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• Dave Morgan: Escape the Matrix
• Bespoke's Commodity Snapshot (12/7/10)
• Pattern of Charts Suggest Gold and Equities Going Higher into 2011
• Gold and Silvers Daily Review for December 7th, 2010
• Gold Reaches New Record Nominal High at $1,428/oz on Sovereign Debt and…
• How Much Gold and Silver Will the Treasury Secretary Determine is Sufficient
• GGR Chosen for The Stock Advisors 2011 Top Pick Challenge
• SIGNS ARE STARTING TO FALL INTO PLACE
• The dumbest things Ben Bernanke ever said
• RISK ON: Stocks and commodities set to surge this morning
• The European "bank mutiny" has begun
• Tax shocker: Obama agrees to extend Bush tax cuts
• Physical Gold and Silver Supplies Are Tighter Than Reported...
• Midas Letter Asks: Is Seafield Resources The Next Ventana Gold?
• Get your gold out of the banking system, Rickards tells King World News
• China's Household Gold Savings Graph
• Get Your Gold Out of the Banking System: Jim Rickards
• Big Squeeze Is On In Gold and Silver
• The Key Relationship between US Real Rates and Gold Prices
• The SP 500 and Gold are in the last stages of the rally from July
• Gold & Silver Bull Markets “Can Withstand Liquidation”…
• The 3457%Gold Analysis Difference Between Pros and The Uninformed
• Guest Post: The Three Stages of Delusion
• ECB’s Wellink says Gold price has increased excessively
• CBS Allows Fed to Spread Disinformation Unchallenged
• Silver rises above $30.00/Huge movements in silver comex/Bernanke on CBS 60 minutes
• Oil Demand’s Triumphant Return
• Alaskan Gold: A New Super-Deposit in the Making?
• JP Morgan vs. Silver: Go Gold
• Gold Plated
• Investing in India: Optimism in the New New World
• How to Be Self-Reliant in the Age of Turmoil
• Sprott: Silver as the Next Big Investing Windfall
• Danger of Deflation Depends on Your Definition of Deflation
• Why I Bought Silver...And Why I Won't Sell
• Gold Seeker Closing Report: Gold Sets a New All-Time Closing High While Silver Tops $30
• Max Keiser vs. JP Morgan Silver Manipulation (German)

Dave Morgan: Escape the Matrix Posted: 07 Dec 2010 05:26 AM PST Dave ain't no Larry Fishburne, but what the heck... Take the SIlver Coin anyway. I think my Adobe Flash is corrupted, the standard Embed Video isn't working for me. If needed, try this link:http://www.youtube.com/watch?v=SK3pItWjvuI

Bespoke's Commodity Snapshot (12/7/10) Posted: 07 Dec 2010 05:13 AM PST Hickey and Walters (Bespoke) submit: Below we highlight our trading range charts for ten major commodities. For each chart, the green shading represents between two standard deviations above and below the commodity's 50-day moving average. Moves above or below the green shading are considered overbought or oversold. At the moment, everything is overbought except for platinum, corn, and coffee. While these three commodities aren't overbought, however, they are in pretty solid uptrends. Oil, gold, silver, and copper are all trading at 52-week highs as well. With pretty much everything extended to the upside at the moment, a short-term pullback wouldn't be shocking. Complete Story »

Pattern of Charts Suggest Gold and Equities Going Higher into 2011 Posted: 07 Dec 2010 04:35 AM PST My technical analyses of the future direction of the U.S. dollar, the price of gold and the American and Chinese stock markets suggest that the near term should be somewhat choppy but with a favorable upward bias for gold and the markets. Let me illustrate my findings with the following charts and explanations. Words: 965

Gold and Silvers Daily Review for December 7th, 2010 Posted: 07 Dec 2010 01:26 AM PST

Gold Reaches New Record Nominal High at $1,428/oz on Sovereign Debt and… Posted: 07 Dec 2010 01:23 AM PST

How Much Gold and Silver Will the Treasury Secretary Determine is Sufficient Posted: 07 Dec 2010 01:16 AM PST gold and silver blog

GGR Chosen for The Stock Advisors 2011 Top Pick Challenge Posted: 07 Dec 2010 12:32 AM PST Our 2010 pick one of the top performers in 2010. As we write this Tuesday morning at 06:30 CT gold is trading in the $1420s and silver is tickling the $30.40s. That's about as good of a segue into our topic for this morning as we could have possibly hoped for. Christmas has come a little early for Vultures this year. About one year ago we were honored to be included in a select group of analysts and newsletter writers to participate in Sephen Halpern's annual The Stock Advisors.com Money and Finance Top Picks Report for AOL.

SIGNS ARE STARTING TO FALL INTO PLACE Posted: 07 Dec 2010 12:13 AM PST If gold closes positive today it will be moving higher at a 76% clip. Today will mark the 14th day of the current daily cycle. We will soon enter the timing band for the next cycle low. The dollar is now deep into the timing band for a cycle low and could bottom sometime this week. Sentiment is starting to get frothy. Traders are starting to find reasons for why gold and silver will just continue higher indefinitely. (JPM short squeeze) All signs that an intermediate top is approaching. Trust me we will get a profit taking event. They come like clockwork about every 20-25 weeks. I went over in the weekend report what to look for to spot a potential top. Stay on your toes here folks! This posting includes an audio/video/photo media file: Download Now

The dumbest things Ben Bernanke ever said Posted: 07 Dec 2010 12:09 AM PST From The Economic Collapse: Did you see Federal Reserve Chairman Ben Bernanke on 60 Minutes the other night? Bernanke portrayed the Federal Reserve as the great protector of the U.S. economy, claiming that unemployment would be 15 percent higher if the Federal Reserve had sat back and done nothing during the financial crisis. And he even started laying the groundwork for a third round of quantitative easing. Unfortunately, 60 Minutes did not ask Bernanke any hard questions and did not challenge him on his past record. It was almost as if they considered Bernanke to be above criticism. But someone in the mainstream media should be taking a closer look at this guy and his record. The truth is that... Read full article... More government stupidity: Fed chairman Ben Bernanke is officially on drugs Congressional hypocrite Barney Frank hits a new low Fed "quarantines" $110 billion in bungled U.S. dollars

RISK ON: Stocks and commodities set to surge this morning Posted: 07 Dec 2010 12:09 AM PST From Bloomberg: Stocks rose, copper and gold climbed to all-time highs, and Treasurys fell after President Barack Obama agreed to extend tax cuts, offsetting concern that Europe's debt crisis will spread further. The Stoxx Europe 600 Index climbed 1.3 percent at 7:35 a.m. in London, while Standard & Poor's 500 Index futures added 0.9 percent. The yield on the 10-year Treasury advanced seven basis points to 2.99 percent. The Dollar Index fell 0.3 percent. Copper rallied as much as 2.8 percent, gold jumped 1 percent to $1,428.55 an ounce, and oil rose to a 26-month high. U.K. power prices increased after electricity consumption swelled yesterday to the highest level this year. Obama said he'll agree to a two-year extension on all Bush-era tax cuts in a compromise he called "an essential step on the road to recovery." The European Union is set to approve Ireland's rescue package, while the region's finance ministers ruled out immediate aid for Portugal and Spain or an increase in the 750 billion-euro ($1 trillion) debt crisis fund. The U.S. tax cut extension "places less of an onus on monetary policy to actually stimulate the economy," David Forrester, a currency economist at Barclays Capital, said in a Bloomberg Television interview from Singapore. In Europe, there's "lots of disagreement among policy makers, which is creating more uncertainty," he said. Europe, Asia More than five companies rose for every one that fell on the Stoxx 600, as all 19 industry groups advanced, while the MSCI Asia Pacific Index gained 0.4 percent. BHP Billiton Ltd. led mining stocks higher, rising 3.7 percent. Unilever climbed 4.2 percent after Morgan Stanley recommended shares of the world's second-largest consumer-goods maker. BP Plc climbed 2.2 percent as the company was said to consider selling some North Sea assets. Tesco Plc advanced 2.1 percent after the U.K.'s largest supermarket chain posted increased sales. Porsche SE jumped 5.9 percent as Barclays Plc lifted its recommendation on the carmaker to "overweight." The futures contract on the S&P 500 expiring this month rose to its highest level this year. Citigroup Inc. slipped 0.7 percent in pre-market trading as the U.S. sold its remaining stock in the bank for $10.5 billion, bringing the country's third-biggest bank a step closer to independence from the government following a $45 billion bailout in 2008. The MSCI Emerging Markets Index climbed for a fifth day, rising 0.6 percent to the highest level in three weeks. Russia's Micex Index advanced 1.1 percent to a 2 1/2 year high as OAO Polyus Gold shares surged 4.6 percent. The country's largest producer of the metal may merge with a global competitor as early as next year to form a "Top 3" gold miner, billionaire owner Mikhail Prokhorov said in an interview with Bloomberg Television yesterday in Moscow. Tax Cuts The three-year Treasury note yield rose three basis points to 0.72 percent before the government sells $32 billion of the securities, the first of three auctions this week totaling $66 billion. Obama said he would accept lower rates on high earners' income, dividends, capital gains, and multimillion-dollar estates for the next two years to break a stalemate over extending the Bush administration's tax cuts for middle-class taxpayers before Congress adjourns. The current tax rates, enacted in 2001 and 2003, are set to increase Dec. 31. The German 10-year bund yield rose four basis points to 2.89 percent, and reached 2.91 percent, the highest since May 14. The extra yield, or spread, investors demand to hold Irish 10-year bonds instead of bunds fell 16 basis points to 519, or 5.19 percentage points, according to data compiled by Bloomberg. Irish Parliament Irish Finance Minister Brian Lenihan will lay out the 2011 budget in parliament in Dublin at 3:45 p.m., adding to measures of about 14 billion euros over the last two years. The EU has given Ireland until 2015 to reduce its budget deficit to 3 percent of gross domestic product from about 12 percent of GDP this year. The spread between Portuguese 10-year bonds and equivalent-maturity German debt rose two basis points to 313 basis points, with Spanish spreads eight basis points higher at 237, and Italian spreads little changed. Credit-default swaps insuring junk-rated European corporate bonds fell to the lowest in three weeks, signaling an improvement in investor perceptions of credit quality, with the Markit iTraxx Crossover Index declining 8 basis points to 458, according to Markit Group Ltd. The dollar weakened against all 16 of its most-traded counterparts, depreciating 0.6 percent to $1.3370 per euro and also 0.6 percent against the pound, to $1.5790. Commodities, Energy Copper jumped to an all-time high of $9,014 a metric ton, extending this year's advance to 22 percent on demand from China. Cocoa futures in New York climbed 1.6 percent on speculation supplies of the beans in Ivory Coast, the world's largest producer, is being disrupted after elections and curfews. Wheat rose to a four-month high as Australia cut its export estimate after rainfall delayed harvesting and reduced grain quality. Gold climbed to records in New York and London on investor demand for an alternative investment to currencies. Silver advanced as much as 2.8 percent to a 30-year high of $30.5475. Oil rose as much as 1.2 percent to $90.46 a barrel in New York before a report forecast to show that U.S. crude stockpiles fell for the first time in three weeks. U.K. baseload power for tomorrow rose as much as 11 percent to 83.50 pounds a megawatt-hour today amid freezing weather, the highest price for a next-day contract since January 2009, according to broker data compiled by Bloomberg. To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net. To contact the editor responsible for this story: Paul Sillitoe in London at psillitoe@bloomberg.net. More on stocks and commodities: Three ideas for safely buying stocks today Three contrarian investments that could soar next year An unexpected development could send silver higher than anyone imagines

The European "bank mutiny" has begun Posted: 06 Dec 2010 11:47 PM PST From Zero Hedge: As a reminder, today is the day when Europeans are supposed to withdraw money from their bank, not necessarily in a beneficial manner. And maybe the action is already having an impact, with the Bank of Ireland apparently the first casualty. BBC reports: "Customers of one of Ireland's largest banks have been unable to access their cash accounts through ATMs or online. The Bank of Ireland said it became aware at 1000 GMT on Tuesday that ATMs were not working and customers were unable to make online transactions. "A spokesperson said... Read full article... More on the euro crisis: You can profit from the euro collapse without touching the dollar Nouriel "Dr. Doom" Roubini: Nightmare scenario ahead for Europe Euro CRISIS: Plans for a European "bank mutiny" are picking up steam

Tax shocker: Obama agrees to extend Bush tax cuts Posted: 06 Dec 2010 11:25 PM PST From Bloomberg: President Barack Obama said he would agree to sustain Bush-era tax cuts for high-income taxpayers in exchange for extending federal unemployment insurance and cutting the payroll tax by $120 billion for one year. Obama said he would accept lower rates on high earners' income, dividends, capital gains, and multimillion-dollar estates for the next two years to break a stalemate over extending the Bush administration's tax cuts for middle-class taxpayers before Congress adjourns. The current tax rates, enacted in 2001 and 2003, are set to increase Dec. 31. Without the compromise, middle-income families would become "collateral damage for political warfare here in Washington," Obama said in televised remarks yesterday. He said he still believes that the nation can't afford to permanently extend the reduced top tax rates. "This compromise is an essential step on the road to recovery," said Obama, who criticized Republicans for insisting on permanent tax cuts for the wealthiest Americans "regardless of the cost of impact on the deficit." Obama spoke in Washington after a White House meeting with Democratic congressional leaders. They and the Republican leadership still have to sell the plan to their caucuses. Obama called it a "framework" for a deal. In addition to preserving the status quo on Bush policies, the proposal creates more than $300 billion in new tax cuts for wage-earners, wealthy families, and corporations. Markets Rise Stocks rose, copper, and gold climbed to all-time highs and Treasurys fell after Obama agreed to extend the tax cuts, offsetting concern that Europe's debt crisis will spread further. The Stoxx Europe 600 Index climbed 1.3 percent at 7:25 a.m. in London, while Standard & Poor's 500 Index futures added 0.9 percent. The yield on the 10-year Treasury advanced seven basis points to 2.99 percent. The Dollar Index fell 0.3 percent. Copper rallied as much as 2.8 percent, gold jumped 1 percent to $1,428.55 an ounce, and oil rose to a 26-month high. An administration official said the president was happy with the agreement because it would give the economy a boost. Obama won his biggest prize: a 13-month extension of unemployment insurance, the official said, speaking on condition of anonymity. The White House also counted as a win an agreement from Republicans to renew a refundable child-care tax credit, the earned income tax credit, tuition tax credits, and a 2 percent reduction in payroll taxes, among other items, the official said. Camp Comment The compromise amounts to a couple hundred billion in tax cuts that no one thought possible just days ago, the official said, adding that the deal will play better across the country than in Washington, D.C. Representative Dave Camp of Michigan, who will become chairman of the tax-writing House Ways and Means Committee when Republicans take control of the chamber in January, welcomed Obama's announcement. "This framework will allow us to extend all current tax rates, and give economic recovery and job creation a chance," Camp said in a statement. Some Concessions Lawrence Mishel, president of the Economic Policy Institute, a Washington group funded in part by labor unions, said Obama extracted some concessions from Republicans that may help the deal advance in Congress. "Economically, if you were going to do a deal, I think this is better than expected and will provide some help to the economy, but we need a lot more help," he said. "I think people generally wanted to have a fight to show who was for the rich people and who was for the rest of us. That fight now will take place in the 2012 election." Some lawmakers said they would take a stand now. "This is a very bad agreement," Vermont Senator Bernie Sanders, an independent who caucuses with the Democrats, told MSNBC television. Sanders vowed to "do what I can" to block Senate passage. In a letter to House Speaker Nancy Pelosi of California circulated yesterday, Representative Peter Welch of Vermont and at least five other Democrats urged her not to agree to the administration's deal. "We support extending tax cuts in full to 98 percent of American taxpayers, as the president initially proposed," Welch wrote. "He should not back down. Nor should we." 'Cautiously Optimistic' Jim Manley, a spokesman for Senate Majority Leader Harry Reid of Nevada, was noncommittal. "Now that the president has outlined his proposal, Senator Reid plans on discussing it with his caucus tomorrow," Manley said. Vice President Joe Biden is scheduled to attend the Senate Democratic Caucus lunch. Mitch McConnell of Kentucky, the Senate Republican leader, said in a statement that he was "cautiously optimistic" that congressional Democrats "will have the same openness to preventing tax hikes that the administration has already shown." If Congress agrees, the deal would leave in place the 10, 15, 25, 28, 33, and 35 percent marginal tax rates created in 2001. It would also preserve for two years the 15 percent tax rate on most capital gains and dividends, and would temporarily index the alternative minimum tax for inflation. Payroll Tax In addition, the plan outlined by Obama would extend aid for the long-term unemployed for an additional 13 months. To help spur hiring, the payroll tax – which funds Social Security and Medicare – would be cut by 2 percentage points during 2011. The payroll tax cut would apply to all wage-earners, an administration official told reporters on a conference call. That would be an $800 savings for individuals with an income of $40,000. Those who earn salaries of more than $106,800 would save a maximum of $2,136. The proposal would cost the government $120 billion, another administration official said. The 2 percent cut represents a savings of about a third on the 6.2 percent share of the tax workers normally pay. Their employers get no benefit. The unemployment rate rose to a seven-month high of 9.8 percent in November as payroll growth slowed to 39,000 from 172,000, according to the Labor Department. Estate Tax The compromise plan would set the estate tax at a top rate of 35 percent, which applies after a $5 million tax-free allowance per individual, two administration officials said on the conference call. That rate would be the lowest since 1931 – not counting 2010, when the rate was zero and replaced with a complicated capital gains tax that applies when inherited assets are sold. Lee Farris, who tracks estate tax policy for the liberal advocacy group United for a Fair Economy in Boston, called Obama's acceptance of the 35 percent rate "inconceivable." "A weaker estate tax, coupled with the extension of the Bush tax cuts for the wealthy, is only going to end in the richest 1 percent owning even more of our country's wealth," she said. Obama also endorsed allowing a full deduction for equipment purchases that currently must be deducted over time. The proposal would accelerate $200 billion in tax savings for companies in the first year and benefit 1.5 million companies and several million individuals who run businesses, according to White House estimates. Total revenue lost from the so-called expensing proposal over 10 years would be $30 billion; companies taking the immediate deductions wouldn't be able to write off their expenses through depreciation in years to come. Negotiations The administration officials said some elements of the plan still have to be negotiated by Treasury Secretary Timothy Geithner, Budget Director Jack Lew, Camp, and three other lawmakers. They include whether to renew dozens of expired or expiring tax provisions. Among them: The Build America Bond program, the fastest-growing segment of the $2.8 trillion municipal debt market. The subsidy, which expires Dec. 31, was created by President Barack Obama's 2009 economic-stimulus plan. More than $173.5 billion of the taxable securities have been sold, according to data compiled by Bloomberg. The U.S. pays 35 percent of the interest costs on the debt. A Senate bill would cut that rate to 32 percent. Republicans may oppose the measure. To contact the reporters on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.net; Mike Dorning in Washington at mdorning@bloomberg.net. To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net. More on taxes: The top 10 low-tax states for retirement Your property taxes are probably too high Obama shocker: White House now in talks of reducing taxes

Physical Gold and Silver Supplies Are Tighter Than Reported... Posted: 06 Dec 2010 11:08 PM PST http://news.coinupdate.com/physical-...reported-0564/ Physical Gold and Silver Supplies Are Tighter Than Reported By Patrick A. Heller on December 6th, 2010 Categories: Gold and Silver Commentary, Precious Metals There are two main markets for trading gold and silver: the London Bullion Market Exchange and the COMEX in New York. London by far has the higher volume. There are other exchanges elsewhere in the US and around the globe, but large traders tend to buy and sell in these two markets. The London market is supposed to be for purchasing contracts for delivery of the physical metal at the maturity of the contract. In theory, there is supposed to be enough physical gold and silver in the London vaults to fulfill 100% of the outstanding contracts. This has not been true for some time. At the Commodity Futures Trading Commission March 25, 2010 hearings on gold and silver regulations, both Jeffrey Christian and Adrian Douglas testified that the London vaults only have enough gold and silver to cover 1-3% of open contracts. The COMEX, in contrast, is more meant for the trading of paper contracts by investors who do not want to take physical delivery (although they can). The COMEX warehouses only have a fraction of the physical gold and silver that would needed if all long positions demanded delivery of physical metal at contract maturity. Realizing this potential problem, the COMEX allows contracts to be settled for cash rather than the commodity. Gold and silver contracts can also now be settled, at the option of the seller of the contract, with shares of exchange traded funds for the same metal. In normal commodity markets, the price of future contracts trade at higher prices than those maturing this month. The price difference normally reflects the prevailing interest rate minus a bit for the cost of storage. This typical market order is called contango. However, there are times when there is an intense demand for immediate delivery of a commodity. Sellers of contracts for future delivery are not subject to making immediate delivery, so their contracts are not worth as much to a buyer who needs physical commodities right now. In such a market, the spot month price may rise above the prices for contracts for delivery in the near future months. Such a market condition is called backwardation. It is normally a short term phenomenon, because higher prices encourage more supply and discourage demand. When a market is in backwardation, that is an indication of a severe supply squeeze. If supply and demand did not return to relative equilibrium, the price would keep rising until the market roughly balanced. For more than one year, the London gold market has been in backwardation for contracts that mature one month and three months in the future. Since November 5, the 6-month contract has also been in backwardation. The London Bullion Market Association database only goes back to 1989. The 6-months in the future gold contract has never been in backwardation during the past 31 years, until last month. Researcher James Turk, who has been a precious metals trader and consultant since the 1970s, does not ever recall a 6-month contract being in backwardation. In the London silver market, the supply shortage is even tighter. The 6-month contract has been in backwardation for much of the past year, and continuously since June 2. Both markets are signaling that current prices are too low to reach a balance between supply and demand. Some skeptics argue that US dollar interest rates are so low that this is what has caused the markets to be in backwardation. However, Turk points out that backwardation did not occur after September 11, 2001, when US interest rates dropped to near-zero levels. Plus, interest rates have been low since the fall of 2008, but the backwardation did not appear until much later. Other skeptics point out that the COMEX settlement prices do not show a similar pattern of backwardation. In the past, this would be a valid objection. However, the COMEX recently changed the method by which it determines the daily settlement prices. Previously, settlement prices were determined by the prices at which gold and silver contracts traded on the COMEX. Now the COMEX reserves the discretion to override market information to report a settlement price of its choice. (really? wow, I didn't know this) Because the COMEX is basically a market for trading "paper gold and silver", it really doesn't matter whether the COMEX prices for these two metals matches what is happening with prices at which physical metals are trading. Turk argues that the COMEX gold and silver contract prices, if reported on the basis of actual ability to deliver metal, would be showing that they are also in backwardation. Turk warns that those buying COMEX contracts for future delivery are actually overpaying for them, enriching the banks that hold huge short positions in gold and silver. The extent of the backwardation in the London gold and silver markets today is a rare event. They are also extremely bullish. There is a greater likelihood that near-term prices could explode upward with little notice, making the surging prices we have experienced so far in 2010 look tame in comparison. As time goes on, expect greater difficulty in finding physical supplies to purchase. Patrick A. Heller owns Liberty Coin Service in Lansing, Michigan and writes "Liberty's Outlook," a monthly newsletter covering rare coins and precious metals. Past issues can be found online at http://www.libertycoinservice.com/ Pat Heller is also the gold market commentator for Numismatic News. Past columns online at http://numismaster.com/ under "News & Articles". His radio show "Things You 'Know' That Just Aren't So, And Important News You Need To Know" can be heard at 8:45 AM Wednesday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.

Midas Letter Asks: Is Seafield Resources The Next Ventana Gold? Posted: 06 Dec 2010 09:00 PM PST

Get your gold out of the banking system, Rickards tells King World News Posted: 06 Dec 2010 08:46 PM PST Link:  Get your gold out of the banking system, Rickards tells King World News Image:  Lastly today, is your only must listen interview today.  I featured it in the headline to today's column.  I'm not going to bother stealing Chris Powell's intro... I'm just going to post the whole thing.  Not only is the video a must listen... Powell's preamble is a must read as well.  The headline is a shocker... read more

China's Household Gold Savings Graph Posted: 06 Dec 2010 08:46 PM PST Image:  I'll start off my gold-related section with this graph that was sent to me by Australian reader Wesley Legrand.  It's titled "China's Household Gold Savings"

Get Your Gold Out of the Banking System: Jim Rickards Posted: 06 Dec 2010 08:46 PM PST New law lets U.S. Treasury decrease gold and silver coin production.  The scramble for physical metal intensifies. J.P. Morgan Getting Squeezed In Silver Market? The euro's end game... and much, much more. ¤ Yesterday in Gold and Silver The gold price didn't do a whole heck of a lot during Monday trading anywhere.  The only price movement of any note occurred was that $8 spike to its high of the day at $1,428.70 spot in electronic trading in New York shortly before 4:00 p.m. Eastern time yesterday afternoon.  Gold close up about $10 on the day. The silver price ran up a decent amount during Far East trading, but ran into some selling pressure around 3:00 p.m. Hong Kong time... about an hour before London opened for their trading day at 8:00 a.m. GMT.  From there, silver slid lower... and didn't show any signs of life until the London silver fix at noon local time [7:00 a.m. in New York].  Then, it fits and starts, the price worked its way slowly higher...hitting it's high price of the day at 4:00 p.m. Eastern time... before selling off a hair into the close.  This is the first silver price close over $30 in more than 30 years. Although the world's reserve currency rose about 80 basis points from its Monday open in the Far East... right up until its high at 8:30 a.m. in New York... this had no impact on precious metals prices whatsoever.  And, by the close of trading at 5:15 p.m. Eastern time, the dollar had given back half of those gains.  Nothing to see here. Except for the little sag in gold stock prices between 11:45 a.m. and 12:30 p.m. Eastern... when the gold price had a little dip... it was another good day for the gold stocks.  The HUI finished up 1.62%. But, with all due respect to the gold stocks, the silver stocks went ballistic almost across the board.  I looked at my own portfolio with my mouth wide open.  I just can't imagine what I'm going to be thinking when silver blasts through $60, $100... and then to the moon and the stars. I sold half my position in a small Canadian gold producer yesterday... and bought positions in two different silver stocks with the proceeds.  I'm closer to 65/35% silver/gold now. Monday's CME Delivery Report showed that 113 gold and 78 silver contracts were posted for delivery tomorrow.  A back-of-the-envelope calculation indicates that there are still about 3,000 gold contracts and around 650 silver contracts still to be delivered in December.  And, if silver shortages develop as the month wears on, it's entirely possible that there could be more requests for delivery posted.  This would most likely be followed with almost immediate draw-downs of the physical inventory from the Comex-approved depositories.  The link to yesterday's action is here. The GLD ETF had no report yesterday... but there was another big chunk of silver deposited in the SLV ETF.  This time it was 1,221,892 troy ounces. Over at Switzerland's Zürcher Kantonalbank last week, they reported adding 24,134 ounces of gold to that ETF... but a withdrawal of 471,394 ounces of silver during the same period.  One has to wonder if physical shortages aren't developing in Europe as well.  As usual, I thank Carl Loeb for these numbers. The U.S. Mint had a sales report on Monday.  Another 2,500 ounces of gold eagles were sold... along with another 375,000 silver eagles.  Month-to-date... there have been 4,500 ounces of gold eagles... and 417,000 silver eagles sold. The Comex-approved depositories on Friday showed that a smallish 22,567 ounces of silver were withdrawn.  All of the activity was with the Bank of Nova Scotia... although there were some adjustments in other warehouses.  The link to that action is here. Before moving on, I'd like to point out an error I made in my analysis of the Commitment of Traders report in Saturday's column.  I had said that the bullion banks had decreased their net short position in gold by 6,576 contracts.  The fact is that they increased their short position by that amount.  All the other COT gold facts I provided, were correct. Sponsor Advertisement Is Obama Terrified of the "Secret $200 Retirement Blueprint?" If you've already retired, or want to retire soon, I urge you to watch this video presentation before  we have to pull it down. This "Secret $200 Retirement Blueprint" shows you step-by-step how to grow a monster-sized nest egg  with a little time and a tiny grubstake. Click here to watch this video presentation now. ¤ Critical Reads Subscribe US M3 - in $Billions Graph With the weekend and all, I have a lot of stories today.  Bernanke's interview on 60 Minutes didn't hold any surprises... Part I and Part II.  Ben looked [and sounded] nervous.  I suppose we'd all be somewhat nervous if we had to lie our faces off on national television.  Anyway, he confirmed that deflation is a danger... and he will run the printing presses until it goes away.  Here's a "US M3 - in $Billions" graph to show you what he's up against.  I thank Nick Laird over at sharelynx.com for the graph. View full GSD edition The Real Cost of Living Graph With Bernanke talking about deflation... he's obviously not talking about commodity prices that affect the consumer out in the real world.  Here's a graph from Casey Research that's headlined "The Real Cost of Living".  Note the government CPI index in the last column.  I thank reader 'David in California' for sharing it with us. View full GSD edition UK Ram Raiders Flock to Rustle Sheep My first story today is about inflation.  It appeared in Friday's edition of the Financial Times and is headlined "UK Ram Raiders Flock to Rustle Sheep".  Criminal gangs targeted manhole covers and copper wiring when rocketing Chinese demand rendered them valuable commodities. Now they have a new target: sheep.  The link to the story... posted in the clear in this GATA release... is here. View full GSD edition JP Morgan Revealed as Mystery Trader that Bought £1 billion Worth of Copper on LME While I'm over in England... here's a story from Saturday's edition of The Telegraph that's headlined "JP Morgan Revealed as Mystery Trader that Bought £1 billion Worth of Copper on LME".  When I ran this copper story in my Saturday column, the identity of the 'mystery buyer' wasn't known.  Now it is... and the link is here. View full GSD edition IMF Tells Eurozone To Buy More, More, More Bonds And That It Needs A Bigger Boat, Er, Rescue Fund; Belgium Wants A Bigger Pie Too Today's next item is a zerohedge.com piece that's also courtesy of 'David in California'.  It appears that one way or another, the IMF will provide a lot more American money to the European rescue.  Reuters and Bloomberg both report that, according to the IMF, the euro zone should have a bigger rescue fund... and the European Central Bank should boost its bond buying to prevent the sovereign debt crisis from derailing economic recovery.  The longish headline reads "IMF Tells Eurozone To Buy More, More, More Bonds And That It Needs A Bigger Boat, Er, Rescue Fund; Belgium Wants A Bigger Pie Too".  The link to the story is here. View full GSD edition Row Over ECB Handling of Euro Crisis: The Lonely Fight of Monetary Dogmatist Axel Weber I have two more stories about Europe's trials and tribulations... and both are worth your time.  Both are from reader Roy Stephens... and the first is posted over at the German website spiegel.de... and is headlined "Row Over ECB Handling of Euro Crisis: The Lonely Fight of Monetary Dogmatist Axel Weber".  The head of the German central bank, Axel Weber, is openly critical of the way the European Central Bank has handled the euro's debt woes. He is fighting to uphold purist monetary principles that are untenable in the current crisis. His chances of succeeding Jean-Claude Trichet as ECB chief are waning as a result.  If you have the time, this is worth the read... and the link is here. View full GSD edition Walker's World: The euro's endgame The last story on the disaster unfolding for the euro and the European Union is this UPI story that was filed from Washington yesterday.  It's headlined "Walker's World: The euro's endgame".  The first paragraph reads "It doesn't take a seer to predict the next agonizing crisis for the eurozone. It simply requires a calendar."  This is another story that's worth your time... and the link is here. View full GSD edition Julian Assange Now Threatening To Drop A 'Poison' WikiLeaks Bomb If He's 'Killed Or Arrested' And my last non-precious metals-related story is this piece posted over at businessinsider.com that was sent to me by 'David in California'.  The whole world is abuzz with what's going on over at Wikileaks... and here's the latest story on that.  The headline readsJulian Assange Now Threatening To Drop A 'Poison' WikiLeaks Bomb If He's 'Killed Or Arrested'.  The link to the story is here. View full GSD edition China's Household Gold Savings Graph I'll start off my gold-related section with this graph that was sent to me by Australian reader Wesley Legrand.  It's titled "China's Household Gold Savings" View full GSD edition Big Squeeze Is On In Gold and Silver Posted: 06 Dec 2010 07:14 PM PST

The Key Relationship between US Real Rates and Gold Prices Posted: 06 Dec 2010 05:10 PM PST

The SP 500 and Gold are in the last stages of the rally from July Posted: 06 Dec 2010 04:40 PM PST

Gold & Silver Bull Markets “Can Withstand Liquidation”… Posted: 06 Dec 2010 04:36 PM PST

The 3457%Gold Analysis Difference Between Pros and The Uninformed Posted: 06 Dec 2010 01:08 PM PST I found this to be a starteling and informative article.I have been learning and reading alot since my humble begginings since buying silver art bars at"10oz for $80" on E-slay. http://danielamerman.com/articles/3475Diff.htm

Guest Post: The Three Stages of Delusion Posted: 06 Dec 2010 12:40 PM PST This article looks at the three stages of the current economic crisis and the future consequences of monetary easing. While policymakers believe the worst is behind us, the European sovereign crisis is foreshadowing the future collapse of the US. From Dylan Grice, posted on John Mauldin’s Outside the Box E-Letter: The recent sequence of reassurances from various [...]

ECB’s Wellink says Gold price has increased excessively Posted: 06 Dec 2010 11:55 AM PST

CBS Allows Fed to Spread Disinformation Unchallenged Posted: 06 Dec 2010 11:09 AM PST Quote: It appears the CBS TV show 60 Minutes is the Federal Reserve's go-to place to get its message out to the country. Fed Chief Ben Bernanke, basically, told America last night that the trillions he pumped out into the world economy, because of the 2008 financial meltdown, was necessary to save us all from a depression. Ben also reassured America and the world Quantitative Easing (QE), or printing vast amount of dollars, will not have an inflationary downside. He told 60 Minutes reporter Scott Pelley he is "100%"sure inflation will remain under control and will not soar higher. In my opinion, what Mr. Bernanke said could not be further from the truth. Most of the world's financial leaders from places like China, Russia, Germany and Brazil all think what the Fed is doing is a very bad idea. Anyone who finds Mr. Bernanke's inflation prediction comforting should look at his past forecasts. The Fed Chief has been wrong on almost every major prophecy he's given since he's been in office. Just 4 years ago, Ben Bernanke predicted "a leveling out or a modest softening" in residential real estate prices and that homeowners were in "reasonably good"financial shape. Three years ago, Mr. Bernanke said the sub-prime mortgage crisis "seems likely to be contained." Since then, we've had record foreclosures in the millions per year, and in some markets, home values have been cut in half! Bernanke admitted last night he did not see the financial meltdown coming. How could he say anything else? Pelley did ask Bernanke, "How did the Fed miss the looming financial crisis?" Bernanke responded, "There were large portions of the financial system that were not adequately covered by the regulatory oversight." It was the Federal Reserve that said repeatedly Over-The-Counter derivatives did not have to be regulated. Derivatives are exotic and sometimes toxic "debt bets" with little or no regulation, standards or guarantees. Soured OTC derivatives were largely responsible for the meltdown of 2008. If there were large portions of the economy that "were not adequately covered by the regulatory oversight," it was the Fed who lobbied against regulating these "debt bets." So, the Federal Reserve's lack of regulation over a market, that is hundreds of trillions of dollars in size, is the cause of the meltdown of 2008. 60 Minutes did not bring up this important point. On the question of printing money, the Fed Chief said, "One myth that's out there is that what we're doing is printing money. We're not printing money. The amount of money in circulation is not changing. . . .What we're doing is lowering interest rates by buying treasury securities and, by lowering interest rates, we hope to stimulate the economy to grow faster." The Fed is creating money electronically to buy treasuries because if the U.S. financed the country's debt through auction, foreign investors would demand much higher interest rates. So, the Fed is buying the government's own debt and, thus, holding interest rates artificially low. If that is not "printing money," I don't know what is. The academic term is called "monetization," and how Bernanke's statement went unchallenged by Scott Pelley, is beyond me.:eek_ma: 60 Minutes allowed the Fed to spew its prognosis about the chances for more inflation without any dissenting view, even though Pelley said critics think what the Fed is doing is a "terrible idea." What kind of one-sided reporting is this?... Source: http://usawatchdog.com/cbs-allows-fe...-unchallenged/

Silver rises above $30.00/Huge movements in silver comex/Bernanke on CBS 60 minutes Posted: 06 Dec 2010 10:00 AM PST

Oil Demand’s Triumphant Return Posted: 06 Dec 2010 10:00 AM PST Lost in the shuffle of the European debt woes, a second round of quantitative easing and gold's record run has been the resurgence in global demand for oil.

Alaskan Gold: A New Super-Deposit in the Making? Posted: 06 Dec 2010 10:00 AM PST The latest development to illustrate how the state's world class discoveries rival the best on offer anywhere else in the world involves a new high-grade discovery zone at the emerging 10.9 million ounce Livengood gold deposit.

JP Morgan vs. Silver: Go Gold Posted: 06 Dec 2010 10:00 AM PST Gold has had a 'remarkable' rise of some 30% in the past year and silver has had a 'sensational' year rising some 70%. So far, so good.

Gold Plated Posted: 06 Dec 2010 09:59 AM PST --How can it not be good news that gold and silver are making new highs? Spot gold made an intra-day high at $1.427.01. But it's also making all-time highs in pounds. sterling. and multi-year highs in Japanese yen. That's pretty clear. Paper money is in a bear market. --It gets worse. The U.S. government can't even print money correctly. More than a billion dollars worth of new one hundred dollar bills (the Ben Franklins) have had to be locked up in a vault in Ft. Worth Texas. The bills are so high tech that the printers printing them couldn't handle all the tricks. Ten percent of the entire $100 billion supply was corrupted. --Or 100%. depending on what you think of paper money. --Seriously though. of course there can be fraud in precious metals too. There was a big kerfuffle earlier this year when a rumour circulated on the Internet that the United States government sold gold plated tungsten bars to foreign central banks in the 1970s. Gold and tungsten have the same specific gravity. --If you put them both in a container of water. they'll displace the same amount of water. And because they have about the same density. a gold-plated tungsten bar looks and feels like a gold-plated gold bar. Counterfeiting Federal Reserve notes is a lot easier. Or least it used to be. --But here is the question: is gold the new oil? Let's put the question to you in two charts. The firsts shows crude oil zooming past a falling S&P in the first quarter of 2008. Oil futures and hard assets became the "go to" investments as the market fell. But oil prices (which hit hard at the gas pump in the real economy) peaked out about one quarter later and then crashed. --Fast forward to today and the chart below. It shows gold versus the S&P 500 since March of 2009. That's about when the great Bernanke reflation (and China credit boom) began lifting stocks. Gold is set to cross the S&P. The question we're asking is simple: has gold become the default hard asset to flee to when investors give up on stocks? --The answer to the question will tell you if gold's move higher is driven by speculators or by something else. What's "something else?" Well. gold is money. Oil is not. That's a key difference between the two commodities. --Ministers are meeting in Europe to decide how to expand Europe's bailout fund from €750 billion to something much larger. The Germans are against it. But given the debt problems in Spain. Portugal. and Italy. everyone else seems to be for it. It's an impasse. The euro is twisting in the wind. --By the way. that's another plus for gold. The US dollar index actually moved up yesterday. It measures the dollar's strength (or weakness) against a basket of currencies. When gold is making new highs against all paper money. even as the dollar gains ground against other paper. you have a strong bull market. --So why so worried? --Soaring commodity prices and pie-in-the-sky optimism (a billion tonnes of Pilbara ore to China) are the same indicators you saw in 2008 just before the market rolled over and fell. When commodity investments become momentum plays instead of contrarian plays (where you have to hold your nose and buy). then you should be aware of the danger in the market. --But here is where the nefarious Ben Bernanke comes in. Our colleagues in the US published a chart (which you'll see below) showing that 30-year bond yields in the U.S. are higher than 30-year mortgage rates. Is a home borrower in the U.S. a better credit risk than the American government? Is that what the chart is telling us? --The chart is telling us something more surprising: the Fed has lowered U.S. short-term and long-term rates to the point where it is driving investors into other riskier assets by necessity. The proof of this is that more money has flowed out of bond funds than in to them in the last two weeks. Those are the only two weeks of negative inflows in bond funds since February of 2009. according to the Wall Street Journal. --If Ben Bernanke can attack the entrenched position of investors in the bond market. he may be able to drive them straight back into the waiting arms of the stock market. You'd see the S&P break out above 1226. We dialled up Slipstream Trader Murray Dawes to ask him about this level. --Murray says 1226 is high point of the range on this bull move for the S&P 500. "To me this is a warning that it could be another false break." Murray's theory of price action is based on these false breaks. Right now. he sees the S&P trading action as an indication that the market is very risky. He says it would have to break out above 1255 for him to reconsider the position. --If you haven't seen how Murray evaluates the price action on the Australian market. check out the free charting presentation he put together last Friday afternoon. We've posted in on YouTube. Dan Denning For The Daily Reckoning Australia Similar Posts: Prices of Gold in the Top 10 World Currencies Price of Gold Communicates U.S. Monetary and Fiscal Policy is Lousy Gold Bulls Are Popping With Enthusiasm About the Post-FOMC Recovery in Gold Prices Gold, the Aussie Dollar, the Greenback and You Is the Bull Market in Gold Over?

Investing in India: Optimism in the New New World Posted: 06 Dec 2010 09:56 AM PST We arrived at the Oberoi Hotel in Mumbai after President Obama had left. As we were leaving, President Sarkozy was arriving. It is a Grand Hotel. They come. They go. Nothing ever changes. One of the problems with traveling so much is that you spend much of your time in a jet-lag fog. It was hazy when we left Mumbai. It is hazy in Kuala Lumpur. Was it the weather...or us? But when we read the news, our eyes opened wide. Friday's jobless numbers were shocking. The latest figures show unemployment increasing, not going down. Here's the New York Times write-up: The United States added a total of just 39,000 jobs last month, down from an upwardly revised gain of 172,000 in October, the Labor Department reported on Friday. With local governments shedding jobs, the additions in the private sector were too small to reduce the ranks of the unemployed or even to keep pace with people entering the work force. The unemployment rate, which is based on a separate survey of households, rose to 9.8 percent in November. It was the highest jobless rate since April and up from 9.6 percent in October. The outlook remains bleak. More than 15 million people are out of work, among them 6.3 million who have been jobless for six months or longer. Many are about to exhaust their unemployment benefits, which have been extended repeatedly by the government because of the severity of the downturn. The latest snapshot of the labor market cast a pall over what had been a brightening picture of a steadying economy. The stock markets shrugged off the report, which was well shy of the forecast for a gain of 150,000 jobs, as all the major indexes rose slightly on Friday. Part of the surprise in the November report was that layoffs, which had subsided earlier this year, picked up again. The number of people who were unemployed because they had been laid off or had concluded a temporary assignment increased by 390,000. We don't want to rub it in. But "we told you so" springs to the lips like a cup of beer to a football fan. Meanwhile, the housing market is weakening. The Case Shiller index shows prices in such hot-spots as Phoenix and Las Vegas, at the lower part of the market, down by more than 40% - and still dropping. Some of them are now below their levels of 10 years ago. So how can you have a real recovery when... A) Fewer people have jobs (less household income)? B) The average household's major asset is losing value? But heck, this is fantasyland now. Anything can happen. The feds are bailing out the banks all over the world...and entire countries, too. Investors actually bid up stocks slightly even after the employment news. The Dow rose 19 points on Friday. Gold rose $16. "What would you recommend to our viewers," asked a Bloomberg reporter in Mumbai yesterday. "Well, I don't make recommendations," we replied. "Especially not to Indians. "But there are some periods and some places when it makes sense to be positive and optimistic...and there are times and places when it doesn't. "If you're an Indian investor, I think you can be generally positive about the financial future. Yes, there are bound to be more crises...more corruption scandals...and more disasters. But there's a trend going on that is probably too big to stop. It's regression to the mean. India is catching up with the West. Wages are growing at maybe 15% per year. The stock market goes up almost every year. And many companies - in terms of growth - are still very cheap. "The population is growing fast. The economy is growing fast. There's plenty of capital for investment. There is plenty of knowledge and skill. There is no reason why this growth can't continue for many, many years... "So, an Indian investor can be optimistic. He should be optimistic. He should want to own a piece of that growth...a piece of the future. "Alas, the situation is very different in the developed world...especially in the USA..." Continued below... And more thoughts... "The US and Europe are struggling just to stay in the same place. They're mature societies...with populations that are getting old and economies that are largely worn out. In Europe this year, for the first time ever, more people will retire than join the workforce. And in America, the Social Security fund, for the first time ever, will pay out more than it takes in. These are two major developments. They signal the beginning of the end. "I saw in the paper that China just set a new record with a passenger train that goes 300 mph. But almost all records are being broken - and they're being broken in China or another 'emerging' market. The biggest, the most, the fastest...it's all happening. But it's not happening in the old, developed world. "I think it was Karl Lagerfeld who noticed that Asia today is the New World. America and Europe are now part of the Old World." *** Meanwhile, in the Old World...no plausible plan to save the dollar...and the credit rating of the US...is at hand. Here's Bloomberg with the story: Dec. 3 (Bloomberg) - President Barack Obama's debt commission rejected a $3.8 trillion budget-cutting plan as members from both parties opposed its mix of tax increases and spending cuts in programs such as Social Security and Medicare. The rejected proposal would have reduced the annual deficit to about $400 billion in 2015, from this year's $1.3 trillion, and begin reducing the debt. The plan by Bowles and co-chairman Alan Simpson would have increased taxes by $1 trillion by 2020 by scaling back or eliminating hundreds of tax deductions, exclusions or credits such as those allowing homeowners to write off interest on their mortgage payments. It would also have cut individual and corporate income tax rates. Social Security benefits would have been cut, the gas tax would have gone up by 15 cents, discretionary spending would have been reduced by $1.6 trillion and Medicare would have been pared by $400 billion. *** An interesting feature of the rise of the "East" is that you don't have to be in the East to participate. Latin America is one of the fastest growing regions. This suggests that the phenomenon - regression to the mean - does not depend on any particular political or economic conditions. In other words, you don't seem to have to worry about what party is in power, what they call themselves, or what policies they follow. Look at this, another report from Bloomberg: Dec. 3 (Bloomberg) - Turkey is converging with the BRIC nations in the credit market as the country's economic rebound sends the cost of insuring debt against default to the lowest in at least a year compared with Brazil, Russia, India and China. Investors are becoming more confident in Turkey as its economy grows at the second fastest pace in the Group of 20 major economies after China and record-low interest rates help spur local consumer demand. Turkey's government plans to reduce public debt to 42.3 percent of gross domestic product this year, 40.6 percent next year and 38.8 percent in 2012, and bring the budget deficit down to 2.8 percent next year from 4 percent this year. Turkey's GDP grew an annual 10.3 percent in the second quarter, matching China's as the fastest expansion the period among G-20 economies. *** Foreigner often have funny ways of expressing themselves in English. In today's New Times of Kuala Lumpur is this headline: "Probe into Teen Prostitutes." It's English. But we wouldn't put it that way. In Paris's Orly Airport, we recall seeing a sign: "Retarded passengers' waiting room." In the airport in Mumbai is a "Mishandled Luggage Depository." And on the airplane from London to Mumbai, a steward on the Lufthansa Airline made the following announcement: "For the inconvenience of passengers, we have arranged for a bus to take them..." Regards, Bill Bonner, for The Daily Reckoning Australia Similar Posts: In India With a Strategic Partner Deficit Spending in Australia Reaches a New Era Free Trade: The Only Fair Trade New York Will No Longer be Among World's Five Largest Cities India Beats China to Walk Away With 200 Tonnes of IMF Gold

How to Be Self-Reliant in the Age of Turmoil Posted: 06 Dec 2010 09:56 AM PST We have entered what I call the Age of Turmoil, a time that is marked by rapid change and fluctuating crises. The old system of debt and consumption that gave us great salaries, generous benefits, stock market and housing appreciation, and a high standard of living is gone forever. What's happening right now is a major sea change: the game is being reset, and the rules are being rewritten. I'm not being pessimistic, and this is not a cause for fear. We shouldn't be afraid of the Age of Turmoil, but rather prepare for it by becoming more self-reliant. Those who are prepared will survive, thrive, and be well-positioned for the enormous opportunities that await. Conversely, those who cling to their faith in the old system, desperately hoping for a return to the carefree days of the past, will have their lives turned upside down. This is because all the major elements of the old system - our political process, our money and financial institutions, the job market, police forces, etc. - only function as long as the system is operating normally. Think about how things work under the old system - people are effectively given pre-packaged options for the major decisions in their lives. Do you want to be a doctor? Follow this career template. A pilot? Follow that one. Investing your money? Select from these mutual funds. I call these "limiting choices," and they are a staple tradition in our modern society. Our realities are defined by people and regulations which govern our thinking, restrict our options, and constrain our creativity. When you walk into a bank, for example, no one is going to sit down with you and say, "Hey I think you should protect yourself from a depreciating currency, let's talk about gold allocation and taking some options in the renminbi." No, instead you get two limiting choices that are jammed down the throats of millions of customers: the generic savings account, or the generic checking account. Even the political process is full of limiting choices. How many times have you gone to the polls and been forced to decide between two equally vapid, insipid candidates? In the end, you vote for the limiting choice who is "less bad," the lesser of two evils. These limiting choices work just fine as long as the system is functioning properly...they're efficient and help maintain order. Human nature is such that most people abdicate the power of choice in their lives, and limiting choices provide basic direction, making it easy to follow the herd. The trouble is, limiting choices are not designed to help you survive when the system collapses. Limiting choices like the standard career template of racking up huge university debt, or investing in index funds, or holding cash in a savings account, or relying on social security, etc. were all successful tactics over the last 20 years. In the Age of Turmoil, they've become destructive. As soon as confidence cracks and the system starts to fail, everything unwinds...and people whose realities are defined by limiting choices will have their lives turned upside down. The way out, the way to survive and thrive in this turmoil, is to reject limiting choices and define your own reality through what I call universal choice. In fact, I consider "defining your reality" to be the first pillar in achieving self-reliance in the Age of Turmoil. This entails being actively engaged in the major problems and decisions we face in life, and developing the independent mindset to design our own paths from an entire universe of possibilities, not just limiting choices. Planting multiple flags is a great example of cultivating this independence and defining your own reality. Instead of the limiting banking choices provided by your hometown bank, you can open a foreign bank account in alternative currencies, or store gold in a private vault overseas. Instead of the limiting investment choices provided by your broker for standard blue chip stocks and index funds that have yielded negative returns for a decade, you can invest in alternative assets like foreign companies or international real estate based on out of the box trends that you identify. Instead of limiting career choices provided by the guidance counselor that will result in massive student loan debt and little else, you can learn valuable skills that solve people's problems, or head to thriving economies overseas looking for more interesting opportunities and adventures. The key theme in defining your reality is to think creatively beyond the limiting choices that the old establishment puts in front of you. In fact, when you consider many of the world's greatest historical figures, the main factor they all shared was a common rejection of limiting choices. People like the Wright Brothers, Gandhi, Bill Gates, and Ayn Rand all dismissed convention and defined their realities based on possibilities that they conceived. I'm absolutely convinced that the greatest outcomes await those who can take this step. Regards, Simon Black, for The Daily Reckoning Australia Editor's Notes: Simon Black is an international investor, entrepreneur, permanent traveler, and free man. Similar Posts: Is Gold Money? Funds Flowing, But For How Long? How Did Australia Get Caught Up Losing Money in Commercial U.S. Real Estate? It Would Take About 19 Years to Erase Debt From Bubble Period Freddie Mac's Main Man is in the News

Sprott: Silver as the Next Big Investing Windfall Posted: 06 Dec 2010 09:54 AM PST With silver continuing to march upwards, the shiny metal has become a hot topic for many hedge funds including Sprott and Co. Despite increasing naked short interest from the Fed, I mean JP Morgan, and a hike in margin requirement from the LBMA, the metal has been able to break through the critical $30 barrier. [...]

Danger of Deflation Depends on Your Definition of Deflation Posted: 06 Dec 2010 09:00 AM PST John Mauldin of Frontlinethoughts.com reports that "the number of people on food stamps continues to rise. As of the end of August, a total of 42,389,619 people were receiving food stamps under the SNAP program. This was an increase of 553,379 people over July's number, or an increase month-over-month of 1.32%." Most horrifically, "The year-over-year increase was 6,147,762 people or 17%." By this time, my heart is breaking from the sheer misery inherent in those numbers, and I am screaming in Loud Mogambo Outrage (LMO) at the damage caused by the Federal Reserve creating so much money for the last few decades that it created bubbles in stock markets, bubbles in bond markets, bubbles in the sizes of government, gargantuan derivatives markets and housing bubbles, all of which are in various stages of panic and loss, all made worse by more people not working and who can't buy food! And this does not even mention inflation in the prices of food and energy, which are going up in alarming rates, and I predict will go up Much, Much Higher (MMH) from here, as George Ure at UrbanSurvival.com reports that the energy input we have been receiving from the sun has been unusually low, with the results that "Since we had such a long-lasting solar minima recently, the winter this year is going to be unusually cold." I jumped into the conversation to make the witty remark that "So, besides losing wealth in our houses, unemployment at more than 10%, inflation in prices at 2.3% and rising alarmingly, we are also going to be freezing our butts off, too? Hahaha! Perfect! Thanks, Federal Reserve!" Well, my little joke was a flop, and the "deafening silence" afterwards was embarrassing. Perhaps my pathetic attempt at humor prompted Mr. Mauldin to relate the classic line where "President Clinton famously remarked about his escapades that 'it all depends on the definition of what is is.'" Hahaha! I always liked that particular historical fact, as it obviously proves that Bill Clinton is a lying, corrupt piece of useful-idiot socialist scum, and the fact that he is not in prison or an outcast in society says a lot about us. I also laugh because I remember the actual time when he said it, and I had immediately used that famous line of Clinton's with my boss, and said to her, "Hey! Hold on there, toots! It all depends on what your definition of 'is incompetent' is!" Well, she did not laugh at my witty attempt to lighten the mood, and it actually seemed to outrage her all out of proportion, sort of like how inflation in prices makes me Go Freaking Nuts (GFN) because of the Federal Reserve creating so much money, and thus so much inflation in prices, and thus so much more misery for those who cannot increase their incomes, and especially for those who have no incomes at all. It turns out that Mr. Mauldin was not merely making a joke, like me, but cleverly ties it into "similarly, whether or not we are in danger of deflation all depends on what your definition of deflation is." As witty as that is, I have to admit that I was sulking and purposely did not laugh at his little joke, which did not faze him at all. Instead, he went on, "First, let's look at the recent headline numbers. What we find is that core inflation, at 0.6%, as well as trimmed inflation (which takes out the statistical outliers and anomalies) are both at post-war all-time lows." I know this is supposed to make me feel better, and that we are not, according to official government statistics, doomed to die of inflation in prices which will follow the outrageous inflations in the money supply by the Federal Reserve, although it does not explain how it is that now – for the first time in history – a gigantic inflation in the money supply will NOT be followed by a gigantic inflation in prices that has unforeseen and catastrophic consequences. As proof, notice that Mr. Mauldin did NOT disavow the possibility of a hyperinflation in prices caused by a hyperinflationary increase in the money supply by the Federal Reserve creating such unbelievable amounts of money so that everyone is bankrupted and the whole economy is destroyed such that only cannibals and cigarette vendors survive, except those holding gold and silver, who have all moved to Hawaii and are having a wonderful, wonderful time consuming everything they see and having a lot of fun.. Well, I am sorry to say that it doesn't make me feel better, perhaps because I am a paranoid cynic who is sure that all government statistics are lies and all government workers are out to hurt me, if not kill me, the most recent evidence being that my lawn sprinkler, that has lasted all these months, was apparently deliberately tampered with by a person or persons unknown, so that when I picked it up by the attached hose the other day, it broke off! Snap! I can take some comfort that Mr. Mauldin seems a lot less paranoid and suspicious than I am, and is probably more lightly armed than I am, although he is a lot smarter than me and can see things I don't see, but to me the fact that official inflation figures being at more than a scary 2% can still be the lowest inflation in 65 years means that we have constantly had persistent, corrosive, debilitating inflation in prices, and higher than 2.3%, for the last 65 years! Thus, thanks to the foul Federal Reserve, we have constantly been suffering from inflation in prices, which brings up, because it must, a truism from a recent translation of one of the mysterious runes of the Ancient Mogambo Scrolls (AMS), which is "Buy gold and silver when thy government allows the manufacture of excess fiat money. To do otherwise is to be but a pathetic dimwit and a moron, such as the lowly donkey or burro, but without the carrying capacity, and a lot more bitchy." There is, at this stage of translation of the ancient texts, no mention of the term, "Whee!" in relation to how easy it is to buy a few ounces of gold or silver ("Here's my money, put the metal in my hand!"), but there ought to be, and probably will be, knowing Mogambo like I do. And even if not, "Whee! This investing stuff is easy!" The Mogambo Guru for The Daily Reckoning Danger of Deflation Depends on Your Definition of Deflation 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."

Why I Bought Silver...And Why I Won't Sell Posted: 06 Dec 2010 08:29 AM PST In January 2002 I bought my first few ounces of physical silver at less than $5 per ounce. The reason I bought silver was that the Commercial Short position in the COMEX Commitment of Traders Report was, in my opinion, way too high considering that the US Government had just announced that they had sold their entire 3 Billion ounce silver position over the last 50 years and would now have to buy silver to support their Silver American Eagle program. Here is the CFTC Silver Commercial Short Position that I based my analysis on:

Gold Seeker Closing Report: Gold Sets a New All-Time Closing High While Silver Tops $30 Posted: 06 Dec 2010 07:19 AM PST Gold extended last Friday's late after hours strength and rose to as high as $1418.68 in Asia before it fell back to $1410.10 in London, but it then rose to a new session high of $1420.64 by late morning in New York and ended with a gain of 0.73% at a new all-time closing high. Silver climbed to $29.298 in Asia before it fell back to $29.457 in London, but it then rose to a new 30-year high of $30.058 in New York and ended with a gain of 2.34%. Both metals have risen to new highs in todays after hours access trade as well.

Max Keiser vs. JP Morgan Silver Manipulation (German) Posted: 06 Dec 2010 03:31 AM PST

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