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- Another Consequence of Zero Interest Rates
- More on Mr. Greenspan
- Physical Bullion Market Tight - Paper Sell Off Due to "Momentum Monkies"
- The long view on gold
- 50% PLEASE
- Unbelievable reports of "mass animal deaths" continue to pile up
- A new "high-tech" indicator says recovery could be just around the corner
- This unusual development suggests silver is about to explode higher
- Sarkozy : Paris ne veut pas remettre en cause le dollar, ni contrôler les capitaux
- Alan Greenspan Advocated For A Gold Standard - In 2007
- Gold Market Update
- Spec Money Exits Gold & Silver but Remains Heavily Long Other Markets
- Silver Market Update
- Selection of Gold Mines charts, monthly
- Sunday night - could it be for real?
- Master Credit Plan of the Global Elite
- China is to Gold as the US is to Paper Currency
- Stealth Symbolism, and a Rare Earths Update
- Bullion Sell-Off Blamed on ‘Momentum Monkies’
- Gold, Oil & the Contrarian Mindset
- Monetary Aspects of the Gold Price
| Another Consequence of Zero Interest Rates Posted: 24 Jan 2011 04:54 AM PST Andy Sutton submits: Over the past two years, I have visited the topic of the consequences of our new zero rate world on several occasions. Despite media ramblings about "free" money stimulating the economy and igniting another 2005-esque period of time, there have been several very negative consequences. Obviously, pathetic rates of return on what are traditionally referred to, as ‘risk-free’ assets are one well-understood development. There are others. This week we’ll take a look at the specter of zero-rates from a risk management perspective and demonstrate exactly how much our world has changed. Perhaps, ironically, the news is not all bad; there is a bit of a silver lining in here! The ‘Pre-Crash’ World Complete Story » |
| Posted: 24 Jan 2011 03:49 AM PST This reply from "Retired" was posted on American Thinker in response to an article similar to Mr. Greenspan: Please Go Away. The points are appropriate. Monty,we are all in for a wild hairraising ride in the next 5-10 years. Many People may salivate at the idea of $6,300.00 gold but what they may not realize [...] |
| Physical Bullion Market Tight - Paper Sell Off Due to "Momentum Monkies" Posted: 24 Jan 2011 02:36 AM PST |
| Posted: 24 Jan 2011 12:44 AM PST We'd still like to see a deep decline in the gold price. Too many people are getting onto gold. Most of them have no idea of what they are doing. Like readers of MONEY magazine, they're buying the yellow metal as a speculation. |
| Posted: 24 Jan 2011 12:23 AM PST I've noted in the nightly updates that gold is now deep in the timing band for a daily cycle low. My best guess is gold should tag the 38% Fibonacci retracement before bouncing out of that short term bottom. However the stock market still hasn't moved down into it's yearly cycle low yet.Both gold and stocks are now due for a major yearly cycle low. This is a much higher degree correction than a daily or intermediate cycle pullback. So the corrective moves in both gold and stocks should be very severe. I would be very surprised if both don't correct at least to the 50% retracement.   The dollar is now moving into the timing band for another short term bottom. I expect the rally out of that coming bottom to drive the final leg down in gold and to power the move down into the yearly cycle low for stocks. While I fully expect gold to bounce off the 38% retracement I doubt that will be the end of the correction. A yearly cycle low usually has to do more damage than that, especially if it's coupled with the massive selling pressure of stocks also moving down into a yearly cycle low. Those that want to speculate could enter precious metal positions at around $1325, but be prepared to get stopped out if gold dips back below that point next week on it's way down to $1290. Personally I'm going to wait until I think the stock market has bottomed before I'm ready to jump back into heavy positions.        This posting includes an audio/video/photo media file: Download Now |
| Unbelievable reports of "mass animal deaths" continue to pile up Posted: 23 Jan 2011 11:50 PM PST From The Economic Collapse: Just what in the world is going on out there? Large groups of animals are keeling over dead, thousands of birds are falling out of the sky dead, and millions of dead fish are washing ashore all over the globe. Something is happening. Do any of you know what is causing all this? Because I sure don't. This all seemed to start around the end of December when mass bird and fish deaths began to be reported all around the world. Normally "weird" news stories like this kind of fade away after a time, but reports of bird deaths and fish deaths continue to come in, and now there are even reports of large groups of land animals suddenly dropping dead. As these reports from all over the globe continue to pile up, it doesn't take a "conspiracy theorist" to figure out that something very much out of the ordinary is going on. Unfortunately, at this point, we have a whole lot more questions than we do answers. ... The following is just a handful of the reports that have poured in from all over the globe during the past week or so.... Read full article... More Cruxallaneous: The "mass animal death" mystery is growing Gold SHOCKER: Alan Greenspan's stunning admission Inflation HORROR: A trillion dollars could soon flood the economy |
| A new "high-tech" indicator says recovery could be just around the corner Posted: 23 Jan 2011 11:39 PM PST From Newsmax: The news last week that Apple's Steve Jobs is taking a leave of absence was a big story. But something else about the company got far less attention and could be even more important to investors this year. Corporations "are adding iPads to their approved device list at an amazing rate," Peter Oppenheimer, Apple'sIchief financial officer, told analysts Tuesday. Apple's products, more known for their consumer appeal, are now used by employees of Wells Fargo, Archer Daniels Midland, DuPont, and others. Splurging on $500 iPads is a sign that the business cycle is starting to turn and that companies are starting to spend the record amount of cash they've accumulated. If the trend is real, companies will do what consumers haven't — spark a strong economic recovery. That could push the... Read full article... More Cruxallaneous: Porter Stansberry: You must prepare for a crisis NOW Shocking admission from Tim Geithner: U.S. on the brink of catastrophic collapse A huge threat to your freedom is gathering strength (WARNING: extremely controversial post) |
| This unusual development suggests silver is about to explode higher Posted: 23 Jan 2011 11:36 PM PST From Investment Postcards from Cape Town: Although the silver price has declined by 11% over the past three weeks, tightness in the physical market continues as the metal is again in backwardation (i.e. the spot price is higher than the futures price). James Turk of GoldMoney provided the following comments to King World News: "Silver is in backwardation which is an extremely important development. Backwardation happens regularly in most commodities, but it is rare in the precious metals. "Silver is in backwardation not just in the short-term, this time it is extending twelve months forward! The last time this happened was in January of 2009. Over the next few weeks, silver rose from about $10.50 to $14.50, roughly a 40% move higher. The key to understanding backwardation is that the price must rise to... Read full article... More on silver: The No. 1 reason you must own gold and silver now Ten things you need to know before buying gold or silver Silver crisis brewing: European shortages spread to the UK |
| Sarkozy : Paris ne veut pas remettre en cause le dollar, ni contrôler les capitaux Posted: 23 Jan 2011 10:41 PM PST La France ne veut pas remettre en cause le "rôle éminent" du dollar ni instaurer un "contrôle des capitaux" dans le cadre de la réforme du système monétaire international, dont elle a fait une priorité de sa présidence du G20, a déclaré lundi le président Nicolas Sarkozy. Evoquant le "socle" de sa réforme, il a rappelé, lors d'une conférence de presse à Paris, trois solutions auxquelles Paris n'est pas favorable... Read |
| Alan Greenspan Advocated For A Gold Standard - In 2007 Posted: 23 Jan 2011 09:54 PM PST
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| Spec Money Exits Gold & Silver but Remains Heavily Long Other Markets Posted: 23 Jan 2011 05:57 PM PST There are many ways to measure market sentiment. We use surveys, put-call ratios, fund flows data and for commodities especially, the commitment of traders reports (COT). Lately, we've noted the improving sentiment picture for Gold. As a market weakens sentiment will naturally become less bullish. In this case, sentiment has weakened considerably yet Gold is only 6% off its high. Most interesting in particular is the divergence between the COT data for Gold and Silver and the rest of the commodities. The speculators (non-commercials) according to the COT data are positioned more bullishly in Copper, Oil, Corn and Wheat while they've cut back long positions in Gold and Silver. First we see the chart of Gold and the commercial traders' net short position at the bottom. The commercials' short position is down 32% in the last several months. In other words, the speculative long position in Gold is down 32% and is at its lowest point since the middle of 2009. Meanwhile, lets take a look at Copper. Back in mid 2010 when Copper fell below $3.00/lb, the commercials' net position was neutral. Now their net short position is the highest in at least several years. It is not shown in the charts but open interest in these markets remains near recent highs while open interest in Gold and Silver are 10% and 14% off recent highs. This is another sign that speculation in Gold and Silver has diminished but not in the other commodities. We'd also note that per sentimentrader.com, public opinion has declined from 73% bulls to 62% in Gold and from 86% to 72% in Silver. In the larger picture, Gold and Silver are in an enviable position. While they've been in corrective mode, they've only declined marginally while shedding the speculative "hot" money that in fact, continues to reside in other markets. Moreover, as the economic recovery stagnates and more monetization is forced on the US and other governments, Gold and Silver will reassert their leadership. Money will come out of bonds in favor of the premier hard assets, Gold and Silver. If this analysis appeals to you, then join us at our professional service for a free 14-day trial as we navigate the bumpy but rewarding bull market in the high potential juniors. Jordan Roy-Byrne, CMT
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| Posted: 23 Jan 2011 05:00 PM PST While silver has performed as predicted in the last update posted on 11th January and has broken to successive new lows as its correction has progressed, it does not now look like it will drop to the downside targets that we earlier projected. Instead it now looks like we are very close to a reversal to the upside. |
| Selection of Gold Mines charts, monthly Posted: 23 Jan 2011 02:00 PM PST |
| Sunday night - could it be for real? Posted: 23 Jan 2011 01:18 PM PST Of course the idiot talking heads quickly shifted their opinions back to being against PMs after the first down day of 2011, but could this be a sign of life? Up $8 so far. Not much percentage wise, but the downturn has be called for lesser moves. :bandit: |
| Master Credit Plan of the Global Elite Posted: 23 Jan 2011 12:58 PM PST --At last. A prediction of the world's economic future that is as bombastic and grandiose on the positive side as your editor's is on the negative side. Investment and urbanisation are the twin engines that will drive global GDP from $62 trillion last year to $143 trillion by 2030, according to Gerard Lyons at London's Standard Chartered. --This is the superest of "super cycles." Lyons reckons it will be only the third time in human history you've had a chance to invest in the kind of synchronised global growth spurt that lifts all the world's boats—big and small—on the rising tide of prosperity. He says the first such super-cycle included the four decades before World War One. The second super-cycle included the three decades after World War Two. --This position is going to get a lot of air time at the upcoming World Economic Forum in Davos, Switzerland. That's where the smartest, best-dressed, most loquacious people in the world will meet in April of this year to discuss how much better the world is getting. And if you're one of the underwriters of globalisation or a firm that's taken advantage of the globalisation of labour, the world HAS been getting better and better. --But here is a question: how were those two previous super-cycles of global growth different? The answer? One was based on sound money, free trade, and occurred in a world with relatively low personal and corporate taxation (there was no income tax in fact), and governed by the Rule of Law (instead of the corporatist welfare/warfare State we now suffer under). --The other "super cycle" was what we'd call the "Keynesian super cycle." It had one attribute in common with the previous cycle, namely the whole world used the same monetary standard. In the 19th century it was the gold standard. In the 20th, it was the U.S. dollar standard. --But the post-World-War-Two cycle was not really the product of growing, non-coercive global trade. It was the product of shattered economies having to rebuild and reindustrialise (Germany and Japan). The U.S. enjoyed unrivalled supremacy on global markets because its industrial machine was undestroyed and consumer credit released years of pent-up war-time demand. --If the Davos crowd is right, you can expect to see two massive trends. The first will be a $100 trillion credit boom to finance the Third Super Cycle. "Credit is the lifeblood of the economy, and much more of it will be needed to sustain the recovery and enable the developing world to achieve its growth potential," write the people who apparently missed the fact that we just had a disastrous credit boom. --But let's assume the trans-national global elites are right on this one. If they are, you should probably buy coal, copper, oil, and energy, or the companies that explore, find, and produce them. So looking on the bright side for Australian investors, all you have to do if the Davos crowd is right is...well nothing. Just sit back and get rich! --BHP, Rio Tinto, Santos, Woodside...these companies will reap a profit harvest of biblical proportions in the coming Third Super Cycle. If steel prices are set to rise by 66% this year alone, then the Pilbara will be to Aussie investors as Ghawar has been to the House of Saud. --But what if "credit" isn't the lifeblood of the economy? What if "credit" is the lifeblood of zombie economies, where real resources are misallocated to uneconomic projects? What if credit accelerates the depletion of scarce resources based on fictitious demand? And what if new credit is just a transparent attempt to recapitalise the global financial system with a new kind of global currency? --Well, that's a lot of what ifs. Who knows what the world will be like in 20 days, much less twenty years? But here's a prediction for the Davos set: your plans to unleash a Third Super Cycle of global growth based on $100 trillion in trans-national credit growth are going to fail spectacularly. Tomorrow, how it will happen. Similar Posts: |
| China is to Gold as the US is to Paper Currency Posted: 23 Jan 2011 10:31 AM PST Big drop in gold yesterday - down $23. Oil fell hard too. Otherwise not much action... We'd still like to see a deep decline in the gold price. Too many people are getting onto gold. Most of them have no idea of what they are doing. Like readers of MONEY magazine, they're buying the yellow metal as a speculation. Most likely they're going to lose money. Almost everyone who speculates on gold loses money. Don't ask us why. It's just one of those Iron Laws of investing. Gold goes up for 10 years straight. Speculators notice. They jump on board. And then the train runs off the tracks. That's just the way it works. Besides, remember that this Great Correction is not over yet...not by a long shot. It has barely begun to correct the excesses of the Bubble Era. A quarter of all homeowners are said to be underwater on their mortgages - that still needs to be sorted out. And the whole financial industry - with the collusion of the Fed - is sitting on trillions of dollars' worth of mortgage backed securities, pretending that they are good credits. There are still major bankruptcies ahead...and deflation of assets prices. And in all the sturm and drang of it, the price of gold could go down too. But if you're acquiring gold, you have some powerful competition. As nations become rich and powerful, they accumulate gold. Those that are getting weak and poor give it up. Here's The Financial Times with the latest news:
Asians build their holdings of gold. Americans add to their supplies of paper money. The Fed is adding some $600 billion of it in the first half of the year. And it is already considering what to do next. How about this: stop. Admit that you've been a fool. Renounce QE, Keynes and the devil too. And all their works. But that's not going to happen. Because liquidity masks insolvency; and inflation disguises deflation. The feds are providing liquidity and inflating the money supply with the only thing they have left - paper money. And as long as the money flows...they can pretend that everything is okay. Things are quiet. Everybody is happy. Confident. "...experience suggests that quiet periods do not extend indefinitely," wrote Reinhart and Rogoff in their history of monetary crack-ups. Meanwhile, smart investors are buying gold...and hoping the price falls so they can buy more. And more thoughts Yesterday, we began telling you about our visits with our strategic advisors...that is, people who advise us about what to do with our family money. One of them runs a fund that focuses on India. The other runs a fund in Germany. Both are looking for bargain stocks - one in the Old World. The other in the New World. Yes, Asia is the New World now...America is part of the Old World. And both of our strategic partners told us the same thing: it's gotten a lot harder to find bargains. So what do you do, we asked. "Just keep looking..." was the answer. We were explaining the difference between investing for yourself and investing for your family. If you're investing for yourself you usually have fixed objectives - often retirement financing. Since you know when you will need the money, you need to focus on investments that will pay off in the allowable time. Trouble is, the trends that pay off most tend to be very long term. And very hard to time. Gold, for example, is probably going to pay off in a big way - some day. It has been in a bull market for a decade. It is hard to imagine such a powerful bull market ending in a whimper... Most likely, it will end in a Big Bang...as the price goes vertical. We've been saying for a long time that the Dow and gold will probably come to the same number, sooner or later. Maybe around 3,000. Maybe 5,000. Whatever it is, it will be a big payday for people who've stuck with gold. But what if you need money next year...or the year after? And what if you buy gold today and it drops 50% - as it did during the early '70s...in the middle of a huge bull market? Bummer, right? But if you're investing for the family, you can take the long view. You can buy gold, bury it...and forget it. Maybe the next generation will need it. Just don't forget to tell someone where you buried it! Regards, Bill Bonner. |
| Stealth Symbolism, and a Rare Earths Update Posted: 23 Jan 2011 10:31 AM PST When US Defense Secretary Robert Gates visited China last week, his hosts chose that particular time to test-fly their new "stealth" aircraft, dubbed the J-20.
There appears to be symbolism at work here. The most direct interpretation is that the timing of the first flight of this new Chinese airplane was meant to insult Sec. Gates, the man who last year canceled the - far more advanced - US F-22 program. Then again, perhaps we should all calm down and believe what a Chinese military spokesperson said. He helpfully explained that the weather at the test site, Chengdu, finally lifted and it was a nice day for a flight. Yes, of course. What to believe? Hey, we may never know. Which leads to the next item. Rare Earths Crackdown This week, Chinese President Hu Jintao is visiting Washington, DC, to discuss US-China issues with President Obama and other dignitaries. One would think that the diplomats from each nation would pass the word for everyone to keep a lid on developments that could somehow cast a shadow over a high profile state visit. So what are we to make of the announcement, out of Beijing, that the Chinese Ministry of Land and Resources has brought 11 rare earth mines under state control? The Ministry announced that the 11 mines, covering an area of 978 square miles, were the first batch of "state planned mining zones" for rare earths. According to news accounts, Chinese authorities stated that the government's goal is to strengthen "protection and reasonable development" of the rare earths sector. Really? Why not just say that the weather was good, and it was a nice time to nationalize some more rare earths mines? Consolidation and Higher Prices This news about rare earths may not exactly be thunder out of China. But under the circumstances, it sure touches a nerve because China already controls about 97% of world's rare earth resources. Indeed, as you probably know, in recent months China has tightened control over rare earths by slashing quotas for overseas shipments, halting unauthorized exports, hiking export taxes and cracking down on heavily polluting mines. The overall picture is that China is consolidating a formerly fragmented industry. The result is - and will continue to be - industrial consolidation, stronger state control and generally higher prices in the future. China is already enjoying greater returns from its diminishing rare earths exports. Earlier this week, China's Ministry of Commerce reported that China's rare earths exports totaled 35,000 tonnes (metric tons) in the first 11 months of 2010, exceeding the posted annual quota of 30,300 tonnes. With soaring international prices, the value of China's rare earths exports jumped by 171% from 2009. Looking ahead, the Commerce Ministry announced last month that it's slashing rare earths export quotas by about 35% for the first six months of this year. According to an account in The New York Times, with very solid reporting by Keith Bradsher, mining in the "southern end of Jiangxi Province, ha[s] been placed under [China's] national planning authority. That step removes administrative oversight of mining from provincial and municipal control." The Chinese View Let me make a few points here, based on my observations over time, as well as what I heard Chinese representatives say during a recent trip to Hong Kong:
Here's the bottom line. There's a great future for the rare earths industry in the West... but you have to be careful about chasing momentum. You need to invest wisely, with a focus on companies that can actually deliver an end product after managing years of capital expenditure, and forming-up many systems of systems. Regards, Byron King, |
| Bullion Sell-Off Blamed on ‘Momentum Monkies’ Posted: 23 Jan 2011 10:00 AM PST After gains in Asia, the precious metals have come under pressure in Europe. The recent sharp sell off has seen gold fall 5.7% in January. |
| Gold, Oil & the Contrarian Mindset Posted: 23 Jan 2011 10:00 AM PST The chart outlines a key support level which may eventually be tested. If that price level breaks down, a major correction in gold will be underway and price could potentially test the $1,250 price level. |
| Monetary Aspects of the Gold Price Posted: 21 Jan 2011 04:45 PM PST |
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