Gold World News Flash |
- Gold Wealth Tactics: India vs USA
- Gold Seeker Closing Report: Gold and Silver Gain With Stocks
- The US Dollar is MAJOR Trouble
- Silver Butterfly: An Option Trading Lesson
- Gold is Bottoming and Longs Soon to be Rewarded
- JH MINT Sales DATA Summary!
- Guest Post: Oil Price Could Doom Obama
- Bad Housing Advice of the Day, Philly Edition
- Gold Market Commentary: Buyer Of 2,000 December 1,800 Calls Emerges
- Gold Price Ceiling Formed at Roughly $1,345 it Must Break Through that to Rally
- Indications of the Broadest Measure of Money Supply
- Funny to reread all these stories from last year claiming the Euro was weak because it’s a ‘pseudo Gold standard.’ Now the truth can be told, the Euro is killing the dollar right now because it’s a pseudo Gold standard.
- TUESDAY Market Excerpts
- “Physical buyers continue to enjoy the dip in paper silver that is providing them with an attractive entry point.”
- Guest Post: The Mathematics Of Hyper-Inflation
- US Mint Sells Absolute Record 6.4 Million Ounces Of Silver In January, 50% More Than Previous Highest Month
- Are Gold Spreaders the Bad Guys?
- The Importance of Demographics in a Cultural Revolution
- Gold consolidating 2010 gains
- Gold Daily and Silver Weekly Charts
- Way bullish for Gold and Silver
- Got Gold Report – Part II, Silver Flag?
- QE3 On Deck! This Confirms The "Good" Economic Reports Are Bogus
- Hourly Action In Gold From Trader Dan
- Gold Initial Resistance at 1348.50
- The Indifference of the Elites
- In The News Today
- US Dollar Index Is At Key Support
- Jim's Mailbox
- Get more gold, Beijing told
- Gold and Silver Price Decline is Over: James Turk
- Gold Wealth Building Tactics: India vs USA
- When and How Gold Will Begin its Bubble
- Goldman Sachs Whistles Past EU Graveyard?.. Is Middle East Freedom the Bush Legacy?
- WTO Chief sees commodities rising in 2011
- LGMR: Gold Loses 5.9% vs. Top 10 Currencies in January
- To all our fellow silver enthusiasts and liberty-lovers,
- Why Most Consumer Prices Aren’t Affected by Money Printing
- Gold and Silver Circling Whilst Barrick Takes Out Prior High
- A People's Uprising Against the Empire
- Strong US GDP Estimate on… Consumer Spending?
- Precious Metals Bull-Riding
- The Continuing Argument Over Fiscal Policy
- U.S. Army Silver Dollar Proof and Uncirculated Coins Released
- 2011 Grizzly Silver Coin Second in Canadian Wildlife Series
- Gold and silver decline is over, Turk tells King World News
- Hugo Salinas Price: Monetizing silver in British pounds
- Policy makers at Davos see dollar losing reserve dominance
- Gold and Silver Set to Resume Upward Trajectory
- Can Gold and Silver Rally?
| Gold Wealth Tactics: India vs USA Posted: 01 Feb 2011 06:14 PM PST
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| Gold Seeker Closing Report: Gold and Silver Gain With Stocks Posted: 01 Feb 2011 04:00 PM PST Gold climbed $7.45 to $1341.25 by about 8:30AM EST before it fell all the way back to $1325.54 by about 10AM, but it then spiked to a new session high of $1343.25 in the last few hours of trade and ended with a gain of 0.43%. Silver climbed 32 cents to $28.48 before it fell back to $27.858 by late morning in New York, but it also surged back higher in late trade and ended near its late session high of $28.655 with a gain of 1.17%.
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| The US Dollar is MAJOR Trouble Posted: 01 Feb 2011 03:18 PM PST
Earlier today I wrote a piece forecasting the end of the Euro. At that time, I speculated that the Euro would be broken up within the next year.
Then I looked at the US Dollar’s chart.
I've said before that the US Dollar was in BIG trouble... but as of tonight, it's on DEFCON 1 RED ALERT TROUBLE.
As the below chart shows, the greenback needs to rally and rally hard if we’re not going to head into a SERIOUS collapse shortly.
What you're looking at is the US Dollar right on its multi-year trendline. If we take this out now, then we are heading into an inflationary death spiral in very short order.
Indeed, once we take out this line, we're just a few ticks away from triggering the MASSIVE Head and Shoulders pattern the greenback has formed over the last 20 years.
In case you're wondering, this pattern has an ultimate target of 40... a full 50% lower than where the US Dollar is today.
We're talking about hyper-inflation on an order that would make Weimar Germany proud. And if we break the green line above, we're THAT much closer to this becoming a reality.
In plain terms, the end game is fast approaching if not already here. I've long thought the US Dollar had one last rally in it, but looking at the charts tonight I could very likely be wrong.
Indeed, inflation is already exploding worldwide, which means paper money in general is going to be worth less and less on its way to worthless.
If you think the US is immune to this situation, you're in for a very RUDE surprise in the coming months. Indeed, the Fed’s Hoenic just announced there might even be QE 3… and he’s supposed to be one of the Fed HAWKS!
The writing on the wall is clear: the Fed will stop at nothing to destroy the US Dollar in order to prop up the Big Banks. The 308 million of us who don’t work on Wall Street are all going to be thrown under the bus. Don’t let it happen. Take steps now to prepare yourself for what’s to come.
Good Investing!
Graham Summers
PS. If you’ve yet to take steps to prepare your portfolio for the coming inflationary disaster, our FREE Special Report, The Inflationary Holocaust explains not only why inflation is here now, why the Fed is powerless to stop it, and three investments that absolutely EXPLODE as a result of this.
All in all its 14 pages contain a literal treasure trove of information on how to take steps to prepare AND profit from what’s to come. And it’s all 100% FREE.
To pick up your copy today, got to http://www.gainspainscapital.com and click on FREE REPORTS.
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| Silver Butterfly: An Option Trading Lesson Posted: 01 Feb 2011 02:59 PM PST One of the notes that I keep stuck to my computer reads "remember seasonality". For those just now becoming familiar with options, you may assume I am reminding myself not to forget deer season or the opening of the season for striper fishing. Read More...
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| Gold is Bottoming and Longs Soon to be Rewarded Posted: 01 Feb 2011 02:58 PM PST My more recent forecasts for Gold were intermediately bearish from the $1390's area as we saw a clear triple top breakdown from the 1425-1430 ranges about 8 weeks ago. However, the drop to $1310 fulfills a potential Fibonacci pivot low ... Read More...
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| Posted: 01 Feb 2011 01:55 PM PST (Top Sellers!) Silver Stock Report by Jason Hommel, February 1, 2011 I'm publishing this proprietary data so that you can see what products are the most popular right now among the investing public who are buying through our store. Often times, people are concerned that dealers will not recognize a 1 oz. generic round. Yet it is our most popular product to sell. Obviously, top sellers are easily recognized. In January, we had a record month of sales volume, just over $3 million. Of that, about $2.3 million was in sales, and $700,000 in purchases of metal from the public. The difference we had to purchase from other refiners, mints, or wholesalers, at about the mid price, in between our bids/asks on our price board. On occasion, we also sold to other dealers, and those dealer to dealer purchases and sales are not included in these figures, which are only sales to the public. On that sales volume, we made, on average, under 3%, and after costs s...
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| Guest Post: Oil Price Could Doom Obama Posted: 01 Feb 2011 11:39 AM PST
Submitted by Llewellyn King of OilPrice.com Oil Price Could Doom Obama Like death and taxes, the price of oil is always with us. And like taxes, it may be President Barack Obama’s worst nightmare at election time next year. Among forecasters, there is a sharp division between those who see an inexorable rise in the price of oil and those who believe it will stabilize about where it is now. The hawks see gasoline streaking ahead to $4-a-gallon this year and $5-a-gallon in 2012. Others say demand will collapse and it won’t go that high. The Energy Information Administration is very conservative in its forecasts and it gives very high prices only a 10-percent chance of coming about. Adding to the confusion is a nasty little spat between the International Energy Agency in Paris and the Organization of Petroleum Exporting Countries over price, inventory and what OPEC calls “technical factors,” such as pipelines down for repair or the loss of the Deep Water Horizon rig in the Gulf of Mexico last year. IEA is saying that OPEC is keeping its production quotas low to jack up the price—currently just over $90 a barrel and the highest grade Brent crude from the North Sea as high as $99 a barrel—and it is endangering the global recovery with its actions. But OPEC Secretary General Abdalla Salem el-Badri has taken issue with the IEA for roiling the markets with weak data and speculation. “Supplying the world’s media with unrealistic assumptions and forecasts will serve only to confuse matters and create unnecessary fear in the markets,” he said. OPEC, which drastically cut back its targets for production in 2008 with the collapse of the global economy, has, in fact, increased its production by 2.3 million barrels a day while formally not changing its declared targets. OPEC controls about 42 percent of the world’s oil production. What is certain is that world is slurping up more oil than ever. The latest IEA prediction is that daily consumption is increasing and will reach 89.1 million barrels a day as the recovery proceeds. Emerging markets and China in particular are held responsible for the surge. With the exception of two of the savants of the oil industry, the legendary T. Boone Pickens and former Shell Oil Company chief John Hofmeister, comment in the United States has been muted. When asked why the price of oil was so high despite the recession, White House Press Secretary Robert Gibbs brushed aside the question, recommending the reporter ask the secretary of Energy, a physicist who has not spoken on oil pricing. Jack Gerard, president of the American Petroleum Institute, did not offer an explanation when he was asked the same question at a meeting in Washington. The fact is that the price of oil is not determined only by simple supply and demand but by complex premiums and market sensitivities. It is a market that is roiled by wars and rumors of wars and, because oil was the first truly globalized commodity, the premiums can have their genesis far from the futures markets of New York and London. Uncertainty in Russia, turmoil in Central Asia, the ongoing suspense of Iran’s nuclear plans and even corrosion in the Trans Alaska Pipeline System are cranked into the price. No wonder so many hedge funds are involved in oil. Instability is mothers’ milk to hedge funds. There are left-wing blogs that maintain that the price of oil and its occasional spikes are created by elaborate speculative plays on the futures markets in New York and London. The left is traditionally paranoid about oil and oil companies, but who is to say they are not right this time? The memory of Enron is still fresh. One way or another, two things stand out: The chances are that the summer driving season will put pressure on gasoline prices this year, after an extremely cold winter all over the Northern Hemisphere. The conservative (10-percent chance of happening) scenario by the Energy Information Administration says $4-a-gallon gas would come at the end of the summer. The second reality is that the world thirst for oil has not been slaked; as the world prospers, the greater that thirst. In 1974, the heads of 23 democracies lost their jobs because of surging energy prices. Obama, beware.
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| Bad Housing Advice of the Day, Philly Edition Posted: 01 Feb 2011 11:36 AM PST Felix Salmon submits: Erin Arvedlund — yes, that Erin Arvedlund — has a pretty crazy column in the Philadelphia Inquirer, under the headline “Why buying gold may be better financially than buying a house.” It says pretty much what you’d expect: house prices are falling, gold prices are rising, and therefore before you go ahead and buy a house, you should probably consider whether you’d be better off buying gold instead. Arvedlund talked to a bunch of people for this column, mostly rent-a-quote types like Barry Ritholtz and Peter Schiff, but the central conceit is all hers: none of the people she quotes is literally saying that people should make a speculative punt on gold rather than buy a home to live in. Indeed, Schiff comes out quite explicitly and says that homes are not an investment, they’re more of a consumption good. (He’s right.) Arvedlund, here, has committed the journalistic equivalent of mixing toothpaste and orange juice. Either tastes fine on its own: it’s perfectly OK to pen a column pointing out that house prices might well continue to fall, or another one looking at gold as an investment and saying that it has a fair amount of possible upside. The really nasty taste comes when you combine the two. To see just how crazy Arvedlund’s thesis is, look at how she presents it:
Complete Story »
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| Gold Market Commentary: Buyer Of 2,000 December 1,800 Calls Emerges Posted: 01 Feb 2011 11:17 AM PST
From FMX Connect Summary ATM Volatility Curve:
Volatility Smile:
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| Gold Price Ceiling Formed at Roughly $1,345 it Must Break Through that to Rally Posted: 01 Feb 2011 11:10 AM PST Gold Price Close Today : 1339.60 Change : 5.80 or 0.4% Silver Price Close Today : 28.524 Change : 0.350 cents or 1.2% Gold Silver Ratio Today : 46.96 Change : -0.378 or -0.8% Silver Gold Ratio Today : 0.02129 Change : 0.000170 or 0.8% Platinum Price Close Today : 1826.10 Change : 37.30 or 2.1% Palladium Price Close Today : 822.20 Change : 8.55 or 1.1% S&P 500 : 1,307.59 Change : 21.47 or 1.7% Dow In GOLD$ : $185.80 Change : $ 1.51 or 0.8% Dow in GOLD oz : 8.988 Change : 0.073 or 0.8% Dow in SILVER oz : 422.11 Change : 5.15 or 1.2% Dow Industrial : 12,040.16 Change : 148.23 or 1.2% US Dollar Index : 77.02 Change : -0.716 or -0.9% The GOLD PRICE today rose $5.80 to close at $1,339.60. Heaven help me, I am not yet persuaded that gold has turned up. I'm just not. GOLD formed a ceiling in the last 5 days at roughly $1,345. It must break through that ceiling to continue its rally. That it failed to close above $1,340 today also leaves me queasy. Why not? Bear in mind that $1,353 was the last low, and above that $1,363. Belief will only come when gold breaks higher than $1,363. If I'm wrong, I won't be able to hid it, and, in a couple of days I'll belly up and admit it. The SILVER PRICE chart looks much stronger than gold's. Unlike gold, silver today crossed ABOVE its 20 DMA (2836c) and touched the 50 DMA (2870c). Comex closed up 35c at 2852.4c. On the five day chart SILVER has built a long, live oak tree branch, straight out for two days under 2850c. Now this looks like an uptrend, but this last two days is a consolidation. Doesn't say it will break off and fall or keep growing. If it does clear 2850c AND the 50 DMA, then 'twill jump higher. Silver is right on the line of breaking out upside. It simply is peaking out of both sides of its mouth. RSI and MACD seem to be trying to turn up, though. Do platinum and palladium give us any clues? Palladium is bumping up against its highest prices from earlier this month. Platinum stands below its last high ($1,843) and appears to me to be pushing up in a B wave after an A-wave drop, which implies there is a fall coming. However, it has jumped over its 20 DMA, which is positive, as are RSI and MACD. So I am still here holding back and dragging my feet on silver and gold, although metals are certainly tugging and pulling upwards. They'll convince me when Gold clears $1,363 and silver clears 2900c. I'm just too prone to jump too quickly when silver and gold are rising, so I'm trying to hold myself back. If you live in South Carolina, or within driving distance of Columbia, South Carolina, you ought to attend the South Carolina Economic Summit on Monday, 7 February 2011 at 5:30 p.m. EST at 300 Senate Street. Purpose is to educate legislators in preparation for the historic Joint House/Senate Hearing on Sound Money on 8 February 2011 at 4:00 p.m. Listen, I have been working for monetary reform for 44 years, and in all that time I have never seen a better bill introduced to return a state to sound money. Senator David Thomas, Chmn Banking and Insurance Committee and Rep. Mike Pitts are braving all the vitriol and ridicule the media can throw at them and still championing sound money. At dinner on Monday you can hear Dr. Edwin Vieira, without question the world's top authority on constitutional money, as well as Dr. Larry Parks, by computer link-up. You can make reservation and pay the $45 fee at www.SCSoundMoney.com. I am mourning because I won't be able to attend myself. Sometimes the market runs wholly contrary to what you expect, and leaves you feeling a bit lonely. Your mind begins to ask questions, like, "Why are you completely wrong? What do others see that you don't see?" and the old favorite, "Have you lost your mind?" I reckon that just goes with the territory, and anyway I know I am always a little early and am heavily influenced by fundamentals and my metals-bullishness. Consider stocks first: What I said about not paying attention to "safe-haven" causes came back to bite me with the Dow. The 5 day chart looks like a pot, with a handle at 1200, a drop to the pot with a bottom around 11,890, then a jump straight up to the lip and higher at 12,050. So far, I am dead wrong about stocks. Looking more closely, yesterday stocks touched off their 20 day moving average, and instead of striking the warning bell of collapse, they used it as a trampoline (the mixed metaphors are making me seasick) to bounce higher than ever. What meaneth this back and forth? It speaketh with forked tongue out of both sides of mouth. It could be merely a corrective break that continues higher. On the other hand, the drop Friday might have marked merely the first leg down with today the reaction against that, preparing to drop off a cliff tomorrow or next day. RSI is overbought, MACD is trying to turn down. But what do I know? I'm just a natural born durn fool. If I wasn't so Scotch-Irish suspicious genetically, I would believe the Nice Government Men in the white coats who know that it's best for folks like me not to think for ourselves or try to manage our own lives or chew bubble gum and walk at the same time. For some reason that syringe in their hands and that long needle just don't leave me trusting, even though they keep telling me everything is hunky-dory. Shucks, I am so out of step that I don't even trust this rise in silver and gold and I -- the world's most rabid fiat money enemy -- am expecting the US Dollar Index to rise! The world is turned upside-down. Dollar index today ended at 77.019, down 71.6 basis points (0.92%). Clearly I misread the chart in ignoring that slightly lower low yesterday below 77.60, and in calling the longer term chart a breakout from a falling wedge. It sank like a rock today, aborting that beginning. Some support lies there at 77.00. If it sinks past 77, then the next stop is 76.70, then 75.60. That looks a ways from any rally. 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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| Indications of the Broadest Measure of Money Supply Posted: 01 Feb 2011 10:51 AM PST The Gold Report interviewed John Williams of ShadowStats.com, who said, "I continue to track M3, the Fed's broadest measure of the money supply until it ceased publication in March of 2006. Generally, the broader the measure of systemic liquidity, the better it serves as a predictor. In terms of giving a signal for the economy, you have to adjust the growth for inflation." I admit I was kind of dozing off by this time, daydreaming of the bacchanalian excesses made possible by gold and silver shooting up in price as a result of the insane increases in new money being created by the foul Federal Reserve. My reverie seemed so much more interesting than what I thought would be one of those academic exercises where smart people talk about things I don't understand because I am stupid, and probably wouldn't care about even if I wasn't so stupid. With a sudden start, I realized I was wrong! There is quite a lot of useful information in, "What's happened historically is that every time the y...
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| Posted: 01 Feb 2011 10:29 AM PST MK: The following links are stories from last year – when most (except Jim Rogers) were negative on the Euro and one of the most often heard reasons was, ‘this is the problem with the Euro and a Gold standard, too inflexible.’ Well, that was then. The inflexibility of the Euro and its similarity to [...]
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| Posted: 01 Feb 2011 10:14 AM PST Gold price ends higher on softer dollar The COMEX April gold futures contract closed up $5.80 Tuesday at $1340.30, trading between $1326.00 and $1344.10 February 1, p.m. excerpts: see full news, 24-hr newswire…
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| Posted: 01 Feb 2011 10:08 AM PST US Mint Sells Absolute Record 6.4 Million Ounces Of Silver In January, 50% More Than Previous Highest Month Share this:
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| Guest Post: The Mathematics Of Hyper-Inflation Posted: 01 Feb 2011 09:51 AM PST
From Alasdair Macleod of FinanceAndEconomics.Org The mathematics of hyper-inflation We have already passed the point of no return on our journey into hyper-inflation for many paper currencies, and investors seeking to protect themselves from currency debasement should understand why. This opening statement is valid even if we ignore today’s abounding systemic risks. There is a simple reason why monetary inflation becomes an exponential phenomenon. As currency is debased, an increasing quantity of money is required to achieve the same real-money effect. For example, if the quantity of money is increased 25%, the initial benefit to the issuer is a tax of that amount on the holders of previously-existing money stock. To achieve the same tax in real terms for a second time requires a further expansion of 31.25% of the original monetary units, and continuing with subsequent 25% expansions on increasing totals we obtain our exponential series of monetary inflation. In practice, the realisation of the loss of purchasing power a currency suffers depends on how quickly it is transmitted into the general price level, and this can vary considerably; but eventually it is reflected in prices. So we need to consider the likelihood of an improvement in government finances sufficient to eliminate reliance on funding through the printing of money, which is the root of this evil. It is here that governments have great difficulties, which lie generally in the nature of government bureaucracy. In government departments, there is always a complex and expensive structure designed to ensure compliance with the wishes of the executive, and to ensure that public money is properly used. This is why boxes are ticked; why it is so important to employ gender and race equality officers to ensure a department complies with government policy. The process, therefore, overrides the result, and nothing can change this. So when a government restricts public spending, there is no cut in bureaucracy; on the contrary, often more bureaucracy is required to administer the cuts and monitor the results. The consequence is that restraint in public sector spending always feeds through disproportionately to cuts in services, leading to public outcry. And this is precisely the problem faced in Britain today. The Coalition government has adopted a hard line on public spending, following the profligacy of the previous socialist administration. This corrective approach is creating uproar, not only from users of government services and civil servants, but also from the intelligentsia who fail to properly understand the true cost of public services. So Keynesian economists are providing the public with an intellectual argument against the cuts by claiming they are recessionary, and opposition to them is growing. What has become lost in the political debate is that at no time is the Coalition government actually cutting public spending: it is set to rise in every year of this Parliament.[i] The pain expressed so loudly in all sections of the community is solely the result of a reduction of the increase in previously planned expenditure. It is evidence that bureaucracy triumphs over services provided, and it is an illustration of the extreme difficulties politicians face in merely reducing the rate of increase of public expenditure. These difficulties have their roots in the current situation, but a glimpse at the future also confirms government spending has to rise exponentially, with welfare and other future liabilities compounding at an alarming rate. We know that there are more pensions to provide and people are living longer, requiring increasingly expensive care services; and that all this is expected to be funded from the public purse. Less appreciated are the long-term destructive effects of inflation on private sector savings and nominal cost of providing state welfare. In other words, inflation itself has directly increased the burden on the state, and indirectly has ensured there is little private capital to fund any shortfall. Consequently, future public spending is firmly tied to an exponentially accelerating path. In most Western democracies it is already too difficult for politicians to face up to this reality. Instead, they pursue policies conceived through hope rather than any realistic assessment of the prospects, dreaming of an economic recovery that will bring public sector borrowing back under control. This allows governments and their independent statisticians to concoct tables showing economic growth, an improvement in tax revenues, and a reduction in welfare costs as employment improves. There is no actual evidence to support this optimism. A detailed critique showing why economic recovery is a forlorn hope is beyond the scope of this article; but if the private sector is expected to regenerate itself without savings, no sustainable recovery can possibly occur. It will also require an historical precedent: an economy increasingly under government command to actually succeed. Furthermore, governments continue to believe that all that is required is the stimulation of further bank credit, when it was excessive levels of bank credit that created the economic crisis in the first place: this is the quackery of prescribing port to cure gout. And there is very little evidence that meaningful economic recovery is developing. The supposed economic recovery of 2010 was merely statistical, with governments using monetary inflation to puff up the numbers,[ii] and not the start of an improving economic trend. Furthermore, targeting tax increases at high earners discourages the most successful elements in society from further productive effort, and encourages them to redirect their efforts at tax avoidance instead. The consequence of these simple policy errors is to make economic recovery even more remote and reduce actual tax collected, and so spread-sheet forecasts of lower government deficits are even less likely to be achieved. For all these reasons, we can see that socialistic government policies rely on accelerating monetary inflation. As inflation accelerates, it becomes increasingly difficult to escape the compounding effect of this exponential arithmetic. The only way the exponential loss of purchasing power that results from monetary inflation ends is through the complete collapse of fiat currencies. Whether this is brought on by a financial crisis or through hyperinflation is irrelevant: the result is the same. Furthermore, quantitative easing programmes have merely accelerated the trend. Particularly worrying is the dramatic expansion of the monetary base in the US, which has greatly exceeded our theoretical example of 25% by increasing 168% over the last two years. While this is routinely explained as a policy response to the banking crisis, it has the likely effect of accelerating future government demand for printed money even more, speeding up its inevitable demise. For those of us who will be victims of the collapse of paper money, there is little point in hoping that more port will somehow cure our gout: it will not. Nor can we turn to our leaders for salvation: they know not what they do. And to this rough law of the exponential trend of monetary growth we must add the abounding systemic risks present today, which we have ignored in order to simplify this analysis. 1 February 2011 [ii] GDP numbers are deflated by a measure of cost inflation, while monetary inflation is considerably greater. The Increasing monetary input has the effect of raising nominal GDP artificially. See http://www.financeandeconomics.org/Articles%20archive/2011.01.12%20USDGP.htm.
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| Posted: 01 Feb 2011 09:34 AM PST
As the topic of US Mint silver sales is not new to our readers, after we first brought attention to the record January sales by the Mint, we will not dwell much on it, suffice to say that the final January tally is in. And at 6,472,000 ounces, this is nearly 50% higher than any prior month in the Mint's 26 years of published sales history. This has occurred, despite supposed profit taking in the paper silver market in January. And just today, another 50k, were sold. It seems that physical buyers continue to enjoy the dip in paper silver that is providing them with an attractive entry point.
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| Are Gold Spreaders the Bad Guys? Posted: 01 Feb 2011 09:28 AM PST Hard Assets Investor submits: Real-time Monetary Inflation (last 12 months): 0.5% On Jan. 24, open interest in COMEX gold futures slumped 14 percent, as a small hedge fund, SHK Asset Management, unwound long-standing positions. So, whence the ire? Well, the assets of the SHK fund amount to just $10 million, but the value of the fund's gold futures holdings was reported to be $850 million, "the equivalent of South Africa's annual gold production," according to Wall Street Journal reporter Carolyn Cui. COMEX gold open interest dropped by more than 81,000 contracts on Jan. 24. Valued at that day's settlement price, you could say the off-take was "worth" some $11 billion. So where does the $850 million figure come from? The reporter apparently added the contract values of the spread's legs. A spread, however, is a net trade. In its simplest form—a calendar spread—you buy one contract and sell another with a different delivery date. Long December, short April, for example. You get a margin break—a big margin break—from the exchange clearinghouse for such a trade, reflecting the spread's comparatively low risk. As gold prices change, both the December and the April contracts will tend to move in the same direction, but by differing degrees. Thus, you don't have full exposure to 200 ounces (each COMEX contract specifies delivery of 100 ounces of gold), but rather, to the price difference between Complete Story »
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| The Importance of Demographics in a Cultural Revolution Posted: 01 Feb 2011 08:47 AM PST "A kingdom founded on injustice never lasts" – Lucius Annaeus Seneca (tutor and later advisor to emperor Nero) Tunisia…Algeria…Yemen…Egypt…Jordan…the road to $200 oil… And that's just for starters! Tempers are flaring and kingdoms are toppling across the Arab world this week as millions of discontented youths take to the streets to demand the overthrow of their respective leaders. First it was Tunisia's dictator of 23 years, Zine El Abidine Ben Ali, who found his head squarely on the political chopping block. Following a spate of insuppressible food riots across the country, the tiny nation's second president has (after being denied entry to France) since fled to Saudi Arabia, where he is currently residing…although not before his wife, Leila Trabelsi, casually rocked up to Tunisia's central bank to collect 1.5 metric tons of the country's gold – roughly $66 million worth. "That's the trouble with trying to maintain an empire," commented Addison Wiggin in The 5 at the time. "It gets very expensive. And messy." The Tunisian-born, Saudi-residing, US-backed former leader was, as recently as a few months ago, still enjoying some rather generous handouts from Uncle Sam. "Last year," continued Addison, "the Obama administration asked Congress to approve a $282 million sale of 12 'excess' Sikorsky military helicopters to Tunisia with engines made by General Electric. "A deal between the United States and the Ben Ali regime funneled $349 million in US military aid over to Ben Ali over the course of his 23-year regime, official Pentagon figures tell us. "Admittedly, $349 million is not a lot of money considering the trillions the State Department has spent on Iraq and Afghanistan. Still, as just one outpost on the fringe of the empire… these sums begin to pile up." Unfortunately, burning outposts have a historical tendency of bringing the whole fence down. Revolution, ever the last resort for repressed youths the world over, soon spread from Tunisia across the Red Sea, emboldening Yemenis to stampede their capital and to call for the ousting of their own US-backed leader of three decades, Ali Abdullah Saleh. Of course, the mood didn't leave Algeria untouched…nor did it fail to light a spark across America's other "moderate Arab clients," as one blogger wryly referred to them. But this week, the story is all Egypt. Although relatively small, with a total economic output of just $217 billion last year, the Land of the Pharaohs straddles the Suez Canal and is home to the Suez Mediterranean Pipeline, both vital conduits for the delivery of oil and gas between the Red Sea and the Mediterranean. It is little wonder, therefore, that as mobs throng the Egyptian capital, calling for the removal of Hosni Mubarak (another leader seen as sympathetic to the US), London Brent Crude lurched over the $100 per barrel mark. And, at just shy of $92 per barrel this morning, West Texas Intermediate is not far behind. And, as we write, news is crossing the wires that Jordan's King Abdullah II, bowing to public pressure in his own backyard, has fired his government and tasked his new prime minister with implementing new economic policies aimed at giving Jordanians a voice in the political sphere. But is it a case of too little too late? Relays The Associated Press: "The country's powerful Muslim opposition, which had demanded the dismissal of Prime Minister Samir Rifai in several nationwide protests inspired by those in Tunisia and Egypt, said the changes didn't go far enough." Of course, as any disheveled malcontent worth his (or her) Molotov cocktail will tell you, revolutions like those we're now seeing in that oily patch of the world don't happen overnight. They take patience…political ineptitude…and a demographic spark to set the whole thing off. For some, the writing has been on the wall for some time now. But while the mainstream press was busy reporting on the region with pictures like this: Egypt: The "New Iraq"?
…others were pouring over historical documents, doing the math and reaching the logical conclusions. In their 2002 bestseller, Financial Reckoning Day: Surviving the Soft Depression of the 21st Century, Bill Bonner and Addison Wiggin foretold much of the turmoil that would later come to pass, both in the financial markets and in the Middle East. Here's a snippet from Chapter 8, entitled "The Hard Math of Demography": "In his book Revolution and Rebellion in the Early Modern World, the historian Jack Andrew Goldstone argues that the great revolutions of Europe – the English and French revolutions – had one thing in common with the great rebellions of Asia that destroyed the Ottoman Empire and dynasties in Japan and China. All these crises occurred when inflexible political, economic, and social institutions were faced with the twin pressures of population growth and diminishing available resources." Continued Bill and Addison, "A large, unruly, and youthful rural population was a leading cause of social stress in France prior to and during the Revolution." "Likewise," they observed, "the Russian population doubled between the 1850s and the beginning of World War I… The stress of feeding and providing shelter for that many people was too great for the existing order." Sound familiar? Joel Bowman The Importance of Demographics in a Cultural Revolution originally appeared in the Daily Reckoning. Recent articles featured in The Daily Reckoning include the impact of quantitative easing and US debt.
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| Posted: 01 Feb 2011 08:29 AM PST Gold, silver, platinum and palladium all finished out 2010 showing remarkable strength. Gold set a new all-time high of $1,423 per ounce, up 23% since August. Silver rocketed up 67% from just under $18 to $30.84. Platinum gained 20% from $1,509 to over $1,830, and palladium posted a whopping 75% increase from $464 to over $814. These gains have been stunning, to say the least. Yet whenever markets surge so strongly, an ensuing consolidation period is normal and even healthy. Gold and silver are now in just such a consolidation phase, while platinum and palladium continue their upward trend. As we’ve said before, all four precious metals are showing extraordinary resilience in this ongoing mega-bull market, and more gains lie ahead. New record highs coming in 2011 Gold's remarkable gains in 2010 were the result of three main economic drivers, all of which are with us still. First, the renewed sovereign debt crisis in Europe caused investors to flee euros into...
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| Gold Daily and Silver Weekly Charts Posted: 01 Feb 2011 08:15 AM PST |
| Way bullish for Gold and Silver Posted: 01 Feb 2011 08:03 AM PST Here Comes QE3: Hoenig Says “More Quantitatve Easing May Be Discussed” Share this:
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| Got Gold Report – Part II, Silver Flag? Posted: 01 Feb 2011 07:59 AM PST As a major winter storm bears down across the Plains and into Texas sending bitter, stinging arctic air into places where it doesn't belong and isn't welcome; a storm so powerful that forecasters say it could rival the 1967 deep freeze blizzards, farmers and ranchers throughout the Nation's mid-section pray the killing cold will be short-lived. Already expensive hay and grain will be in super-high demand if the cold persists as livestock needs the extra calories for fuel just to survive.
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| QE3 On Deck! This Confirms The "Good" Economic Reports Are Bogus Posted: 01 Feb 2011 07:31 AM PST Feb 1 (Reuters) - The Federal Reserve could debate extending its bond-buying program beyond June if U.S. economic data prove weaker than policymakers expect, Kansas City Fed President Thomas Hoenig said. Another round of bond buying "may get discussed" if the numbers look "disappointing," Hoenig told Market News International in an interview published on Tuesday. Here's the LINK This confirms that the string of economic reports from GDP to employment, and even today's auto sales, are manipulated and misleading. If the "good news" was bona fide, the Fed would be discussing the tightening of monetary policy - raising interest rates and unwinding QE1/2. But the golden truth is that the only policy keeping the banking system from collapsing and the U.S. Government funded is the Fed's printing press. Got gold? Just like diamonds are a girl's best friend, quantitative easing/money printing/currency debasement is a gold investor's best friend! I'm not going to post the charts, but the daily charts for gold and silver look as bullish as I've seen in a long time. The price correction in January has likely set up a very big move in the metals. Pray to whatever you pray to that Eric Sprott's technical analyst is wrong about how high gold/silver may go by this spring, because that would imply that this country is on the verge of some very painful economic/social turmoil... 
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| Hourly Action In Gold From Trader Dan Posted: 01 Feb 2011 07:19 AM PST Dear CIGAs, It looks as if the Dollar's implosion was just too much for the gold market to ignore today. Earlier in the session, it came under selling pressure as the growth trades were jammed on and gold was once again jettisoned in favor of an now almost panic type of buying occurring in the equity markets. However, with the HUI refusing to break down and moving up alongside the rest of the equity world, once the Dollar began increasing its downward speed, buying began to surface in gold that took it through $1336 where it then gained further upside traction moving up towards $1345 and yesterday's session high. The metal continues to have trouble clearing the downtrending 10 day moving average, which is the bare minimum required before the bulls can feel a bit more confident that the bottom in this latest reaction has been forged, but the longer it can stabilize in this general region, the faster it will be able to manage this simply because of the manner in which that average is calculated. Shortly after the close of pit session trading, the usual attack on the metal occurred which took it down below $1340. I am watching Euro gold as the last few days have seen it stabilizing near the €962 level. Yen priced gold has also been stabilizing near the 1090 level the last few days. Yen priced gold has me interested because of last week's downgrade of Japanese debt by the rating agency S&P. I should note here that the fund long side liquidation continues apparently unabated as we witnessed another big drop in the total number of contracts outstanding in gold during yesterday's price retreat. The total open interest remaining in gold is now down to 463,700 contracts. To put things into a bit of perspective, the peak in open interest was 650,764 back in November of last year. Interest is down nearly 190,000 contracts in the last 9 weeks! That gold has only fallen some 6% in the face of this huge exodus of speculative money is remarkable. It tells me that the short side of the market (the bullion banks and the swap dealers) has been aggressively covering shorts at a rapid rate. As said yesterday and at the risk of beating a dead horse – the speculative long side must stop liquidating longs before this market can begin moving higher in earnest. As long as they view rallies as selling opportunities, the open interest will bleed down further. That brings me to the non-stop party that has been occurring in the US equity markets. The S&P put in a top near 1574 at the height of the stock market bubble back in March of 2000. It then collapsed nearly 50% before recovering in late 2002 when it embarked on another run to above 1500 before it peaked near 1586 in October 2007. From that point it then forged a double top on the long term charts as it fell through chart support centered near 1255 as the credit crisis erupted in full force upon the implosion of Lehman Brothers in the summer of 2008. Price continued falling down towards the 750 level which forced a panic in the ranks of the Federal Reserve which then announced its first QE program back in March 2009. From that point on, the index has now gone up 19 months out of the last 24 months to the point where it is now trading ABOVE the level it was last at all the way back in June 2008, just prior to its collapse due to the advent of the credit crisis. I am not sure exactly what supposedly got "fixed" with all this money printing to so improve the economy as to justify a move in the stock market to a level higher than it was at before the inception of the credit crisis, especially with the woes remaining the housing sector and on the employment front. Another way to look at this, based just on the level of the S&P 500, is that the entire credit crisis fallout has been solved and it now has never happened! This madness just goes to prove the old adage:" You cannot fight the Fed", especially when its primary dealers are in there using free money jamming the stock indices higher with the passing of each day. At some point, once the panic among the more prudent money managers and the general public which has been sitting the rally out and watching from the sidelines, begins to take hold and they begin rushing into equities at full speed, Goldman and Morgan will then begin unloading all those longs that they shoved on into the hands of these latecomers to the party. That will keep the champagne corks popping and the toasts flowing as they once again pass out huge bonuses to their "skilled traders" who are only skilled because they got their hands on billions of dollars in free money courtesy of the US taxpayers, their children, and their children's children. Isn't America great! In what is becoming more the norm rather than the unusual occurrence, the CCI (Continuous Commodity Index) made yet another record all time high today as the relentless rise in commodities continues. The Australian Dollar, a key commodity currency, soared back above the par level with the US Dollar today and looks like it wants to take another shot at the peak it put in at the end of last year near the 102 level. Should this currency take out its record high, it would portend further rises in the commodity sector especially in the base metals. Along that line copper finally took out that stubborn overhead resistance near the upper $4.40's and has now gone on to make an all time record high. The cost of plumbing and electrical wire continues to soar. Say Ben, are you seeing this? In a rather ominous development, the Dollar crashed through a strong floor of chart support near the 78 level on the USDX in today's session plunging all the way down towards 77 before it encountered some buying. There is some support on the chart near the 76.50 level which if it cannot hold should see it move down to challenge a major chart inflection point near the 75 level. Ben and company have gotten their wish – they have succeeded in jamming the Dow and the rest of the equities markets higher but they have destroyed our birthright in the process. What makes this so dastardly is that this has been their plan all along – knock the Dollar lower but try to do in a manner that is more of a controlled descent rather than an utter collapse. Paper asset inflation is now moving at full speed ahead and that has the less informed "analysts" praising the Fed's actions but the fact is that if one compares the current equity market ratio to the price of gold, the market has not gone anywhere in real terms when measured against some sort of objective standard of value. Translation – the rally in the equity markets is nothing else but paper asset inflation courtesy of the Federal Reserve. Bonds did pop higher overnight upon their initial reopening of trade but then moved lower as the equities moved higher. Once again, at the very moment of their worst levels of the trading session, even with the CCI moving higher into record territory and the equities partying like the good times are ready to roll, the bonds magically levitated off their worst levels turning what was a full point plus move lower into a modest loss for the day. The Fed's dealers are alive and well. What makes this such a mockery of any semblance of a free market is that at the same time the sharks are front running any Fed action on the next QE bond buy, the talking heads are telling us how wonderful the US economic improvement is becoming. The whole thing is a massive display of senselessness. If the economy was as good as the stock rally is telling us it is, then there would be NO NEED OF ANY FURTHER QE and the bond market would promptly collapse. I am afraid that those who cannot see the utter illogic of it all, are beyond hope. Such things are lost on the trading world however as the only thing that matters in the short term is the technicals and the need to follow the momentum wherever it leads. It will stop when it just stops and until it does, the trading systems will do their thing. Still, I wonder what it must feel like to be able to turn the entire investment world into a group of lemmings or to play the part of the Pied Piper of Hamelin. The HUI is trying to muster a close over the 517 level but thus far has not quite been able to pull it off. The majority of technical indicators are now issuing buy signals from down deeply in oversold territory. That plus the fact that the index has now managed to put in a close above the 10 day moving average which continues to flatten out should begin to attract further buying into the sector. It will now take a solid push down through the 500 level to put the recent low in danger. Good traders will have some money management levels to now work with. Click charts to enlarge in PDF format with commentary from Trader Dan Norcini
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| Gold Initial Resistance at 1348.50 Posted: 01 Feb 2011 07:02 AM PST courtesy of DailyFX.com February 01, 2011 07:06 AM 240 Minute Bars Prepared by Jamie Saettele Gold has held a multiyear support line. However, the decline from 1425.40 is in 5 waves, indicating that the larger trend is most likely down. Price has nearly reached initial resistance from the former 4th wave at 1348.50. Just above there is the 38.2% retracement at 1353.28. This area is reinforced by former support....
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| The Indifference of the Elites Posted: 01 Feb 2011 06:55 AM PST by Addison Wiggin - February 1, 2011
Thus, if 1 million people are demonstrating today in Cairo, guess where most of them fall on the income scale.
"I spent some memorable time in Egypt, back in my days in the Navy, particularly in the mid-1990s as a Navy Reservist. During one military exercise called Bright Star, I saw a lot of Egypt up close. In the company of an Egyptian military driver-translator-minder-handler, I travelled all over the place: Cairo, Alexandria, El Alamein, Suez and more. "There's not much middle class. And the slums of the large cities stretch for mile after mile. It's an urban squalor, the likes of which most North Americans cannot conceive. You have to see it to believe it. The poverty in some areas is stunning, staggering -- as is the indifference of the elites."
Of course, Egypt has shut down Internet access. But Google is offering an ingenious workaround: People can dial a phone number and leave a voice message that's automatically translated into a Twitter message using the identifying tag #egypt.
"It hasn't helped Egypt that in the past 20 years, many of the world's low-end factory jobs migrated to China. The Egyptian 'working' class has been left to toil at the truly local low-wage jobs, where they can't be out-competed by cheap imports from China. Think about the low economic bar that sets. As we write, the military has issued a statement ruling out attacks on civilian protesters. Meanwhile, the government has shut down all the mobile phone networks. How long can Hosni Mubarak hang on? We shall see… [Ed. Note: Yesterday, Byron recommended Outstanding Investments readers sell two companies with oil claims in Egypt -- just to be on the safe side and bag certain gains of 44% and 166%. If you're not a subscriber, you're well advised to keep an eye on other events in the Middle East that could affect oil prices. Byron explains it all in this eye-opening presentation.]
Of course, that's West Texas Intermediate, the stuff that flows into the tank complex at Cushing, Okla., where inventories are near record highs. Brent crude, the standard in much of the rest of the world, is pushing $100, thanks to declining supplies in the North Sea and high demand in Asia.
Remember, 50 is the dividing line between expansion and contraction. At 60.8, the index just turned in its best performance since last May. All five components of the index look strong, too: Employment jumped nearly 3 points, to 61.7, and new orders rose nearly six points, to 67.8. But there's a fly in the ointment: The index for input prices soared from 72.5 in December to 81.5 in January, thanks to rising prices for energy, metals and chemicals. "Many of the earnings reports coming out in the last week have confirmed the underlying 'stagflation' trend developing in the U.S. economy," writes Strategic Short Report editor Dan Amoss. "Stagflation is a general term referring to sluggish growth combined with high or rising inflation." "Stagflation" is bad news for companies whose costs are rising, but whose capacity to pass those costs on to strapped consumers is limited. "Margin squeeze " is what we call it, affectionately. Dan's readers have laid on a couple of trades aimed at profiting from the trend, and it's not too late to get in. Learn all about the strategy right here.
"If we get silver above $28.70," says James Turk of GoldMoney, "that will reverse the trend followers from short to long. This little shakeout over the last couple of weeks has done nothing to change the very bullish fundamental factors that have been driving gold and silver higher." If you want to get on the silver bus, get your recommendations here.
Traders have been unfazed by the emergence, and then disappearance, of a huge position in the London copper market, equivalent to 80% of all the inventory at London Metal Exchange warehouses. (At one point in the process, that position was owned by JP Morgan Chase.) By Jan. 19, that position had been sold into the market, according to the LME's daily records. Copper sold off to below $4.25 in the following days, but launched another big run starting last week. Meanwhile, in the United States, we have the following random incidents of copper theft:
An electric substation? What's with these high-risk thefts? We're still floored by the thieves who broke into a TV transmitter site in Kansas City last year. If the threat of 35,000 volts won't stop you, nothing will.
66.5% of Americans owned a home in the last quarter of 2010 -- the lowest since Q4 1998. The peak was 69.2% in 2004. As we've pointed out before, this number is a farce. Once you take into account "homeowners" who have no equity… or negative equity… the number slides to roughly 43%. Meanwhile, 11% of all U.S. homes are now vacant. Whatever happened to the housing bulls' demographic argument that there will never be enough homes for all new homebuyers and immigrants to the U.S.? Busted.
Gone are the ARMs that were so popular at the peak of the bubble -- where the rate reset after one or two years, forcing most buyers to refinance and fork over big-time fees to the lenders. The most popular ARM now is something called the "5-1 hybrid." The rate is fixed for the first five years and then adjusts annually for the next 25, with rate caps just in case interest rates shoot up. Hoo boy… these might be a good deal for jumbo borrowers who expect to move within five years. But if that's the case, why wouldn't you just rent?
"When the government has co-opted all of a nation's wealth and resources and is pacifying the populace with bread and circuses, it's pretty much a foregone conclusion what's going to happen to the rulers when the bakeries run out of wheat.
"However, I note that there were some 26,000 murders, or more, this past year on our southern border country. Some of the murders quite horrific. The Mexican government seems unable to cope and is nearly completely ineffectual and close to disintegration when viewed as the only avenue for stability. Yet hardly a peep from the media. "Considering our own drift toward s ocialism and the economic and political uncertainty in our own country, it will be interesting to see how things wash out. I hope The 5 stays on top of it all. Thank you." The 5: Byron's still attending a conference in Toronto today, but he had just enough time to pass along this chart of Mexico, similar to the one of Egypt yesterday :
You may recall Mexico is set to become a net oil importer as early as 2012. Judging from this chart, the day of reckoning may be a bit further off than that… but the trend is unmistakable.
"EPA? OSHA? Minimum wage? Litigation/liability expenses? How about all the drilling permitting/restrictions in the energy industry? Americans have no idea how many costs their government over the last 75 years has added to industry's costs that must be added to employee salaries and paid for by industry's customers. "Until Americans realize how our national government has sold out the American worker, there's little hope that needed change can be undertaken.
"Having owned well over 100 patents, I can say with some certainty that they are merely the ticket to the show. Unless you have the money for the lawyers, patents are not worth much in the real world to little companies and inventors, nor are much deterrent to the knock off folks who know the game well." Regards, Addison Wiggin P.S. "Am forced to cancel attendance at the Feb Chill in Rancho Santana due to obligations with declining parent," reads a letter from a Reserve member. "Hopefully, this doesn't put us on anyone's sh@* list, because both of us were truly looking forward to the trip that Resource Trader Alert paid for!" The 5: No hard feelings, and thanks for the kind words. This opens up a spot for our Reserve-Only Chill Weekend this month. The dates are Feb. 15-19, 2011. Reserve members who are interested and can free up their schedule on short notice should contact our man on the scene Marc Brown. (We've got another Chill scheduled for June 7-11, 2011, if you need a little more time to plan.) But yes... the gains you can make with Resource Trader Alert can finance your next getaway, wherever it may be. Readers who followed Alan Knuckman's cocoa recommendation on Jan. 4 -- less than a month ago -- are now up a staggering 480%. Never traded commodity options before? Alan makes it simple and oh-so-lucrative. He walks you through the process right here.
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| Posted: 01 Feb 2011 06:45 AM PST Dear CIGAs, If there is a departure of Mubarak from Egypt that will be seen in history as akin to the departure of the Shah of Iran, upon which the US had its signature.
Jim Sinclair's Commentary This storm is almost as long as this country is. Do you get the feeling Mother Nature is angry at the Banksters and Sheeple that allow this economic and social disaster? Massive Winter Storm Affecting Large Portion of Great Plains and Midwest A large swath of blizzard warnings, winter storm warnings, freezing rain advisories, winter weather advisories and winter storm watches are in effect, stretching from new Mexico and the Southern Plains northeastward through the Midwest and into the upper Mid-Atlantic and New England. Get the latest updates from your local weather forecast office by clicking on the map
Jim Sinclair's Commentary More international QE to infinity. Gold is the only currency with no liability attached to it. See Occum's Razor on Gold posted yesterday. IMF, warning of war, says ready to help Egypt The International Monetary Fund stands ready to help riot-torn Egypt rebuild its economy, the IMF chief said Tuesday as he warned governments to tackle unemployment and income inequality or risk war. Dominique Strauss-Kahn also said rising food prices could have "potentially devastating consequences" for poorer nations, and warned that Asia's fast-growing economies faced a risk of a "hard landing". Overall, according to the IMF managing director, widening imbalances across and within countries were sparking tensions that threaten to derail the fragile global economic recovery — and could even spark armed conflict. As Egyptian protesters gathered in their thousands demanding the departure of President Hosni Mubarak, Strauss-Kahn said: "The IMF is ready to help in defining the kind of economic policy that could be put in place." In a speech in Singapore, he said rampant unemployment and a growing income gap was a "strong undercurrent of the political turmoil in Tunisia and of rising social strains in other countries".
Jim Sinclair's Commentary You know every bit of the world's problems are primarily a product of the damned OTC derivatives and the people who made a fortune due to the Lehman melt down. Sarkozy is the only person with a large platform that has publicly called it. Why do you think Paul Volcker quite Washington? Ireland's outgoing PM officially announces intention to dissolve parliament DUBLIN, Feb. 1 (Xinhua) — Ireland's outgoing Prime Minister Brian Cowen announced Tuesday afternoon that he will officially ask President Mary McAleese to dissolve the Dail (lower house of parliament), paving the way for the general election which will most likely take place on Feb. 25. In a farewell speech to the Dail, Cowen said he will head Aras an Uachtarain (official residence of the Irish president) to advise the president to dissolve the Dail and to summon the incoming Dail to meet at midday on March 9. He said his time as Taoiseach (prime minister) has been a period of great "trial and test." The outgoing Irish prime minister said the common good was always at the forefront of his decisions. Parliament officials expect the Dail's final session to last up to one and half hours. Later, Cowen will be driven to Aras an Uachtarain, where he will ask President McAleese to formally dissolve the 30th Dail, which was formed after the 2007 general election.
Jim Sinclair's Commentary Believe it or not Al Jazeera has become the news service of choice worldwide. There are approximately 2 million people in Tariah Square. This was just reported. A very large public revolution is occurring. http://english.aljazeera.net/watch_now/
Jim Sinclair's Commentary This is not an Egyptian problem, it is a regional problem being outrageously understated by North American media. Jordan's King Abdullah dismisses government in wake of protests Jordan's King Abdullah has dismissed his government and named a new prime minister to carry out "true political reforms," the palace says, according to AFP. Earlier posting: Jordan's King Abdullah has dismissed his government and appointed a new prime minister, AlJazeera reports. The network says the Jordanian government resigned amid protests in the country. Update at 8:24 a.m. ET: The Palestinian Cabinet in West Bank says it will hold municipal elections "as soon as possible," the Associated Press reports. The Palestinian Authority has not held elections since 2006. Prime Minister Salam Fayyad's Cabinet said Tuesday it will set dates for the vote next week.
Jim Sinclair's Commentary Back door QE rescues will be purchases by the Fed via Goldman on state bonds. This will be similar to how the ECB is present in every EU State auction as a primary buyer. Cuomo to Cut New York State Spending by $8.86 Billion, Fire 9,800 Workers New York Governor Andrew Cuomo proposed cutting local school funding by 7.3 percent and reducing Medicaid spending by almost $3 billion in a budget that seeks to close a $10 billion deficit. As many as 9,800 workers may be fired under the spending plan for the third most-populous U.S. state, according to Cuomo's budget documents released today. Aid to 700 school districts, the state's largest expense, would be cut by $1.5 billion from last year to $19.4 billion in the fiscal year beginning April 1. Cuomo, a 53-year old Democrat elected in November, said the state needs to break the cycle of "continually spending more money at levels you cannot afford," as required by laws approved in past years. "More money does not equal better service" in Medicaid or education, he said yesterday. Outlays for Medicaid would be reduced by $2.85 billion, with future growth in the health-care program for the poor tied to the medical-care-costs portion of the Consumer Price Index. The state's existing rules and formulas would have required spending growth of 13 percent this year, Cuomo has said.
Jim Sinclair's Commentary Egypt is not only an Egyptian problem, it is a total Mid Eastern clutch event. A clutch event is one that shifts the gears of the area into something new whose definition will only emerge as it occurs. A clutch event is rare, large and usually not well understood until after it has happened.
Jim Sinclair's Commentary This is extremely good for the sale of low orbit satellite phones with prepaid minutes. Internet 'Kill Switch' Legislation Back in Play Legislation granting the president internet-killing powers is to be re-introduced soon to a Senate committee, the proposal's chief sponsor told Wired.com on Friday. The resurgence of the so-called "kill switch" legislation came the same day Egyptians faced an internet blackout designed to counter massive demonstrations in that country. The bill, which has bipartisan support, is being floated by Sen. Susan Collins, the Republican ranking member on the Homeland Security and Governmental Affairs Committee. The proposed legislation, which Collins said would not give the president the same power Egypt's Hosni Mubarak is exercising to quell dissent, sailed through the Homeland Security Committee in December but expired with the new Congress weeks later. The bill is designed to protect against "significant" cyber threats before they cause damage, Collins said. "My legislation would provide a mechanism for the government to work with the private sector in the event of a true cyber emergency," Collins said in an e-mail Friday. "It would give our nation the best tools available to swiftly respond to a significant threat." The timing of when the legislation would be re-introduced was not immediately clear, as kinks to it are being worked out.
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| US Dollar Index Is At Key Support Posted: 01 Feb 2011 06:44 AM PST |
| Posted: 01 Feb 2011 06:33 AM PST Trouble In Commerical Real Estate Follow the money, not the talk. Commercial real estate (CRE), highlighted by the blue box in the table below, has always been a significant contributor to credit creation in the United States. The table reveals that CRE loans have been contracting aggressively for more than a year. The following headline reads, "The Coming Collapse of Commercial Real Estate is Already Here, Says Davidowitz". I'd say the writing has been on the wall since October 2009. QE to infinity! Table: Breakdown of Credit for Commercial Banking Headline: The Coming Collapse of Commercial Real Estate is Already Here, Says Davidowitz A coming collapse in commercial real estate has been looming for the last couple years, but Davidowitz thinks it has already begun. "I think there has [already] been a partial collapse in the commercial real estate business," he says pointing to the rising number of community bank failures. "I think retail real estate developers better start rethinking the use of their space." There are always exceptions to the rule, but his resounding advice is to stick to commodities and stay away from the retail space, at least for now. Source: finance.yahoo.com
Jim, I found out Tim Wien's banks were heavily into commercial real estate. He didn't get hit by bad home loans but was crunched under bad commercial loans. I'll be curious to see if this is a harbinger of the next wave of collapse. Take care and thanks for all your help! CIGA Dave Dear CIGA Dave, Yes, it absolutely is. Regards,
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| Posted: 01 Feb 2011 06:08 AM PST by Tony Liaw … Xia said relevant departments must maintain the "buy-at-a-low" strategy to boost gold reserves. "Increasing gold reserves can increase the amount of solvency, which is critical for the internationalization of the yuan," said Xia, noting that "the United States did not sell a single gram of gold, despite financial hardship in 2008." [source] RS View: Notable is that the article reports Xia saying "relevant departments" rather than, specifically, the People's Bank of China as one might be inclined to expect. This use of relevant departments, however, is consistent with the method that China used when it had previously accumulated (at least) 454 tonnes of gold over the course of six years through the Chinese State Administration of Foreign Exchange (SAFE) prior to its eventual transfer onto to official reserve books of the PBOC in April 2009. Despite no changes to China's official gold reserves since then, Xia's phrasing gives good reason to deduce that more of the same sort of "off-stage" activity is still underway.
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| Gold and Silver Price Decline is Over: James Turk Posted: 01 Feb 2011 06:04 AM PST "China Central Bank Advisor Urges Increase In Official Gold And Silver Reserves. Egypt and Tunisia usher in the new era of global food revolutions. Jim Rickards speaks twice...and much more. " Yesterday in Gold and Silver Gold jumped over five bucks right at the open, but there was a not-for-profit seller waiting in the wings...and gold was soon down below its Friday closing price...and never made it back above it for the rest of the trading day on Monday, as every rally attempt ran into selling. Volume was very heavy in the first couple of hours trading in the Far East yesterday morning...so it took a fair amount of firepower to keep the gold price down during that time period. Early Far East trading volume is normally extremely light in both metals. That wasn't the case yesterday. It was the same story in silver...with silver up 30+ cents at the Far East open. Every silver rally attempt ran into selling as well...especially the two that occurred at 9:...
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| Gold Wealth Building Tactics: India vs USA Posted: 01 Feb 2011 05:58 AM PST Stewart Thomson email: [EMAIL="stewart@gracelandupdates.com"]stewart@gracelandupdates.com[/EMAIL] email: [EMAIL="stewart@gracelandjuniors.com"]stewart@gracelandjuniors.com[/EMAIL] Feb 1, 2011 1. Into the month of “Feb”, here we go. Towards month 4 of getting richer, here you go. 2. “Pardon me? Stewart, get real. I’m not getting any richer. Gold stocks are down big time since October! My bullion is way off the $1387 highs, never mind the highs of $1430!” – You, Feb 1, 2011? 3. In one corner, of your boxing ring, stands the Western investor. He’s pretty tough. He clenches his fists ready to fight. Well, ok, he doesn’t clench a fist. He clenches a photocopier and a calculator. 4. The Western investor fighter has gold. But all he thinks about is pricing that gold, over and over, and over and over again, in… dollars. 5. In the ...
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| When and How Gold Will Begin its Bubble Posted: 01 Feb 2011 05:50 AM PST Jordan Roy-Byrne - Gold Speculator The bull market in Gold is in its 12th year (globally it began in 1999) but has yet to exhibit any “bubble-like” conditions. In fact, we still see many people referring to this bull market as “the Gold trade,” as if its an aberration that needs to be reversed or corrected. That aside, we know that Gold is under-owned as an asset class. The very well respected BCA Research estimates that globally only 1% is allocated to Gold and that fits with some of the charts that I’ve shown in the past. Institutional accumulation began in 2009 (e.g. Paulson, Einhorn) and we know that phase lasts at least a few years before a bull market gives birth to a bubble. Part of the problem for Gold has been the solid performance of other asset classes through most of the Gold bull market. Stocks performed very well from 2003 to 2007 and from 2009-2010. Commodities performed well from 2001-2002 and in the first hal...
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| Goldman Sachs Whistles Past EU Graveyard?.. Is Middle East Freedom the Bush Legacy? Posted: 01 Feb 2011 05:30 AM PST Goldman Sachs Whistles Past EU Graveyard? Tuesday, February 01, 2011 – by Staff Report The Eurozone's problems are exaggerated – it won't be the centre of the next global crisis, argues Jim O'Neill ... Almost 27 months have passed since the collapse of Lehman Brothers; but judging by what I hear every day, the British public remains in a state of high anxiety about this country's economic future. In the aftermath of the credit crisis, that was understandable – but now that mood doesn't have to persist. The number of countries with lasting credit hangovers is declining. The world's economy grew close to 5 percent in 2010. And this year may see something similar. There are reasons to be hopeful. At the heart of the post-crisis global story is China and its consumer. The more gloomy commentators frequently allude to the fact that the Chinese consumer is only worth just over 35 percent of the country's overall GDP ... In fact, to other parts of China's econom...
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| WTO Chief sees commodities rising in 2011 Posted: 01 Feb 2011 05:30 AM PST by Laura MacInnis and Amena Bakr … "Over 70 percent of the growth will come from commodity-intensive emerging markets. China, India and Latin America, in particular, will be acting as a 'pull' for global commodities," Lamy said. Rising commodity prices could be a boon for countries where raw materials are grown, mined, produced and refined. But higher food prices can also pinch the world's poorest people, who spend almost all of their income on basic staples, said David Nabarro, the U.N.'s special representative on food security and nutrition. [source]
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| LGMR: Gold Loses 5.9% vs. Top 10 Currencies in January Posted: 01 Feb 2011 05:27 AM PST London Gold Market Report from Adrian Ash BullionVault Tues 1 Feb., 08:55 EST Gold Loses 5.9% vs. Top 10 Currencies in Jan., Chinese Wholesale Demand "Non Existent" as New Year Draws Near THE PRICE OF GOLD ticked higher for Dollar investors in London trade on Tuesday morning, but slipped against other currencies as world stock markets rose and government bonds edged back. Copper reached fresh all-time highs, and other base metals hit 2-year highs, after new data showed Chinese manufacturing activity accelerating. Silver prices kicked off February by touching 7-session highs at $28.50 per ounce. "January has not been a kind month" for gold investment, notes Scotia Mocatta in its latest technical analysis, again reminding clients of the "bullish trend line on the weekly chart that comes in just below $1300" per ounce – a trendline starting just after the collapse of Lehman Bros. in Sept. 2008. Priced against a basket of the world's 10 most important currencies by economic ...
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| To all our fellow silver enthusiasts and liberty-lovers, Posted: 01 Feb 2011 05:21 AM PST To all our fellow silver enthusiasts and liberty-lovers, The Silver Circle Fiat Money Bomb has launched! We have already raised over $4,000 just this morning! We have the rest of the day to hit our goal of $10,000. Time to open up your wallets and help out a film that will carry the ideas of [...]
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| Why Most Consumer Prices Aren’t Affected by Money Printing Posted: 01 Feb 2011 04:32 AM PST "Commodities head for longest run since 2000," says a Bloomberg headline. What gives? On Friday, stock markets sold off all over the world. But there was no follow-through on Monday. Instead, the Dow posted another 68-point gain. Gold, meanwhile, lost $7. There's a lot of money in the world. Central banks are printing it! Particularly, the Fed. So what happens when central banks print money? Well, prices move. If you believe the "quantity theory of money" you have to believe that prices will rise. More money in circulation means that there is more money available for every unit of output. So, things that can't be easily reproduced…and things that are priced on the international auction market…go up. Like wheat. Like copper. Like oil. And, of course, like gold. Markets are always discovering prices. Prices go up and down. But they usually find an equilibrium in a fairly narrow range. In a world of real money, prices don't vary that much. But with so much new, ersatz money in circulation, markets have a hard time keeping up. They get bubbly. They discover that yesterday's price was too low…so they move it up again. And then they worry that it is too high, so it drops back again. Generally, as central banks add money, prices move higher and higher…until the bubbles pop. Why don't local items react too? Like the cost of parking…or houses? Well, it's a long story. But the Fed's easy money doesn't lift all prices evenly. Because the money isn't distributed evenly. The Fed prints money, but it doesn't give the money to us. It gives it to the banks. And the banks put it into hedge funds, trading departments, and speculative portfolios. This is what is known as "hot" money. It never gets into consumers' pockets. So, it never is used to buy the ordinary stuff of a domestic economy. Instead, it goes into hot markets – markets for global, auction-priced goods. Those items are soaring…even as the core inflation reading in the US is nearly flat. Oil is at a 2-year high. And check this out. From the Telegraph: Christies auction house has best year in 245-year history. Christie's has announced record sales for 2010 after the auction house enjoyed the best 12 months in its 245-year history. Total sales rose more than 50pc to hit £3.3bn last year, as the company retained its position as the world's largest auction house. Christie's was involved in two-thirds of global artwork sales worth more than $50m (£32m). Works sold over the course of 2010 included Pablo Picasso's Nude, Green Leaves and Bust, which sold for an auction world record £70.3m, as well as the £35.2m sale of Alberto Giacometti's Grande tête mince, both of which were sold on the same day last May. Impressionist and modern art sales [were] Christie's most successful market, with sales [totaling] £767m, followed by post-war and contemporary art sales of £603m. Europe and the US were responsible for the lion's share of sales, but growth was fastest in the company's Asian business, with sales more than doubling to £499m. These price increases are not driven by consumer price inflation. People aren't desperate to get rid of money before it loses value. This phenomenon is driven by greed, not fear. Bill Bonner Why Most Consumer Prices Aren't Affected by Money Printing 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 and Silver Circling Whilst Barrick Takes Out Prior High Posted: 01 Feb 2011 04:18 AM PST Gold and Silver prices are circling unchanged today, but the precious metals miners are acting well. Barrick Gold Corp. (NYSE: ABX) just took out its prior high at 48.42 from Jan 28, and although there is no upside follow-through just yet, my near-term pattern work and momentum oscillators point to 50.50-51.00 next.
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| A People's Uprising Against the Empire Posted: 01 Feb 2011 03:58 AM PST Those of the young generation, people too young to remember the collapse of Soviet bloc and other socialist states in 1989 and 1990, are fortunate to be living through another thrilling example of a seemingly impenetrable state edifice reduced to impotence when faced with crowds demanding freedom, peace, and justice. There is surely no greater event than this. To see it instills in us a sense of hope that the longing for freedom that beats in the heart of every human being can be realized in our time.
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| Strong US GDP Estimate on… Consumer Spending? Posted: 01 Feb 2011 03:51 AM PST Consumer Spending? Well… The euro (EUR) (and the rest of the currencies) got slammed on Friday, from mid-morning on… The euro, which was well into the 1.37 handle when I hit send on Friday, fell 1.5-cents… And while the euro was getting slammed, gold and silver woke up from their doldrums, and rallied strongly. I mentioned to the boys and girls on the desk that the trading seemed very strange, given that the euro was down, and gold was up versus the dollar. As I look at the screens this morning though, it seems we're getting a reversal of that Friday trading, with the euro gaining back 1-cent, and gold selling versus the dollar. So… What happened on Friday, and what's turned it around overnight? Well, Friday, we saw the first estimate of fourth quarter GDP here in the US, and while it wasn't as robust as expected (3.6%), GDP did show a strong move of +3.2%… Of course that's the first estimate, and it could go up or down from there… My guess? I think it will go down… One of the components just didn't make sense to me… The report said that consumer spending is strong… What? Where are they getting the money to spend? Ahhh… My good friend, and investment sage, John Mauldin, addressed this in his weekly letter… Here's John on that consumer spending claim… The really surprising number you saw the talking heads on TV mention was the growth of consumer spending, at 4.4%. Is the US consumer back? After all, real final sales rose by 7.1%, a number not seen since 1984 and Ronald Reagan. But real income rose a paltry 1.7%. Where did the money that was spent come from? Savings dropped a rather large 0.5% for the quarter. That was part of it. And I can't find the link, but there was an unusual drawdown of money market and investment accounts last quarter, somewhere around 1.5%, if I remember correctly. (David Walker remembered that article as well.) That would just about cover it. But that is not a good thing and is certainly not sustainable. Yes, John, I agree… Those draw downs can't be a good thing as far as sustaining strong growth… Besides, are we, as a country, going to go down that "consumption" road again? Before we embark on that journey, let me remind everyone that consumption does not create wealth! And, as the Big Boss Frank Trotter told an audience one time, "I walked through a cemetery the other day, and I noticed that 100 years ago, most of the grave stones said that people died of 'consumption'"… OK… So it was all about the dollar on Friday, as the mass media was in love again… But something else strange happened on Friday… And that was that the stock market sold off by more than 100 points (and at one point in the day it was 150 points!) … If the US economy is as strong as the GDP would suggest, I would certainly think that the stock jockeys would be dancing in their seats. But that was not to be… What could they be afraid of, for they're not smart enough to look under the hood of the GDP report… They take it for what it is, and usually run with it… I'm not knocking stock jockeys, I'm just pointing out that this was not normal trading for them… Well that was Friday… Overnight, like I said above, the euro has climbed back 1-cent. Well… Can you believe that it was a pop up of Eurozone inflation? Well, my dear reader friends, that's exactly what pushed the euro higher this morning. Eurozone inflation accelerated to a two-year high in January… Remember now, the European Central Bank's (ECB) ceiling for inflation is 2%, and January's number was 2.4%… In December it was 2.2%, so… The trend for inflation here is not the ECB's friend. But, you may recall me pointing out a couple of weeks ago, that ECB members were beginning to take notice of the rising inflation, and as the ECB and its members will tend to do, they started talking hawkishly… Well, folks, the ECB can stop talking now… I know the Eurozone economy is on tenterhooks, but the ECB could become the first major central bank to hike rates… Don't think they will? I wouldn't bet against the ECB… Their mandate from the Maastricht Treaty is to provide price stability, and even if 2.4% inflation isn't the worst thing in the world… They're the ones that instituted the ceiling of 2%, so if you place a ceiling of 2%, you have to do something once it moved above the ceiling for more than 1 month… The unrest in Egypt continues this morning… The goings on here are sure to upset the risk applecart… Especially for the emerging markets… Remember that when one emerging market suffers, they all suffer, whether they have problems or not… So, the Egypt thing has really put pressure on the likes of Brazil, South Africa, and others… One emerging market that is not suffering though, and bucking the trend, is Mexico… But I'm not even going to board that bus! The data cupboard here in the US will get a workout this week, beginning today with two of my faves, Personal Income and Spending…. We'll get a better look at the "income" of those so-called "spending consumers"… And we end the week with the Jobs Jamboree! Lots will happen before Friday, though! But… As it looks right now, the forecast for Job creation in January is going to be +140,000… While that's far better than the -300,000 we saw a couple of years ago, 140,000 jobs is not enough to sustain a so-called growing economy… And unfortunately, for us… That means the boys and girls over at the CABAL (I'll explain in a bit), will feel that their QE2 is justified… And as readers of this letter know, I've already gone out on the limb and said that QE2 won't be the last one in the installments of debt monetization… OK… As you all know, I've called the Fed the Cartel ever since I read the book, The Creature from Jekyll Island… And told you that if you read that book, you too would call the Fed, the Cartel. OK… So… Now I'm getting some heat for using Cartel from the powers that be… So… Here's another version I can use: CABAL… You may or may not know the story of the secretive closet advisers to Charles II of England in the mid 17th century. At any rate, after the departure of an appointed minister, it was said, somewhat inconclusively that Sir Thomas Clifford, Lord Arlington, the Duke of Buckingham, Lord Ashley, and Lord Lauderdale – thus CABAL became his primary advisers and were signatories to a treaty with France against Holland. C – Central Bankers (for the other major central banks) So… That's it! My new name for the Fed Reserve… Because there's nothing Federal about them, and there are no reserves… I see where Moody's downgraded Egypt's credit rating… Isn't that like adding insult to injury? Leave it to these credit ratings guys… Then there was this… From Reuters this morning… Quantitative easing by the Federal Reserve and other central banks cannot address fundamental economic problems but may lead to excessive global liquidity and competitive currency depreciation, China's central bank said on Sunday. "Quantitative easing policy cannot fundamentally address economic problems, and it may cause excessive liquidity on a global scale as well as risks of competitive currency depreciation," the Chinese central bank said in its 59-page report. "It is creating imported inflation and short-term capital inflows, pressuring emerging markets," it said. Same old stuff I told you with the first round of QE in March of 2009… And then again last fall when it was brought on again by the CABAL… To recap… The US fourth quarter estimate of GDP was 3.2%, and along with the unrest in Egypt, knocked the stuffing out of the currencies on Friday… But a stronger-than-expected inflation report for the Eurozone this morning, has the euro back on the rally tracks, and acting as the engine that it is, the rest of the currency are following along. The GDP report was a little suspicious and we discuss that along with good friend, John Mauldin… Chuck Butler Strong US GDP Estimate on… Consumer Spending? 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." More articles from The Daily Reckoning….
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| Posted: 01 Feb 2011 03:51 AM PST By Jeff Nielson, Bullion Bulls Canada For obvious reasons, there is no metaphor more applicable to investing in the precious metals sector than riding a bull. With gold and silver prices having risen relentlessly for a decade, the stature and stamina of this "bull" are beyond question. Equally, remaining atop this "bull" has been an activity to challenge the perseverance and staying-power of the most dedicated rider. Helping us to improve our prowess as bull-riders have been two groups of "trainers". However to state that these two groups have opposite intentions is clearly an understatement. On the one side are long-established websites like Jim Sinclair's site, GATA, and LeMetropole Café. These fine sites have performed several valuable functions. They provided novice bull-riders with guidance on the precious metals sector. Of equal importance, they have continuously shone a spotlight on the manipulative activities of the bullion-banks. In other words, they have taught us about the tactics and motives of the "bull" we have sought to ride. Lastly, they have supported those whose "grip" was weakening to help them stay atop the bull, while encouraging those who have been "thrown" to get back on the beast. The value of this last service cannot be overstated. My own "moment of weakness" occurred in the summer of 2007, after a very long stretch of sideways trading in the sector. From an intellectual standpoint, I never lost my conviction about where gold and silver must be headed over the longer-term. The "arithmetic" of the fiat money-printing of the bankers leads to only one possible outcome. However, emotionally I had begun to question whether the bankers could still exert such control over this market that the "long term" would be a test of endurance which would exhaust the patience of most investors. It was the unwavering conviction of the principals of these sites who helped me conquer those doubts. A major "break-out" took place in the fall of 2007, and my own doubts have never returned. In subsequently founding Bullion Bulls Canada, we have endeavoured to follow in the fine tradition established by these sites: keeping those already in the sector well-informed, educating those new to the sector, and reassuring both "veteran" and "novice" alike – when the inevitable banker-generated "volatility" tests their faith. Our site (and others) swell the ranks of the "old guard" who came before us, just in time to meet the rising tide of precious metals investors flowing into the sector. At the same time, we cannot overlook the contribution of the other group of "trainers", without whom we could have never become the fearless, veteran "bull riders" that we are today: the bullion bankers. As with learning any other skill, there is only so much expertise we can acquire through being "taught" and "told" what to do. At some early point in skill-development we need to be able to put into practice what we have learned, as part of the trial-and-error method of learning which epitomizes our species. In this respect the bullion-bankers have been invaluable: they have supplied the "training bull" which all novices to this sector have been forced to ride, in order to earn their own status as bull-riders. More articles from Bullion Bulls Canada….
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| The Continuing Argument Over Fiscal Policy Posted: 01 Feb 2011 03:50 AM PST I note that a Bloomberg.com article reported that Jean-Claude Trichet – whom I refer to as "socialist moron Keynesian euro-trash halfwit," but which everyone else refers to as European Central Bank President – is said to have said, while "speaking on behalf of the world's central bankers," that "the global economy has recovered better than expected, boosting inflation pressures in emerging markets." Hahaha! What Mr. Trichet literally said is that, "It's clear that it is extremely important that we all keep control of inflation expectations, and that calls for appropriate decisions," which is actually a relief, because I hate it when something is extremely important, yet not in control, like when my wife is so mad at me about something that is, apparently, extremely important, yet her anger is so uncontrolled in that she is stammering in rage "You…you…you…!" And if I try to help her by asking, "What in the hell are you stammering about, now?" oddly enough, she gets worse! And her eyes kind of bug out, too! I mean, I can't win here! You can see the kind of crap that I have to put up with all the time! And it doesn't get any better with this Trichet character, either, as he says that it is clear, and that it is extremely important, to "keep control of inflation expectations" which, in this case, is apparently achieved by saying lying, stupid things like how the economy has recovered "better than expected," which is only true if you expected the world to erupt in anarchist flames where everything gets destroyed in a hyperinflationary catastrophic bankruptcy that sweeps around the world while flying saucers invade the Earth and enslave us all, or Democrats invade the Earth and enslave us all, one's as bad as the other, probably. And so, explains Mr. Trichet, the "recovery," which is better than expected, is why price inflation is up! Hahaha! And the lie of a recovering economy makes it suddenly OK that the poor, and everyone else, for that matter, slip a little closer to starvation because rising prices for food and energy consumes all their income? What kind of crazy, demonic government is that? The same kind as America has, that's what kind! Hahaha! And that – that! – is why I am a proud Tea Party member who wishes us the best, and who laments the fact that it is Far, Far Too Late (FFTL) to do anything, like a car going 90 miles an hour sailing off a cliff after careening crazily down a perilous and steep mountain road. As the car sails though the air, two guys inside are arguing, one saying, "More spending!" and the other saying, "Less taxes!" Now, there are those that do not understand that such examples of Real Mogambo Humor (RMH) are very, very subtle, and thus not suited to the masses, who do not see the glaring, obvious connection between comparative economic virtues of more spending or less taxes and the prospect of a speeding car going over a cliff and smashing onto the rocks below, everyone inside screaming in fear all the way down, until the sudden stop kills everyone in a horrible, gruesome death milliseconds before the car bursts into flames, destroying everything, including whatever the car landed upon, probably an endangered species of some kind, or somebody's mailbox, which aren't cheap. And when people gather around to see what happened, they will ask, "What happened?" If they did, then I would tell them that two guys in the car went over a cliff because they were arguing about fiscal policy when they should have been, instead, in total agreement to complain about the Federal Reserve creating so freakishly much money!" If I did, I am sure that they would look at me with those same blank looks of incomprehension and befuddled stupefaction that are on the faces of the people in the security video that shows I am peacefully standing in line, waiting for a cashier, and I am exercising my First Amendment rights by passing the time saying to the cashiers as I waited, "Take your time, morons! The longer you wait to ring up my sale, the utility of my purchase is still new and undiminished, even as my money becomes more worthless, losing purchasing value with every tick of the clock – tick tock, tick tock, tick tock! – because the foul Federal Reserve is creating $100 billion of new money Per Freaking Month (PFM)!" I expected, as I always expect, someone to say, "Well said! Well said, handsome, intelligent stranger to whom the bewildering world of economics seems but children's toys!" Well, they didn't. So you can see on the video where I tell them, "The Federal Reserve is creating money out of thin air so that the corrupt government can borrow the money and spend it, which increases the money supply, which distorts everything, leading to weird bubbles and busts, mostly busts, fads and flops, mostly flops, and inflation, inflation, inflation that is going to eat you alive!" This is when the security video shows the security guard coming over and asking me to leave, which I do, but not before saying, in my most melodramatic Mogambo eloquence and with a theatrical dismissive wave of my arm, "You have been warned, earthlings!" It's too bad that the video does not have a sound track, and thus there is no official record of my voice trailing off into the distance, saying, "So buy gold and silver, you morons! Gold and silver!" I hope I did some good! The Mogambo Guru The Continuing Argument Over Fiscal Policy 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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| U.S. Army Silver Dollar Proof and Uncirculated Coins Released Posted: 01 Feb 2011 03:50 AM PST The 2011 U.S. Army Silver Dollar Commemorative Coins in proof and uncirculated qualities are now available from the United States Mint for respective introductory prices of $54.95 and $49.95.
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| 2011 Grizzly Silver Coin Second in Canadian Wildlife Series Posted: 01 Feb 2011 03:50 AM PST The Royal Canadian Mint has released the 2011 Grizzly silver bullion coin, its latest issue within the Canadian Wildlife coin series.
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| Gold and silver decline is over, Turk tells King World News Posted: 01 Feb 2011 03:50 AM PST 5:40p ET Monday, January 31, 2011 Dear Friend of GATA and Gold (and Silver): The recent decline in gold and silver prices is over as oil and other commodity prices continue to rise, GoldMoney founder and GATA consultant James Turk tells King World News. Excerpts from the interview can be found at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/1/31_Ja… Or try this abbreviated link: CHRIS POWELL, Secretary/Treasurer 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
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| Hugo Salinas Price: Monetizing silver in British pounds Posted: 01 Feb 2011 03:50 AM PST 5:30p Monday, January 31, 2011 Dear Friend of GATA and Gold (and Silver): The presentation of Hugo Salinas Price, president of the Mexican Civic Association for Silver, at last week's Cheviot Asset Management Sound Money Conference in London, described how silver might gradually be monetized in British pounds. You can find the presentation at the association's Internet site here: http://www.plata.com.mx/mplata/documentos/images/Hugo_Salinas_Price_Lond… CHRIS POWELL, Secretary/Treasurer 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
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| Policy makers at Davos see dollar losing reserve dominance Posted: 01 Feb 2011 03:50 AM PST By Paul Carrel http://www.reuters.com/article/2011/01/31/uk-davos-dollar-idUKTRE70U3X82… DAVOS, Switzerland — The U.S. dollar's role as a reserve currency will diminish in the coming years as Asian economies like China grow and countries seek to diversify their monetary holdings, policymakers said on Friday. The U.S. Federal Reserve's policy of quantitative easing — essentially printing money — and a call by France to look at ways to wean the world off the dollar as the sole reserve money have put the U.S. currency in the spotlight. "I'm more optimistic about the euro gaining strength as a potential reserve currency," Bank of Israel Governor Stanley Fischer said during a panel discussion at the annual World Economic Forum here. "We ourselves are diversifying into currencies which we would never have put in the reserves before, including the Australian dollar and so forth," he added. "I think people will diversify their reserves." French President Nicolas Sarkozy is trying to rally the Group of 20 powers to the idea of a more varied monetary system after decades of the dollar being the world's reserve currency and a major unit of international trade settlement. The dollar debate comes at a time when many countries are tempted to let their currency drop to promote exports and growth after the worst downturn since World War Two, even if that can be at each others' expense. Bank of Canada Governor Mark Carney and Fischer anticipated that, in the long run, Asian monies would have a greater role as reserve currencies. "I agree with Stan (Fischer) that over time there will be more of a multi-polar system. Other currencies will play a central role in reserves," he said. "The (Chinese) renminbi, over time, should have a role as a reserve currency." Turkish Finance Minister Mehmet Simsek saw the United States' quantitative easing policy leading to a diversification of reserve holdings. "If the U.S. continues the way it is … certainly countries will look for alternatives because you can't print so much money and expect no consequences," he said. "Ultimately the centre of gravity is shifting toward the East," Simsek added. "Certainly 10 years from now there could be a very different landscape." 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
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| Gold and Silver Set to Resume Upward Trajectory Posted: 01 Feb 2011 03:50 AM PST A strange start to the year and a strange end to a volatile week, so we take a whiz across the air waves in order to get a ‘feel’ of what's going on, so this will be a mixed bag of data. The first eye catcher is this: Eric Sprott: Expect $50 Silver, Gold Possibly $2,150 by Spring.
What follows is a brief summary of an interview that Sprott gave to King World News. Eric Sprott recently launched a silver fund and so entered the market to acquire 15 million ounces of physical silver. To his surprise, it wasn’t readily available and in fact it took 10 weeks to get his order filled. Another order placed for 1 million ounces has been given a delivery period of around 2 months. The silver that he received looks to have come directly from the refiners; it is that new. This also tells us that that the supply side is indeed very tight. On the subject of China, Eric drew listeners' attention to this interesting dynamic: In 2005 China exported 100 million ounces of silver. Fast forward to 2010 and China imported 100 million ounces of silver; that's a 200 million ounce turnaround in an 800 million ounce market. Other influential factors: One of China’s major banks has offered its customers a facility whereby they can save a portion of their savings in gold. Since the offer, the bank had to open one million accounts, which required 10 tonnes of gold to satisfy
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| Posted: 01 Feb 2011 03:50 AM PST Ananthan Thangavel submits: With precious metals dropping seemingly every day so far this year, the question on many investors' minds is whether gold and silver can sustain the rally witnessed on Friday. While most market pundits believe that fear regarding the Middle East sparked precious metal buying on Friday, the reality is that both gold and silver were oversold markets, and both were fast approaching strong technical support levels. For an indication of conviction behind Friday's rally, we can view the volume on the silver futures contract as well as the SLV. Click to enlarge
The above charts show the front month silver futures contract and the SLV, along with their corresponding daily volumes. As shown by the red trend lines, the selling during the first four days of last week that saw silver sink to 2-month lows occurred on falling volume. Usually when trends are accompanied by decreasing volume, it indicates that traders' conviction in the trend's continuation is also falling. A reversal of the trend on strong volume can be a signal that the trend reversal will continue. Friday's rally saw both silver futures and the SLV trade 4% higher on large volume, signifying a possible end to the correction in the white metal. Silver futures traded ~76.4k contracts, 30% more than the 45 day moving average. The SLV traded 32.8 million shares, 21% more than the average. The significance of this increase in volume is apparent when considering that silver rallied on Wednesday, but on low volume. From the lack
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"Gold is rallying on a collapse of the dollar to 12-week lows," said Peter Grant, senior metals analyst at USAGOLD-Centennial Precious Metals Inc. For gold, it's an "evaporation of safe-haven bid in greenback after the biggest protest yet in Egypt failed to illicit a violent response from [Egyptian President Hosni] Mubarak," said Grant. "I certainly don't think events today in Egypt are suggestive of stability, it just doesn't look like things are going to deteriorate into a violent put-down of the protests."…
"My impression of Egypt," writes Byron King, "is a land of a few very wealthy, well-connected people and a whole lot of poor and very poor folk."
Hence, the following Tweet that just made it out of Egypt: "The government is spreading rumors of fear and of burglary and of violence. The only incidence of theft and burglary are done by the police themselves."
"Jobs are scarce in Egypt," says Byron, assessing the economy. "Unemployment is easily north of 20%, and under employment is doubtless another 20% or so. 
Crude prices are holding steady a hair below $92 a barrel, after a big Egypt-fueled run-up Friday and yesterday. 
The ISM Manufacturing survey turned in a robust 60-plus number in January.
Of course, traders are ignoring the warning signal buried within the ISM report and are reacting merely to the headline number. The Dow is up 80 points as we write. Just 30 more and the index will flirt with 12,000 again, as it did much of last week. 
Gold is languishing at $1,335… but silver continues to progress in steady increments. It's up to $28.15.
Copper prices have zoomed to another record high -- up nearly 1% today, to $4.47 a pound.
Well, well... we've reached a milestone in the housing bust: The Census Bureau's "homeownership rate" is now back close to pre-bubble levels.
The adjustable-rate mortgage is making a comeback. A survey of 112 lenders by Freddie Mac finds that ARMs accounted for just 3% of mortgages in 2009… but will be nearly 10% this year.
"Any chance that Byron could replicate his Egyptian Peak Oil charts with the other OPEC countries? The one he published in yesterday's 5 was stunning in its simplicity. 
"Like many people," adds another, "I am reading about the troubles and speculation about the possible carnage in the Middle East. Lots of press, and there's no pause from any news source about the existing and potential problems. 
"Regarding the discussion about why Americans have to be paid more than $2-$3 a day," a reader offers this suggestion: "Take the regulations and restrictions off industry along with lower taxes and see the needed wage per hour dissolve.
"I am an investor in smaller private companies," writes a reader contributing to our patent discussion. "I often hear the ' We have patents, so we cannot be copied! ' argument as to why their company is so valuable. My response to that is always the same. I do not see in your budget the $3 million and three-plus years it will take to protect that patent... per infringement. 
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