Gold World News Flash |
- GoldSeek.com Radio Gold Nugget: James Turk & Chris Waltzek
- Still Waiting for the Next Move in Gold and Silver
- Sprott says SLV has physical?
- Insight from a Master
- Moody’s ‘Threat’ Sends Gold, Silver Reeling
- Inflation Fears : Chinese Rush to Gold
- The U.S. Dollar: Too Big to Fail?
- Europe: We’ve Passed Insane and Are Now On Our Way to Full-Scale Looney Tune-Ville
- Gold Sleeper Trend You Must Know About
- Gold Insight from a Master
- The Silver Dispute: $ 424 Or $ 21 Per Ounce?
- "Chinese Take-Out (of USEconomy)"
- The Most Important Commentary You Will Read All Year
- Rich Guys Vote To Extend Tax Cuts For Rich, Laughter Trickles Down to Middle Class
- Gold Seeker Closing Report: Gold and Silver Fall Over 1%
- The Inverse Dollar Relationship, SPX and Fear
- Alasdair Macleod: Are the central banks running a fractional gold system?
- No Surgery Needed?
- In The News Today
- Jim's Mailbox
- Guest Post: What The Silver Vigilantes Understand That You Probably Don’t (Arithmetic, Human Nature and other Stuff)
- Observations On The Correlation Between Gold Price And Rates... Or The Complete Lack Thereof
- Gold Guru Steve Palmer: Get in Early, Short Gold
- Gold Price Won't Dip Lower Than $1,365 or $1,350, Buy Anywhere in There
- Crash JP Morgan, Buy Silver: Spotted in a bathroom in a bar in Brooklyn
- Silver vigilantes, led by Max Keiser and Mike Kreiger brilliantly simple plan (go get some physical silver) promises to topple the criminally insane fraud that has become US economy.
- Are the central banks running a fractional gold system?
- Ben Takes Out the SNB?
- Obama's Novel Spin On M.A.D. - "Assured Self-Destruction"; President Tells Congress Not Passing Tax Deal Would End His Presidency
- Steve Palmer: Get in Early, Short Gold
- John Williams - Massive Selling of US Currency Lies Ahead
- WEDNESDAY Market Excerpts
- Why Central Bank Secrecy is Detrimental to Free-Market Capitalism
- Chinese Take-Out (Of US Economy)
- BofA To Extend Discussions With Pimco, New York Fed, Seeking Settlement Over $47 Billion In Putback Claims
- Mining Stocks Finally Appear to Have Resumed Their Upward Trend
- The Albatross that Happens Upon Hapless Homeowners
- Gold Daily and Silver Weekly Charts
- Bond Market Meltdown
- Inflationary Pressures Are Persistent
- Hourly Action In Gold From Trader Dan
- Why You Shouldn’t Trust the Core CPI Numbers
- Their Inflation, and Yours
- CFTC will miss statute's deadline on commodity position limits
- CFTC will miss statute's deadline on commodity position limits
- Yuan-ruble trade starts as Russia, China shun dollar
- Nicole Foss takes on Gonzalo Lira: Hyperinflation or Deflationary Collapse?
- SLV Takes in Another 2.34 Million Ounces of Silver
- Gold and Silver Mining Stocks XAU, GDX Finally Resume Up Trend
- Chinese Take-Out Of The U.S. Economy, Debt Crisis Triggering Reserves Conversion into Gold and Silver
| GoldSeek.com Radio Gold Nugget: James Turk & Chris Waltzek Posted: 15 Dec 2010 07:00 PM PST GoldSeek.com Radio Gold Nugget: James Turk & Chris Waltzek
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| Still Waiting for the Next Move in Gold and Silver Posted: 15 Dec 2010 06:51 PM PST Dr. Duru submits: Last week, I mentioned that I had not yet decided on my re-entry strategy for gold and silver. I remain in neutral as gold, silver, and the dollar index churn in various holding patterns (using GLD and SLV as proxies for gold and silver respectively). GLD is right where it was two months ago. SLV is where it was a month ago when I flagged the parabolic upward movement in the silver ETF. I suspect that the dollar’s resilience since bottoming at critical support in November is contributing to the congestion (I would love to buy gold and silver denominated in euros). Moreover, interest rates are on the rise in the U.S., adding one more potential headwind to further appreciation in the precious metals. GLD and SLV are now approaching trend lines that have served them well since August. Their behavior at these trendlines will provide the first tentative indicators on the potential for confirmation/invalidation of the double-top patterns. My friend TraderMike laid out the case for potential double-tops last week. The charts below are a supplement to his case. (Note well, I am not interested in shorting gold or silver; my main interest is in determining when and where I might re-establish positions. The long-term bullish fundamentals for gold and silver have not yet changed). Complete Story »
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| Posted: 15 Dec 2010 06:30 PM PST GoldChat
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| Posted: 15 Dec 2010 06:09 PM PST When John Hathaway spoke at the Casey's Gold and Resource Summit in October, many of the audience came away feeling like they were listening to Doug Casey, with his contrarian views, bold statements, and laying much of the blame for our current problems at the feet of government. Read what John, a seasoned investment pro and manager of the famously successful $1.4 billion Tocqueville Gold Fund, has to say about gold, precious metals stocks, and the future of the U.S. dollar.
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| Moody’s ‘Threat’ Sends Gold, Silver Reeling Posted: 15 Dec 2010 06:00 PM PST Bullion prices seem likely to remain under pressure for the rest of the year now that Moody's has trained its water hose on…Spain! Yesterday, the ratings firm dithered its way into the headlines with a threat to downgrade Iberian debt. Presumably, this was done at the behest of Geithner, Bernanke & Friends.
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| Inflation Fears : Chinese Rush to Gold Posted: 15 Dec 2010 05:49 PM PST Indications from China suggest that the surge in gold buying, which has already led to the country's imports rising dramatically, is turning into a rush. While recent statistics show that China's gold imports have risen dramatically this year, despite China itself being the world's largest gold producer with mine production still rising to, anecdotal evidence suggests that this may just be the tip of the iceberg as Chinese people are, apparently, rushing to buy gold as an inflation hedge. A report in the Financial Times suggests that gold purchasing by individuals is turning into such a rush - and the rising price, if anything, is - contrary to Indian experience - fuelling the intensity of gold demand there. With the ever-rising growth in the numbers of middle-income Chinese as the country's wealth drips down to the people, this source of gold demand is becoming increasingly relevant to the global market. China is expected to surpass India as the world's leading gold purchaser within the next few years and with the kind of surge in popularity of gold bars and coins, rather than jewellery, there this could even take place sooner rather than later. 
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| The U.S. Dollar: Too Big to Fail? Posted: 15 Dec 2010 05:47 PM PST Silver and Gold Money
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| Europe: We’ve Passed Insane and Are Now On Our Way to Full-Scale Looney Tune-Ville Posted: 15 Dec 2010 05:36 PM PST Europe: We've Passed Insane and Are Now On Our Way to Full-Scale Looney Tune-Ville Possibly the most insane development in a year of nothing but insane developments from a financial standpoint was the idea that somehow the Euro was saved as a currency because the IMF leant even more money to various European countries that were already over-indebted. Consider that these countries already owed too much money… so the IMF (indirectly the US) leant them even more. Now, this is insane on any level. But for Europe to be doing this stuff TWO YEARS after the US pulled the same nonsense and set itself up for an even bigger collapse is outright looney tune crazy. Seriously, do European politicians not even bother to read the newspaper? A cursory review of even the most bullishly biased mainstream financial rag shows that the only "recovery" in the US pertains to banker bonuses. Consider the following:
And if you need it to be even MORE clear:
Man, the Fed's policies SURE fixed the US economy. Small wonder Europe wants to implement the same policies now, two years later. Heck, they'd be nuts not to! In all honesty, detailing just how insane the whole Europe situation is can actually drive you mad. In the simplest terms, a bunch of countries lied about their true debt situation using derivatives that were created by the banks in order to join the European union. Years later, these same countries start blowing up courtesy of their debt problems. However, rather than defaulting on their debts (which would hurt the SAME banks that created the derivatives mess) they start trying to borrow even MORE money (thereby going even further into debt) while cutting social spending. So the bankers keep their bonuses and massive salaries and the citizens get screwed so a failed experiment (the Euro) can limp on for another six months? And somehow it's a surprise that the European citizenry is flipping out? Let's be blunt here: the Euro in its current form is finished... done… canceled. Greece got a bailout in June and ALREADY is asking for an extension on the repayment. If that doesn't make it clear that NONE of the bailout money is going to be paid back, I don't know what will. The markets know this, which is why the Euro chart makes it clear that it's heading down, down, DOWN in the coming months.
This chart forecasts a break below 118 in the coming months. In other words, the Euro will be going down BELOW its June Crisis levels… before the ECB started throwing hundreds of billions of bailout money down the drain. Like I said, the whole bailout to was insane to begin with. And it's only going to end in disaster. On that note, if you're looking for investment ideas to profit from the ongoing Euro collapse, I strongly urge you to take out a trial subscription to my paid newsletter Private Wealth Advisory.
I've already showed subscribers double-digit gains from the first leg down in the Euro, as well as the Silver correction in the last month alone. I'm now preparing subscribers for the coming Inflationary Storm in the US, not with ordinary inflation hedges (though we're currently up 23% and 66% on our first two inflation trades, respectively) but with three incredible inflation trades that 99.9% of the investment world and fund managers don't know about. All three of these investments currently trade at HUGE discounts to their underlying assets. In fact, they're so cheap that all of them are prime take-over targets REGARDLESS of when inflation erupts in the US. Indeed, I fully expect all three of these investments to be up in the triple digits within six months. And I just revealed all three of them, including their names, symbols, and how to go about investing in them in a special report called The Inflationary Storm to subscribers of Private Wealth Advisory last night. To find out what these investments are, you can pick up a copy of The Inflationary Storm now by taking out a "trial" subscription to Private Wealth Advisory. To do so…
An annual subscription to Private Wealth Advisory costs just $180. However, I realize my analysis and investment style are not for everyone.
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| Gold Sleeper Trend You Must Know About Posted: 15 Dec 2010 05:14 PM PST by Louis James, Senior Editor, Casey’s International Speculator In the midst of any long-term trend, like the secular bull market for metals we’re in now, there will be trends within the trends. You could think of them as being like eddies, whorls, and side-channels in a great torrent. We see one such developing that could benefit junior gold stock investors in the near- to mid-term. Here’s the basic idea: metals prices, especially precious metals prices, have been increasing at a faster rate than mining costs. Gold and silver are up 75.9% and 61.7% respectively over the last three years, while the cost of things like power, equipment, and wages have not risen as much (-1.0% for oil, and 5.1% for wages, as examples). Obviously, this is good for producing companies, and we have seen the market’s reaction in their share prices. What may not be so obvious is that companies with major, low-grade discoveries in hand that are preparing...
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| Posted: 15 Dec 2010 05:10 PM PST A BIG GOLD interview with John Hathaway, Tocqueville Gold Fund When John Hathaway spoke at the Casey's Gold and Resource Summit in October, many of the audience came away feeling like they were listening to Doug Casey, with his contrarian views, bold statements, and laying much of the blame for our current problems at the feet of government. Read what John, a seasoned investment pro and manager of the famously successful $1.4 billion Tocqueville Gold Fund, has to say about gold, precious metals stocks, and the future of the U.S. dollar.
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| The Silver Dispute: $ 424 Or $ 21 Per Ounce? Posted: 15 Dec 2010 05:08 PM PST In an article published on Dec 10 (see “SOMETHING’S WRONG IN THE SILVER PIT, AND IT’S MUCH BIGGER THAN JP MORGAN”), Mr. Rob Kirby, who publishes a newsletter most likely specialized on Gold and Silver (sorry, didn’t have time to check), just argues with millions of impressive figures thrown at your face that Silver should be priced at $ 424 per ounce instead of the current $ 28
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| "Chinese Take-Out (of USEconomy)" Posted: 15 Dec 2010 04:50 PM PST
This post has been generated by Page2RSS
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| The Most Important Commentary You Will Read All Year Posted: 15 Dec 2010 04:49 PM PST Now that the Asians have begun to convert their dollar-based reserves and assets into physical gold and silver, the world will soon understand the degree to which U.S. and European banking systems have issued to investors an absurd amount of paper claims on gold/silver which does not exist to be delivered. This imbalance - of which the paper amount outstanding is several 100 multiples (including OTC derivatives per the BIS quarterly bank reports) the amount of actual supply of gold/silver - will be resolved such that price of gold/silver in all currencies will soar to levels that take even the most ardent goldbugs by surprise... "[T]he basic problem is that government and banking debt around the world are both rapidly moving towards default, and since governments are guaranteeing the lot, the pace of monetary creation is accelerating. The consequence is that the gold suppression schemes, which have existed for the last one hundred years in one form or another, are finally coming to an end. We are trying to guess how dramatic that end will be. It will be difficult enough to stop a run by unallocated account holders on the bullion banks, without forcing a cash-payout amnesty. But if the central banks themselves cannot supply the necessary bullion to prevent this, the prospect of a total collapse of paper money will be staring us all in the face." Here's the link: MUST READ MATERIAL That essay should be read in conjunction with this: It's [meaning the paper manipulation vs. physical bullion supply] eventually going to blow because at some point these buyers will say, 'I'm indexed, but I actually want to get all of this physical gold and silver now.' When that happens, the game is over.Here's the LINK ...for anyone long gold and silver that is actually in their possession - or appropriately safekept at a safe distance from all Governments - the shock and awe of the upward price revaluation will be breathtaking. 
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| Rich Guys Vote To Extend Tax Cuts For Rich, Laughter Trickles Down to Middle Class Posted: 15 Dec 2010 04:47 PM PST
The market continued to move sideways today as economic data was less relevant than Bernie Madoff's thoughts on the CAPM and fund managers don't want to rock the boat (though they'll happily tickle the little man inside of it) this close to year end bonuses. This lack of volatility in the market is less surprising than John Boehner crying over a paper cut (or a tax cut) or finding out that old men still want sex (and you really needed to do a study to for that?).
The big news of the day was that the Senate passed the tax cut plan ensuring the "spend and don't tax" policies of George W. Bush will continue to bankrupt this country for generations to come. It is the Government's ultimate fuck you to anyone who still believes in the Ricardian equivalence proposition or the mathematical concept of compounding.
The bill extends all of the tax cuts that were enacted in 2001 and 2003 for another two years (until they will be extended again so Wall Street traders who make billions of dollars by hitting a button won't ever have to downgrade from their daily diet of five unicorn fetuses to only four) and it extends expanded unemployment insurance benefits through 2011 (so the unemployed can eat for another few months while employers tell them their skills have become more obsolete than rotary phones, penny-farthings, and full bush). The compromise will also cut payroll taxes by 2% (which might stimulate hiring if margins weren't going down like Gayle King at Oprah Winfrey's house) and will allow businesses to write off 100% of capital investments until 2011 which means executive suites will all soon be redone with neorests, rockstars, and Ashley Dupre. At this rate, Wesley Snipes will be let out of jail early, and not for good behavior, but rather for paying too much in taxes over the past 10 years. But party on, politicians, party on.
In macro news, both the core and actual CPI rose by .1%, slightly below analyst guesses of .2% and completely irrelevant to anything. Industrial output rose by .4% which was its biggest gain since July as a spike in utilities partly offset a 6% decline in the production of motor vehicles and a 15% reduction in hope. Finally, applications for home loans fell last week as mortgage rates rose to 7 week highs and people still don't have any fucking money to waste on expensive declining assets (which is terrible news for Elizabeth Taylor's vagina).
The only other bit of interesting US market news was that the inconceivable Lloyd Blankfein and his fellow warlords are slated to get $111MM in bonuses from this year and 2007 as a reward for destroying the economy but having enough political pull to stay afloat. Wow. And who said only massages have happy endings? Blankfein will net $24.3MM by himself which he promises to put towards world peace, making sure all of Camille Crimson's classes (probably NSFW) at the Learning Annex are free, and developing a vaccine for iocaine powder. Just kidding, he's probably going to put it all in a pile in the middle of his bedroom and dance naked around it as he wildly cackles at the robbery he got away with in front of everyone's eyes. Damn it feels good to be a Banksta.
Internationally, fears of European defaults are once again rising (though it's unclear why they ever sank) as Moody's said they are putting their credit rating of Spain on review for a possible downgrade. While this would have more credibility if Moody's hadn't both missed the biggest global financial meltdown in 80 years and also been complicit in it, it was enough to spook the markets (and Money McBags means spook in the literal sense, so don't go all Coleman Silk on him). This news, coupled with violent worker strikes in Greece (and Money McBags would have coupled that news with a nice Chianti, and not worker strikes, but whatever), sent the Euro down and once again made people realize that like RuPaul, Europe's banking system may be hiding something underneath.
In the market, Goldman and Nomura cut EPS guesses for Morgan Stanley from "made-up" to "made-up and shitty." Joy global was up~7% after a better than expected Q which saw profits rise 18% as the CEO said they "simply dug the fuck out of some more shit." Elsewhere, Honeywell fell a bit after they gave below guesses 2011 earnings guidance even though profits are supposed to rise 17% to 24% thanks to the production of huge cockpits. And finally, Best Buy continued to get pounded as this is one dip investors refuse to buy (and this is another dip investors refuse to buy).
For more, Money McBags puts the "fun" and the "mental" in fundamental analysis today by looking at RICK's Q on the award winning When Genius Prevailed.
Editors Note: As the next 2.5 weeks promise to be duller than amish porn or a Henry James novel (and Money McBags still hasn’t forgiven Mr. James for the 4ish hours of his life he wasted reading The Bostonians which had all of the action, intrigue, and humor of a shriveled taint hair), Money McBags may struggle a bit to make this shit interesting. He could just post pictures of Rosie Jones, fabricate stories like other great media outlets, or simply try to write in only rhyming iambic pentameter (Today nothing went on in the market, news was lighter than a tiny ant’s shit) but those are all gimmicks and you all know Money McBags is cockposterously against gimmicks and all for originality. So bear with Money McBags for the next few weeks as he navigates the dulldrums (misspelling intended) of the end of the year, and tries to continue to take the market from boring and stuffy, to boring and slightly less stuffy.
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| Gold Seeker Closing Report: Gold and Silver Fall Over 1% Posted: 15 Dec 2010 04:00 PM PST Gold chopped its way lower throughout most of world trade and ended near its early morning New York low of $1383.99 with a loss of 1.32%. Silver fell to as low as $28.881 in London before it climbed back higher in New York, but it still ended with a loss of 1.72%.
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| The Inverse Dollar Relationship, SPX and Fear Posted: 15 Dec 2010 03:44 PM PST As we all know, when the market is trying to top and roll over it tends to be more of a process than a couple day event. It's this lengthy topping process which has a lot of choppy price action which sucks traders into a position much too early... Read More...
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| Alasdair Macleod: Are the central banks running a fractional gold system? Posted: 15 Dec 2010 03:29 PM PST 11:46p ET Wednesday, December 15, 2010 Dear Friend of GATA and Gold: Economist and former banker Alasdair Macleod tonight reflects on GATA consultant Robert Lambourne's study, published in November (http://www.gata.org/node/9331), about the obscure, misleading, and likely duplicitous gold accounting of the Bank for International Settlements and the fractional reserve gold banking scheme this accounting implies is being run by Western central banks. Macleod writes: "China and Russia must be watching this with great interest. We can assume that their intelligence services are more aware of the true position than the general public, and if they also conclude that the Western central banks are running a fractional system using sight accounts, this knowledge hands them great economic power." Actually, Russia's central bank has at least suspected as much since the bank revealed itself in 2004 as a close observer of GATA's work. While GATA previously had had no contact with the Bank of Russia, nor with any Russian government official, the Bank of Russia's deputy chairman, Oleg V. Mozhaiskov, went out of his way to mention GATA in his address to a meeting of the London Bullion Market Association held in Moscow in June 2004. Mozhaiskov's address was delivered in Russian and the only English words in it were "Gold Anti-Trust Action Committee." While GATA learned of this because the LBMA distributed copies of Mozhaiskov's speech to participants in the Moscow meeting, the LBMA refused GATA's request for a copy. GATA's request for a copy was granted some weeks later by Mozhaiskov himself, who insisted on directing the English translation. GATA has always construed Mozhaiskov's address at the LBMA meeting as a warning to the Western bullion bankers that Russia was now on to their racket and as the preface to the Bank of Russia's demanding the return of Russian national gold from price-suppressing leasing operations by the bullion banks in London. Many relatively recent GATA supporters may not have come across the Mozhaiskov address, an early milestone in the international currency war that now rages. You can find it at GATA's Internet site here: Macleod's commentary is titled "Are the Central Banks Running a Fractional Gold System?" and you can find it at his Internet site, Finance and Economics, here: http://www.financeandeconomics.org/Articles%20archive/2010.12.16%20BIS.h... CHRIS POWELL, Secretary/Treasurer 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 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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| Posted: 15 Dec 2010 02:31 PM PST
Timothy Inklebarger of Pension & Investments reports, Proposals target Canadian corporate plan funding:
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| Posted: 15 Dec 2010 02:06 PM PST My Dear Friends, All you are looking at is the mirror image event in the US dollar as a product of Mrs. Merkel's "Open Mouth" euro intervention as a part of the ongoing currency war and profit making short play. Hong Kong equity traders got excited over Mrs. Merkel's lip service and sold off, putting secondary pressure on gold. It means very little as gold is going to $1650 and beyond. Respectfully,
Jim Sinclair's Commentary With today's enormous concentrations of wealth this may not be a sovereign position. One Company Holds at Least 90% of LME Copper Stocks One unidentified company holds 90 percent or more of copper stockpiles in warehouses monitored by the London Metal Exchange, the latest bourse data shows. The so-called dominant position indicated in the Warrant Cash Banding Report was previously 50 percent to 79 percent and moved to the higher band on Dec. 10, according to data from the bourse. The figure includes stockpile holdings and open positions for the next three trading days. Each warrant represents one lot of metal, equal to 25 metric tons. The fee to borrow copper for next-day delivery, also known as the tom-next spread, jumped to a premium of as much as $13 today, the most since July 2009. It was last at a discount of 50 cents. LME rules oblige holders of dominant positions to lend metal at fixed rates. "The dominant long is even longer than they were previously, and it's having an impact," Robin Bhar, an analyst at Credit Agricole SA's investment-banking unit in London, said by phone today. "It's forcing short-term rates to borrow metal to go higher." The bourse's lending guidance applies to a separate notice, called the Warrant Banding Report. That comprises of stockpiles and open positions for the next two trading days. The dominant position in that report was still at 50 percent to 79 percent on Dec. 10.
Jim Sinclair's Commentary The time is approaching when various members of the 40 states identified as bankrupt when the awful financial condition can no longer be hidden from view. Jerry Brown: California Budget Is "Much Worse Than I Thought — We've Been Living In Fantasy Land" You know it's a bad sign when the outgoing California governor announces a fiscal emergency and everyone ignores him. Now incoming governor Jerry Brown has realized how screwed the state is and he's announcing his own budget emergency, according to the LAT. He said last night: "I'm going to try to get the budget agreements done within about 60 days. I don't think we have a lot of time to waste… It will be a very tough budget, but it will be transparent… We've been living in fantasy land. It is much worse than I thought. I'm shocked." Hear that, last year's $20 billion budget cuts amounted to living in fantasy land. Brown implied he would apply major cuts to the education system and other programs. He also refused to rule out new taxes. And it's got to add up to at least $29 billion in cuts.
Jim Sinclair's Commentary John Williams' must have subscription service makes the following points: - Beware Unstable Economic Reporting! "No. 339: November Inflation, Retail Sales, Production"
Jim Sinclair's Commentary Hyperinflation will produce similar distribution problems that to the public look like shortages. Portugal Tries to Prevent Sugar Hoarding Amid Shortage, FT Says Portugal faces a sugar shortage, the first European country to find itself in this position in more than three decades, the Financial Times reported. Agriculture Minister Antonio Serrano asked people not to hoard the commodity after a breakdown in imports to refineries led to a run on supplies in the shops, the newspaper said. Global sugar prices have reached a 30-year high.
Jim Sinclair's Commentary Our Gold delivery man, JB Slear, asks if we think Mother Nature might be angry over how we are treating Earth and all that abide in it. Natural disasters kill nearly 300,000 in Latin America Nearly 300,000 people have died as a result of natural disasters that hit Latin America this year, according to a UN report released on Tuesday. The death toll is the highest in Haiti where a Force 7 earthquake killed an estimated 220,000 people earlier this year. Chile was hit by a divesting temblor measuring 8.8 on the Richter scale. In all, almost 14 million people across Latin America became homeless due to natural calamities that hit the continent since January.
Jim Sinclair's Commentary They execute derivative traders in China! China Needs to Develop More Currency Derivatives, Nafmii Says Dec. 15 (Bloomberg) — China needs to develop more currency derivatives based on the yuan, the dollar, euro and yen, Feng Guanghua, deputy secretary-general of the National Association of Financial Market Institutional Investors, said today at an industry conference in Hainan. The nation should also develop derivatives contracts based on international bonds and loans, he said, without providing a timetable for these objectives.
Jim Sinclair's Commentary You must be your own Central Bank and depository to insure your financial well being. Safe sales soar as worried bank customers keep money at home SAFE sales are soaring as more and more worried bank customers stash their cash at home. AIB said last month that the amount of money on deposit at the bank has fallen by €13bn since the start of the year — although it blamed most of the reduction on withdrawals by companies and financial institutions. Another reason for the increased use of home security safes is a growing fear of burglaries because of the recession. The AllSafes.ie company, one of the largest suppliers in the country, said its sales of home safes had increased by 80pc over the past three months compared with the same period last year. Its founder, Neil Donnelly, said that most customers did not reveal their purpose for buying one –except to say they wanted it to store cash or jewellery. But some of them had specifically cited their fears about the banks while buying a home safe.
Jim Sinclair's Commentary Don't let yourself get glued to a quote screen. Gold is going to $1650 and beyond. Expect new gold price highs Uncertainty abounds, with ongoing concerns over eurozone sovereign debt, nervousness in global financial markets, and the potential for increased concern over deflationary pressures. In the current economic and global-political environment, we see potential for gold to re-test all-time highs, above $1,424/oz (£903.32) and push to $1,500/oz in early 2011. We expect contagion from the eurozone debt crisis and for Portuguese, Spanish and Italian debt to be restructured over the next three to six months. As long as this crisis remains unresolved, and the elevated levels of risk around North Korea and the Middle East remains, we believe the gold price should remain well supported. Central banks are now net buyers of gold. The estimated 191 tons of gold that the IMF is expected to sell as part of the third European Central Bank Agreement should easily be absorbed by the market. To date, we estimate 125 tons have been sold with some 66 tons, about three months of sales, remaining. In addition, seasonal demand trends created by year-end and Chinese New Year buying are expected to have a positive impact. The next likely signal for a pause in the current gold rally would be a hike in the Fed Funds rate, which we now assume to be likely to occur towards the end of 2011 or even into early 2012. We continue to believe the very accommodative fiscal and monetary policy will ultimately prove inflationary and positive for the gold price.
Jim Sinclair's Commentary The Green Hornet says this article run today in the Asia Times is the trend maker, and not the vocal Mrs. Merkel and her euro pound manipulation. US takes Greek path The insouciant approach which President Barack Obama and the US budget negotiators have taken to the federal deficit, adding around US$900 billion to deficits over the next two years with no countervailing spending cuts, has been greeted by a sharp rise in Treasury bond yields. This brings into focus a very delicate question: at what point does the US government's credit cease being the world's "safe haven" and become merely a much larger and more dangerous version of Greece? For the past two years, anti-Keynesians such as this columnist have warned that massive federal deficits run the risk of crowding out the private sector, especially the small business private sector, which has the most difficulty accessing funding. With dollar interest rates generally declining and Chinese and other foreign investors happily piling in to fund budget deficits of $1.3-$1.4 trillion, this had appeared a purely theoretical problem. However, with commercial and industrial loans (including small business, but also including the relatively active leveraged buyout sector) declining by 25% to $1.22 trillion in the two years since 2008, the problem has been a real one. With the supply of long-term government debt so overwhelming, the yield curve between short-term and long-term interest rates has been artificially steep for over two years. Thus banks have been able to borrow in the short-term markets and invest in long-term bonds, picking up a 3% interest spread for doing so, which they leverage 15-20 times.
Jim Sinclair's Commentary China bashers are wrong one more time. China looks at keeping bank lending high Chinese policymakers are examining bank lending targets for next year that will equal or even exceed their 2010 quota, despite fears about overheating amid the highest inflation in the country in more than two years. Most analysts had expected a significant reduction from Beijing's 2010 target of Rmb7,500bn ($1,130bn) in total new loans, especially after inflation hit 5.1 per cent in November and the government promised to tighten monetary policy. But on Tuesday, a leading Chinese official newspaper reported that the government's lending quota was likely to be Rmb7,500bn again in 2011. Officials close to the process stressed that the final quota decision has not been made and the Rmb7,500bn figure is just "one opinion". The various regulatory agencies responsible for economic policy are meeting "every day" to discuss how much credit the state-controlled banking sector will be allocated for 2010, officials said.
Jim Sinclair's Commentary This is more of the standard operating process in the euro manipulation. These fellows take no risk, they are not great traders. The entire show is a set up. Euro slips as Moody's warns on Spain downgrade Early-rising European dealers have been rattled by the return of eurozone fiscal angst after Moody's said it may downgrade Spain's credit rating. The euro's legs were whipped away and forecasts for opening prices of the continent's bourses have been pulled back as dealers once again have to cope with the chronic irritation of the currency bloc's budgetary woes. The FTSE All-World index is down 0.3 per cent and commodities are lower as the dollar rallies, partly in response to the recent sharp move higher in US sovereign debt yields. US stock futures are down 0.4 per cent. The credit rating agency said it was putting Spain's Aa1 rating on review for a possible downgrade, citing Madrid's large debt and its funding requirements in 2011. The reaction to the news shows that investors remain extremely skittish about the festering fiscal difficulties in Europe and the deleterious impact that accompanying austerity measures and financial system anxiety may have on growth.
Jim Sinclair's Commentary The purchase of influence is perfectly legal, but totally amoral. Money talks, but only the few walk. Goldman Sachs Hires New York Fed's Lubke, Pointman on Derivatives Reform Theo Lubke, who headed the Federal Reserve Bank of New York's efforts to reform the private derivatives market, joined Goldman Sachs Group Inc. to help Wall Street's most profitable firm navigate the looming overhaul of financial regulations. Lubke, 44, started this month as chief regulatory reform officer in Goldman Sachs' securities division, according to a memo obtained by Bloomberg News. The newly-created role will allow Lubke to "work closely with divisional and firm-wide leadership to implement regulatory reform legislation," the memo said. Goldman Sachs is hiring Lubke five months after Congress mandated the regulation of the $583 trillion over-the-counter derivatives market, which complicated efforts to resolve the financial crisis. The reforms threaten to cut profits at dealers because they will make swaps prices known to the public. Lubke's new firm employs a former New York Fed president and has an ex- Fed board chairman as a director. The current president of the New York Fed, William Dudley, also worked there. "It's a pattern," said Charles Geisst, a finance professor at Manhattan College in Riverdale, New York, who has written about Wall Street's history. "It's troublesome stuff and there needs to be some regulation so people don't do it and undermine public policy." Michael DuVally, a spokesman for Goldman Sachs who confirmed the contents of the memo, declined to comment. Lubke Reassigned
Jim Sinclair's Commentary Open mouth currency intervention is a speciality of Mrs. Merkel. Ever wonder where she is? Apparently the manipulation of the euro has some time to go, but not price. In the final analysis Germany will fall in line. Right now they take prestige by being the strongest of the weakest. That seems a tad lame. Germany Stiffens Opposition to Aid Boost in Face-Off With ECB Germany stiffened its opposition to expanding government-financed aid for debt-plagued euro nations, leaving the European Central Bank to shoulder the bulk of the burden of fighting the crisis. With Chancellor Angela Merkel ruling out an increase in the euro area's 750 billion-euro ($1 trillion) emergency fund, Germany yesterday put the spotlight on the ECB by endorsing a possible boost in its capital. Discord between Merkel and ECB President Jean-Claude Trichet and Luxembourg Prime Minister Jean-Claude Juncker on the eve of a European Union summit evokes the tensions during the first phase of the debt crisis, when Germany held out for more than two months before consenting to a loan package for Greece. "The consequence is a stalemate that leaves us with a familiar sense of déjà vu," Ken Wattret, chief euro-area economist at BNP Paribas SA in London, said in a note to investors. "Market tensions are likely to resurface, as governments remain very publicly divided on the appropriate way forward." European bond markets fell yesterday. Spain's 10-year borrowing costs remained 248 basis points over Germany's. Portugal's spread, a measure of risk, rose 6 basis points to 339 basis points. Both spreads were the highest since Dec. 1.
Jim Sinclair's Commentary I call your attention to the statement made by key Chinese personalities concerning the price of gold as China was accumulating by every means possible. Maybe if China is paying present prices they will not be present for long, but rather go to $1650 and beyond. China's Golden Surprise: A Glittering Opportunity? This is the kind of thing that the Chinese usually keep a secret. No one knows why Beijing broke with tradition. But perhaps the news was too big to contain behind the usual wall of silence. If you hadn't already heard, China's gold imports are up – way, way up. In the first ten months of the year, China's gold imports jumped fivefold. With two months to go in the year, China had quintupled its intake of gold compared to the full year of 2009. This is big! Remember, China is already the world's largest producer. Yet its gold imports rose to 209 tonnes in the first ten months – up dramatically from just 45 tonnes the year before. Clearly Chinese mines are hitting the limits of their ability to satisfy internal demand. And make no mistake, consumer demand is booming. Not long ago, I mentioned that Beijing was actively encouraging consumers to buy gold as an investment through banks and retail outlets. The plan worked beyond anyone's wildest dreams. Tiny gold ingots, stamped with the image of a rabbit, are suddenly flying off the shelves. (2011 is the year of the rabbit in China, a year in which some say "
Jim Sinclair's Commentary You must admit that Aldous Huxley was a visionary. His predictions of government by Big Brother have become reality to those that are not among the sheeple. Maybe Oman's approach is more functional. "Technology can be among the most powerful weapons in the dictator's armory. Propaganda, the suppression of the truth, particularly in democratic societies, will bring upon an age of enslavement where instead of yokes and chains, people in celebrated "free" societies like America will be bound by the soft restraints of ignorance, incuriousness, distraction and irrationality." "Great is truth, but still greater, from a practical point of view, is silence about truth. By simply not mentioning certain subjects, by lowering what Mr. Churchill calls an 'iron curtain' between the masses and such facts or arguments as the local political bosses regard as undesirable, totalitarian propagandists have influenced opinion much more effectively than they could have done by the most eloquent denunciation, the most compelling of logical rebuttals."
Jim Sinclair's Commentary The problem already exists. There is no means of meeting the requirements. QE to infinity is not a choice, it is the only choice. Mounting Debts by States Stoke Fears of Crisis The State of Illinois is still paying off billions in bills that it got from schools and social service providers last year. Arizona recently stopped paying for certain organ transplants for people in its Medicaid program. States are releasing prisoners early, more to cut expenses than to reward good behavior. And in Newark, the city laid off 13 percent of its police officers last week. While next year could be even worse, there are bigger, longer-term risks, financial analysts say. Their fear is that even when the economy recovers, the shortfalls will not disappear, because many state and local governments have so much debt — several trillion dollars' worth, with much of it off the books and largely hidden from view — that it could overwhelm them in the next few years. "It seems to me that crying wolf is probably a good thing to do at this point," said Felix Rohatyn, the financier who helped save New York City from bankruptcy in the 1970s. Some of the same people who warned of the looming subprime crisis two years ago are ringing alarm bells again. Their message: Not just small towns or dying Rust Belt cities, but also large states like Illinois and California are increasingly at risk. Municipal bankruptcies or defaults have been extremely rare — no state has defaulted since the Great Depression, and only a handful of cities have declared bankruptcy or are considering doing so.
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| Posted: 15 Dec 2010 02:05 PM PST Dear LT, Many years ago I spoke to a man who lived through the Weimar Republic. He said that their warning was when there was no longer any change or small bills around before things got bad. the reason the penny is not worth a penny is because of all the flagrant money printing the central banks have been doing to paper over the monster mountain of OTC garbage paper. Best, Punting the penny makes sense, Senate finance committee says OTTAWA — The Canadian penny has become a nuisance in consumers' lives and the cost of producing it exceeds its financial worth, the Senate's finance committee said Tuesday as it recommended abandoning the copper coin. There are about 20 billion pennies in circulation across the country and about 600 pennies for each Canadian, said Senator Richard R. Neufeld, deputy chairman of the committee. "Most of us know the penny as no more than a nuisance that slows down the line up at the grocery store and ultimately ends up under couch cushions or in drawers," Neufeld said. "The fact is, the penny is not much use anymore." The one-cent coin has lost 95 per cent of its purchasing power since it was first introduced in 1908 and what used to cost a penny now costs 20 cents, according to the report.
Newswire Targets Zombie Traders Thus, eliminating the need to think objectively. Eric, I just thought you'd get a kick out of Yahoo finance's front page right now… Hilarious… Amir
Lower Taxes AND Spend! Deficit Cuts "Will Be Self-Defeating," Economist Declares This is not opinion but rather the message of the markets. Any material reduction in deficit spending will generate a harsh response not only on Wall Street but also Main Street. Either devalue the currency – kick the can down the road to live another day, or immediately adopt harsh fiscal discipline and get your ass served on silver platter of social order here and now. Nobody wants to be the lead scapegoat story on 60 minutes. Damned if you do, or damned if you don't. Those seeking the protection of gold understand the conundrum. The U.S. Senate is soon expected to pass an across-the-board extension on the Bush-era tax cuts. President Barack Obama's $858 billion proposal also allows an extension of jobless benefits for the close to 15 million unemployed Americans. The bill, however, is still a long way from a done deal as it does not have the full backing of House Democrats, who want to limit the tax cuts to the first $250,000 of family income. Liberals also oppose the estate tax provisions in the bill, as discussed here with former Sen. Ted Kaufman (D-Del.). Source: finance.yahoo.com Senate Overwhelmingly Passes Tax-Cut Package, 81-19 In a vote of 81 to 19, the Senate on Wednesday overwhelmingly passed the tax-cut compromise struck between President Obama and senior members of the Republican Party. Despite protestations of many congressional Democrats, the House is expected to vote on the bill later Wednesday evening or perhaps Thursday, where it is likely to be approved. Obama has said he would sign it into law later this week. The vote in the Senate nearly mirrored those from earlier in the week, which ended debate on the bill and cleared a way to final passage. The 19 dissenters were Jeff Bingaman (R-N.M.), Tom Coburn (D-Okla.), Jim DeMint (R-S.C.), Byron Dorgan (D-N.D.), John Ensign (R-Nev.), Russ Feingold (D-Wis.), Kristen Gillibrand (D-N.Y.), Kay Hagan (D-N.C.), Tom Harkin (D-Iowa), Frank Lautenberg (D-N.J.), Patrick Leahy (D-Vt.), Carl Levin (D-Mich.), Jeff Merkley (D-Ore.), Bernie Sanders (I-Vt.), Jeff Sessions (R-Ala.), Mark Udall (D-Colo.), Tom Udall (D-N.M.), George Voinovich (R-Ohio) and Ron Wyden (D-Ore).
Attention Will Turn To The U.S. Dollar Soon The media's intense, unbalanced focus on the troubles within the Euro Zone should be a major warning sign for astute trades. The US Union (States) are also struggling with massive budgetary holes driven by excessive consumption have already drawn from the bailout well numerous times under relative media blackout. Yet each time the bucket is dipped, it is camouflaged by 'redirective' headlines. Who's the more foolish: The fool, or the fool who follows him? The eventual termination operation Euro necessitates the following question: what's next? The dollar index strength, a byproduct of Euro weakness, is cyclical rather than structural. The US Union requires similar, possibly significantly more, withdrawals from the bailout well as the European Union. Jim said it best this morning, The momentum decline of the euro in operation short of the euro named "Shark Feed' is the best precursor of the " Shark Feed" being a terminal attack on the US dollar very soon. The 12/3 down gap on heavy volume has been filled on contracting volume. This suggests that the cyclical strength in the Dollar Index is weakening. A turn in the leveraged money flows from short to long by smart money will mark the turn in the dollar. U.S. Dollar Index ETF (UUP): Heading: Stocks, euro hit by Spanish credit rating warning World markets and the euro fell Wednesday after Spain was warned it may have its credit rating downgraded, echoing a similar report on Belgium the day before and renewing worries about Europe's debt crisis. In Europe, the FTSE 100 index of leading British shares was down 22.92 points, 0.4 percent, at 5,868.29 while Germany's DAX fell 55.70 points, or 0.8 percent, to 6,971.70. The CAC-40 in France was 34 points, or 0.9 percent, lower at 3,868.87. Source: finance.yahoo.com
Batême Du Feu – Baptisted By Fire Will Characterize The Recognition of Hyperinflation The undeniable face of hyperinflation – policy desperation, shortages, and growing social discontent is everywhere yet largely unrecognized by the public. I can't help but think of the old French phrase baptême du feu. Unfortunately, baptized by fire will characterize the public's recognition. Headline: Hungary Follows Argentina in Pension-Fund Ultimatum, `Nightmare' for Some Hungary is giving its citizens an ultimatum: move your private-pension fund assets to the state or lose your state pension. Economy Minister Gyorgy Matolcsy announced the policy yesterday, escalating a government drive to bring 3 trillion forint ($14.6 billion) of privately managed pension assets under state control to reduce the budget deficit and public debt. Workers who opt against returning to the state system stand to lose 70 percent of their pension claim. Headline: Anti-austerity riots erupt amid Greece strike Protesters clashed with riot police across Athens on Wednesday, torching cars, hurling gasoline bombs and sending Christmas shoppers fleeing in panic during a general strike against the government's latest austerity measures. Police fired tear gas and flash grenades as the violence escalated outside parliament and spread to other parts of the capital. Headline: Portugal Tries to Prevent Sugar Hoarding Amid Shortage, FT Says Portugal faces a sugar shortage, the first European country to find itself in this position in more than three decades, the Financial Times reported. Agriculture Minister Antonio Serrano asked people not to hoard the commodity after a breakdown in imports to refineries led to a run on supplies in the shops, the newspaper said. Headline: U.S. Called Vulnerable to Rare Earth Shortages The United States is too reliant on China for minerals crucial to new clean energy technologies, making the American economy vulnerable to shortages of materials needed for a range of green products — from compact fluorescent light bulbs to electric cars to giant wind turbines. So warns a detailed report to be released on Wednesday morning by the United States Energy Department. The report, which predicts that it could take 15 years to break American dependence on Chinese supplies, calls for the nation to increase research and expand diplomatic contacts to find alternative sources, and to develop ways to recycle the minerals or replace them with other materials.
Dear Jim, I think this speaks for itself. It matters more what 2 billion Asians think than what 700 million in the USA and West. As you have said before, the US and the West is screwed. When Lehman was flushed so was the Western world financial system. The derivative market was dead because no longer would all the OTC derivatives cancel out. That left no practical solution to the impending and then present problems. The jig was up. Best, WikiLeaks: Bank of England Sought Global Bank Bailout in 2008 (Excerpts From Article) According to the cable, King told the U.S. ambassador and former U.S. Treasury Deputy Secretary Robert Kimitt, who was visiting London, that the Group of Seven major economies was no longer relevant to deal with global financial issues. "The G7 is almost dysfunctional on an economic level, said King. Key economies are not included, especially those that have large and growing pools of capital. King said that a new international group was needed to address the issue," Tuttle said in the cable. King also said, according to the cable on the Guardian's website, it was imperative to find a way for banks to sell off unwanted illiquid securities, including mortgage backed securities, without resorting to sales at distressed valuations.
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| Posted: 15 Dec 2010 02:03 PM PST
Submitted by Mark McHugh from Across the Street What The Silver Vigilantes Understand That You Probably Don’t (Arithmetic, Human Nature and other Stuff) Sorry about the insulting headline, but every last shred of evidence I can find suggests that the most people remain utterly clueless about silver, despite the efforts of the silver vigilantes, led by Max Keiser and Mike Kreiger. Their brilliantly simple plan (go get some physical silver) promises to topple the criminally insane fraud that has become US economy. It doesn’t require politicians or regulators to lift a finger either, you simply take advantage of what is undoubtedly an artificially low price. I can completely understand anyone who is skeptical of that last statement; I’m sure you’ve been burned before, but that doesn’t mean you should stop seeking truth. Part 1. A little math.I’m not sure when performing basic arithmetic made you a conspiracy theorist, but here we are. The 2009 World’s population was about 6.8 Billion. According to the Silver Institute, total silver supply in 2009 was 889 million ounces. That means there was .13 ounces of silver produced for every human being on the planet. That looks like this:
Yep, your fair share of Worldwide silver production is a little less than the silver content of two pre-1965 dimes. That’s all. A bargain at about four bucks when you consider the amazing properties of this element. FYI: World oil production per capita is 190 gallons. This….
…represents more than ten years of worldwide silver mining production divided by 2009 population. Less than $35, and hell of lot easier to transport than 7,600 quarts of Quaker State. Please note that so-called “World production” includes government sales and scrap. Government sales and “scrap” have accounted for more than 25% of “World Silver Production” from 2000 to 2009. I’m not sure I believe that one out of every four ounces of silver gets recycled, but understand that without that bonus production, demand exceeds supply by 37%. Part 2. Who needs silver?Just about everybody, it turns out. Sadly, another way to get yourself labeled a conspiracy theorist is by reading government documents like the Constitution, or the Department of the Interior’s 2009 U.S. Geological Survey which states:
Yet you can actually find dunces out there claiming the digital cameras have made silver obsolete. You should live so long… Fun Fact: Silver (not gold, copper or anything else) is the element with the highest electrical conductivity. Part 3. People lie…..
Lesson: When someone says you can exchange paper for precious metals – make the swap before they change the rules. Since the invention of paper, people have been writing bogus notes, and if there are two time-tested methods to become wealthy beyond your wildest dreams, they are: 1)Selling stuff that doesn’t exist and 2) Selling stuff you don’t actually own. Unless you believe there has been a sudden outbreak of integrity in the banking industry, there’s no reason to believe these dynamics are not still in play, is there? As recently as 2007, Morgan Stanley settled a class-action lawsuit with 22,000 clients who bought and paid storage on “phantom” silver (check out the Ted Butler article Money for Nothing). At today’s prices, a million dollars in gold weighs less than fifty pounds, but a million dollars in silver weighs more than 2,300 pounds! So ask yourself, how many rich people are storing their own silver? How many hedge funds hold physical silver in their own storage facility? Or have they entrusted the storage to the big banks? JP Morgan is the custodian of the ishares Silver Trust (SLV), which now holds over 350 million ounces of silver, provides sovereign and corporate investors with precious metals solutions (JP’s website), and is the largest short seller of silver in the history of the world. Berkshire Asset Management’s Eric Fry writes:
If you can, forget about the conflict of interest, and ponder the enormity of the explosion.
Part 4. A little more math.Estimates of total silver production since the dawn of man range from 46 to 53 billion ounces (roughly 11x gold production), but unlike gold, we’ve used pretty much all of it (although squandered might be a better word). It’s in our cemeteries (fillings) and scattered throughout our landfills. There hasn’t been a significant surplus since 1990. Ted Butler and others estimate that there is far less silver bullion in the world than gold bullion and they back up their case with numbers that the paperbugs have never even bothered to refute. So why does gold trade at more than 45 times the price of silver? Because JP Morgan, the US government, and every other psuedo-capitalist parasite wants it that way. But that’s a truth for another day. Part 5. Other things you should know.The Treasury has sold 34 million one ounce American Eagles so far in 2010. Those sales total less than one Billion dollars. Apple (AAPL) trades about that much every hour the market is open. Meanwhile the Treasury has issued more than 1.5 Trillion in new debt (1,500 times more) in 2010. Just for fun, let’s multiply 1500 by 34 million. A transaction of that size would have equaled every last bit of silver ever discovered at $30 an ounce. Yet you can actually find people who believe silver is the bubble. Treasury doesn’t make it easy to buy silver. They’ll sell you bills, bonds and notes directly online, but not precious metals at anything close to market price. The mint only does business with 11 Authorized Purchasers (a list can be found here), Why the lack of savvy? China can blow up the COMEXs silver market in the blink of an eye, at any moment. They can do it with their pocket change, as a goof. And if we piss them off enough, they will. Part 6. So what’s silver worth.The short answer is: more. If silver were priced based on its occurrence relative to gold, it would be over $125/oz. If it were priced on its availability – somewhere around $2,000. But if you are content to let the likes of Blythe Masters dictate the value based on truckloads of worthless paper promises, you can expect ultra-low prices until the whole thing blows up. Of course at that point, we’ll be so busy killing each other for food no one will have time to say, “I told you so.” The silver vigilantes just want you to re-learn what the phrases like, “cold, hard cash,” and “payment in full” are supposed to mean. There not asking you to sink everything you have into physical silver, just a little. Silver can’t be printed into oblivion, or stolen by a cyber attack. Why wouldn’t you want to own some of your very own? A paper dollar from 1960 is worth exactly the same as a paper dollar in 2010, but four quarters from 1960 are worth more than $21. Given the fiscal insanity of the US government, I can’t imagine the US dollar surviving another 50 years, but I’m quite sure that silver will still be useful. Please consider getting some while you still can.
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| Observations On The Correlation Between Gold Price And Rates... Or The Complete Lack Thereof Posted: 15 Dec 2010 01:36 PM PST
One of the specious and false memes circulating among the faux-punditry, which is undoubtedly based on a few months worth of amateur observations, is that gold is supposed to correlate inversely with interest rates. Presumably the logic goes something like this: instead of buying gold, it makes more sense to take one's money and buy $4.99 grande lattes, as it will be $6.99 tomorrow. So sell now. Fair enough, and on the surface this almost makes sense. Too bad it is completely wrong. If those same people who base their observations on one quarter of a business cycle maybe had the tools to extend their analysis a little further back, they would find that gold correlates with 10 year rates... in absolutely no way (with one very notable exception). Exhibit A: Correlation plot between gold and the 10 Year since 1980.
Exhibit B: Tabular correlation between gold and the 10 Year: not the correlation coefficient.
Exhibit C: And just to confirm, there is no correlation between gold and stocks either.
Why start at 1980 one may ask? Great question. Because going just a little back shows the one true outlier to our statement... And the one that totally blows the opposing argument out of the water. To wit: when 10 year rates exploded in the end of 1979 and early 1980, and only the last minute intervention by Paul Volcker prevent an all out out of control inflationary episode (when the 10 Year moved from 9% to 13.% in 6 months), gold...doubled, and hit its all time inflation adjusted prices of over $800/ounce. In other words, a surge in rates resulted in the biggest break out in gold in history. Gold price in 1980:
And 10 Year rates in 1980:
So hopefully this will end all debate over how the price of gold correlates with rates. It doesn't. What it does correlate with, is the propensity of the US economy to go down the shitter, and will certainly surge in a comparable demonstration of a self-imposed gold standard by the time the bond vigilantes come to the conclusion that it is time to redecorate the living room furniture. Ironically, the only thing that can crash the price of gold is if Bernanke, just like Volcker before him, does the right thing, and proceeds with the biggest tightening episode in recent US history. Everything else is smoke and spurious correlation (as for the probability of Bernanke tightening, that is worth another zero-word post altogether).
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| Gold Guru Steve Palmer: Get in Early, Short Gold Posted: 15 Dec 2010 11:44 AM PST The Gold Report submits: If you're looking for an upward-trending outlook on gold from AlphaNorth Asset Management President and CEO Steve Palmer, it's not coming anytime soon. "If you just look at the supply/demand factors outside all the gold investment demand, it's not a pretty picture," he says. But he's still making money on junior gold equities. The AlphaNorth Partners Fund, about 10% of which is comprised of gold small caps, has averaged returns of 28.4% since it started in 2007. In this Gold Report exclusive, Steve explains his position on gold and shares some of his favorite gold juniors in the Yukon. Complete Story »
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| Gold Price Won't Dip Lower Than $1,365 or $1,350, Buy Anywhere in There Posted: 15 Dec 2010 11:15 AM PST Gold Price Close Today : 1385.70 Change : (17.90) or -1.3% Silver Price Close Today : 29.225 Change : (0.534) cents or -1.8% Gold Silver Ratio Today : 47.41 Change : 0.249 or 0.5% Silver Gold Ratio Today : 0.02109 Change : -0.000111 or -0.5% Platinum Price Close Today : 1697.10 Change : 1.30 or 0.1% Palladium Price Close Today : 747.20 Change : -8.80 or -1.2% S&P 500 : 1,235.23 Change : -6.36 or -0.5% Dow In GOLD$ : $170.92 Change : $ 1.92 or 1.1% Dow in GOLD oz : 8.268 Change : 0.093 or 1.1% Dow in SILVER oz : 392.04 Change : -0.58 or -0.1% Dow Industrial : 11,457.47 Change : -19.07 or -0.2% US Dollar Index : 80.24 Change : 0.877 or 1.1% The GOLD PRICE and SILVER PRICE answered my query from yesterday by falling hard. US Dollar avenged itself on those currencies who have been kicking sand in its face and calling it a 98 lb. weakling. Stocks, I think, broke. Silver and gold op'ed the day in weakness and kept on getting weaker. That hints they may dip even deeper tomorrow. In New York the GOLD PRICE dropped off a cliff at the open from 1395 to 1384 in a little more than an hour. It tried to rally but couldn't rise above 1392, then steadily eroded the day away. At Comex close gold had given up $17.90 to $1,385.70. In the aftermarket it kept on falling to $1,379.90. It's a good guess this weakness will continue tomorrow, maybe breaking the last low at $1,372 and falling to the 50 DMA at $1,368. A real scare would carry slightly through the 50 DMA to $1,350 or so. Right now I am expecting that the present correction will not reach lower than $1,365 or $1,350, and would buy anywhere in there. Then gold may trade sideways a few days, maybe a number of days, before picking up its upward climb again. In the plainest English, I don't believe we have seen the peak of this long move yet, although that probably will not come before January. If that's correct, the GOLD/SILVER RATIO should make a new low by a couple of points, drifting down to perhaps 45.5. I would swap silver for gold at any spot ratio between 47.50 and 45.50. The SILVER PRICE began the day around 2940c and about NÉE open it was still at 2930c. About that time it stumbled to 2885, rose and climbed back to 2940, then fell off the rest of the day. Comex close found it 53.4c shorter at 2922.50, but the damage didn't stop there. Aftermarket dragged it below 2900c to 2880c. What's to come? Here's a guess: silver drops tomorrow slightly below the 20 DMA at 2816 and even breaks 2800c and scares everybody to death. Then it trades sideways a while before lifting off again for the final leg up. Today the dollar slapped the nose off the euro. Euro fell 1.01% to 1.3218, pushed below its 20 DMA and nearly to its 200 DMA (1.3126). So much for scrofulous euro replacing the scrofulous dollar. Tuesday saw the US DOLLAR INDEX drop to 78.80 in a V-bottom, recover and shoot to 79.65. Today it launched from that pad, withstood an attack that drove it back to 79.46, then fought back and soared to a high of 80.284. Last traded at 80.244, showing a gain of 87.7 basis points, a high jump by the dollar's usual standards. Resistance to be now becomes 80.30. Today's jump carries the dollar nearly to the last high at 80.40 and above its 20 DMA. A mere 10 basis points tomorrow carries it above that last high and breeds the assumption that the dollar has turned up again. Of course, it must confirm that. Dollar appears to be ready to rally for a time. When I say that the Dow looks like rags hung out to dry on a line on a windy day, y'all have to see that in your mind's eye. If you look at today's charts for the Dow and S&P500 at www.nasdaq.com you'll see what I mean, a ragged edge above the line here and another below there. Dow still did better than the Nasdaq and SYP500, which just fell down the hill at 11:00 and never stopped rolling. Dow lost 19.07 to end at 11,457.47 while the S&P 500 was robbed of 6.36 points to 1,235.23. Soon, soon, one day soon will come a weighty plunge that will have investors weeping, wailing, and gnashing teeth even at Christmastide. Ain't no Santa Claus on Wall Street. Miserable weather here this evening, freezing rain has smothered everything. Mercy! Avoiding this stuff is one of the chief reasons I don't live in Minnesota, and here it is chasing me! Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com Phone: (888) 218-9226 or (931) 766-6066 © 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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| Crash JP Morgan, Buy Silver: Spotted in a bathroom in a bar in Brooklyn Posted: 15 Dec 2010 10:47 AM PST Thanks Ben. Share this:
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| Posted: 15 Dec 2010 10:46 AM PST What The Silver Vigilantes Understand That You Probably Don't (Arithmetic, Human Nature and other Stuff) Share this:
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| Are the central banks running a fractional gold system? Posted: 15 Dec 2010 10:31 AM PST Online version is here Are the central banks running a fractional gold system?
This thought is prompted by a forensic study of the Bank for International Settlements’ records and accounting procedures with respect to its dealings in gold, which was presented by Robert Lambourne to the Gold Symposium in Sydney on 9th November. The link to his report is here. Lambourne points out that the BIS was founded in 1930, when settlements between central banks routinely involved gold, and the primary function of the BIS was to facilitate these settlements without the physical transfer of bullion. This involved gold accounts being maintained at the BIS for gold owned by central banks, with other central banks at the main depository centres. Lambourne cites the example of the pre-war German Reichsbank, which held gold through the BIS in Amsterdam, Berne, Brussels, London and Paris. Central banks were offered two different types of account at the BIS, earmarked and sight: earmarked accounts recorded gold held separately and specifically for a central bank, and sight accounts were non-specific. Earmarked gold is allocated, while sight gold is unallocated; earmarked is custodial and sight is co-mingled. The flexibility of the system allowed a central bank to diversify its gold reserves in a number of centres through a politically neutral institution, and it made sense to allocate some of this into a fungible account to settle transactions with other central banks. But that was pre-war, and before the US demonetised gold with the co-operation of the IMF and other European central banks. Today, the BIS still operates earmarked and sight accounts for central banks, but crucially, rather than have the bulk of gold in earmarked accounts with a smaller float in fungible sight accounts, the bulk of central bank gold is now held in unallocated sight form. Lambourne brings this point out in his analysis of the 2009/10 BIS Annual Report, which shows in Note 32 that the BIS holds only 212 tonnes for central banks in earmarked accounts, and 1,704 tonnes on its balance sheet in sight accounts. Furthermore, the BIS accounts disclose that almost all of the 1,704 tonnes is held at central banks in unallocated sight form. This confirms that the major central banks themselves also operate sight accounts. So to summarise so far, out of 1,912 tonnes at the BIS, 90% of it is now unallocated and nearly all of this gold is held in unallocated accounts at other central banks. While this sight gold at central banks is technically deliverable on demand, there is no apparent requirement for them to actually have it. It is therefore entirely possible for a central bank to retain only a small portion of the total owed on sight accounts, which after all is what banks have done from time immemorial. The temptations to use physical gold from these unallocated sight accounts to supply the market have been enormous, given the progressive demonetisation and discreditation of gold by the BIS founder members. It is easy, without proper audits, to keep these activities secret from the markets and even from other central banks not in the inner circle. It would be very interesting to know, for example, the terms under which India agreed to buy 200 tonnes of gold from the IMF. Did she actually take delivery into an earmarked account, or was it a pure paper transaction across sight accounts? If she had insisted on an earmarked account, would the deal have gone to someone less picky? Was the IMF gold itself earmarked or sight, existing or non-existent? As an outsider from the inner BIS circle the Bank of India is not in a position to suspect she may be the victim of a pyramid scheme run by her superiors; nor indeed is any other of the minor central banks with sight accounts in London, New York or Zurich. We must hope for the sake of financial stability that such suspicions are without foundation, but this hope is untenable while the major note-issuing banks refuse to provide independent audits of their activities. If these central banks have been operating a fractional sight system, then it could explain how they have managed to supply so much bullion into the markets while appearing to maintain their official reserves. China and Russia must be watching this with great interest. We can assume that their intelligence services are more aware of the true position than the general public, and if they also conclude that the Western central banks are running a fractional system using sight accounts, this knowledge hands them great economic power. It is relevant to bear this in mind, because it will condition the US’s response to what is developing into a destructive gold crisis. Political and strategic considerations will have to be weighed as well as purely financial and practical ones. It would be downright stupid, for example, for the US to confiscate privately owned gold, without international agreement from Russia China and India as well as the Europeans to take similar action. And how co-operative would any nation be when they discover that the gold they thought they had at the BIS, the Fed and the Bank of England has actually vanished? This is important because the basic problem is that government and banking debt around the world are both rapidly moving towards default, and since governments are guaranteeing the lot, the pace of monetary creation is accelerating. The consequence is that the gold suppression schemes, which have existed for the last one hundred years in one form or another, are finally coming to an end. We are trying to guess how dramatic that end will be. It will be difficult enough to stop a run by unallocated account holders on the bullion banks, without forcing a cash-payout amnesty. But if the central banks themselves cannot supply the necessary bullion to prevent this, the prospect of a total collapse of paper money will be staring us all in the face.
16 December 2010 Alasdair Macleod FinanceAndEconomics.Org Somerled Newton Poppleford Sidmouth Devon EX10 0BX Tel: +447790 419403 +441935 568393 
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| Posted: 15 Dec 2010 10:28 AM PST
There are a dozen different barometers for economic stress in the EU. They are all pointing higher. CDS and bond spreads are going through the roof. There are riots again. While it is not a new story, the fact that Belgium is now going center stage in the EU mess is a very interesting elevation of risk. Geographically speaking, we have reached the core. For me, the best measure of stress has always been the EURCHF. That pair is sending off alarms. We are just a tad above the all time low of 1.2770. I see no reason why a new low should not be set by the NY open. The strong Swissie, weak Euro story has been with us for quite a while now. This graph shows how far we have travelled on this cross.  It is easy to blame all of the weakness in the EURCHF on the ongoing circus in Disney Euro Land. But I think there is more to the story. The recent meltdown in the cross started on 11/3/2010, the day that QE-2 became a reality (surprised?). I never have believed in coincidences, this time is no exception.  As of the end of the third quarter the Swiss National Bank reported reserves in Euros totaling 90.9b. If the year-end rate is the same as today it translates into a three-month loss of CHF 5.5b (USD 5.6b). On a population-adjusted basis this would be the equivalent of a $214b loss in the US. On a GDP comparison this is equal to $160b. Can you imagine if the Federal Reserve had a loss in three months of that magnitude? Ron Paul would shut them down. This is a big deal for little Switzerland. The problem that the market faces is that the year is not over. Liquidity between now and year-end is going to get thinner and thinner. Big risk taking and big FX books are not in the cards this holiday. That being the case, some unanticipated things might occur. Watch out for gaps in currency trading for a bit. If that starts to happen and volatility jumps up it will spread to other markets. I think markets have been “thin” across the board for some time. Equities are just robots moving paper for the most part. The big jump in global bond yields of late stinks a bit of liquidity issues. FX volume has been heavy, but are there folks who are willing to take on big new risk if money starts moving? I wouldn’t think so. If money decides it does have to make a move over the next few weeks, then it’s likely to have an out-sized impact. 
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| Posted: 15 Dec 2010 10:13 AM PST
By now America has grown to expect that every failed negotiation by the politico-financial oligarchy always ends up with some version of the "Mutual Assured Destruction" card. And while the bankers of the world at least threaten others with total annihilation if their "much more erudite" suggestions are not adopted up by the great unwashed plebs, the president has come up with a unique spin on this worn out tactic. The Hill reports that the president has been telling members of Congress that failure to pass the tax-cut legislation could result in the end of his presidency. This begs the question: with the domestic (and global) economy in shambles, and not foundering only due to $4+ trillion in fiscal and monetary stimuli, and near-double digit unemployment, (there is, however, a silver lining - Reuters reports 2010 may be the second highest bonus payout season on Wall Street ever), whether Obama's departure would even be considered 'bad thing'... From The Hill:
So here is the math: marginally higher taxes, and the potential for actual economic improvement in the future, or we keep Obama, and get $5 trillion more in cumulative deficits over the next 10 years. It sure sounds like a toss up.
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| Steve Palmer: Get in Early, Short Gold Posted: 15 Dec 2010 10:12 AM PST Source: Brian Sylvester of The Gold Report 12/15/2010 If you're looking for an upward-trending outlook on gold from AlphaNorth Asset Management President and CEO Steve Palmer, it's not coming anytime soon. "If you just look at the supply/demand factors outside all the gold investment demand, it's not a pretty picture," he says. But he's still making money on junior gold equities. The AlphaNorth Partners Fund, about 10% of which is comprised of gold small caps, has averaged returns of 28.4% since it started in 2007. In this Gold Report exclusive, Steve explains his position on gold and shares some of his favorite gold juniors in the Yukon. The Gold Report: For our readers, who may not know much about AlphaNorth Asset Management, please give us an overview of your company, its funds and how you manage them. Steve Palmer: My partner Joey Javier and I founded AlphaNorth in 2007. In December of that year, we launched the AlphaNorth Partners Fund, which is a long-biased, smal...
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| John Williams - Massive Selling of US Currency Lies Ahead Posted: 15 Dec 2010 10:10 AM PST  John Williams today was dispatching information regarding gold, silver, M3, nearby massive selling of dollars and inflation. Here is a portion from his commentary, "Despite November 9th's historic high gold price of $1,421.00 per troy ounce (London afternoon fix) and the multi-decade high silver price of $30.50 per troy ounce (London fix) on December 7th, gold and silver prices have yet to approach their historic high levels, adjusted for inflation."
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| Posted: 15 Dec 2010 09:36 AM PST Gold dips; firmer dollar, profit taking cited The COMEX February gold futures contract closed down $18.10 Wednesday at $1386.20, trading between $1383.70 and $1398.00 December 15, p.m. excerpts: see full news, 24-hr newswire…
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| Why Central Bank Secrecy is Detrimental to Free-Market Capitalism Posted: 15 Dec 2010 09:00 AM PST WikiLeaks is grabbing the headlines, but your California editor considers the "Icky-Leaks" issuing from the Federal Reserve to be much more intriguing – like the icky leak that the Fed doled out trillions of dollars in clandestine bailouts and guarantees during the crisis of 2008 and early 2009. Thanks to a nifty little provision in the Dodd-Frank reform bill, the Fed was forced to come clean with these embarrassing details. On December 1, the Fed published an exhaustive and detailed list of bailout recipients, along with the sums each received. "The document dump confirms," The Nation reports, "that the $700 billion Treasury Department bank bailout…signed into law under President George W. Bush in 2008 was a small down payment on an secretive 'backdoor bailout' that saw the Fed provide roughly $3.3 trillion in liquidity and more than $9 trillion in short-term loans and other financial arrangements." Bernanke vehemently resisted making these disclosures…for obvious reasons. The disclosures reveal the Fed's too-cozy relationship with Wall Street. They also reveal a kind of institutionalized arrogance: the Federal Reserve knows what's best for us, even if we don't know it ourselves…or believe it. During the last several months, Chairman Bernanke frequently and persistently asserted the need for secrecy at the Federal Reserve. Transparency, he argued, would compromise the Fed's independence. The argument is ridiculous. Secrecy facilitates corruption and abuse. Transparency prevents it. A couple of free-thinking politicians recognized this reality early in the credit crisis. As early as February, 2009, Senator Bernard Sanders, the Vermont Independent, complained to Bernanke, "Given the size of the [Fed's] commitments, it is incomprehensible that the American people have not received specific details about them." Bernanke tersely replied: "The Federal Reserve does not release specific information regarding the borrowings of individual institutions from our lending facilities. The approach is completely consistent with the long-standing practice of central banks." As it turns out, this approach is also completely consistent with promoting deceptions and conducting crony capitalism…like doling out enormous bailout checks to Wall Street banks without ever disclosing the timing or size of these bailouts to the general public. This is not a healthy circumstance for an economy that purports to practice "free-market capitalism." "Since its inception," Congressman Ron Paul griped in a February 2009 speech, "the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations. While the conventional excuse is that this is intended to reduce the Fed's susceptibility to political pressures, the reality is that the Fed acts as a foil for the government…" But now that the Fed has lost its "right" to non-disclosure, the American public is learning some very ugly truths, like the ugly truth that several large Wall Street banks received much greater assistance from the Fed than anyone had ever disclosed during the crisis of 2008-9. The bailout recipients and the Fed were both as silent as starfish about the spectacular scale of the Fed's bailout activities. "Almost two years ago," Senator Sanders recalled recently. "I asked Chairman Bernanke to tell the American people which financial institutions and corporations received trillions of dollars as part of the Wall Street bailout. He refused. [But now], as a result of an audit-the-Fed provision I put into the financial reform bill, we finally learn the truth – and it is astounding." During the crisis, most Wall Street banks admitted to receiving a few billion dollars in TARP lending (after which they all made a big to-do about re-paying it). But they never uttered a peep about the billions of dollars they obtained secretly. Goldman Sachs borrowed billions from the Fed's Primary Dealer Credit Facility, but never bothered to mention this fact in any of its SEC filings. Goldman was equally silent about its borrowings from the Fed's Term Securities Lending Facility. Only now – nearly two years later – do we learn what really happened. "Morgan Stanley sold the Fed more than $205 billion in mortgage securities from January 2009 to July 2010," The Huffington Post reports, "while it's much bigger rival, Goldman Sachs, sold $159 billion. Citigroup, the nation's third-largest bank by assets, sold the Fed nearly $185 billion in mortgage bonds. Merrill Lynch/Bank of America sold about $174 billion. It's not clear how much these firms profited, but it's abundantly clear that they did turn a profit." These obscenely large taxpayer-funded bailouts are not merely reprehensible for being conducted secretly; they are reprehensible for having deceived taxpayers, dollar-holders, investors and all other individuals who deserve honest and transparent financial markets. Eric Fry Why Central Bank Secrecy is Detrimental to Free-Market Capitalism 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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| Chinese Take-Out (Of US Economy) Posted: 15 Dec 2010 08:51 AM PST by Jim Willie CB December 8, 2010 home: Golden Jackass website subscribe: Hat Trick Letter Jim Willie CB, editor of the “HAT TRICK LETTER” Use the above link to subscribe to the paid research reports, which include coverage of critically important factors at work during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy. The Chinese really must think the American strategy and behavior to be braindead and self-destructive. The US helped them assembl...
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| Posted: 15 Dec 2010 08:48 AM PST
After it was earlier announced by the WSJ that BofA was in settlement discussions with the various parties seeking putbacks on $47 billion worth of mortgages, the bank has just released an statement that while there is no settlement imminent, the bank is merely extending the period of negotiation, which started on October 18 and had a 60 day duration. This is not surprising: after all the bank has a mere $872 million in amounts reserved for putbacks. This amount will be laughable should even 10% of the total amount sought to be put to BofA be formally repurchased by the undercapitalized bank. Here is the WSJ's earlier announcement:
This is notable, as, if true, it once again confirms a 180 on the prior lies told by Brian Moynihan:
As a reminder, BofA has a tiny $872 million amount reserved for mortgage repurchases. Should the bank be forced to repurchase anything more than just 2% of the claim, it will have to seek substantial income statement impairments in its Q4 earnings. And full BofA statement:
Counsel for BAC Home Loans Servicing, LP and Gibbs & Bruns LLP on behalf of certain investors including those who signed the previously reported October 18, 2010 letter with respect to private label residential mortgage-backed securitizations, as well as counsel for The Bank of New York Mellon, as trustee, have agreed to extend any time periods commenced by the October 18 letter. This extension will permit the parties to continue constructive dialogue around the concerns raised. The agreement covers all of the securitizations listed on the attached Exhibit A. The claims and defenses of all parties are preserved.
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Gold futures on the COMEX were pressured by a bout of U.S. dollar strength as well as investors' profit-taking. A trader mentioned that the dollar gained momentum against other major currencies on Wednesday after Moody's ratings agency warned that it was considering cutting Spain's sovereign debt rating, adding to the persistent fear over the eurozone's financial woes…
Consumer prices rose 0.1% in November... and less than a percent over the past year. If you strip out food and energy -- which government number crunchers do, because those prices are allegedly “volatile” -- you still get a 0.1% increase.
But whom are we kidding? Even the “headline” figure, the one including food and energy, is suspect.
You can see the end result over time maintained by our friend John Williams of Shadow Government Statistics. Mr. Williams calculates economic numbers the way they did back in the Carter era. The “official” CPI number is in red. The shadow stat is in blue:
In the meantime, the Federal Reserve statement issued after yesterday's meeting amounted to, “steady as she goes” on the ill-fated QE2. The Fed, looking at current "official" CPI numbers, sees “deflation”...
Sooner or later, reality is going to catch up to the gamed statistics. Indeed, “an inflationary outbreak is very likely,” says Chris Mayer.
Stocks are up modestly this morning, the major indexes adding to yesterday’s gains. Traders are digesting the CPI numbers and a Federal Reserve report saying industrial production grew at its fastest clip since July.
Standard & Poor’s threatened yesterday to downgrade Belgium, home to a real estate bubble big enough to rival Spain’s. Austria, meanwhile, is home to a boatload of banks that got into trouble lending to neighbors like the Czech Republic and Hungary -- where a credit bubble popped long ago.
Gold is taking every nugget in stride this morning and holding firm above $1,380. Last we checked, the spot price was $1,389.
The tiny gold miner Byron King likes right now just announced it’s partnering up with another company to develop “King Alexander’s mine” (as Byron has labeled it).
To the list of indignities facing small business owners -- new regulations, onerous Form 1099 requirements -- we can add this today: “Results-oriented” job candidates touting their “extensive experience.”
“Have you ever sent an email to your congressman (senator, president)?” writes a reader, addressing the fellow who wrote yesterday suggesting our readership stop kvetching and do something by emailing Congress and the White House.
“I had the unfortunate experience of e-mailing my local congressman,” writes another, “concerning a vote on a bill of high importance to me. I received a generic response saying something to the effect that he would research the bill and give my input serious consideration.
“I've just finished a four-year tour in the war against the zombies as president of an active and effective local taxpayer group. The job included some e-mails to public officials (largely useless wastes of time), as well as frequent public comments at city councils, transportation authorities, emergency services committees, county commissions, etc.
“You missed the point,” writes the reader who launched this discussion, “but that’s OK, because you made up for it with your 'drop out' comment! Great idea, and one that even the sheeple can get behind.
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