Gold World News Flash

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• IMaGiNiNG THe TBTF MoRTGaGe FuBaR
• Jan 9, 1933 : South Africa goes off the Gold Standard
• Judge Sides With GATA, Orders Fed To Present Her With Its Classified Gold Records
• Waymar Resources Could be the Next Ventana
• New Year’s Resolutions for Your Gold Portfolio
• New Year’s Resolutions for Your Gold Portfolio
• Gold Seeker Closing Report: Gold and Silver Start the Week with Decent Gains
• Florida Pension Fund Broke?
• Crude Oil Tests 26-Month Highs on Pipeline Leak, Gold Inches Higher on Dollar Decline
• Meet The Fed's POMO Desk... Which Doesn't Even Have Bloomberg Terminals
• Gold Price Trading Sideways, is it Consolidation or Reversal Pattern?
• Not owning gold is insane, Cazenove's Griffiths tells CNBC
• Virginia Creates Subcommittee To Study Monetary Alternatives In Case Of Terminal Fed "Breakdown", Considers Gold As Option
• John Williams Eyes Gold as Insurance Against Armageddon
• Not Owning Gold is a Form of Insanity
• Hourly Action In Gold From Trader Dan
• Volcker Leaves the Obama Team
• Mayhem Ahead
• MONDAY Market Excerpts
• Synonymous Terms for Quantitative Easing
• “The Pasadena Police Department would like to inform the public that buying gold is against the law unless you are licensed by the California Department of Justice.”
• Sleeping again Keiser ?
• The Debt of Nations
• Bill Buckler: "Sovereign Debt Can Never Be Repaid"
• Factors Bringing Gold Miners (and ETFs) Down
• Judge Sides With GATA, Orders Fed To Present Her With Its Classified Gold Records For Private Review
• Plenty of silver paper but metal is scarce, Sprott warns
• Mainstream Haters Deny Gold Its Fundamentals
• Gold Outlook 2011: Irreversible Upward Pressures and the China Effect
• Gold Daily and Silver Weekly Charts: Judge Orders Fed to Release Gold Records to Court
• Guest Post: V for Vendetta - 2011
• Looking Past the Politics at Our Economic Future
• Mainstream Hacks Deny Gold its Fundamentals
• Reference Point: Gold - Update #1
• A Long Winter for the Unemployed
• Gold 1380/85 Remains Resistance
• New Year's Resolutions for Your Gold Portfolio
• Technically Precious with Merv For week ending 07 January 2011
• Hedge Fund Position Update
• Gold Has More Room to Fall
• Why the Bullish Forecasts for 2011 Might Hit a Few Snags
• The Mechanism of China's Silver Accumulation
• Hi-Ho Silver: How SLV and PSLV Differ
• A New Gold Boom Right Here in the USA
• Gold looks good amid the devaluation race, Einhorn tells King World News
• Judge orders Fed to produce records for her review in GATA's lawsuit
• Judge orders Fed to deliver gold records for her review
• Buy a House… Then Buy Another
• Egypt experts warn of full-blown currency war
• The Fiscal Quicksands of Huge Deficits Should Support Precious Metals

IMaGiNiNG THe TBTF MoRTGaGe FuBaR Posted: 10 Jan 2011 06:30 PM PST TBTF MoRTGaGe FuBaR I just came across this hypothetical scenario presented by John Carney (CNBC NetNet Blog). It is a great example of how last week's Ibanez decision will put a severe monkey in the works of the TBTF fraudclosure mills. You will smile when you read this and you will laugh when you think about what it is like to deal with thousands of scenarios resembling this one. This comes pretty close to the perfect definition of a TBTF FUBAR. Carney: "Let’s say you are US Bancorp and you find yourself with a mortgage whose chain of title is incomplete. You took the mortgage from a now bankrupt subsidiary of the now bankrupt Lehman Brothers. Getting someone at Lehman to go through the process of executing the assignment is going to be very difficult. It’s not even clear if anyone at Lehman Brothers has the legal authority to execute an assignment now, while Lehman is bankrupt. In any case, getting the assignment from Lehman wouldn’t really help you. You’d still have a gap in the chain from Option One to Lehman. It’s probably best to skip over Lehman all together and go directly to Option One to ask for the assignment. But you have a bit of a problem. You didn’t buy the mortgage from Option One. They aren’t under any contractual obligation to you to execute any documents. So when you call, here’s how the conversation goes. US Bank dude: “Hey, can I speak to whoever it is who is handling the Ibanez mortgage?” Option One guy (after some delay): “No one handles that mortgage. We sold it five years ago to Lehman and closed the file.” US Bank: “Right. Okay. Well, I need you to find someone who will execute an assignment of the mortgage to me.” Option One: “First of all, no one who handled that mortgage still works here. You might have heard about the mortgage meltdown, right? Second, we sold it to Lehman, according to the file.” US Bank: “Right. But I bought it from Lehman.” Option One: “So get the assignment from Lehman.” US Bank: “They’re an empty company that is in bankruptcy.” Option One: “I’ve heard about that. Thanks for the news.” US Bank: “So I need you to execute the assignment.” Option One: “First of all, you’re going to have to show me that you bought the loan from Lehman. Second, I need to talk to legal to make sure I can assign a mortgage to someone we never dealt with. Third, how much are you willing to pay me to do all this?” US Bank: “Pay you? I already own the mortgage.” Option One: “The mortgage we sold to Lehman. If Lehman asks for the assignment, we’ll do it as part of that deal. But, as far as I can tell, I don’t owe you anything. If you want an assignment, you’re going to at least be paying the legal bills for the legal opinion that says it’s okay for us to do this.” US Bank: "You don't have to be an [expletive deleted] about this." Option One: "I also don't have to give you an assignment." By the way, if you do get Option One to assign it to Lehman, you might find yourself trapped. In that case, the mortgage arguably becomes part of the estate of Lehman—subject to the jurisdiction of the bankruptcy court. Sure, eventually, you may be able to prove that you are entitled to the assignment from Lehman. But you’ll be fighting the other creditors, who will argue that you are just one more unsecured creditor in a long line of people who say that Lehman owes them something." WB7: This is obviously a simplification. It is more complicated than this. But this simple example cuts through all the long winded legal explanations. If you were Option One, why would you cooperate without receiving an indemnification agreement, an expense reimbursement and a fee for your trouble? Better yet, wouldn't you just steer clear of the whole smelly mess? BTW guess who is on the other end of the call: "Option One Mumbai, can I help you?"

Jan 9, 1933 : South Africa goes off the Gold Standard Posted: 10 Jan 2011 05:30 PM PST Time

Judge Sides With GATA, Orders Fed To Present Her With Its Classified Gold Records Posted: 10 Jan 2011 05:07 PM PST Judge Sides With GATA, Orders Fed To Present Her With Its Classified Gold Records For Private Review Our friends at GATA report an interesting development in its multi-year confrontation with the Fed, namely that the organization has "scored a small but perhaps auspicious victory over the Federal Reserve in our lawsuit seeking access to the Fed's secret gold files. The judge presiding over GATA's federal freedom-of-information lawsuit in U.S. District Court for the District of Columbia, Ellen Segal Huvelle, granted GATA's motion to order the Fed to produce in complete form for the judge's private review 20 gold-related documents the Fed has sought to keep secret. The judge ordered the Fed to deliver the documents by Friday." While this does not mean that the Fed will actually publicly announce that its gold vaults are in fact filled with GLD stock certificates, it does put the Fed in an unpleasant position to have to escalate its defense of its secrecy in an increasingly m...

Waymar Resources Could be the Next Ventana Posted: 10 Jan 2011 04:54 PM PST By James West MidasLetter.com January 9, 2011 Waymar Resources (TSX.V:WYM) is another contender for the next Ventana – in terms of shareholder win, not geology – in Colombia. The Anzá project, which is the main focus of Waymar’s considerable expertise, has an active gypsum mine on it. As luck would have it, a massive sulphide lens was discovered under the gypsum deposit, and samples of this lens have yielded assays as high as 20 grams per tonne gold and 20% zinc. The exploration focus for Waymar at Anzá is for base metals mineralization with associated precious metals. Their initial focus will be on identifying Volcanogenic Massive Sulphide style mineralization. There are small artisanal gold mines 10 kilometres to the west of the Exman gypsum deposit, and these are not part of the Anzá project concession. However, the presence of these mines bodes well for possible hardrock and placer gold sources. This company was brought to my attention by Ari S...

New Year’s Resolutions for Your Gold Portfolio Posted: 10 Jan 2011 04:50 PM PST By Jeff Clark, BIG GOLD It's exciting to think we may be nearing a mania in gold. The price will likely double or more within a 12-month period not too far in the future (it rose 125.7% in 1979). And yet, amazingly, there will be investors who lose money in that run. How? Chasing returns. Jumping in and out of positions. Too emotional. Underinvested. Lack of diversification. Inappropriate expectations. Ironically, all of these are within the control of the investor. While you likely have some exposure to precious metals if you're reading this, is your portfolio arranged in the most effective ways to take full advantage of the ongoing bull market? In my opinion, there is a material difference between those who will make enough money to vacation in Malibu vs. those who could choose Milan. And those differences mostly come down to mindset. With the assumption that gold has years to go before it peaks, here are a few New Year's resolutions to consider for you...

New Year’s Resolutions for Your Gold Portfolio Posted: 10 Jan 2011 04:27 PM PST Casey Research

Gold Seeker Closing Report: Gold and Silver Start the Week with Decent Gains Posted: 10 Jan 2011 04:00 PM PST Gold rose $7.25 to as high as $1376.05 in Asia before it fell to see a $3.20 loss at as low as $1365.60 in midmorning New York trade, but it then rallied back higher into the close and ended with a gain of 0.41%. Silver erased most of its overnight gains and fell to as low as $28.62 by about 8AM EST, but it then rallied back higher in New York and ended near its late morning high of $29.10 with a gain of 1.19%.

Florida Pension Fund Broke? Posted: 10 Jan 2011 03:59 PM PST Via Pension Pulse. Mary Ellen Klas of the Miami Herald reports, Florida pension fund is not broke, AFL-CIO:   The war of words over reforming state and local pension funds heated up Monday as the head of one of the state's largest unions said that the system is not broken and doesn't need fixing.     ``Information that continues to circulate is not based on verifiable fact,'' said Rich Templin, political director of the AFL-CIO, which represents 600 local unions and 500,000 workers. He said, evidence shows, Florida'as state and local retirement system ``is actually functioning quite well.''     But Sen. Jeremy Ring, D-Margate, the Senate committee chairman who is preparing legislation to impose new limits on cities and counties pension plans, said he disagrees with Templin that no problem exists.     ``They can either come to the table and be part of the solution and offer suggestions or they can simply be obstructionist and say the system is fine and doesn't need reform and they won't be welcome at the table,'' Ring told the Miami Herald/St. Petersburg Times.     Gov. Rick Scott has joined House and Senate leaders in calling for sweeping reform of state and local public pension systems in the face of increasing costs. Ring will continue hearing from stakeholders at a meeting of the Senate Governmental Oversight and Accountability Committee on Wednesday.     While the Florida Retirement System continues to face a drag from the stock market losses of 2008, Ring said he is especially alarmed by the poor health of many municipal pension funds.     ``We've got cities paying close to 70 percent of their overall budget on pensions. It's not sustainable,'' he said.   Chad Little, a Merritt Island actuary that works with public pension systems, said at a news conference called by Templin that the average Florida city and county spends only 2.37 percent of its revenue from tax dollars on paying retirees, lower than the national average of 2,89 percent.     ``The health of the pension fund has more to do with the willingness and the ability of the plans' sponsors to make the contributions than it does whatever the current level of the funding percentage might by,'' Little said.     Templin also tried to dispel the notion that public sector pensioners get a better deal than those in the private sector, receiving on average $16,000 to $23,000 a year. ``Would anybody think that's a lavish amount to spend on your retirement and look after your grandkids?''     The James Madison Institute also released a report Monday that concluded that while the ``Florida appears to be in better shape that the typical state,'' many local governments have pension accounts that are severely underfunded.     Ring said he urges them help find consensus. Among his ideas: develop a model that bases an employee's contributions based on the performance of the market. If the pension account is fully-funded, then participants pay less but if it is not then their contribution would rise. In his article, Bill Kaczor of Bloomberg reports, AFL-CIO disputes 'myths' about Fla. pension funds: The AFL-CIO and two outside experts Monday disputed what they say are "myths" that Florida's public employee retirement plans are underfunded and provide lavish benefits.   Also, during a news conference they disagreed with claims that public pension costs are too high and eating up state and local budgets and that they hurt local economies.   The pension plans have drawn those kinds of criticisms from Gov. Rick Scott, lawmakers and a conservative think tank.   Florida AFL-CIO legislative and political director Rich Templin said the union is troubled by such comments although details of proposed legislation are hazy and nothing has yet been filed.   "We can't find any verifiable information to indicate that those claims are true, that those claims are anything other than political rhetoric and ideological posturing," Templin said.   He said pension benefits averaging $16,000 to $23,000 a year cannot be considered extravagant.   Scott has called the $122 billion Florida Retirement System "a ticking fiscal time bomb" because he doesn't think it can sustain its current high rate of return on investment. He's also worried about its unfunded liability.   As of last June 30, the closing date for the plan's last annual report, it had $109 billion in assets and an unfunded liability of about $15 billion, or 12 percent.   That percentage is one of the lowest of any public pension funds in the nation.   "You are one of the shining stars of pensions systems throughout the United States," said Ray Edmonsdon, CEO of the Florida Public Pension Trustees Association, a nonprofit educational organization for local plans.   The state plan, which isn't a member of Edmonsdon's organization, covers state and some local employees including teachers. Florida also has 488 local government pension funds.   Unfunded liability is the difference between a plan's assets and liabilities assuming it had to pay out benefits all at once.   "To say that a pension fund that has an unfunded liability is underfunded is not true," said Chad Little, a partner in Freiman and Little Actuaries of Merritt Island, which specialized in public pension plans. "Unfunded and underfunded are not the same thing."   In response, the James Madison Institute, a Tallahassee think tank, issued a news release acknowledging underfunded public pensions have not yet reached a crisis in most Florida municipalities but saying that possibility should be addressed now to prevent future problems.   "Underfunded public pension liabilities are economic sinkholes waiting to collapse," said the institute's president, J. Robert McClure III.   Florida is one of very few states that don't require state employees to pay into its pension fund. Scott has proposed compelling them to contribute although they've gone five years without an across-the-board pay raise.   Little acknowledged that would save taxpayers money but said it also would reduce the plan's financial health. That's because employee contributions must be returned if a worker leaves the system before being vested or dies early. The state's contributions stay in the fund under all circumstances.   Scott also wants new hires to be placed in a defined contribution plan similar to a 401K. That would allow employees to take their individual plans with them if they move to a new job not covered by the state system. They'd also be responsible for managing their own investments and would not be guaranteed lifetime payments that they get under the present defined benefits plan.   Edmonsdon, a retired Fort Lauderdale police officer, said switching to defined contributions could cost taxpayers more because retirees who exhaust their pension benefits would qualify for welfare at taxpayer expense.   The investment track record for such plans also has been poor compared to defined benefit systems, which are more diversified and run by professional money managers, he said. Edmonsdon is right, the switch into defined-contributions could cost taxpayers more if retirees exhaust their pension benefits. And an unfunded liability of $15 billion or 12% is not bad at all, especially when compared to other states that are in far worse shape. But Florida should introduce measures to have state employees contribute to their pension fund and the contribution rate shouldn't be based on rosy investment assumptions. Finally, all these state pension plans should improve on their governance. Without proper governance, the rest is meaningless.

Crude Oil Tests 26-Month Highs on Pipeline Leak, Gold Inches Higher on Dollar Decline Posted: 10 Jan 2011 03:41 PM PST courtesy of DailyFX.com January 10, 2011 08:51 PM Crude oil managed to put in a solid gain on Monday despite declines in U.S. equities and most other commodities thanks to production cuts in Alaska. Meanwhile, gold rallied after the dollar fell for the first time in six sessions. Commodities – Energy Crude Oil Tests 26-Month Highs on Pipeline Leak Crude Oil (WTI) - $89.30 // $0.05 // 0.06% Commentary: WTI added $1.22, or 1.39%, to settle at $89.25 on Monday, while Brent advanced $2.37, or 2.54%, to settle at $95.70. The differential between the two benchmarks widened to $6.45, the most since the $10.67 record set in early 2009. Brent actually hit a new 26-month closing high, though it did not surpass last week’s intraday high at $96.17. The catalyst for Monday’s move higher in oil was the shut-in of nearly 95% of Alaska’s crude oil production due to a pipeline leak. All indications are that the leak will be fixed shortly and that there will be no la...

Meet The Fed's POMO Desk... Which Doesn't Even Have Bloomberg Terminals Posted: 10 Jan 2011 01:43 PM PST Over one year after Zero Hedge made POMO, and the Fed's open market operations group a household name, and Brian Sack a household curse, the NYT has finally decided to write an expose on the people who are charged with enforcing America's transition to central planning. And they just happen to be the grizzled 40 year old Mr. Sack, a 34 year old supervisor, two 29-year olds and a 26 year old girl... who goes to NYU. Yes, ladies and gentlemen, these are the people who are gifting billions in commissions to the Primary Dealers on a daily basis. You see, the FRBNY whiz-kids have a "computer algorithm that works out which [offers] to [lift]. The computer compares the offers from Wall Street against market prices and the Fed’s own calculation of what constitutes a “fair value” price." In other words, taxpayers are getting raped during each and every single POMO but that's ok - the Fed's algorithm, probably created by yet another ex-Goldmanite, determines that said raping is "fair" and with absolutely no transparency anywhere in the process, except of course the Fed telegraphing in advance what bonds will be monetized, there is no way to ever check... Because that kind of mutually assured destructive disclosure would mean the financial world would promptly implode in a case study of total protonic reversal. After all, only smart people (and we are talking Wall Street smart) can handle the responsible truth... of daily Primary Dealer Subsidies. Behold what the nerve center of 21st century central planning looks like. Note the abundance of Bloombergs: Blake Gwinn, left, and James White in the operations room at the Federal Reserve Bank of New York. As for the lovely pre-cleared narrative of how a few people run the world on behalf of Wall Street, pardon, revive the economy, here is the spin, courtesy of the NYT's Graham Bowley. In a spare, government-issue office in Lower Manhattan, behind a bank of cubicles and a scruffy copy machine, Josh Frost and a band of market specialists are making the Fed’s ultimate Wall Street trade. They are buying hundreds of billions of dollars of United States Treasury  securities on the open market in a controversial attempt to keep interest rates low and, in the process, revive the economy. To critics, it is a Hail Mary play — an admission that the economy’s persistent weakness has all but exhausted the central bank’s powers and tested the limits of its policy making. Around the world, some warn the unusual strategy will weaken the dollar and lead to crippling inflation. But inside the Operations Room, on the ninth floor of the New York Fed’s fortresslike headquarters, there is no time for second-guessing. Here the second round of what is known as quantitative easing — QE2, as it is called on Wall Street — is being put into practice almost daily by the central bank’s powerful New York arm. What exactly is the Operations Room task? Why to gift huge bid/ask spreads to the Primary Dealers of course, making sure that bonuses of traders in the govvie desks of the PD crew are well padded, and those same people continue to cooperate in the pumping of the ponzy pyramid. But in NYT speak, this is known as getting the "best possible price" - too bad this is the best possible price for Goldman, not for Joe Sixpack, who is unaware that the bent over Vaseline treatment proceeds daily with every single POMO, which directly funnels tens if not hundreds of millions of dollars to the Primary Dealers (we don't know - you see the Fed does not disclose the asking prices that ultimately are lifted, contrary to what the NYT will have you believe. Each morning Mr. Frost and his team face a formidable task: they must try to buy Treasuries at the best possible price from the savviest bond traders in the business. The smallest miscalculation, a few one-hundredths of a percentage point here or there, could unsettle the markets and cost taxpayers dearly. It could also embolden critics at home and abroad who say QE2 represents a dangerous expansion of the Fed’s role in the markets. “We are looking to get the best price we can for the taxpayer,” said Mr. Frost, a buttoned-down 34-year-old in a striped suit and rimless glasses. Unfortunately, the best price for the taxpayer is one which results in billions in commissions to Primary Dealers at the end of any given QE program (and there will be many after the current one is done). Louis V. Crandall, the chief economist at the research firm Wrightson ICAP, said Wall Street bond traders were driving hard bargains. The Fed has tipped its hand by laying out which Treasuries it intends to buy and when, giving the bond houses an edge. “A buyer of $100 billion a month is always going to be paying top prices,” Mr. Crandall said of the Fed. “You can’t be a known buyer of $100 billion a month and get a good price.” Nevertheless, Mr. Frost and his team have been praised on Wall Street for creating a simple, transparent program. Neither the Fed nor Wall Street want any surprises. The central bank is even disclosing the prices at which it buys. Mr. Frost and his team work out of a small, beige corner office with arched windows that used to be a library. There, at about 10:15 most workday mornings, one of them pushes a button on a computer. Across Wall Street, three musical notes — an F, an E and a D — sound on trading terminals, alerting traders that the Fed is in the market. On one recent Tuesday morning, what Mr. Frost and his five young colleagues did over a 45-minute period might have unsettled even a seasoned Wall Street hand: they bought $7.8 billion of Treasuries. As for the actual people who push the buttons to see of this symphony of taxpayer rape, meet 26 year old Tiffany Wilding (who will graduated from NYU in 2013), 29 year old Blake Gwinn and 29 year old James White. These are the people who every day (and in some cases twice daily) proceed to monetize billions in bonds. The real work is done by three traders who are referred to during the operation as trader one, trader two and trader three. They sit at a long table against the wall, tapping at seven screens. On one recent morning, trader one was Tiffany Wilding, 26. While she reviewed the stream of offers and then the prices finally accepted by the algorithm, trader two, Blake Gwinn, 29, double-checked her decisions and trader three, James White, 29, made a duplicate of everything in case the computers crashed. All the while, Mr. Frost stood behind his colleagues, ready to intervene — and even cancel the Fed’s purchases — at any sign of trouble. Too bad the only sign of trouble is if the Primary Dealers are not extracting their daily allotted ten/hundred million pounds of flesh. And between the talented Mr. Sack, and the NYU students who actually execute the billions in dollars, there is the mysterious Mr. Frost: Mr. Frost — a Rutgers math grad who has worked at the Fed for 12 years, lives in the Borough Hall area of Brooklyn and takes the subway each day to work — is fairly well known within the dealer community. He and his team talk to the big banks most days. The job carries great responsibility and is prominent within the Fed. So prominent and so responsible... yet his entire QE2 operation has been an abysmal failure - note the rates on the 10 Year today, and 2 months ago when QE2 started. Oops... Mr. Frost, and his boss, Brian P. Sack, insist the program has succeeded. Mr. Sack, 40, joined the Fed 18 months ago to run the entire markets group. He has a Ph.D. from M.I.T. and worked most recently for a Washington consulting firm. In 2004, he wrote a paper with Ben S. Bernanke, the future chairman of the Federal Reserve, and another economist about unconventional measures for stimulating the economy in extraordinary times — just like large-scale purchases of Treasuries. “We didn’t know then that the Fed would be putting it to the test,” he said. He said the Obama administration’s $858 billion tax compromise with Congressional Republicans in December complicated the macroeconomic picture. But the biggest reason for the rise in interest rates was probably that the economy was, at last, growing faster. And that’s good news. “Rates have risen for the reasons we were hoping for: investors are more optimistic about the recovery,” said Mr. Sack. “It is a good sign.” And there you have it: to "prominent and respected" puppets within the Fed, evidence of the the adverse outcome is proof that the desired outcome has been achieved. With lunatics such as this who needs Kool Aid... and who cares if teenagers with a penchant for Jersey Shore push the "Buy" buttons (also known as Any Key) at the heart of US central planning. After all it is more than clear by now that even Snooki knows to BTFD.

Gold Price Trading Sideways, is it Consolidation or Reversal Pattern? Posted: 10 Jan 2011 12:11 PM PST Gold Price Close Today : 1373.00 Change : 4.50 or 0.3% Silver Price Close Today : 29.010 Change : 0.349 cents or 1.2% Gold Silver Ratio Today : 47.33 Change : -0.419 or -0.9% Silver Gold Ratio Today : 0.02113 Change : 0.000186 or 0.9% Platinum Price Close Today : 1745.00 Change : 9.20 or 0.5% Palladium Price Close Today : 748.50 Change : -3.40 or -0.5% S&P 500 : 1,269.75 Change : 3.75 or 0.3% Dow In GOLD$ : $175.21 Change : $ (1.12) or -0.6% Dow in GOLD oz : 8.476 Change : -0.054 or -0.6% Dow in SILVER oz : 401.15 Change : -1.33 or -0.3% Dow Industrial : 11,637.45 Change : -37.31 or -0.3% US Dollar Index : 80.90 Change : -0.250 or -0.3% The GOLD PRICE today closed Comex at $1,373, up $4.50. The SILVER PRICE closed at 2901c, up 34.9c and above the psychologically important 2900c line, but not by enough to crow about. After five down days, one 34.9c up day doesn't count for much. It's below its 20 DMA (29.31) but above the 50 (28.10). Rats! I misspoke. On Friday I wrote, "Those who have already swapped gold for silver have locked in big gains against gold and are ready to swap back when the time comes in the next four months." Clearly (or maybe not so clearly) I meant, "Those who have already swapped SILVER for GOLD." Sorry, sometimes my tongue plays tricks on me, especially when it's typing. I feel really good about gold because big time analysts are talking about the end of the gold boom, gold rolling over, and so forth. Whenever you hear those tales, you know you are far from a long term top, because at the top you won't be able to find a radioactive pessimist with a Geiger counter. Today gold again traded sideways and rangebound, between $1,375 and $1,365. Gold's refusal to break down further leaves me somewhat antsy. Construing gold with the GOLD/SILVER RATIO leads me to expect gold and silver to fall, because after a ratio low they usually do, and fast. The ratio hit a low and has since clearly broken through its downtrend line. This sloth in rolling over and bouncing up leaves me scratching my head. For obvious reasons I would like to see the ratio re-visit its 200 dma, now at 60.32. It remains above the 20 dma tripwire, but below the 50 dma at 49.32. Time to re-think the fundamental expectation. The SILVER PRICE and the GOLD PRICE should have made a higher high, but failed on 3 January 2011 at a level lower than gold's last high, but not silver's. Ergo, both ought to drop. Silver dropped about 300c, but that is nothing as dramatic as it has done after past ratio lows. Since October gold has traded sideways between $1,315 and $1,430. Is it a consolidation for a continuation, or a reversal pattern? Don't know, but the question keeps buzzing around like a pesky fly. Silver vastly outperformed gold over the past 5 months, which typically happens toward the end of a long rally. Yet the sharp reaction after the ratio low hasn't occurred. So far, that indicates great strength, but a break below $1,350 would change that. If gold jumped above $1,430, that would also change the outlook to "rally mode," but this correction surely has more time before it. Today the US DOLLAR INDEX gave up 25 basis points to close at 80.895. Considering that it climbed last week from Wednesday, it has earned a rest. It bobbled along 80.8 at the day's end, so tomorrow may push down toward 80.40, but dollar gives no indication of turning back its decision to rise. Dollar nearly reached its 200 day moving average, now at 81.66, and 'twas probably that nearness that turned it back. Once it clears that mark it should run strongly for 83.50 if it truly intends to keep climbing. 20 DMA stands at 80.13, so dollar must hang on above that. STOCKS today were confused. Dow and S&P500 dropped, Nasdaq Comp rose. Nothing about stocks attracts me: they have traced a bearish upward wedge, come off of shockingly overbought RSI (above 70), and have an MACD turning down and sputtering. More than that, this next year will not be kind to the economy. More corpses will float to the surface in the Banking Swamp, all in states of advanced decomposition. The real estate bodies have not been buried, only put on the ice in the Fed and the basement, and they must be interred yet. Municipalities are likely to begin going white side up like so many poisoned alligators, taking muni bond holders with them. None of this makes me cheer for stocks. They remain the e. coli lettuce lurking in the investment supermarket's produce section. The Dow dropped 37.31 points today to 11,637.45. S&P500 lost 1.75 to end at 1,269.75. Dow in Gold Dollars jumped back from that 200 DMA like I did this morning when I picked up a hot cast iron skillet by the handle. Naaw, I didn't burn myself. It just doesn't take me long to look at a hot skillet. 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.

Not owning gold is insane, Cazenove's Griffiths tells CNBC Posted: 10 Jan 2011 12:10 PM PST 8:10p ET Monday, January 10, 2011 Dear Friend of GATA and Gold: Interviewed today by CNBC, Cazenove Capital's technical strategist, Robin Griffiths, remarked that gold is still in a "linear trend" but eventually will "go exponential" as fiat currencies are "printed into oblivion," and so not owning gold is "a form of insanity." Of course this doesn't mean that all gold owners are sane, just that even the crazy ones may end up able to pay for their own institutionalization. You can read a summary of the interview with Griffiths and watch its video, about 4 minutes long, at the CNBC Internet site here: http://www.cnbc.com//id/40997445 CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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 Wednesday-Thursday, January 19-20, 2011 http://theyukonroom.com/yukon-eblast-static.html Vancouver Resource Investment Conference Vancouver Convention Centre West Vancouver, British Columbia, Canada Sunday-Monday, January 23-24, 2011 http://cambridgehouse3.com/conference-details/vancouver-resource-investment-conference-2011/15 Cheviot Asset Management Sound Money Conference Guildhall, London Thursday, January 27, 2011 http://www.gata.org/files/CheviotSoundMoneyConferenceInvite.pdf Phoenix Investment Conference and Silver Summit Renaissance Glendale Hotel and Spa Friday-Saturday, February 18-19, 2011 Glendale, Arizona http://cambridgehouse3.com/conference-details/phoenix-investment-confere... Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts 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: http://www.goldrush21.com/ 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Prophecy Drills 71.17 Metres of 0.52% NiEq (0.310 % Nickel 0.466 g/t PGMs +Au and 0.223% Copper) from surface at Wellgreen Project in the Yukon 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

Virginia Creates Subcommittee To Study Monetary Alternatives In Case Of Terminal Fed "Breakdown", Considers Gold As Option Posted: 10 Jan 2011 11:29 AM PST In what may one day be heralded as the formal proposal that proverbially started it all, the Commonwealth of Virginia introduced House Resolution No. 557 to establish a joint subcommittee to "to study whether the Commonwealth should adopt a currency to serve as an alternative to the currency distributed by the Federal Reserve System in the event of a major  breakdown of the Federal Reserve System." In other words, Virginia will study the fallback plan of a "timely adoption of an alternative sound currency that the Commonwealth's government and citizens may employ without delay in the event of the destruction of the Federal Reserve System's currency" and avoid or "at least mitigate many of the economic, social, and political shocks to be expected to arise from hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System." Most importantly as pertain to the currency in question, "Americans may employ whatever currency they choose to stipulate as the medium for payment of their private debts, including gold or silver, or both, to the exclusion of a currency not redeemable in gold or silver that Congress may have designated 'legal tender'." Whether this resolution will ever get off the ground, and actually find that the world is at great risk should gold not be instituted as a backstop currency, is irrelevant. The mere fact that it is out there, should provide sufficient impetus to other states to consider the ultimate Plan B. We urge all legislators to carefully read this resolution. Full proposal (pdf):   h/t infocyde

John Williams Eyes Gold as Insurance Against Armageddon Posted: 10 Jan 2011 10:57 AM PST Source: Karen Roche of The Gold Report 01/10/2011 Stronger corporate balance sheets, tighter reins on costs and better stock performance in 2010 haven't swayed ShadowStats Editor John Williams' assertion that the bottom-bouncing economy is weaker than ever, with specters of hyperinflation and systemic financial collapse on the not-so-distant horizon. As he says in this exclusive Gold Report interview, the yellow metal is his "insurance against Armageddon"—or at least the single best asset that people can use to ride out the storm. The Gold Report: In our last two interviews, you noted that based on the contraction in the M3 in 2009, you anticipated a resulting contraction in the general economy six to nine months later. Are you seeing that impact yet? John Williams: Just to be clear on what's involved. . .I continue to track M3, the Fed's broadest measure of the money supply until it ceased publication in March of 2006.Generally, the broader the measure of sys...

Not Owning Gold is a Form of Insanity Posted: 10 Jan 2011 10:51 AM PST Gold will eventually rally exponentially and investors who don't own the precious metal are "insane," and may be showing "masochistic tendencies," Robin Griffiths, technical strategist at Cazenove Capital, told CNBC. "I think not owning gold is a form of insanity, it may even show unhealthy masochistic tendencies, which might need medical attention," Griffiths said. Gold, along with other metals such as copper, has been making new all time highs, which is a strong buying signal, according to Griffiths. "Although it's been a top performer for each of the last ten years, it's still in a linear trend. Eventually it will go exponential and make more in the last little bit than the whole of the ten year trend," he said. Griffiths said that any short-term declines in the price of gold represent a buying opportunity and the asset is still not an "over-owned trade". "Real assets hedge paper money being printed into oblivion, so you've got to own gold and you've got to own other commodity-related investments still,"  he said. As gold [XAU=X  1374.5    0.05  (+0%)   ] is likely to continue its rise, the value of the dollar [.DXY  80.85    -0.16  (-0.2%)   ] is likely to remain in a long-term downtrend against other major currencies as the Federal Reserve maintains its policy of quantitative easing to stimulate the economy, according to Griffiths. "The downward trend in the dollar is awesomely powerful. It's vital to get yourself out of the dollar long-term on any significant rally. Continuing to own a currency that is going to be printed virtually into oblivion … is crazy," he said. More Here.. The Mechanism of China's Silver Accumulation

Hourly Action In Gold From Trader Dan Posted: 10 Jan 2011 10:20 AM PST View the original post at jsmineset.com... January 10, 2011 12:13 PM Dear CIGAs, There seemed to be a general reflation type of trade back in play today although it was mixed in the sense that the bonds were a bit higher which generally does not comport with the return of risk trades. Copper was lower as well which sent off a mixed signal. The grains however were very strong with beans leading the charge and corn right on their heels. Crude oil moved higher on news of a drop off in oil moving through the Trans Alaska Pipeline due to a discovered leak near Prudhoe Bay. The Dollar was slightly lower and equities were a tad lower leading to some conflicting short term signals for traders to sort through. In response to a private email, I suggested while the US Dollar is going to continue exerting a strong influence on the overall level of commodity prices, I am not so sure that we are going to see a direct link reassert itself to the degree where we have nearly every tick higher in ...

Volcker Leaves the Obama Team Posted: 10 Jan 2011 10:00 AM PST Now, here's some bad news. As far as we could tell, the Obama team only had one good man on it…former Fed chief and DR hero Paul Volcker. But word came last week that Volcker is out as head of the president's economic advisory committee. Dear Readers are reminded that Volcker saved the day back in 1979. He pledged to cut inflation. He kept his word. It wasn't easy. He put interest rates up over 15%…at a time when the CPI was running at 13%. And Ronald Reagan backed him up. If you're going to get control of inflation you can't trail the CPI. You have to get ahead of it. Which is why Bernanke's pledge is such nonsense. He says that as inflation rates go up, he'll put up the key Fed lending rate to 2%. He's already increased the monetary base to 3 times what it was under Volcker. He's committed to raising it another 33% by the end of June, bringing it to 4 times its 1980s level. When all that latent inflation becomes real inflation we'll see prices rise more than just 2% per year. We'll see them fly. What we won't see is Ben Bernanke getting ahead of them by putting rates up even more than inflation. It won't happen. Because it goes completely against the grain of Ben Bernanke's theories. The US is in a Great Correction. He thinks it needs stimulus, not austerity. When inflation rates finally begin to go up, he'll dither. He won't want to put up interest rates at all. At first, he'll hope that it is just a fluke. He'll delay. He'll hesitate. He'll stall. At first, the rise of inflation will be confused with a growing economy. Prices will move up. Consumers will spend money just to get rid of it. Businessmen will think they have more demand on their hands. They may even hire more workers. Stocks may go up. Bernanke won't want to nip this "recovery" in the bud. "Growth" – even with inflation – is better than no growth, he will reason. Then, when CPI is really getting up some real speed…and the inflation rate is headed towards 10%…he'll realize that it is too late. The only way to get ahead of it would be to "pull a Volcker"…and bring the whole economy down around him – like Volcker did. But Volcker was still dealing with an essentially healthy economy. It could survive the fall. Today, the economy is much heavier…and more fragile. Debt levels are three times what they were back then. Stocks are high, with a long way to fall too. And unemployment – as we saw above – is already about 12%, with mortgage rates still near 50-year lows. Imagine what would happen with the prime rate above 10%. Who would hire anyone? How could the US finance its deficits? What would it do to the US economy? We don't know…but we'll guess that Sherman did less damage to Atlanta. Inflation will run wild… Bill Bonner for The Daily Reckoning Volcker Leaves the Obama Team 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."

Mayhem Ahead Posted: 10 Jan 2011 09:30 AM PST The 5 min. Forecast January 10, 2011 01:56 PM by Addison Wiggin - January 10, 2011 [LIST] [*] The connection between the “Tragedy in Tucson”… and “leadership” that doesn’t listen [*] “Massive breakdown of law and order” in U.S. prophesied by a reader who’s seen it first hand… and another prophecy you should read right away [*] “Mere noise”… “Best opportunity”… Byron King, John Embry weigh in on gold’s pullback [*] France tries to break bad dollar news to the White House… while Brazil upgrades “currency war” warning [*] Chinese complete world’s longest bridge… in four years, for $8 billion [/LIST] Six people dead, 14 wounded. A congresswoman left in a medical coma. Our ensuing forecast for 2011: more mayhem to come. Not because the crazy SOB who did it was justified. Jared Loughner’s Facebook postings and YouTube videos were...

MONDAY Market Excerpts Posted: 10 Jan 2011 09:29 AM PST Euro-zone worries help lift gold price again The COMEX February gold futures contract closed up $5.20 Monday at $1374.10, trading between $1365.00 and $1376.40 January 10, p.m. excerpts: (from Marketwatch) Gold futures ended a four-session losing streak as Europe re-emerged as a concern for investors and the dollar weakened. Gold had wavered between small gains and losses most of the morning, but started to move higher as the dollar moved downward and the euro came off its lows. Gold for February delivery added 0.4%, while the dollar index was most recently down 0.2% to 80.85. Reports that Portugal is preparing to take an European Union and IMF bailout had earlier weakened the euro…more (from Dow Jones) The market was watching fiscally fragile Portugal, which this week is scheduled to sell billions of euros worth of bonds. Analysts speculate that the debt sale could be met with a chilly response by investors nervous about the country's economic prospects. Bond traders said that the European Central Bank engaged in "aggressive" buying of peripheral euro-zone debt Monday. Two traders said the ECB had bought Portuguese sovereign debt…more (from Bloomberg) The cost of insuring European sovereign debt against default increased to a record today before Portugal's bond sale on January 12. "When you look over your shoulder, the worries in Europe are still there," noted Frank McGhee, head dealer at Integrated Brokerage Services. "Another bailout means you'll be seeing a movement out of European currencies into metals." Bayram Dincer, analyst at LGT Capital Management, said that investors in China and India may boost gold purchases to hedge against inflation…more (from TheStreet) Brazil's inflation rate is 5.9% and reportedly growing at its fastest rate in six years, while China's is just shy of that number at 5.1%. Raising key interest rates is the common tool to fight inflation, which most countries like Brazil are expected to do, but it would take a lot of hikes to move real interest rates from negative to positive. Negative real interest rates are always a green light to gold buyers as their currency is worth less and gold becomes a more profitable place to store their money…more see full news, 24-hr newswire…

Synonymous Terms for Quantitative Easing Posted: 10 Jan 2011 09:22 AM PST I was having a leisurely breakfast with the family when I read where Philipp Bagus, writing at Mises Daily newsletter, quotes James Bullard, president of the St. Louis Federal Reserve Bank, as saying, "it's important to defend inflation from the low side as we would on the high side." I thought to myself, "Defend inflation? Inflation needs to be defended from being too low? Arrgghhh!" As indicated by the surprising use of the pirate-sounding phrase, "Arrgghh!" you can tell that this sublime idiocy drives me Up The Freaking Wall (UTFW), as soon indicated by a few almost-obligatory and loud Mogambo Screams Of Outrage (MSOO) emanating from my lips, which, unfortunately, upset my stupid family, and they all started complaining about the noise and the way that food was flying out of my mouth and getting all over everything. Amid rude comments like, "Calm down, you idiot!" and, "Ewww!" I just explained, "Screw you!" got in my car and went to work. As I was driving along, thinking abo...

“The Pasadena Police Department would like to inform the public that buying gold is against the law unless you are licensed by the California Department of Justice.” Posted: 10 Jan 2011 09:20 AM PST Police issue warning about buying and selling gold Share this:

Sleeping again Keiser ? Posted: 10 Jan 2011 09:17 AM PST Judge orders Fed to deliver gold records for her review .. The judge presiding over GATA's federal freedom-of-information lawsuit in U.S. District Court for the District of Columbia, Ellen Segal Huvelle, granted GATA's motion to order the Fed to produce in complete form for the judge's private review 20 gold-related documents the Fed has sought [...]

The Debt of Nations Posted: 10 Jan 2011 09:15 AM PST Citigroup Global Markets released their Global Economics Outlook late last week. It is aptly titled The Debt of Nations. The report is 84 pages and worth reading in its entirety, but even those that aren't interested in all the grizzly details should at least read the 3½ page introduction. Here are a couple highlights (er lowlights?): ◙ There are no absolutely safe sovereigns. ◙ There are likely to be several sovereign debt restructurings in the euro area (EA) in the next few years. ◙ Greece's sovereign is manifestly insolvent… ◙ Ireland's financial support package will buy time, but does not address the fundamental insolvency issues of the consolidated sovereign and banking system. ◙ Portugal is likely to access the EFSF (bailout mechanism) soon. ◙ Despite the recent drama, we believe we have only seen the opening [Greece] and second [Ireland] act, with the rest of the plot still evolving. ◙ [M]arkets had put Spain in Italy's sovereign risk class when, in our view, it should be closer to Portugal and Ireland… ◙ We expect these [sovereign debt] concerns to extend before long beyond the EA to encompass Japan and the US — especially if we extend the concept of sovereign default to include not only violations of the legal terms of the sovereign debt contract, but also the infliction of severe capital losses on owners of domestic-currency-denominated sovereign debt by deliberately engineered unanticipated inflation and currency depreciation. [source] PG View: A pretty grim piece of analysis, that basically suggests that efforts to prevent contagion are likely for naught. This reality is evidenced by the record — or near record — spreads and credit default swap (CDS) premiums for Greek and Irish debt. The two counties that have already taken their bailouts. When they talk about "sovereign debt restructurings," that's a nice way of saying "sovereign defaults." This analysis also goes a long way toward explaining why the 'too-big-to-fail' (TBTF) banks — like Citi — choose to sit on accumulated reserves. They are forecasting, and therefore preparing for, the coming storm. One might be well advised to do a little reserve-bolstering on a personal level for all the same reasons. However, Citi's line about "engineered unanticipated inflation and currency depreciation" would suggest the dollar (or any other currency for that matter) might not be the best choice for the purpose of wealth preservation.

Bill Buckler: "Sovereign Debt Can Never Be Repaid" Posted: 10 Jan 2011 09:13 AM PST The following extract from Bill Buckler's latest Privateer Report hits at the heart of the current systemic collapse, and is thus presented without commentary. Sovereign Debt Can NEVER Be Repaid Wherever you live in the world, you are pushing a huge rock uphill. You and I live in a world whose money, markets and financial system is TOTALLY dependent on the debt issued by government. In any form of rational economic definition, a debt is a deferred and therefore an UNFINISHED transaction. It cannot be completed until the principal plus interest incurred in its issuance have been repaid in full - and in money which retains the purchasing power of that which was borrowed to incur the debt. No government debt has ever been or can ever be repaid in full. This is especially the case when a government imposes a monopoly on what can be used as money by passing and enforcing “legal tender” laws. The US did this with the introduction of the Fed in 1913. Eventual default becomes an absolute certainty when government makes its own debt paper the ONLY “reserve” behind the “money” it alone can create. The US did this under President Nixon in 1971. The whole world went along with it because the US Dollar was the reserve currency and no government or people anywhere dared jettison it. The result is the global financial quagmire we see everywhere we look. If there is going to be any progress towards a REAL solution to this mess, a necessary step is the recognition that governments MUST live within their means. Any social entity which must monopolise the use of force as a pre-requisite for its existence CANNOT be allowed to use that force to augment its power. That is what government debt always does, until the day comes when it collapses in ruins. Mure more in the full report

Factors Bringing Gold Miners (and ETFs) Down Posted: 10 Jan 2011 09:01 AM PST Tom Lydon submits: Despite sky-high gold prices, even after this most recent pullback, gold miner ETFs are suddenly feeling some pain. What gives? Gold prices gained 25% last year and gold miner ETFs did even better; Market Vectors Gold Miners (GDX) finished the year up 33%, while the Market Vectors Junior Gold Miners ETF (GDXJ) gained 55%. Complete Story »

Judge Sides With GATA, Orders Fed To Present Her With Its Classified Gold Records For Private Review Posted: 10 Jan 2011 08:50 AM PST Our friends at GATA report an interesting development in its multi-year confrontation with the Fed, namely that the organization has "scored a small but perhaps auspicious victory over the Federal Reserve in our lawsuit seeking access to the Fed's secret gold files. The judge presiding over GATA's federal freedom-of-information lawsuit in U.S. District Court for the District of Columbia, Ellen Segal Huvelle, granted GATA's motion to order the Fed to produce in complete form for the judge's private review 20 gold-related documents the Fed has sought to keep secret. The judge ordered the Fed to deliver the documents by Friday." While this does not mean that the Fed will actually publicly announce that its gold vaults are in fact filled with GLD stock certificates, it does put the Fed in an unpleasant position to have to escalate its defense of its secrecy in an increasingly more sensitive topic, i.e., precious metals price manipulation with or without JP Morgan, and is a definite setback for Bernanke in his pretend push to make the Fed appear more transparent. More from GATA: The judge's order to the Fed to produce documents for her private review can be found at GATA's Internet site here: http://www.gata.org/files/GATAFedLawsuitCourtOrder-01-10-2011.pdf Those who are skeptical of GATA's complaint that the Federal Reserve is part of an international gold-price rigging scheme should reflect on the meaning of the Fed's refusal to disclose all its gold-related records, records that include gold swap arrangements with foreign banks: http://www.gata.org/node/8192 If the U.S. gold reserves are just sitting somewhere, inert, unencumbered, and unused for surreptitious market intervention, what's the problem with full disclosure? Financial journalists unafraid of aggravating the world's financial powers should start putting gold-related questions to the Fed and other central banks and stop simply assuming that secrecy should be the normal order of things with central banks and gold. And people everywhere who believe in free markets in the monetary metals and who have not already supported GATA financially can join our struggle here: http://www.gata.org/node/16 This struggle could have been undertaken easily and likely more effectively by the World Gold Council, which aims to represent gold mining companies and gold investors. But the council's indifference to questions of surreptitious central bank intervention in the gold market has left the struggle to GATA. We need your help to pursue this struggle to victory for free markets, limited government, and a better, fairer world. And from the actual order: ORDER Upon consideration of defendant’s motion for summary judgment [dkt. #9], plaintiff’s opposition thereto [dkt. #13], plaintiff’s motion for in camera review [dkt. #14], defendant’s opposition and reply [dkt. #16], and plaintiff’s reply [dkt. #20], it is hereby ORDERED that defendant shall produce to the Court for in camera inspection by January 14, 2011, redacted and unredacted copies of the 20 documents indicated on its Vaughn index. (See Exhibit 8 to Declaration of Alison M. Thro.)

Plenty of silver paper but metal is scarce, Sprott warns Posted: 10 Jan 2011 08:48 AM PST Sprott Physical Silver Trust Updates Investors on the Delivery Status of its Silver Bullion Purchases Company Press Release via PRNewswire and Yahoo News Monday, January 10, 2011 http://finance.yahoo.com/news/Sprott-Physical-Silver-Trust-prnews-187235... TORONTO -- Sprott Asset Management LP is pleased to provide investors with an update on the delivery status of silver bullion purchased by the Sprott Physical Silver Trust (NYSE: PSLV). As of November 10, 2010, the Trust had contracted to purchase a total of 22,298,525 ounces of silver bullion. As of December 31, 2010 a total of 20,919,022 ounces of silver bullion had been delivered to the Trust. T he Trust expects to take delivery of the final 1,379,503 ounces of silver bullion by January 12 and will subsequently publish the serial numbers of all bars held by the Trust on its website: www.sprottphysicalsilver.com. "Frankly, we are concerned about the illiquidity in the physical silver market," said Eric Sprott, chief investment officer of Sprott Asset Management. "We believe the delays involved in the delivery of physical silver to the Trust highlight the disconnect that exists between the paper and physical markets for silver." Additional detail on the Trust can be found in the final prospectus available on EDGAR (www.sec.gov/edgar.com) and SEDAR (www.sedar.com) or on the Trust's website at www.sprottphysicalsilver.com. ADVERTISEMENT Prophecy Receives Permit To Mine at Ulaan Ovoo in Mongolia VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY, OTCQX: PRPCF, Frankfurt: 1P2) announces that on November 9, 2010, it received the final permit to commence mining operations at its Ulaan Ovoo coal project in Mongolia. Prophecy is one of few international mining companies to achieve such a milestone. The mine is production-ready, with a mine opening ceremony scheduled for November 20. Prophecy CEO John Lee said: "I thank the government of Mongolia for the expeditious way this permit was issued. The opening of Ulaan Ovoo is a testament to the industrious and skilled workforce in Mongolia. Prophecy directly and indirectly (through Leighton Asia) employs more than 65 competent Mongolian nationals and four expatriots. The company also reaffirms its commitment to deliver coal to the local Edernet and Darkhan power plants in Mongolia." The Ulaan Ovoo open pit mine is 10 kilometers from the Russian border and within 120km of the Nauski TransSiberian railway station, enabling transportation of coal to Russia and its eastern seaports. Thermal coal prices are trading at two-year highs at Russian seaports due to strong demand from Asian economies. For the complete press release, please visit: http://prophecyresource.com/news_2010_nov11.php Join GATA here: Yukon Mining Investment e-Conference Wednesday-Thursday, January 19-20, 2011 http://theyukonroom.com/yukon-eblast-static.html Vancouver Resource Investment Conference Vancouver Convention Centre West Vancouver, British Columbia, Canada Sunday-Monday, January 23-24, 2011 http://cambridgehouse3.com/conference-details/vancouver-resource-investment-conference-2011/15 Cheviot Asset Management Sound Money Conference Guildhall, London Thursday, January 27, 2011 http://www.gata.org/files/CheviotSoundMoneyConferenceInvite.pdf Phoenix Investment Conference and Silver Summit Renaissance Glendale Hotel and Spa Friday-Saturday, February 18-19, 2011 Glendale, Arizona http://cambridgehouse3.com/conference-details/phoenix-investment-confere... Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts 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: http://www.goldrush21.com/ 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, 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

Mainstream Haters Deny Gold Its Fundamentals Posted: 10 Jan 2011 08:22 AM PST Wall Street Cheat Sheet submits: By Jordan Roy-Byrne Yesterday I came across a clip from one of the business channels. The discussion was about “king dollar” and Gold (NYSE:GLD). (The king dollar probably gives it away). Anyway, one of the guests quipped, “I’m on record that Gold is a dumb trade. It is rising based on fear and confusion and when that subsides, the Gold trade ends.” Complete Story »

Gold Outlook 2011: Irreversible Upward Pressures and the China Effect Posted: 10 Jan 2011 08:18 AM PST Good afternoon. It is a pleasure to return to the Empire Club to discuss the outlook for gold and precious metals in 2011. I know this may appear to some to be an enviable job--getting to speak about the one asset class that seems to ... Read More...

Gold Daily and Silver Weekly Charts: Judge Orders Fed to Release Gold Records to Court Posted: 10 Jan 2011 08:18 AM PST This posting includes an audio/video/photo media file: Download Now

Guest Post: V for Vendetta - 2011 Posted: 10 Jan 2011 08:04 AM PST Submitted by Jim Quinn of The Burning Platform V for Vendetta - 2011   After the horrific mass murder in Tucson yesterday I had trouble sleeping last night. When my mind gets overloaded, I can’t sleep. I came downstairs at 3:30 am and for some reason decided now was the time to watch the movie V For Vendetta. Many people had recommended this movie over the years, but I had never gotten around to it. Well, on the day after the attempted assassination of a Congresswoman and murder of six others, including a Federal Judge, this movie provided a vision into what could happen next in this country. The 2006 movie centers around a man wearing a Guy Fawkes mask who refers to himself as V.  He is a bold, charismatic freedom fighter driven to exact revenge on those who disfigured him.  The film is an allegory of oppression and coercion by government. It is a declaration against government intervention into the lives of the citizens. He blows up the Old Bailey on November 5, Guy Fawkes Day. He promises to blow up Parliament one year later on the 5th of November. His speech at the beginning of the movie, broadcast to all of England, explains what happened in a fictional England and what is happening here: “Good evening, London. Allow me first to apologize, for this interruption. I do, like many of you, appreciate the comforts of everyday routine, the security, the familiar, the tranquility, repetition… I enjoy them as much as any bloke. But in the spirit of commemoration, whereby those important events of the past, usually associated with someone’s death or the end of some awful, bloody struggle, are celebrated with a nice holiday, I thought we could mark this November the 5th, a day that is certainly no longer remembered, by taking some time out of our daily lives to sit down and have a little chat. There are, of course, those who do not want us to speak. I think that even now orders are been shouted into telephones and men with guns will soon be on their way. Why? Because when the truncheon maybe used in lieu of conversation, words will always retain their power. Words offer the means to meaning, and for those who would listen, the enunciation of the truth. And the truth is, there is something terribly wrong with this country, isn’t there? Cruelty and injustice, intolerance and oppression, and where once you had the freedom to object, to think and speak as you saw fit, you now have censors and systems of surveillance coercing your conformity and soliciting your submission? How did this happen? Who’s to blame? Well certainly there are those who are more responsible than others, and they will be held accountable, but again, truth be told, if you’re looking for the guilty, you need only look into a mirror. I know why you did it. I know you were afraid! Who wouldn’t be? War, terror, disease… There were a myriad problems that conspired to corrupt your reason and rob you of your common sense. Fear got the best of you, and in your panic, you turned to the now High Chancellor, Adam Suttler. He promised you order, he promised you peace, and all he demanded in return was your silent, obedient, consent. Last night, I sought to end that silence. Last night, I destroyed the Old Bailey to remind this country of what it has forgotten. More than 400 years ago, a great citizen wished to embed the 5th of November forever in our memory. His hope was to remind the world that fairness, justice and freedom are more than words, they are perspectives. So if you’ve seen nothing, if the crimes of this government remain unknown to you, then, I would suggest you allow the 5th of November to pass unmarked. But if you see what I see, if you feel as I feel, and if you would seek as I seek, then I ask you to stand beside me, one year from tonight, outside the gates of Parliament, and together we shall give them a 5th of November that shall never, ever, be forgot.”    The movie’s central theme revolves around the 1605 Gunpowder Plot to blow up Parliament. The plot was a failed assassination attempt against King James I of England by a group of provincial English Catholics led by Robert Catesby. The plan was to blow up the House of Lords during the State Opening of Parliament on November 5, 1605, as the prelude to a popular revolt in the Midlands during which James’s nine-year-old daughter, Princess Elizabeth, was to be installed as the Catholic head of state.      Guy Fawkes, who had 10 years of military experience fighting in the Spanish Netherlands in suppression of the Dutch Revolt, was given charge of the explosives. The plot was revealed to the authorities in an anonymous letter sent to William Parker, 4th Baron Monteagle. During a search of the House of Lords at about midnight on November 4, 1605, Fawkes was discovered guarding 36 barrels of gunpowder – enough to reduce the House of Lords to rubble – and arrested. He was hanged shortly thereafter. November the 5th has been celebrated ever since this event with celebrations and fireworks. Anarchy Has Arrived There’s no certainty – only opportunity. V - V For Vendetta   As I watched hour after hour of coverage about the ambush and assassination attempt on a Congresswoman from Arizona, I couldn’t help but think this could be the spark for something bigger. There were almost immediate reactions from the MSM that this murder was instigated by the Tea Party. The liberal ideologue Paul Krugman blamed the Republican Party for the murders. Apoplectic left wing faux journalist Keith Olbermann described conservative commentators as those ”who have so irresponsibly brought us to this time of domestic terrorism”. The local sheriff, an Arizona State Senator and the Congresswoman’s father all blamed the Tea Party, either directly or indirectly. Based on my reading of the murderer’s writings and youtubes, he appears to be a mentally deranged psycho. Somehow, every liberal MSM “journalist” has concluded that this was due to the contentious political atmosphere in the country. This is code for “we need less dissent”. Stop disagreeing with the Obama agenda. If you disagree, you are dangerous. The scene in the movie that made me think of yesterday’s events was toward the end of the movie when Inspector Finch, who is trying to capture V, has a feeling about what is going to happen: Finch: I had to see it. There wasn’t much left. But when I was there it was strange. I suddenly had this feeling that everything was connected. It’s like I could see the whole thing, one long chain of events that stretched all the way back before Larkhill. I felt like I could see everything that happened, and everything that is going to happen. It was like a perfect pattern, laid out in front of me. And I realized we’re all part of it, and all trapped by it. Dominic: So do you know what’s gonna happen? Finch: No, it was a feeling. But I can guess. With so much chaos, someone will do something stupid. And when they do, things will turn nasty. And then Sutler will be forced to do the only thing he knows how to do. At which point, all V needs to do is keep his word. And then… [Dominoes collapse with TV footages showing conflicts between rioting citizens and the anti-riot police]  The line that hit me like a ton of bricks was, “With so much chaos, someone will do something stupid.” As Inspector Finch was speaking these words a scene of a policeman shooting a 10 year old girl with a Guy Fawkes Mask on is shown and then an angry mob surrounds and kill the policeman. Yesterday, someone did something stupid. The question is what happens next. Already, a fringe religious fanatic pastor and his followers, who have previously picketed the military funerals of Americans killed in Iraq, issued this press release:  ”Thank God for the shooter – 6 dead! WBC will picket their funerals!”  It continues on to condemn what it condemns as violence unleashed on WBC by a “hateful nation…hoping to silence our kind warning to obey God and flee the wrath to come.”  There is one thing I’m sure about. This will not result in more civil discourse. Opposing ideologies will become further entrenched in their positions. Those who attempt to be peacemakers will be shouted down. Passions will rise as they did in the 1850s when another member of Congress was badly injured as national passions flamed over slavery.  On May 19, 1856, Senator Charles Sumner of Massachusetts, a prominent voice in the anti-slavery movement, delivered an impassioned speech denouncing the compromises that helped perpetuate slavery and led to confrontations in Kansas. Sumner singled out Senator Andrew Pickens Butler of South Carolina. Butler, who had recently been incapacitated by a stroke and was recuperating in South Carolina, was held to particular ridicule by Sumner. Sumner said that Butler had taken as his mistress “the harlot, slavery.” Sumner also referred to the South as an immoral place for allowing slavery, and he mocked South Carolina. Preston Brooks, a member of the House of Representatives from South Carolina, was particularly incensed. Not only had the fiery Sumner ridiculed his home state, but Brooks was the nephew of Andrew Butler, one of Sumner’s targets. Brooks walked to Sumner’s desk in the Senate chamber, and reportedly said: “You have libeled my state and slandered my relation, who is aged and absent. And I feel it to be my duty to punish you.” With that, Brooks struck the seated Sumner across the head with his heavy cane. Brooks continued raining blows with the cane upon Sumner, who tried to fend them off with his arms. As might be expected, northern newspapers responded to the violent attack on the Senate floor with horror. Southern newspapers published editorials lauding Brooks, claiming that the attack was a justified defense of the south and slavery. Supporters sent Brooks new canes, and Brooks claimed that people wanted pieces of the cane he used to beat Sumner as “holy relics.” This attack was a foreshadowing of what was to come – the deaths of 600,000 Americans in the space of four years – over 4% of the male population. Yesterday’s tragedy is another step deeper into this Fourth Turning. Every Fourth Turning has proven to be a decisive era of secular upheaval, when the values regime propels the replacement of the old civic order with a new one.  Words Matter, Ideas Can Change the World People should not be afraid of their governments. Governments should be afraid of their people. V – V For Vendetta   The prior Fourth Turnings in U.S. history (American Revolution, Civil War, Great Depression/World War II) all proved to be secular upheavals of immense proportions, tore apart the existing civil order, but had numerous moments of danger and uncertainty about the future turn of events. We are six years into a twenty year Crisis saeculum. Every Crisis intensifies as time progresses to an ultimate crescendo. The initial financial crisis built to a dramatic peak in September 2008 as the government and Federal Reserve have taken extraordinary and immoral actions to protect Wall Street banks. Since September 11, 2001, the government has used fear as its primary means of controlling the American population. Fear of terrorists, fear of flying, fear of WMD, fear of mushroom clouds, fear of the axis of evil, fear of economic collapse, fear of a Great Depression, and now fear of the Tea Party movement. This attack by a crazy man will lead to further losses of liberties and freedoms. That is a certainty. Americans have been lulled into a false sense of security. V’s speech to the people of England invokes Ben Franklin: “I know why you did it. I know you were afraid! Who wouldn’t be? War, terror, disease… There were a myriad problems that conspired to corrupt your reason and rob you of your common sense. Fear got the best of you, and in your panic, you turned to the now High Chancellor, Adam Suttler. He promised you order, he promised you peace, and all he demanded in return was your silent, obedient, consent.” - V - V For Vendetta Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety. - Ben Franklin This country has not reached the level of control and fear seen in Orwell’s 1984 and V For Vendetta, yet. We are moving relentlessly in that direction. Surveillance, monitoring, spying, censorship, secret prisons, predator drones, and conforming to state rules and regulations put citizens further under the thumb of an all powerful state. The freedom to dissent, the freedom to be left alone, the freedom to speak out against injustice, the freedom to disagree with your government, and the freedom to present your ideas without fear of retribution or penalty are essential in a democratic society. The next phase of this Fourth Turning will surely include another downward spiral in financial markets as un-payable debts accumulate to a tipping point level. When ATM machines stop spitting out twenties, food shelves are bare and gas stations are shuttered, social chaos will ensue. The government will react with further command and control measures. In V For Vendetta, the government creates a terrorist incident in order to gain unquestioned control over the population. Americans will need to be more vigilant than they have been over the last ten years in keeping an eye on their government.   In the movie, Parliament is the symbol of government power. The thought of destroying this symbol provided the people with a renewed sense of purpose and power. By V’s destruction of the building, the people regained their hope for the future. The symbol of America is the Statue of Liberty. The pedestal at the base of the statue states: “Give me your tired, your poor, Your huddled masses yearning to breathe free, The idea of America is still alive. Whether it is kept alive is up to us. Words matter. Ideas can change the world.  ”I know of no reason why the Gunpowder Treason should ever be forgot… But what of the man? I know his name was Guy Fawkes and I know, in 1605, he attempted to blow up the Houses of Parliament. But who was he really? What was he like? We are told to remember the idea, not the man, because a man can fail. He can be caught, he can be killed and forgotten, but 400 years later, an idea can still change the world. I’ve witnessed first hand the power of ideas, I’ve seen people kill in the name of them, and die defending them… but you cannot kiss an idea, cannot touch it, or hold it… ideas do not bleed, they do not feel pain, they do not love… And it is not an idea that I miss, it is a man… A man that made me remember the Fifth of November. A man that I will never forget.” – Evey Hammond – V For Vendetta THE IDEA OF AMERICA – THE CHOICE IS OURS

Looking Past the Politics at Our Economic Future Posted: 10 Jan 2011 08:00 AM PST Six people dead, 14 wounded. A congresswoman left in a medical coma. Our ensuing forecast for 2011: more mayhem to come. Not because the crazy SOB who did it was justified. Jared Loughner's Facebook postings and YouTube videos were, to put it mildly, incoherent. But the violence has already been turned into a political football… Why are so many members of Congress, backed up by members of the media, holding not only Mr. Loughner responsible…but anyone who's ever said a cross word about Congress or the government? "They" reads a New York Times editorial this morning, "seem to have persuaded many Americans that the government is not just misguided, but the enemy of the people." "They," in this case, refers to a nameless mob the writer identifies as "many on the right," as if normal people without political affiliation or agenda couldn't be justifiably incensed at the self-serving and irresponsible way in which members of Congress conduct themselves. "They" – members of Congress and the media – are just not listening. "In Congress, you don't address the real problems," we wrote late on Friday in a letter to the Honorable Harry Reid. "You talk around them, play politics with them and then make frantic appeals at the 11th hour to borrow more money to paper over the problems again for yet another year." The letter was suggested by our publisher Joe Schriefer as a response to yet another frantic appeal by Treasury Secretary Tim Geithner for Congress to raise the debt ceiling…yet again. The response we've received has been overwhelming… "The problem," reads one response in particular, "is that the average American doesn't know where he or she is heading. They are too busy with various sitcoms and social network sites. "I originally came from Nigeria. Nigeria in the late '60s and '70s was one of the prosperous countries in the world. We are blessed with abundant oil and any solid mineral you can mention. Until the early '80s, US dollars traded at 65% of naira (Nigeria currency). My father used to tell us how they enjoyed free meals in college at the expense of the government. "After graduation from college, each graduate would be congratulated with a brand-new car and at least a job waiting. The government was totally in control of oil and almost all the resources. Nobody cared to ask questions about government expenditures because of free meals and easy life. "However, in 1980, the then president discovered that the country was heading toward doom. He introduced austerity measures for the first time. People started shouting. The military dictators came in. Everything went downhill. In the mid-'80s, the dollar hit parity with the naira. Today, a dollar is buying 160 naira. "Corruption became so endemic that the people were too helpless to fight. The unemployment rate is on top of the roof. We are not talking of poverty rate. There is total decay of infrastructures, which results in a high crime rate. The list goes on. "The short story of my background is to encourage you and others that may call all sorts of names (conservatives, leftists, etc.) to fight for the future generations. It's very painful to see that your children will grow up to learn from history that there was once upon a time a prosperous America. "No chemotherapy today? The children will undergo the therapy. There will be massive breakdown of law and order, because they will not understand why they have to go through the pains they didn't cause. Be courageous, bold and do everything you can. With God on your side, you will be remembered by future generations as a man that cared for them. "God bless you." Addison Wiggin for The Daily Reckoning Looking Past the Politics at Our Economic Future 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."

Mainstream Hacks Deny Gold its Fundamentals Posted: 10 Jan 2011 07:58 AM PST Yesterday I came across a clip from one of the business channels. The discussion was about "king dollar" and Gold. (The king dollar probably gives it away). Anyway, one of the guests quipped, "I'm on record that Gold is a dumb trade. Read More...

Reference Point: Gold - Update #1 Posted: 10 Jan 2011 07:42 AM PST FoFOA

A Long Winter for the Unemployed Posted: 10 Jan 2011 07:40 AM PST Bill Bonner View the original article. January 10, 2011 09:45 AM It was snowing when we left Baltimore. Bad weather… The weather has been odd this year. Florida had its coldest spell ever this year. Freeways in Southern California were closed because of the snow. Forecasters are predicting the coldest January in many years. And Cancun, Mexico hit record lows just when the experts were there debating how to cure global warming. Here in Paris it is raining…temperature about 45 degrees. Very typical for this time of year. The first business week of the year was calm. Traders and investors were getting back to their desks, reading the papers, and trying to get a grip on what was going on. No one wanted to panic until he had chance to figure out what to panic about. Except for a big drop in gold early in the week, nothing much happened… Investors seemed mostly optimistic. Most believed that a slow recovery really was on the way. But the actual reports were mixed an...

Gold 1380/85 Remains Resistance Posted: 10 Jan 2011 07:40 AM PST courtesy of DailyFX.com January 10, 2011 07:19 AM 240 Minute Bars Prepared by Jamie Saettele “The gold decline from the high is an impulse (5 waves), therefore the odds are high that an important top is in place.” Waning downside momentum warns of a b wave low. The implications are for a rally in wave c that exceeds 1380 (if just barely) before the next leg lower. If gold trades below Friday’s low (135270), then focus would shift immediately to the 10/22 low at 131710....

New Year's Resolutions for Your Gold Portfolio Posted: 10 Jan 2011 07:40 AM PST It's exciting to think we may be nearing a mania in gold. The price will likely double or more within a 12-month period not too far in the future (it rose 125.7% in 1979). And yet, amazingly, there will be investors who lose money in that run. Read More...

Technically Precious with Merv For week ending 07 January 2011 Posted: 10 Jan 2011 07:31 AM PST It seems that gold puts on a rally of sorts at the end of the year. The big question always is "will it last?" It seems that this year it may not last but the action is still not all that bearish so there is hope that the down ... Read More...

Hedge Fund Position Update Posted: 10 Jan 2011 07:24 AM PST In her weekly HF positional analysis, BofA' Mary Ann Bartels (whose recent technical prediitions did not quite pan out) finds that Long Short hedge fund exposure has declined from 25% to 18% as of January 10, well below the 40% average, market neutrals are -3% net short (explaining the ongoing bloodbath in the space), and that macro HFs are long commodities and short US equities and 10 year Treasuries. All in all, exposure continues to be below average bullish levels, yet the market continues to go up. Cue in TrimTabs and let them answer just how is doing the buying. On Long-Short exposures: Estimated factor exposures for Long-Short Equity Funds Long/Short funds market exposure is ~18% net long, which is likely due to unwinding exposures at year-end. It may take our models several weeks to put up a rotation back to the market. Positive inflationary expectations; large cap, high quality and growth tilt. Significant factor exposure changes since last week Long/Short funds switched to high quality tilt from quality neutral. Other readings didn’t change much. Market Neutrals are even more bearish: Significant estimated factor exposures for Equity Market Neutral funds M/N hedge funds market exposure is ~3% net short (below 50 L/50 S). Positive inflationary expectations; slight value tilt; size and quality neutral. Significant factor exposure changes since last reading M/N hedge funds readings didn’t change much from last reading. On the other hand, L/S decided to materially cover their Nasdaq 100 short positions: L/S HFs noticeably covered NASDAQ 100 shorts Our models indicate that Equity Long/Short (L/S) hedge funds were only slightly short the NASDAQ 100 futures at year-end. They moved to a high quality tilt from neutral while favoring large caps and growth style stocks. Macro funds were not fans of equities, instead they more than made their money being long gold: Macros Exposure Analysis Preliminary readings indicate that global Macro hedge funds went up 3.3% in December and up 8.0% in 2010. In comparison, HFRX investable Macro hedge funds were up 1.4% in December and down 1.7% for the year respectively. Based on our exposure analysis, macros were long commodities and short the US dollar, US equities and 10-yr Treasuries at the end of 2010. They still favor small caps. Lastly, and as was discussed on Zero Hedge recently, the bulk of the gains in the market in November came on the back of increasing margin, resulting in a leveraged pursuit of beta, a strategy which works until it always blows up spectacularly. HF leverage, as measured by NYSE Margin Debt, rose to $274 billion in November which is up 1.6% since month-over-month and up 24.0% year-on-year. Leverage does remain below the July 2007 peak of $381billion. Generally speaking, NYSE margin debt has a positive correlation with the equity market, because investors add leverage as the market goes up and leverage is reduced as the market falls. Although the S&P 500 went down marginally (-0.23%) in November, margin debt rose 1.6% and continued the up-trend since September. In comparison, a very sharp correction for the US equity market from May to June of 13% decreased confidence in the US equity market and margin debt fell 9.8% in May. Margin debt levels were up 2.1% in July and unchanged for August.

Gold Has More Room to Fall Posted: 10 Jan 2011 07:13 AM PST Sean Hannon submits: Investor psychology is fascinating. Studies have shown that when faced with an impersonal decision such as picking investment A or investment B, people usually act in a rational manner. However, when an emotional attachment is involved, we are much more vested. Whether it be a person unwilling to sell a stock inherited from grandparents, or someone who tends to view a stock through a certain prism because he loves the product (examples include companies like Amazon.com (AMZN) and Apple (AAPL) whose users are extremely loyal), set beliefs are difficult to overcome. Attachment to ideas is prevalent across all investments, but no more so than when it comes to gold. Just mention the yellow metal and the opinions begin flying. Believers, most commonly referred to as “gold bugs”, stress that over the centuries gold has served as a store of wealth, is “true” money, and that over time the experiment in manipulated fiat money will eventually collapse, as history has shown it always to do, and the holders of gold will be the last men standing. Those who look down upon gold seize upon John Maynard Keynes’s view that the metal is a “barbaric relic” that yields nothing, has little industrial use, and is worth only what people will pay for it. With such staunch views on each side, it is not surprising that debating the merits of investing in gold triggers constant bickering. Complete Story »

Why the Bullish Forecasts for 2011 Might Hit a Few Snags Posted: 10 Jan 2011 07:00 AM PST The Dow Jones Industrial Average did not produce any explosive gains during the first five days of the New Year, but it did produce a "quiet" gain of almost 100 points –continuing a recent trend of steady, if unremarkable, progress. The Dow has advanced for seven consecutive weeks, but has gained only about 100 points per week during that timeframe. So the recent price action does not feel over-the-top exuberant. Instead, it feels steady, reliable…almost predictable. Everyone knows the market will go up next week, just like it went up last week…and the week before that. This seeming predictability is simply a different strain of irrational exuberance. When the market seems as soothing as a Corona Beer commercial, the "fear instinct" goes dormant. Investors forget to worry. But a Corona beer commercial isn't reality. And neither is a tranquil, friendly stock market. Nevertheless, most Wall Street strategists have been falling all over one another to proclaim their bullish forecasts for 2011. Goldman Sachs strategist, David Kostin, is looking for a 17% rally in the S&P 500 Index this year, while most of his Wall Street counterparts are expecting at least low double-digit gains. We hope these hopeful prognostications come to fruition. In general, up is much better than down. But it's a long year ahead and the road to gains may not be as direct and "predictable" as the Dow's recent performance might suggest. The market might encounter a few bumps along the way. In fact, David Rosenberg, economist for Canada's Gluskin Sheff, expects the market to encounter a few bumps very soon. "Signs of excessive exuberance abound," says Rosenberg. In particular: The VIX index, at 17.5x, is back to where it was last April. Remember what happened next. Investors Intelligence bullish sentiment is back to where it was at the all-time market highs of October 2007. The non-commercial accounts on the CME have recently opened up a considerable net speculative long position in equities, particularly the QQQ's (NASDAQ stocks). Market leadership is narrowing, as Bob Farrell has been busy pointing out. The number of short-selling positions slid 2.2% in the first half of December on the NYSE; and by 2.8% on the NASDAQ. The bears are running scared. As Kelly Evans asserted last week, the AAII investor sentiment poll has been above its historical norm now for 17 weeks running – the longest stretch in six years. Since July, margin debt has exploded by 16% to $274 billion, the most since September 2008 when people still thought we were in a soft landing. Equity mutual funds and ETF's took in $24 billion in December (TrimTabs data)… The last time we saw retail inflows like this into equities was last March…just ahead of a 17% correction. Meanwhile, over in the housing market, there are absolutely no signs of excessive exuberance. In fact, there are barely any signs of anything, which is just one of the reasons why the housing market may offer one of the most compelling investment opportunities of 2011. Eric Fry for The Daily Reckoning Why the Bullish Forecasts for 2011 Might Hit a Few Snags 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."

The Mechanism of China's Silver Accumulation Posted: 10 Jan 2011 06:59 AM PST Harold Goodman submits: I was gratified to see how well my recent article (Is China Behind The Big Silver Short Dec 25th, 2010) was received, when over 50 websites worldwide picked it up in the first 24 hours. But I am afraid that a fair bit of confusion was created by that article, which I want to clarify here. First, I am not presenting this as fact. I am presenting this as a theory that explains the observable facts. Complete Story »

Hi-Ho Silver: How SLV and PSLV Differ Posted: 10 Jan 2011 06:55 AM PST Kid Dynamite submits: I should have given this post a hysterical, hyperbolic title like "Physical Silver Trust Admits to Not Owning Physical Silver!" But as usual, my goal is to educate, not spread hype, fear and misinformation. From Sprott Asset Management, which manages PSLV, today: As of November 10, 2010, the Trust had contracted to purchase a total of 22,298,525 ounces of silver bullion. As of December 31, 2010 a total of 20,919,022 ounces of silver bullion had been delivered to the Trust. The Trust expects to take delivery of the final 1,379,503 ounces of silver bullion by January 12, 2011 and will subsequently publish the serial numbers of all bars held by the Trust on its website. Complete Story »

A New Gold Boom Right Here in the USA Posted: 10 Jan 2011 06:40 AM PST Conrad Reed has long been forgotten by the history books. He was 12 years old when he made the first documented gold discovery in the United States. He stumbled across a 17-pound gold nugget ($370,000 current value) while fishing just outside of Charlotte, North Carolina in 1799. Reed and his father went on to discover more gold in surrounding areas and sparked America’s first gold rush.

Gold looks good amid the devaluation race, Einhorn tells King World News Posted: 10 Jan 2011 06:38 AM PST 2:32p ET Monday, January 10, 2011 Dear Friend of GATA and Gold: Eric King of King World News today interviewed hedge fund manager and gold investor David Einhorn of Greenlight Capital, who remarks, among other things, that gold looks pretty good to him while the major currencies are in a race to devalue. Excerpts from the interview are headlined "David Einhorn: Federal Reserve's Policies Are Quite Dangerous" and you can find them at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/1/10_Da... Or try this abbreviated link: http://tinyurl.com/4dv9ap4 CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Opportunity in the gold coin market Swiss America Trading Corp. alerts GATA supporters to an opportunistic area of the gold coin market. While the gold bullion market has been quite volatile lately and as of November 29 gold has risen only $7 per ounce over the last month, the MS64 $20 gold St. Gaudens coin has risen about 10 percent in the same time. The ratio between the price of these coins and the price of gold is rising. If you'd like to learn more about the ratio and $20 gold coins, Swiss America can e-mail you a three-year study of it as well as other information. Swiss America also can provide a limited number of free copies of "Crashing the Dollar," a book written by Swiss America's president, Craig Smith. For information about the ratio between the $20 gold pieces and the gold price and for a free copy of "Crashing The Dollar," please call Swiss America's Tim Murphy at 1-800-289-2646 X1041 or Fred Goldstein at X1033. Or e-mail them at trmurphy@swissamerica.com and figoldstein@swissamerica.com. Join GATA here: Yukon Mining Investment e-Conference Wednesday-Thursday, January 19-20, 2011 http://theyukonroom.com/yukon-eblast-static.html Vancouver Resource Investment Conference Vancouver Convention Centre West Vancouver, British Columbia, Canada Sunday-Monday, January 23-24, 2011 http://cambridgehouse3.com/conference-details/vancouver-resource-investment-conference-2011/15 Cheviot Asset Management Sound Money Conference Guildhall, London Thursday, January 27, 2011 http://www.gata.org/files/CheviotSoundMoneyConferenceInvite.pdf Phoenix Investment Conference and Silver Summit Renaissance Glendale Hotel and Spa Glendale, Arizona Friday-Saturday, February 18-19, 2011 http://cambridgehouse3.com/conference-details/phoenix-investment-confere... Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts 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: http://www.goldrush21.com/ 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Prophecy Drills 71.17 Metres of 0.52 percent NiEq (0.310 percent Nickel 0.466 g/t PGMs +Au and 0.223 percent copper) from surface at Wellgreen Project in the Yukon 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

Judge orders Fed to produce records for her review in GATA's lawsuit Posted: 10 Jan 2011 06:34 AM PST GATA today scored a small but perhaps auspicious victory over the Federal Reserve in our lawsuit seeking access to the Fed's secret gold files. The judge presiding over GATA's federal freedom-of-information lawsuit against the Fed in U.S. District Court for the District of Columbia, Ellen Segal Huvelle, granted GATA's motion to order the Fed to produce in compete form for the judge's private review 20 gold-related documents the Fed has sought to keep secret. The judge ordered the Fed to deliver the documents by Friday.

Judge orders Fed to deliver gold records for her review Posted: 10 Jan 2011 06:05 AM PST 2:18p ET Monday, January 10, 2011 Dear Friend of GATA and Gold: GATA today scored a small but perhaps auspicious victory over the Federal Reserve in our lawsuit seeking access to the Fed's secret gold files. The judge presiding over GATA's federal freedom-of-information lawsuit in U.S. District Court for the District of Columbia, Ellen Segal Huvelle, granted GATA's motion to order the Fed to produce in complete form for the judge's private review 20 gold-related documents the Fed has sought to keep secret. The judge ordered the Fed to deliver the documents by Friday. Through its lawyers, William J. Olson P.C. of Vienna, Virginia -- www.LawAndFreedom.com -- GATA has argued that the Fed's production of gold-related documents has been so inadequate and the Fed's arguments for keeping them secret so weak that the court should review the documents acknowledged by the Fed and order the Fed to answer 25 questions from GATA about the Fed's search for relevant information. While Judge Huvelle still could grant at any time the Fed's motion to dismiss GATA's lawsuit, her ruling today at least implies a little skepticism about the Fed and its tactics. Combined with today's statement by U.S. Rep. Ron Paul, the new chairman of the House Financial Services Committee's Subcommittee on Monetary Policy (http://www.gata.org/node/9495), Judge Huvelle's ruling gives hope that the Fed's enormous secret power to rig markets and bestow the most fantastic patronage on a parasitic financial elite can be brought to account eventually. The judge's order to the Fed to produce documents for her private review can be found at GATA's Internet site here: http://www.gata.org/files/GATAFedLawsuitCourtOrder-01-10-2011.pdf Those who are skeptical of GATA's complaint that the Federal Reserve is part of an international gold-price rigging scheme should reflect on the meaning of the Fed's refusal to disclose all its gold-related records, records that include gold swap arrangements with foreign banks: http://www.gata.org/node/8192 If the U.S. gold reserves are just sitting somewhere, inert, unencumbered, and unused for surreptitious market intervention, what's the problem with full disclosure? Financial journalists unafraid of aggravating the world's financial powers should start putting gold-related questions to the Fed and other central banks and stop simply assuming that secrecy should be the normal order of things with central banks and gold. And people everywhere who believe in free markets in the monetary metals and who have not already supported GATA financially can join our struggle here: http://www.gata.org/node/16 This struggle could have been undertaken easily and likely more effectively by the World Gold Council, which aims to represent gold mining companies and gold investors. But the council's indifference to questions of surreptitious central bank intervention in the gold market has left the struggle to GATA. We need your help to pursue this struggle to victory for free markets, limited government, and a better, fairer world. CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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 Wednesday-Thursday, January 19-20, 2011 http://theyukonroom.com/yukon-eblast-static.html Vancouver Resource Investment Conference Vancouver Convention Centre West Vancouver, British Columbia, Canada Sunday-Monday, January 23-24, 2011 http://cambridgehouse3.com/conference-details/vancouver-resource-investment-conference-2011/15 Cheviot Asset Management Sound Money Conference Guildhall, London Thursday, January 27, 2011 http://www.gata.org/files/CheviotSoundMoneyConferenceInvite.pdf Phoenix Investment Conference and Silver Summit Renaissance Glendale Hotel and Spa Friday-Saturday, February 18-19, 2011 Glendale, Arizona http://cambridgehouse3.com/conference-details/phoenix-investment-confere... Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts 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: http://www.goldrush21.com/ 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Prophecy Drills 71.17 Metres of 0.52% NiEq (0.310 % Nickel 0.466 g/t PGMs +Au and 0.223% Copper) from surface at Wellgreen Project in the Yukon 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 Attachment Size GATAFedLawsuitCourtOrder-01-10-2011.pdf 8.66 KB This posting includes an audio/video/photo media file: Download Now

Buy a House… Then Buy Another Posted: 10 Jan 2011 06:00 AM PST Investment ideas are cyclical. They go dormant for a while, then revive, like fashions or cicadas – obeying their own curious rhythms. During the past few years, rare was the investment thinker who said you should buy a house. Housing was in a bubble that was deflating. But the investment seasons turn. Today some smart investors are once again saying you should a buy house. John Paulson is one of them. You may know him as the man who turned the greatest trade of all time. Betting against the housing market, he netted a cool billion dollars for himself in 2007. One fund he managed rose 590% that year. Today, he is one of the richest men in America. His advice today is very different. "If you don't own a home, buy one," Paulson said. "If you own one home, buy another one, and if you own two homes, buy a third and lend your relatives the money to buy a home." That's a strong endorsement. It sounds similar to the advice another investor gave his audience in 1971, at the dawn of one of America's biggest housing bull markets. The investor was Adam Smith (George Goodman) on The Dick Cavett Show. Here is a snippet from that conversation: Smith: The best investment you can make is a house. That one is easy. Cavett: A house? We were talking about the stock market. Investments… Smith: You asked me the best investment. There are always individual stocks that will go up more, but you don't want to give tips on a television show. For most people, the best investment is a house. Cavett: I already own a house. Now what? Smith: Buy another one. It was good advice. In the 1970s, US stocks returned about 5% annually, which failed to keep pace with inflation. Still, it was an up-and-down ride. In 1974, the stock market fell 49%. But here are the average selling prices for existing homes in the 1970s as inflation heated up: 1972 – $30,000 1973 – $32,900 1974 – $35,800 1975 – $39,000 1976 – $42,200 1977 – $47,900 1978 – $55,500 1979 – $64,200 You can see that housing held up pretty well. And think about the effect of a mortgage on 80% of that house in 1972. That would mean $6,000 in equity, a sum that went up fivefold in eight years. It's hard to find a better inflation fighter than that. Granted, today's market is different, but still. Apart from this, you might also reflect on the fact that it is quite absurd today to think that anyone can buy an average house for any of these prices – and that, too, is the point. The average price today is $257,500 – even after the great collapse in the last few years. "If you have a 7% mortgage and your house is worth half a million dollars," Adam Smith writes, "you may gripe about shoes and lamb chops and tuitions like everybody else, but your heart isn't in it." Your heart won't be in it because you'll be in fine fettle with your house. Of course, you can do a lot better than 7% today. For the first time, the rate on 30-year mortgages slipped below that on the 30-year Treasury bond. You can get a 30-year mortgage at little more than 4% today. Factoring in mortgage rates, housing affordability is back to where it was in September 1996. Then mortgage rates were 8% and the average price of a home was $171,600. As Murray Stahl writes: "One can actually buy a home for a monthly payment that is not very many dollars different from the monthly payment one would have needed in September 1996, when rates were significantly higher." Adjusted for inflation, Stahl points out that the payment for an average-priced home today is about 30% lower than it was 14 years ago. The advice of Paulson and Smith starts to make sense now, doesn't it? Essentially, real estate is a way to buy now and pay later. And the case for housing extends to other property types, too. Owners of quality real estate are getting deals on mortgages that we are unlikely to see for a generation. In my investment letter, Capital & Crisis, I haven't recommended a real estate stock since 2006. That may soon change. I've spent quite a bit of time looking over blue chip real estate stocks. Real estate, after a long absence from the menu, is back on. Regards, Chris Mayer for The Daily Reckoning Buy a House… Then Buy Another 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."

Egypt experts warn of full-blown currency war Posted: 10 Jan 2011 05:53 AM PST By Christopher Le Coq January 10, 2011 (Daily News Egypt) — Increasingly over the past few months, talk of a currency war breaking out between major economic powers has been common in policy circles, Magda Kandil, executive director and director of research of the Egyptian Center for Economic Studies (ECES), said Monday. … She advocated, amongst others, expanding trade relations through bilateral and regional agreements, as intertwining countries' economies would help buffer against a currency war, adding that policy priorities "should target the exchange rate in line with underlying fundamentals." Mohamed Ozalp, CEO of Blom Bank, pointed out that the current global imbalance transpiring is highly unsustainable, especially when taking into consideration that the US deficit is projected to reach $14 trillion by 2012. Given such an astounding figure, should many of the world's creditor countries stop buying US T-bills, the US economy would collapse, he underscored. Furthermore, the US, along with other fiscally irresponsible European countries, such as Spain, should be considered, according to Ozalp, "too big to save"…. [source]

The Fiscal Quicksands of Huge Deficits Should Support Precious Metals Posted: 10 Jan 2011 05:50 AM PST Jeb Handwerger submits: Bill Gross, the PIMCO money manager to whom it is often worth listening, cautioned this week that our nation's leaders really don't know where they're going. They're mired in the fiscal quicksands of perpetual trillion dollar deficits. I believe, as he does, that there will be more agony ahead after the present euphoria in the equity markets. Thus I say, “Caveat Emptor - Let the Buyer Beware!” Our leaders are paying scant attention to the “buck” that is being passed on to our children who are going to be stuck with the bills. Today I don't see anybody around to weep for our infants. As the reporter covering the burning of the Hindenburg shouted in horror, “Oh, the humanity!” Even though the markets are hitting new highs, don't be blinded by the current euphoria on equity markets. Bullish sentiment is reaching new highs, surpassing the pre-credit crisis top. Herds are selling their precious metal investments to enter U.S. equities on the hope of a recovery. This is giving an opportunity to precious metal investors to buy gold and silver on sale. As the mining stocks correct and gold and silver make a healthy pullback, precious metal traders who took profits in October and November, when it was overbought and reaching resistance, will now be in a strong position to enter as the price finds support over the next few weeks and reaches oversold levels. Complete Story »

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