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Wednesday, December 29, 2010

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Is Gold the 'Ultimate Bubble?'

Posted: 29 Dec 2010 05:45 AM PST

Moses Kim submits:

The way investing works is that most of your success will result from answering the most critical questions correctly. As a gold investor, the most important question for me to answer is whether or not gold is a bubble. The accurate response to this question will determine whether I have 100% gains or 50% losses. As you can see, this is not a question I want to take lightly.

All bubbles are not created equal - some bubbles are of the more mundane type, such as the bubble in home shopping stocks in the 1980s, and some are of the truly epic kind. The bubbles with the most profound effects on society are centered around one of the major asset classes (stocks, real estate, bonds, commodities). Bubbles in real estate wipe out latent capital on a large scale. Bubbles in bonds wipe out capital accumulation, period. Bubbles in gold, as you will see, come at the end of significant shifts in society.


Complete Story »

COT Report: All Bullish on the Silver Front

Posted: 29 Dec 2010 05:07 AM PST

Small but very telling structural changes continue in this week’s Commitment of Traders (COT) report, once again highlighted by another drop in adjusted Net open interest. Another telling line item is the net short position of the four largest commercial traders, dominated by JP Morgan (JPM), dropped 5.9% to a net short position of 39,647 from 42,167 contracts week/week.

The bullish factor here is not just the drop in the net short position but the concentration levels, which account for the change in adjusted net open interest, down 1.67% and currently at 51.21%. The eight largest commercials also had a significant drop in the net short position, illustrating that they didn’t take control of the short positions covered by JP Morgan and the other three largest commercial traders. Their net short position decreased 2,676 contracts in addition to their concentration levels contracting 1.34% to 70.63%.


Complete Story »

Rising Copper Prices Bode Well for 2011

Posted: 29 Dec 2010 05:06 AM PST

Hale Stewart submits:


(Click to enlarge)

Copper is a great indicator of overall economic activity. Notice that we're seeing prices near their highest level in five years. In addition to a declining dollar, this also indicates demand is strong, which should bode well for the new year.


Complete Story »

Top 15 Gold Mining Stocks With Bullish Options Sentiment

Posted: 29 Dec 2010 04:43 AM PST

Kapitall submits:

The following is a list of the top 15 gold stocks in terms of the Put/Call ratio, which measures the number of open call option positions relative to the number of open put option positions.

Of all the gold stocks, these companies have the lowest Put/Call ratios, i.e. the highest level of bullish sentiment in the options market.


Complete Story »

Peak Oil Is Coming, Courtesy of Political Incompetence

Posted: 29 Dec 2010 02:24 AM PST

Graham Summers submits:

Before starting today’s essay, I have to thank Rick Rule of Global Resource Investments for his insights on the following issues.

Rick has been involved in natural resources investing since 1974. He founded Global in 1994 and has been behind many of the largest deals (Silver Standard (SSRI) being one) and the largest profits (between 1998 and 2006 he grew $15 into $460 million) the industry has ever seen.


Complete Story »

Gold and silver break through resistance/Bonds falter badly

Posted: 28 Dec 2010 10:20 AM PST

Pigs Get Fat But Hogs Get Slaughtered

Posted: 28 Dec 2010 07:38 AM PST

Mercenary Links Roundup for Tuesday, Dec 28th (below the jump).

12-28 Tuesday

Demise of the Pork-Belly Contract – WSJ.com

Bullish Sentiment Reaches Historical Extremes
NYSE Short Interest Drops To Lowest In 2010 | zero hedge
Short Interest Declines to Lowest Levels Since 2007

Consumer Confidence Misses Big, Prints Below Consensus
Consumer Confidence Unexpectedly Falls on Jobs Outlook

U.S. Home Prices Fell in October – WSJ.com
Home Prices in U.S. Decrease More Than Forecast – Bloomberg
Home prices falling faster in biggest US cities – Yahoo! Finance
Case Shiller Misses Consensus As Home Price Decline Continues

As Ireland Flails, Europe Lurches Across the Rubicon
European borrowing costs eclipse US
Next Leg Down? First Failed ECB Monetization Sterilization
Backlash over use of Fed crisis cash

Dollar turns up after weak Treasury auction Currencies
Swiss franc hits dollar peak
Taiwan Curbs Access to Derivatives in Bid to Curb Speculation on Currency

Investor doubts linger over holiday sales upside | Reuters
Retailers Face Big Challenges After Robust Holiday Sales

Retail gasoline demand up 4.6 percent: report | Reuters
U.S. gas price tops $3 a gallon, highest since Oct '08 | Reuters
Brazilian Oil Regulator Finds More Signs of Crude at Libra Offshore Field
Hedge Funds Bet Natural Gas Will Decline in Warm New Year
Copper Again in Record Territory – WSJ.com

Hot Trade in Private Shares of Facebook – WSJ.com
Wall Street Optimistic on GM – WSJ.com
M&A King Is… Not Yet Decided – WSJ.com

Kass: Here Are My 15 Surprises To Watch For In 2011
Hedge Funds Crash, Apple Turns Uncool in 2011: Matthew Lynn
Glenview's Larry Robbins Sets The World's Most Bullish Target: DOW 20,000

Consumption growth could power US in 2011
Credit Faces Tougher Times in 2011 – WSJ.com
1 Out Of 3 Americans Has Zero Dollars In A Retirement Account

Beijing city to raise minimum wage 21%
China cuts rare earth export quotas, U.S. concerned | Reuters
Hugo Restall: China's Real-Estate Frenzy – WSJ.com
Top Chinese blogger shuts down country's first pvt magazine

Canada's Banks Look South for Expansion – NYTimes.com
China Central Bank absorbing substantial amounts of gold

Lessons from Japan's fiscal disaster | Analysis & Opinion |
Japan and the Limits of Keynesianism – Megan McArdle
Dark Pools Boost Share of Japan Equity Trades, Bourse Data Show

Russia: The World's Largest Dying Power | The Moscow Times
In Cuba, holiday cheer from Uncle Sam | Reuters
M&A Bankers See Cross-Border Takeovers Propelling India Past Record 2010

Dr Pepper Sees Sticky Prices Sweetening Profits – WSJ.com
Sears Launches Online Movie-Download Service With Sonic Solutions

Hurd Asks to Join Hewlett-Packard Investor Lawsuit – Bloomberg
Allstate Sues Countrywide Over $700 Million Investment – Bloomberg

Send in the Plows! Outrage as Transit a Mess, NYers Still Stuck
Snowbound New Yorkers upset about unplowed streets
New York City digging out after crippling blizzard – NYPOST.com
Several injured as chairs drop from Maine ski lift – Yahoo! News

China has carrier-killer missile, U.S. admiral says – Washington Times
Chinese missile shifts power in Pacific

Julian Assange Book to Cover Founding of WikiLeaks – NYTimes.com
The Hazards of Nerd Supremacy: The Case of WikiLeaks

The 50 Best Albums of the Decade (2000-2009)
Florida Lottery Winners Exclude Co-Worker – ABC News
Seeking the Connectome, a Mental Map, Slice by Slice – NYTimes.com
Disney Command Center Aims to Keep Lines Moving – NYTimes.com
The Storming of St. Barth's | Society | Vanity Fair
~

Gold Seeker Closing Report: Gold Gains Over $20 and Silver Surges to A New 30-Year Closing High

Posted: 28 Dec 2010 07:13 AM PST

Gold climbed higher throughout most of world trade and ended near its early afternoon high of $1406.15 with a gain of 1.62%. Silver climbed to as high as $30.313 and closed with a gain of 3.45%.

Gold Silver Lease Rates Spiking Up - Why

Posted: 28 Dec 2010 05:24 AM PST

Can some people who understand the PM markets better than I chime in to explain the action.....Thanks in advance.

Caught between a 100 oz. Silver Bar and the new tax laws.....

Posted: 28 Dec 2010 02:55 AM PST

My understanding of the new tax law is that if I were to sell any PM to a dealer in excess of $600, the dealer would have to do a IRS 1099, and record my detains, and I will have to pay a tax on that sale come the yearly reckoning. :reddy: If I am wrong, please correct me.

If this is the case, I may need to part with a 100 oz. JM bar I bought a couple years ago in order to "catch up" to where I should have already been. I had planned to sell the bar, and turn the proceeds into rounds. Can someone give me some clarification, and advice on my situation? :vollkommenauf:

Thanks
Poirot

$30!

Posted: 28 Dec 2010 02:01 AM PST

No Signs of a Gold Bubble Despite Record Advances in 2010

Posted: 28 Dec 2010 01:00 AM PST

Class action against Morgan, HSBC specifies silver manipulation mechanism

Posted: 28 Dec 2010 12:31 AM PST

A Chicago law firm yesterday announced another class-action lawsuit against J.P. Morgan Chase & Co. and HSBC Holdings PLC complaining of silver market manipulation. Interestingly, the lawsuit cites GATA's silver market manipulation whistleblower Andrew Maguire and U.S. Commodity Futures Trading Commission member Bart Chilton, and specifies mechanisms by which Morgan and HSBC could manipulate the silver market through the use of silver exchange-traded funds.

Richard Russell - We Will Have an Upside Explosion in Gold

Posted: 28 Dec 2010 12:21 AM PST

With gold still consolidating gains, the Godfather of newsletter writers Richard Russell in his latest commentary stated, "I have posted (above) the year-end price of gold starting with the year 2000, the first up-year of one of the greatest and least appreciated bull markets in history. Take in this series, you may never see its like again."

"I've been around a long time, and I've studied many primary bull markets. And now I want to venture a few of my observations.

In markets, I have never seen a series like the above end with a whimper or a fizzle. The end or the wind-up of such a series usually arrives with an upside "explosion," as those who have failed to participate in the series finally rush in to join in the apparent endless advance. This is the wild and wooly speculative phase of a great bull market. Big bull markets don't end with a sigh, they end in exhaustion.

(1) Most great primary bull markets last longer and carry farther than the majority of investors (even the bulls) expect.

(2) A great primary bull market is an expression of something changing in a very fundamental and meaningful way. Following a great bull market, the world is never quite the same.

...Second note -- The Washington-based IMF recently completed its promised sale of gold. It was rumored that the IMF would have to sell its gold on the open market. Not so. The fact is that central banks eagerly gobbled up the IMF's gold. According to The Financial Times, the IMF sold its gold directly to the central banks of India -- 300 tonnes, Sri Lanka -- 10 tonnes, Bangladesh -- another 10 tonnes, and Mauritius -- two tonnes.

And why are these central banks trading paper for gold? After all, it's the central banks that are creating the fiat paper. Why are they swapping their own beloved products for gold?

The latest anti-gold propaganda centers around the gold exchange traded funds. A full page article in Sunday's New York Times implied that only with the advent of all the gold ETFs has gold boomed. The article implies that the ETFs (mainly GLD) allowed an ignorant public to buy gold, and that this is the reason for gold's recent advances. The article did not explain why gold has risen yearly for almost a decade, even before gold ETFs were created. The Times article hinted that gold was in a bubble, and that it was a dangerous bubble. The article emphasized the 20-year gold bear market of 1980 to 1999.

...For the first time, more gold is being taken for investment than is used in jewelry. Asians have been gold buyers for years, while Americans have accumulated dollars and are just beginning to learn about gold. Meanwhile, the ignorant media continues to publish "beware" articles about gold. Soros announces that gold is the "biggest bubble" in the area of commodities, but the Soros largest holding is in gold. Sound as though Soros wants to knock the price of gold down so he can buy more on the cheap.

These billionaire investors; they have no consciences. Hmm. maybe that's why they're billionaires."

http://kingworldnews.com/kingworldne...n_in_Gold.html

$1400!

Posted: 27 Dec 2010 11:23 PM PST

Is everybody outside shovelling snow, or what?

$1,405!

:banana::banana::banana::banana:

Three Things that Could Halt Gold’s Run

Posted: 27 Dec 2010 10:00 AM PST

Normally we write about the things that cause precious metals to rise. While these things may be obvious, the corresponding rise in the bull market will not always be consistent and linear. Small and large corrections will occur along the way.

Yesterday=Tomorrow?

Posted: 27 Dec 2010 10:00 AM PST

Gold prices opened at the $1,400 mark as the dollar's most significant decline in two weeks prompted fresh buying. Values soared on the greenback's fall showing larger than normal moves amid still thin participation and a London market that was closed.

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