Gold World News Flash |
- How Far Will The Gold Correction Go?
- Confiscation Through Inflation [With Xtranormal Video]
- Gold and Silver Ebb, but Not the Larger Trend
- Gold Seeker Closing Report: Gold and Silver Fall About 2% and 5%
- Gulf nations urged to boost gold reserves
- Emerging Market Mania: China Tells Bernanke to Take a Hike
- 10 Reasons To Shun Stocks till Banks Crash
- Crash JP Morgan Buy Silver (*)
- Why the Eurozone and the Euro Will Not Collapse - But Will Change
- Does it Remain Possible that the Gold Price will Reach $1600 Soon?
- Betting on Gold a Bet Against Currency Management
- WEDNESDAY Market Excerpts
- Ambrose Evans-Pritchard: Global bond rout worsens on U.S. fiscal worries
- Bernanke Ignores 4,500 Years of Failed Monetary Policy
- Will the gold price go higher?
- Ten ways to invest in gold
- End of a Bull Market?
- Chart Of The Day: Build America Bond Yields Hit 11 Month High
- What to Look for in the Gold-Silver Ratio
- Swiss bank client can't get his silver back two months after asking
- Swiss bank client can't get his silver back two months after asking
- Jon Nadler: Split Camps on a Dual Asset
- December 7, 2010 -- A Day Which Will Live in Infamy
- Is Capitalism Dead?
- How to Play the Gold Silver Ratio
- Crash JP Morgan Buy Silver: Anarcho-Capitalism
- Hourly Action in Metals From Trader Dan
- Gold Daily and Silver Weekly Charts
- Kazakh gold miner eyes London listing
- Two Possible Reasons for the Rise in 10-Year Treasury Notes
- Gold: Will This Reversal Prove Valid?
- Top Silver Plays: Endeavour Silver, Hecla Mining and Mag Silver
- First ‘Keiser Silver’ crash JP Morgan Buy Silver vid (***)
- Discussing Gold and Related Issues With Nick Barisheff of Bullion Management Group
- In the News
- Gold likely to hit $1,600 in 2011 — Credit Suisse
- Stronger Dollar Weighs on Gold, Silver, Oil
- Investors to Silver: “Let’s Get Physical”
- Is the U.S. Worse than Europe? Yes.
- GCC urged to boost gold reserves
- Should You Buy Gold?
- Outlook for Commodities Remains Positive
- U.S. Military Prepares for Economic Collapse
- Congress Growing up, Putting Away Childish Things… Sort Of
- The Dollar, Failing Euro and Volatile Gold and Crude Oil
- Turk - Swiss Bank Client Battles Over 2 Months For His Silver
- J.P. Morgan and the Great Silver Caper
- Michael Pento On The Two Biggest Lies In Bernanke's Latest 60 Minutes Episode
- What the price of gold reveals about UK house prices
- Silver 101: Production By Country
| How Far Will The Gold Correction Go? Posted: 08 Dec 2010 06:13 PM PST Gold is taking us on a roller coaster ride that I'm sure has many people concerned. However, long-term gold bulls can rest assured that this is not the type of price action typical of bubbles; when bubbles pop, they don't retest highs for many, many years. Gold on the other hand is making new highs, correcting, then making new highs. If anything, the price action suggests a big thrust upward once we get this correction behind us.
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| Confiscation Through Inflation [With Xtranormal Video] Posted: 08 Dec 2010 06:05 PM PST Greetings, I would like to talk about a subject of which I believe to be of great importance. It is to do with the devaluation of our currency. The continual and increasing issuance of U.S. dollars has steadily eroded its value. This has been particularly pronounced since abandoning the final vestige of the Gold Standard some forty years ago.
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| Gold and Silver Ebb, but Not the Larger Trend Posted: 08 Dec 2010 06:00 PM PST Gold and silver have been hit hard this week, so it is probably a good time to remind ourselves that the factors that have been driving bullion prices higher for the last decade are still very much in place – are indeed more powerful than ever. In the following interview, Greg Weldon of Weldon Financial explains why this is so.
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| Gold Seeker Closing Report: Gold and Silver Fall About 2% and 5% Posted: 08 Dec 2010 04:00 PM PST Gold traded about 1% lower in Asia and London before it fell as much as $36.52 to as low as $1371.78 by about 10:30AM EST, but it then rallied back higher in the last few hours of trade and ended with a loss of just 1.9%. Silver fell to as low as $27.978 before it also bounced back higher in late trade, but it still ended with a loss of 5.14%.
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| Gulf nations urged to boost gold reserves Posted: 08 Dec 2010 03:03 PM PST By Tom Arnold http://www.thenational.ae/business/economy/gcc-urged-to-boost-gold-reser... Gulf Cooperation Council states should boost their foreign reserve holdings of gold to help shield their billions of dollars of assets from turbulence in global currency markets, say economists at the Dubai International Financial Centre Authority. Diversifying more of their reserves from US dollars to the yellow metal would help to offer central banks in the region higher investment returns, said Dr Nasser Saidi, the chief economist of the authority, and Dr Fabio Scacciavillani, the authority's director of macroeconomics and statistics. "When you have a great deal of economic uncertainty, going into paper assets, whatever they may be -- stocks, bonds, other types of equity -- is not attractive," said Dr Saidi. "That makes gold more attractive." ... Dispatch continues below ... ADVERTISEMENT Opportunity in the gold coin market Swiss America Trading Corp. alerts GATA supporters to an opportunistic area of the gold coin market. While the gold bullion market has been quite volatile lately and as of November 29 gold has risen only $7 per ounce over the last month, the MS64 $20 gold St. Gaudens coin has risen about 10 percent in the same time. The ratio between the price of these coins and the price of gold is rising. If you'd like to learn more about the ratio and $20 gold coins, Swiss America can e-mail you a three-year study of it as well as other information. Swiss America also can provide a limited number of free copies of "Crashing the Dollar," a book written by Swiss America's president, Craig Smith. For information about the ratio between the $20 gold pieces and the gold price and for a free copy of "Crashing The Dollar," please call Swiss America's Tim Murphy at 1-800-289-2646 X1041 or Fred Goldstein at X1033. Or e-mail them at trmurphy@swissamerica.com and figoldstein@swissamerica.com. Declines in the dollar during recent months have dented the value of GCC oil revenues, which are predominantly weighted in the greenback. Gold prices rose to a record high before falling back this week as the dollar strengthened. Longer term, gold could play a more important role in the global monetary system as the shift from developed world to emerging markets intensified, the two economists said in a report published yesterday. The dollar's position as the leading reserve currency was likely to diminish as US dominance of the world economy dwindled. Gold could help to fill the void in the monetary system in the absence of the euro or the yuan proving viable alternative reserve currencies, they said. The greenback accounts for almost two thirds of global reserves and serves as a currency peg for 89 nations including five of the six GCC currencies. The region is a significant holder of US Treasury bills, considered a low-risk but also low-return investment. GCC states have historically maintained less than 5 per cent of their total reserves in gold. About 12 per cent of Kuwait's reserves are in gold, with the holdings of Saudi Arabia and Qatar even smaller at about 2.7 and 2.3 per cent, respectively. The UAE's gold reserves are believed to be negligible, although the Central Bank does not disclose the amount. Recent turmoil in currency markets has hastened moves by other emerging markets including India, China, and Russia to add to their gold reserves. Gold accounts for about 25 per cent of the total reserves of the European Central Bank. "The value of paper money is being debased by injections of quantitative easing in Europe, Japan, and the US," said Dr Scacciavillani. "Gold is a means of exchange not dependent on any political decisions and has a role as a hedge against inflation and economic risk." While gold is proving to be a safe haven for investors during recent economic uncertainty, an easing of volatility in currency markets could yet attract investors back to paper assets. "Investors are likely to get rid of gold when the economy picks up, as gold has no industrial value," said Alessandro Magnoli Bocchi, the chief economist of the Kuwait China Investment Company. Longer term, the commodity's importance would not diminish the need for the GCC to develop more monetary independence by pressing ahead with a single currency project, he said. Join GATA here: Yukon Mining Investment e-Conference http://theyukonroom.com/yukon-eblast-static.html Vancouver Resource Investment Conference http://cambridgehouse3.com/conference-details/vancouver-resource-investment-conference-2011/15 Cheviot Asset Management Sound Money Conference Phoenix Investment Conference and Silver Summit 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 Prophecy Drills 71.17 Metres of 0.52 percent NiEq Prophecy Resource Corp. (TSX-V: PCY) reports that it has received additional assays results from its 100-percent-owned Wellgreen PGM Ni-Cu property in the Yukon, Canada. Diamond drill holes WS10-179 to WS10-182 were drilled during the summer of 2010 by Northern Platinum (which merged with Prophecy on September 23, 2010). WS10-183 was drilled by Prophecy in October 2010. Highlights from the newly received assays include 71.17 metres from surface of 0.52 percent NiEq (0.310 percent nickel, 0.466 g/t PGMs + Au, and 0.233 percent copper) and ended in mineralization. For more drill highlights, please visit: http://prophecyresource.com/news_2010_nov29.php
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| Emerging Market Mania: China Tells Bernanke to Take a Hike Posted: 08 Dec 2010 02:49 PM PST Emerging Market Mania: China Tells Bernanke to Take a Hike Over the last few months, I've noted that the most important monetary relationship in the world is that between China and the US, the world's largest creditor and debtor countries respectively. Both countries' central banks engaged in a money-printing orgy to counter the Financial Crisis in 2008. Now they're butting heads on the consequences of their actions: the US Federal Reserve wants to create inflation, while China wants to aggressively halt it. This is IT, the #1 dynamic for the financial markets going forward. How this plays out will impact everything from the US Dollar's reserve currency status to where the stock markets will head. With that in mind, we need to consider the power dynamics between these two countries from a monetary perspective. China has made it clear that it is NOT pleased with the US's current monetary policy (China has blamed the Fed for its inflation woes with some officials going so far as to label the Dollar's status as a reserve currency, "absurd"). The US has in turn responded by labeling China a currency manipulator and blaming it for the US's economic woes. Indeed, it seems almost every other week that some US Government official comes out with a "it's ALL China's fault" statement. However, when push comes to shove, it is China that holds the trump cards in the form of interest rates. Many commentators have posited that the US Federal Reserve will not hike interest for several years. It is my contention that the Fed CANNOT raise rates EVER again. The reason for this is that some 80% of the $600 TRILLION in over the counter derivatives market is based on interest rates.
If even 4% of this is "at risk" and 10% of it goes wrong you've wiped out ALL The equity at the five largest banks in the US. If you're looking for the REAL reason Ben Bernanke is scared stiff about state of the US financial system and continues to pump money into Wall Street by the hundreds of billions despite the fact the stock market has hit new highs from the March 2009 lows (when the Fed first announced its QE program), you've got it. China, on the other hand, not only WANTS to cool its monetary system, but CAN do something about it. To whit, the People's Republic has already hiked interest rates once without warning on October 10 2010. Rumors are swirling that it's about to do this again over the coming weekend. Why does this matter? Well, for one thing this move, if it happens, will cool China's "loose money" flow even more, which will affect its economy: the economy the financial industry is banking on pulling the world back into recovery. Secondly, if China hikes rates again, it would have an adverse effect on the world financial markets pushing stocks and commodities down: an interest rate hike indicates China is trying to cool its economy and so will have less demand for commodities. And stocks, which are now just a single asset class that moves in correlation to others thanks to the overly-computerized state of the markets, will fall too. And then of course, there's the $190+ trillion of interest rate-based derivatives sitting on US commercial banks' balance sheets. If China chooses to rock the interest rate boat too heavily… KA-BOOM. In plain terms, China holds the trump cards when it comes to monetary policy. Ben Bernanke better pray they don't start playing them, because no matter how "certain" he is off his abilities, he's got the weaker hand. And he's definitely clueless about the risks of getting it wrong. Good Investing! Graham Summers
PS. If you're getting 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).
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| 10 Reasons To Shun Stocks till Banks Crash Posted: 08 Dec 2010 02:14 PM PST Do not buy stocks. Not for retirement. Not in the coming decade. Don't. Huge risks. Wall Street is a loser. Stocks are Wall Street's ultimate sucker bet. And it'll sucker you again. You'll lose, worse than in the last decade. Wake up before Wall Street banks trigger the next meltdown, igniting mass bankruptcy. Here are 10 more reasons not to bet at Wall Street's casino … wait till after they implode: 1. American stocks are a high-risk sucker betThat's the view of Peter Morici, the former chief economist at the International Trade Commission: that U.S. stocks are a sucker bet. Is Main Street waking up to Wall Street's con? Maybe. "With corporate profits breaking records, Wall Street anxiously anticipates the return of the individual investors to the stock market. It may be a long wait, because the little guy may have concluded investing in stocks is a sucker bet." 2. New 'big short' dead ahead: Derivatives con game will crash again3. Hedge funds shorting China: Warning — U.S. faces collateral damage
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| Crash JP Morgan Buy Silver (*) Posted: 08 Dec 2010 02:00 PM PST Share this:
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| Why the Eurozone and the Euro Will Not Collapse - But Will Change Posted: 08 Dec 2010 01:00 PM PST There appears to be just over one week left for the Eurozone Finance Ministers to resolve the Eurozone debt crisis or face a collapse of confidence in it and the euro. This need not lead to a collapse of the two though. In perhaps an underestimated situation, the discord among the members of the "Europe United" bloc, the seeming inability to permanently resolve the crisis is well on the way to that end.
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| Does it Remain Possible that the Gold Price will Reach $1600 Soon? Posted: 08 Dec 2010 11:12 AM PST Gold Price Close Today : 1381.70 Change : (25.80) or -1.8% Silver Price Close Today : 28.224 Change : (1.524) cents or -5.1% Gold Silver Ratio Today : 48.95 Change : 1.641 or 3.5% Silver Gold Ratio Today : 0.02043 Change : -0.000708 or -3.4% Platinum Price Close Today : 1684.00 Change : -19.70 or -1.2% Palladium Price Close Today : 725.95 Change : -16.30 or -2.2% S&P 500 : 1,228.28 Change : 4.53 or 0.4% Dow In GOLD$ : $170.05 Change : $ 3.33 or 2.0% Dow in GOLD oz : 8.226 Change : 0.161 or 2.0% Dow in SILVER oz : 402.94 Change : 0.69 or 0.2% Dow Industrial : 11,372.48 Change : 13.32 or 0.1% US Dollar Index : 79.98 Change : 0.120 or 0.2% GOLD PRICE 5 day chart looks like a corrective move off the Tuesday peak, not the beginning of a new impulsive move down. Today $1,400 capped the market and all the fighting was done between there and $1,372.20 Gold opened at $1,393 tried to rise but slipped to $1,372.20 between 10:00 and 11:00. After that it moved sideways in a tight range just above $1,380. Comex closed at $1,382.50, trimmed by $25.80. Gold's 20 day moving average at $1,377.55 was hit today. The 50 DMA lies beneath at $1,361. If gold closes below $1,361 then we have to reckon with the worst correction since last August. If gold doesn't turn up by Monday, it will begin to look queasy. Above it must best $1,430.60 to prove a continuing uptrend. SILVER PRICE, I remind y'all, is more volatile not only to the upside but also to the downside. Therefore it should surprise no one that today it lost about twice as much as gold, 1.77% versus 0.8%. Silver's 5 day chart speaks more clearly than gold's, and it appears to have exhausted its downside momentum today. Low struck at 2793c. Comex lost 152.4c to close at 2822.4c. The daily chart looks more like gold's. From 11:00 forward silver traded in a tightening range from 2800 to 2850 -- a long narrow triangle. That signifies an equilibrium, but an equilibrium may result from no force on either side to thousands of foot-pounds on either side. Either way the forces are balanced, and when the pressure up or down increases just a little, a big move will result. Comex lost 152.4c to 2822.4c. Think about this: silver hasn't even touched its 20 DMA, now at 2751c. 2800c holds out very strong support for silver, as does 2650c. Folks keep on questioning me about the present glut of silver on the market. They cite JP Morgan's silver short, etc., etc. Whether that JP Morgan story is true or not, I only know that when refineries are backed up from now to February, and when large wholesalers completely pull their bids on 90% coins, that does NOT signal a silver shortage. Rather, the opposite. And remember that the pipeline is very narrow, and easily clogged, and very shallowly financed. Tomorrow may not tell us much. After two harrowing days, silver may simply take a rest, and resume work on Friday. Does it remain possible that gold will reach $1,600 soon? Sure, but watch that tell-tale support at $1,350. Break that and it won't. GOLD/SILVER RATIO jumped up to 48.95 today. And it is feasible that the ratio is stalled trying to break through 47.50 and will yet during this move break through that barrier and fall further. If gold continues rising toward $1,600, that is likely. But who knows? That's why you set targets, and don't deviate from them when they are hit. Balance of the arguments slightly favour that silver and gold have topped for this move. The US DOLLAR INDEX today failed to clear 80 and fell back, barely below 80. Oh, it tried to leap through 80.40, but failed and spent the rest of the day doing penance, bowing lower and lower. Over yesterday it actually gained 12 basis points to 79.977. Not clear yet whether dollar is merely bouncing off its 20 DMA preparatory to crashing through it, or decided to advance again. Stay tuned. STOCKS vacillated and oscillated today. Dow managed to scratch out 13.32 points at the close, 11,372.48. S&P500 won 4.53 points to close $1,228.28. Stocks are the Gila Monster of investments. 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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| Betting on Gold a Bet Against Currency Management Posted: 08 Dec 2010 11:00 AM PST While stocks have been going nowhere, guess what's been going up. You know. Gold! That's right, gold has been in a bull market for the last 10 years. And this year, gold is up 28%. That's a trend we like. Because it is long. Solid. And it shows no sign of stopping anytime soon. Why? Because the world monetary system has a rendezvous ahead of it too…a rendezvous with destruction. Until that's behind us, it's still ahead of us. "Wait a minute, Bill… How do you know the monetary system is going to crack up? You admit that you don't get to read tomorrow's headlines before everyone else." Good point. Of course, we don't KNOW anything. We're just guessing. But it seems like a good guess. Let's put it this way, it's an extrapolation of current trends in which we have great confidence. Ben Bernanke admitted this week that he didn't see the problem coming. Which confirms what we knew all along – the people running US monetary policy have no idea what they are doing. Gold is a bet against Ben Bernanke. It's a bet against the feds. It's a bet against a system that is corrupt and reckless. It's a bet that the managers of a managed currency will sooner or later manage to mess it up. Bill Bonner Betting on Gold a Bet Against Currency Management 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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| Posted: 08 Dec 2010 10:32 AM PST China concerns, firmer dollar spur profit-taking in gold The COMEX February gold futures contract closed down $25.80 Wednesday at $1383.20, trading between $1372.10 and $1405.40 December 8, p.m. excerpts: see full news, 24-hr newswire…
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| Ambrose Evans-Pritchard: Global bond rout worsens on U.S. fiscal worries Posted: 08 Dec 2010 10:23 AM PST By Ambrose Evans-Pritchard http://www.telegraph.co.uk/finance/economics/8190059/Global-bond-rout-de... The yield on 10-year Treasuries -- the benchmark price of money worldwide and the key driver of US mortgage rates -- has rocketed to 3.3 percent, up 35 basis points since President Barack Obama agreed on Monday to compromise with Senate Republicans on tax cuts. The Treasury selloff has ricocheted through the global system, triggering bond selloffs in Asia, Europe, and Latin America. Japan's finance ministry braced as borrowing costs on seven-year debt jumped by a sixth in one trading session, while German Bunds punched through 3 percent. The White House deal with Congress will renew the Bush tax cuts for rich and poor alike for two years, as well as adding a further a 2 percent cut in payroll taxes and an extension of unemployment aid. ... Dispatch continues below ... ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property 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 David Bloom, currency chief at HSBC, said it is hard to disentangle whether investors are shunning bonds because they expect US stimulus to boost growth next year, or whether they are losing patience with profligacy in Washington. "If this is all about growth, that's brilliant. But if yields are rising because people think Amirca's fiscal situation is unsustainable, then its Armaggedon," he said. "The US can get away with this only because it is the world's reserve currency. This would be totally unacceptable in any other country. We think these problems will start to crystallise for the US in the second half of 2011, once the European debt crisis has stabilised," he said. The warnings were echoed by Li Daokui, a rate-setter for China's central bank. "The focus of the market is still in Europe, but we must be aware that the US fiscal situation is much worse than in Europe," he said. The US tax deal adds $1 trillion of stimulus over two years, according to BNP Paribas. America's budget deficit will remain stuck near 10 percent of GDP, not just in 2011 but also in 2012. This will push gross public debt to 110 percent of GDP under the IMF definition, near the brink of a debt compound spiral. The contrast with fiscal tightening in Europe has become starkly evident. Both Moody's and Fitch warned that the US must map out a credible strategy to control spending. "We have long-term concerns about the US rating outlook and they're not yet being addressed," said Stephen Hess, chief US analyst for Moody's. Stephen Lewis from Monument Securities said the bond rout is a sign that Washington can no longer take global markets for granted. "We have reached the limits of tolerance for budget deficits. There is a feeling around the world that nobody in Washington is paying any attention to the implications of what they are doing, but there is a very real risk that this will backfire if it causes mortgage rates to keep going up," he said. "At the same time we've seen a loss of confidence in Fed strategy. There is a feeling that the Fed doesn't care about inflation -- in fact, wants more of it -- and that is certainly not in the interest of bondholders," he said. The standard rate for 30-year mortgages in US has moved up in tandem with Treasury yields. The rate has been creeping up ever since the US Federal Reserve first signalled plans for a fresh blast of quantitative easing, rising 85 basis points in three months. The housing squeeze raises serious doubts about the Fed's plan to purchase a further $600bn in Treasuries over coming months, or QE2 as it is known. Fed chair Ben Bernanke stated on Sunday that the explicit purpose of the policy -- which he calls "credit easing" -- is to bring down yields. "We're not printing money. What we're doing is lowering interest rates by buying Treasury securities. And by lowering interest rates, we hope to stimulate the economy to grow faster," he said. US data on foreign holdings of Treasuries and agency bonds are published with a delay, but monthly figures show that China sold a net $24 billion in September and Russia sold $10 billion. The concern is that investor flight from US debt will overpower the monthly purchases of $100 billion by the Fed, making it ever harder for Washington to raise the $1.4 trillion needed next year to cover the deficit. The rise in yields risks becoming a textbook case of a central bank losing control over long-term rates. The danger is that market fears of future bond losses -- whether from inflation or higher default premiums -- will neutralise the stimulus, or lead to stagflation. Tom Porcelli from RBC Capital Markets said the Fed rates might be nearer 4 percent by now if the Fed had not acted. However, he said, there was no justification for QE2 at a time when the economy is growing at more than 2 percent and core inflation -- though the lowest since the 1960s -- is positive at 1 percent. "Nobody believes that we're slipping into deflation anymore. That phase has passed," he said. Join GATA here: Yukon Mining Investment e-Conference http://theyukonroom.com/yukon-eblast-static.html Vancouver Resource Investment Conference http://cambridgehouse3.com/conference-details/vancouver-resource-investment-conference-2011/15 Cheviot Asset Management Sound Money Conference Phoenix Investment Conference and Silver Summit 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 Drills 71.17 Metres of 0.52% NiEq Prophecy Resource Corp. (TSX-V: PCY) reports that it has received additional assays results from its 100-percent-owned Wellgreen PGM Ni-Cu property in the Yukon, Canada. Diamond drill holes WS10-179 to WS10-182 were drilled during the summer of 2010 by Northern Platinum (which merged with Prophecy on September 23, 2010). WS10-183 was drilled by Prophecy in October 2010. Highlights from the newly received assays include 71.17 metres from surface of 0.52 percent NiEq (0.310 percent nickel, 0.466 g/t PGMs + Au, and 0.233 percent copper) and ended in mineralization. For more drill highlights, please visit: http://prophecyresource.com/news_2010_nov29.php
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| Bernanke Ignores 4,500 Years of Failed Monetary Policy Posted: 08 Dec 2010 10:00 AM PST I naturally wanted to get my two-cents in about Ben Bernanke's interview on 60 Minutes where he answered softball questions by explaining that everything will be fine and there is no cause for alarm because he and the Federal Reserve were "on the job," although things will probably get worse for a long time, while he is "100 percent" certain that he could prevent inflation in prices by (get a load of this!) raising interest rates! This is the same guy who has pounded interest rates to historic lows, near zero, less than the rate of inflation that is perking along at more than 2%, according to the GDP Deflator, and yet he would raise rates! Hahahaha! Unfortunately, I could not write a thing with my hands, as I was still trussed up in a straightjacket and tied to a chair so that I could watch the spectacle on TV, a situation that was the result of a compromise. The family knew from the years of my watching Alan Greenspan (the horrid little man who is directly, personally responsible for getting this whole bankrupting, inflationary mess started when he was chairman of the Federal Reserve) on TV, that watching Bernanke would make me go likewise crazy with outrage and anger, and their position was that I should not be allowed to watch it. Or, if I did watch it, then I should be immediately killed, which I thought was a little extreme. My bargaining position, on the other hand, was that I watch it, and then we go to Washington, DC to storm the Federal Reserve building, take over monetary policy, put the dollar back on a gold standard, and then I would be famous and everyone would love me, and everywhere I would go people would say, "Mogambo! Come and have a free donut or perhaps a free slice of pizza, which I give you because I, like all Americans, love you and revere you for putting us back on the glorious gold standard, which has kept prices from rising while giving us higher quality goods and services as the miracle of capitalism and free enterprise provide their blessings upon us!" Back and forth the negotiations went, with the final compromise being that I was allowed to watch it, but only while being tied up in a straightjacket and lashed to a chair. So, I did get to watch the spectacle, and I noticed that he did not say that he thinks he is the smartest man who ever lived, but it is implied since every other dirtbag government in the last 4,500 years that borrowed too much money and was facing the inevitable bankruptcy, a falling GDP and rising unemployment that listened, in desperation, to a blustering moron like Bernanke who had a "theory" that one could buy oneself out of debt by creating more money and more debt, or a government which heeded the cacophony of likewise blustering morons like we have today in the mainstream media and the majority of universities who parrot such a preposterous "theory," none of whom see anything wrong in this monetary insanity. Unfortunately, it always failed to "fix" things because a tidal wave of inflation swept in and destroyed everything, which is the moral of the story. Thus, quantitative easing has failed very time in the last 4,500 years, although Ben Bernanke thinks he will be the first person to pull it off. After 4,500 years of everybody else trying and failing. As I watched him blubbering, one thing I noticed is that I wanted a voice-stress analyzer, so that I could more accurately pinpoint exactly when he was lying and what he was lying about, instead of merely watching and listening to him on TV, his dry lips trembling in fear, his voice stammering and obviously nervously aware that I am watching him. Oh, you could see by the way he squirmed that he knew that my Beady Mogambo Eyes (BME), although bloodshot, were upon him, and still capable of boring into his head like a laser, penetrating his brain to read his mind, analyzing his every word, examining his every move, watching him for the tell-tale giveaways that will cause me to suddenly leap to my feet and exclaim, "That proves he's a lying bastard who is destroying the dollar, the economy and the world by inflation due to his constantly creating more and more money, and enrolling foreign central banks in his wicked schemes to do the same thing, and all in some bizarre mental illness parading around as neo-Keynesian econometric theoretical swill wherein he actually hears voices, or sees visions, or somehow gets the message to institute a long-term plan to purposely create constant inflation in prices in the range of 2% by purposely creating constant inflation in the money supply, instead of it being the most stupid thing that a banker ever said!" Secretly, in my dark heart full of anger, I think he should have his face slapped over and over and over until he pleads, "No more, Mighty Mogambo Man (MMM)! I admit I am a lying scumbag, but since nothing can be done, I figure what's the harm in trying anything, no matter how outlandish?" Or is it just assumed that since he is the chairman of the foul Federal Reserve, a secretive bank that has destroyed 97% of the buying power of the dollar since 1913 and destroyed a quarter of it in the last few years alone, he is lying all the time because everything that the Federal Reserve has done has been a Bad, Bad Thing (BBT) of higher inflation and more government intrusion about which they always lie? Well, to be sure, everything the Fed has done has turned out badly, as just looking around will prove. The only bright spot in such monstrous monetary inflation is that it causes the prices of gold, silver and oil to go up, and they will go so much that all my idle dreams of indolence, gluttony and sloth will all soon be coming true. And the best part is that it's so easy that I happily say, "Whee! This investing stuff is easy!" The Mogambo Guru Bernanke Ignores 4,500 Years of Failed Monetary Policy 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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| Will the gold price go higher? Posted: 08 Dec 2010 09:47 AM PST The price of gold has risen 27pc this year and gold funds have returned up to 90pc.
This posting includes an audio/video/photo media file: Download Now |
| Posted: 08 Dec 2010 09:46 AM PST Demand for gold is soaring - some say the price could reach $2,000.
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| Posted: 08 Dec 2010 09:15 AM PST by Addison Wiggin - December 8, 2010
 Somehow, we don’t think this is what Ben Bernanke had in mind when he launched another round of easy money five weeks ago.Indeed, he promised us lower long-term interest rates. But this morning, the yield on a 10-year Treasury note just reached its highest level in more than six months -- 3.28%.  There are two possible explanations… the benign one, and the more likely one. The benign one, pimped by Deutsche Bank, zeroes in on the cut in payroll tax that’s part of the Grand Bargain between President Obama and congressional Republicans. Deutsche figures that’ll add 0.7% to GDP during the next two years. The more likely one is evident even to the always-late-to-the party analysts at Moody’s and Fitch: The Grand Bargain is just digging Uncle Sam into a bigger hole. The rating agencies reckon that with no spending cuts as part of the deal, it’ll add another $1 trillion to the national debt -- above and beyond what’s already baked into the cake. Treasury plans to auction $21 billion in 10-year notes today. Could be interesting. But really, should anyone be surprised? After Bernanke launched the first round of “quantitative easing” in March 2009, the rate on the 10-year spiked from 2.5% to over 4% within three months. Our call: Look for 4% by early February. But we’ll go a step further.  “Every streak must come to an end,” says our income-investing specialist Jim Nelson. “On Nov. 17, that truism hit home in the bond fund world. It was the first week in the previous 100 that saw a net outflow of money.“Investors, after nearly two years of manic consumption, are finally leery over the future of bonds.”  That outflow continued in the week ending Dec. 1, according to a report from EPFR Global analysts. Few sectors were spared…
“Now, that's not to say they won't forget about this in another couple of days and pile right back into bond funds. But if this is a true turning point, we might soon see some discount opportunities -- something we haven't had in quite a while. “But,” Jim reminded his Lifetime Income Report readers recently, “even as the rest of the world struggles with tough issues, we still find ourselves in a pretty good place. We have a number of solid, undervalued plays that have plenty of capital and growing dividends.” Ah, dividends. That’s going to be the key for income investors if the 28-year bull market in bonds is really over. Say this much for the Obama-GOP Grand Bargain: It leaves the tax rate on dividend income alone, at least for two more years. To learn about some of Jim’s favorite dividend players for 2011, check this out.  Despite the exit from Treasuries this week, hot money isn’t flowing into commodities:
There’s new buzz that China’s about to raise interest rates -- the one action that really would put a damper on its inflation problem. That would put a hurt on demand for raw materials. Well, for the short term. In theory, anyway. But that overlooks some other big trends, like this…  Chinese oil inventories are plunging, even as demand for fuel hasn’t let up. “Refined oil stocks held by China’s two largest oil companies have fallen for eight consecutive months,” according to former CIBC World Markets chief economist Jeff Rubin, “while diesel stocks in the country fell 14% in October.”And the tightening oil market won’t just be felt in China. “The 140 million gallons of international oil inventories sloshing around in floating storage on the high seas is also all but gone. “That may come as a shock to those who thought the bloated oil inventories that came in the wake of the last recession would provide a buffer against future oil price spikes. Suddenly, that buffer has literally gone up in smoke. “With no letup in China’s fuel demand,” Rubin concludes, “the world should be looking at triple-digit oil prices again within a quarter.”  Another half-million Americans went on food stamps in September, according to new figures from the Agriculture Department. That’s a 15.2% increase over a year earlier.The number continues to climb even as the “U-6” unemployment rate -- which includes part-timers who want to work full-time -- has leveled off.  42.9 million Americans are now on food stamps -- 13.8% of the population.  Fifty-eight percent of Americans expect the housing market to stay depressed for two more years -- at least according to a poll commissioned by Trulia and RealtyTrac. The survey also finds 48% of respondents saying they’d consider walking away from their home if they had negative equity -- up from 41% six months ago."As a result of the recent robo-signing debacle, half of U.S. adults expressed that they now have less faith in mortgage lenders, banks and the government," says a press release accompanying the poll. Whatever it takes to wake folks up, we figure. Actually, the number crunchers at the two websites are even more gloomy than the public at large. They don’t see recovery until 2014.  As long as science is developing algae to make fuel for our cars, how about using wasps to electrify our homes?Researchers in Britain and Israel have discovered the Oriental hornet is able to absorb solar energy. The yellow stripe along the hornet’s body helps it trap the sun’s rays… triggering a pigment that harvests the energy.  This solves a long-standing mystery in the insect world: Why most wasp species are “morning wasps,” but the Oriental hornet can’t seem to drag itself out of bed till the sun is shining brightest at midday. In the journal article where this discovery appears, there’s no mention of harnessing the hornet for electricity -- that’s just our own flight of fancy. Probably not such a hot idea, either; they’d make a frightful noise up on your roof.  “I never attend these conferences, but would consider it if you got Assange there,” a reader writes in reply to our query yesterday about whether it would be a good idea to bring WikiLeaks founder Julian Assange to our annual shindig in Vancouver.“I expect to leave Vancouver in late June,” writes another, “but might consider staying longer if you can get him there. “Julian in Vancouver, that might bring me back 'topside,'” writes a third. “Vancouver is probably my favorite city, if I had to live in one, that is.” We didn’t do a formal tally, but we’d venture to say the mail ran between 2-to-1 and 3-to-1 in favor.  “He should be put in jail for life for his leaks or put on the U.S. hit list and assassinated,” writes a dissenter. “He is a scumbag rapist also.“It would fit your left-wing agenda though to have this moron at one of your seminars. And shows me that you are also condoning treasonous behavior by supporting this a**h***. Look at him he looks like a child molester/pedophile that crawled out from under a rock.”  “Regardless of his troubles in Sweden,” writes a dissenter who manages to avoid the ad hominem fallacy, “this character, while masquerading as a ‘do-gooder,’ in fact has released several items that may have far-reaching and potentially deadly effects to real people's lives.“The problem is that in his arrogance, he doesn't know enough to know what is relatively harmless and what is not... while I would be the last to say that even the U.S. government doesn't have some secrets it should not be covering, there are, in fact, items of national security that should be secret and remain so in our national interest... this guy should be jailed without any access to electronic media, or even games.”  “While it’s great to find out some of this stuff, and know some unknown crooks are going to squirm... the bottom line is this guy's a scumbag who doesn't give a damn about our soldiers' lives. Let me know if you will bring him in, so I can cancel my subscription.” “Yes, invite him,” says another. “Politicians hate transparency. I think his actions, while not exactly honorable, are necessary.” “You bet,” says another. “At least he believes that a light should be shined on the government so we the taxpayer knows what is going on in our name.” “You should make the invitation public now, as that would make clear that he is not a pariah in all eyes. His crime, if there is a crime, is that he has made some folks very uncomfortable.”“It is similar to what happens when we come upon a nest of roaches and shine a light on them.”  “Yes, I think it is a good idea to invite Assange to speak in Vancouver. I can’t wait for his release on ‘the banks.’” “I agree that he would be a ‘gold mine’ of information. He might even be able to shed some extra light on the ‘quantitative squeezing’ (QS).” “I'm all for it. It's amazing the number of people who made unfavorable comments on Yahoo about the guy. They think he's some kind of threat to national security.“Those are the same people who still trust the government to act in the best interest of the people, as opposed to its own self-interest. How dense can some people still be?”  “Yes!” says a reader in 18-point boldface. With an apparently conspiratorial bent, he adds, “But keep in mind we all might end up with Legionnaires’ disease.”The 5: We don’t think you have much to worry about. Assange isn’t well-disposed to travel anywhere as long as he’s in custody. And especially not to a country where the prime minister’s former campaign manager said on national TV that he should be assassinated.  “I don't see what the big problem is with those high-tech bank notes,” writes our final contributor, noting our item about the creased $100 bills. “There are numerous possible solutions.“The first one is to give the job to Bill Gates, who will promptly declare the misprints as features, not bugs, and distribute them forthwith. “Another would be to turn the notes over to the banksters and require them to use these notes to pay all bonuses AND also keep the notes out of circulation.” “Third would be to simply distribute the notes. I mean, who is going to try to counterfeit misprinted notes? “We could also send the notes to the U.K. as foreign energy aid, you know, something to burn when they run out of oil this winter. “Oy vey, these Americans lack imagination and ingenuity.” Cheers, Addison Wiggin The 5 Min. Forecast P.S.: Byron King just interrupted his busy travel schedule to record an audio briefing about the most extraordinary resource opportunity he’s encountered in nearly two years. The audio wound up a little scratchy, but Byron insisted this couldn’t wait for him to get to a better phone connection. Our technical team is cleaning up the audio as we speak, so you won’t miss a thing. Once you hear why Byron is so excited, we don’t think you’ll mind the fact it’s not a studio-quality recording. Watch your inbox for the link later today.
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| Chart Of The Day: Build America Bond Yields Hit 11 Month High Posted: 08 Dec 2010 09:09 AM PST
Yesterday's highlighted chart was the plunge in the 30 Year bond. Today, we take it one step further and demonstrate what happens to an asset class once it become clear (or unclear) that the government may not prop it in perpetuity. Presenting the average yield on Build America Bonds, which has just hit an 11 month high. If this collapse is a harbinger of what will happen once a Federal props are removed, feel free to just imagine what would happen to stocks if and when the Fed were to withdraw its support of the stock market...
Some observations from Bloomberg on why the shaky BAB domino (whose biggest casualty by far would be PIMCO) better be caught before it plunges and takes down the entire credit (and this equity) market with it.
In other words, expects chants of "the end is nigh" within 2 days, as the idiot politicians realize that letting BABs expire will first lead to the collapse of PIMCO, immediately followed by that of civilization as we know it (which can not possibly operate without the witty banter of the most self-serving bond manager in existence).
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| What to Look for in the Gold-Silver Ratio Posted: 08 Dec 2010 09:07 AM PST The gold-silver ratio is perhaps one of the first indicators traders looked at to comprehend the state of the precious metals market and accordingly acquire positions. Indeed, it has been out of favor among modern investors who believe ... Read More...
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| Swiss bank client can't get his silver back two months after asking Posted: 08 Dec 2010 08:56 AM PST 4:50p ET Wednesday, December 8, 2010 Dear Friend of GATA and Gold (and Silver): Following Jim Rickards' story this week that a gold investor had to struggle with a Swiss bank for a month and threaten legal action and publicity to obtain the return of $40 million in gold he had deposited there, GoldMoney's James Turk tells King World News that he knows of similar cases, including that of a silver investor who for two months has been unable to induce a Swiss bank to return 20,000 of silver for which the investor long has been paying storage fees. Excerpts from the interview with Turk are headlined "Turk -- Swiss Bank Client Battles Over 2 Months For His Silver" and can be found at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/12/8_Tu... Or try this abbreviated link: CHRIS POWELL, Secretary/Treasurer 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 Join GATA here: Yukon Mining Investment e-Conference http://theyukonroom.com/yukon-eblast-static.html Vancouver Resource Investment Conference http://cambridgehouse3.com/conference-details/vancouver-resource-investment-conference-2011/15 Cheviot Asset Management Sound Money Conference Phoenix Investment Conference and Silver Summit 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 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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| Swiss bank client can't get his silver back two months after asking Posted: 08 Dec 2010 08:56 AM PST 4:50p ET Wednesday, December 8, 2010 Dear Friend of GATA and Gold (and Silver): Following Jim Rickards' story this week that a gold investor had to struggle with a Swiss bank for a month and threaten legal action and publicity to obtain the return of $40 million in gold he had deposited there, GoldMoney's James Turk tells King World News that he knows of similar cases, including that of a silver investor who for two months has been unable to induce a Swiss bank to return 20,000 of silver for which the investor long has been paying storage fees. Excerpts from the interview with Turk are headlined "Turk -- Swiss Bank Client Battles Over 2 Months For His Silver" and can be found at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/12/8_Tu... Or try this abbreviated link: CHRIS POWELL, Secretary/Treasurer 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 Join GATA here: Yukon Mining Investment e-Conference http://theyukonroom.com/yukon-eblast-static.html Vancouver Resource Investment Conference http://cambridgehouse3.com/conference-details/vancouver-resource-investment-conference-2011/15 Cheviot Asset Management Sound Money Conference Phoenix Investment Conference and Silver Summit 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 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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| Jon Nadler: Split Camps on a Dual Asset Posted: 08 Dec 2010 08:45 AM PST Source: Brian Sylvester of The Gold Report 12/08/2010 Jon Nadler has never been without gold. In fact, it actually helped saved his life. But that doesn't mean the senior analyst for Kitco Metals wants to see gold's sky-high price edge even higher. In this exclusive interview with The Gold Report, Jon explains why gold is an insurance policy that investors should never want to cash in on. The Gold Report: Jon, many people classify you as a gold bear. What do you think of that characterization? Jon Nadler: It's a function of the camps that have been delineated so firmly in this market over the last two to three years. There seems to be very little give or tolerance on either side for the other's opinion. We have staunch bulls and firm bears and, thus, the in-betweens you'll never meet. Actually, I tend to believe I come into the market picture from a different angle. My good friend, Michael Checkan, over at Asset Strategies International in Maryland, has always quoted my motto a...
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| December 7, 2010 -- A Day Which Will Live in Infamy Posted: 08 Dec 2010 08:44 AM PST ¤ Yesterday in Gold and Silver The gold price didn't do much of anything during Far East trading on Tuesday... but, an hour after London opened, the gold price began to move higher... with the rally lasting until about 8:45 p.m. in New York when the selling began. A dollar rally began in earnest about fifteen minutes later at 9:00 a.m. Eastern time. It was, as they say, all down hill from there... with an extra shot coming to the downside in electronic trading well after Comex trading was done for the day. Gold closed above $1,400 spot... but just barely. From its high of the day [$1,432.50 spot]... to its low of $1,395.10 at 4:15 p.m. Eastern time... the gold price got clocked for $37.40. But, the big hit was saved for silver... which, by now, should be no surprise to anyone. After doing nothing in Far East trading, silver began to rise steadily right from the London open at 8:00 a.m. GMT... hitting its high of the day [$30.73 spot] at the same second that gold did... a...
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| Posted: 08 Dec 2010 08:40 AM PST Wednesday, December 08, 2010 – by Staff Report As the recession grinds on, politicians in most industrial countries have an incentive to make exaggerated claims about the supposed coming economic recovery. Some say the recession is over. Obama is in the group that claims we're on "the road to recovery," while other nations can only spot recovery "on the horizon." Below are seven important social phenomena that point to a more realistic economic and political outlook. – Tehran Times Dominant Social Theme: In this case, none. Tehran Times, an "international" newspaper tells the truth more succinctly than major Western media. Free-Market Analysis: Is there a recovery? Do you feel it, dear reader? Deep down in 'dem bones? We don't. We've explained the reasons why in dozens of articles: The fiat meltdown of 2008 was a meltdown of MONEY caused by the Internet's ability to expose the truth of a fraudulent central banking controlled monetary system and the power elite who bene...
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| How to Play the Gold Silver Ratio Posted: 08 Dec 2010 08:36 AM PST The gold-silver ratio is perhaps one of the first indicators traders looked at to comprehend the state of the precious metals market and accordingly acquire positions. Indeed, it has been out of favor among modern investors who believe that this is one ratio even his barber is tuned in to and a simple sinusoidal movement does not often work. Anything that goes up comes down – while the cliché cannot be disregarded, if an uncomplicated philosophy like that really worked as simply, it would have earned several investors guaranteed profits over time. It is essential to understand that the game in the markets is all about being in the side who are doing things that the majority are not, given that the majority loses. In order to outsmart the majority, we need to look at the gold silver ratio in a way the majority is not.
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| Crash JP Morgan Buy Silver: Anarcho-Capitalism Posted: 08 Dec 2010 08:24 AM PST The story of Andrew Maguire is gaining the notoriety of the Great Train Robbery. To summarize, a whistleblower has revealed JP Morgan (and HSBC) have been manipulating the metals market, driving the price down. Share this:
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| Hourly Action in Metals From Trader Dan Posted: 08 Dec 2010 08:19 AM PST Dear friends, We have some short term technical damage done to the gold chart but the primary long term uptrend remains intact. Traders with a short term perspective will act accordingly while longer term oriented investors will also take note and look to establish positions in the direction of the primary trend. The HUI experienced a bearish engulfing pattern on its daily chart yesterday and that is leading to follow through selling today in the mining shares. Watch the support levels closely and see how the shares act as they move into this region especially if you are acquiring for the long term. The HUI has remained above the 40 and 50 day moving averages since August of this year on an end of trading session basis. Should it move down into this region again and refuse to breakdown, you will know what to do. There is a band of congestion support in silver coming in near the 26.75 – 26.45 level. From a technical perspective we would not want to see it violate 25 to the downside. Good technical action in the grey metal would be for it to hold above the recent breakout level near 27.90 and work sideways for a week or so. The trend is your friend in the metals. The bond market has gotten beaten with an ugly stick today. I am sure that is not making the Fed officials very happy especially considering the huge sums of money that they have spent in artificially trying to push rates lower on the long end of the curve.
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| Gold Daily and Silver Weekly Charts Posted: 08 Dec 2010 08:15 AM PST |
| Kazakh gold miner eyes London listing Posted: 08 Dec 2010 08:03 AM PST The billionaire Assaubayev family is planning a £500m listing of its Kazakh gold mines in London or Hong Kong within six months, having wrested them back from Polyus, the Russian gold company.
This posting includes an audio/video/photo media file: Download Now |
| Two Possible Reasons for the Rise in 10-Year Treasury Notes Posted: 08 Dec 2010 08:00 AM PST Somehow, we don't think this is what Ben Bernanke had in mind when he launched another round of easy money five weeks ago. Indeed, he promised us lower long-term interest rates. But this morning, the yield on a 10-year Treasury note just reached its highest level in more than six months – 3.28%.
There are two possible explanations…the benign one, and the more likely one. The benign one, pimped by Deutsche Bank, zeroes in on the cut in payroll tax that's part of the Grand Bargain between President Obama and congressional Republicans. Deutsche figures that'll add 0.7% to GDP during the next two years. The more likely one is evident even to the always-late-to-the party analysts at Moody's and Fitch: The Grand Bargain is just digging Uncle Sam into a bigger hole. The rating agencies reckon that with no spending cuts as part of the deal, it'll add another $1 trillion to the national debt – above and beyond what's already baked into the cake. Treasury plans to auction $21 billion in 10-year notes today. Could be interesting. But really, should anyone be surprised? After Bernanke launched the first round of "quantitative easing" in March 2009, the rate on the 10-year spiked from 2.5% to over 4% within three months. Our call: Look for 4% by early February. But we'll go a step further. "Every streak must come to an end," says our income-investing specialist Jim Nelson. "On Nov. 17, that truism hit home in the bond fund world. It was the first week in the previous 100 that saw a net outflow of money. "Investors, after nearly two years of manic consumption, are finally leery over the future of bonds."
That outflow continued in the week ending December 1, according to a report from EPFR Global analysts. Few sectors were spared…
There's no shortage of reasons, Jim says. "Start with QE2…then add Ireland's new massive bailout…throw in the new permanent bailout fund for the eurozone. And what do you get? Panicked and confused investors. "Now, that's not to say they won't forget about this in another couple of days and pile right back into bond funds. But if this is a true turning point, we might soon see some discount opportunities – something we haven't had in quite a while. "But," Jim reminded his Lifetime Income Report readers recently, "even as the rest of the world struggles with tough issues, we still find ourselves in a pretty good place. We have a number of solid, undervalued plays that have plenty of capital and growing dividends." Ah, dividends. That's going to be the key for income investors if the 28-year bull market in bonds is really over. Say this much for the Obama-GOP Grand Bargain: It leaves the tax rate on dividend income alone, at least for two more years. Addison Wiggin Two Possible Reasons for the Rise in 10-Year Treasury Notes 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: Will This Reversal Prove Valid? Posted: 08 Dec 2010 07:50 AM PST courtesy of DailyFX.com December 08, 2010 07:30 AM Daily Candles Prepared by Jamie Saettele I wrote yesterday that “gold has registered a fresh all-time high but the incredibly extreme divergence with momentum remains in place. At this point, coming under 1384 would signal bearish potential.” Just after that high, gold reversed violently to form a key reversal and bearish engulfing pattern and the yellow metal is already testing 1384. The divergence and reversal patterns should not be dismissed....
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| Top Silver Plays: Endeavour Silver, Hecla Mining and Mag Silver Posted: 08 Dec 2010 07:45 AM PST Shawn Wang submits: Why people are long silver. Unless you have been living under a figurative rock, you know that Bernanke's QE2 has been swinging markets around since it was announced in August - at first positively, on a Pavlovian response mirroring what happened after QE1, and then negatively, after the announced numbers failed to impress. If you are a little better informed, you will know that gold has been a major play of everyone in the markets, from Joe Sixpack to John Paulson, on a thesis of a depreciating USD. You may also have seen this SilverGoldSilver video, which lays out the pretty compelling case that silver is about to go the same way as gold has gone, with added fuel from a massive short-covering that JP Morgan (JPM) will have to make if this ZeroHedge post is accurate. SLV or silver miner stock? Having decided to go long on silver, one is then faced with the perennial question of whether silver mining companies or the Silver ETF (SLV) will be a better way to play this. There are any number of fundamentally "sound" reasons why silver mining companies should outperform just the physical metal (profit margins, pricing power, the value of the mines, leverage), but also some contrarian reasons why not (management inefficiency, relative illiquidity, idiosyncratic risk). And it is a guarantee that one side or the other will be wrong at some point in time. This is a question that can only be resolved with an empirical look at the data. (All numbers shown here are drawn from Yahoo Finance using weekly data.) Unfortunately, when we do so, we have to adopt the language and tools of statistical arbitrageurs and pairs traders, because that really is the only way to answer this question. Complete Story »
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| First ‘Keiser Silver’ crash JP Morgan Buy Silver vid (***) Posted: 08 Dec 2010 07:41 AM PST Share this:
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| Discussing Gold and Related Issues With Nick Barisheff of Bullion Management Group Posted: 08 Dec 2010 07:33 AM PST Arjun Rudra submits: Predicting a $1,700–2,000 gold price in 2011, Nick Barisheff of Bullion Management Group urges investors to acquire unencumbered physical bullion with no financial intermediaries or counter-party risk, saying, “Owning gold, silver, and platinum bars is like having a real fire extinguisher instead of a paper picture of a fire extinguisher.” We are very excited to present our interview with Nick Barisheff on gold, bonds, fiat currencies, economics, investing, and more. Enjoy. Complete Story »
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| Posted: 08 Dec 2010 07:30 AM PST Dear Jim This wouldn't happen to be why Obi-Wan Sinclair has said to hold your metals close? Sincerely, Yahn Jim Sinclair's Response Yes, Yahn as there is a major disturbance (banksters) in the Force. Jim Sinclair's Commentary It requires no courage to go short when you control the playing board. Euro's Worst to Come as Best Forecasters See Crisis Spreading By Anchalee Worrachate – Dec 5, 2010 4:00 PM PT The most accurate foreign-exchange strategists say the euro's worst annual performance since 2005 will extend into next year as the region's sovereign-debt crisis saps economic growth. Standard Chartered Plc, the top overall forecaster in the six quarters ended Sept. 30 based on data compiled by Bloomberg predicted the euro may weaken to less than $1.20 by mid-2011 from $1.3414 last week. Westpac Banking Corp., the second most accurate, is "bearish in the short term," and No. 3 Wells Fargo & Co. cut its outlook at the end of last week. Dear Eric: With the 10 year in trouble, you can be sure the 30 year is a short sell on every rally as the price move sides out of the French Curve uptrend. Ditto on the downside for cover! Jim Dear Jim, Re: 10-Year Auction Results It's not so much that anyone is buying but rather who's been doing the buying since onset of the debt collapse. Dealer participation rates are falling and remain weak in comparison to historical reference points. This has been offset by increased purchases from Direct (anonymous) and Indirect (likely foreign central banks), likely coordinated, sources. CIGA Eric 10-Year Auction Results
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| Gold likely to hit $1,600 in 2011 — Credit Suisse Posted: 08 Dec 2010 07:25 AM PST by Geoff Candy This is the view of Tom Kendall, Vice President for commodities research at Credit Suisse. Speaking on Mineweb.com's Gold Weekly podcast, Kendall said the bank remains rather bullish about gold's prospects for 2011, but he wouldn't be surprised if things quieten down in the run-up to the new year. … "Technically the chart looks pretty good for gold both in US dollar terms and in euro terms and although some of the bigger macro funds will be reducing risk ahead of the close of the year, we've probably got another week to ten days or so of decent activity in the shorter term money flows." Asked about the question of real interest rates and whether or not, Credit Suisse expects them to turn any time soon, Kendall, said, "The question of real interest rates is always there at the back of one's mind when looking at the gold market but from what we see out of the United States in terms of monetary policy in recent statements by Ben Bernanke and by the members of the FOMC it's clear to us and to our strategists in the United States that we are going to remain in a very low or even negative real interest rate environment in the United States for some considerable time to come and by that I mean at least 18 months and potentially much longer. Moving into 2011, Kendall says the other big factor he is going to be watching is the developments within the Chinese market. ""I was in Shanghai last week and it is clear that there is a considerable amount of bullishness within the Chinese market about gold and the market is expanding and developing and evolving quite rapidly both in terms of the number of players coming in and in terms of the products that are available to investors and that's going to be one of the key themes as we go through 2011." [source]
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| Stronger Dollar Weighs on Gold, Silver, Oil Posted: 08 Dec 2010 07:03 AM PST Proactive Investor submits: Commodities were weaker across the board on Wednesday, following sharp gains in the dollar after President Obama announced a $120 billion payroll "tax holiday" as part of extending the Bush-era tax cuts. WTI Nymex crude is back below the $90/bbl mark today, having touched a 26-month high in yesterday’s session at almost $91/bbl. The OPEC extraordinary meeting in Ecuador this weekend is beginning to come into focus somewhat more, although expectations still suggest output quotas will not be changed. The U.S. Department of Energy released its monthly Short Term Energy Outlook yesterday, revising higher its forecast for 2010 and 2011 global oil demand, up 2.02 million barrels (mbls) and 1.43mbls, respectively, year on year. Complete Story »
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| Investors to Silver: “Let’s Get Physical” Posted: 08 Dec 2010 07:00 AM PST The scramble for physical gold and silver is intensifying. People increasingly want to own the real thing, and not some paper substitute, all of which comes with counterparty risk. This conclusion is apparent from the fact that the futures prices for gold and silver have moved into "backwardation." Allow me to explain… Because gold is money, gold almost always trades in "contango," meaning that the future prices – i.e., forward prices – are higher than the spot price. The percentage difference between gold's spot and forward price is gold's "interest rate." So in this regard, gold is not different from other moneys, except gold's interest rate is lower than those of national currencies. But supply and demand dynamics also influence the differential between the spot price and forward prices. And this is where our story gets interesting… If the forward price is lower than spot – a condition called backwardation – you can sell your metal in the spot market, invest the dollars you receive to earn interest, and then buy your metal back in the future at a lower price and profit the difference. But there is another important factor to consider outside the math of this formula. If you sell your physical metal in the spot market and at the same time agree with someone to buy it back at a future date, you are now holding someone's paper promise instead of physical metal. In other words, you have counterparty risk, which, of course, is avoided when you hold physical gold or physical silver. Normally, few people worry about counterparty risk. So bullion dealers and other institutions that deal in the precious metals watch for opportunities to profit from backwardation, with the result that gold rarely trades in backwardation, which explains why the chart below is so extraordinary.
Gold for 1-month and 3-months forward has been mainly in backwardation for more than one year. Even more exceptional is that gold 6-months forward has been in backwardation since November 5th. To show how rare this event is, I checked the LBMA database, which goes back to 1989. There is not one instance of 6-month forward gold being in backwardation, which confirms my own experience. I've been trading the precious metals since the 1970s, and I can't recall any time before this year when 6-months forward gold was in backwardation. The current and continuing backwardation is truly incredible. 12-month forward gold is also approaching backwardation. These downtrends make clear that the demand for physical gold is intensifying. The picture is even starker in silver. Silver 6-months forward has been continuously in backwardation since June 2nd and mainly in backwardation for more than one year. What does it all mean? In a word, it is bullish. The only way the increasing demand for physical metal can be met is with higher prices. The higher price will at some level entice people to sell their metal and hold a national currency instead. Some skeptics may argue that there is no backwardation apparent from COMEX settlement prices. Aside from the fact that COMEX recently changed the method to determine settlement prices from a market-driven basis to instead allow a manual override, which now makes backwardation on the posted COMEX settlement prices virtually impossible, one has to first recognize that COMEX is first and foremost a market for paper-gold and paper-silver. Therefore, a piece of paper can promise virtually anything, without regard to the underlying reality of how physical metal is actually trading. In other words, COMEX shows March futures in contango, when they should in reality be in backwardation. Thus, if you are buying March silver or April gold futures, you are overpaying. This overpayment is no doubt going into the pockets of those banks that are perennially short and use their size to control the paper market. They can, after all, always conjure up whatever paper they want out of thin air, which of course they cannot do with physical metal. Any way you look at it, the backwardation in gold and silver is a truly rare event and an exceptionally bullish one too. So be prepared for an upside explosion in the price of both precious metals as the scramble for physical metal intensifies even further, and investors increasingly choose to hold the metals themselves, instead of paper promises. Regards, Frank Holmes Investors to Silver: "Let's Get Physical" 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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| Is the U.S. Worse than Europe? Yes. Posted: 08 Dec 2010 07:00 AM PST There's at least one adviser to China's central bank who isn't afraid to say what most central bank officials probably think about the fiscal condition of the U.S. after another $900 billion in tax cuts/stimulus, at least according to this story at Reuters.
That"ll be the day – when Moody's, Fitch, or S&P downgrade U.S. debt…
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| GCC urged to boost gold reserves Posted: 08 Dec 2010 06:59 AM PST by Tom Arnold [... GCC states have historically maintained less than 5 per cent of their total reserves in gold. About 12 per cent of Kuwait's reserves are in gold, with the holdings of Saudi Arabia and Qatar even smaller at about 2.7 and 2.3 per cent, respectively. The UAE's gold reserves are believed to be negligible, although the Central Bank does not disclose the amount.] Diversifying more of their reserves from US dollars to the yellow metal would help to offer central banks in the region higher investment returns, said Dr Nasser Saidi, the chief economist of DIFCA, and Dr Fabio Scacciavillani, the director of macroeconomics and statistics at the authority. "When you have a great deal of economic uncertainty, going into paper assets, whatever they may be – stocks, bonds, other types of equity – is not attractive," said Dr Saidi. "That makes gold more attractive." Declines in the dollar during recent months have dented the value of GCC oil revenues, which are predominantly weighted in the greenback. Gold prices rose to a record high before falling back this week as the dollar strengthened. Longer term, gold could play a more important role in the global monetary system as the shift from developed world to emerging markets intensified, the two DIFCA economists said in a report published yesterday. The dollar's position as the leading reserve currency was likely to diminish as US dominance of the world economy dwindled. Gold could help to fill the void in the monetary system in the absence of the euro or the yuan proving viable alternative reserve currencies, they said. … "The value of paper money is being debased by injections of quantitative easing in Europe, Japan and the US," said Dr Scacciavillani. "Gold is a means of exchange not dependent on any political decisions and has a role as a hedge against inflation and economic risk." [source]
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| Posted: 08 Dec 2010 06:56 AM PST Joe Ponzio submits: A few months back, I read an interview with legendary investor Jim Rogers. In the 1970s and together with partner George Soros, Rogers soared to fame and fortune with the Quantum Fund — a private investment fund that, in ten years, gained 4,200% (47% annualized). How did he do it? Commodities and Leverage Complete Story »
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| Outlook for Commodities Remains Positive Posted: 08 Dec 2010 06:55 AM PST Chris Ciovacco submits: With news of a compromise on extending the Bush tax cuts, recent strength in the U.S. dollar and signals from China it may raise interest rates, it is a good time to check on the health of weak-dollar assets, such as commodities (DBC). Commodities, especially hard commodities like copper (JJC) and gold (GLD), are often used as a way to protect purchasing power during periods where concerns about future inflation are elevated. In general, commodities tend to have a tailwind when the U.S. dollar is weak, and a headwind when the greenback strengthens. The extension of the Bush tax cuts could add as much as half a percentage point to U.S. GDP in 2011. Stronger economic growth in the U.S. could propel the dollar higher and put some pressure on commodities. Complete Story »
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| U.S. Military Prepares for Economic Collapse Posted: 08 Dec 2010 06:39 AM PST Skeptics who continue to assert that the economic plight of the United States has been overstated need not look further than the Pentagon to find out just how wrong they are. CNBC has learned that the Pentagon is currently playing out "war games" pertinent to an American economic meltdown. According to CNBC, "The Pentagon is planning for real economic threats to America." CNBC's Business News analyst Eamon Javers explains: Ever since the crash of 2008, the Defense Intelligence establishment has really been paying a lot of attention to global markets and how they could serve as a threat to U.S. National security interests. At one upcoming seminar that we're going to see here next month, they're going to be taking a look at a lot of the issues … [including] the use of sovereign wealth funds to manipulate markets, currencies; nation state economic collapse, sovereign default, nation state instability; U.S. Allies' budgets, deficits, national security infrastructures. Similarly, the Army has launched an operation called "Unified Quest 2011" in which it studies the "implications of 'large scale economic breakdown' inside the United States that would force the Army to keep 'domestic order amid civil unrest.'" The Quest also trains the Army in how to "deal with fragmented global power and drastically lower budgets." In October, the United States Marine Corps visited J.P. Morgan to "study markets and the economy." Javers concludes: All different parts of the Pentagon and Defense Intelligence establishment are looking at markets and looking at ways they can present a new kind of threat to the United States. These are the guys whose job it is to think of the worst possible things that could happen. According to Wired.com, the Army hosts a Unified Quest every year, which entails "the Army's chief of staff [instructing] talented mid-career and senior officers and senior enlisted (wo)men to evaluate where the service is falling short — and propose remedies." 
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| Congress Growing up, Putting Away Childish Things… Sort Of Posted: 08 Dec 2010 06:24 AM PST The co-chairmen of President Barack Obama's National Commission on Fiscal Responsibility and Reform — former Wyoming Senator Alan Simpson and University of North Carolina President Erksine Bowles — have called for increasing taxes and cutting spending in order to trim some $4 trillion from the nation's budget over the next ten years. Predictably, the plan will never see the light of day, as the commission failed to get the votes required for Congress to even take a look at the recommendations. At least both parties can come to an agreement on some matters… such as the "adult stuff" highlighted below. This cartoon came to our attention via The Mess That Greenspan Made, in its post on how now both sides are talking about the deficit.
Congress Growing up, Putting Away Childish Things… Sort Of 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 Dollar, Failing Euro and Volatile Gold and Crude Oil Posted: 08 Dec 2010 06:24 AM PST First we look at the Dollar index. The streets are cheering as the treasury yields have jumped in the past two days therefore giving the green back the boost it needed to snap out from last week’s losing streak but whenever you have extra hype which to us looks like a stampede we shy away from it for one reason, we aren’t strong enough to run with the stampede and more than often it serves us well. The hype is such that as if Green back is going to blow straight off the roof however, that hasn’t happened thus far. The Dollar index as we write is only marginally up 0.21% which hardly depicts anything but the hype.
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| Turk - Swiss Bank Client Battles Over 2 Months For His Silver Posted: 08 Dec 2010 06:10 AM PST  Since King World News broke the news with Jim Rickards that a Swiss bank client was refused his $40 million of gold and had to threaten the bank to get it, the story has been going viral. KWN interviewed James Turk out of London today to get his comments on the situation. Turk responded by citing another example, "I found that Jim Rickards comments about the individual who had difficulty getting $40 million of gold out of the Swiss bank where he had it stored very interesting. I could tell you several stories of similar experiences."
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| J.P. Morgan and the Great Silver Caper Posted: 08 Dec 2010 06:00 AM PST There's a lot of rumor, buzz, innuendo, chitchat and scuttlebutt about the precious metals markets these days. Most of the chitchat is about J.P. Morgan and silver. Rumor has it that J.P. Morgan has amassed a whopping short position in silver. The scuttlebutt, according to SFGate.com, is that "J.P. Morgan holds a giant short position in silver. Furthermore, some observers are accusing the bank of acting as an agent for the Federal Reserve in the market…I.e., a lower silver price helps maintain the relative appeal of the US dollar… "By selling massive amounts of paper silver in the futures market," SFGate continues, "J.P. Morgan has been able to suppress the price of the precious metal. It is believed that these short positions are naked (i.e. they are not backed by any physical silver)." If the silver price were falling, Morgan's (alleged) short position would be lauded as a stroke of genius. But since the silver price is soaring, Morgan's (alleged) short position looks much less laudable. "In recent days," SFGate notes, "rumors have been swirling on the Internet that J.P. Morgan's massive short position is about to blow up in its face in the form of an almighty short squeeze and potential COMEX default, as large traders demand physical delivery of silver that COMEX does not have in its vaults." Based on some of the latest conjecture, Morgan's short position totals a whopping 3.3 billion ounces. If, therefore, the buzz about J.P. Morgan and silver is even half true, the prestigious investment bank could be cruisin' for bruisin'. For perspective, 3.3 billion ounces is roughly equal to: 1) One third of all the world's known silver deposits; 2) Two times the world's approximate stockpiles of silver bullion; 3) Four times the annual mined supply of silver; 4) 30 times the inventory of silver at the COMEX. To repeat, short positions – even titanic ones – are no big deal, as long as the price of the underlying asset is falling. But if, inconveniently, it is rising, the spaghetti can hit the fan in spectacular and gruesome fashion. The silver price is rising…a lot. From less than $10 an ounce two years ago, the silver price has more than tripled. Therefore, if J.P. Morgan does, in fact, hold a 3.3 billion ounce short position, every one-dollar increase in the silver price would produce a loss of $3.3 billion…at least on paper. Unfortunately, Morgan cannot simply unwind this trade with a couple of mouse-clicks in an E*trade account. The position is too large, both in relation to the world's physical supplies of silver and in relation to the paper "supplies." (Morgan holds almost half of all short positions on the COMEX, which is essentially a "paper market" – participants rarely take delivery of physical silver). To make matters even more dicey for Morgan, the supplies of physical silver are disappearing rapidly from the marketplace. Increasingly, the kinds of folks who invest in precious metals are also the kinds of folks who distrust intermediaries. These precious metals investors want to know that the shiny stuff is in their personal possession. Meanwhile, the ETFs that hold precious metals are soaking up massive quantities of physical metal. Over the last 12 months, the silver ETFs around the globe have increased their holdings by nearly 100 million ounces – or almost as much silver as the entire inventory of the COMEX. The trend in gold is identical.
Therefore, as a result of soaring demand from both individual investors and ETFs, the physical stockpiles of gold and silver are atrophying in relation to the paper claims on both metals. This is not a pleasant picture for a short seller of silver. Furthermore, the kinds of folks who tend to buy gold and silver are also the kinds of folks who have contempt for Wall Street…and for Wall Street banks like J.P. Morgan. So it should come as no surprise that a grassroots campaign has formed – the sole purpose of which is to punish J.P. Morgan for its attempted manipulation of the silver market. "A viral campaign (Crash JP Morgue Video [below]) to buy a physical silver and 'crash' the bank is now spreading like wildfire on the Internet," SFGate reports. "Just Google, 'Crash JP Morgan Buy Silver' [to learn more about it]… Those who wish to participate in squeezing the living daylights out of J.P. Morgan, may want to consider buying physical silver, silver futures and SLV." Maybe this story about J.P Morgan's short position in silver is mere innuendo. Maybe not. But two facts are irrefutable: 1) J.P. Morgan is already under investigation by the CFTC for manipulating the silver market. "The investigation into the bank can be traced back to November 2009," SFGate reports, "when London metals trader and whistleblower Andrew Maguire contacted the CFTC to report market manipulation prior to it actually occurring." 2) Precious metals investors are increasingly keen to get their hands on physical gold and silver, rather than mere paper facsimiles. Eric Fry J.P. Morgan and the Great Silver Caper 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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| Michael Pento On The Two Biggest Lies In Bernanke's Latest 60 Minutes Episode Posted: 08 Dec 2010 06:00 AM PST
By Michael Pento of EuroPac Capital Bernanke: 60 Minutes, 2 Big Lies This past Sunday on the CBS program “60 Minutes”, Americans received a massive dose of mendacity from our Fed Chairman. Mr. Bernanke’s shaky delivery, and even shakier logic may cause faith in America’s economic leadership to evaporate faster than the value of our dollar. In particular, Bernanke delivered two massive distortions: Lie #1 - The Fed isn’t printing money. Bernanke stated: “The amount of currency in circulation is not changing…the money supply is not changing in any significant way. What we’re doing is lowering interest rates by buying Treasury securities.” Given that it is the Treasury Department’s Bureau of Engraving and Printing, not the Fed, that actually prints paper money, his statement is technically correct while substantively false. However, Bernanke is buying bank assets with Fed credit. With such an arrangement, printing becomes unnecessary. According to gentle Ben, credit created to buy something should not be considered money and has no affect on asset prices? But if that’s true, why is he concentrating his buying in the middle of the Treasury yield curve. His stated purpose is to boost bond prices and lower yields in order to stimulate borrowing and aggregate demand. So pushing up bond prices is an act of inflation. Bernanke similarly contradicts himself by saying that he isn’t creating inflation, while at the same time claiming that his easing campaign is designed to boost asset prices to combat the phantom of deflation. And by the way, the Fed is causing money supply to increase significantly. The compounded annual growth rate of M2 is over 7% in the last quarter. Apparently in the eyes of the Chairman, a 7% annualized increase in the broad money supply isn’t considered significant. Lie #2- Bernanke is “100 % confident” that, when necessary, the Fed can control inflation and reverse its accommodative monetary policy. He stated, “We’ve been very, very clear that we will not allow inflation to rise above 2 percent. We could raise interest rates in 15 minutes if we have to. So, there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation, at the appropriate time.” He failed to mention that the Fed doesn’t have the will to drain money from the system, without which all tools are useless. The Fed has consistently demonstrated its unwillingness to take the appropriate actions when necessary. In claiming he is 100% confident in his ability to control inflation, Mr. Bernanke ignores the record that during his tenure he has misdiagnosed the economy. In June of 2006, Bernanke culminated his inflation fighting efforts by raising the Fed Funds target rate to 5.25%, after CPI inflation reached 4.2%. But that interest rate was enough to help burst the housing bubble and to spark an international credit crisis. Bernanke was completely unaware that the Fed actions had created an economy that had become completely addicted to artificially-produced low interest rates and inflation. Shortly after the collapse of the real estate market and the ensuing truncated deflationary-depression, Bernanke took interest rates to near zero percent. But if the Fed was ever really serious about unwinding excessive leverage, the time had clearly arrived. Instead, the U.S. economy has become more addicted to free money than at any other time in our history. Commodity prices are soaring once again and the real estate market, banking sector, and the overall economy cling precariously on the arm of government induced bailouts and low interest rates. Even worse, our government has massively increased its level of debt, which now stands at just below $14 trillion. Once the rate of inflation eclipses the Fed’s 2% target rate, which appears likely, how then will the Fed raise rates to contain it? Could the economy then withstand an increase in the cost of home ownership? Most importantly, when will Mr. Bernanke find it politically tenable to dramatically increase debt service payments for the Federal government? In truth, there is never a convenient time to have a severe recession or a depression. Unfortunately, reality can be extremely inconvenient. Bernanke was accurate in saying that the economy is not expanding at a sustainable pace. Of course, his prescription was the same as it always is; print more money in the misguided belief that inflation will lead to growth. As such, he indicated that it’s possible that the Fed may actually expand bond purchases beyond the $600 billion announced last month. (Remember that the $600 billion comes after the $1.7 trillion that has already been printed, which failed to produce anything much beyond a weaker dollar). Therefore, the country can look forward to yet more inflation, continued anemic GDP growth, a poorer citizenry, and a vastly lower standard of living. On the bright side, the next segment on 60 Minutes outlined some of the new social networking capabilities being created by Mark Zuckerberg and Facebook. In other words, although our economic misery will likely increase, it should become much easier to share the bad news with friends. h/t John
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| What the price of gold reveals about UK house prices Posted: 08 Dec 2010 05:51 AM PST By Dominic Frisby The problem is that, for all the 'bond vigilantes', and for all the regulation and whatever other means there are of imposing discipline, governments and central banks, however well intentioned, find ways of debasing the currency. There are so many ways of doing so, from deficit spending and inflation to artificially compressed interest rates to quantitative easing. It's just too tempting, as it's usually the easiest way out of a bind. So I prefer to look at investment markets – whether it's the Dow Jones index, the oil price, or the UK housing market – valued in terms of a store of wealth that governments can't debase so easily. That store for me, is gold and silver. And given that more than a few people have moved their wealth out of real estate and into precious metals, the comparison between the two is, in my view, an extremely important ratio. First, to put things into perspective, here is a long-term chart of UK house prices in pounds sterling. It is an apparently-never-ending upward slope. It's why the attitude that 'you can't go wrong with bricks and mortar' is embedded in our psyche. (Really, of course, this is just a manifestation of the never-ending decline in the purchasing power of sterling). Now we look at a long-term chart of UK house prices measured in gold, a store of wealth that governments, for all their hard work, find considerably harder to debase. It's a rather different picture…. For those based in London or Scotland, here's a chart of your neighbourhood priced in gold. I see 200 gold ounces (currently £180,000) for the average London home (currently costing c. £340,000) as a very realistic target. We now sit at 380 ounces. … I remain a bull on precious metals and a bear on housing. The trade is maturing, but the run is not over. Long-term holders of gold and silver should sit tight.
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| Silver 101: Production By Country Posted: 08 Dec 2010 05:42 AM PST
From the same folks at Money Choices who brought to you: "Gold 101: Who's Got It And Who's Finding It" now comes the 101 lesson in silver: world silver production by country. While his may not come as news to many, the bulk of production comes out of three distinct countries: Peru, Mexico and China. And with the price of the metal having surged more in the past several months than virtually any commodity, suddenly the producers may find themselves with substantial leverage to dictate terms of delivery: think of what happened to Rare Earth Minerals when China blocked exports briefly. With the US not even in the top 5 of world production, could we soon see the formation of yet another cartel, especially when one considers that unlike gold (so the thinking goes), silver also has industrial uses? Courtesy of Money Choices
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Gold retreated 1.8% on the Comex, hit by concerns about an imminent interest-rate increase in China and a stronger dollar. China's announcement that it was moving up the release date of key macroeconomic reports to Saturday from Monday fueled fears that an interest-rate hike could come as early as this weekend, though China's statistics bureau said the change was aimed at keeping the date of the monthly release consistent with previous months…
Li Daokui, an academic member of the central bank's monetary policy committee, said that U.S. bond prices and the dollar would fall when the European economic situation stabilized.
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