Gold World News Flash |
- The BRIC Self Sufficiency Index
- Market Shrugs Off CSCO Guidance, Prefers to Buy the Rip
- The Economics of the Gold Standard
- In The News Today
- JH MINT Silver & Platinum at 2.5% UNDER spot!
- Silver Poised for Breakout
- Gold Seeker Closing Report: Gold and Silver End Slightly Lower
- Dutch pension fund ordered by central bank to sell gold
- Seeking Gold: An Interview With Chris Waltzek
- Gold Miners Index May Be Warning Us...
- Is The Gold Price Forming the Fatal Broadening Top Pattern That Usually Breaks Out to the Downside? Wait and See
- French bank chief wary of ‘silver bullet'
- THURSDAY Market Excerpts
- Decoding the Truth About Inflation
- Unprecedented backwardation for silver, Turk tells King World News
- Goldbugs on Parade
- “Various Chinese officials have proposed making China’s gold holdings 10,000 tons, larger than that of Fort Knox.”
- King World News has received word from James Turk that silver is in extreme backwardation. Turk stated, “There is a huge story that is brewing. Silver is in backwardation to 2015, which is 13-cents cheaper than spot. This is unbelievable. Money does
- Options for Silver Traders
- Get in the Game? Get Real!
- Hourly Action In Gold From Trader Dan
- January Deficit Grows by $50B, on Pace For $1.5T
- How Much More Demand Can Silver Handle? - February 9, 2011
- When the People Push Back
- IMF urges overhaul of global monetary system
- Gold Daily and Silver Weekly Charts
- Forced selling of Gold . . . Not Since Gordon Brown gave away 1/2 of Britain’s Gold reserves at $250 an Oz. have we seen such blatant government cooperation with market riggers
- Economic shearing: falling house prices, rising food and energy costs. The middle class is getting ripped to shreds.
- ECB's Stark: Can't insure financial system against all risks
- The Long and Frustrating Arm of Government Intervention
- Gold comes off lows after Mubarak reports
- The Inflation Tipping Point (Part Three of Four)
- Vulture Rules of the Road, Part 1
- A Trading Strategy for the Gold Correction
- China May Increase its Gold Holdings Beyond Ft Knox Level
- Technical Analysis DOES Work For Gold
- How Much More Demand Can Silver Handle?
- The Worst Possible Investing Mistake
- Grandich Client Silver Quest Resources
- Completed Pullback for Silver Wheaton
- LGMR: ECB Buys Portugal Debt, UK Rates Stay "On Hold" for Post-WWII Record
- The Two Faces of Ben Bernanke
- Increasing Government Debt to Produce Economic Growth
- 1-2-3 REVERSAL
- Gold Miners Index May Be Warning Us…
- The Violent Declines the Follow Overbought Rallies
- U.S. Housing ‘Vicious Circle’ Worsens
- Dutch govt. orders pension fund to sell gold, Zero Hedge says
- Perth Mint, Scotia out of hundred-ounce silver bars, KWN says
- Warsh, who confirmed gold swaps, to leave Fed next month
| The BRIC Self Sufficiency Index Posted: 10 Feb 2011 07:39 PM PST Demand for natural resources in the emerging world is increasing, but how much of this increased demand is met by the country's own production? This interesting chart from Bank of America-Merrill Lynch shows the supply/demand fundamentals of several key industrial metals and basic materials. The dotted line represents a key tipping point. The resources to the left of the line are those the BRIC countries must obtain outside of their own borders in order to meet domestic demand (BRIC refers to the emerging market countries Brazil, Russia, India and China). The BRICs produce an excess amount of the two metals to the right of the line and export the remaining amount to other countries.
Last year, copper, nickel and coal were all top-half performers of the 14 commodities we track in our popular periodic table. The two metals the BRIC nations produce an excess amount of (aluminum and zinc) were among the worst-performers. These materials are the necessary elements needed for emerging nations to take the next steps in their development. You can see that the BRICs must rely on imports in order to meet demand for metallurgical coal, copper concentrate, thermal coal, iron ore, refined copper and uranium. For example, BRIC production of metallurgical coal is less than 20 percent of BRIC consumption. Met coal, or coking coal, is used to make iron and steel—very important to the infrastructure build-out taking place in Asia. Thermal coal is also important because it is principally used for power generation. Coal is the primary source of electricity in the emerging world, supplying more than 50 percent of Asia's power. The BRICs consumed nearly 2 billion tons of coal for electricity in 2009, according to BP's World Energy Statistics. In order to combat these supply deficiencies, the BRICs have looked beyond their borders. In India, there were 27 cross-border deals in the metals and ores sector last year, according to research firm Grant Thornton. China has been especially proactive in this regard. From 2005 through early 2010, the country inked more than $45 billion worth of cross-border deals for coal, copper and iron ore. These are deals in countries near (Vietnam, Mongolia) and far (Peru, Canada). We think these areas are especially important for investors because these are the areas where we're seeing wider profit margins and stronger returns on capital. This is why our Global Resources Fund (PSPFX) is currently seeking the best opportunities in this area. Regards, Frank Holmes, P.S. For more updates on global investing from me and the U.S. Global Investors team, visit my investment blog, Frank Talk. The BRIC Self Sufficiency Index originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
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| Market Shrugs Off CSCO Guidance, Prefers to Buy the Rip Posted: 10 Feb 2011 07:02 PM PST
The S&P closed up today despite earnings more disappointing than Congressman Christopher Lee's online dating skills (because 1. If you're married, don't use your real fucking email address and 2. everyone knows the easiest way to an internet girl's heart is through a cock shot and not some weird ass old man flexing pose, so really just embarrassing for all) led by technology bellwether CSCO who got their bells rung and let technology know that the weather is going to be extremely shitty with a chance of declining margins, an increasing budget deficit as the government stocks up on the rare o.b. tampons in preparation for the heavy period of economic malaise soon to be here, and the outcome of the Free Harry Baals movement coming to an inglorious end (and as a side note, Money McBags thinks the Femen Movement should 100% get behind Harry Baals).
In all, it was a news filled day in the market that in aggregate rounded up to "who fucking cares" as investors ignored rising inflation, shrinking margins, and sputtering jobs growth, by simply rolling up their foreskins and taking hits of hope and delusion. So as always, buy the dip, buy the rip, and if you can, buy the nip, because Bernanke would want it that way.
As for macro news, new claims for unemployment fell to their lowest level in 2.5 years as bad weather knocked down the phone lines and internet connections that people ordinarily use to file new claims as well as apparently knocking down common fucking sense (because, um, if the jobs report was negatively affected by the weather, shouldn't new claims have you know, also been negatively affected by the fucking weather? This is as confusing to Money McBags as M-theory or why anilingus is spelled with an "i" and not an "a"). New claims dropped 36k (or 32k if using the the number that was reported last week instead of this week's made up higher number as the "hold the shock and hope for no awe" strategy rears its ugly head) to 383k which was 27k below analyst guesses and 35k below believability. The number dropping below 400k can be taken as a good sign (that is if the number weren't more bogus than John Travolta's marriage), though this can be taken as a better sign.
In other macro news, foreclosures fell, or they didn't, depending on if you want to use a year over year number (which was down 17%), a month over month number (which was up 1%), or a non "lenders were too fucking bogged down in fixing mortgage fraud procedures to increase foreclosures" number (which would have been up a cockriffic percent). James Saccacio, the CEO if RealtyTrac commented "Unfortunately this is less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing." This would usually be concerning for the market but as all investors care about is the perception of the numbers and not what is behind those numbers (unless it is Brooklyn Decker who is behind them), the release was more irrelevant than James Garfield's presidency or Lacey Banghard's IQ.
Elsewhere wholesale inventories jumped 1% while sales only rose .4% as businesses build up inventory right before people can stop affording it with the coming stagflation (and of course stagflation is coming not just because Bernanke is making sweet love to the ponzeconomy™, but also because he showed it pictures of Olivia Wilde). The budget deficit grew to $50T as spending picked up with the government busy buying the dip and finally Federal Reserve Board Governor and noted QE2 critic (even though he never had the Thomas Hoenig balls to dissent) Kevin Warsh is stepping down to do what all Americans aspire which is to live a happy life off of his wife's money. Warsh was the youngest Fed Governor by decades and simply got tired of the constant hazing of having to always erase the whiteboards, bring the doughnuts, and be the one picked to play seven minutes in heaven with Fed Governor Daniel Tarullo. Warsh is most famous for an op-ed he wrote for the WSJ where he said the Fed’s Treasury buying “poses nontrivial risks” such as unexpected movements in risk premiums across asset classes and whatever is a bit worse than stagflation, perhaps "fucking stagflation.
The big news of the day though was earnings where CSCO reported their Q and dropped ~13% after not connecting with investors who had them as the backbone to their portfolios. The company warned that their margins were under more pressure than Tom Cruise's colon in the Castro on a Saturday night or Hosni Mubarak's presidency (who by the way is supposed to be stepping down tonight so the guy exactly fucking like him can take over, so um, great fucking job guys, really. It's like Andrew Johnson restoring rich white southern confederates to power immediately after the civil war or Pam Anderson getting back with Tommy Lee after he gave her hepatitis). Along with declining margins, CSCO said they are also facing increasing competition as customers in their core network switching business are switching to products from HP and Juniper (and that line was so awful Jay Leno can use it all he wants).
In other earnings news AKAM was down 15% after reporting a good Q but giving revenue guidance for Q1 a wide margin below analyst guesses as a result of more normal seasonality after last Q's post-recession big jump in Q1 (and the margin was so wide that it immediately became the most popular member of LargeandLovely.com). And CS missed profit expectations because of debt charges and regulations that keep them from manipulating their numbers as usual.
In positive earnings news, WFMI once again crushed guesses and raised guidance because now that all food costs have skyrocketed, people don't give a shit about paying the marginal dollar to eat food that has fewer chemicals in it than Charlie Sheen's stool. Also EBAY was up ~7% after they said that they expect PayPal revenue to double by 2013 as wireless iPads making memberships to the Bangbus more prevalent during bathroom breaks in the office.
Finally, corn reserves are at 15 year low, thus potentially figuratively cornholing part of the country's food supply, NYSE is in merger talks with Deutsche Borse, Harrah's, and Las Vegas Sands where they promise to share the VIG with whomever they merge, and WFC's CFO is walking away with a $27MM retirement package which is but a small pittance for nearly ruining the global economy. Noted analyst Dick Bove (and he is noted for consistently being wrong) said "It is not normal for a CFO to leave a company for personal reasons when major disclosures about to be made," but then again, it is not normal for a man named Richard to insist on calling himself Dick, so potato-puhtato.
As always, if you need more market analysis, dick jokes, and Sara Underwood in your lives (and really who among us doesn't?), Money McBags drops some small cap analysis today on the award winning When Genius Prevailed where he breaks down RICK's Q of which he is not only a shareholder (up 30% in 2 months), but also a client.
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| The Economics of the Gold Standard Posted: 10 Feb 2011 06:45 PM PST
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| Posted: 10 Feb 2011 05:22 PM PST Jim Sinclair's Commentary Stratfor outlines three lousy choices for the military of Egypt. Any one of these will serve to increase tensions. There are 10 countries with similar problems. Saudi Arabia is not exempt. "This now creates a massive crisis for the Egyptian military. Its goal is not to save Mubarak but to save the regime founded by Gamal Abdel Nasser. We are now less than six hours from dawn in Cairo. The military faces three choices. The first is to stand back, allow the crowds to swell and likely march to the presidential palace and perhaps enter the grounds. The second choice is to move troops and armor into position to block more demonstrators from entering Tahrir Square and keep those in the square in place. The third is to stage a coup and overthrow Mubarak."
Jim Sinclair's Commentary Omar Sulieman is the head of the Egyptian Intelligence Service. Egypt is the place that captured insurgents in Iraq were sent to be tortured. Therefore Omar's hands are the undercurrent that accepted them. Financial TV is reporting this as a success. The Brotherhood does not want Omar. There is much more to come.
Jim Sinclair's Commentary The supply of US Treasuries increases at a time when QE has been the only swing buyer. The final Pillar of Gold at $1650 is in.
Jim Sinclair's Commentary You have to have a Gold dog regardless of what Martin says.
Jim Sinclair's Commentary When you sell your liberty for supposed protection this is what you get, Nazis. Ontario Woman Sues Over Strip-Search At Ambassador Bridge DETROIT (WWJ) – An angry and embarrassed Ontario woman who says she was strip-searched at the Ambassador Bridge without justification has sued two U.S. Customs and Border Protection agents. The Detroit Free Press says Loretta Van Beek of Stratford filed the suit in Detroit federal court against the unnamed agents. She says she was en route to her Georgia vacation home last March when one agent strip-searched and groped her while the other one watched. Van Beek says she was detained for two hours, then sent to a windowless cell and ordered to strip because she neglected to disclose she had raspberries in her vehicle. The lawsuit claims one agent aggressively groped her breasts and genital area while the other watched. Van Beek says she was then photographed and fingerprinted and sent back to Canada. Attorney S. Thomas Wienner of Rochester tells the Free Press the experience traumatized Van Beek and "She's concerned she might not be the only victim."
Jim Sinclair's Commentary There is a number whereby Martin Armstrong's reaction is nullified. Many people in finance read him but will not admit it. His second before last missive has contributed to the reaction we have experienced. There is no way I will say the price because why should we give the opposition more ammunition?
Jim Sinclair's Commentary This is the birth of a durable democracy? You have to be kidding. Omar Suleiman warns of coup as tension rises between Egyptian demonstrators, army Egypt's government and protesters edged closer to violent confrontation Wednesday as demonstrators escalated their tactics and the vice president warned of a coup if the unrest continued, saying protests must end or "the dark bats of the night" would emerge to terrorize the nation. Labor unrest continued in the nation for a second day, threatening to merge the political goals of the opposition with the more focused economic issues that have long plagued Egypt. And violence spread to a normally peaceful desert oasis 500 miles southwest of Cairo, where police killed four people. Protesters in central Cairo's Tahrir Square, reenergized by a massive crowd Tuesday after turnout began to flag on Monday, promised the biggest demonstrations yet on Friday, this time nationwide as well as in multiple locations in Cairo. On Wednesday, they defied the Egyptian army by occupying the street in front of the parliament building, creating a second front in downtown Cairo. Egyptian Vice President Omar Suleiman, in comments to Egyptian newspaper editors published Wednesday, warned sharply that the demonstrations could not continue. Suleiman, who until now has presented himself as a soft-spoken voice of reason in discussions with opposition leaders, sounded rattled as he warned of tougher measures.
Jim Sinclair's Commentary Israel supports democracy with one present exception – Egypt. What do they know that the Western world media and financial TV missed? How Egypt resolves itself is the singular most important fundamental in the political and economic world today. Egypt is more important than Afghanistan, Pakistan, Iran and Iraq at this moment in time. Israel urges U.S. to reaffirm support in light of Egypt unrest Defense Minister Ehud Barak on Wednesday stressed the importance of U.S. support for Israeli security in light of the political unrest in Egypt, while Ambassador Michael Oren urged the Obama administration to reaffirm its commitment to that regard. Barak met with Secretary of State Hillary Clinton, Secretary of Defense Robert Gates and National Security Advisor Tom Donilon at the White House on Wednesday evening, to discuss the tense situation in Egypt. The White House press office said the meeting dealt with "the need to move forward on Middle East peace, our efforts to prevent Iran from acquiring nuclear weapons, and other regional and bilateral issues." The U.S. officials stressed their country's "unshakeable commitment to Israel's security, including through our continued support for Israel's military, and the unprecedented security cooperation between our two governments," the White House said in its statement. Barak's spokesman characterized the meeting as "excellent". Israel envoy Oren later Wednesday conveyed a similar message when he urged the administration to reaffirm its commitment to Israel, in an address to the Congressional Israel Allies Сaucus reception on Capitol Hill.
Jim Sinclair's Commentary A military coup can't supply food at reasonable prices and jobs for the Egyptian unemployed. Yes, but only if they draft the entire population. This is no road to a sustainable democracy as the media would have us believe. Why anyone believes the media today is baffling to me. Egypt's Army Signals Transfer of Power CAIRO — The command of Egypt's military stepped forward Thursday in an attempt to end a three-week-old uprising, declaring on state television it would take measures "to maintain the homeland and the achievements and the aspirations of the great people of Egypt" and meet the demands of the protesters. The development appeared to herald the end of President Hosni Mubarak's 30-year rule. Several military leaders and officials in Mr. Mubarak's government indicated that the president intended to step down on Thursday. Some reports said he aimed to pass authority to his hand-picked vice president, Omar Suleiman, but what role Mr. Suleiman would play in a military government, if any, remained uncertain. In testimony before the House Intelligence Committee, C.I.A. Director Leon E. Panetta said that there was a "strong likelihood" that Mr. Mubarak would step down by the end of the day. State television said Mr. Mubarak will appear tonight with an announcement. The character of the military's intervention and the shape of a new Egyptian government remained uncertain. A flurry of reports on state media on Thursday indicated a degree of confusion — or competing claims — about what kind of shift was underway, raising the possibility that a competing forces did not necessarily see the power transfer the same way.
Jim Sinclair's Commentary Few, other than here, thought that China could do it. Few, other than here, thought India would do it. Joseph Kahama is writing a new book – "Boom, Insights and Visions into Economic Opportunities in the African Bull Market." Africa is the best of opportunities for continued growth over the next many years. Africa's share of mine deals triples Africa's share of global mining deal flows tripled from 5% in 2009 to 15% in 2010, according to a report released on Wednesday by Ernst & Young. The bulk of these deals was inbound and showed a significant growth in volume, signifying the increased interest of the rest of the world in Africa. "In one major deal, Rio Tinto offered US$3.9 billion to buy Mozambican coal miner Riversdale, while Xstrata is paying US$513 million for Sphere Minerals, with the goal of gaining three iron ore projects in Mauritania," said Adrian Macartney, mining sector leader for Africa at Ernst & Young. "When one takes into account the increasing interest in Africa's mining sector from companies in China, India, Brazil and Russia, it is easy to see why the future looks rosy," added Macartney. When it was suggested a year ago that Africa's economic recovery was on track, many thought this premature. However, a quick look at current figures shows that there can be little doubt that the continent is definitely "open for business".
Jim Sinclair's Commentary This is easy. China only needs one ounce to accomplish this. China may increase gold reserves beyond 'Fort Knox' level – Hale CAPE TOWN (miningweekly.com) – China's central bank is being advised to increase its gold holdings nearly tenfold to a level greater than the world's biggest bullion depository, the US's "Fort Knox". Global economist David Hale, who addressed the packed Mining Indaba in Cape Town attended by a record 5 700 people, says that China's gold reserves are currently at 1 050 t – only $30-billion to $40-billion compared with the country's total assets of $2,8-trillion. Various officials in China have proposed the central bank should increase its gold reserves to 10 000 t, which would give China larger gold reserves than Fort Knox. "This would be a huge development for the gold market," he says, with global mining output of gold only at 2 500 t a year. "China will probably start to buy gold in the near future, but they won't report it for two or three years," Hale says. When China announced new gold reserves from 600 t to 1 050 t in April 2009, purchsing had been done in the preceding years..
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| JH MINT Silver & Platinum at 2.5% UNDER spot! Posted: 10 Feb 2011 04:48 PM PST (Bullion Specials!) Silver Stock Report by Jason Hommel, February 10, 2011 We have 5 bars of silver that are each odd weight, all over 100 oz., such as 101.6 troy oz., etc. Offered at 2.5% under spot. Minimum, 1 bar. Spot Silver is about $30.20 right now. We have 7 Platinum 1 oz. bars, offered at 2.5% under spot. Minimum, 1 bar. Platinum is about $1830 per oz. now. Spot prices are locked after your wire gets to us. Please, do not send any wires until after you call us on the phone, and set aside the bullion for you. THESE ARE LIMITED QUANTITY, ONE TIME OFFERS; we cannot reorder these products. (Yet we have offers like this from time to time.) LIKELY TO SELL OUT TOMORROW. We have an ongoing regular special of gold that we are selling cheaper now, because we have a bit too much, these, we can reorder at these prices. We have 44 Gold Eagles offered at 7.1% over spot. We have 50 Gold bars offered at 4.6% over spot. We have over 13,000 one oz. silv...
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| Posted: 10 Feb 2011 04:04 PM PST Kenneth D. Worth submits: If you look at the technicals on silver they do at first glance look a little "frothy," to borrow a term from Mr. Greenspan. The value of silver has more than doubled in just the past 18 months.
In the short-term, however, any break above $30 an ounce would be a new high after a correction of 14%, and from a technical perspective this would be very bullish. This would suggest that silver is headed to $40/oz. and higher, given the strength of the previous move up.
There is talk of a bubble in precious metals. Isn't there always? There is also some discussion on this site and elsewhere of silver pushing up against its highs of the past two decades in terms of its price in relation to gold (currently around 1/45th of an ounce of gold, i.e. a gold-silver price ratio of 45 to 1). I would suggest that, rather than "froth" indicating the top of a bubble, we are currently at an inflection point in the silver market, which reflects a fundamental change in investor psychology. A return to the historic relative value of gold and silver of 15 to 1 would put silver at $91 an ounce (with gold currently around $1,365 per ounce.) That means there is tremendous upside in the silver market should investor psychology truly be changing, as it appears to be. As the Federal government continues to run multi-trillion dollar deficits, and as the Federal Reserve continues to provide the bulk of Complete Story »
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| Gold Seeker Closing Report: Gold and Silver End Slightly Lower Posted: 10 Feb 2011 04:00 PM PST Gold fell as much as $13.20 to $1351.20 by about 8:30AM EST before it rallied to see a $1.60 gain at as high as $1366.00 three hours later, but it then fell back off a bit in the last couple of hours of trade and ended with a loss of 0.14%. Silver fell $0.618 to $29.662 before it rallied back to almost unchanged at as high as $30.278 by late morning in New York, but it also fell back off a bit in the last couple of hours of trade and ended with a loss of 0.53%.
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| Dutch pension fund ordered by central bank to sell gold Posted: 10 Feb 2011 02:14 PM PST From The Associated Press http://www.bloomberg.com/news/2011-02-10/dutch-central-bank-pension-fund... AMSTERDAM, Netherlands -- A pension fund in the Netherlands says the country's central bank has ordered it to sell its gold holdings because it is overexposed to a fall in the value of the yellow metal. The Vereenigde Glasfabrieken pension fund said Thursday it wants to keep the gold but a Rotterdam court sided with the bank in a ruling Tuesday. The fund will now sell its gold holdings down from 13 percent of assets to 3 percent at most. The fund began buying gold in 2008 due to concerns about inflation and the stability of the euro. It argued the investment has performed well since then, rising about 70 percent to around E1,000 per ounce. The fund had E260 million in assets in December 2008, mostly in Dutch and German government bonds. ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php Join GATA here: Phoenix Investment Conference and Silver Summit Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf
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| Seeking Gold: An Interview With Chris Waltzek Posted: 10 Feb 2011 01:11 PM PST
A few years ago, an email from an old friend prompted me to watch a film called The Money Masters, narrated by William Still. To say I became suspicious about everything after watching it would be an understatement. I started tuning into shows like FSN, KWN, GSR and others, and was inspired. About a year ago, I began piloting interviews with folks who knew a lot more about economics and finance than I did/do. As a teacher it The show has become more erratic than I’d hoped with obligations of: a wife, a baby, a job, another baby and night school. I’m satisfied TVR is still alive. This month it was my pleasure to speak with Chris Waltzek of GoldSeek Radio. In the interview from a week or so ago Chris and I discussed the beginnings of GSR, the basics of saving, energy, his book and more.
Click To Listen To The Interview
~MV
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| Gold Miners Index May Be Warning Us... Posted: 10 Feb 2011 12:48 PM PST The past couple weeks I have been keeping a close eye the price of gold and the gold miners index. I check to see if its pointing to higher or lower prices in the near future using inter-market analysis, price and volume, along with technical ... Read More...
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| Posted: 10 Feb 2011 11:14 AM PST Gold Price Close Today : 1361.90 Change : (2.90) or -0.2% Silver Price Close Today : 30.091 Change : (0.182) cents or -0.6% Gold Silver Ratio Today : 45.26 Change : 0.176 or 0.4% Silver Gold Ratio Today : 0.02209 Change : -0.000086 or -0.4% Platinum Price Close Today : 1825.10 Change : -29.00 or -1.6% Palladium Price Close Today : 821.35 Change : -8.90 or -1.1% S&P 500 : 1,321.87 Change : 0.99 or 0.1% Dow In GOLD$ : $185.62 Change : $ 0.25 or 0.1% Dow in GOLD oz : 8.980 Change : 0.012 or 0.1% Dow in SILVER oz : 406.41 Change : -0.33 or -0.1% Dow Industrial : 12,229.29 Change : -10.60 or -0.1% US Dollar Index : 78.19 Change : 0.547 or 0.7% Daily chart of the GOLD PRICE today takes the fatal shape of a Broadening Top, where highs are level or slightly rising and lows keep getting lower. Dow made a similar patter at the 2000 top, but later became a diamond top. Never mind, it only matters that it's a pattern that usually breaks out to the downside. Only other interpretation is that gold has established a ceiling of resistance at $1,367/$1,365 and must bayonet its way thru that barbed wire and machine guns before it advances further. (Whoa! My metaphor gland is SMOKING today!) On Comex today gold shut the doors down $2.90 to $1,361.90. The SILVER PRICE five day chart looks more like a rounding top, but since broadening tops sometimes show a rising upper boundary, it might be called that, too. Upper barrier for silver is 3050c, and the lower safety net is 2965c. On Comex today silver closed down 18.2c at 3009.1c. The daily chart opened about 3018c, then slammed down to 2967c, and rose smartly back to 3025c, but closed lower. Y'all don't get mad and start throwing inkwells at me through the computer, I have to tell y'all what I see. Silver can only overcome the bad juju of the last three day's chart by clearing that 3050c level. Stepping back a bit and viewing the five month chart. So far SILVER has merely made a lower high than its 3 January peak, which constitutes nothing more than a double top or maybe a peaking B-wave of an A-B-C correction. Of course, closes above $1,365 and 3050c resistance would gainsay my elaborate ratiocination. That old meth-head the US DOLLAR INDEX decided to go straight today. It burst up off yesterday's 77.50 bottom, adding 54.7 basis points and leaving that chart looking even more like a head and shoulders bottom. From here the dollar will spike its own future if it closes, even trades, below 78. Overhead it needs to break clean through 78.35. The dollar cleared its trend-change trip-wire 20 day moving average (78.13) and closed at 78.188. The Euro, on the other hand, closed at 1.3602, down 3/4 of one percent and below its 20 dma (1.3607). Early in the day stocks were knocked down and they stayed down the rest of the day. Again it was a mixed day, with some indices up and some down. Dow lost 10.6 points to close 12,229.29, looking something like the repeating decimal fraction of an ounce of silver's statutory value in "dollars of silver," that is, $1.29292929292. But I digress, for as we all know, stocks ain't like silver at all. Besides, stocks might have broken their uptrend. If so, expect the rats to come over the sides of the ship in great carpets whenever the Dow cuts through 12,000. S&P500 today closed up a meaningless 0.99 point to 1,321.87. My confidence in stocks remains as high as it has been since 2000. (Some of you won't get that, I'll bet.) 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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| French bank chief wary of ‘silver bullet' Posted: 10 Feb 2011 10:41 AM PST By Scheherazade Daneshkhu … Christian Noyer, the head of the French central bank … warned against pushing banks to concentrate their assets in sovereign bonds to comply with new liquidity rules requiring banks to hold more cash and liquid assets against a market freeze. "We know by experience now, after the sovereign debt crisis, that the government debt securities market is not necessarily at all moments the most liquid and the safest, so that this concentration may be very risky," Mr Noyer told the Financial Times in an interview. … France, which currently holds the rotating presidency of the G20 group of industrialised countries, has been planning to argue at next week's meeting for reducing the volatility of commodity markets and reforming the international monetary system. … Mr Noyer, who sits on the European Central Bank's governing council, declined to blame speculators but said volatile commodity prices were an issue for central bankers because they could raise inflationary expectations among the public. Commodities were a relatively new problem due to the interest of funds and other investors, which had contributed to price rises, he said. [source] RS View: Whenever the topic of commodities comes up in the context of investment/speculation/prices, no dialog can be considered lucid or well-grounded unless the parties to the discussion have fully absorbed the deep bedrock of John Locke's thoughts on the matter.
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| Posted: 10 Feb 2011 10:12 AM PST Gold rebounds on safe haven demand The COMEX April gold futures contract closed down $3.00 Thursday at $1362.50, trading between $1351.40 and $1366.80 February 10, p.m. excerpts: see full news, 24-hr newswire…
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| Decoding the Truth About Inflation Posted: 10 Feb 2011 09:53 AM PST Proving once again that investing in fixed-yield bonds when the foul, filthy Federal Reserve is creating so much money (so that their governments can deficit-spend it!) is a stupid, stupid, stupid idea because inflation will result, Agora Financial's 5-Minute Forecast newsletter reports that "Already since October, the rate on the 10-year has jumped from 2.4% to 3.6% – a 50% increase." Yikes! So how much value does a bond paying 2.4% lose when yield rates climb to 3.6%? I don't know, nor do I care, since I currently have less than zero interest in bonds, which is a kind of hostile antipathy towards them, not unlike that time I took the beautiful Brenda out, and when I later tried to kiss her goodnight, she said, "If your lips even come close to me one more time, I am going to claw your eyes out!" I changed my mind about Brenda, and, of course, I will eventually change my mind about bonds, too. This will be when interest rates are so high but inflation seems to be peaking, which means that I will get out of gold (which will theoretically be at its high price) and into bonds (which will be, theoretically, at their low prices). But that ain't now! Indeed, the torrent of new money continues, as The Daily Bell newsletter reports, "Central banks have pumped something like US$20 to US$50 TRILLION into the world's economy to try to reinflate economies that collapsed in 2008." The keen eyes and sharpened economic senses of Junior Mogambo Rangers (JMRs) everywhere surely detected the use of all-caps to spell "trillion," and which JMRs rightly suspect contains a secret code of some kind, perhaps relaying an important secret message to a shadowy group of insiders who have the code key, or a Secret Code Thingamabob (SCT) of some kind, such as a Mogambo Secret Decoder Ring (MSDR). Of course, there is the obvious interpretation that the $50 trillion dollars is a Hell Of A Lot Of Money (HOALOM), being just short of equaling the GDP of the Entire Freaking World (EFW)! Perhaps if we had a Mogambo Secret Decoder Ring (MSDR) to solve the mystery! Alas, the idea for the stupid rings never really worked, it cost WAAAY too much, it was made of really cheap materials (I think some of it was radioactive), with cheap labor, it was a Big Pain In The Butt (BPITB) to encode secret messages, and then I forgot how, but which wasn't the point, anyway: the Mogambo Secret Decoder Ring (MSDR) was just another attempt to make a lot of money in a hurry so that I could have a lot of money to buy gold, silver and oil because the Federal Reserve was creating so much money! Since I had no decoder ring, or code key, or any idea what I am talking about, I decided to just shut up, whereupon The Bell continued, "As this currency begins, finally, to circulate, price inflation must result, unless such money is quickly removed." And since money is obviously NOT being removed, it is no surprise that price inflation is already here, as attested to by Bloomberg reporting that "World food prices rose to a record in January on higher dairy, sugar and cereal costs and probably will remain elevated. An index of 55 food commodities climbed 3.4% from December to 231 points, the seventh straight increase." The biggest gainers were dairy prices, which were rising at 6.2%. And The Economist magazine reports that inflation in the "food" category made prices rise by a staggering 44% in the last year, and "non-food agriculturals" rising by a whopping 100.6%! More than doubling! In One Freaking Year (OFY)! Tyler Durden at zerohedge.com reports, "Corn spot up 7.76%, wheat up 5.63%, Rice up 10.08%, Hogs up 10.16%, Sugar up 5.64%, Orange Juice up 3.33%, and cotton… up 17.08%. That's in one month!" Mr. Durden's use of an exclamation point proves that he is concerned about inflation, and how fast prices are rising, too! What does this all mean to me? It means I was abso-freaking-lutely right to be buying gold, silver and oil, because monetary inflation means price inflation, and that means gold, silver and oil go up in price! Whee! This investing stuff is easy! The Mogambo Guru Decoding the Truth About Inflation originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
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| Unprecedented backwardation for silver, Turk tells King World News Posted: 10 Feb 2011 09:51 AM PST 5:47p ET Thursday, February 10, 2011 Dear Friend of GATA and Gold (and Silver): GoldMoney founder and GATA consultant James Turk tells King World News that silver is in unprecedented backwardation and he expects a massive short squeeze and possibly declaration of "force majeure" to rescue the shorts. Excerpts from Turk's interview are headlined "Turk -- Silver Backwardation for Years, Possible Hyperinflation" and you can find it at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/2/10_Tu... Or try this abbreviated link: CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf Join GATA here: Phoenix Investment Conference and Silver Summit Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php
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| Posted: 10 Feb 2011 09:25 AM PST Modeled Behavior submits: By Karl Smith Will Wilkinson notes the intuition behind the golden warriors.
I would disagree. First, that money is a reliable store of value is not a virtue but a regrettable defect of our economic system. It is extremely difficult to create money that is a workable medium-of-exchange without it having some value-storing properties. This is a fundamental problem that industrious minds work to solve whenever faced with it. The less fundamental value money has the better. An item that is used as a medium-of-exchange cannot be put to productive use otherwise. More to Ryan’s point, attempts to store value as money have the potential to collapse our entire economic system. Money does not create anything. Value stored as money is value lost; lost because it represents resources not directed towards capital. Capital, unlike money, does create things. That people sometimes see it as advantageous to stop investing in capital and start holding money is the source of enormous economic instability. A sudden hoarding of cash means that businesses at once have fewer customers, fewer investors and fewer creditors. They have no choice but to retrench. They have to lay off good workers and shut down good machines. Unemployment rises. Complete Story »
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| Posted: 10 Feb 2011 09:22 AM PST China May Increase its Gold Holdings Beyond Ft Knox Level Share this:
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| Posted: 10 Feb 2011 09:16 AM PST Turk – Silver Backwardation for Years, Possible Hyperinflation Silvergod says: “My ass is worth more than your whole life!” Share this:
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| Posted: 10 Feb 2011 09:05 AM PST Hard Assets Investor submits: By Brad Zigler Some silver traders were left scratching their heads after reading our feature, "Playing The Silver Gosose." While the probabilities of breakout moves in the white metal were laid out in the article, no plan for actually "playing" the game was advanced. For those teased by the headline, we offer the following stratagem—a bull call spread on the iShares Silver Trust (NYSE Arca: SLV). In the article, the odds calculated for further bull moves in the near term were higher than those of a decline. Given silver's—and, consequently, SLV's—penchant for big gyrations, we can't totally discount downside volatility. What we need is a percentage shot for the near term. Hence the spread. A bull spread is constructed by buying an SLV call option and simultaneously selling short another call with a higher exercise, or strike, price. The risk of being short a call is covered—meaning there's no likelihood of margin calls—by ownership of the call with the lower strike. With SLV trading midway between $29 and $30 now, an April $32 call could be purchased for 78 cents. If you had a near-term price expectation of $36 by mid-April, you might be enticed by the prospect of risking $78 for a potential $322 payday. That's a 4-to-1 reward-to-risk ratio, after all. By selling a $34 April call—and collecting 41 cents in premium—alongside your call purchase, though, you're bestowed the same reward-to-risk potential, with just half the dollar outlay. How so? Your net premium cost would be just 37 Complete Story »
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| Posted: 10 Feb 2011 08:56 AM PST by Addison Wiggin - February 10, 2011
 “I want to encourage you to get in the game,” the president told CEOs assembled at the U.S. Chamber of Commerce across the street from the White House earlier this week. “Today, American companies have nearly $2 trillion sitting on their balance sheets… My message is now is the time to invest in America.”Ah, if only it were so simple. We find ourselves in a pickle this morning. Somehow, we’ve veered off the track of providing you with incisive investment recommendations into the quagmire of presidential puffery… we apologize. In an effort to extricate ourselves, we’ve contrived an experiment… with the hopes that we can be done with this debate and get back to opportunity ASAP. What follows is, more or less, a conversation consisting of a speech given by the president asserting that the United States must be the best place on Earth to do business. And the response by an entrepreneur faced with the reality of doing business in today’s post-crisis regulatory environment.  The setting: The administration’s own Small Business Administration issued a study last year that says businesses with fewer than 20 employees are stuck with regulatory costs 42% higher than firms of 20-499 employees.And when it comes to environmental regulations, the cost to small business is 364% higher. Tax compliance? 206% higher. “These findings should anger us all,” wrote Gary Shapiro, president of the Consumer Electronics Association. “Over the past decade, small businesses created 70% of jobs in this country, and we are looking to them again to help lead us out of the current economic downturn.”  “America’s success didn’t happen overnight,” the president stated in one of the ‘duh’ moments of his Chamber speech, “and it didn’t happen by accident. It happened because [of] the freedom that has allowed good ideas to flourish, that has allowed capitalism to thrive; it happened because of the conviction that in this country hard work should be rewarded and that opportunity should be there for anybody who’s willing to reach for it.”“Yes, Mr. President!” replies our friend Greg Stemm, CEO of Odyssey Marine. “We did ‘get in the game,’ hired lots of people, innovated and created a new industry out of wasted resources lost for centuries at the bottom of the ocean and abided by all applicable laws -- and, I am sorry to report, the U.S. Government is ‘encouraging’ us by trying to hand over the fruits of our labor to another government.” We’ve recounted the sordid tale many times, but for reference. The WikiLeaks cables revealed back in December that both the Bush and Obama administrations sought to lend a hand in turning over Odyssey’s Black Swan find (some $500 million in coins) to the government of Spain, in exchange for a painting in Madrid claimed by the estate of a U.S. citizen. “Your administration,” Greg continues, “is trying to change long-standing U.S. government policy and is ‘reinterpreting laws’ midstream to appease a foreign government, at the cost of hundreds of millions of dollars to U.S. investors -- hundreds of millions from our ‘balance sheets’ that we could unleash to create new jobs. “It even appears that our own government was offering to ‘assist’ a foreign government in our courts to literally steal hundreds of millions of dollars from the ‘balance sheet’ of the U.S. shareholders who earned it. The U.S. government is helping to ‘return’ property that the foreign government never owned or had any legal or ethical claim to.”  “We know what it will take for America to win the future,” continued the president as he courted the Chamber leaders. “We need to out-innovate, we need to out-educate, we need to out-build our competitors. We need an economy that’s based not on what we consume and borrow from other nations, but what we make and what we sell around the world. We need to make America the best place on Earth to do business.”“It’s one thing when bureaucrats are beating you down,” Greg replies. “You learn after a while that this is just politics and business -- and sometimes you happen to be in the wrong place at the wrong time. “It’s quite another thing when the president asks you to ‘get in the game’ while the people under him go to great lengths to create problems for your company.” We’ve been following Greg’s trials and tribulations with the U.S. government in a documentary film we’ve just submitted to the Tribeca Film Festival. With any luck, we’ll get in and finish the project by the end of April. For us, Odyssey serves as a proxy for the situation many entrepreneurs across all industries face. The details of their specific challenge may be unique. But their effort to create and grow a business in an increasingly hostile environment does not appear to be so. We’ve published the complete response Greg wrote to the president below. And thank you for letting us get this off our chest.  Meanwhile, China’s biggest energy producer is buying its first stake in North American natural gas. PetroChina will buy 50% of Encana Corp.’s Cutbank Ridge assets for $5.4 billion. That gives China access to gas coming from 635,000 acres in Alberta and British Columbia.If you’re keeping score (and we are), that’s $46 billion in total energy acquisitions by Chinese firms since last year. Nearly a quarter of that is in Canada alone; Sinopec paid $4.5 billion to ConocoPhillips last year to pick up a 9% stake in Canada’s biggest oil sands project. [Ed. Note: These deals will no doubt be the source of much debate at this year’s Investment Symposium in Vancouver, B.C. (July 26-29, 2011). We hope you’re making plans to join us now… the event sells out quickly, as space is limited. Our advance team, namely symposium director Bruce Robertson, is making his way back from Vancouver, as we speak. He’s finalized the contracts necessary to host this year’s event and we’re ready to start promoting it. If you know you want to join us, we recommend you register now, before the line forms and the price of entry goes up… call Barb Perriello at (800) 926-6575 and tell her you want the discount Addison is referring to.]  Major U.S. stock indexes plunged on the open today, but have recovered some of those early losses.Among the factors weighing on the market: Cisco turned in better-than-expected numbers… but happened to mention its routing and switching revenue (that is, its high-margin operations) was down 7% for the quarter.  “Things are getting awfully interesting, as stocks push to recovery highs,” writes Options Hotline editor Steve Sarnoff. ”We’re seeing measures of volatility extremely low. This has me on watch for a coming increase in volatility.“We are seeing conditions that would warrant a serious correction coming soon to markets near you. Negative divergences are developing...China is pressing the brakes on its speeding economy...European debt worries are returning...Egyptian unrest is spreading. “But demand and liquidity are keeping the bulls in charge. The U.S. dollar is weak, and we may be nearing the point where it becomes clear, even to the staunchest bond bulls, that the long-term down trend in rates is broken.” Steve’s is on a roll again in 2011. He’s made four recommendations so far, and the average play is up 25% in just 10 days. One is up 52%. It looks as if Steve is on his way to another year of 12 or more plays that can double your money or better. Learn more about Options Hotline here.  The recent run-up in Treasury rates is taking a rest. The yield on 10-year notes peaked yesterday at 3.72% and then retreated after a decent 10-year auction and soothing words from Fed chief Ben Bernanke about inflation remaining at bay.We kid you not… The 10-year is back this morning to 3.68%.  Gold backed off overnight, too. But has now returned to roughly where it was 24 hours ago, at $1,365. Silver has picked up a nickel, to $30.25. If you’re looking for indicators that we’ll avoid a double dip in housing, you won’t find them in the latest data points…
 “The grain rally surged again yesterday with new 2½-year highs in corn, beans and, most importantly, wheat,” says Resource Trader Alert’s Alan Knuckman.At $8.87 a bushel, “Wheat is closing in on the $9.00 target of the 50% recovery resistance from 2008 highs to 2009 lows.” Blame the most recent move on drought in China and wheat purchases by governments hoping to keep Egypt-scale protests from breaking out in their own backyards. Just this morning, Alan recommended taking a wheat trade off the table for potential gains of 216%. Keep an eye out next week for a special announcement on how you can join Resource Trader Alert… and also gain access to two more of our best-performing services.  We bid farewell and shed a tear this morning for a staple technology now fading into the past. 2011 marks the first year since -- well, probably the 1970s -- that you can’t order a car with a built-in cassette deck. Lexus was the last make to offer it, and 2010 was the final year. Aftermarket models are still available if you can’t bear to part with that mix tape your ex-girlfriend gave back to you when you broke up. But the age of the mix tape has at last been supplanted by iPod playlists. “Now the question the automakers are asking is,” says Phil Magney of the industry research firm IHS iSuppli, “how long has the CD got to go?” How long, indeed?  “As an archaeologist who specializes in amphoras (transport jars) of the Classical Greek period,” responds a reader to Odyssey Marine’s effort to introduce a commercial model into shipwreck salvage, “and as one whose work more often than not involves shipwrecks, I would suggest that there is a clear distinction between those who seek profit from shipwrecks and those who seek to gather all traces of material culture and to then read them in such a way as to increase our understanding of history.“Because almost all amphora handles were stamped with tax information and because there are differences in design predicated on where any amphora was made, archaeologists have been able to understand the role of trade in ending the Greek Dark Ages as well as to trace the economy of the Greek city-states, and, in doing so, help explain why Greece failed to form a unified nation. Amphoras have no value on the open market. However, I have witnessed far too many shipwrecks that have been looted by for-profit archaeologists who have destroyed such junk items as amphoras. “Frankly, just as the Victorians collected mummies for afterdinner entertainment without regard to what they were destroying, commercial treasure hunters destroy what they consider valueless material culture. The goals of the commercial archaeologists and the scholarly archaeologists are just too disparate to co-exist. “The difference is clear: For-profit archaeologists want to make money and are looking for booty. Once you introduce a profit motive, the entire paradigm collapses. What makes leaving archaeology to those who are neither interested in making money nor selling the material culture they find seems blatantly obvious. Or do you really think that history has no value?” The 5: This is exactly our point. You’re asserting that a person seeking profit cannot also value history. We’re not experts in the field by any means. Nor do we mean to beat a moribund horse. But we know that in their lab in Tampa, Odyssey has rows of amphoras that they’ve preserved to the highest standards of the archeological community. And have published their own findings on these artifacts because the scholarly journals refuse to print research from for-profit institutions. Likewise, Odyssey employs a world-class team of historians, archeologists and oceanographers to locate and excavate the wrecks they’re seeking, including the gentleman who helped “raise” the Titanic. You think that simply by choosing to work for a for-profit company they lose their interest in history and its preservation? Right now, there is a movement afoot to strip any archeologist of their professional credentials if they go to work for a commercial outfit. How does that make any sense? Wouldn’t that encourage exactly the kind of ignorant looting you’re worried about?  “I am a contractor in Michigan who recently has been turning down work,” a reader comments on the state of the economy. “Why, you might ask? Over the past three years, I have had to reduce my work force from eight to four. Each reduction was a painful, sleepless thing for me. These people need their jobs.“What I have learned is to become much more efficient with less (profit margins up). The phone has been ringing off the hook recently, but I have chosen to become more selective, rather than add employees to meet demand. “I am not sure why we have had so much action recently. I think the masses are falling for the debt-fueled recovery. I believe that most small business owners have the same attitude as I do: Increased regulation, higher taxes and forced health care benefits are not a good recipe for small business job growth. I personally believe our days of reckoning are coming. With your help, I have been preparing.”  “Am I missing something with this oil tanker pirate thing?” a third reader asks, changing tack. “I figure if I operated an oil tanker, I’d enlist the help of one ex-special forces trooper as insurance. I think that one (well-trained) fellow with one crane-mounted minigun could easily repel pirates at sea.”“For the life of me,” adds another, “I can’t understand why the various governments of the world don’t simply allow the crews of the tankers and other vessels sailing anywhere near Somalia to have effective small arms to repel a pirate attack. “A couple of .50-caliber sniper rifles and some proper training on their use on the tanker just taken would have prevented these attacks and saved millions of dollars in goods from being seized. Political correctness run amok.” The 5: That’s the crux of the issue. “There are two barriers preventing defensive armament of merchant shipping,” according to gun rights analyst Dave Kopel of the Independence Institute. “A ship flying the American flag is governed by American law, which of course allows American crew members to possess arms. But the vast majority of commercial shipping these days is on ships that are registered to other flags, such as Liberia, Panama, Greece, the Bahamas, Hong Kong or Turkey. A permit to own a firearm for defensive purposes is not necessarily easy to obtain from such governments. “Also, territorial waters extend 12 miles from a nation’s coast. A ship that enters a nation’s territorial waters must obey that nation’s laws, including the gun laws… “Plenty of foreign ports ban arms on any nonmilitary vessel.”  “It seems the Somali pirates never take over ships headed to China,” adds another reader. “I wonder why. Payoffs? Fear?” “Those girls are not flat,” a reader writes after seeing our note yesterday that “stocks were flat as a Victoria’s Secret model.“Victoria’s Secret normally uses much curvier models than you’d typically see on a runway,” he says. ”I’ve done my DD on this.” The 5: Is that ‘due diligence’ or… a measurement?
Cheers, Addison Wiggin The 5 Min. Forecast P.S.: George Soros and T. Boone Pickens don’t agree on much politically. But they agree on one of the best opportunities in the energy patch in a long time. They’ve both taken stakes in the “special situation” that recently came on Chris Mayer’s radar. For now, shares can be had at under $3.50… but probably not for very long. Chris shares all the details here. “I guess he’s speaking to me as a CEO of an American company,” says Odyssey Marine CEO Greg Stemm, “so I’d like to respond in an open letter to President Obama: Yes, Mr. President! I’m with you on this. We’ve been trying -- but it feels like our efforts are being sabotaged by our own government. We need your help -- and all we are asking for is an honest and level playing field. We did “get in the game,” hired lots of people, innovated and created a new industry out of wasted resources lost for centuries at the bottom of the ocean and abided by all applicable laws -- and I am sorry to report that the U.S. Government is “encouraging” us by trying to hand over the fruits of our labor to another government. Your administration is trying to change long-standing U.S. Government policy and is “reinterpreting laws” midstream to appease a foreign government at the cost of hundreds of millions of dollars to U.S. investors -- hundreds of millions from our “balance sheets” that we could unleash to create new jobs. It even appears that our own government was offering to “assist” a foreign government in our courts to literally steal hundreds of millions of dollars from the “balance sheet” of the U.S. shareholders who earned it. The U.S. government is helping to “return” property that the foreign government never owned or had any legal or ethical claim to. How do I really feel about this? It’s one thing when bureaucrats are beating you down -- you learn after awhile that this is just politics and business -- and sometimes you happen to be in the wrong place at the wrong time. When you run a business, you learn to take the knocks that come from anti-business bureaucrats -- people who have never had to make payroll, never had to hire someone, never had to let someone go -- never created a job, and many who wouldn’t know how to begin to do these things. We build our companies in spite of these obstacles and pray that we aren’t destroyed by a government employee who can inadvertently wipe out our business with the swipe of his or her pen. That’s something we’ve learned to live with... reluctantly. It’s quite another thing when the president asks you to “get in the game” while the people under him go to great lengths to create problems for your company. I hope you can understand how frustrating that can be. Mr. President, if you really want to encourage us to “get in the game,” please send a message to the U.S. State Department and the Justice Department to encourage them to be absolutely honest with the courts about the actual intent and meaning of the laws that have recently twisted to serve foreign interests. Please encourage them to allow former U.S. government employees, who drafted and understand the intent of these laws, to explain that intent to the courts. Respond to the members of Congress who are calling for the State Department to allow the courts to do their work
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| Hourly Action In Gold From Trader Dan Posted: 10 Feb 2011 08:41 AM PST View the original post at jsmineset.com... February 10, 2011 11:23 AM Dear CIGAs, Click chart to enlarge today's hourly action in Gold in PDF format with commentary from Trader Dan Norcini ...
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| January Deficit Grows by $50B, on Pace For $1.5T Posted: 10 Feb 2011 08:38 AM PST  Note: Guy on Al-Jazeera just now said, he believes this will be the most violent, bloody revolution ever in the history of the world.. Protesters Complain of Torture and Detentions by Mubarak's ArmyWASHINGTON (AP) -- The federal government's budget deficit grew by $50 billion in January and is expected to finish the year as the highest in history. The Treasury Department said Thursday the deficit was one of the highest ever for the month of January, second only to the $63 billion deficit recorded two years ago. For the first four months of this budget year, the deficit totaled $418.8 billion, 2.7 percent lower than the same period a year ago. However, this improving trend is expected to reverse in coming months. The Congressional Budget Office is projecting a record deficit of $1.5 trillion this budget year, which ends in September. The estimate was revised upward last month based on a tax-cut package brokered between the White House and Republicans that will add $400 billion to this year's red ink. More Here.. Federal Reserve To Buy More Air From The Treasury Dept Dollar Is Finished: IMF Calls For Dollar Alternative Ron Paul Says Next US Crash Will Be Comparable To That Of Soviet Union
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| How Much More Demand Can Silver Handle? - February 9, 2011 Posted: 10 Feb 2011 08:21 AM PST How Much More Demand Can Silver Handle? - Casey's Daily Dispatch [LIST] [*]Sign Up Now! [*]| [*]RSS Feed [*]| [*]Print this [*]| [*]Visit the Archives [*]| [*]Email to a Friend [*]| [*]Back to All Publications [/LIST] February 9, 2011 | [url]www.CaseyResearch.com[/url] Dear Reader, Everyone is familiar with the myth that booms can last forever. But another, less noticeable myth takes hold right when the boom begins to weaken. It's the idea that the central bank can slowly unwind apparent problems on the horizon. The U.S. experienced this during...
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| Posted: 10 Feb 2011 08:15 AM PST Not much time for careful cogitations today, Fellow Reckoner. In fact, we barely have time for careless ones. We're on a bus right now, traveling from Uruguay's capital of Montevideo to the seaside town known to locals simply as "Punta". But wouldn't you know it…they've gone and enabled the bus with a Wi-Fi connection. We're in the middle of nowhere and somehow, some way, the news still finds us. Day by day, it's getting harder and harder to avoid. So we recline our chair, flick the reading light on overhead and take a look around the empire from right here on our Uruguayan coach. The reports are flooding across the wires that Egypt's dictator of 30 years is to step down. You remember Hosni Mubarak – "good friend" of one Dick Cheney and outpost sentinel for the US over in the MENA region. He's been the focal point for the rage of a generation of young Egyptians who have been busily protesting up and down the Nile. They want the old coot out, they say. This is a new generation, after all, and they're wising up to what's been left to them: poverty, massive unemployment and a generally pitiful existence. Not much, in other words. When the protests began, the Egyptian government suspended the Internet and disabled texting capabilities for cellular phones. They saw what happened in Iran a year earlier, where angry citizens took to the social media waves to bring news of the electoral fraud there to the world. They published videos of police brutality and tweeted their hearts out for all to see. "There's no way we're having any of that," Hosni must have thought. "Cut the cables!" It didn't matter, of course. The truth has a reliable habit of making its way into the light eventually. In Egypt's case, Google set to work developing "speak-to-tweet" technology, whereby citizens there could call a specific number and have their recorded voice messages converted into micro-blogs. And lo! "The government is spreading rumors of fear and of burglary and of violence," said/wrote/tweeted one concerned Egyptian. "The only incidence of theft and burglary are done by the police themselves." This will come as a shock to almost nobody. It's just what you'd expect from the crumbling edges of a failing empire. Kings, warlords, gangsters and presidents have for millennia fought to protect their privilege and power. It's what they do. And, for just as long, "the people" have been pushing back. Like all others, this trend has its ebbs and flows. For generations at a time the state gains ground, encroaching on the rights and lives of those it affects to serve. Then, when the masses have finally had enough, they storm the palace grounds and give their oppressors the boot…only to replace them with a new ruler, one who promises "change." Today, while the outposts burn in far off lands, the Antoinettes continue the party closer to home, right there in the US of A. But there's something very different about the "post-recession" vibe at this shindig. For one thing, the cost of eating cake (and of eating in general) is skyrocketing. Corn, which is used to feed the cattle, hogs and chickens, has doubled in the past six months. That has a knock-on effect. Fellow Reckoners flooded our inbox last week with stories of price hikes at their grocery stores and gas pumps. Ben Bernanke says this has little to do with his ark-worthy flood of US dollars into the world economy. Right. A trillion here…a trillion there… "What, me worry?" In other news, foreclosures in the US jumped 12% in January from the previous month. According to a report from real estate data firm RealtyTrac, lenders foreclosed on 78,133 properties for the month. "The numbers will inevitably go up," Rick Sharga, senior vice president at RealtyTrac, told the papers. "It's just a question of will it be sooner or will it be later." Meanwhile, The US Postal Service is hinting that it may default on some of its financial obligations later this year after reporting yet another quarterly loss. The cumbersome government agency said it suffered a loss of $329 million in the first quarter of federal fiscal year 2011. That was up from a loss of $297 million a year earlier. Faced with a problem caused by too much spending, the Obama Administration has promised to do just what it ought to avoid; that is, to spend more…more than any other administration in the history of the republic. More waste…more incompetence…and, incredibly, more intervention. Joel Bowman When the People Push Back originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
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| IMF urges overhaul of global monetary system Posted: 10 Feb 2011 08:14 AM PST by Paul Vieira … Mr. Strauss-Kahn's remarks emerge a week before Group of 20 finance ministers and central bankers gather in Paris. Reform of the global monetary system and changes to the dollar's role as a reserve currency are expected to be on the agenda at this meeting. … "Global imbalances are back, with issues that worried us before the crisis — large and volatile capital flows, exchange rate pressures, rapidly growing excess reserves — on the front burner once again. Left unresolved, these problems could even sow the seeds of the next crisis," Mr. Strauss-Kahn said. "In my opinion, reforms to the international monetary system that help us get to the root of these imbalances could both bolster the recovery and strengthen the system's ability to prevent future crises." [source] ALSO… IMF calls for dollar alternative The IMF said Special Drawing Rights, or SDRs, could help stabilize the global financial system. SDRs represent potential claims on the currencies of IMF members. They were created by the IMF in 1969 and can be converted into whatever currency a borrower requires at exchange rates based on a weighted basket of international currencies. The IMF typically lends countries funds denominated in SDRs. While they are not a tangible currency, some economists argue that SDRs could be used as a less volatile alternative to the U.S. dollar. … In addition to serving as a reserve currency, the IMF also proposed creating SDR-denominated bonds, which could reduce central banks' dependence on U.S. Treasuries. The Fund also suggested that certain assets, such as oil and gold, which are traded in U.S. dollars, could be priced using SDRs.
Fred Bergsten, director of the Peterson Institute for International Economics, said at a conference in Washington that IMF member nations should agree to create $2 trillion worth of SDRs over the next few years. SDRs, he said, "will further diversify the system." [RS offering a Side Note to Fred: "You, sir, are an economic hack." Fred is among that special breed of economic thinkers in this world who would seek to "diversify" a gasoline inferno with liberal infusions of kerosene, hydrogen and alcohol.] ALSO… (see below for a firm reality check) Confession: IMF admits it failed to spot economic crisis … This was blamed on a combination of factors – unwillingness to go beyond the group thinking, inability to see beyond what some of the big banks and members countries were saying and, unsurprisingly, "turf" issues. The findings were released on Wednesday with statements from the IMF brass, including managing director Dominique Strauss-Kahn, endorsing the investigation's findings and recommendations. The probe was conducted by the Independent Evaluation Office of the Fund tasked to look at the organisation's surveillance mechanism from 2004 to 2007 leading up the crisis in 2008. And it was found to have performed miserably. … The Fund also got India wrong and continued to push it to further liberalise its financial markets and the capital account, when in fact its limited exposure to the western financial system was what saved the country from the contagion. … It did not miss the signs completely though. Some of its reports had mentioned risks and dangers, but the organisation was not listening to itself – and its annual forecast the World Economic Outlook never took note of them. … "The Fund is so closely aligned with the world's top banks that it was unable to see the crisis which was rooted in these banks," said Nayan Chanda, an expert on globalisation at Yale University. That's probably why India never heeded the Fund's advice, forcefully and repeatedly delivered over 2006 and '07, and stuck to its chosen course on financial sector reforms. "Some senior officials consider," said the evaluation report, "that India's success in weathering the crisis could be attributed in part to its more conservative banking sector…" - – - – - RS View: In light of this final article impugning the general competence of the IMF, please consider again the previously posted note in which Jürgen Stark urges a "new thinking in politics" and a "change of mentality in the financial system."
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| Gold Daily and Silver Weekly Charts Posted: 10 Feb 2011 08:12 AM PST | |
| Posted: 10 Feb 2011 07:53 AM PST Here Comes Executive Order 6102 For The QE Generation: Dutch Central Bank Orders Pension Fund To Sell Its Gold Wiki: Executive Order 6102 Share this:
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| Posted: 10 Feb 2011 07:34 AM PST 20 Facts That Will Make You Mad MK: We had ‘stagflation’ in the 1970′s during the oil crisis that jacked up prices while wages stayed flat. But this is something different – two opposing economic forces – devastating deflation in the multi-trillion dollar broken housing/banking sector – combined with out of control money printing by [...]
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| ECB's Stark: Can't insure financial system against all risks Posted: 10 Feb 2011 07:26 AM PST February 10, 2011 FRANKFURT (Market News International) – The financial system cannot be protected from all possible risks and any attempt to do so would run afoul of the system's very nature, European Central Bank Executive Board member Juergen Stark said in an opinion piece released Thursday. … "Every insurance fosters ways of behaving that make the insured event become more probable, i.e. 'moral hazard.' … To insure the financial system against all risks is not only illusory, but contradicts its fundamental way of operating," he wrote. "Additional liquidity is created to solve problems whose origin is not a shortage of liquidity," Stark said. "Ultimately, there is neither a global counterinsurance for global safety nets nor an extra-terrestrial or intergalactic counterinsurance." … Authorities should instead strive for policies that are "stability-oriented and geared towards the medium term" and banks should remember their role as "financers of the real economy," Stark said, urging a "new thinking in politics" and a "change of mentality in the financial system." [source] RS View: For a change of mentality, the paperheads will need to wrap their mind around gold. Given that gold is unique among assets (i.e., it can maintain value outside the context of the financial system, unlike all other financial assets which require the system's context to foster counterparty performance) gold is therefore as close as we can get to having recourse to the special sort of extra-terrestrial or intergalactic counterinsurance that Jürgen Stark lightly (teasingly) refers to.
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| The Long and Frustrating Arm of Government Intervention Posted: 10 Feb 2011 07:19 AM PST "I want to encourage you to get in the game," the president told CEOs assembled at the US Chamber of Commerce across the street from the White House earlier this week. "Today, American companies have nearly $2 trillion sitting on their balance sheets… My message is now is the time to invest in America." Ah, if only it were so simple. We find ourselves in a pickle this morning. Somehow, we've veered off the track of providing you with incisive investment recommendations into the quagmire of presidential puffery…we apologize. In an effort to extricate ourselves, we've contrived an experiment…with the hopes that we can be done with this debate and get back to opportunity ASAP. What follows is, more or less, a conversation consisting of a speech given by the president asserting that the United States must be the best place on Earth to do business. And the response by an entrepreneur faced with the reality of doing business in today's post-crisis regulatory environment. The setting: The administration's own Small Business Administration issued a study last year that says businesses with fewer than 20 employees are stuck with regulatory costs 42% higher than firms of 20-499 employees. And when it comes to environmental regulations, the cost to small business is 364% higher. Tax compliance? 206% higher. "These findings should anger us all," wrote Gary Shapiro, president of the Consumer Electronics Association. "Over the past decade, small businesses created 70% of jobs in this country, and we are looking to them again to help lead us out of the current economic downturn." "America's success didn't happen overnight," the president stated in one of the 'duh' moments of his Chamber speech, "and it didn't happen by accident. It happened because [of] the freedom that has allowed good ideas to flourish, that has allowed capitalism to thrive; it happened because of the conviction that in this country hard work should be rewarded and that opportunity should be there for anybody who's willing to reach for it." "Yes, Mr. President!" replies our friend Greg Stemm, CEO of Odyssey Marine. "We did 'get in the game,' hired lots of people, innovated and created a new industry out of wasted resources lost for centuries at the bottom of the ocean and abided by all applicable laws – and, I am sorry to report, the US Government is 'encouraging' us by trying to hand over the fruits of our labor to another government." We've recounted the sordid tale many times, but for reference. The WikiLeaks cables revealed back in December that both the Bush and Obama administrations sought to lend a hand in turning over Odyssey's Black Swan find (some $500 million in coins) to the government of Spain, in exchange for a painting in Madrid claimed by the estate of a US citizen. "Your administration," Greg continues, "is trying to change long-standing US government policy and is 'reinterpreting laws' midstream to appease a foreign government, at the cost of hundreds of millions of dollars to US investors – hundreds of millions from our 'balance sheets' that we could unleash to create new jobs. "It even appears that our own government was offering to 'assist' a foreign government in our courts to literally steal hundreds of millions of dollars from the 'balance sheet' of the US shareholders who earned it. The US government is helping to 'return' property that the foreign government never owned or had any legal or ethical claim to." "We know what it will take for America to win the future," continued the president as he courted the Chamber leaders. "We need to out-innovate, we need to out-educate, we need to out-build our competitors. We need an economy that's based not on what we consume and borrow from other nations, but what we make and what we sell around the world. We need to make America the best place on Earth to do business." "It's one thing when bureaucrats are beating you down," Greg replies. "You learn after a while that this is just politics and business – and sometimes you happen to be in the wrong place at the wrong time. "It's quite another thing when the president asks you to 'get in the game' while the people under him go to great lengths to create problems for your company." We've been following Greg's trials and tribulations with the US government in a documentary film we've just submitted to the Tribeca Film Festival. With any luck, we'll get in and finish the project by the end of April. For us, Odyssey serves as a proxy for the situation many entrepreneurs across all industries face. The details of their specific challenge may be unique. But their effort to create and grow a business in an increasingly hostile environment does not appear to be so. We've published the complete response Greg wrote to the president below. And thank you for letting us get this off our chest. *** "I guess he's speaking to me as a CEO of an American company," says Odyssey Marine CEO Greg Stemm, "so I'd like to respond in an open letter to President Obama: Yes, Mr. President! I'm with you on this. We've been trying – but it feels like our efforts are being sabotaged by our own government. We need your help – and all we are asking for is an honest and level playing field. We did "get in the game," hired lots of people, innovated and created a new industry out of wasted resources lost for centuries at the bottom of the ocean and abided by all applicable laws – and I am sorry to report that the US Government is "encouraging" us by trying to hand over the fruits of our labor to another government. Your administration is trying to change long-standing US Government policy and is "reinterpreting laws" midstream to appease a foreign government at the cost of hundreds of millions of dollars to US investors – hundreds of millions from our "balance sheets" that we could unleash to create new jobs. It even appears that our own government was offering to "assist" a foreign government in our courts to literally steal hundreds of millions of dollars from the "balance sheet" of the US shareholders who earned it. The US government is helping to "return" property that the foreign government never owned or had any legal or ethical claim to. How do I really feel about this? It's one thing when bureaucrats are beating you down – you learn after awhile that this is just politics and business – and sometimes you happen to be in the wrong place at the wrong time. When you run a business, you learn to take the knocks that come from anti-business bureaucrats – people who have never had to make payroll, never had to hire someone, never had to let someone go – never created a job, and many who wouldn't know how to begin to do these things. We build our companies in spite of these obstacles and pray that we aren't destroyed by a government employee who can inadvertently wipe out our business with the swipe of his or her pen. That's something we've learned to live with… reluctantly. It's quite another thing when the president asks you to "get in the game" while the people under him go to great lengths to create problems for your company. I hope you can understand how frustrating that can be. Mr. President, if you really want to encourage us to "get in the game," please send a message to the US State Department and the Justice Department to encourage them to be absolutely honest with the courts about the actual intent and meaning of the laws that have recently twisted to serve foreign interests. Please encourage them to allow former US government employees, who drafted and understand the intent of these laws, to explain that intent to the courts. Respond to the members of Congress who are calling for the State Department to allow the courts to do their work uninfluenced by politics and to back down from an anti-American business policy that is costing American jobs and hundreds of millions of dollars to US investors. Please just tell the people who serve under you to be honest and do the right thing. If you can do that, we're hopeful that justice will be served in the US courts. When we are confident that the fruits of the labor of all our employees can go to our "balance sheets," instead of being stolen from our shareholders, we are ready to unleash that capital to help accelerate the economic recovery. Sincerely, Greg Stemm The Long and Frustrating Arm of Government Intervention originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
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| Gold comes off lows after Mubarak reports Posted: 10 Feb 2011 07:03 AM PST By Claudia Assis … The metal inched into the black after several media outlets reported on Egyptian President Hosni Mubarak's impending resignation. … Others cautioned that, while markets were indeed rattled, volumes are low and thus prone to swings. The tone for gold is "bullish, but it's just cautious … and volume is not really there today," said Scott Meyers, a senior trading analyst with Pioneer Futures, a division of MF Global. Gold has struggled to stay in the upper $1,360s and hit $1,370 an ounce, but if it crossed over, that next leg up could come "rather quickly," he added. [source]
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| The Inflation Tipping Point (Part Three of Four) Posted: 10 Feb 2011 06:43 AM PST [Continuing from Part Two...] Alongside the evidence that credit deflation reversed into inflation around mid-2010, we also notice that commodity prices began to rise sharply around this time. Moreover, in most parts of the world, consumer price inflation began to pick up noticeably and by year end had reached the highest levels in years. At this point, one can quite easily draw parallels with the massive surge in global commodity prices which occurred in the first half of 2008, immediately prior to the arrival of the global financial crisis. (More on this below.) Commodity prices are once again rising rapidly in the US and elsewhere
The evidence is thus rather clear that the entire monetary transmission mechanism, from narrow to broad money; from broad money to credit and asset growth; from credit and asset growth to commodity and consumer price inflation; is now functioning. Indeed, it is functioning perhaps almost too well as one economy after another approach an inflation tipping point. In this context, it is perhaps curious why the Fed remains so steadfastly committed to its Treasury bond purchasing program known as QE2. The official, current Fed position is twofold: First, inflation–at least based on how they prefer to measure it–is undesirably low; second, unemployment is undesirably high. As such, the Fed will most probably continue with QE2 and, if this does not change this situation in the coming months, consider expanding or extending the program. (Indeed, we consider this more likely than not). In our view, the real reason why the Fed continues to stoke the inflationary fire may have more to do with the still-perilous state of the US financial system and the massive debt overhang which, naturally, needs to be serviced. It is much easier to service a debt which is depreciating quickly in real terms, even if it is growing in nominal terms. The Fed may claim to be aiming for just slightly higher inflation but it is possible that they are, in fact, seeking a significantly higher rate to shore up the banking system. With informed observers of all kinds–investors, businesses and consumers–now smelling the inflationary smoke of rising commodity and consumer price inflation, the Fed's continuing, unwavering commitment to create inflation could at any moment lead to dramatic changes in behavior. Once the tipping point is reached, the Fed will have lost the ability to control inflation without raising interest rates to punishing levels that will cause a major recession and possibly a financial crisis greater than that which struck in 2008. Why? Consider how rational economic agents are likely to respond to the onset of clear and present inflation. Prices are already rising and the Fed has not shown the remotest willingness to reconsider its current policies. Investors, therefore, will keep right on chasing returns in asset markets, seeking to remain ahead of the inflation curve. Businesses will stockpile inventories of real assets in an attempt to do the same. Finally, households may begin to stockpile consumer goods. What will be the combined result of these activities? Well, by driving up demand for all manner of assets, and wholesale and consumer goods, they are going to exponentially reinforce the price inflation already underway. As this sort of demand is not for consumption, but rather for stockpiling or hoarding, it is not positive for growth but rather quite the opposite; it is, rather, economically inefficient and stagflationary. Real consumption is not going to increase. Indeed, as prices rise, it is going to fall. Amidst structurally high unemployment, real wages are also going to fall. To be continued in Part Four of Four… Regards, John Butler, [Editor's Note: The above essay is excerpted from The Amphora Report, which is dedicated to providing the defensive investor with practical ideas for protecting wealth and maintaining liquidity in a world in which currencies are no longer reliable stores of value.] The Inflation Tipping Point (Part Three of Four) originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
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| Vulture Rules of the Road, Part 1 Posted: 10 Feb 2011 06:32 AM PST Vultures might be wondering why we haven't been out with any new Vulture Bargains lately. There's a good reason for that. Bargains are currently pretty scarce, and we are not as comfortable jumping on "already moving" trains as we are gaming harsh sell-downs on the issues we take an interest in.
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| A Trading Strategy for the Gold Correction Posted: 10 Feb 2011 06:28 AM PST seekinGold submits: In the bigger picture we expect gold make new highs this year mainly due to the devaluation of currencies but in the near term, in our opinion, the current correction could take the metal much further down. Shares of big miners like Goldcorp and Agnico Eagle are technically facing strong resistance. Based on this prediction, this is the trading strategy that we are taking. If in the mean time fundamentals change, we will revise our plan. 1. Hold on to the core positions and sell the underperformers and stocks in other industries that are over bought to secure cash [seen Lululemon (LULU) lately?]. 2. Buy 1/3 at $1,260 to $1,290 area. This is the old resistance level to 200 day moving average (that is rising). 3. Buy 1/3 at $1,200 the psychological support. 4. Buy 1/3 at $1,150. This is the Fibonacci retracement level that also corresponds to the support for the July 2010 rally.
(Click to enlarge) If prices go below $1,150 we will look at Options. The metal may not hit our buying targets and keep climbing up to make a new high, we get in once it crosses $1,450 to ride with the trend. Therefore, the $1,300 to $1,450 is a no trading zone. What Complete Story »
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| China May Increase its Gold Holdings Beyond Ft Knox Level Posted: 10 Feb 2011 06:27 AM PST  Global Economist David Hale made remarks at a conference in Cape Town South Africa that various Chinese officials have proposed making China's gold holdings 10,000 tons, larger than that of Fort Knox. Hale also stated, "The odds very much favor China making, over five years, very large gold purchases, and this in turn makes me bullish on the gold price."
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| Technical Analysis DOES Work For Gold Posted: 10 Feb 2011 06:27 AM PST By Warren Bevan, Precious Metal Stock Review In response to two articles recently by much greater and high profile minds than mine I thought I'd put a little pice out showing how technical analysis does work in the Gold market. It's been my philosophy to KISS. Keep-It-Simple-Stupid. I'm talking to myself above, not you nor any of my many loyal and wonderful readers and even more wonderful subscribers who get my daily thoughts on markets and Gold, Silver or anything else I'm thinking that morning as well as real-time trades. Let me begin by saying I'm far from perfect and at times forget my KISS mantra. In fact we have been underwater recently in our swing trading portfolio and have just this week righted the weightings and have already made back the losses and look set to continue higher, taking profits along the way. I know and readily admit that errors are part of investing. It's the ability of being able to be humble enough to recognize those errors and change your mind quickly that I feel makes for a truly great investor trader. It's just a part of life and especially investing to make errors. Just learn from them. One of the great minds in investing today, J.S. Kim, wrote a piece titled "Technical & Fundamental Analysis Fall Woefully Short in Assessing Manipulated Markets" Alasdair Macleod also wrote an article the day prior titled "Precious metals and the validity of technical analysis". They are both well worth the read. I just want to refute both their points that technical analysis doesn't work in Gold. I read and enjoy both men's work as often as I can. Mr. Kim suggests technical and fundamental analysis is mute in manipulated markets in the short-term. As for fundamentals, I say demand is increasing for Gold, while supply is not keeping pace with demand growth. That equates to higher prices over the mid to longer term. I'll show just how wrong he is in a minute on the technical analysis front though. While there is no doubt Gold is being manipulated, or held lower every chance possible, the fact is also true that large sovereign buyers and fund buyers are waiting in the wings to scoop up cheaper Gold. More recently they have had less patience and have not waited for large pullbacks, rather they've stepped back in at relatively minor support areas in an attempt to front run the growing list of others who are looking to do the same. It's been a hot topic lately that the best way to buy Gold is to acquire shares of GLD. What's termed a "basket" of GLD shares consists of 100,000 shares, and in theory can be redeemed for 10,000 ounces of pure Gold. Whether this is true, practical or only available to the big well connected boys is a topic for another day so let's leave it at that. But for today let's assume this to be correct, that GLD is the best way to acquire physical delivery of Gold. This is in no way a knock on Mr. Kim as I've enjoyed his writing for years now and agree with many of his thoughts. First let's take a look at the six month chart of Gold since it's relatively short term.
This is the basic chart I've been showing in my free weekly letters and it was quite easy to spot the rounded top as it was completing and I did mention that and I know many readers took advantage of it. The recent bottom occurred just below mild horizontal support then broke the very simple basic downtrend line. That would constitute a bottom having been put in. In my opinion. I mentioned these both in the free and clear to everyone in my weekly letters every weekend. The fact that the recent bottom was on only mild horizontal support is further evidence of the strong willingness and eagerness of buyers to step in at the first opportune time. Now this is all well and good and very basic, but not enough for me to call B.S to J.S. Kim! So let's take a look at another indicator I use and mention every week for free in the
weekly letter, the GLD chart. It's clear, to me at least, that any large volume days above roughly 25 million shares traded in GLD have marked high or low points within a day or two. In my book, a very accurate indicator. As long as it works, it works. Initiating and closing positions once the volume metrics line up, using very short stops would have netted you very nice profits, especially if leverage with options or futures. I'll follow my "KISS" mantra today and not ramble. I think I've proven my point as simply as possible. Volume matters. Along with simple technical analysis, I seem to have a pretty accurate track record in predicting Gold moves. In fact one most generous comment I received late in 2010 mentioned that this gentleman actually tracked pundits predictions and said I was by far the most accurate. A most flattering and humbling comment to be sure. And history is no predictor of future success. Knock on wood! One last note, you should read Mr. Kim's article linked above. He does bring up many great points and I agree with him everywhere except the fact that you can call bottoms and tops quite easily and accurately even in the manipulated Gold market. I've modestly supported GATA financially in the past and continue to mention them at times in my writings. I agree with Mr. Kim that not enough writers, analysts and traders take into account the whole picture, even manipulation, which can be easily pushed aside as conspiracy theory stuff. I do try and take in the whole picture, and I believe that's why I've been so lucky during this precious metal bull market to date. Have a great end of the week and I'll be back writing this weekend in the weekly letter. Warren Bevan In my free, nearly weekly newsletter I include many links and charts which cannot always be viewed through sites which publish my work. If you are having difficulties viewing them please sign up in the left margin for free at http://www.preciousmetalstockreview.com/ or send an email to warren@preciousmetalstockreview.com with "subscribe" as the subject and receive the newsletter directly in your inbox, links and all. If you would like to subscribe and see what my portfolio consists of please see here. If you found this information useful, or informative please pass it on to your friends or family. Free Service The free weekly newsletter "Precious Metal Stock Review" does not purport to be a financial recommendation service, nor do we profess to be a professional advisement service. Any action taken as a result of reading "Precious Metal Stock Review" is solely the responsibility of the reader. We recommend seeking professional financial advice and performing your own due diligence before acting on any information received through "Precious Metal Stock Review".
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| How Much More Demand Can Silver Handle? Posted: 10 Feb 2011 06:19 AM PST "Perth Mint Out of 100 oz. Silver Bars for at least 6 Weeks. Sunshine Mint quotes 90-day delivery on all investment-size silver bars. China may increase gold reserves beyond Fort Knox level...and much more. " Yesterday in Gold and Silver After Tuesday's excitement, there isn't much to report regarding Wednesday's gold trading day. Gold's New York high of $1,368.20 spot was at 10:20 a.m...which was immediately followed by gold's new York low [$1,357.20 spot] at precisely 11:30 a.m. Eastern. The gold price recovered from that...and closed virutally unchanged from Tuesday. Here's the New York Spot Gold chart on its own, as what happened elsewhere yesterday isn't worth looking at. The 11:30 a.m. on-the-button low is the standout feature...and I would bet serious coin that it wasn't random market forces at work here. The silver price action was slightly more interesting than gold's on Wednesday. A rally that went vertical just before the Comex open was dea...
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| The Worst Possible Investing Mistake Posted: 10 Feb 2011 06:19 AM PST There are many mistakes people make that ensure they won't get rich investing. In 2011, I think one in particular mistake will hurt more than others. I can sum it up by citing the phrase, "Generals fighting the last war." I have come across many people in my travels who, despite a 50%-plus drop in the stock market from its peak in October 2007 to the March 2009 bottom, are still waiting for the market to crash. They missed one of the greatest rallies in the history of Planet Earth because they looked backward when they should've been looking ahead. I know people who still think the housing market will crash. Yet housing prices are already down 30% from the peak nationwide. Housing is now more affordable than it's been in a generation, as we've seen. I know people who still won't touch a tech stock, even though the tech bubble burst and hit bottom eight years ago, or who won't even think about owning a Brazilian stock, because they lost money on one when Brazil blew up in the 1990s. These are not dumb people. Most of them are successful in their chosen fields. But even smart people can get stuck in their views…which become outdated – and unprofitable – as the world changes around them. It is like Mark Twain's old dictum about the cat and the stove. "She will never sit on a hot stove lid again – and that is well," Twain said, "but also she will never sit down on a cold one anymore." Over the holidays, I read a good paper on this subject entitled, "Investment Strategy," by Barton Biggs in January 1977. Biggs was a well-known strategist for 30 years at Morgan Stanley. More recently, he wrote a very good book about investing called Hedgehogging, which I would recommend. Anyway, Biggs wrote his paper as a sort of New Year's address to the money managers under his charge. He began by talking about all the experiences an investor accumulates over a career, even a career as short as 10 or 15 years. "He has had his share of winners and bloody noses," Biggs writes, "his back is permanently twisted from whipsaws and he has gotten whatever benefit there is to get from being run up and down the market flagpole countless times." As the old saying goes, "Experience is a comb that life gives you after you lose your hair." But seriously, that experience is important, especially if you have a few hairs left. Experience gives you a sense of the market's habits, its moods and conventions. You have a working knowledge for some of its industries and stocks. And you've probably learned a great deal about yourself, such as your tolerance for risk. But that experience also comes with barnacles that latch onto your hull. Biggs captures it eloquently: The problem is that in accumulating experience, he also acquires prejudices against industries and stocks because he has lost money in them. It is easy to…become an investment bigot with a closed mind on many subjects… A fresh, opportunity-minded mind, uncluttered by prejudice, is crucial for superior investing in an environment where the one constant, the one inevitability is change and industry group rotation. By definition, there can be no uninvestable industries. In short, an investor should never say, "Never." As in, "I'll never buy a housing stock," or "I'll never buy an airline stock." Biggs calls that kind of thinking "pure, fat, unadulterated laziness." There is a time and place for all things. I know I have to work hard to cultivate an open mind about all things investing. I try to change as the market changes. I don't want to be one of those guys who say the same thing every year even though the market has clearly changed. So while I always insist upon a favorable risk/reward proposition, I do not care what shape or structure that proposition takes. For example, I was bullish on fertilizer stocks in 2005 when I recommended Agrium to the subscribers of Capital & Crisis. After the stock tripled, I urged subscribers to sell the stock. I subsequently turned bearish on fertilizer stocks in 2007. In 2008, after the fertilizer stocks had collapsed, I told my subscribers to buy them once again. Since these 2008 recommendations, PotashCorp has more than doubled, while Mosaic (NYSE:MOS) sits atop a 57% gain. But I suspect we'll exit this position once again in 2011, as the grain story reaches a feverish pitch. Also in Capital & Crisis, I recommended various hotel, real estate, insurance and bank stocks in 2004-2005. I told subscribers to exit these positions – usually very profitably – in 2006. I did not recommend any stocks from these sectors after 2006, since I was worried about the housing bubble. But now that real estate prices have tumbled, this sector and the industries that support it, may be serving up some investment opportunities in 2011. As Roy Neuberger, who didn't suffer a single down year in 68 years on Wall Street, once said, "Fall in love with people…the last thing to fall in love with is a particular security. It is, after all, just a sheet of paper indicating a part ownership of a corporation. Its use is purely mercenary." Knowing this, I still have to fight not to make the very same mistakes I am warning you to avoid. I got burned badly investing in a master limited partnership (Atlas Pipeline) and that experience has hardened me against those structures. I got blasted investing in an oil refinery (CVR Energy), which prejudices me against that model. So I work at this too. But I think Biggs' message is going to be particularly important in 2011. That's because the wind has shifted…and some areas that have been hot will cool. And some areas that I've avoided look promising once again. Mining stocks, for instance, have been red-hot. Miners are flush with cash and spending lots of money on new projects and mines. That's the problem. In 2011, mining companies will pour a record $115-120 billion toward creating new supply. Companies that sell the picks and shovels have also been en fuego. "Exhibit A" is Joy Global, a mining equipment company. Its stock is up 300% since January 2009. With a few exceptions – such as in uranium and gold – I think there is too much optimism around mining-related stocks. The sun shines on no dog for long. Conversely, there are rafts of small banks trading for 60%, 70% or 80% of tangible book value, when acquirers are paying premiums as high as 148% of book to own them. These are sleepy local institutions that typically hold onto the loans they make. They didn't participate in the shark fest that hobbled the big banks. They have loads of cash. There is a lot of insider buying. Yet investors are ignoring these stocks out of prejudice stemming from the financial crisis…and hence, I think there is opportunity here. These are but two examples on either ends of the spectrum. The world changes and your views need to change with it. Don't get stuck. As Biggs said, "Successful investing is like riding a bicycle – either you keep moving or you fall down." Regards, Chris Mayer The Worst Possible Investing Mistake originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
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| Grandich Client Silver Quest Resources Posted: 10 Feb 2011 06:13 AM PST The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! February 10, 2011 10:35 AM Interview [url]http://www.grandich.com/[/url] grandich.com...
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| Completed Pullback for Silver Wheaton Posted: 10 Feb 2011 05:48 AM PST My near-term work indicates strongly that Silver Wheaton (NYSE: SLW) ended a minor pullback at 33.60 off of yesterday's rally peak at 35.55. If accurate, this means that a new upleg is in its infancy and will extend the larger upmove from the Jan 25 low at 28.85 -- initially towards a test of 35.40/55 resistance (the 50 DMA and yesterday's high) and then to test the Dec-Jan resistance line, now at 36.75.
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| LGMR: ECB Buys Portugal Debt, UK Rates Stay "On Hold" for Post-WWII Record Posted: 10 Feb 2011 05:48 AM PST London Gold Market Report from Adrian Ash BullionVault Thurs 10 Feb., 08:30 EST Gold Slips vs. Rising Dollar as Stocks Markets Fall, ECB Buys Portugal Debt, UK Rates Stay "On Hold" for Post-WWII Record THE DOLLAR price of gold slipped to two-day lows on Thursday morning as the US currency rose and world stock markets fell hard. Hong Kong's Hang Seng index lost 2% and London's FTSE100 dropping 0.9% by lunchtime. Silver prices shed 2.5% from Wednesday's early high. "London entered [Thursday's trade] a seller of precious metals," says one wholesale trader, "taking silver down through $30 per ounce." "Risk appetite appears to waning [but gold investment] demand...is not forthcoming," says Standard Bank. Indian stock markets have lost more than $20 million per minute so far in 2011, the Economic Times reports, with billionaire Anil Ambani blaming "vicious and illegal" rumors – spread by "unscrupulous corporate rivals" – for the 19% drop in Reliance Infrastructure Ltd which took ...
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| Posted: 10 Feb 2011 05:22 AM PST Based on his recent public comments, Fed Chairman Bernanke seems determined to give the U.S. dollar the reputation of Egypt's Hosni Mubarak: an unwanted relic of the past that everyone agrees must go, but stubbornly clings to a privileged position. Read More...
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| Increasing Government Debt to Produce Economic Growth Posted: 10 Feb 2011 05:17 AM PST Is the Great Correction over? Not quite! Nothing much in the markets yesterday. Dow and gold both essentially flat. So, let's rehearse what we've learned so far. Government's main business is protection. Always and everywhere, its chief responsibility is the security of the nation's borders and the safety of its own officers. As a secondary matter, it is concerned with the protection of the people it governs. Of course, it protects, first and foremost, the interests of the people who control it. A modern democracy is controlled by competing groups. In a combination of larceny and bribery, almost everyone gets something. Elite and powerful groups get a lot. The less powerful masses get a little. In the crisis of '07-'09, for example, government moved fast to protect elite interests – with trillion-dollar transfers to the banks and their bondholders. Then, as the economy weakened, the masses of voters needed bribes too – food-stamps, unemployment relief, shovel-ready jobs, etc. These measures do not produce genuine prosperity. How could they? They are just boondoggles and bailouts. But they give the appearance of stability and they help keep everything under control. But how can the feds pay for all this larceny and bribery? They have to borrow…effectively shifting the cost to the next generation. Debts are incurred now. Money is spent now. It is meant to be repaid sometime in the future, by people who benefit from neither the bribes nor the thefts. The private sector unloaded debt as quickly as it could in '08 and '09. Savings rates went from 2% of disposable income to 7%. We called it a "Great Correction." But now the process of correcting seems to have stalled. While the private sector threw off debt, the public sector picked it up. And now, it looks like the private economy is beginning to borrow again too. Savings rates have fallen back to around 5%. Credit card debt has increased for the first time since the crisis began. Non-revolving credit is reported to be at a record high. Government debt, meanwhile, is soaring. The US deficit last year was greater than all the money borrowed by the US government from its founding until 1986. And the Obama administration will borrow more than all previous administrations put together. Is the Great Correction over? Where will this end? Bankruptcy? Hyperinflation? Or revolution? Maybe all of the above. But wait. What if the peoples' representatives "see the light"? What if they turn the situation around, forcing the US government to de-leverage along with the private sector? Well, anything is possible. But we wouldn't count on it. Meanwhile, there's another part to our hypothesis. Over time, stable societies become more and more rigid as elites get a tighter grip on them. They become "zombified," with more and more of the society dependent on giveaways, bribes, boondoggles, protected markets and redistributed income. In a democracy, that means that the numbers begin to work against evolution. Against change. Against natural correction. More and voters get more from the government than they pay for it. They will not permit any change to the system, because any change would be harmful to them. So, over time, governments become less and less able to produce wealth…less dynamic…less responsive to evolutionary adjustment. How does that work, exactly? Well, it works in many, many different ways. But here's a simple example. If the crisis of '07- '09 had happened back in the 19th century the big banks involved would have gone broke. Not only that, the bankers involved would have lost everything – including their personal mansions in the Hamptons. Because back then, typically, a banker was personally responsible for his losses. Neither banks nor investment houses had the advantage of corporate protection. Today, the failures remain in business. The failed executives continue to receive bonuses. Their losses are socialized…picked up by feds and spread to people who don't deserve them – notably, the next generation. Most people think this process will last forever…with the costs pushed infinitely into the future. But it won't. "Stability leads to instability," said Hyman Minsky. We see it coming. Stability makes people think that the system is eternal. They lend to the government at low interest rates…or even accept its new, paper money as though it was the real thing. This permits the government to run up far more debt than it could in an "unstable" era. The debt then becomes unsustainable…and the system collapses. When? Who knows? But sooner or later, the lenders revolt. Or the next generation does. Bill Bonner Increasing Government Debt to Produce Economic Growth originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
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| Posted: 10 Feb 2011 04:52 AM PST By Toby Connor, Gold Scents It appears likely that we may see our first reaction against the new uptrend. This is the #2 test of the lows in a 1-2-3 reversal.  If gold then reverses and breaks through the pivot it will complete the 1-2-3 reversal and it will have begun a pattern of higher highs and higher lows.  That would be the signal that the down trend has been broken and one could add in full positions or leverage (don't get carried away) as they see fit. The downside is of course one will lose some profit potential waiting for confirmation and if gold reverses the early morning weakness you will just have to immediately buy back. The action would be to lock in some profits this morning and then wait for the pattern of higher highs and higher lows to complete before putting positions back on.        Toby Connor A financial blog primarily focused on the analysis of the secular gold bull market. If you would like to be added to the email list that receives notice of new posts to GoldScents, or have questions, email Toby.
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| Gold Miners Index May Be Warning Us… Posted: 10 Feb 2011 04:51 AM PST By Chris Vermeulen, TheGoldAndOilGuy The past couple weeks I have been keeping a close eye the price of gold and the gold miners index. I check to see if its pointing to higher or lower prices in the near future using inter-market analysis, price and volume, along with technical analysis. At this time the charts are still pointing to lower prices in the coming days or weeks. Taking a look at the daily chart of Gold
With international fears floating around and the fact that inflation has started does make me a little weary of shorting gold but one thing I have learned over the years is that trading on fundamentals and news clips seen on TV is not a reason to pass on a setup if one forms in the coming days. The only thing that pays in the stock market is when the price action goes in your favor. This is why I focus on price, volume and momentum while avoiding what others are saying elsewhere. Trading is a numbers game and I put my money on the table when the odds are clearly favoring one direction. Unfortunately I am trading trades against what the masses think and feel is the right thing to do.
Gold Miner stocks are forming much of the same pattern as gold bullion but today (Wednesday) the chart actually put in a possible reversal candle. If this is correct then we should see gold and most likely silver follow suit tomorrow by moving lower and possibly even start a correction.
Gold Swing Trading Conclusion: If you would like to get my daily trading analysis and swing trade alerts please join my newsletter: http://www.thegoldandoilguy.com/trade-money-emotions.php Chris Vermeulen
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| The Violent Declines the Follow Overbought Rallies Posted: 10 Feb 2011 04:51 AM PST I am as skeptical as the next guy about technical analysis, maybe more so, so I was kind of intrigued when Robert McHugh of Main Line Investors wrote an essay titled "Time Analysis of the Coming Market Top." He writes, "We have identified when an extended overbought rally has likely reached its expiration date." And what is this time frame? "Two and a half months," he says. This "two and half months" time frame is particularly intriguing to me, as this is the approximate time it took for my wife to realize that marrying me was the worst mistake of her Whole Freaking Life (WFL). Without showing the usual sympathy that my wife gets from her friends and family, the parallels are eerily obvious when he goes on that "once this condition reaches the 2.5 month age, the rally not only ends, but a sharp, sometimes violent decline begins." Violent declines! That's it! Of course, there are those who say that since she did not actually hit me with anything that she threw at me, it cannot be termed "violent," although nobody is contending that it wasn't a "decline" in our relationship. But this has taught me two valuable lessons. One is that I should never pick her to be on my softball team because she obviously can't throw worth a crap. The other one is that there is perhaps something profound about this "two and half months" thing. And apparently there is, because he goes on, "Guess what? We are inside one of these overbought extended rally periods, which will reach the 2.5 month age over the next week. So, based upon this time analysis, we could be about to see markets drop sharply, perhaps violently." And this "violent drop" in the stock market is when, I assume, people will slap themselves on the forehead and exclaim, "What in the hell am I doing to be risking my entire net worth in the corrupt stock market, when even an idiot can see that, even in a completely honest market, it is impossible for all the people to take more money out of the stock market than they put into it, a dismal mathematical fact that is borne out by the entire last century of seeing the vast majority of people losing money by investing in stocks!" And it is worse than that, as the few who do "make money" actually broke even since the money they took out in "gains" had less buying power than the money they put in! Hahaha! April fools, chumps! If you want to know how accumulating a retirement nest egg really works, it is when people save a fraction of their weekly income by putting it in the bank, whereupon the bank would pay them enough interest on the deposited funds to stay even with inflation. For the more adventurous, investing maybe 10% of their savings in the stock market was considered a "bold move," especially seeing that most people lost most of that money, although there are always enough successes to keep people doing it. Gathering enough successes is the trick! Of course, nowadays, with the despicable Federal Reserve forcing interest rates to zero in a pathetic, desperate, frantic attempt to reverse the calamity caused by its previous incompetence and Keynesian stupidities, saving money in the bank is foolish since they pay the depositors about 0.1%, if that. Certificates of Deposit are now paying an average of 0.41%, which means, with inflation running at more than 6%, that the stupid owner of a Certificate of Deposit is losing 5.59% and ordinary depositors are losing the whole 6%! Hahaha! Suckers! I know what you are thinking. You are thinking, "What in the hell is the point of all this? Do you have a point, or is this just more of you running your Stupid Mogambo Mouth (SMM) until we are sick of listening to you and that is why nobody likes you?" Well, it's a "bad news/good news" thing. The bad news is that I don't know why I run my mouth so much or why people don't like me, which I figure only shows how hateful and stupid they all are, and how those treacherous bastards are always "out to get me," as I always suspected. The good news, on the other hand, is that I do have a point. The point is, to what I assume is your obvious delight, twofold. Firstly, for those of you who are optimistic enough to invest your money in the hopes of a big score, Mr. McHugh seems pretty confident of shorting the indexes. Secondly, buying gold and silver is a guaran-freaking-teed winner of an investment by virtue of 4,500 years of history, massive undervaluation due to decades of governments and markets manipulating their prices to be low, incipient hyperinflation due to the odious Federal Reserve creating So Freaking Much Money (SFMM) and the foul Obama administration deficit-spending almost $2 trillion a year ($6,536 dollars for every man, woman and child in America), and (most importantly) exploding demand for the metals but falling supply. And you can keep gold and silver with you at home, warm and snuggly, and not have to deal with banksters or custodians of any kind, who I assume are, even as we speak, thinking of new ways to screw you Good And Hard (GAH). And since buying gold and silver is so easy ("Here is my money. Give me my metal!"), what can you do except say, "Whee! This investing stuff is easy!" The Mogambo Guru The Violent Declines the Follow Overbought Rallies originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation. More articles from The Daily Reckoning….
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| U.S. Housing ‘Vicious Circle’ Worsens Posted: 10 Feb 2011 04:50 AM PST By Jeff Nielson, Bullion Bulls Canada It wasn't supposed to be like this. For three years, two successive U.S. administrations have made "fixing the housing sector" explicitly a top priority. Since that time, we have been assured by a plethora of politicians, housing "experts", and media talking-heads that the U.S. housing sector had "bottomed", and (like the U.S. economy itself) had begun a "recovery". It was all fiction. New numbers show that roughly 27% of all U.S. mortgages are currently "underwater", worse than the (supposed) "bottom" of the original collapse, when that number soared to a previous record of 25%. This single number exposes a multitude of myths. For three years, Americans have been told by both politicians and bankers that they were "working hard" specifically to eliminate/alleviate the blight of underwater mortgages. In fact, what this number proves is that these charlatans were "hardly working". Their "progress" after three years is less-than-zero. For two years, Americans have been told by politicians and bankers that there is a "U.S. economic recovery" underway. Two years ago, the U.S. housing market was in the worst shape it had ever been in, after a collapse more severe than the worst years of the Great Depression. And now after two years of a "recovery", it's in even worse shape? Quite simply, one could spend their entire life scanning the annals of economic history, and would never find another example where a housing market which was already at a multi-decade bottom has deteriorated after two years of "an economic recovery". There is no "U.S. economic recovery". There never was a recovery. Rather than debate this obvious point, as the saying goes "a picture is worth a thousand words".
More articles from Bullion Bulls Canada….
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| Dutch govt. orders pension fund to sell gold, Zero Hedge says Posted: 10 Feb 2011 04:47 AM PST 12:02p ET Thursday, February 11, 2011 Dear Friend of GATA and Gold: Zero Hedge today reports that the Netherlands government has ordered a pension fund to sell most of its gold holdings on the grounds that the gold price fluctuates too much for gold to qualify as a proper investment. The Zero Hedge report can be found here: http://www.zerohedge.com/article/here-comes-executive-order-6102-qe-gene… 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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| Perth Mint, Scotia out of hundred-ounce silver bars, KWN says Posted: 10 Feb 2011 04:47 AM PST 11:36a ET Thursday, February 10, 2011 Dear Friend of GATA and Gold (and Silver): King World News reports today that the Perth Mint has no inventory of hundred-ounce silver bars and expects none until the end of March and that such bars remain unavailable at Scotia Mocatta as well. The King World News report can be found here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/2/10_Pe… 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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| Warsh, who confirmed gold swaps, to leave Fed next month Posted: 10 Feb 2011 04:47 AM PST Kevin Warsh Plans to Resign From Fed's Board of Governors By Sewell Chan http://www.nytimes.com/2011/02/11/business/economy/11fed.html WASHINGTON — Kevin M. Warsh, who helped manage the Federal Reserve's response to the financial crisis and was Chairman Ben S. Bernanke's liaison to Wall Street and conservative Republicans, plans to leave the bank's board of governors around March 31. The departure of Mr. Warsh, 40, gives President Obama another opportunity to leave his stamp on the Fed. In addition to naming Mr. Bernanke to another four-year term last year, Mr. Obama has named three others to the seven-member board; a fourth nominee is awaiting Senate confirmation. Mr. Warsh, a former investment banker at Morgan Stanley, was had pivotal role in the Fed's response to the financial crisis in 2008: arranging the sale of Bear Stearns to JPMorgan Chase, allowing Lehman Brothers to go into bankruptcy (the Fed maintains there was no other option), and then bailing out the American International Group, the insurance giant. In a statement, Mr. Bernanke praised Mr. Warsh for "exemplary service" and said "his intimate knowledge of financial markets and institutions proved invaluable during the recent crisis." "I deeply appreciate his insights and wise counsel and, most especially, his fortitude and friendship during the difficult days, nights and weekends of the crisis," Mr. Bernanke said in the statement. In recent months, Mr. Warsh has at times distanced himself from Mr. Bernanke, who has pushed the Fed to take extraordinary measures to speed the recovery. Five days after the Fed's policy-marking arm voted on Nov. 3 to buy $600 billion in Treasury securities — the second round of a strategy intended to lower long-term interest rates — The Wall Street Journal published an op-ed article by Mr. Warsh expressing considerable doubt. Though Mr. Warsh voted for the bond-buying plan — by Fed tradition, members of the board almost never vote against the chairman — he said he considered the strategy a "necessarily limited, circumscribed, and subject to regular review," and added that "policies should be altered if certain objectives are satisfied, purported benefits disappoint, or potential risks threaten to materialize." In his resignation letter to Mr. Obama on Thursday, Mr. Warsh wrote, "I am honored to have served at a time of great consequence." 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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was my intent to shed added light on history in the making. TVR recently celebrated one year in existence. Thanks to a boatload of traffic from ZHedge, thousands of listeners have hit the site, if only for a second.
Gold futures settled lower, but came off session lows after reports that Egypt's embattled president may step down took some of the sting out of a stronger dollar. The metal earlier had traded as low as $1,351.40 an ounce, but inched into the black after several media outlets reported on Egyptian President Hosni Mubarak's impending resignation. Earlier concerns about soaring yields for Portuguese debt had failed to ignite safe-haven buying for gold, but the euro came under selling pressure, helping the dollar…
Thursday, Feb. 10, 2011 (Financial Post) — The head of the International Monetary Fund called on key global economic players Thursday to accept an increased role for an alternative reserve currency as a way to curb trade imbalances that are at risk of widening further.
by Yashwant Raj
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