Gold World News Flash |
- The January 13, 2011 edition of Casey's Daily Dispatch, now available
- Predictions for 2011: Gold, Silver and the Economy
- Forgotten Treasure: Unconventional Oil in the Middle East
- Saving Investments, Sovereignty, & Freedom from The Cartel ‘End-Game’
- Economic Ruination from Money Creation to Price Inflation
- Crude Oil Falls for First Time This Week, Gold Moves Lower in Listless Trade
- Once Again, New Claims for Unemployment Claim the Economy Still Sucks
- Euro's Dramatic Rise Examined
- Gold Seeker Closing Report: Gold and Silver End Mixed; Fall After Hours
- Silver: From $30/oz To Over $500 by 2020?
- Precious Metals: The Outlook for 2011
- Silver: From $30/oz to over $500 by 2020
- The Gold Price Bounced off it's $1,390 Resistance to Below it's 20 DMA, Does That Calls for Lower Prices Tomorrow?
- Money & Markets Charts ~ 1.13.2011
- Four Financial Farces… All of Which Will End in Disaster
- Market Recap: 1.13.2011
- Precious Metals and the Dollar’s Next Big Move
- THURSDAY Market Excerpts
- Guest Post: The 10 Things That Would Be Different If The Federal Reserve Had Never Been Created
- Guest Post: Forgotten Treasure: Unconventional Oil In The Middle East
- Gonzalo Lira: Why Democracies Will Always Go Bankrupt
- Gold price bubble a “high probability” says Deutsche Bank
- “On the Edge” with David Morgan of Silver-Invester.com
- The Latest Bad News For The State Of New Jersey: 460,000 Shares Of Coinstar
- Are Signs of Gold Bubble Showing?
- In The News Today
- Over 1 million Americans seen losing homes in 2011
- Spot gold prices set for breakout, says analysts
- COT data looks very healthy if you are a gold bull. During the sideways consolidation, commercial short positions (or speculative long positions) have decreased by 16% in the last three months while open interest has fallen 9% in the last two months
- Gold Daily and Silver Weekly Charts: Bear Raids Abounding
- Government Says No to Helping States and Main Street, While Continuing to Throw Trillions at the Giant Banks
- Silver chart
- Free shipping for 1 Oz. Silver coin in the USA from Scottsdale to support the “Crash JP Morgan Buy Silver” campaign (this is not a paid advertisement, I reprint this info here as a point of interest)
- Will Gold Be Currency Or Will Cash Be Illegal?
- How to Invest Successfully in Emerging Market Real Estate
- Commodity Inflation: You Ain't Seen Nothing Yet
- Paper Silver gets slammed!
- Gold Will Glitter in the New Decade
- Paper promises
- Three days ago we noted that in just the first week of January, the US Mint had sold 2,221,000 ounces of silver “a number which if run-rated would be an absolutely all time monthly record,” A quick glance at the tally today, shows that somethi
- Guest Post: Market Dislocation: Dow 11,908?
- Bernanke Admits The "QE's" Boost Stock Prices As We Face Starvation
- Observations On The Government Spending Bubble, The Dollar and Government Lies
- SILVER SELLING LIKE HOTCAKES
- Why 2011 Won’t be Much Better for the Housing Market
- US Mint Reports Unprecedented Buying Spree Of Physical Silver
- Consolidation or Correction?
- Hourly Action In Gold From Trader Dan
- GoldCore notes GATA's evidence of gold market manipulation
- Gold Versus Defective Economists and Delusional Leaders on Drugs
| The January 13, 2011 edition of Casey's Daily Dispatch, now available Posted: 13 Jan 2011 07:35 PM PST Gold Pool Accounts and Chilean Taxes
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| Predictions for 2011: Gold, Silver and the Economy Posted: 13 Jan 2011 06:09 PM PST As a hedge fund manager one lives between the realms of market volatility/mass paranoia and an unending stream of data collection. The main objective of the exercise is to know that no matter how right you may be on your analysis of value and expected future returns you are operating in an arena (investment markets) that can become irrational at any moment.
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| Forgotten Treasure: Unconventional Oil in the Middle East Posted: 13 Jan 2011 06:06 PM PST For many who aren't familiar with the region, the Middle East comes across as an updated version of Lawrence's Arabia, only with lots of oil. But this mosaic of cultures isn't made up of only Arabs or Muslims, and most Middle East countries are neither awash with heavily armed, rather excitable citizenry… nor with black gold, which is what we're interested in. Twenty-three countries comprise the Arab League, but only Saudi Arabia, Iraq, Kuwait, the United Arab Emirates (UAE), and Iran are major oil producers.
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| Saving Investments, Sovereignty, & Freedom from The Cartel ‘End-Game’ Posted: 13 Jan 2011 06:04 PM PST Several Commentators have expressed astonishment in recent years about the blatantly Economy and U.S. Dollar Destructive policies of The Fed, typically posing the question "How could The Fed be so Stupid, Incompetent, etc?" Former Deutsche Bank Chairman, Dr. Kurt Richebächer, R.I.P., was a leader in articulating devastating critiques of Fed policies.
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| Economic Ruination from Money Creation to Price Inflation Posted: 13 Jan 2011 06:02 PM PST John Rubino at Dollar Collapse.com obviously thinks, like I do, that inflation is a Terrible, Terrible Thing (TTT). To prove it, and to simultaneously prove to my wife, kids, relatives, co-workers and neighbors that I am not the "weirdest man who ever lived" as concerns inflation, I call him up on the phone!
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| Crude Oil Falls for First Time This Week, Gold Moves Lower in Listless Trade Posted: 13 Jan 2011 05:20 PM PST courtesy of DailyFX.com January 13, 2011 08:51 PM Crude oil fell back slightly as traders locked in some of this week’s significant advance. Meanwhile, gold gave back some of the gains from earlier this week. Commodities – Energy Crude Oil Falls for First Time This Week Crude Oil (WTI) - $91.07 // $0.33 // 0.36% Commentary: Crude oil put in its first loss in four sessions, shedding $0.46, or 0.5%, to settle at $91.40, while Brent ticked $0.06, or 0.06%, lower to settle at $98.06. We can’t make much of such a minor loss given the significant gains we have seen this week, so we won’t. The only notable news on the day was the release of U.S. weekly jobless claims which ticked up to 445K, much higher than the 415K expectation, but this has been a volatile series and the consensus remains that the U.S. labor market is in a very gradual recovery. We maintain that crude oil has priced in a lot of this year’s positive outlook. To advanc...
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| Once Again, New Claims for Unemployment Claim the Economy Still Sucks Posted: 13 Jan 2011 05:07 PM PST
The market limped in to the close today as the dip buyers were somehow distracted by the jump in new claims for unemployment which were so far from analyst guesses that they were perhaps a Nassim Taleb-ian black swan (as opposed to a Natalie Portman-to-lesbian Black Swan), the continued rise of commodity prices (as companies get ready to exclaim "we don't need no stinking margins"), and the news of Mt. Etna blowing again (which makes it the biggest thing to blow since Veronica Bottoms).
With macro news continuing to show little to no improvement (unless you count a lower labor force participation rate, falling inventories, and an increase in meth users as improvement), Money McBags remains very cautious about buying any dips as cognitive dissonance is not his preferred investing strategy (you all know Money McBags is more of a bottoms up investor than he is a top down investor anyway). The point is, Money McBags gets that the market offers some inflation protection especially since bonds are deader than the Lebanese government or Alan Greenspan's reputation as the "Bernanke Put" floods the market with dollars and keeps interest rates lower than Uma Thurman's boobs, but at some point people need to get the fuck back to work because even the tiniest prick can pop a stimulus inflated bubble economy.
As for actual data today, as mentioned above, first time claims for unemployment were announced and they rose to 445k while analysts guessed they would fall by 5k to 405k (or by 4k if one wants to use the non-upwardly revised number in the B(L)S' weekly game of "psych") and it was the biggest rise in 6 months. The good news though is that it gives people more free time to buy the dips. That said, the most disturbing part of the number was that non-seasonally adjusted claims (and if it were Money McBags, the season he would use to adjust claims would be saffron) was 770k, which was the highest it has been in a year and as good a sign for a real recovery as a "bridge out ahead" sign was for Mary Jo Kopechne in 1969.
In other macro news, U.S. producer prices climbed 1.1% in December after a 0.8% rise in November, but luckily core inflation was up only .2% so the Fed can sleep easy tonight (as long as they don't have to buy any necessities like food, gas, or shovels to clear the snow in the morning). Honestly, judging inflation by using core inflation (and thus taking food and energy out of the equation) is like is like judging Andrew Johnson's presidency by taking all of his policies out of the equation (you know the ones where he basically negated any gains from the Civil fucking War, so well done you fucking asshat) or judging a Jay Leno monologue by taking all of the jokes out of the equation (and see, that's funny because as far as Money McBags can tell, there are no jokes in a Jay Leno monologue).
And the macro news kept coming as the trade deficit narrowed to a 10 month low thanks to exports rising as a result of a weaker dollar and pre-orders for Faye Reagan's new release Bottomfeeders. Finally, home foreclosures topped 1MM for 2010 with the lucky 1MMth foreclosed on homeowner winning an all-inclusive night's stay at their local YMCA where they are free to contract all of the scabies and old man smell they want (unfortunately, trips to the bacteriologist are not included). But none of that mattered to Benny B who got his Fed on again today at a Small Business Forum in Washington DC co-sponsored by the FDIC, CNBC, and the ATC. Benny B stepped away from his cauldron long enough to say that 3% to 4% growth is likely this year (and he can have the B(L)S goalseek to prove it) but that won't reduce unemployment "at the pace we'd like it to" before mumbling "or at all."
Internationally, Spain sold some fucking bonds (well $3.9B of five-year bonds to be exact) at a yield of 4.54% which was 97bps more than the previous auction in November, but 33bps below expectations and 400bps below a healthy fucking market. That said, it gives Spain at least one more month as a contributing member of the global ponzeconomy to enjoy some tapas and milkshakes with Helen Lindes.
Also in Europe, the ECB kept rates on hold as inflation concerns were overshadowed by renewed debt tensions and something called selective memory. Of note though was that this was the first time the ECB governing council included a representative from new euro member Estonia, and for those of you unfamiliar with Estonia, it is just north of Latvia, its capital city is called Tallinn, it likes long walks on its oil shale deposits, and if you get it drunk enough, it will whip out pictures of its large Peipus (or Peipussee in German).
As for the market, MRK was down ~6% after they dropped their trials of blood clot drug Vorapaxar which in turn clogged up their hopes for revenue growth. Vorapaxar was thought to be a multi-billion dollar drug and was a big reason for MRK's $41B acquisition of Schering-Plough in 2009, so um, oops. The problem is that the drug was found not to be safe for stroke patients, which in turn gave investors a stroke, thus lowering the drugs potential market opportunity even more.
Elsewhere in the market, SAP SAPeed on guesses as the stock surged ~6% after the firm reported a 27% increase in software revenue driven by business demand, Infosys infosucked after the Indian firm's profit grew 14% but was below guesses due to the strength of the Indian rupee, and Marathon Oil ran all day after it announced it would move its refinery and pipeline operations into a separate company which continued the trend of large break ups including Motorola, ITT, and the zodiac.
For more, Money McBags fucks around with some small caps at the award winning When Genius Prevailed, and as always, the only price is your dignity.
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| Posted: 13 Jan 2011 04:06 PM PST Entering the week there noticeable headwinds for the euro. The single currency had suffered from a nasty sell-off the previous week, reaching fresh multi-month lows vs. the Japanese Yen, British Pound, US Dollar and Canadian Dollar. Read More...
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| Gold Seeker Closing Report: Gold and Silver End Mixed; Fall After Hours Posted: 13 Jan 2011 04:00 PM PST Gold fell $8.35 to $1377.80 in Asia and London before it spiked up to see a $6.74 gain at $1392.89 in early New York trade and then dropped back down to see a loss of $7.20 at $1378.95 by a little before 11AM EST, but it then rallied back higher into the close and ended with a gain of 0.06%. Silver dropped to $29.122 and jumped up to $29.765 before it fell back off for most of the rest of trade and ended with a loss of 0.81%. Both metals have fallen to new lows in afterhours access trade at the time of writing.
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| Silver: From $30/oz To Over $500 by 2020? Posted: 13 Jan 2011 03:24 PM PST (snippet) 1. Silver is more scarce due to 30 more years of industrial consumption.2. Paper silver scams are more abundant. 3. Baby Boomers will be retiring, cashing out stocks and draining pension plans that have not yet invested into silver, causing other investments to vastly under perform silver, making silver ever more attractive. 4. More trend investors today will notice the silver bull market and continued gains in the silver price, and invest in it, and carry it to further highs. 5. The US government and political leaders are spending like never before, and the people, even the world over, lack the political will to control government spending which will ruin all currencies. 6. There are no "safe" currencies to run to, leaving gold and silver as the only alternatives; and gold and silver have been in bull markets in all major currencies for 10 years now. I'm sure you can think of many other reasons, but that's enough for now. So, the true skeptic may ask, "Yes, but this guy is a coin dealer, he's just pushing his product because he has plenty of silver he wants to dump. Besides, what kind of argument will he come up with to sell silver after it hits $500/oz.?" Let me answer this two part question. Yes, I do have silver! I have it, because I believe that the price will go up a lot, thus, it makes perfect sense for me to carry it as inventory. I sell it, because few people are able to buy it in bulk like we can, so I use my own stash, and industry connections, to enable others to buy it. But what will I say after silver hits $500/oz., or nears that price? I'll say, "Obviously this bull market in silver is just getting started. Only 1% of American public money is buying silver per year. Just wait until at least 10% of US money is buying silver in a year, the price will be well over $2500 to $5000 per oz. for silver." More Here.. 
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| Precious Metals: The Outlook for 2011 Posted: 13 Jan 2011 12:00 PM PST This Thursday night is our first precious metals Solari Report of the new year. Franklin and I will talk about what happened in 2010 and share our outlook for the silver and gold markets in 2011. One of our expectations is that we will experience greater volatility in all markets, as well as in the general [...]
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| Silver: From $30/oz to over $500 by 2020 Posted: 13 Jan 2011 12:00 PM PST Long before, say 10-20% of people buy silver, at least 1% of the American public will buy silver. We can calculate what might happen to the silver price when that happens. Share this:
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| Posted: 13 Jan 2011 11:43 AM PST Gold Price Close Today : 1386.90 Change : 1.20 or 0.1% Silver Price Close Today : 29.252 Change : (0.280) cents or -0.9% Gold Silver Ratio Today : 47.41 Change : 0.490 or 1.0% Silver Gold Ratio Today : 0.02109 Change : -0.000220 or -1.0% Platinum Price Close Today : 1804.50 Change : 3.90 or 0.2% Palladium Price Close Today : 806.55 Change : -3.45 or -0.4% S&P 500 : 1,283.76 Change : -2.20 or -0.2% Dow In GOLD$ : $174.86 Change : $ (0.48) or -0.3% Dow in GOLD oz : 8.459 Change : -0.023 or -0.3% Dow in SILVER oz : 401.06 Change : -0.77 or -0.2% Dow Industrial : 11,731.90 Change : -23.54 or -0.2% US Dollar Index : 79.22 Change : -0.809 or -1.0% If I do what my friend Bob the Technical Genius demands and cut the top off the GOLD PRICE chart so I don't know what market I'm viewing, I see a break DOWN from the last few days' uptrend. Low today was at $1,369.25, high at $1,392. That high came as a spike shortly after the New York open, a spike that had disappeared within an hour. Gold traded sideways a while, and even closed $1.20 higher on Comex. Oh, but in the aftermarket the bottom dropped out. Right now it's trading $14 lower at $1,372.20. Sort of a "key reversal" day. Today is not by itself fatal, but the GOLD PRICE did bounce off that $1,390 resistance area, and lodge below both its 20 dma ($1,386.64) and 50 Dma ($1,383.30). That calls for lower prices tomorrow. GOLD/SILVER RATIO rose 1% today to close at 47.41, now 48.11 in the aftermarket. Rising ratio whispers, "Trouble" for silver and gold. The SILVER PRICE gainsaid gold today, closing down 28c at 2925.2c on Comex although gold rose. Disharmony is never healthy. SILVER low came at 2851c, down nearly 75c after the Comex close. 2980c resistance slapped silver to the ground. Tomorrow that 2850c becomes silver's rampart to be defended. Last intraday low came at 2832c, and the 50 DMA stands nearby at 2837c. I expect silver is in for a rough beating. Looks like the correction that the rising Gold/Silver Ratio has been pointing at may arrive tomorrow. Well, don't just stand there -- somebody help the dollar! Dollar index fell another 80.9 basis points today (1.4%) to 79.222, clearing the whole of the distance from 80 to 79 in a day (low came at 78.994). This brings the dollar to the 78.80 - 79 area that has supported it thrice since last December, and "fish or cut bait" time. Mercy, yet again it is proved that I am just a natural born durn fool. Who would have thought, just looking at the facts, that finding a nest of suckers willing to be duped into buying Portuguese debt would make that much difference in the rate of the euro? A fool like me would ask, "Have the debts disappeared? Is Portugal now solvent? Greece? Ireland? Italy? Spain? Has anything really changed?" See, those are the questions that only natural born durn fools ask, cause we are too plumb dumb to understand that facts have nothing to do with markets, only headlines, enthusiasm, and following the latest fads. So the euro gapped up today, o'erleaping its 20 DMA (1.3160) and shooting to its 50 DMA (1.3361), up 1.89% to 1.3362. Alas, natural born fools might suspect that 'tisn't euro STRENGTH that is driving it but euro SHORTS who were caught massively short the euro and had to cover by selling dollars. The dollar has reached critical support. Let's see if it can hold on. I confess, this natural born fool has been expecting a long period (6 months or more) of dollar strength, but I'm a fool anyhow. STOCKS today gave back most of the gains they stole yesterday. Dow dropped 23.54 to 11,731.90. S&P500 returned 2.2 to close at 1,283.76. I hear many roosters crowing about stocks, but they must be blind roosters. When I look at the Dow chart, all I can see is that massive rising BEARISH wedge which will eventually make good on its threat and break down in fears, tears, and plunges. I repent not: for me, stocks remain the day-old gizzards in the KFC of investing. (My daddy loved gizzards because he grew up eating them, but I don't have jaws strong enough to chew 'em.) Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com Phone: (888) 218-9226 or (931) 766-6066 © 2010, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't. 
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| Money & Markets Charts ~ 1.13.2011 Posted: 13 Jan 2011 11:40 AM PST View this week's chart comparisons of gold against fiat currencies, oil and the Dow. Stay tuned for our next Money & Markets segment of The Solari Report tonight, Thursday, January 13, 2011. Click here to view all charts as a pdf file. See previous Money & Markets Charts blog posts here. Currency charts are from StockCharts.com. Gold vs Oil Gold [...]
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| Four Financial Farces… All of Which Will End in Disaster Posted: 13 Jan 2011 10:55 AM PST
At this point the news out of the financial world is more insane than… well, anything.
Farce #1: Japan Can Bail Out… Anything.
First off, Japan, which has a debt to GDP ratio of 200%, is bailing out Europe, which has a smaller, but equally disturbing debt problem. Yes, one broke country (Japan) is now trying to bail out an entire economic union, despite the fact that it HASN’T succeeded in managing its OWN finances or economy in over 20 years.
Indeed, the idea that Japan could bail out ANYONE when it’s failed to create any substantial economic growth despite spending TRILLIONS of Yen should give you an idea of just how out of control the entire financial system has become. We are literally in the end game now. Unless martians come down and start bailing out Earth, the great Sovereign Default will be in full effect within the next six months.
Farce #2: Inflation is at 1%
Meanwhile, Ben Bernanke claims that inflation in the US is 1%. President Obama has to maintain that this is a fact with a straight face next week when he meets with French President Nicolas Sarkozy who is witnessing food riots in Algeria due to soaring food prices.
The Fed has claimed inflation is under control for months now, proving that its members must not eat food, drive cars, OR know how to read. Indeed, in order to ignore rising prices in the US, you would literally have to not shop for groceries, not pump gas in your car, not read the newspaper, and not have access to the Internet or any financial news outlet.
I sincerely hope that the Fed is not run by folks who fit this description, but after reading the next farce, I’m not so sure.
Farce #3: QE is Working
Various Fed officials have stepped forward to claim that its Quantitative Easing program has worked. Correct me if I’m wrong, but I thought the whole purpose of QE was to lower interest rates.
How then do you explain the following?
As you can see, interest rates have soared since the Fed implemented QE 2. It’s not like QE has helped the US economy either: food stamp usage has hit new records since it began.
And yet, the Fed claims that QE is not only working but we need more of it. However, even that farce pales compared to the next and final financial farce of today’s essay.
Farce #4: The Folks Managing the Fed’s QE Efforts Have NO Investing Experience
Then of course, there’s the recent revelation that the Fed’s monetary policies involving the purchasing of TRILLIONS of US Treasuries is in the hands of folks aged 26, 29, and 34, NONE of whom have any investing experience what-so-ever.
And they’re in charge of buying up TRILLIONS in US Debt.
Here’s a pic of them at work. Warning, the following image, when coupled with the significance of these folks’ responsibilities, may cause a severe mental breakdown.
If, at this point, it’s not clear that the entire financial system is not a disaster waiting to happen, then I don’t know what else to say. Indeed, our entire system is built on fraud and managed by folks who don’t know what they’re doing. And if you think they’ll get us steer us to safety, consider that around the globe we’re already beginning to see signs of systemic collapse.
Good Investing!
Graham Summers
PS. If you’re getting worried about the future of the stock market and have yet to take steps to prepare for the Second Round of the Financial Crisis… I highly suggest you download my FREE Special Report specifying exactly how to prepare for what’s to come.
I call it The Financial Crisis “Round Two” Survival Kit. And its 17 pages contain a wealth of information about portfolio protection, which investments to own and how to take out Catastrophe Insurance on the stock market (this “insurance” paid out triple digit gains in the Autumn of 2008).
Again, this is all 100% FREE. To pick up your copy today, got to http://www.gainspainscapital.com and click on FREE REPORTS.
PPS. We ALSO publish a FREE Special Report on Inflation detailing three investments that have all already SOARED as a result of the Fed’s monetary policy. You can access this Report at the link above.
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| Posted: 13 Jan 2011 10:50 AM PST
Goldman's Henry Bowe summarizes the day's key events Modest selloff in equities today, which is actually somewhat surprising. Better global backdrop: European sovereigns tighter. Domestic conditions encouraging: weaker USD + lower rates. Easy to chalk weakness up to disappointing claims data, but those early losses were actually recovered by midday. So looking at the macro dashboard what sticks out? Munis. MUB retesting the lows as plans for new muni bond ETFs are scrapped. Remember too that muni bond funds have recorded eight-straight weeks of outflows according to Lipper data. SPX closes down 2 at 1284. The DOW closes down 24 at 11732. The NASDAQ closes down 2 at 2735.
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| Precious Metals and the Dollar’s Next Big Move Posted: 13 Jan 2011 10:31 AM PST There is a potentially big setup in precious metals sector along with the dollar which looks like its about to unfold. Since mid-October of last year gold started to show signs of distribution selling. Only a month later in November silver started...
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| Posted: 13 Jan 2011 10:01 AM PST Euro rally helps gold futures close higher The COMEX February gold futures contract closed up $1.20 Thursday at $1387.00, trading between $1377.20 and $1392.90 January 13, p.m. excerpts: see full news, 24-hr newswire…
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| Guest Post: The 10 Things That Would Be Different If The Federal Reserve Had Never Been Created Posted: 13 Jan 2011 10:00 AM PST
Reprtinted From The Economic Collapse 10 Things That Would Be Different If The Federal Reserve Had Never Been Created The vast majority of Americans, including many of those who believe that they are "educated" about the Federal Reserve, do not really understand how the Federal Reserve really makes money for the international banking elite. Many of those opposed to the Federal Reserve will point to the record $80.9 billion in profits that the Federal Reserve made last year as evidence that they are robbing the American people blind. But then those defending the Federal Reserve will point out that the Fed returned $78.4 billion to the U.S. Treasury. As a result, the Fed only made a couple billion dollars last year. Pretty harmless, eh? Well, actually no. You see, the money that the Federal Reserve directly makes is not the issue. Rather, the "magic" of the Federal Reserve system is that it took the power of money creation away from the U.S. government and gave it to the bankers. Now, the only way that the U.S. government can inject more money into the economy is by going into more debt. But when new government debt is created, the amount of money to pay the interest on that debt is not also created. In this way, it was intended by the international bankers that U.S. government debt would expand indefinitely and the U.S. money supply would also expand indefinitely. In the process, the international bankers would become insanely wealthy by lending money to the U.S. government. Every single year, hundreds of billions of dollars in profits are made lending money to the U.S. government. But why in the world should the U.S. government be going into debt to anyone? Why can't the U.S. government just print more money whenever it wants? Well, that is not the way our system works. The U.S. government has given the power of money creation over to a consortium of international private bankers. Not only is this unconstitutional, but it is also one of the greatest ripoffs in human history. In 1922, Henry Ford wrote the following....
It is important to try to understand how the international banking elite became so fabulously wealthy. One of the primary ways that this was accomplished was by gaining control over the issuance of national currencies and by trapping large national governments in colossal debt spirals. The U.S. national debt problem simply cannot be fixed under the current system. U.S. government debt has been mathematically designed to expand forever. It is a trap from which there is no escape. Many liberals won't listen because they don't really care about ever paying off the debt, and most conservatives won't listen because they are convinced we can solve the national debt problem if we just get a bunch of "good conservatives" into positions of power, but the truth is that we have such a horrific debt problem because it was designed to be this way from the beginning. So how would America be different if we could go back to 1913 and keep the Federal Reserve Act from ever being passed? Well, the following are 10 things that would be different if the Federal Reserve had never been created.... #1 If the U.S. government had been issuing debt-free money all this time, the U.S. government could conceivably have a national debt of zero dollars. Instead, we currently have a national debt that is over 14 trillion dollars. #2 If the U.S. government had been issuing debt-free money all this time, the U.S. government would likely not be spending one penny on interest payments. Instead, the U.S. government spent over 413 billion dollars on interest on the national debt during fiscal 2010. This is money that belonged to U.S. taxpayers that was transferred to the U.S. government which in turn was transferred to wealthy international bankers and other foreign governments. It is being projected that the U.S. government will be paying 900 billion dollars just in interest on the national debt by the year 2019. #3 If the U.S. government could issue debt-free money, there would not even have to be a debate about raising "the debt ceiling", because such a debate would not even be necessary. #4 If the U.S. government could issue debt-free money, it is conceivable that we would not even need the IRS. You doubt this? Well, the truth is that the United States did just fine for well over a hundred years without a national income tax. But about the same time the Federal Reserve was created a national income tax was instituted as well. The whole idea was that the wealth of the American people would be transferred to the U.S. government by force and then transferred into the hands of the ultra-wealthy in the form of interest payments. #5 If the Federal Reserve did not exist, we would not be on the verge of national insolvency. The Congressional Budget Office is projecting that U.S. government debt held by the public will reach a staggering 716 percent of GDP by the year 2080. Remember when I used the term "debt spiral" earlier? Well, this is what a debt spiral looks like....
#6 If the Federal Reserve did not exist, the big Wall Street banks would not have such an overwhelming advantage. Most Americans simply have no idea that over the last several years the Federal Reserve has been giving gigantic piles of nearly interest-free money to the big Wall Street banks which they turned right around and started lending to the federal government at a much higher rate of return. I don't know about you, but if I was allowed to do that I could make a whole bunch of money very quickly. In fact, it has come out that the Federal Reserve made over $9 trillion in overnight loans to major banks, large financial institutions and other "friends" during the financial crisis of 2008 and 2009. #7 If the Federal Reserve did not exist, it is theoretically conceivable that we would have an economy with little to no inflation. Of course that would greatly depend on the discipline of our government officials (which is not very great at this point), but the sad truth is that our current system is always going to produce inflation. In fact, the Federal Reserve system was originally designed to be inflationary. Just check out the inflation chart posted below. The U.S. never had ongoing problems with inflation before the Fed was created, but now it is just wildly out of control....
#8 If the Federal Reserve had never been created, the U.S. dollar would not be a dying currency. Since the Federal Reserve was created, the U.S. dollar has lost well over 95 percent of its purchasing power. By constantly inflating the currency, it transfers financial power away from those already holding the wealth (the American people) to those that are able to create more currency and more government debt. Back in 1913, the total U.S. national debt was just under 3 billion dollars. Today, the U.S. government is spending approximately 6.85 million dollars per minute, and the U.S. national debt is increasing by over 4 billion dollars per day. #9 If the Federal Reserve did not exist, we would not have an unelected, unaccountable "fourth branch of government" running around that has gotten completely and totally out of control. Even some members of Congress are now openly complaining about how much power the Fed has. For example, Ron Paul told MSNBC last year that he believes that the Federal Reserve is now more powerful than Congress.....
#10 If the Federal Reserve had never been created, the American people would be much more free. We would not be enslaved to this horrific national debt. Our politicians would not have to run around the globe begging people to lend us money. Representatives that we directly elect would be the ones setting national monetary policy. Our politicians would be much less under the influence of the international banking elite. We would not be at the mercy of the financial bubbles that the Fed has constantly been creating. There is a reason why so many of the most prominent politicians from the early years of the United States were so passionately against a central bank. The following is a February 1834 quote by President Andrew Jackson about the evils of central banking....
But we didn't listen to men like Andrew Jackson. We allowed the Federal Reserve to be created in 1913 and we have allowed it to develop into an absolute monstrosity over the past century. Now we are drowning in debt and we are on the verge of national bankruptcy. Will the American people wake up before it is too late?
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| Guest Post: Forgotten Treasure: Unconventional Oil In The Middle East Posted: 13 Jan 2011 09:55 AM PST
Submitted by Martin Katusa of Casey Research Forgotten Treasure: Unconventional Oil in the Middle East As the conventional and cheap oil and gas start to dry up in the Middle East… a bigger, even better opportunity seeks to replace it. For many who aren’t familiar with the region, the Middle East comes across as an updated version of Lawrence’s Arabia, only with lots of oil. But this mosaic of cultures isn’t made up of only Arabs or Muslims, and most Middle East countries are neither awash with heavily armed, rather excitable citizenry… nor with black gold, which is what we’re interested in. Twenty-three countries comprise the Arab League, but only Saudi Arabia, Iraq, Kuwait, the United Arab Emirates (UAE), and Iran are major oil producers. No matter; with the exception of Kurdistan in northern Iraq, none of the oil heavies are currently open to us investors anyway. We’re digging for other finds, with three basic criteria. We’re looking for countries in the Middle East that:
Why? In short, conventional production is in decline, but demand for oil isn’t. That means the state-owned oil companies and large companies operating in the region either need to find new fields and basins or apply new technology to get more out of established ones. Or both, of course. Nowhere is this reality more critical than in the Middle East, the world’s most important oil region, where oil production is the lifeblood of governments. Our analysis, gleaned from data and on-the-ground experience alike, points to investment opportunities in new, unconventional technology and resources. Exploration costs will likely be lower, as companies aren’t starting from scratch. And in what we see as early days in the national drives for energy security, it makes sense to look close around your own turf. We believe that blue-sky potential lurks in companies operating in the Middle East with expertise in unconventional production, access to good source rock, and management that can marry the two. The Proving Grounds It’s still early in the game, which can mean both good (high returns) and bad (high uncertainty) for investors. We believe the potential upside of unconventional development in the Middle East is just too big to ignore, however. So what we’ve done, is track down and lay out the most likely go-to countries for those explorers with the right stuff. The following chart will narrow further the countries that meet the three criteria we outlined above. That is, who’s “in the red” when it comes to oil?
We see here that six countries currently rely on imports for their crude oil: Egypt, Cyprus, Lebanon, Jordan, Israel, Turkey. Egypt Outlook: The oil and gas industry are an essential sector in Egypt's economy, and the country’s reserves convey its potential to become a significant producer. In 2009, Egypt produced 678,300 of barrels of oil per day, while consuming 683,000 barrels per day. Egypt has traditionally been a net producer, but production peaked in 1993 and has been in decline. Combine that with its increase in domestic consumption, and Egypt is now a net oil importer. Consequently, the Egyptian government has reversed its previously much harsher fiscal regimes and now actively encourages the exploration of domestic oil, which has resulted in an industry dominated by foreign players. Natural gas, on the other hand, has tripled in production in recent years due to some major discoveries. Thus Egypt is a net producer here, and more important in the broad picture, a source for European natural gas. European countries are usually eager to decrease their reliance on Gazprom, the state-controlled gas giant from Russia. Egypt has a developed network of pipelines to export its natural gas to Southern European and eastern Mediterranean countries. It also sends liquefied natural gas (LNG) to Europe, Asia, and the Americas. However, as natural gas represents over 80% of Egypt's source of electricity, the government has slowed plans for export expansion to ensure all domestic demands will be met before any further moves. Cyprus Outlook: Cyprus has no oil or gas production currently, and so must import all it needs. However, an oil deposit has been found recently in the seabed between Cyprus and Egypt. An oil licensing round took place in 2007, when 11 blocks were offered to potential investors. This first round took place against a backdrop of opposition from the Turkish government. As a result of this territorial dispute, companies chose not to bid, and as of now, only Noble Corporation has a production-sharing agreement (PSA) with the Cyprian government. In May 2010, Cyprus announced it was close to commencing a second oil licensing round for several offshore blocks. It’s again under Turkish protest. Turkey has even warned Lebanon and Egypt against working out a deal with Cyprus for oil exploration. Lebanon Outlook: Lebanon also has neither oil or gas production at this time. However, Cyprus has signed lineation agreements with Lebanon and Egypt to exploit large hydrocarbon reserves that cross borders offshore, as we mentioned above, and hope to begin exploration by 2012. And according to Lebanon’s parliament speaker, Nabih Berri, gas reserves found off the coast of Israel are located in Lebanon's territorial waters as well. These fields, however, may run into developmental difficulties as Israel and Lebanon to this day still dispute their maritime borders, leaving large fields such as Leviathan and Tamar in a state of limbo. Jordan Outlook: Large corporations have been eyeing the unconventional potential in Jordan for quite some time, but were put off due to both political as well as economic reasons. However, with advancements in oil shale technology and a gradual shift towards liberalization by the Jordanian government, which has long been envious of the hydrocarbon wealth of its neighbors, Jordan’s government has established plans to liberate the oil market in the next five years. If that happens, it will be a first for investors since 1958. Under the National Energy Strategy’s initial phase, four companies will be offered 25% of the kingdom's reserves. The remaining 75% will remain under the control of the state-owned Petroleum Refinery Company (JPRC) until full liberalization. This development will pave the way to exploit Jordan’s oil shale resources. Oil shale deposits underlie more than 60% of the Kingdom of Jordan and have enormous potential. The World Energy Council estimates Jordan's oil shale reserves at approximately 40 to 60 billion tons, making it the second richest state after Canada in rock oil reserves. Furthermore, the oil shale quality is very high compared with the oil shale in the United States. Jordan has recently signed a deal with Shell Oil to extract oil shale in the central part of the country. First commercial quantities are expected by 2020, with an estimated amount of 50,000 barrels of oil per day. Modest natural gas reserves were discovered in 1987, and the Risha field near the Iraq border produces approximately 30 million cubic feet of gas per day. However, production is pretty flat and looks to stay that way. That means imports. Israel Outlook: Israel relies on importing resources to meet the majority of its energy needs. It boasts no major reserves, and thus oil production is minimal. However, as we said above, Israel has found substantial natural gas reserves located in Mediterranean deep water. This discovery has prompted increased exploration off Israel's coastline, not to mention increased territorial disputes. The U.S. Geological Survey reports that Israel's offshore reserves could hold 122 trillion cubic feet of recoverable gas. That makes it one of the world's richest deposits. As a result of this discovery, Lebanon has rushed through approval of a law that outlines the guidelines of surveying, exploring, and producing of gas. The legislation also calls for a sovereign wealth fund to manage the potential revenues. Nevertheless, Lebanon is still three to four years behind the Israelis, as it still must secure investors, select bidders, and begin exploration work. Israel is already well on its way. Turkey Outlook: Although Turkey has both oil and natural gas reserves, the country is a net importer for both resources. It may become energy independent as new oil and natural gas reserves have been discovered off the coast of the Black Sea, Eastern Thrace, the Gulf of Iskenderun, and in the regions near the borders of Syria and Iraq. Due to its location, Turkey is vital in energy transportation between major oil-producing areas, in the Middle East and the Caspian Sea, and consumer markets in Europe. In 2009, the pipeline network in Turkey covered over 3,636 kilometers for crude oil and 10,630 kilometers for natural gas. One of the pipelines, the Baku-Tbilisi-Ceyhan, is the second largest oil pipeline in the world. It’s responsible for delivering crude oil from the Caspian Sea to the port of Ceyhan on Turkey's coast. From Ceyhan, the crude oil is distributed to oil tankers, which will further transport it to the world's markets. Another pipeline, Nabucco, is in the planning stages. It is expected to provide European markets with natural gas from the Caspian Sea basin. Syria Outlook: Compared with some of its neighbors, Syria's oil and gas production is fairly unassuming. On the other hand, Syria is the only significant producing country in the Eastern Mediterranean region. Oil production had declined, then flattened out for several years before new fields were discovered. They’re expected to bump up future production. Syria's known oil reserves are located mainly near the Iraq border and along the Euphrates River, while some smaller fields are located in the central part of the country. Upstream production is controlled by the state-owned Syrian Petroleum Company (SPC). The main foreign consortium which is currently producing is Al-Furate Petroleum, a joint venture made up of SOC (50%), Shell Oil (32%), and a collection of other companies. Contracts have been awarded to Shell, in 2008, and TOTAL, earlier this year, for exploration at greater depths in existing oil fields in the Euphrates and central areas. Offshore exploration came up dry in 2007, but recently there’s been renewed interest. The SPC has commenced plans to issue tenders for the offshore blocks in the future. Syria is also strategically important as a transit hub and will provide a larger role with the ongoing plans for pipeline network expansions in the area. As for gas, new fields are expected to ensure that Syria's domestic demands are met after several years of decline in production. About 35% of natural gas production is reinjected into oilfields for enhanced oil recovery techniques, with the remainder going mostly to generate electricity and for domestic use. By the end of 2010, Syria expects to double its natural gas production. Yemen Outlook: Like Egypt, Yemen is a strategic hub for oil shipping. More than 3.7 million barrels of oil pass daily through shipping lanes off its coast. The alternative is a very costly trip around the southern tip of Africa, so governments and oil companies are anxious to avoid any disruptions. Hydrocarbons currently account for approximately 25% of Yemen's GDP and over 70% of government revenues. Accordingly, the government is actively seeking to increase foreign capital in this sector. Barring significant change, however, its harsh fiscal regime is strangling exploration. Yemen is currently a net producer of oil, but it won’t be for much longer at this rate. Production is currently limited to two major sedimentary basins, but another 10 basins are believed to hold oil reserves. A number of companies are interested in the area of Yemen’s border with Saudi Arabia, though activity has been very limited due to a combination of limited infrastructure and continued security concerns. An initial licensing round in 2007 for offshore exploration also stirred interest, but the rise of Somali pirate activity in the Gulf of Aden has more or less put the kibosh on that. A fourth round of bidding was postponed in August 2009 because of the pirates and the exorbitant insurance rates that companies would need to pay to operate in the region. Up until 2009, all natural gas produced was reinjected to provide enhanced oil recovery. Natural gas export only became viable when a milestone agreement was signed in 2005 with Korea Gas Corp. Yemen also signed an agreement Swiss GDF Suez Company and TOTAL. All three contracts run for 20 years. Yemen's first liquefied natural gas (LNG) plant, located on the port of Balhaf on the Gulf of Aden, went online in October 2009. Yemen has the ability to export over 200 million cubic feet of LNG per year, and much of the future investment into Yemen is expected to be used in the natural gas infrastructure. What It All Means So the question is, what do we have and, more importantly, how can we make money? When investing in the Middle East, there’s evaluating infrastructure, fiscal policies, and, perhaps most important of all, Middle East politics. Much of the Middle East is well developed, particularly around urban centers. But many places where a company would be looking for unconventional oil are a ways off the beaten track, and that means additional infrastructure. A prominent example is Kurdistan, where billions of dollars’ worth of infrastructure upgrades are needed to turn the region into prolific oil-producing center. A junior company alone could not possibly have the connections to build such infrastructure. Countries such as Yemen and Oman have similar stumbling blocks to investment and development. The Catch-22 is that these places are precisely where the remaining “elephant deposits” could be hiding. Behind the scenes in the Middle East is always politics, much of it nuanced and layered by generations of history and family ties. It takes a management team that has been in the arena before and knows the intricacies of the particular area of interest. A good security detail may be a must in some places as well. Lastly, the fiscal systems in the Middle East are relatively tough compared with the rest of the world, and in some countries, such as Saudi Arabia, there are very few, if any, opportunities for foreign companies to even come in and share the wealth. Countries with the highest petroleum shortfalls tend to have the lowest government take. But that’s relative. Any company that operates in the area needs to remember the Middle East holds the dubious record of the highest number of “two-stars” (80-90% government take) and “one-stars” (90%+ government take) in the world, leaving contractors with very little with which to recuperate their costs and justify their investments. Southern Iraq and Kuwait can even reach 95%+. Who’s Got It Nevertheless, opportunities are definitely available for those looking for them. Some are conventional, but the big upside that we see in the Middle East is in its unconventional potential. Reconnaissance and seismic data for the region are readily available due to decades of exploration in the area, saving companies millions, if not billions of dollars that would have been needed to do the same work. There are also a good number of pipelines here that, where geography and geology meet, can convey a premium to any unconventional oil production. As several countries begin to look for the oil shale opportunities, the unconventional story has the potential to be the biggest boom in the energy market in decades.
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| Gonzalo Lira: Why Democracies Will Always Go Bankrupt Posted: 13 Jan 2011 09:40 AM PST (snippet) The United States is going bankrupt—and economics cannot explain why. In fact, a surprisingly large number of economists choose to ignore the problem of America's looming bankruptcy altogether; or claim there is something called a "structural deficit" (a highfalutin way of pretending that it cannot be fixed, and therefore doesn't need fixing); or else—as is the case of the fools backing Modern Monetary Theory—they make the claim that all deficits are just debts the government owes itself, so therefore the American government cannot go broke, so therefore—and let's ring out the QED—the fiscal over-indebtedness is actually not a problem because it doesn't even actually exist! They really do claim that. And no, they are not high. Of course, sovereign over-indebtedness does exist, and it is a problem—a terrible, life-or-death problem: As a lot of historians have pointed out, sovereign bankruptcy presages and ushers the collapse of great nations—often violent collapse. And this is something we want to avoid, no? Some schools of economic thought recognize that deficits are bad because they lead to bankruptcy, and that therefore fiscal budgets should be balanced so as to avoid them. But they do not explain why this is the case—they have no argument to explain why deficits happen in the first place. That these clever Austrians point to something that has happened before, and therefore infer that it will happen again if similar conditions are met is not an argument—it is an observation, like saying that the sun has risen countless times in the east, so it will likely rise again in the east tomorrow morning. This is a true observation—but it doesn't explain why the sun will rise tomorrow in the east. Since the Austrians cannot explain why deficits happen and eventually lead to national bankruptcy, they are simply positing them, much like tenets of a religion. These arguments might appeal more to our experiences in the real world—especially when compared to the a priori drivel of Neo-Keynesians, Monetarists, MMT weenies, and their ilk: Peddlers of arguments as unsound as atonal clamor. But a posteriori arguments based on intuition and "common sense"—gussied up in German though they may be, and attractive though we may find them—are of no help, because they are based on faith, not reason. 
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| Gold price bubble a “high probability” says Deutsche Bank Posted: 13 Jan 2011 09:39 AM PST by Chris Flood
Mr Lewis says that the price of gold would need to rise above the $2,000 an ounce mark to represent a bubble but he notes that the factors that have driven the market higher in recent years are likely to continue in 2011. … Mr Lewis also warns that a collapse of the dollar "cannot be dismissed out of hand" given the significant fiscal consolidation required in the US. … He also expects central banks, particularly in Asia, to diversify their foreign exchange reserves further by increasing their holdings of gold and he says inflows into gold exchange traded funds will continue to increase, reflecting investors' desire to find protection against the twin threats of deflation or rising inflation. … Suki Cooper, precious metals analyst at Barclays Capital, says that investment demand for gold is likely to slow towards the end of 2011 but it will still be strong enough to push the price to a fresh record high. Barclays is forecasting that gold will trade this year between a low of $1,300 and a high of $1,620, helped by the growing interest in physically backed ETFs and buying by central banks. [source] RS View: In other words, Deutsche Bank considers it a high probability that gold will climb above $2,000. As for the label, one analyst's "bubble" is merely another man's "fundamental". The central bankers mentioned above do tend to tip the equation more resolutely toward "fundamental". And frankly, $2,000/oz for gold is nothing — it doesn't even represent the players getting warmed up. Hell, they've been known to roll out of bed in the morning and mark far higher prices than that on mere pieces of paper that weigh even less! (Although spoken tongue in cheek, do think about that, as there is a great revelation of truth to be found therein.)
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| “On the Edge” with David Morgan of Silver-Invester.com Posted: 13 Jan 2011 09:39 AM PST Share this:
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| The Latest Bad News For The State Of New Jersey: 460,000 Shares Of Coinstar Posted: 13 Jan 2011 09:31 AM PST
It has not been a good day for New Jersey. First, governor Christie dared to tell the truth (i.e., that the state could go bankrupt on increasing... yes you read that right - INcreasing - health care costs) which pretty much cost the state a successful bond auction as we reported earlier, and now we find that one of the casualties in today's Coinstar collapse is none other than the State of New Jersey, which owns a (less than) whopping 460,000 shares. Granted the loss for NJ is only $8.2 million but it is never nice to kick a man down as he is on the very of insolvency. The table below shows all the biggest losers in today's after hours wipe out in Coinstar. Notably, at position 4, is Jim O'Neill's latest fiefdom, Goldman Sachs Asset Management, which continues to live up to its reputation of one of the worst asset managers on Wall Street.
Source: CapitalIQ
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| Are Signs of Gold Bubble Showing? Posted: 13 Jan 2011 09:30 AM PST optionMONSTER submits: By Chris McKhann The chinks in gold's armor may be showing up. Clearly the precious metal still shines bright, but there are indications that those who think that we are seeing a bubble may soon be vindicated. I am not trying to call a top, but some traders are starting to lay bets that gold is at least ready for a substantial pullback on its run to a zillion. Complete Story »
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| Posted: 13 Jan 2011 09:17 AM PST Jim Sinclair's Commentary Vanguard postpones 3 municipal bond funds. Does that tell you what that market is like?
Jim Sinclair's Commentary Every bear in the woods cut lose today on gold. The following article might give you deserved comfort. Seven reasons for gold to hit $1700 or higher this year Gold's steep ascent continued in 2010, finishing the year in New York at $1,420.75. Though just shy of its all-time high of $1,432.50 registered on December 7th, gold nevertheless advanced some 29.5 percent from the prior year's close and scored its tenth consecutive annual increase. Despite a rocky start – with prices dipping briefly under $1,360 an ounce on January 7th – 2011 promises to be another stellar year as the metal's bullish price drivers continue at full throttle. I expect the price will very likely rise to the $1,700 level by year-end 2011. This would be a "modest" gain of "only" 19 percent from last year's closing price. And, with the right confluence of events, gold could quite possibly rise to $1,850 or higher by next New Year's Eve. Over time and across currencies, bull markets in precious metals often last twenty years or more – so we should not be surprised to see the current decade-long advance continue for at least a few more years. Indeed, I strongly believe gold will surpass $2,000 an ounce in the next few years . . . and I wouldn't be at all surprised to see gold reach $3,000 or higher at the next cyclical peak. Gold prices are likely to remain volatile, registering big short-term swings both up and down. Although sizable intermittent price declines will lead some to question the bull market's staying power, the long-term trend, as noted above, will remain positive for years to come.
Jim Sinclair's Commentary David Rosenberg is a class act. I still consider the best currency position to be 50% Swiss Franc and 50% Canadian dollar. Rosenberg gives you the basis for the Canadian side. Click here to view David Rosenberg's January 13th, 2011 PDF, Donuts With Dave…
Jim Sinclair's Commentary The meeting next week between the US Administration and President Hu of China is at best a photo opportunity. The Administration's desire that China will cease military operations before the next G20 is a waste of words.
Jim Sinclair's Commentary Jobs count but Washington tells us food and fuel prices do not. Jobless Claims Jump, Wholesale Food Costs Surge U.S. jobless claims jumped to their highest level since October while food and energy costs boosted producer prices, pointing lingering headwinds for an economic recovery that had been showing renewed vigor. A surge in exports to their highest level in two years helped narrow the trade deficit, however, an encouraging sign. Out of Work Despite the more positive outlook for growth in recent weeks, the job market still appeared to be struggling. The number of Americans filing for first-time unemployment benefits rose unexpectedly to 445,000 from 410,000 in the prior week, the Labor Department said on Thursday. It was the biggest one-week jump in about six months, confounding analyst forecasts for a small drop to 405,000. U.S. stock index futures added to losses after the jobless claims data, while government debt prices rose. "The jobless number highlights the patchy recovery we've seen in the job market and reinforces that it will be a slow process bringing down the jobless rate," said Omer Esiner, market analyst at Commonwealth Foreign Exchange in Washington.
Jim Sinclair's Commentary If they do this and the free speech defence concerning the false ratings fails. Following that the rating agencies will be litigated out of business in six months. That would be a pre-emptive bankruptcy due to an overabundance of legal claims without sound defence. America's Credit Rating to Take a Hit? Moody's and Standard & Poor's, the two leading credit-rating agencies, have warned that they might downgrade the United States's triple-A rating because of the country's deteriorating fiscal situation. Yes, these are the same ratings agencies that helped cause the country's deteriorating fiscal situation by giving triple-A ratings to dodgy subprime-mortgage-backed bonds (but they had a good excuse—they were being paid to do so by the banks issuing those bonds!). [Wall Street Journal] • In a stirring speech last night at the University of Arizona, President Obama hoped that the tragedy in Tucson would "usher in more civility in our public discourse" and warned against "simple explanations." He also announced that Representative Giffords opened her eyes yesterday for the first time since her shooting. [NY Times] • All of Arizona's federal judges have been ordered to recuse themselves from the Jared Lee Loughner cause, since among his alleged victims was one of their own, Judge John Roll. Instead the case will be heard by Judge Larry Burns, of the Southern California district court. [Politico]
Jim Sinclair's Commentary Sure, business is getting better… Banks repossessed 1 million homes last year — and 2011 will be worse Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and more will miss payments as they struggle with job losses and loans worth more than their home's value, industry analysts forecast. "2011 is going to be the peak," said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The outlook comes after banks repossessed more than 1 million homes in 2010, RealtyTrac said Thursday. That marked the highest annual tally of properties lost to foreclosure on records dating back to 2005. One in 45 U.S. households received a foreclosure filing last year, or a record high of 2.9 million homes. That's up 1.67 percent from 2009. For December, 257,747 U.S. homes received at least one foreclosure-related notice. That was the lowest monthly total in 30 months. The number of notices fell 1.8 percent from November and 26.3 percent from December 2009, RealtyTrac said.
Jim Sinclair's Commentary Why do you not hear screaming and crying on this? Could it be because the great profits of all these banker's trading departments were mark ups on the crap paper they held after the FASB sold their souls to the devil? Getting rid of the trading departments is akin to what you do with a restaurant after using it as a money laundering facility – you burn it down. Morgan Stanley to spin off prop trading desk Morgan Stanley agreed to spin off its last big proprietary trading desk by 2012 in a move that brings it a step closer to meeting new US rules on banks betting their own capital. Last year's sweeping financial regulatory reform legislation outlawed large US banks from betting their own capital on trades where clients' interests were not being served, setting in motion a wave of departures and restructurings at trading desks that were once among the most coveted and lucrative spots on Wall Street. Morgan Stanley began to retreat from prop operations during the financial crisis as its risk-taking businesses racked up losses. Other banks, including Goldman Sachs and JPMorgan Chase, have followed suit. Morgan Stanley is spinning out Process Driven Trading, which has traded equities with the bank's own capital since 1993 and has been the last meaningful prop business in Morgan Stanley. The bank had shut down its four credit-trading desks after a multibillion-dollar trading loss three years ago, and in October agreed to sell FrontPoint to the hedge fund's employees.
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| Over 1 million Americans seen losing homes in 2011 Posted: 13 Jan 2011 09:13 AM PST by Janna Herron Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and industry experts say more people will miss payments because of job losses and also loans that exceed the value of the homes they are living in. "2011 is going to be the peak," said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The firm predicts 1.2 million homes will be repossessed this year. The blistering pace of foreclosures this year will top 2010, when a record 1 million homes were lost, RealtyTrac said Thursday. One in every 45 U.S. households received a foreclosure filing last year, a record 2.9 million of them. That's up 1.67 percent from 2009. … would-be buyers remain hesitant, according to Wednesday's mortgage indexes from the Mortgage Bankers Association. It will take more than low mortgage rates to jumpstart a housing market plagued by high unemployment, falling prices, tighter credit standards. [source] RS View: With that final sentence summarizing the nation's grim economic backdrop, the Fed is sure to maintain ultra-loose monetary policy, and may even be swayed to reach deeper into their bag of magic.
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| Spot gold prices set for breakout, says analysts Posted: 13 Jan 2011 08:47 AM PST by Andrea Tse … Kitco senior analyst Jon Nadler said gold prices could hop if signs of discord between the U.S. and China arise amid Chinese President Hu Jintao's visit to the White House next week. However, he thinks that it's more likely that the nations' leaders will stick to cooperative dialogue. … "The big kahuna I see on the horizon next week will be retail sales for December," Chuck Butler, President of EverBank said. "If retail sales do disappoint … we could very well see spot gold back to $1,400 and silver to $30. December retail sales, to be released on Friday, are expected to come in flat versus the prior month's rise of 0.8%. Meanwhile, BullionVault's head of research Adrian Ash notes that profit-taking by Western funds after the year-end has met "massive" demand from China ahead of the Chinese new year holiday that begins on Feb. 3. "Everyone we speak to says Chinese dealers will take all the gold they can get at these prices." [source]
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| Posted: 13 Jan 2011 08:45 AM PST Although gold has essentially failed to make a sustained new high in the last several months, sentiment indicators show a clear improvement from a contrary point of view. Share this:
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| Gold Daily and Silver Weekly Charts: Bear Raids Abounding Posted: 13 Jan 2011 08:40 AM PST |
| Posted: 13 Jan 2011 08:19 AM PST
The Wall Street Journal noted last week:
Congress has also discontinued the Build American Bond program, which was significant in temporarily financing California and other states' budgets. See this, this, this and this. That's unfortunate, given that many states and big cities are in a dire financial situation, and given that Keynesian economists say that aid to the states is one of the best forms of stimulus. In any event, as Steve Keen points out, giving money to the debtors is much better for stimulating the economy than giving it to the lenders. Unfortunately, as I will demonstrate below, virtually the entire government economic policy is to throw trillions of dollars at the biggest banks. Because there are so many rivers and streams of bailout money going to the big banks, I will start with the specifics and end with broader monetary policies. Tarp: a Preview of Things to Come The $700 billion dollar TARP bailout was a massive bait-and-switch. The government said it was doing it to soak up toxic assets, and then switched to saying it was needed to free up lending. It didn't do that either. Indeed, the Fed doesn't want the banks to lend. As I wrote in March 2009:
But the TARP bailout is peanuts compared to the numerous other bailouts the government has given to the giant banks. And I'm not referring to the $23 trillion in bailouts, loans, guarantees and other publicy-disclosed programs that the special inspector general for the TARP program mentions. I'm talking about more covert types of bailouts. Like what? Mortgages and Housing Most independent experts say that the government's housing programs have been a failure. That's too bad, given that the housing slump is now - according to Zillow's - worse than in the Great Depression. Indeed, PhD economists John Hussman and Dean Baker, fund manager and financial writer Barry Ritholtz and New York Times' writer Gretchen Morgenson say that the only reason the government keeps giving billions to Fannie and Freddie is that it is really a huge, ongoing, back-door bailout of the big banks. Many also accuse Obama's foreclosure relief programs as being backdoor bailouts for the banks. (See this, this, this and this). Commercial Real Estate, Mortgage Backed Securities, Cars and Student Loans Some pretty sharp writers allege that the government is also secretly bailing out the banks by supporting everything from commercial real estate, to mortgage-backed securities, car loans and student loans (and don't forget McDonald's and Harley). Derivatives The government's failure to rein in derivatives or break up the giant banks also constitute enormous subsidies, as it allows the giants to make huge sums by keeping the true price points of their derivatives secret. See this and this. Foreign Bailouts Toxic Assets and Accounting Shenanigans The PPIP program - which was supposed to reduce the toxic assets held by banks - actually increased them (at least in the short-run), and just let the banks make a quick buck. In addition, the government suspended mark-to-market valuation of the toxic assets held by the giant banks, and is allowing the banks to value the assets at whatever price they desire. This constitutes a huge giveaway to the big banks. As Forbes' Robert Lenzner wrote recently:
And as one writer notes:
Fraud As a Business Model Nobel prize-winning economist George Akerlof demonstrated that if big companies aren't held responsible for their actions, the government ends up bailing them out. So failure to prosecute directly leads to a bailout. Moreover, as I noted last month:
The government has not only turned the other cheek, but aided and abetted the fraud. In the words of financial crime expert William K. Black, the government "created an intensely criminogenic environment". Settling Prosecutions For Pennies on the Dollar Even when the government has prosecuted financial crime (because public outrage became too big to ignore), the government has settled for pennies on the dollar. Nobel prize winning economist Joe Stiglitz says about the way that the government is currently prosecuting financial crime:
Bloomberg noted on Monday:
And Freddie and Fannie's recent settlement with Bank of America - a couple of billions - has been criticized by many as being a bailout. In "BofA Freddie Mac Putbacks Resolved for 1¢ on $", Barry Ritholtz notes:
In "Is Fannie bailing out the banks?", Forbes' Colin Barr writes:
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| Posted: 13 Jan 2011 08:10 AM PST Jack Chan, Simply Profits – published Monday, 1-10 EMA(50) $27.51 Definition of Exponential Moving Average (EMA) Share this:
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| Posted: 13 Jan 2011 07:58 AM PST 1 Troy Ounce – Special Offering (Free Ship Item) Support the Silver Movement – If everyone bought 1 ounce of silver, it would break the back of the banks that are being investigated for manipulating the silver market. The blogs are heating up with the google trend "Crash JP Morgan Buy Silver" so we've created [...]
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| Will Gold Be Currency Or Will Cash Be Illegal? Posted: 13 Jan 2011 07:51 AM PST SafeHaven
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| How to Invest Successfully in Emerging Market Real Estate Posted: 13 Jan 2011 07:43 AM PST Today, I'm revisiting my "Five Golden Rules for Buying Pre-construction." I find this a useful process whenever a pre-construction project I have invested in or recommended is delivered. To remind you, buying pre-construction is where you buy into a development before it has been constructed. You are relying on a set of architectural plans. Frequently, developers will offer substantial discounts to buy off-plan. Often the best units go to "insiders." Developers do this because they need investor funds to finance the project. That's a strong incentive to create simple and profitable investor terms. Moreover, bank finance for construction costs will typically be dependent on a certain level of pre-sales. The developer will want to hit that number as soon as possible. The developer will also want to share some of the risk by selling pre-construction. He knows he is giving a good deal based on today's prices – but who knows what the market will be like when the units are delivered in two years time? Buying pre-construction makes more sense for the investor than for someone buying for personal use. For the investor, the unit doesn't have to meet your own taste, and you probably don't mind that it will take a few years before you take possession of your unit, as long as the market is seeing appreciation. When you buy a unit pre-construction, however, it should be a property that a large portion of the general public wouldn't mind owning or renting. You are buying the unit to eventually sell or rent to an end user, and you want to make sure the property will be attractive to as many end users as possible. The end user may be a long-term renter, a first-time homebuyer, a short-term vacationer, or even another investor. That will depend on where and what you are buying. Analyze who the end user will be before you put your money down, as you will want to make sure there will be a big enough market to sell or rent your property to. Plus, pay attention to how much similar supply is in the pipeline in the area. You get a discounted price to compensate you for taking on some of the early development risk, but the real incentive to buy pre-construction comes from leverage. While the terms of the payments vary from project to project, no matter what the terms are, you are leveraging your returns to some degree. A typical deal will start with a small down payment…say, 5%…and work through various stage (progress) payments during the construction period, until you have paid anywhere between 5% and 80% of the purchase price. The balance is due when the keys are turned over. Let's walk through a sample deal to show how leverage works when buying pre-construction. You purchase a $100,000 condo with a 10% down payment. The balance is due on completion in two years. A 20% increase in price during the build period means a 200% return (net of fees) if you were to flip. Of course, leverage, like buying an option, can work in two ways; a 10% fall in price means that you are down your entire investment. Buying pre-construction is a strategy that will maximize the retail investor's ROI in the early to mid-stages of a market appreciation cycle. Buy pre-construction at the top of the market and you risk losing your entire investment…and maybe even more than you have invested, if you are contractually bound to complete and that clause is enforceable. All the benefits of buying pre-construction are tied to a rising and active market. Without a rising and liquid market, pre-construction almost never makes sense. If there isn't activity in the market, you run the risk that the project you buy into won't be completed. Or if it does get completed, half the building will be empty. This can be a big problem when it comes to maintaining communal areas or amenities and security. White-hot pre-construction markets can frequently overheat. Too much supply becomes a problem. Prices rise too fast. If prices rise to the point where there is no expectation of future price increases, the market will stall. Five years ago, Panama was one of the hottest pre-construction markets I have seen. Today, as you know, it's a different story. As I said…you want to play the pre-construction market in the early to mid-growth stages of the market. The market punishes late arrivals who think prices will continue to rise as they have been rising all along. The "right deal" should always follow all five golden rules, below. To illustrate the essentials of investment in pre-construction projects, let's look at the Sian Ka'an project near Tulum on the southern edge of Mexico's Riviera Maya. 1. An appreciating market in the early to mid-stages of growth. Sian Ka'an is set in the Riviera Maya, home to Mexico's best beaches. It's close to the site for a new international airport, and is positioned directly in the path of progress. 2. A developer with a strong track record who is financially stable. Sian Ka'an's developer, Benjamin Beja, has built and/or sold 1500 homes across Mexico, mostly to the North American market. 3. Supply constraints – a lack of developable land, for example. Sian Ka'an is in a location with a lack of developable land. The Sian Ka'an biosphere and other preserved land close by on this section of coast cover 1.5 million acres, and can never be developed. 4. A market with an abundant supply of end users. Benjamin conceived Sian Ka'an in response to a supply shortage of hotel rooms. Sian Ka'an is in the Gran Bahia Principe resort, which has 2,700 hotel rooms…but it needs 3,000. So Benjamin built Sian Ka'an, with 300 condos. 5. A liquid market with a large volume of transactions. More than 400 sales in less than two years at Sian Ka'an alone, tells us that this is a liquid market. Pre-construction success isn't a fluke. Good fortune is always welcome but the key to pre-construction is following these five golden rules. They are simple, easy to follow…and should stand you in good stead. Regards, Ronan McMahon How to Invest Successfully in Emerging Market Real Estate originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."
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| Commodity Inflation: You Ain't Seen Nothing Yet Posted: 13 Jan 2011 07:38 AM PST Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves. - Norm Franz, Money and Wealth in the New Millennium As soon as your born they make you feel small, By giving you no time instead of it all, [...]
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| Posted: 13 Jan 2011 07:36 AM PST Share this:
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| Gold Will Glitter in the New Decade Posted: 13 Jan 2011 07:33 AM PST Avi Morris submits: From the earliest time, gold has been used for money as a relative standard for currency equivalents specific to economic regions or countries. Gold, like all precious metals, is a hedge against inflation, deflation or currency devaluation. When the return on investment is not adequately compensating for risk and inflation, then the demand for gold (and other commodities) increases. Jewelry accounts for over 70% of gold demand. India is the largest consuming country, accounting for 27% of demand, followed by China and the U.S. Central banks and official organizations hold about 20% of all above-ground gold as official gold reserves. The price of gold has had a remarkable rise in recent times. After trading in a $300-400 range for 20 years, the price exploded in the last 10 years. It started the decade at less than $280 an ounce and ended at almost $1,400, equivalent to a 17½% compounded annual growth rate. During this same time span, stocks for many prominent companies did well if they achieved modest gains with small dividend yields. Complete Story »
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| Posted: 13 Jan 2011 07:30 AM PST by Addison Wiggin - January 13, 2011
 Home prices have now fallen farther from their peak than happened during the Great Depression.Sorting through the news this morning, we detect a common thread: IOUs gone bad and the inevitable response -- a search for tangible wealth.  Since 2006, the average home price has fallen 26%, according to Zillow.com. That’s a greater percentage than the 25.9% drop registered from the plunge that helped kick off the Great Depression from 1928-1933.And for the record, home prices have now fallen for 53 straight months. They fell 0.78% in November, the fastest pace since February 2009.  Still, that trend remains in the works. Look for a 20% increase in the number of foreclosure filings this year, says RealtyTrac.The real estate forecasting firm says 2.87 million homes got a notice of default, auction or repossession last year -- up only 2% from 2009. The foreclosure pace slowed briefly during Q4 2010 following the “robo-signing” scandal. But the pace is already picking up again: Foreclosures grew 4% between November and December. “There are 5 million seriously delinquent loans not yet in foreclosure,” says RealtyTrac’s Rick Sharga. “They’ve got to eventually get in the pipeline unless the homeowners cure the defaults.”  That ultimate in paper promises, the U.S. dollar, is taking a severe hit today. The dollar index has tumbled to 79.1, its lowest level so far in 2011. Ordinarily, this would put some wind in the sails of gold, but not today. The spot price sits at $1,384. No doubt this will give cheer to the “gold-is-a-bubble” crowd… but overnight Byron King sent us a compelling pie graph that tells us how gold still pales in comparison to other assets: That’s impressive enough… but when you look at it historically, it’s simply staggering. Here’s a chart sent our way by Gold Switzerland’s Egon von Greyerz, showing gold and gold stocks as a percentage of global assets:  Dare we point out that that all four of those larger bars happened to mark major stock market bottoms?  “Enormous economic, scientific and sociological trend lines are coming into focus,” says Patrick Cox. “And I’ve got to admit that I’m feeling better than I have in years about our future.”And why shouldn’t he?: The last couple of weeks have brought staggering new developments, some of which we’ve detailed here…
This is another instance of a “DNA vaccine.” As Patrick explained here on Monday, the beauty of a DNA vaccine is that “rather than introducing into the body an actual virus, only the antigen that would be recognized as foreign is introduced.” The potential is staggering: “The company is proving to the world now that their platform of DNA plasmids will do exactly what they say it will do. When they accomplish Bill Gates’ goal of curing malaria, which I believe they’ll do in the next few years, the entire financial and medical world will know this company’s name.” You, on the other hand, can know this company’s name today. It’s one of the five “wealth quake” opportunities Patrick sees lining up in 2011. You can learn about all of them… and get a membership in Breakthrough Technology Alert for more than half off the regular fee. You can find all the details here… Just know that this offer expires at midnight tomorrow night.  Here we go again: The U.S. Department of Agriculture just cut a key harvest forecast… and grain prices are going to town.On Oct. 8 of last year, USDA cut its outlook for the U.S. corn crop by 3.8%… and grain futures traded “lock limit up” -- the exchange’s maximum allowed one-day rise. Now? USDA issued a global outlook… and it’s grim: Floods in Australia will cut the wheat crop by 2%. Drought in South America will cut Argentina’s corn crop 6%:
This comes on the heels of last week’s report from the U.N. Food and Agriculture Organization -- its index of global food prices just set a record, higher than during the crisis of 2008, when food riots broke out across the developing world.  So here we go again…
 As we’ve pointed out before, these rising costs are bad news for food companies if they can’t pass along their rising costs to customers. Actually, evidence of margin squeeze is becoming evident across all industries.Thus, this morning’s Producer Price Index from the Commerce Department: It rose 1.1% in December, driven mostly by -- you guessed it -- food and energy. The year-over-year increase is 4%. And that’s just for finished goods. For crude goods, the year-over-year increase is a staggering 15.5%.  The stock market is taking these data in stride, the major indexes down a mere 0.2%. Nor are traders fazed by the weekly numbers for first-time unemployment claims -- 445,000, the highest in two months and way above the Street’s guess. The world’s biggest gold nugget is about to go up for auction: The “Washington nugget” weighs in at 100 ounces, or 6.8 pounds -- it’s about the size of a small loaf of bread. And while it turned up in California Gold Rush country, it escaped the notice of the Forty-niners. A man searching his own property near Nevada City, Calif., found it just last year. He took it to geologist Fred Holabrid, who called it “one in a trillion.” We can believe that: Before this, the biggest California nugget still in existence (housed in the Smithsonian) weighed 80 ounces. In light of the current spot price, the nugget is worth $139,100. But given the sheer novelty of the thing, Holabrid, who’s handling the auction, hopes it’ll fetch twice as much when it goes on the block on March 15.  “Yes -- I purchased 1,000 shares of Consolidated Thompson on July 14, 2009, at $3.47 per share, with Chris Mayer’s recommendation,” writes a reader who’s tickled pink with yesterday’s acquisition announcement by Cliffs Natural Resources.“I sold 700 shares in 2010, recouping my original cost plus an 80% profit. I still have 300 shares, which I will sell and move into a new recommendation from Mr. Mayer. Great work, Chris!”  “Yes, I did buy CLM in summer 2009 at $3.20,” says another. “Unfortunately, I sold during the pullback in summer 2010 at 7.95. I did OK in 12 months, 148%, but could have done much better. The story of my life.”The 5: Sorry you exited the position early. It’s worth noting, Chris steers clear of the conventional wisdom about setting stop losses for this very reason. “When something I know is cheap gets cheaper, why sell it?” he wrote in this space just last week. “If anything, I think about buying more.” This is why Mayer’s Special Situations readers are up 166% on a natural gas producer, even as natgas prices languish. It’s why they’re up 105% on a gold miner in just eight months. And it’s why those with patience will collect 466% on Consolidated Thompson. To learn about the newest opportunities on Chris’s radar, check this out.  In reply to the reader who wrote yesterday, “We have no intention of allowing our system to deteriorate to the point that China has,” another reader says:“Wow. I lived in China for a while. One thing I concluded. Their system is different than ours. But it sure isn’t different because of some process of deterioration! It’s different by design. It’s different on purpose. There are no dummies leading China.” “Sorry, goofy, you’re too late!” another reader piles on. “Furthermore, do not suggest that the Chinese are in worse shape. They own you.”  “I commend Addison for writing the letter to Sen. Reid and others in Congress. However, I suspect that it will be totally ignored, knowing that the ‘debt ceiling’ has been a total farce for many years, or get the reaction ‘tell us something we don’t already know.’“My concern is that Addison followed the example of many that have raised the debt issue before and referred to leaving the debt and its solution to our children and grandchildren. We’ve been hearing that for 50 years -- the truth is that the children and grandchildren are us! “The crisis isn’t 20 or 30 years down the road; it’s maybe two or three years ahead, if that long. As you have speculated of the possible upcoming scenarios, the one by far the most likely is continued debasement of the currency, resulting in inflation of 10% or more per year, or, if it can’t be controlled to that degree or our creditors quit lending, hyperinflation.”  “Regarding Jared Loughner,” writes a South African reader, “it is clear to me that there is developing in the U.S. and other Western countries a revolutionary trend. A trend or fashion such as this does not start with ringleaders stirring up the masses. It starts as any fashion does as an organic development with a seeming life of its own.“If you consider that we are animals, then it is likely that we exhibit herding behaviour similar to wildebeest herding across the veld. “You get all types of people involved in this trend, and each person will be held responsible for their actions according to what is generally accepted behaviour at the time. Jared Loughner is simply one person reacting to this developing trend in his way. “Over time, what is generally accepted behaviour changes radically. In the French or Russian Revolutions, assassinating the previous regime’s political leaders was generally acceptable behaviour at the time.”  “We will see more violence in the future,” adds another. “They’ve misspent my Social Security. They continue to give my tax dollars to thieves, beggars and themselves, and are not really ‘helping’ anybody but themselves. Power and greed from Washington to Wall Street. More regulations than any country should have to endure.“And I guarantee horrendous times coming, unless they change. Do I have to tell you who ‘THEY’ are? Unless they change, yes, I am inclined to believe there will be lots more violence. I don’t think I’m violent yet, but I’m damn sure pissed off.” Cheers, Addison Wiggin The 5 Min. Forecast P.S.: “Well,” writes a skeptical reader, “Mr. Cox is all for investing in products and methods that are designed to lengthen life span -- but the U.S. government is all for reducing life span to save money. “Let’s see what the FDA has to say about Mr. Cox’s new products and methods -- let’s see what the Obamacare machine has to say about this.” You’ve fallen victim to the “it’s-all-about-us” fallacy. It’s a global market out there and what the “Obamacare machine” has to say is largely irrelevant to the global potential of the companies Patrick follows. For instance, one of Patrick’s leading stem cell research companies launched an operation in China last year, thanks to a more friendly regulatory environment. “Whereas our FDA often acts to protect established pharma interests,” says Patrick, “Asian authorities are consciously attempting to establish new medical industries to compete with American companies and technologies. “Luckily, investors are not restricted by national borders and can follow the science and profits wherever they find a friendly home.” To date, that company has been a ten-bagger for Patrick’s early readers. And it’s not too late to get in on the five “wealth quakes” he sees coming for 2011. But after midnight tomorrow night, membership in Breakthrough Technology Alert returns to full price. Best move on this now.
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| Posted: 13 Jan 2011 07:23 AM PST US Mint Reports Unprecedented Buying Spree Of Physical Silver Share this:
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| Guest Post: Market Dislocation: Dow 11,908? Posted: 13 Jan 2011 07:14 AM PST
Submitted by Charles Hugh Smith from Of Two Minds Market Dislocation: Dow 11,908? I've got a bad feeling that the Great Intervention Rally of 2009 - 2011 is about to hit an iceberg. The S&P 500, meanwhile, has traced out a gargantuan double top. Optimists can discern the possibility of a triple-top, but I doubt the Central Bank interventions that have goosed the SPX to these heights can work their magic long enough to push the index 300 points higher to complete the triple top pattern. (As I type, the SPX is 1,285.) As the Star Wars guys and gals said: I've got a bad feeling about this.
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| Bernanke Admits The "QE's" Boost Stock Prices As We Face Starvation Posted: 13 Jan 2011 06:59 AM PST  Duringtoday's little CNBC circlejerk shindig, Ben Bernanke, in defense of his disastrous, and now deadly policies, once again confirmed that the (one and only) benefit from QE2 has been to boost stock prices. Oddly enough, there was no mention of surging energy, food and commodity prices. Nor did Liesman ask the Chairman about 43.2 million Americans on foodstamps, just as he did not ask the dictator of the centralized ponzi for his comments on why at last count 50 people in Tunisia were dead protesting, among other, record food prices and cost of living.From Market Watch: Federal Reserve Board Chairman Ben Bernanke said Thursday that a controversial $600 billion bond buying plan has contributed to a stronger stock market. "Our policies have contributed to a stronger stock market just as they did in March 2009 when we did the first iteration of this program," Bernanke said at a Federal Deposit Insurance Corp. forum on small businesses. "A stronger economy helps small businesses more than larger businesses. Interest rates are higher but that's mostly because the news is better. It has responded to a stronger economy and better expectations." The $600 billion bond buying plan follows a completed effort to buy $1.75 trillion in government bonds and Fannie Mae and Freddie Mac-backed mortgage securities. Obviously, none of this is news to anyone who realizes, as Zero Hedge readers have been told since 2009, that the Fed's one and only goal is to push stock prices higher in some fallacious linkage that the stock market is equivalent to the economy. But that's what happens when the person running the formerly free world is an academic historian with absolutely no real world experience. And just to confirm this observation, we present Trim Tabs latest press release which states that the "Fed's Quantitative Easing Works Wonders on Stock Market but Does Little for Economic Growth and Employment." Unfortunately it does a whole lot to make people all around the world cold, hungry, and increasingly angry and in increasingly more cases, dead: 
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| Observations On The Government Spending Bubble, The Dollar and Government Lies Posted: 13 Jan 2011 06:49 AM PST Here's a great chart I borrowed from: HERE  I'm all for the tax cuts just passed, but it has to be offset by cuts in spending. Not only will we NOT get cuts in spending, the budget grows by the day more quickly than pinocchio's nose. Here is what the market thinks about the U.S. Government's ability to manage its finances:  (click on chart to enlarge) For sure, we get some technical dead cat bounces along the way, and a reader always busts my stones when we get one (but is radio silent when the dollar resumes its descent lol), but Geither - in so many words with his China rhetoric yesterday - essentially told the world that the U.S. is going to print the dollar to much lower levels. Bernanke is putting those words into action. It's a serious Comedy of Errors. And what is even more humorous to me is that everyone in this country is discussing the dire multi-sovereign fiscal crisis going on in Europe. The fact is that California alone is in worse shape than several countries over in Europe combined. Then layer on top of that Illionois, NY, NJ, etc. I don't have time to add up the numbers, but if you include the full present value of Federal entitlement liabilities, State pension unfunded-liabilities, State/municipal debt obligations and private debt in this country, we would all wonder why news about the situation in Europe is even in the news. Besides, China has already said it will prevent a collapse in Europe. I have not heard China make that proclamation about this country, nor will we after Geithner took his water pistol to a battle field of political rhetoric. It was more pathetic than Poland's calvary trying to defend against Germany's tank and air attack. Two of the biggest Government lies that grow and perpetuate on a monthly basis are the monthly employment and inflation reports. For a great explanation of the golden truth about the real numbers, this interview with John Williams is a must-read: Govt Lies Those of us who have been investing in precious metals for at least the past decade have known all along that the Govt economic reports are bogus. The analysis of this is now starting to seep into the mainstream media, to an extent. Certainly not the most common sources of news like the night time local t.v. news broadcast or daily newspapers. But it's getting a lot more exposure and acknowledgement in blogosphere. One has to wonder how long it will be before the Obama people decide to curtail what is allowed to be posted on the internet....it gets more Orwellian by the day. Protect yourself with gold and silver. 
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| Posted: 13 Jan 2011 06:48 AM PST Looks like J6P is trying to bring down JPM and their massive silver short. Something's happening here. What it is ain't exactly clear. There's a man with a gun over there, telling me I got to beware. There's battle lines being drawn. US Mint Reports Unprecedented Buying Spree Of Physical Silver Submitted by Tyler Durden [...]
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| Why 2011 Won’t be Much Better for the Housing Market Posted: 13 Jan 2011 06:38 AM PST Home prices have now fallen farther from their peak than happened during the Great Depression. Sorting through the news this morning, we detect a common thread: IOUs gone bad and the inevitable response – a search for tangible wealth. Since 2006, the average home price has fallen 26%, according to Zillow.com. That's a greater percentage than the 25.9% drop registered from the plunge that helped kick off the Great Depression from 1928-1933. And for the record, home prices have now fallen for 53 straight months. They fell 0.78% in November, the fastest pace since February 2009. Still, that trend remains in the works. Look for a 20% increase in the number of foreclosure filings this year, says RealtyTrac. The real estate forecasting firm says 2.87 million homes got a notice of default, auction or repossession last year – up only 2% from 2009. The foreclosure pace slowed briefly during Q4 2010 following the "robo-signing" scandal. But the pace is already picking up again: Foreclosures grew 4% between November and December. "There are 5 million seriously delinquent loans not yet in foreclosure," says RealtyTrac's Rick Sharga. "They've got to eventually get in the pipeline unless the homeowners cure the defaults." That ultimate in paper promises, the US dollar, is taking a severe hit today. The dollar index has tumbled to 79.1, its lowest level so far in 2011. Ordinarily, this would put some wind in the sails of gold, but not today. The spot price sits at $1,384. No doubt this will give cheer to the "gold-is-a-bubble" crowd…but overnight Byron King sent us a compelling pie graph that tells us how gold still pales in comparison to other assets:
That's impressive enough… But when you look at it historically, it's simply staggering. Here's a chart sent our way by Gold Switzerland's Egon von Greyerz, showing gold and gold stocks as a percentage of global assets:
Dare we point out that all four of those larger bars happened to mark major stock market bottoms? Addison Wiggin Why 2011 Won't be Much Better for the Housing Market originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."
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| US Mint Reports Unprecedented Buying Spree Of Physical Silver Posted: 13 Jan 2011 06:23 AM PST
Three days ago we noted that in just the first week of January, the US Mint had sold 2,221,000 ounces of silver "a number which if run-rated would be an absolutely all time monthly record," A quick glance at the tally today, shows that something very scary is going on. In the subsequent three days, the number has surged by 50% and has hit 3,407,000 ounces of silver! In just the first 12 days of the month we have already surpassed the total monthly sales of 9 separate months of 2010. And some additional observations on what is becoming a physical buying frenzy from CoinNews.net:
Mike Krieger presents the following disturbing observation on this trend: "In the first 12 days of January 3.4 million silver eagles have been sold. I have never seen anything like this. The amount of physical being taken off the market on this paper sell off is EXTRAORDINARY. We must be VERY close to the end." Whoever has adopted JPM's legacy paper silver short position is in for some very troubling days ahead.
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| Posted: 13 Jan 2011 06:15 AM PST We have taken the last few days to watch developments in all the various charts, indices, ratios and the trading in the gold and silver futures markets. Like everyone else, we are trying to decide whether the early year profit taking will remain dominant or if demand will once again ramp higher and overwhelm it. Our instinct, which we shared with Vultures in last Sunday's full Got Gold Report, is that we are due for a corrective phase for gold and silver. But we have to admit that our confidence in that assessment is not absolute. It's yet another reason we Vultures use trading stops in our short-term positioning rather than attempting to divine market tops. ...
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| Hourly Action In Gold From Trader Dan Posted: 13 Jan 2011 06:14 AM PST Dear CIGAs, Click chart to enlarge today's hourly action in Gold in PDF format with commentary from Trader Dan Norcini
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| GoldCore notes GATA's evidence of gold market manipulation Posted: 13 Jan 2011 06:05 AM PST 2p ET Thursday, January 13, 2011 Dear Friend of GATA and Gold: Today's commentary at the GoldCore blog by Mark O'Byrne notes the seemingly coordinated selling of gold on the London PM fix and the unwillingness of the financial news media and many gold market analysts to confront the evidence of market manipulation produced by GATA over the years. O'Byrne's commentary is headlined "Gold Manipulation? Important Gold Chart -- 1,000 Days of Average Intraday Prices" and you can find it at GoldCore here: CHRIS POWELL, Secretary/Treasurer 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 http://theyukonroom.com/yukon-eblast-static.html Vancouver Resource Investment Conference http://cambridgehouse3.com/conference-details/vancouver-resource-investment-conference-2011/15 Cheviot Asset Management Sound Money Conference Phoenix Investment Conference and Silver Summit Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Prophecy Drills 71.17 Metres of 0.52 percent NiEq Prophecy Resource Corp. (TSX-V: PCY) reports that it has received additional assays results from its 100-percent-owned Wellgreen PGM Ni-Cu property in the Yukon, Canada. Diamond drill holes WS10-179 to WS10-182 were drilled during the summer of 2010 by Northern Platinum (which merged with Prophecy on September 23, 2010). WS10-183 was drilled by Prophecy in October 2010. Highlights from the newly received assays include 71.17 metres from surface of 0.52 percent NiEq (0.310 percent nickel, 0.466 g/t PGMs + Au, and 0.233 percent copper) and ended in mineralization. For more drill highlights, please visit: http://prophecyresource.com/news_2010_nov29.php
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| Gold Versus Defective Economists and Delusional Leaders on Drugs Posted: 13 Jan 2011 05:42 AM PST For 2011, there is no sign of slowing for the default mechanism of quantitative easing. The only question is, at what point will this junkie overdose terminally?
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GFMS, a precious metals consultancy firm, released its Gold Survey 2010 this morning which had pretty bullish news for gold. GFMS expects prices to break $1,500 by the first half of the year and even rise to $1,600 in late 2011 or early 2012. The main factors are expected to be low interest rates and global sovereign debt fears, both of which were key to gold's 2010 pop. The group expects jewelry demand to wane but to pick up on any correction as seen over the past week in emerging markets…
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