Gold World News Flash |
- Unusual COT Action, Bullion Banks Cover Shorts, Swap Dealers Hammer Gold
- What’s With Those Financial Stocks?
- In The News Today
- US Dollar Closes At Lows Of The Week
- Meet GATA's board at conclusion of Vancouver conference
- Guest Post: Ook And Mook Invent Money, Wealth And Taoism
- Will China's Yuan Overtake US Dollar?
- Egypt: Rock the Casbah!!!!!
- Fed Traders Buying Billions in U.S. Debt, Nation Risks Credit Downgrade
- Who Holds the Trump Cards in the China vs. US Poker Game?
- Global Insurrection Against Banker Occupation: All people everywhere unite and buy some Silver; the universal ‘color revolution.'
- Stock Market Elliott Wave Analysis and Forecast for Week Starting 24th Jan
- Ireland’s Titanic Bailout at Risk, Iceland looms ahead
- Egypt Proactively Preparing For Tunisian-Style Rioting: Airport Intercepts 59 Outbound Gold Shipments Worth Tens Of Millions
- This is like “The Bad Lieutenant” meets “Leaving Las Vegas” – Crash JP Morgan Buy Silver
- Crash JP Morgan Buy Silver – interesting American coins from when ‘our money used to be worth something.'
- Peter Schiff's latest vlog
- Weekly precious metals market review at King World News
- Gene Arensberg: Bullion banks now least short in gold since 2008
- Michael Pento Recaps The Key Economic News Of The Week
- Gold Standard Fully Supported by Alan Greenspan
- High Wages and Economic Prosperity, Part I
- From Squeeze to Crush (Part Two of Two)
- Gold, Oil, and the Contrarian Mindset
- Weekend Edition - January 22, 2011
- The Main FX And Commodity Charts For The Upcoming Week
- Jean-Claude Juncker Says Not To Rule Out Europe Becoming A Ponzi Protectorate
- Unusual COT Action, Bullion Banks Cover Shorts, Swap Dealers Hammer Gold
- Trader Dan Comment?s On Greenspan?s Gold Standard
- Unbacked Money, 40 Years On
- Gold, Crude Oil, and the Contrarian Mindset
- Gold Moves Lower as Stocks Reach Their Key Resistance Level - What's Next?
| Unusual COT Action, Bullion Banks Cover Shorts, Swap Dealers Hammer Gold Posted: 22 Jan 2011 05:10 PM PST HOUSTON (GotGoldReport.com) -- More unusual action in the positioning of the largest traders of gold futures in New York surfaced in the Commodity Futures Trading Commission (CFTC) Commitments of Traders (COT) Report released Friday, January 21. The report is for large trader positioning as of the close on Tuesday, January 18. Gold closed Tuesday at $1,367.91, down $13.27 the ounce from the previous Tuesday. From the disaggregated COT data, it is pretty clear who was behind this week’s weakness in the gold bullion market, and it wasn’t the big U.S. reporting banks – this time. Indeed, as spot or cash market gold was moving 1% lower for the week (Tuesday to Tuesday), the category of COMEX commercial traders the CFTC classes as Producer/Merchant/Processor/Users (PMs); the category of traders that we believe includes the largest U.S. bullion banks, covered or offset 16,173 contracts of their existing net short positioning, moving from 149,434 to 133,261 l...
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| What’s With Those Financial Stocks? Posted: 22 Jan 2011 03:26 PM PST Mark J Lundeen [EMAIL="Mlundeen2@Comcast.net"]Mlundeen2@Comcast.net[/EMAIL] 21 January 2011 Excitement in the gold and silver market this week makes me want to lead off with a look at the progress of Wall Street's bear raid on rational valuations. Let's first look at gold. At the close of trading on January 21st, gold was down 5.74% from its last all-time high. What's the big deal? I haven't got a clue. Well, that's not exactly true as I know that Wall Street has been talking up their pathetic "earnings" on financial shares and equities and talking down gold and silver, hoping to fool retail precious metal investors into swapping a winning hand for one of Wall Street's losers. Just listen to some of these people on CNBC: gold is down less than 6% from its last all-time high on January 3rd, and all they can talk about is how this is a sure sign that gold is doomed as an investment. Apple computer goes down 12% in one day when Steve Jobs announces th...
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| Posted: 22 Jan 2011 03:03 PM PST View the original post at jsmineset.com... January 22, 2011 12:53 PM Jim Sinclair's Commentary The sheeple run as China’s public buys and Russia curtails supply to the market. This is nothing new. China buys gold and the world follows The Chinese are building on a trend that's likely to last By Myra P. Saefong, MarketWatch Jan. 21, 2011, 12:01 a.m. EST SAN FRANCISCO (MarketWatch) — Gold prices have lost around $75 an ounce this year but analysts are unfazed by the drop, with many betting the slump in prices will soon be cut short as the Chinese New Year feeds an increase in global demand that's destined to last. "We are entering a period of strong seasonal growth in gold demand and Chinese New Year is a big part of that," said Brien Lundin, editor of Gold Newsletter. "Physical demand has been supporting the gold prices on the downside even during the typical slack periods, and I expect that upcoming increase in demand will also support the price, but at...
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| US Dollar Closes At Lows Of The Week Posted: 22 Jan 2011 12:38 PM PST The US Dollar fell across the board following a surge in global risk appetite. Solid corporate earnings by General Electric and a record high in a German confidence survey helped drag the safe-haven greenback lower, triggering a ... Read More...
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| Meet GATA's board at conclusion of Vancouver conference Posted: 22 Jan 2011 12:19 PM PST 5:16p PT Saturday, January 21, 2011 Dear Friend of GATA and Gold: Here's a reminder that GATA will be participating in the Vancouver Resource Investment conference, to be held Sunday and Monday at the new Vancouver Convention Centre West on Coal Harbor. Many GATA favorites will be speaking and many resource companies will be exhibiting. Admission is free if you register in advance. You can learn all about the conference here: http://cambridgehouse.com/conference-details/vancouver-resource-investme... At the conclusion of the conference, starting at about 5:30 p.m. Monday, GATA's Board of Directors plans to meet friends at the Lions Pub, 888 West Cordova St., just a couple of blocks away from the convention center. CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf Join GATA here: Vancouver Resource Investment Conference Cheviot Asset Management Sound Money Conference Phoenix Investment Conference and Silver Summit Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php
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| Guest Post: Ook And Mook Invent Money, Wealth And Taoism Posted: 22 Jan 2011 09:33 AM PST
Submitted by Charles Hugh Smith from Of Two Minds Ook and Mook Invent Money, Wealth and Taoism Demonstrating Humankind's remarkable ingenuity with financial and philosophical innovation, Non Sequitur's Stone Age geniuses Ook and Mook invent money, wealth and Taoism with only sticks and stones.
From The Way of Chuang Tzu by Thomas Merton:
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| Will China's Yuan Overtake US Dollar? Posted: 22 Jan 2011 07:27 AM PST US President Barack Obama is hosting China's President Hu Jintao to discuss their economic co-dependence, currency and trade. Does this mean the US is losing ground to China's new found success? RT's Kristine Frazao is joined by Andrew Gavin Marshall from the Centre for Research on Globalization and Michael Hudson, Professor of Economics at the University of Missouri.
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| Posted: 22 Jan 2011 07:22 AM PST Egypt Proactively Preparing For Tunisian-Style Rioting: Airport Intercepts 59 Outbound Gold Shipments Worth Tens Of Millions Share this:
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| Fed Traders Buying Billions in U.S. Debt, Nation Risks Credit Downgrade Posted: 22 Jan 2011 07:22 AM PST Fed Traders Buying Billions in U.S. Debt, Nation Risks Credit DowngradeFed Traders Buying Billions in U.S. Debt, Nation Risks Credit Downgrade At the same time, Moody's and Standard & Poor's warned the triple-A sovereign debt rating of the United States is in jeopardy of being downgraded if there continues to be a deterioration in the negative fundamentals of the United States, including the trillion-dollar federal-budget deficits President Obama has run in the last two years.
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| Who Holds the Trump Cards in the China vs. US Poker Game? Posted: 22 Jan 2011 07:08 AM PST
In my last article, I outlined the current financial/ economic relationship between China and the US. In particular I focused on the manner in which China is diverting its money and resources away from the US Dollar and US economy.
Indeed, in my opinion, when push comes to shove it is China, NOT the US who holds the trump cards on the major issues. Here is a list of the trump cards I perceive. I’ve referenced this list previously in a report on the Fed’s Quantitative Easing Program 2, but I believe it bears reiteration:
1) Rare earths production (China controls 93% of global production). 2) US Treasuries ownership (a decision by the #1 holder to dump would start a global rush from the US Dollar) 3) Derivatives: China could simply tell its banks and firms to renege on all derivatives deals, not just the commodity ones (commodity derivatives only comprise 2% of global derivatives, interest rate-based derivatives, in contrast, comprise 80% or so of the $600 TRILLION derivative market. 4) Interest rates hikes: a series of interest rate hikes could greatly damage the US via its derivatives market (see #3 above) or the US Dollar, which currently pays next to nothing.
In contrast, the US’s primary strengths are its indebtedness (it could potentially renege on its debts to China, though this would likely kick off a systemic implosion too), its military (which is already stretched thin due to the wars in the Middle East), and its reserve currency (which China is already moving to confront).
In plain terms, China has the upper hand here. So be prepared to see any of the above cards played in the coming years depending on how things play out between the two countries.
In closing, I want to stress that none of my statements are meant to come across as US-bashing nor do I think the US is somehow “finished” from an economic standpoint. The history of this country has been one of continually re-inventing itself via conflict and I fully believe that it will successfully emerge from its current economic problems (though this process will take years).
Moreover, I do not wish to come across as a disciple of the “Chinese growth miracle” doctrine, which has saturated the financial community. The Chinese economy faces its own major issues particularly regarding inflation, over-capacity, loose monetary policies and infrastructure needs beyond the coast cities.
Indeed, in some regards it is clear China is currently in something of a bubble at least from a real estate and financial speculation perspective. This bubble, when it pops, will set the country’s growth prospects back dramatically. The Chinese economy will have its downs as well as its ups just as the US did during its ascendancy to power in the 20th century.
However, to me it is clear that the overall big trends in this picture are that China is taking aggressive steps to attain super-power status while the US is something of an empire in decline. Thus, going forward the US will face greater and greater challenges from China, which has proven to be more forward thinking in terms of gaining economic clout in recent years. These challenges will likely play out in terms of trade wars or even actual physical warfare, so be prepared for shortages of goods, or potentially even violent conflict in the coming years.
Best Regards,
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: 22 Jan 2011 07:06 AM PST The 25 Countries Whose Governments Could Get Crushed By Food Price Inflation MK: For many years now I've been hearing about the dangers of the 'liberal media' when in fact liberalism, aka, 'left wing' interests have been dormant for 25 years since the Reagan/Thatcher revolution that deregulated Wall St. and squashed labor. Here's the deal [...]
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| Stock Market Elliott Wave Analysis and Forecast for Week Starting 24th Jan Posted: 22 Jan 2011 06:56 AM PST The US markets closed out the week with their first weekly decline on friday, after seven consecutive weekly gains. Economic reports were good: seven up, three down, and one flat. Year end earnings reports, thus far, have been better than expected. On the economic front the NY FED, building permits, existing homes sales, leading indicators, weekly jobless claims, the monetary base and the WLEI all improved. Housing starts, the Philly FED and the M1-multiplier was down, while the NAHB housing index remained flat. For the week the SPX/DOW were mixed, and the NDX/NAZ were -2.4%. Asian markets were mostly lower -1.3%, European markets were mixed +0.8%, the Commodity equity group was mixed -1.1%, and the DJ World index was -0.8%. Bonds were -0.6%, Crude slid 3.2%, Gold lost 1.2%, and the USD declined 1.2%. Next week the FED concludes its two day FOMC meeting on wednesday, two days before the Q4 GDP report on friday.
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| Ireland’s Titanic Bailout at Risk, Iceland looms ahead Posted: 22 Jan 2011 06:53 AM PST
The first funds available under the bailout were provided by the raiding of the Irish retirement fund by its bankers. The next steps were to be funded by the EU and IMF funding sources, once the people of Ireland were legally subjected to the bailout requirements. The bailout never made it to a full vote before the collapse of the Fianna F&cute;il party. This leaves Ireland in the unique position of being able to reclaim its future, by denying its past. The citizens of Ireland have not accepted the bailout. The coalition is not expected to be able to put the matter to a vote before the election. “All we know is we are going to get an election on or before March 11 but that is about it,” said Micheal Marsh, professor of politics at Trinity College Dublin, calling the events of the past week “bizarre.” “If the conditions in which all of this was going on were not so serious it really would be farcical.” The people are clear they plan on voting for anyone who will fight the bailout. This makes the chances of a post-election bail out vote of acceptance unlikely. If the Bailout fails to be voted on in the coming days, it may never make it to a vote. The Irish people are overwhelmingly against the loss of their Sovereignty because bankers were allowed to take outsized risk. The fact that these same bankers were allowed to book extremely large bonuses for bankrupting the nation is at the core of the problem.
“We’re at an important turning point in many ways,” Finance Minister Steingrimur J. Sigfusson said. “We’re mainly trying to present our own case, which we think is good enough to make a convincing story that Iceland is a safe place to lend money to.” “The economy is turning to growth and we think it’s about time to start seriously preparing to make a move on the international financial markets,” he said. “The long-term developments have been very favorable and the CDS on Iceland is now lower, or around the same, as it was well before the banking crisis.” Today, Iceland’s Sovereign CDS swaps are at levels before the crisis. They have dropped below the level of Portugal and Spain. The nation had its first organic growth in the last two years, from July through September. CDS on Iceland’s five-year debt traded at 310 basis points on Jan. 10, compared with 359.6 for Spain and 650 for Portugal, according to CMA data available on Bloomberg. Iceland is sitting on large FX reserves, and due to its small number of actual citizens, it is in no need for actual funding. The first bond offering since the crisis will be small in size, but large in symbolic terms. Iceland will be fully rehabilitated; no one can say the same about any of the EU states following the proscribed internal deflation approach.
The only question about Ireland today, is if they are going to stay debt slaves of their banks, or are they going to embrace a return of Sovereignty to the Emerald Island. H/T TD @ Zerohedge Links of interest to the story
Confessions of a Macro Contrarian www.jackhbarnes.com
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| Posted: 22 Jan 2011 06:41 AM PST
After a week ago we learned that the central bank of Tunisia had parted with 23% of its gold stash courtesy of now deposed president who fled the country with a 1.5 ton shipment of gold, it appears that Egypt is preparing for a comparable spike in revolutionary activity. Only unlike the now former Tunisian president whose gold sequestering actions were retroactive and thus, quite lucky to succeed, Egypt has taken proactive measures. According to Egypt News, the country's airport has intercepted 59 shipments of gold directed for the Netherlands "worth tens of millions." The gold, as well as an indeterminate amount of foreign currencies, was hidden in pillow cases: uh, cotton may not show up on X-Rays, but gold sure does. We eagerly await to learn how big the decline in the country's official holdings 75.6 tonnes of gold will be after this most recent episode confirming that gold is precisely money. And all this happening despite gold's complete and thorough inedibility.
From News Egypt, google translated from the Arabic:
In other news we urge readers to listen to Jim Rickards most recent interview with King World News discussing everything from gold, silver, Greenspan, the Fed, QE the US Dollar and much more (link). h/t Scrataliano
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| Posted: 22 Jan 2011 06:39 AM PST
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| Posted: 22 Jan 2011 06:23 AM PST
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| Posted: 22 Jan 2011 06:15 AM PST MK: Good recap on the week, strength in the Euro and its impact on Gold and Silver (and weakness in dollar). The good news is that Gold and Silver tends to do better rallying against a falling dollar than against a falling Euro. Bond market continues to fall. Share this:
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| Weekly precious metals market review at King World News Posted: 22 Jan 2011 06:01 AM PST 11:05a PT Saturday, January 22, 2011 Dear Friend of GATA and Gold (and Silver): The weekly precious metals market review featuring Bill Haynes of CMI Gold and Silver and Dan Norcini of JSMineSet.com has been posted at King World News here: CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf Join GATA here: Vancouver Resource Investment Conference Cheviot Asset Management Sound Money Conference Phoenix Investment Conference and Silver Summit Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Prophecy Drills 71.17 Metres of 0.52% NiEq Prophecy Resource Corp. (TSX-V: PCY) reports that it has received additional assays results from its 100-percent-owned Wellgreen PGM Ni-Cu property in the Yukon, Canada. Diamond drill holes WS10-179 to WS10-182 were drilled during the summer of 2010 by Northern Platinum (which merged with Prophecy on September 23, 2010). WS10-183 was drilled by Prophecy in October 2010. Highlights from the newly received assays include 71.17 metres from surface of 0.52 percent NiEq (0.310 percent nickel, 0.466 g/t PGMs + Au, and 0.233 percent copper) and ended in mineralization. For more drill highlights, please visit: http://prophecyresource.com/news_2010_nov29.php
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| Gene Arensberg: Bullion banks now least short in gold since 2008 Posted: 22 Jan 2011 05:53 AM PST 11a PT Saturday, January 22, 2011 Dear Friend of GATA and Gold: Gene Arensberg writes today at the Got Gold Report that there's a whole lotta short-covering going on in gold. Arensberg writes: "The largest, best-funded, and presumably the best-informed large hedgers and short sellers of Comex gold futures have become the least confident in lower gold prices since the Thanksgiving from Hell in 2008." Arensberg's analysis is headlined "Unusual COT Action: Bullion Banks Cover Shorts, Swap Dealers Hammer Gold" and you can find it at the Got Gold Report here: http://www.gotgoldreport.com/2011/01/unusual-cot-action-bullion-banks-co... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Receives Permit To Mine at Ulaan Ovoo in Mongolia VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY, OTCQX: PRPCF, Frankfurt: 1P2) announces that on November 9, 2010, it received the final permit to commence mining operations at its Ulaan Ovoo coal project in Mongolia. Prophecy is one of few international mining companies to achieve such a milestone. The mine is production-ready, with a mine opening ceremony scheduled for November 20. Prophecy CEO John Lee said: "I thank the government of Mongolia for the expeditious way this permit was issued. The opening of Ulaan Ovoo is a testament to the industrious and skilled workforce in Mongolia. Prophecy directly and indirectly (through Leighton Asia) employs more than 65 competent Mongolian nationals and four expatriots. The company also reaffirms its commitment to deliver coal to the local Edernet and Darkhan power plants in Mongolia." The Ulaan Ovoo open pit mine is 10 kilometers from the Russian border and within 120km of the Nauski TransSiberian railway station, enabling transportation of coal to Russia and its eastern seaports. Thermal coal prices are trading at two-year highs at Russian seaports due to strong demand from Asian economies. For the complete press release, please visit: http://prophecyresource.com/news_2010_nov11.php Join GATA here: Vancouver Resource Investment Conference Cheviot Asset Management Sound Money Conference Phoenix Investment Conference and Silver Summit Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going: GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf
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| Michael Pento Recaps The Key Economic News Of The Week Posted: 22 Jan 2011 05:52 AM PST
From Michael Pento of Euro Pacific Capital Fence Sitters Jump In The number of Americans filing first-time claims for unemployment insurance payments fell 37,000 in the week ended Jan. 15, the biggest decline since February 2010, to 404,000, figures from the Labor Department showed today. The four-week moving average dropped to 411,750 from 415,750. While the trend in claims is no doubt headed in the correct direction, it is important to stress that the current level of initial unemployment claims is still above the trailing 10 year average of 396,486. That fact is amazing given the massive number of layoffs which occurred during the last 3 years. So layoffs are still above trend and hiring is below trend. Those are the facts. The big jump in mortgage rates caused the bulk of fence-sitters to jump into the real estate market. Existing Home Sales jumped 12% to reach a 5.28mm annualized rate. However, home sales dropped YOY and median prices were also down 1% from the year ago period. For all of last year, purchases decreased to 4.91 million, the fewest since 1997. Those who were timing the bottom of interest rates to buy a house have now made their commitment. Therefore, the real estate market is set to take another dip down as rates continue to rise and the economy and job creation continues to stagnate. The Philly Fed came in at 19.3 for January, which declined from the previous reading of 20.8. The bigger news here was the rise in the prices paid component, which increased to 54.3 from 47.9 and was the highest reading since July of 2008. Slow growth and inflation will remain with us until the next crisis arrives in just a few years time. Which, we should all know by now will consist of a U.S. sovereign debt and dollar crisis.
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| Gold Standard Fully Supported by Alan Greenspan Posted: 22 Jan 2011 05:48 AM PST "On Wednesday, the COMEX experienced an epic event in the silver spread market. GLD ETF adds 653,831 ounces. SLV ETF has withdrawal of 4,249,437 ounces. Interview with Jim Rickards and John Hathaway...and much more. " Yesterday in Gold and Silver As I mentioned in this column yesterday, I'm at the Vancouver Resource Conference...and this column is going to be as short as I can make it. The gold price didn't do much on Friday anywhere on Planet Earth...and the low price tick [$1,337.00 spot] occurred in New York minutes after 9:30 a.m. Eastern time. Gold then traded sideways for the rest of the day...and closed down $3.20 from Thursday's close. Silver's trading pattern was similar, but it hit a new low for this move down when 'da boyz' pulled their bids shortly before the London open at 8:00 a.m. GMT...and the tech funds found themselves selling into a vacuum...and down went the price. The low was around $27.05 spot. From there, the silver price recove...
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| High Wages and Economic Prosperity, Part I Posted: 22 Jan 2011 05:47 AM PST In my writing, I typically focus upon exposing the current economic myths and deceptive propaganda which continually emanate from the mainstream media. However, thanks to some recent questions and materials supplied by readers, I have found my gaze drawn back through time. In this look back, I have come across economic myths and propaganda which are nothing less than shocking. For more than four hundred years, Western economies (and the deluded theorists who have been allowed to guide those economies) have focused upon two extremely simplistic and somewhat opposite "models" for our economies. In this respect, I am indebted to John Maynard Keynes. While Keynes may have been utterly inept as an "economist", he is more than adequate as a "research assistant". Keynes tells us that the older of these too economic models (by far) is "mercantilism", while the more recent theoretical model is that of "free trade". For those readers who become phobic whenever exposed to economic jargon, relax. I have no intention of bombarding you with complex jargon. Indeed, as I alluded to earlier, these economic models are shocking for their simplicity (among other things). Both of these models centered on the need to have a "balance of payments" surplus for one's economy. There is nothing controversial here. A nation having a balance of payments surplus is like a corporation which makes a profit. No nation (or corporation) can survive over the long term as a money-losing enterprise. However this aspect of economic theory has obviously been totally (and conveniently) forgotten by all of our politicians and all of our modern "theorists" (i.e. banker apologists). For the benefit of the precious metals enthusiasts out there, the "surpluses" that these nations and economists coveted above all else were not surpluses accumulated in banker-paper, but rather surpluses of gold and silver. For more than four centuries, those who accumulated the gold and silver were considered history's winners, while those whose gold and silver was taken from them were the losers. We can see the obvious result of such thinking through the rampant corruption of modern, Western precious metals markets. Mercantilism is by far the older of these two economic models, and can be thought of as an "adversarial" system of economic management. In this law-of-the-jungle philosophy, nations aggressively sought to out-maneuver competing nations in creating their balance of payments surplus – in the simplistic belief that there could only be "winners" and "losers" in any economic system. If you didn't try to "screw the other guy" then they would certainly try to "screw" you. Conversely, free trade is a much more cooperative economic system, in that thanks to the wonders of "comparative advantage" it was theoretically possible that most (or even all) economies could simultaneously be "winners". To reiterate, this is all simple stuff. The doctrine of comparative advantage stipulates that if all nations focus on producing the goods/services which they can produce the best, then through the mechanisms of "free markets" and global commerce an optimal equilibrium can be achieved where (in theory) everyone is a winner. While free trade can immediately be seen as a more enlightened approach to global commerce, it should not be seen as some "theoretical breakthrough". Rather, all it did was to mirror the general change in attitude in Western cultures, which (for the first time in history) sought to use diplomacy and negotiation as the principal tools of "foreign policy" rather than war, and more war. Mercantilism was an economic model of "constant war", while free trade was a model (supposedly) based upon cooperation and mutual advantage (i.e. enlightened self-interest). Keynes characterizes mercantilism and free trade as being in many respects opposite to each other, yet notes that both schools of thought have some shared beliefs. Here is where this previous theoretical work becomes interesting. Any time more-or-less opposing views share a common belief, this is highly suggestive that such a belief is flawed (with respect to at least one of the competing theories). While it is possible for opposing systems to share valid, common beliefs/goals, such scenarios clearly represent the "exception" rather than the "rule". With respect to my own analysis, the shared belief in which I am most interested is the belief of both schools of theorists that minimizing wages (for the average worker) was a critical component of economic prosperity. Some will accuse me of twisting the meaning of the work of Keynes and others here, in that these renowned theorists typically talk about the virtues of a "stable wage-unit". I would argue that such double-talk is very transparent. Look into the work of these theorists in detail, and we will observe a remarkable 'coincidence'. All of these theorists warn of the "great danger" of rising wages (i.e. wages being too high), but none of these theorists have ever been able to see any harm in falling wages (i.e. wages being too low). Indeed, all that low wages have ever represented to these titans of economics are high profits for corporations (i.e. the very wealthy who own those corporations). Clearly, an economic system which possesses a large, permanent, extreme bias against "high wages" while having demonstrated a multi-century "love affair" with low wages is not a system which believes in keeping wages "stable", but rather in keeping them as low as possible. |
| From Squeeze to Crush (Part Two of Two) Posted: 22 Jan 2011 05:46 AM PST Continued from From Squeeze to Crush (Part One of Two). There is another, far more subtle yet sinister economic force at work which is, in the longer run, even more negative for US equity valuations than the profit margin crush discussed above. This is the erosion of the capital stock, which has been underway for some time. Capital erosion is arguably the single most pernicious if generally unseen side-effect of systematically inflationary monetary policies. One of the major failings of mainstream, neo-Keynesian economics is that it doesn't have a coherent theory of capital formation and, hence, no theory of its opposite, capital erosion or depreciation. For the most part, Keynesian analysis takes the capital stock as given and assumes that it grows at some long term potential growth rate, with the business cycle occasionally adding to or, in a recession, subtracting from this growth rate. The most obvious weakness of this approach is that, by taking the capital stock largely as a given, Keynesian analysis fails to consider, for example, how tax, regulatory, fiscal and even monetary policies can create incentives or disincentives for entrepreneurs to grow the capital stock over time. The best explanation for this glaring omission is that growth (or erosion) of the capital stock is enormously difficult to model. Indeed, we would argue that it is impossible. One reason for this is the central role played by business confidence, what Keynes himself referred to as "Animal Spirits". If entrepreneurs are confident, they invest. As such, most mainstream economics treats the bulk of changes in tax, regulatory, fiscal and monetary policy as essentially neutral when it comes to the capital stock. To entrepreneurs directly engaged in investing in and profiting from the capital stock, however, they are anything but. There is an alternative school of economics, known as the Austrian school, which places the capital stock front and center, notwithstanding the impossibility of modeling it directly. The reason should be obvious: It is the capital stock that ultimately provides for all economic goods. If one wants to understand why economies grow and prosper or stagnate over time, rather than merely understand temporary fluctuations in output, one needs to focus on the capital stock. At the current juncture, with the central bank trying to reflate asset values with monetary inflation, it is important to understand just how such policies impact the capital stock over time. Sadly, rather than helping to grow the capital stock, in fact they erode it, even if we can't easily quantify at what rate. We have addressed the topic of capital formation in a previous Amphora Report (Vol 1/15) but approach it here from a different angle, which is that of arguably the most prominent Austrian economist, Ludwig von Mises. With respect to monetary inflation and its destructive effects on the capital stock, von Mises made the following observation: [Monetary inflation] falsifies accounts of profit and loss. If the value of money falls, ordinary bookkeeping, which does not take account of monetary depreciation, shows apparent profits, because it balances against the sums of money received for sales a cost of production calculated in money of a higher value, and because it writes off from book values originally estimated in money of a higher value items of money of a smaller value. What is thus improperly regarded as profit, instead of as part of capital, is consumed by the entrepreneur or passed on either to the consumer in the form of price reductions that would not otherwise have been made or to the laborer in the form of higher wages, and the government proceeds to tax it as income or profits. In any case, consumption of capital results from the fact that monetary depreciation falsifies capital accounting. Von Mises is making a subtle but powerful point here, demonstrating how inflation, even in small amounts, distorts rational economic calculation, resulting in businesses consuming their capital when, in fact, they believe it is constant or growing. As such, one does not even need to believe that inflation damages business confidence to understand why it causes fundamental economic damage. Confidence can remain constant, yet inflation, though unseen on the surface, is undermining the economy by eroding the capital stock over time. Now consider a booming business with soaring profits, yet one that pays out a substantial share of those profits as annual bonuses to senior employees and, of course, dividend payments to shareholders. Consider further that said business is operating in an environment of rapid monetary (and credit) inflation. Finally, let's say that this business is a bank and that the bank's capital is comprised of small amount of low-risk, liquid assets held on the balance sheet as a loss reserve for risky commercial or residential loans or securities holdings. Well, we have just described the US banking sector, which perhaps completely naïvely paid out huge bonuses (and substantial dividends to shareholders) in 2004-07, thereby unwittingly draining its real capital base immediately prior to the great financial crisis of 2008! So do you see where the capital base went? To employees and shareholders of US banks, where it resides to this day. They are now happily "consuming" with the appropriated capital of their firms, some of which incidentally used to belong to US taxpayers, against whose wishes their so-called representatives in Washington, DC, decided to seize this capital at a critical moment in 2008, when the financial markets were demanding an immediate re-capitalization. This is quite possibly how von Mises, were he alive today, would describe the TARP program. Would he be as furious as US taxpayers are today? Perhaps. Von Mises was highly conservative in his use of language, but the TARP episode might have pushed him to use uncharacteristic vitriol. Regards, John Butler, [Editor's Note: The above essay is excerpted from The Amphora Report, which is dedicated to providing the defensive investor with practical ideas for protecting wealth and maintaining liquidity in a world in which currencies are no longer reliable stores of value.] From Squeeze to Crush (Part Two of Two) 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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| Gold, Oil, and the Contrarian Mindset Posted: 22 Jan 2011 05:21 AM PST Over a month ago I began to issue a warning to traders and investors who were long precious metals that a possible correction was likely. Prices were overextended and nearly every 5 minutes a gold investment advertisement was appearing ... Read More...
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| Weekend Edition - January 22, 2011 Posted: 22 Jan 2011 05:00 AM PST Weekend Edition - Casey's Daily Dispatch [LIST] [*]Sign Up Now! [*]| [*]RSS Feed [*]| [*]Print this [*]| [*]Visit the Archives [*]| [*]Email to a Friend [*]| [*]Back to All Publications [/LIST] January 22, 2011 | [url]www.CaseyResearch.com[/url] Dear Reader, Welcome to the weekend edition of Casey's Daily Dispatch, a compilation of our favorite stories from the week for the time-stressed readers. Of course, if you want to read all of the Daily Dispatches from the week, you may do so in the archives at CaseyResearch.com. Uranium vs. Gold By the Casey Energy Team Think gold is the hottest...
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| The Main FX And Commodity Charts For The Upcoming Week Posted: 22 Jan 2011 04:49 AM PST
The schizophrenia at Goldman continues. After one part of the FX trading desk told clients last week to chase the EURUSD up to a 1.37 stop limit, in John Noyce's most recent update on his EURUSD views he notes: "The ST structure is not particularly clear, but we are certainly uncomfortable chasing the recent bounce and are watching for signs of the market again peaking/turning to the downside." Uh... So one part of Goldman says to chase the EUR, while another part says it is not comfortable chasing it. Well, win win. Too bad the rest of us don't have access to the discount window and if all that 5,000x margin does not work out our way, we can't go running to our former co-worker Bill Dudley (not to mention our subordinate Brian Sack who personally came over to us and introduce himself) and demand another bail out. More from Noyce:
Incidentally we agree with Noyce. That said, the biggest concern in EURUSD right now is the 2 year swap which is predicting a substantial pick up in spot :
His comment:
Noyce is also rather bearish on silver, per the 55/200 DMA spread, which is getting "stretched"
Technically silver is getting overbought:
And since commodities are due for a retraction, Noyce also sees some material weakness in store for the AUD (more inside). Full report:
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| Jean-Claude Juncker Says Not To Rule Out Europe Becoming A Ponzi Protectorate Posted: 22 Jan 2011 04:09 AM PST
One of the hottest topics over the past two weeks in Europe has been whether or not the EFSF, or the multi-billion, AAA-rated synthetic CDO that is affectionately called the "rescue fund" (and which we are confident Goldman is somehow betting against as we type), should be allowed to buy back debt of insolvent countries trading at less than par (obviously). Allowing this process to go ahead is nothing less than a wholesale ponzi pyramid, whereby everyone chips in to make everyone that little richer, while in reality the fundamental problem remains, and the only thing achieved is eliminating the need to have a market interest for any country's sovereign debt (something Portugal recently did when it placed a billion or so in debt with China), and completely eliminating market discovery. And while Germany has, as usual, been very much against this proposal, which it sees as one step short of a federal Euro debt issuance authority, it will sooner or later have to cave in to the chorus of demands by everyone who is insolvent, if it wants to keep the Euro, which it does since it is the European equivalent of the Dollar-Yuan peg, and keeps the country's export strength supremacy to the rest of the continent. To that point, earlier today, Eurogroup Chief Jean-Claude Juncker told Spiegel that European leaders should not shy away from a proposal to buy back the bonds of troubled euro member states but should not rely too much on rich countries. "It would be wrong to create taboos but we cannot overstretch the strong countries," Juncker said in an interview with German magazine Der Spiegel seen by Reuters on Saturday ahead of publication. We wonder who they should rely on then: why themselves of course - let everyone chip in a little so they can grab from the rescue fund with both hands, all the while pretending this is a fair and equitable treatment. More from Reuters:
Just the tip:
Aside from the complete and utter idiocy of a glaringly obvious ponzi scheme being supposed to fix Europe's problems, we find it deliciously ironic that somehow Wall Street has managed to convince Europe that a few years after its simian-like asset managers blew up the continent's banking system through wholesale buying of Wall Street-created CDOs, the very same CDO structure is now supposed to rescue the continent. One day very soon books will be written about the greed and stupidity of the by then non-existant block's leaders.
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| Unusual COT Action, Bullion Banks Cover Shorts, Swap Dealers Hammer Gold Posted: 22 Jan 2011 03:59 AM PST More unusual action in the positioning of the largest traders of gold futures in New York surfaced in the Commodity Futures Trading Commission (CFTC) Commitments of Traders (COT) Report released Friday, January 21. The report is for large trader positioning as of the close on Tuesday, January 18. Gold closed Tuesday at $1,367.91, down $13.27 the ounce from the previous Tuesday. From the disaggregated COT data, it is pretty clear who was behind this week's weakness in the gold bullion market, and it wasn't the big U.S. reporting banks – this time. ...
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| Trader Dan Comment?s On Greenspan?s Gold Standard Posted: 22 Jan 2011 03:00 AM PST View the original post at jsmineset.com... January 21, 2011 09:16 PM Friends, I want to go on record with comments about Alan Greenspan's remarks about a gold standard that hit the news today. That this man, who has rightly been criticized for speaking in riddles so that his hearers could take from his comments that which they wanted to hear him say, has now apparently changed his tune once again and yet can do so without the least bit of remorse is infuriating to me. He basked in the accolades of his peers in the financial community being acclaimed, "The Maestro", because of his supposed ability to deal with financial crises and keep the US economy humming along in spite of it all come hell or high water. Yet we all know that his manner of so doing was to ramp up the printing presses and have them running at warp speed, flooding the system with liquidity at the first sign of any potential danger signs. Whether it was Mexico, or Russia, or Y2K, or the breaking of the tech stock bubbl...
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| Posted: 21 Jan 2011 11:01 PM PST |
| Gold, Crude Oil, and the Contrarian Mindset Posted: 21 Jan 2011 09:25 PM PST Over a month ago I began to issue a warning to traders and investors who were long precious metals that a possible correction was likely. Prices were overextended and nearly every 5 minutes a gold investment advertisement was appearing on my television. Additionally gold advertisements could be heard during commercial breaks of many right leaning radio talk show hosts, not that I listen to them or anything.
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| Gold Moves Lower as Stocks Reach Their Key Resistance Level - What's Next? Posted: 21 Jan 2011 09:10 PM PST In our previous free essay we’ve mentioned that mining stocks are at a particularly important crossroad, and whichever they decide to move is likely to determine the way for the underlying metals as well. In the following article we will put another factor into the equation – the general stock market.
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