representatives of the market’s take on future volatility, and the lower expected volatility of the market as a whole comes from macro investors who think the next month will be smooth sailing. Conversely, those traders who use sector ETFs and their options to hedge specific single stock positions see a different and potentially more volatile story developing. The last point I would like to make is on Gold. There has been some concern of late that the yellow metal has topped out for the year and perhaps for good. Looking at the data from the options market, the “Gold VIX” doesn’t show either extreme complacency or extreme worry. It is exactly in the middle of its historical range of 15-25, with a current reading of 20. Maybe that puts Gold in the coffee shop rather than the roadside bar, but it does seem that the risk pricing in the options market does not support any overly positive or negative call.
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| Posted: 22 Nov 2010 02:17 PM PST All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation.
Dear CIGAs, How many times have we discussed the fact that securitized mortgages are not that at all? The collateral supposedly behind these OTC derivatives simply does not exist in the legal sense. This problem is bigger than anything we have seen so far. The ramifications are far reaching. Think pension funds on this one. Now people are waking up to this major financial problem which we knew about years ago. This was reported here on JSMineset in 2008 when we discussed the emergency meeting called by the New York Fed supposedly because of back office problems on securitized mortgage debt. This is not only the Bank of America, but every manufacturer of toxic OTC derivatives called securitized debt instruments. QE to infinity is the only politician's tool to kick the can down the road at the cost of hyperinflation. The can will get kicked. Gold will trade at $1650 and better. Countrywide's Mortgage Document Errors May Doom Bank of America Testimony in a New Jersey foreclosure case decided last week may spell big trouble for Bank of America (BAC). If what one bank employee said on the stand proves to be accurate, paperwork problems it acquired when it purchased the failing mortgage provider Countrywide in 2008 could leave BofA on the hook for billions of dollars. Linda DiMartini, a supervisor and operational team leader for the Litigation Management Department of BAC Home Loans Servicing, testified in the foreclosure case of John T. Kemp that it was "customary for Countrywide to maintain possession of the original note and related documents." If that's true, then Bank of America may discover that it has millions of loans on its books that it thought it had transferred to trusts that issued mortgage backed securities, because 96% of Countrywide loans were ostensibly securitized. As the Congressional Oversight Panel explained, that outcome alone could cause massive damage to a bank's balance sheet. And as bad as that would be, it isn't the only problem that could result from Countrywide hanging on to the notes. If the mortgage-backed securities aren't in fact "mortgage-backed," investors who bought them could be able to force BofA to buy the securities back. A significant number of buybacks could on its own destroy BofA's balance sheet. Nor could BofA stave off either outcome retroactively by delivering those notes today. First, the contracts that created the trusts would typically forbid transferring the loans into the trusts now. Second, even if somehow that could happen, such a transfer would destroy the special tax status the mortgage backed securities enjoy and give the investors a different reason to put back the securities or sue over them.
Jim Sinclair's Commentary I am bullish on gold, but let's hope this price objective is a tad rich. Lear Capital: Could An Ounce Of Gold Be Worth Trillions One Day? Posted 11/22/2010 4:13 PM by Lear Capital In a really bizarre moment in history, a single American dollar was actually worth 4.2 trillion German marks. It really happened. To fund its mega-expensive World War I effort, Germany severed the tie between its mark and gold — something that's always happened, sooner or later, with government-generated currency. Today there are no gold-backed currencies in the world. After 1914 in Germany, the mark became just another fancy piece of worthless paper. No longer tied to gold, there were no longer any limitations on how many marks could be printed. But no worries, either — the patriotic German populace somehow believed everything would work out fine as long as Germany won the war. Because the winners of wars, everybody knew, always dictated the terms of surrender, including — and especially — the economic terms. The trouble was: GERMANY LOST THE WAR By the end of the war in 1918, Germany was a real mess. The Treaty of Versailles imposed steep war reparations, and that did nothing to strengthen a German Reichmark no longer backed by gold or anything else for that matter. Confidence in the mark continued to nosedive, especially under a deluge of post-war government spending in many new social programs (sound familiar?). But Germany couldn't spend its way back to normal — no country can pull that off — and confidence in the post-war currency continued to plummet. By 1922, just four years after the war, Germany's inflation pest had turned into a gigantic hyperinflation monster.
My Dear Friends, The action of gold is quite interesting. It is threatening to the shorts. Forget the reasons given by experts. If gold was trading regularly as per three weeks ago it should have sold off $20 to $40 this morning. This has to attract the attention of the shorts. A follow through of this new relationship into the Comex morning US session tomorrow will be telling. Regards,
Jim Sinclair's Commentary Think what this would be if the FASB had not sold their soul to the devil, allowing banks to carry their assets at whatever they wished them to be worth. This is so wrong. It totally destroys the purpose of accounting and auditing as it produces an audited statement with a false value on a given date. The excuse that the bank is going to hold crap until the end does not change crap to gold. Top banks face $100 billion Basel shortfall: report LONDON (Reuters) – The new Basel III banking rules will leave the biggest U.S. banks short of between $100 billion and $150 billion in equity capital, with 90 per cent of the shortfall concentrated in the top six banks, the Financial Times said, citing research from Barclays Capital. The newspaper said the study by the investment banking arm of Barclays Plc (LSE:BARC.L – News) assumes the banks will need to hold top quality capital equal to 8 percent of their total assets — a one point cushion against falling below the effective global minimum of 7 percent set in September by the Basel Committee on Banking Supervision. The regulations mean banks may need to increase their capital through retained earnings or issuing equity or they can cut their risk-weighted assets by selling off assets and cutting back riskier business. "These shortfalls are entirely manageable … The more difficult question is what affect the new rules will have on the cost and availability of credit and bank profitability," the FT quoted Tom McGuire, head of the Capital Advisory Group at BarCap, as saying. McGuire estimates that U.S. banks can cut their equity needs by $10 billion with each $125 billion reduction in risk-weighted assets, the FT said.
Jim Sinclair's Commentary The raiders at work, except this time it is nations in their grip.
Jim Sinclair's Commentary Surprise, surprise. Moody's makes the warning at center stage, right on queue. The euro cover continues. In Ireland, Call for Election and Warning From Moody's DUBLIN — Ireland's decision to accept a rescue package worth more than $100 billion prompted a call Monday for early elections and a warning from a major ratings agency that the bailout could prove to be a "credit negative" for the country. European Union officials, who had been pushing Ireland to accept help, quickly agreed to the request late Sunday, committing a significant amount of money to an ailing member for the second time in six months. The total amount was not announced, but several officials said it would be 80 billion to 90 billion euros, or $109 billion to $123 billion. Last spring, Europe disbursed 110 billion euros to Greece to save it from default. The move, which will allow Ireland to shore up its faltering banks and operate without having to borrow money at budget-breaking rates, was welcomed by Ireland's neighbors on Monday, although financial markets were more cautious. There were also rising worries about political stability in Ireland as a result of the bailout and the angry public backlash it engendered. The Green Party, the junior partner in Ireland's coalition government, announced it would pull out of government once a series of fiscal packages and budgets were in place next month — and called for early elections after that. "We have now reached a point where the Irish people need political certainty to take them beyond the coming two months," the Greens said in a statement, according to Reuters. "So, we believe it is time to fix a date for a general election in the second half of January 2011."
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| Irish Government Is Dissolving Posted: 22 Nov 2010 01:57 PM PST First came the real-estate collapse, which caused the banks to tumble. That in turn led the economy to teeter and the national budget to plummet toward insolvency, requiring a huge foreign bailout on the weekend. So it is almost inevitable that, at the end of it all, the Irish government is about to fall. In a sharp indication of the political consequences of the euro crisis, Ireland's cascade of bad fortune has just reached the highest office in the land. Amid calls for his immediate resignation from at least two MPs in his own Fianna Fail party and the withdrawal of support from coalition partners the Green Party, Prime Minister Brian Cowen was forced on Monday to announce the pending dissolution of his government. 
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| #1) We begin by highlighting our friend Max Keiser. His Buy Silver, Crash JP Morgan campaign Posted: 22 Nov 2010 01:00 PM PST Revolution Roundup #1: Silver Bullets, Bank Runs and Bomb Threats "I sold my uniform and bought 4 ounces of Silver. Thank you Max Keiser."
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| Graham Summers’ Weekly Market Forecast (Risk Back On? Edition) Posted: 22 Nov 2010 12:54 PM PST
Last week’s rally occurred for one reason and one reason only: options expiration week. I’ve detailed this phenomenon countless times, but the primary point is that EVERY month, Wall Street shreds options traders by pushing the market this way and that to insure the maximum number of options contracts expire worthless.
As the below chart shows, last week was no exception with both the puts and calls taking it on the chin in succession. In particular, Wall Street gunned for 1,200 on the S&P 500.
Again, none of this action was related to anything fundamental or economic in the world: it was option contract shredding by Wall Street and that’s that. Of course, the ramp job occurring on the 18th coincided with the US Dollar dropping when it hit up against the upper trend-line of its recent downward trading channel:
This rejection was in turn precipitated by the Euro bouncing at the lower trend-line (135) of its own upward trading channel (the Euro accounts for over 50% of the US Dollar index and consequently the two currencies trade in near perfect inverse correlation).
In many ways, this move was to be expected. The Euro had fallen pretty far pretty fast. The main issue now is whether the currency can rally to break above resistance at 137.5. This line acted as strong former support multiple times in the last few months, so it should now act as strong resistance.
In this context, we could see a tad bit more upside in stocks as the Euro rallies to challenge 137.5 (which would coincide with the US Dollar falling to test 78). However, at that point the risk-off trade should return with a vengeance with the US Dollar rallying strongly and the Euro falling (along with equities and commodities).
If this DOESN’T happen, then the US Dollar has serious trouble as a violation of 76 would break its multi-year trend-line.
This would trigger a serious potential “flight from the Dollar” pattern in the form of a massive Head and Shoulders that has been forming in the US Dollar over the last 20 years.
In closing, keep your eyes glued to the Euro. The markets seem to view the Irish bailout as a “positive” for the currency. If this view results in the European currency breaking above 37.5, then the inflation trade is back on with a vengeance and the US Dollar could potentially be in SERIOUS trouble.
PS. If you’re worried about the future of the stock market and have yet to take steps to prepare for the Second Round of the Financial Crisis… I highly suggest you download my FREE Special Report specifying exactly how to prepare for what’s to come.
I call it The Financial Crisis “Round Two” Survival Kit. And its 17 pages contain a wealth of information about portfolio protection, which investments to own and how to take out Catastrophe Insurance on the stock market (this “insurance” paid out triple digit gains in the Autumn of 2008).
Again, this is all 100% FREE. To pick up your copy today, got to http://www.gainspainscapital.com and click on FREE REPORTS.
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| US FEDERAL RESERVE STEALS 700 BILLION FROM TAIWAN Posted: 22 Nov 2010 12:22 PM PST This first story is very big. This story has become public. It seems that the Federal Reserve has kept funds sent to it from the central bank of Taiwan. When large sums of money are involved, money is cleared through central banks by way of ACATs. In this case, the sum of money involved is 700 billion usa dollars. The BIS was asked to make the US Federal Reserve carry out the transfer. The BIS refused to do so, even though its purpose is to make sure that international settlements are completed. When the gold and silver markets explode who would now expect the BIS to deal with that crisis any more effectively? TroposRe LINK HERE.. 
This posting includes an audio/video/photo media file: Download Now |
| One of the growing industrial uses for silver is photovoltaic cells in solar panels Posted: 22 Nov 2010 12:00 PM PST Rising Solar-Panel Generation Means Increasing Industrial Demand For Silver
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| No wonder Murenbeeld could never see gold price manipulation Posted: 22 Nov 2010 11:55 AM PST "Unallocated gold" seller Bank of Nova Scotia (http://www.scotiamocatta.com/products/faq.htm) has owned 18 percent of DundeeWealth Inc., for which Murenbeeld is chief economist (https://www.dundeewealth.com/en/public/askTheExperts.htm), and has just bought the whole company. * * * Scotiabank Strikes Deal for DundeeWealth By Tim Kiladze, Tara Perkins, and Grant Robertson http://www.theglobeandmail.com/globe-investor/scotiabank-strikes-deal-fo... In its latest move to expand a growing wealth management business, Bank of Nova Scotia is buying the remaining 82 per cent of DundeeWealth Inc. it currently does not own for $2.3 billion. The deal values DundeeWealth at $3.2 billion and the company's shareholders will get a mix of Bank of Nova Scotia common shares and either cash or 20 per cent of a preferred share for each DundeeWealth common share. DundeeWealth shareholders will also get a special distribution of $2 per share in cash and an interest in Dundee Capital Markets, which is being spun out. The deal ties into Scotia's focus on global wealth management, which is now one of the bank's official operating segments. "This is a great way to start our new fourth business line," the bank's president and chief executive officer Mr. Waugh said on a conference call Monday. "And I'm so delighted to be partnering with the Goodman family." ... Dispatch continues below ... ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf Scotia first bought an 18 per cent stake in DundeeWealth three years ago and Mr. Waugh said the timing was right to buy the remaining portion. "We have enjoyed a long and very successful relationship with both Dundee Corp. and DundeeWealth and there is a clear strategic alignment between our businesses," he said in a statement Monday. However, Mr. Waugh added that the deal doesn't suggest Scotia is backing off its expansion in Latin America, where it has recently made acquisitions in Panama. "I don't think you can read into that at all," Mr. Waugh he said. Once Scotia owns all of DundeeWealth, the bank will have to decide what to do with its investment in CI Financial, which it bought into in 2008. "Our first and foremost priority is to make this acquisition with Dundee very successful," said Chris Hodgson, group head for the bank's wealth management division. "I wouldn't read too much into this in terms of where we will go next," he added. "I think this leaves us with options and we'll certainly explore those in the future." Despite the uncertainty about CI, analyst John Aiken at Barclays Capital noted the deal makes sense for Scotia. He said: "We believe that it is a very good acquisition for [Bank of Nova Scotia], which it forecasts will be earnings neutral in year one with a very limited impact on capital ratios." He also was not surprised that the deal materialized. "While the ultimate acquisition was largely viewed as an inevitability by the market, the transaction occurred sooner than we had anticipated." Scotiabank chief executive Rick Waugh has made wealth management a key priority for the bank in recent years, and has been bulking up in the business with a number of expansions. Beginning in 2007, the bank bought Canadian online brokerage boutique TradeFreedom Securities Inc., followed by its sizable deal for Dundee Bank and its original stake in DundeeWealth. Around the same time, Scotiabank quietly began building an international wealth management business. Then in 2008, the bank paid $2.3-billion to Sun Life Financial Inc. for a 37 per cent stake in mutual fund giant CI Financial. The momentum continued this year when the bank reorganized its business lines in order to bolster its wealth management arm outside of Canada and highlight the growing importance of the global wealth management business. Scotiabank carved out a global wealth management division this fall, so that it would begin to report its quarterly results under four headings: Canadian banking, international banking, Scotia Capital, and global wealth management. Prior to that, the Canadian and international banking segments each held information on the wealth management business in those geographies. As for DundeeWealth, currently Dundee Corp. owns 48 per cent of the business, but Ned Goodman, controlling shareholder of Dundee Corp., has already agreed to support the transaction. After the merger, David Goodman will remain as DundeeWealth's president and chief executive officer, heading the firm's investment management activities as well as its sales and distribution platforms. Support GATA by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:http://www.gata.org/node/16 ADVERTISEMENT Prophecy Receives Permit To Mine at Ulaan Ovoo in Mongolia VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY, OTCQX: PRPCF, Frankfurt: 1P2) announces that on November 9, 2010, it received the final permit to commence mining operations at its Ulaan Ovoo coal project in Mongolia. Prophecy is one of few international mining companies to achieve such a milestone. The mine is production-ready, with a mine opening ceremony scheduled for November 20. Prophecy CEO John Lee said: "I thank the government of Mongolia for the expeditious way this permit was issued. The opening of Ulaan Ovoo is a testament to the industrious and skilled workforce in Mongolia. Prophecy directly and indirectly (through Leighton Asia) employs more than 65 competent Mongolian nationals and four expatriots. The company also reaffirms its commitment to deliver coal to the local Edernet and Darkhan powerplants in Mongolia." The Ulaan Ovoo open pit mine is 10 kilometers from the Russian border and within 120km of the Nauski TransSiberian railway station, enabling transportation of coal to Russia and its eastern seaports. Thermal coal prices are trading at two-year highs at Russian seaports due to strong demand from Asian economies. For the complete press release, please visit: http://prophecyresource.com/news_2010_nov11.php
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| Posted: 22 Nov 2010 11:19 AM PST Gold Price Close Today : 1357.70 Change : 5.50 or 0.4% Silver Price Close Today : 27.457 Change : 0.282 cents or 1.0% Gold Silver Ratio Today : 49.45 Change : -0.311 or -0.6% Silver Gold Ratio Today : 0.02022 Change : 0.000126 or 0.6% Platinum Price Close Today : 1661.00 Change : -5.20 or -0.3% Palladium Price Close Today : 693.00 Change : -10.50 or -1.5% S&P 500 : 1,197.84 Change : -1.89 or -0.2% Dow In GOLD$ : $169.80 Change : $ (1.46) or -0.9% Dow in GOLD oz : 8.214 Change : -0.071 or -0.9% Dow in SILVER oz : 406.17 Change : -1.92 or -0.5% Dow Industrial : 11,152.09 Change : -51.46 or -0.5% US Dollar Index : 78.62 Change : 0.392 or 0.5% In spite of Friday's equivocal closes (gold down 70 pennies and silver up 34.5c) both the SILVER PRICE and the GOLD PRICE rose today, even in the teeth of a rising dollar. Yet a touch of equivocation remained with gold. The GOLD PRICE is also following that same pattern. Although gold rose $5.50 at Comex close, a number disappointingly near $1,355 resistance, in the aftermarket gold leapt and polished its sheen, the SILVER PRICE also added 30c after Comex closed and right now costs 2777c. Gold's late-in-the-day rise took it above its 20 DMA (now $1,365.30). The MAC is turning up and the RSI already has, pointing also skyward. GOLD/SILVER RATIO rose again today, to 49.45 at the close. In the last few days I had the opportunity to meditate in quiet on the ratio, and everything I came up with still points to 47.50 as the best place to swap silver for gold. Yes, it might drop further, but that sort of meandering indecision is a sure profit killer. It paralyzes you from acting on a decision, and the best investment strategy in the world is worth nothing unless you act on it. I thought about the ratio so long I even worked out the target for the next swap from gold back into silver, which should present itself within 15 weeks or less of the swap from silver into gold. Never forget the market proverb, "Bulls get rich, bears get rich, but pigs get slaughtered." Take profits with humility and self control, and keep that greed at bay. It appears that the silver and gold correction that began with the 9 November peak has ended and reversed. For confirmation silver must rise above 2800c and then 2900c not long thereafter, while gold needs to close over 1365, then 1380. Last high close was $1,409. I got a right tart and tangy email from a reader in New York in answer to my remark Friday that the "dollar is sorry but we only have to bail out California and New York, and not Ireland." In his words, "Although California may need a federal bailout, so far us New Yorkers have been able to pay the price for our state's fiscal insanity without excess federal help." Well, he said a couple of other things, too. I stand corrected, New York has pretty well held its own and the state and city shouldn't be tarred with the same brush as Wall Street and the NY Banks. And believe it or not, we in Tennessee do understand that the entire state of New York has not yet been asphalted over, and still contains many sane people and exquisite countryside -- but then, NY shares the same mountain range with Tennessee. The US DOLLAR INDEX made a low today at 77.975, handily defending 89 support with a nice little V-bottom, then ran like a scalded dog for 78.80 resistance. Trading now at 78.622, it rose 39.2 basis points (0.55). Dollar clearly aims to beat 79.30 resistance and climb higher, ambitious, scrofulous rascal that it is. In a classic instance of "Buy the rumor, sell the news" the Eurocrats announced a bailout for Ireland today and the Euro sold off, down 1.38c (-1%) to 1.3622. For the time being, at least, the Euro is winning the race to the bottom. Looking at the 6 month silver chart you mark at once that above 2800c silver traded only on one day's spike, and that was a reversal day. That makes 2800c the upper resistance, although, yes, 2900c lies up there above it. Once silver crosses 2800c it will blow past 2900c like it was standing stock still. Silver reached 2789c in European trading about 2:30 a.m. EST, then dropped and dropped and dropped until 9:30 a.m. when it hit 2715c. It rallied to 2755c, fell back to double bottom at 2712c, and off that firm footing launched a leap into the sky nearly hitting 2790c again. Comex closed at 2745.7, up 28.2c. I am inclined to see this morning's peak as finishing the move up from 2500c last Wednesday. A sideways correction lasting several days would fit well with this week's US Thanksgiving holiday. Then silver might rev its motor up on Monday. That fits a pattern often seen in a rising metals market that bottoms in August, backs off in October or November, corrects slightly, then blasts off into year end. One more little thing: on Friday Susan's having that pacemaker implanted. Y'all have been very kind to pray for her in the past, and I deeply appreciate your intervention for her now. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2010, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't. 
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| Posted: 22 Nov 2010 10:50 AM PST The 5 min. Forecast November 22, 2010 02:14 PM by Addison Wiggin - November 22, 2010 [LIST] [*] MythBusters, 5 Min. style… Is the “average stock holding period” really 11 seconds? [*] The ugly truth behind high-frequency trading… and a market the HFT computers can’t touch [*] Market relief over Ireland bailout… but now, a new fly in the ointment [*] Silver prices ease, but Silver Eagle demand surges [*] “I’d rather be blown out of the sky,” and other provocative reader thoughts on airport security [/LIST] We begin the week seeking to dispel a myth: The average holding time for a share of stock in the United States is not 11 seconds. The myth is, if nothing else, persistent: “Punch into Google ‘Average Stock Holding Period: 11 Seconds,’ and you get 850,000 results,” says our friend and Vancouver favorite Barry Ritholtz -- to whom we’re indebted for doing the legwork. Turns out the...
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| Posted: 22 Nov 2010 10:09 AM PST
From Goldman Sachs and Zero Hedge
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| Posted: 22 Nov 2010 09:43 AM PST Gold chops higher on safe-haven buying The COMEX December gold futures contract closed up $5.50 Monday at $1357.80, trading between $1347.90 and $1364.80 November 22, p.m. excerpts: see full news, 24-hr newswire…
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| Chris Powell and GATA: Throwing gasoline onto the fire Posted: 22 Nov 2010 09:31 AM PST MK: I just read through Chris Powell's GATA comments regarding "Crash JP Morgan Buy Silver." He's made some glaring miscalculations that I will discuss with him when he comes on "Keiser Report." In the meantime, consider Chris' comment about JP Morgan that; "the investment bank is the government and the government is the investment bank." [...]
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| Posted: 22 Nov 2010 09:20 AM PST (Neither Porn or Fondling Here!) Silver Stock Report by Jason Hommel, November 22nd, 2010 What kind of world is it when a man who says to airport security, "Don't touch my junk", becomes a national hero? [ame]http://www.youtube.com/watch?v=-UqM56e-kRA[/ame] Lost in the national "Porn or Fondle" choice being offered by the TSA is the loss of our gun rights. On the campaign trail for President of the United States, Ron Paul said, "911 would never have happened if, in the United States of America, there was more respect for the Second Amendment!" As I recall, it was one of the loudest applause lines he received that day. If we want secure planes, then let God fearing Americans exercise their second amendment rights to kill the terrorist bastards in flight at the first provocation! Ron Paul says "Enough is Enough!" 5 min clip before Congress. [ame]http://www.youtube.com/watch?v=d-N5adYM7Kw[/ame] What's truly insane is that I read that Muslim women should be exempt from t...
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| James West: Monetary Policy—Negligence, Ignorance or Fraud? Posted: 22 Nov 2010 09:16 AM PST Source: James West/The Gold Report 11/22/2010 Recovery? What recovery? With more money in circulation than ever before in history, Midas Letter Editor James West asks, "Where's all the money?" The government would have us believe a "recovery" is underway and that we're all firmly back on the road to prosperity. "A recovery is underway," says James, "but those elements of the global economy that are recovering aren't in the economic interests of most planetary citizens." In this Gold Report exclusive, James looks beyond media talking heads and rosy governmental economic forecasts to ponder the eventual consequences of a regulatory framework that is fractured and impotent. Ken Fisher, the U.S. billionaire fund manager and Forbes columnist, recently quipped, "We are chimpanzees with no memory. The next 10 years are going to be just as good the 1990s." Well, maybe Ken Fisher is a chimpanzee with no memory; and for billionaires, I'm sure the next 10 years will be fabulous....
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| Take all the metal you can, but it won't break Morgan Chase Posted: 22 Nov 2010 08:58 AM PST Noting J.P. Morgan Chase & Co.'s central role in suppressing the price of the monetary metals, particularly silver, the international journalist and provocateur Max Keiser has been waging a campaign to smash the market-manipulating investment bank by persuading civic-minded people to buy and take possession of at least 1 ounce of the precious metal.
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| Global Monetary Policy - Negligence, Ignorance or Fraud? Posted: 22 Nov 2010 08:31 AM PST Recovery? What recovery? With more money in circulation than ever before in history, Midas Letter Editor James West asks, "Where's all the money?" The government would have us believe a "recovery" is underway and that we're all firmly back on the road to prosperity. "A recovery is underway," says James, "but those elements of the global economy that are recovering aren't in the economic interests of most planetary citizens." In this Gold Report exclusive, James looks beyond media talking heads and rosy governmental economic forecasts to ponder the eventual consequences of a regulatory framework that is fractured and impotent.
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| Is It Time to Buy Chinese Yuan? Posted: 22 Nov 2010 08:30 AM PST On November 19, the People's Bank of China ordered the country's banks to increase their reserves by an additional 0.50%. It's the second time in two week the Bank has boosted reserve requirements as it tries to keep the value of the yuan down. But it won't be enough. The yuan will continue surging despite these latest efforts, creating a tremendous opportunity for anyone who missed out the last time around — even if you're not a global currency investor. For one thing, China's decision to increase reserve requirements it nothing new. Chinese policymakers have used this tool in the past to keep the supply of currency under control. But it hasn't been very effective. Despite the regulations, the yuan is now 17% stronger against the U.S. dollar. And measures like this are becoming more difficult to implement as the Chinese economy continues to expand. China's gross domestic product jumped almost 10% in the third quarter of 2010 — matching the 30-year average. Although dipping slightly from previous years, the current pace of Chinese expansion is 4 times that of the United States. And the trend is going to continue as long as China maintains its strong exporting relationships. Both the United States and Germany make up about a quarter China's trade, with South Korea, Hong Kong and Japan comprising another 25%. These countries not only rely on China's low-cost food processing and manufacturing, they also rely on China's raw material excavation and energy production. China is ranked third in global energy production and first in wind power. Domestic demand in China is also going to push the yuan higher. Roughly 200 million individuals are now considered the middle class in China. That figure is expected to more than triple in the next five years as wage growth increases the country's standard of living. As it is, consumption of food and electronics has already grown by an average of roughly 30% over the last five years. And the number of Chinese people using the Internet has more than doubled in the past seven. With more and more people joining China's middle class every day, you can bet that their consumption will continue rising, too. But you can't have rapidly accelerating growth without having consumer price increases. The People's Bank of China knows this, so it keeps a close eye on the economy's underlying inflation rate. As the economy keeps booming, China's central bankers will keep monetary policy restrictive. Simply put, this means interest rates will keep going higher. And higher rates naturally support demand for the currency. In fact, even though China's one-year bank deposit rate (currently at 2.25%) doesn't match the central bank's national rate of 5.56%, it's still a bigger draw than the U.S. savings deposit rates of barely 0.50% The higher interest rate will continue to attract foreign investments and support further appreciation in the exchange rate — no matter how much China tries to control it. But you don't need to be a foreign currency trader to participate in the yuan's unstoppable rise. You can just invest in the WisdomTree Dreyfus Chinese Yuan (CYB) ETF. CYB aims for returns similar to money market investments available to foreign investors while tracking fluctuations in the Chinese yuan. For everyday investors, it's a great conduit for slow, stable appreciation in China's currency. At the same time, it helps diversify domestically focused portfolios without a lot of volatility. The ETF should do quite well in the months ahead. China's economy will continue to expand. Central bankers will keep raising interest rates and increasing reserve requirements on national banks. The yuan will continue to appreciate. Ultimately, it's an opportunity that's almost impossible to pass up. And CYP offers a great way to play it. Richard Lee Is It Time to Buy Chinese Yuan? 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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| Take a Look Inside the Federal “Credit Card Machine” Posted: 22 Nov 2010 08:30 AM PST A few days ago, CBS Evening News aired a special report on the $1.5 trillion federal budget deficit, which is currently the largest in US history. It features senior business correspondent Anthony Mason's look inside the US Treasury's Auction Room, where the nation's delicately-balanced finances manage to stave off fiscal disaster just one day at a time. According to Mason: "'That room is essentially the American credit card machine. It's basically selling treasury bills, basically IOUs that we use to pay off the money that we are borrowing,' Mason says. 'I found that room kind of spooky. If we can't issue those IOU's – which keeps the government running on a day-to-day basis – then we can't run the country anymore. We don't have the money.'" You can watch the clip below from CBS Evening News on where the $14 trillion national debt goes for love, which came to our attention via The Daily Bail. Take a Look Inside the Federal "Credit Card Machine" 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 Daily and Silver Weekly Charts Posted: 22 Nov 2010 08:25 AM PST |
| Posted: 22 Nov 2010 08:08 AM PST
Monday - When Irish Banks are Ailing $130 Billion! That's how much money Ireland will be getting in the bailout package they said they didn't need as recently as Friday. I just want to make it perfectly clear that I also DO NOT need a bailout of tens of Billions of dollars so whatever you do - DON'T give me a bailout this weekend. Let's hope that works! The U.K. and Sweden may contribute bilateral loans, the EU said in a statement. Irish Finance Minister Lenihan declined to say how big the package will be, saying that it will be less than 100 billion euros but Goldman Sachs said yesterday the government needs 65 billion euros to fund itself for the next three years and 30 billion euros for the banks. Ireland's annual deficit is the worst in Europe at 30% of GDP (that would be like the US having a $5Tn annual deficit) and the nation is expected to slash its budget by $20Bn next year just to keep it under that level. Prime Minister Cowen holds a very thin majority and now faces a "no confidence" vote that could lead to further turmoil with a special election coming on Thursday for a vacant parliamentary seat. "The likelihood of this government surviving long beyond the first month or two of next year is virtually gone now," says David Farrell, professor of politics at the University College Dublin. I already put out a special note to Members early this morning on the Dollar and the markets, so I won't get back into it here but suffice to say we are VERY concerned about any instability that may drive people back into the dollar. I also have nothing to say on the US Economy that John Mauldin didn't say in his great article this weekend "O Deflation, Where is Thy Sting?" so please read that and catch up on Market Tamer's very nice chart series and then we can move ahead with current events. All caught up now? Great, let's go!
Even mighty German export growth is slowing according to the Ifo Economic Institute, which showed October's Export Climate index fell for the sixth consecutive month to 1.0, which is the lowest reading since last December. India is facing a mini crisis as micro-lenders begin to fail en masse and the S&P downgraded New Zealand to NEGATIVE on concerns over that country's finances. Keeping in mind that it's ALL about the Dollar (see note to Members) - the bulls should be VERY concerned about these developments. Another thing you need to see is this weekend's Stock World Weekly which features, among other things, the amazing Beta 3 tracker and, as we're still in free Beta, I can still print the chart for you here. UNFORTUNATELY, the chart has not let us down so far and woe unto the markets if we hold this pattern through December:
Keep in mind that we are completing the Beta 3 as it's the up-trending pattern we've been following for months. If we begin to break down, that's going to be a different pattern and it's not likely to be driven and distorted by a "flash crash" like our May dip was although we can't discount the possibility and THAT'S WHY WE'RE BACK IN CASH! I'm bored with saying it so you must be bored hearing it but I still see too many people asking "what's good to buy" when my answer is generally "nothing" at the moment. If you think the above chart is depressing, take a look at this little piece of pattern recognition panic:
The big news in the US this week will be the "vast" insider trading probe of US markets that will, as usual, include our friends at Goldman Sachs. US banks are looking at another $100Bn in potential mortgage losses, according to Barron's this week and, of course, China continues to try to flight inflation, which some estimate will move over 6% next year despite measures already in place. Keep an eye on copper $3.80, that's a canary in the coal mine for the global markets as is oil failing the $80 mark if it comes to that (now $81.67) but today is the last day of December contracts on the NYMEX and our bet is they dump off in the morning and climb back over $82.50 into inventories this week - as long as the Dollar stays below that 79 mark (now 78.67). We will get a lot of data for a short week with GDP and Existing Home Sales tomorrow morning and FOMC minutes, which are always fun, at 2pm. Tuesday is all of the week's data stuffed into one day including oil inventories plus Mortgage Applications, Personal Income and Spending, PCE Prices, Durable Goods, Jobless Claims, Michigan Sentiment, New Home Sales and the FHFA Home Price Index. As I said this morning to Members in the Weekly Outlook:
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| Gold 20 day Average is Resistance at 1370 Posted: 22 Nov 2010 07:52 AM PST courtesy of DailyFX.com November 22, 2010 07:09 AM 60 Minute Bars Prepared by Jamie Saettele A corrective advance from the low may be complete in gold. In the event of additional strength, resistance is 1377 (former 4th wave extreme and 50% retracement). A drop below 1315 would shift focus to the June high at 1269....
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| Gold vs. The Fed: The Record Is Clear Posted: 22 Nov 2010 07:30 AM PST There were no worldwide financial crises of major magnitude during the Bretton Woods era from 1947 to 1971. Lesson: Gold is a more efficient governor of monetary policy that the Federal Reserve. When it last met, the Federal Open Market Committee (FOMC) signaled its desire to increase the rate of inflation by providing additional monetary stimulus. This policy is based on a false – and dangerous – premise: that manipulating the dollar's buying power will lead to higher employment and economic growth. But the experience of the past 40 years points to the opposite conclusion: that guaranteeing a stable value for the dollar by restoring dollar-gold convertibility would be the surest way for the Federal Reserve to achieve its dual mandate of maximum employment and price stability. From 1947 through 1967, the year before the US began to weasel out of its commitment to dollar-gold convertibility, unemployment averaged only 4.7% and never rose above 7%. Real growth averaged 4% a year. Low unemployment and high growth coincided with low inflation. During the 21 years ending in 1967, consumer-price inflation averaged just 1.9% a year. Interest rates, too, were low and stable – the yield on triple-A corporate bonds averaged less than 4% and never rose above 6%. What's happened since 1971, when President Nixon formally broke the link between the dollar and gold? Higher average unemployment, slower growth, greater instability and a decline in the economy's resilience. For the period 1971 through 2009, unemployment averaged 6.2%, a full 1.5 percentage points above the 1947-67 average, and real growth rates averaged less than 3%. We have since experienced the three worst recessions since the end of World War II, with the unemployment rate averaging 8.5% in 1975, 9.7% in 1982, and above 9.5% for the past 14 months. During these 39 years in which the Fed was free to manipulate the value of the dollar, the consumer-price index rose, on average, 4.4% a year. That means that a dollar today buys only about one-sixth of the consumer goods it purchased in 1971. Interest rates, too, have been high and highly volatile, with the yield on triple-A corporate bonds averaging more than 8% and, until 2003, never falling below 6%. High and highly volatile interest rates are symptomatic of the monetary uncertainty that has reduced the economy's ability to recover from external shocks and led directly to one financial crisis after another. During these four decades of discretionary monetary policies, the world suffered no fewer than 10 major financial crises, beginning with the oil crisis of 1973 and culminating in the financial crisis of 2008-09, and now the sovereign debt crisis and potential currency war of 2010. There were no world-wide financial crises of similar magnitude between 1947 and 1971. At the center of each of these crises were gyrating currency values – either on foreign-exchange markets or in terms of real goods and services. As the dollar's value gyrates it produces windfall profits and losses, feeding speculation and poor judgment. The housing bubble was fed in part by 40 years of experience with a dollar that lost purchasing power every year. Today, individual investors are piling into gold and other commodities in hopes of finding a safe haven from the FOMC's intention to decrease the buying power of the dollar and reduce the value of our savings. And what of the seductive promise that a floating dollar would make American labor more competitive and improve the nation's trade balance? In 1967, one dollar could buy the equivalent of approximately 2.4 euros (based on the pre-euro German mark) and 362 yen. Over the succeeding 42 years, the dollar has been devalued by 72% against the euro and 75% against the yen. Yet net exports have fallen from a modest surplus in 1967 to a $390 billion deficit equivalent to 2.7% of GDP today. The members of the FOMC, like their predecessors, are trying to do the best they can, but they are not really sure what it is that needs to be done. They have kept the federal-funds rate near zero for almost two years, but small businesses find it difficult to get loans and savers suffer from the lost income brought by artificially low interest rates. Now they're about to advocate higher inflation – i.e., less price stability – in hopes of spurring economic growth. Economists and pundits may disagree on why the gold standard delivered such superior results compared to the recurrent crises, instability and overall inferior economic performance delivered by the current system. But the data are clear: A gold-based system delivers higher employment and more price stability. The time has come to begin the serious work of building a 21st-century gold standard for the benefit of American workers, investors and businesses. Regards, Charles W. Kadlek, Gold vs. The Fed: The Record Is Clear 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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| The Gold & Silver Play Has Gone To Greed? Posted: 22 Nov 2010 07:21 AM PST The past few months it seems the gold and silver play has been getting a little crowded with everyone wanting to own gold. While I am a firm believer that these precious metals are a great hedge/investment long term, I can’t help but notice the price action and volume for both metals which looks to me like they are getting exhausted. Silver – Daily Chart The silver chart below shows an extremely high volume reversal candle in early November which typically leads to lower prices and some times a major change in the trend. That being said silver remains in an uptrend with the possibility of a bullish pennant forming. On the other hand there is a possible head and shoulders pattern forming. I will be looking for light volume sideways chop keeping a close eye for a possible neckline breakdown or a momentum thrust to the upside for a possible trade. Gold – Daily Chart Gold is forming a bullish and bearish pattern also giving us a mixed signal. I am curr...
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| Posted: 22 Nov 2010 07:20 AM PST  Hickey and Walters (Bespoke) submit: Gold and silver both saw declines from overbought levels in recent weeks, but they have taken divergent paths over the past few days. Below are price charts of the iShares gold (GLD) and silver (SLV) trusts. Last Tuesday, both GLD and SLV traded down to support at the bottom of their long-term up-trend channels. While SLV held its up-trend that day, GLD broke below support. SLV has bounced back nicely since holding support, and it is getting close to all-time closing highs again. GLD, on the other hand, has meandered sideways since last Tuesday, and it is now struggling to break above the bottom of its old up-trend channel. click to enlarge Complete Story »
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| Posted: 22 Nov 2010 07:20 AM PST The question most often asked of gold bulls is, "At what price will you take your profits?" It is a question that betrays a lack of understanding about why anyone should own gold. Nevertheless, the simple answer must be, "When paper money stops losing its value". This response should alert anyone who asks this question to the idea that owning fiat cash is the speculative position, not ownership of precious metals. That one gets my vote. The author is Alasdair Macleod, and his must-read commentary can be found HERE. I highly recommend bookmarking his website. I recently discovered this Scotsman's commentary and have found it to be among the most value-added material in cyberspace. On another note, as I have previously suggested and per the observations of several other long-time precious metals market participants, the "character" of this market seems to have significicantly transformed since August. By this I mean that it would appear, at least for now, that the usual suspects who have been suppressing the price of gold/silver for over 30 years seem to have lost, to a high degree, their ability to keep the metals from moving higher. This, despite an avalanche of bearish articles and commentary which have deluged the mainstream media. With tomorrow's Comex options expiry looming, the open interest in gold/silver calls/puts is set up to keep silver below $27 and gold below $1350. At this point it looks likely, barring some kind market torpedo tomorrow, that they will fail. I have to believe GATA is getting the hospital stretchers and body bags ready for delivery to the Comex trading floor tomorrow... 
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| Posted: 22 Nov 2010 07:12 AM PST Richard (Rick) Mills Ahead of the Herd As a general rule, the most successful man in life is the man who has the best information Caza Gold Corp. TSX.V - CZY is a new gold resource company focused on acquiring, exploring and developing prospective gold mining properties in Mexico. Currently Caza holds two attractive gold exploration projects. Projects Santiago, Chihuahua – The Santiago gold project (962 hectares) is located 12 km east of the town of Batopilas - a famous high-grade silver district - 20 km east of Goldcorp's multi-million ounce El Sauzal Gold Mine and 230 km southwest of Chihuahua City in Chihuahua State, Mexico. Infrastructure is very good with state power lines crossing the properties and labor, supplies and services all available locally. The Santiago project has been owned by the same family for over 100 years and has never been explored by modern methods. Caza can acquire a 100% interest in the San...
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| Barney Frank Resumes His Extremely Hypocritial Ways By Calling All Fed Attacks "Extreme Hypocrisy" Posted: 22 Nov 2010 07:08 AM PST
The person who is almost singlehandedly responsible for the complete disaster that are today's bankrupt GSEs, somehow succeeds in making America hate him even more, when he notes that the global response of condemnation to the Fed's actions, and the subsequent enjoinder by Republicans who wish nothing less than to save the dollar, instead of allowing hyperinflation to deal with the consequences of the idiotic actions by the MA congressman, is "extreme hypocrisy." How this excuse for a representative (of anything more than a few well-rounded bankers) gets any air time is beyond us. Until then, we will make sure the collective blood pressure of our readership remains elevated thanks to such unprecedented examples of the supreme corruption in D.C. as Barney Frank. And unrelated, but even more disturbing, is Frank's statement that he doesn't mind that there haven't been prosecutions of financial crisis players. Don't worry Barney, prosecutions will come... Luckily these will happen once your immunity lapses. Anyone with a hear condition is advised against reading/watching this post. From a letter just sent out by the Frank. Chairman Frank Statement on Republican Attacks on Fed Efforts to Boost U.S. Economy And here is Frank on Bloomberg earlier:
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| Take all the metal you can, but it won't break Morgan Chase Posted: 22 Nov 2010 07:05 AM PST 3:12p ET Monday, November 22, 2010 Dear Friend of GATA and Gold (and Silver): Noting J.P. Morgan Chase & Co.'s central role in suppressing the price of the monetary metals, particularly silver, the international journalist and provocateur Max Keiser has been waging a campaign to smash the market-manipulating investment bank by persuading civic-minded people to buy and take possession of at least 1 ounce of the precious metal. A comic excerpt from Keiser's recent program on the Russia Today television network promotes the campaign at YouTube here: http://www.youtube.com/watch?v=hC3ewlIWizs&feature=player_embedded Of course GATA applauds anything that gets people out of paper claims and into real metal, but we're skeptical that even the exhaustion of public inventories of silver and the explosion of the huge short positions nominally on Morgan Chase's books will hurt the bank very much. ... Dispatch continues below ... ADVERTISEMENT Prophecy Receives Permit To Mine at Ulaan Ovoo in Mongolia VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY, OTCQX: PRPCF, Frankfurt: 1P2) announces that on November 9, 2010, it received the final permit to commence mining operations at its Ulaan Ovoo coal project in Mongolia. Prophecy is one of few international mining companies to achieve such a milestone. The mine is production-ready, with a mine opening ceremony scheduled for November 20. Prophecy CEO John Lee said: "I thank the government of Mongolia for the expeditious way this permit was issued. The opening of Ulaan Ovoo is a testament to the industrious and skilled workforce in Mongolia. Prophecy directly and indirectly (through Leighton Asia) employs more than 65 competent Mongolian nationals and four expatriots. The company also reaffirms its commitment to deliver coal to the local Edernet and Darkhan power plants in Mongolia." The Ulaan Ovoo open pit mine is 10 kilometers from the Russian border and within 120km of the Nauski TransSiberian railway station, enabling transportation of coal to Russia and its eastern seaports. Thermal coal prices are trading at two-year highs at Russian seaports due to strong demand from Asian economies. For the complete press release, please visit: http://prophecyresource.com/news_2010_nov11.php For those short positions, like the overwhelming interest rate derivative positions on the books of Morgan Chase, are probably not Morgan Chase's own at all but rather the U.S. government's. Certainly no financial institution would undertake such disproportionate positions -- positions that essentially make Morgan Chase both the silver market and the interest-rate market -- without effective assurance that government would backstop those positions. No other investment bank has undertaken such disproportionate positions. So much of the spending and lending by the Federal Reserve, Treasury Department, and Exchange Stabilization Fund is secret that there can be nothing outlandish about such suspicions. No one can deny that the government also has intimate and secret communications with J.P. Morgan Chase & Co. about the markets. After all, the bank is a primary dealer in U.S. government securities and often acts openly on behalf of the U.S. government and thus in effect has access to virtually infinite amounts of money for market intervention. Indeed, there is long history along these lines, since even before creation of the Federal Reserve, J.P. Morgan himself -- the banker, not the bank -- functioned in extremis as the central bank of the United States. And in her prize-winning biography, "Morgan, American Financier," the writer Jean Strouse reported that Morgan's first big score in the financial markets was his cornering the gold market in New York during the Civil War. Further, Morgan's monopolizing of industries was a major cause of enactment of anti-trust law. Yes, exhausting the metal available for delivery could blow up the commodity futures markets, an admirable objective insofar as those markets, overloaded with derivatives, long have been largely mechanisms of price suppression. (See the British economist Peter Warburton's 2001 essay discerning this: http://www.gata.org/node/8303.) But if the metal runs out, the commodity exchanges will change their rules or implement rules already adopted requiring cash settlement and prohibiting new long positions. The government can cover any amount of such settlements in cash through its agents. This sort of thing has been done before and can be done again. In short, take the metal out of the banking system -- yes, all you can. That will make market manipulation a lot more difficult and drag it into the open. But you won't crush J.P. Morgan Chase, for the investment bank is the government and the government is the investment bank. The big objective here is to take control of the government away from the bankers and return it to the people. This is just the latest round in an old political struggle -- the struggle between the financial interests and the producing interests -- that has been simmering in the United States since William Jennings Bryan made it the center of his presidential campaign in 1896. Advocating free coinage of silver back then, Bryan told the Democratic National Convention in Chicago that went on to nominate him: "Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank and that the government ought to go out of the banking business. I stand with Jefferson rather than with them, and tell them, as he did, that the issue of money is a function of the government and that the banks should go out of the governing business." CHRIS POWELL, Secretary/Treasurer Support GATA by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf
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| Posted: 22 Nov 2010 07:05 AM PST [U]www.preciousmetalstockreview.com November 20, 2010[/U] It was one of the slowest weeks on record which showed absolutely no direction. Rise, fall, rise, fall. All within the first half hour of the the day only to have traders watch nearly nothing happen the rest of the day. The good news is the metals did splendidly well and appear to have the wind at their back coming into this new week. The metals may continue to do well this coming week but options expiration for Gold and Silver do occur Tuesday November 23rd so it’s definitely something to be aware of. It’s also American Thanksgiving week coming up so more football! I expect markets in general to be quite subdued although the Irish debt crisis may spark some strong moves. But after Wednesday there should be very little movement. I will not be publishing a weekend letter next weekend but will get out an update on Wednesday before the Turkey is cooked. ...
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| LGMR: Gold Traders "Torn" as Ireland Takes Bail-Out But Euro Falls Posted: 22 Nov 2010 06:57 AM PST London Gold Market Report from Adrian Ash BullionVault 07:55 ET, Mon 22 Nov. Gold Traders "Torn" as Ireland Takes Bail-Out But Euro Falls, Futures Positions "Enormous" THE PRICE OF GOLD closely tracked the Euro currency on Monday morning, initially rising after Ireland agreed a €90 billion rescue package from its European partners and the International Monetary Fund, but slipping back after Dublin coalition members the Green Party then called for a general election in January. Finance minister Brian Lenihan dubbed the call "the height of irresponsibility", and the gold price in Dollars edged down to last week's finish at $1354 per ounce as the single currency lost more than 1¢ from an early one-week high. The silver price in Dollars also retreated from an early rally, trading back at Friday's record-high weekly close of $27.36 per ounce. "We are torn regarding gold's near-term direction," says the latest note from Switzerland's MKS Finance team. "A deeper correction shoul...
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| Gasparino On The Implications Of The Latest Insider Trading Spectacle Posted: 22 Nov 2010 06:53 AM PST
Speaking on Fox Business, Charlie Gasparino notes that the full wrath of the government in the latest insider trading spat may end up hurting as many as a dozen hedge funds. We already know three of them. The question of whether the big kahuna will also be implicated will be resolved another day. Additionally, now that the implications of the Galleon fund scandal are finally coming back with a vengeance, and everyone is once again talking about insider trading, which is a crime when one person does it, but is perfectly condoned when all the biggest hedge funds are engaged, below we present Gasparino's conversation with a securities fraud expert on just how far-reaching the implications of today's gauntlet may be. On the other hand, how not one TBTF bank has been (so far) prosecuted for being an integral part of all these illegal activities is beyond us. As readers will recall, as part of the FrontPoint filing, there were at least two investment banks named in the allegation. Here is what our thoughts were on the matter:
This will be another topic to be pursued soon, but in the meantime, here is the disclosure as part of Gasparino's earlier conversation: On the Justice Department’s insider trading probes: “Sources in Washington and New York are saying there is essentially a war on hedge funds from the Justice Department. The Justice Department wants to set a major example here in the trillion dollar hedge fund industry and their plan is to take down as many as a dozen hedge funds that are involved in this investigation. Shut them down or at least severely alter their business practices. They believe hedge funds have had an unfair advantage in the markets.” “What’s interesting is the SEC seems to be taking a backseat. SEC generally investigates insider trading but the Justice Department has taken the lead on this. It is a goal of the Justice Department to fundamentally alter the hedge fund business; how they make money, how they gain information, even if it’s not technically illegal at this point, they are looking to change practices.” “We are getting this from sources who have dealt with the Justice Department; these are attorneys, these are hedge fund managers, who are right in the middle of this thing.” On whether the SEC is looking to broaden the definition of insider trading: “I haven’t heard that from them. There’s also some uncertainty about how far the government is pushing. There is some legitimate reason to worry whether the government is over extending their idea of insider trading. I think what they stumbled across is a very useful witness and they threatened him. The prosecutor often uses people as a means rather than an end, ultimately you have got to decide what is insider trading and I don’t think US Attorneys are going to dare expand the definition very far.” “It is a big matter. It’s a nationwide investigation. The FBI is spread across the country interviewing. We do know as a result of the Galleon probe some 14 people have plead guilty already. All of those 14 will be pumped by the SEC and US Attorneys to give information and leads into other cases and all of them have an incentive to give information for leniency.” “I think we have some knowledge that they have been taping telephones. Which requires a court order. That’s the real new development in terms of the procedures used. Classically insider trading investigations you more or less stumbled over a conspiracy. Over the weekend they were finding FBI agents appearing on their front steps and demanding they wear a wire.” “I think that’s going to give you credible proof. There are going to be issues about privacy, and it’s very expensive. You can’t do this to an unlimited degree.”
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| Hollow Economy Recipe For Hyperinflation Posted: 22 Nov 2010 06:40 AM PST In case you are trying to put two and two together about what's going on out there to make gold, silver, everything that's not nailed down soar in price these days, let me clear things up for you. It's our hollowed out economy ... Read More...
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| A Word of Caution for Gold Investors: Jewelry vs. Investment Demand Posted: 22 Nov 2010 06:35 AM PST Irfan Chaudhry submits: World Gold Council’s Q3 demand report has generally been received favorably by analysts and the investing community. Total gold demand was reported at 922 tonnes in Q3 2010 (12% yoy) (43% to US$36.4 billion in dollar terms) but -10% qoq. Of the reported demand segments, Jewelry demand at 529 tons was 8% higher ((yoy)), industrial demand at 110 tons (13% yoy from a very low base in Q3 2009) and investment demand at 282 tons (19% yoy) with net retail investment at 243 tons (25% yoy) (bar holding demand at 132 tons, 44% yoy) and ETF demand at 38 tons (-7% yoy). The report projected a rosy demand outlook picture based on the rise in jewelry demand increase in India and China. I also came across some analysts comments suggesting that Q3 2010 demand trends have restored market’s balance to five years average balance of 65% jewelry, 23% investment and 12% industrial demand (Q3 2010: Jewelry demand at 57%, investment demand at 31% and industrial demand at 12%) . This healthy demand balance has been deemed as a key to keeping gold prices stable. 2009 Tonnage is estimated to climb from last year by 5-6% despite a significant rise in the price of the metal itself. My observations on this report are as follows: 1. The key question which emerges from Q3 2010 gold demand is about potential increase in Jewelry demand being able to take up any slack in investment demand. Another question is about gold investors make up, which should make gold price stable / unstable to any short term headwinds. The answer to both these questions is “NO”. 2. Jewelry buyers, the longer term investors, may not stick to their buying habits and suppliers like miners and recyclers may increasingly feed the market with ever greater quantities as the price is rising. 3. Higher restocking in India in Q3 2010 may mean a decline in Q4 2010 Indian Jewelry demand. In total, the non-investment market for gold is weak and getting weaker as the price of gold rises. Jewelry demand continues to decline while supply is rising from both higher mine output and higher recycling activity. 4. Trailing 12-month gold jewelry demand at end of Q2 2010 was 1882 tonnes which was 24% less than the yearly average for 2002-2008, and 41% less than the 2000 level. 5. Meanwhile, supply keeps rising. It was 3605 tonnes in 2008, 4024 tonnes in 2009 and it is up nearly 11% in the first half of 2010. Another interesting aspect is that of 169,000 tons of gold mined till today, 64% is unaccounted for, and with rise in gold prices - scrap supply is gaining velocity. 6. Investment demand may rise in Q4 2010 / Q1 2011 as portfolios position themselves for 2011. Momentum of investment demand may slow down by mid 2011 because of overall improvement in risk aversion and decrease in risk premium related to competitive devaluation and death of fiat currencies. 7. Inflation does not have any coincident or shorter time period effect on gold price. However, deflation / stagflation may be supportive of gold price in 2011 and beyond. 8. Going forward gold price will be determined by central banks, institutional portfolio demand (SWF, Insurance companies, pension funds, and private wealth etc – total managed money of US$200 trillion) and retail ETF buyers and not Jewelry demand. 9. When the price of gold turns down and sentiment reverses, many investors will find that the exit door has gotten pretty narrow. Gold price will still find support from institutional investors and central banks because of diversifying portfolios and US$ based forex reserves. Global / Indian Jewelry Demand Global jewelry demand increase in Q3 2010 was followed by a -5% in Q2 2010 (-14% totaled 408.7 tonnes during the second quarter, a decline of 14% from Q1 levels and 5% from year-earlier levels. Jewelry off-take was lower across most markets, with just a handful of countries bucking the declining demand trend. Jewelry demand increase in India in Q3 2010 can not be read as start of a trend as India’s Q2 2010 demand of 123 tonnes was very depressed when compared with average second quarter demand over the five year period Q2 2003 – Q2 2007 of 182.1 tonnes. The second quarter is historically the most important period for jewelry demand in India. This demand deficit of 62 tons compared to five years average was likely shifted to Q3 2010 Indian Jewelry demand (+40 tons higher than Q3 2010 five years average demand of 140 tons) as mentioned later in the report that re-stocking has helped shore up Indian gold demand in Q3 2010 (estimated at around 38 tons). If we strip that out to reach a sustainable level, demand is flat to negative in line with the Q2 2010 trend. Indian Jewelry demand has been steadily declining since 2000 as gold price started its long upward ascent. Jewelry now accounts for only 57% of total demand (43% in Q2). That compares with 80% between 2002 and 2008. Stating that Indian Jewelry demand is defensive to higher gold prices is incorrect. Indian consumers may remain cautious given record gold prices. Silver and gold plated items have taken an increasing share of demand at the lower end of the market, where affordability of gold jewelry has been most affected by its price. Also, many previously exclusively gold high-end designers have included silver lines to try and build entry-level ranges for consumers at more affordable prices to offset overall sales declines. Healthy Market Makeup It is too early to say that we are returning to the natural balance on the demand side—the relative balance between jewelry, industrial and investment. Besides the running demand, holding gold as an investment has increased considerably over the course of last year, which does not support the healthy demand and supply argument to keep the gold price stable as investors may try to exit at first sign of trouble. Also jewelry purchases by investors are increasing. This view of jewelry as an investment may not be as stable as genuine jewelry demand. Investment Demand Another factor behind the increase in total Q3 2010 demand was identifiable investment, (19% yoy) at 281.8 metric tons. The bulk of this came from investors who increased their demand for retail gold products by 25% to 243.1 metric tons. New investment into ETF and similar products at 38 tons was down 7% yoy. Bar hoarding was particularly strong at 132 tons-- up 44% yoy -- driven by a demand among Asian & ME investors. This is the second wave of investment related demand (after ETFs), which may be somewhat more stable compared to ETF demand but may not be as sticky as jewelry and industrial demand. These retail consumers having adjusted their price expectations upwards and anticipating yet higher prices is a bubble symptom and may not be good for gold prices in the medium to long term. Industrial Demand Industrial use accounted for 12% of demand in Q3 2010 and was in line with its five-year average (110.2 metric tons, including an 18% climb for electronics products). We expect this demand segment to increase at a decreasing pace. Recycling / Scrap Supply I expect that with a higher gold price environment, recycling will further accelerate. Recycling supply activity during the Q2 2010 reached 496 tonnes, 35% yoy and the second highest quarterly number for recycled gold. Most of this price induced recycling activity may come from western, ME and East Asian consumers (gradually rising trend). Recycling activity among Indian consumers is still low and may ensue in the case of a significant price downtick against alternative opinion of a higher price profit point. Disclosure: Author has a position in GLD. Complete Story »
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Gold futures rose modestly amid unease about Ireland's bailout request, but a stronger dollar capped the gains. The Irish government Sunday said it had formally applied for tens of billions of euros in aid from the European Union and the IMF. The E.U. and the IMF indicated the money will be forthcoming, pending negotiations on the details of steps the government will have to take to restructure its debts and cut its budget deficit. Concerns surrounding how the deal will be hammered out also spooked euro investors, sending them into the dollar…
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