Gold World News Flash |
- Why It's Good to Hold Gold in 2011
- The Day After The Dollar Crashes
- In The News Today
- Insuring Your Pension Savings
- The Highest Authority!
- DMITRY ORLOV: PEAK OIL LESSONS FROM THE SOVIET UNION
- David Bond: Stiff the Fed
- US Dollar Currency, Short Term Bullish, Long Term Bearish Not So Sure
- "Get Ready For Margin Collapse" Goes Mainstream
- SILVER BULL
- Major Currency Trends For Major Gain – YEN and Dollar
- Analyzing a Basket of Miners
- Losing Faith in Paper Money
- Gary North: Bernanke’s free ride is over
- Dan Norcini: Speculators are crucial to gold’s price advance
- Metals correction remarkable for shallowness, Embry tells King World News
- Gold Still Misunderstood by Many Analysts
- Options: Profit From Gold Regardless of Price Direction
- Newmont Takeover of Fronteer: Evidence of Secular Bull Market in Gold’s Second Phase
- Gold, Silver & the Dow Progress from the Lows of the Credit Crisis
- Tiex Inc. – Green Fields and Blue Sky in BC’s Cariboo
- Modern Monetary Theory Part II: Money and The Limits of Empire
- Crude Oil Steady Ahead of China Data, Gold Tests $1353 Support
- Buying Homes with Cash… Gold Edges Closer to Currency Status
- China Takes Tentative Steps Towards Global Currency
- Guest Post: Democracy And Its Contradictions
- The Golden Parabola
- Got Gold Report – Gold, Silver Correction Ahead?
- Is That a Pyramid in Your Portfolio or Are You Just Happy to See a United Egypt?
- Gold Bull Market Parabola
- Gold Miners Index Suggests Even Lower Prices In Coming Days or Weeks
- Are Pensions Planning to De-Risk Funds?
- Guest Post: Preparing Accordingly II
- Rice Speculators Expect 50% Jump In Price
- Silver in Backwardation and the Emperor, Once Again, Nearly Naked
- VALUE IS WHAT THE FEDERAL RESERVE SAYS IT IS
- Watch the Gold/Silver Ratio
- Bullion banks get Financial Times help in trying to talk silver down.
- Major Currency Trends For Potential For Major Gains, Yen and Dollar
- What Part Of Bernanke's Secret FCIC Interview Constitutes A Disclosure Of National Secrets?
- Currency Manipulators Created $7 Trillion, Causing the Global Economic Bubble
- Can't Buy Silver? Try This
- Precious Metals - Week of 2.13.11
- Gold Fails to Respond to Middle East Crisis, Looks Ready for More Downside Action
- Dan Norcini: Speculators are crucial to gold's price advance
- Gary North: Bernanke's free ride is over
- U.S. silver term structure inverts as supply tightens
- Modern Monetary Theory: The Sophistry of the US Dollar and Debt Monetization
- Newmont Takeover of Fronteer: Evidence of Secular Bull Market in Gold's Second Phase
| Why It's Good to Hold Gold in 2011 Posted: 13 Feb 2011 07:42 PM PST Thoughts Worth Thinking submits: With gold in the mid-$1300s ($1356.70 as of February 11 close), still within sight of its historic nominal high of $1421 on November 9, 2010 [i], people who have accumulated gold and gold-related assets are asking if it's time to sell. While it's never wrong to manage risk by trimming assets when prices appreciate, I believe that there is a good case for U.S. investors who have diversified into gold investments to hold those assets now:
Complete Story »
| ||||||||||||||||||
| The Day After The Dollar Crashes Posted: 13 Feb 2011 04:22 PM PST 
| ||||||||||||||||||
| Posted: 13 Feb 2011 04:04 PM PST Jim Sinclair's Commentary And then there were four closed banks. Canyon National Bank, Palm Springs, CA
Jim Sinclair's Commentary Will the growing vacuum in power be filled by the Brotherhood? I think so. Algeria shuts down internet and Facebook as protest mounts Plastic bullets and tear gas were used to try and disperse large crowds in major cities and towns, with 30,000 riot police taking to the streets in Algiers alone. There were also reports of journalists being targeted by state-sponsored thugs to stop reports of the disturbances being broadcast to the outside world. But it was the government attack on the internet which was of particular significance to those calling for an end to President Abdelaziz Boutifleka's repressive regime. Protesters mobilising through the internet were largely credited with bringing about revolutions in Egypt and Tunisia. "The government doesn't want us forming crowds through the internet," said Rachid Salem, of Co-ordination for Democratic Change in Algeria.
Jim Sinclair's Commentary You think these guys are going to produce a durable democracy? What are you smoking? This story is far from over. Egypt's army clashes with protesters Egypt's army has clashed with protesters that refuse to leave Cairo's Liberation Square two days after the US-backed dictator Hosni Mubarak was ousted from power. Soldiers on Sunday scuffled with thousands of protesters camping out in the Square, the focal point of massive rallies that brought down Mubarak on Friday, a Press TV correspondent reported. Shouting slogans, protesters fought street battles with soldiers forcing them to back away, the report added. The protesters, remaining in Cairo's central Liberation Square on Saturday night, warned of holding further rallies if the military fails to fulfill its promise of a peaceful transition of power to a democratic civilian system. Eighteen days of revolution across Egypt forced the embattled Mubarak to leave office on Friday, handing over power to a military council. The military promised "a peaceful transition of power" to an elected civilian government on Saturday in order to build "a free democratic state."
Jim Sinclair's Commentary There will come a day soon when paper will no longer command price. Chinese Demand For Gold Surges To Around 25% Global Production It's hard to believe that ordinary Chinese citizens are responsible for an increase in gold imports to China– some 5 times larger than in the recent past. But, that is what the Financial Times of London reported this past week. For one thing China is already the globe's largest producer. So, it has its own domestic supply of gold. Also, it suggests that possibly the Chinese are utilizing far greater amounts of their savings to purchase gold, rather than increase domestic consumption. Or that official figures of Chinese wealth are being under-stated. Gold prices have been in a consolidation phase, trading between $1325 an ounce and $1375 an ounce for the past few months, as the dollar has been somewhat stronger in reaction to improving statistics on the US economy. Another positive for gold is last week's recommendation from the IMF that $2 trillion in the form of a new international currency be created out of a weighted average of several currencies to begin the replacement of the dollar as the globe's chief reserve currency. Gold experts point out that the recent weakness in gold has hit the price of the small mining company shares worse than the majors as speculation in gold has quieted down. The speculative interests in gold futures on the Comex has been substantially reduced. And net redemptions in the ETF GLD, has reduced its gold holdings by $2 billion or almost 4%.
| ||||||||||||||||||
| Posted: 13 Feb 2011 04:00 PM PST by Adrian Ash BullionVault Friday, 11 February 2011 How much gold is too much gold if you're a fixed-income investor...? GOLD DOESN'T pay any income, of course. Which is why retirees and pensioners should hate it. But since gold cannot go bust – and because its tight supply typically finds strong demand when cash loses value to inflation in the cost-of-living – gold in fact makes the perfect insurance for fixed-income investments like corporate or government bonds. At least, that's what €39 million gold investor Stichting Pensioenfonds Vereenigde Glasfabrieken says. Crazy name, crazy Dutch fund managers! SPVG holds a massive 13% of its assets in gold, running a total €300m ($400m) to try and ensure a pension for workers past and present at the Schiedam, Netherlands glass manufacturer. That compares with the typical 5% or 10% allocation which even the friendliest gold-friendly advisors might suggest. And seeing how the average European pension fund holds 2.7%...
| ||||||||||||||||||
| Posted: 13 Feb 2011 03:57 PM PST (The King of Kings!) Silver Stock Report by Shanna & Jason Hommel, February 13th, 2011 Godly people are to fear God, not fear man: Deu 31:6 Be strong and courageous. Do not be afraid or terrified because of them, for the LORD your God goes with you; he will never leave you nor forsake you. Luk 12:5 But I will forewarn you whom ye shall fear: Fear him, which after he hath killed hath power to cast into hell; yea, I say unto you, Fear him. Rev 14:11 "And the smoke of their torment ascends forever and ever; and they have no rest day or night, who worship the beast [GOVERNMENT?] and his image, and whoever receives the mark of his name." Isa 8:12 "Do not say, 'A conspiracy,' Concerning all that this people call a conspiracy, Nor be afraid of their threats, nor be troubled. Isa 8:13 The LORD of hosts, Him you shall hallow; Let Him be your fear, And let Him b...
| ||||||||||||||||||
| DMITRY ORLOV: PEAK OIL LESSONS FROM THE SOVIET UNION Posted: 13 Feb 2011 03:20 PM PST [Admin et al: This is a transcript of a video interview for The Nation for the series "Peak Oil and a Changing Climate."] The video is here: http://cluborlov.blogspot.com/ I witnessed the Soviet collapse, and then later on I couldn't help but notice that something very similar is happening to the United States. So, as a [...]
| ||||||||||||||||||
| Posted: 13 Feb 2011 02:20 PM PST 10:18p ET Sunday, February 13, 2011 Dear Friend of GATA and Gold (and Silver): While U.S. Rep. Ron Paul would "End the Fed," the title of his popular book, mining writer David Bond has a possibly more satisfying idea: "Stiff the Fed." That's the title of his new essay at The Wallace Street Journal page at SilverMiners.com, which you can find here: http://silverminers.com/commentary/wallace/index.php?&content_id=1290 CHRIS POWELL, Secretary/Treasurer 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
| ||||||||||||||||||
| US Dollar Currency, Short Term Bullish, Long Term Bearish Not So Sure Posted: 13 Feb 2011 02:11 PM PST The funny thing about cycles is they repeat, as expected, just like clock work. While the bull bear debate rages, eventually price aligns to the dominate cycle. Cycles gain respect when they statistically demand it. Read More...
| ||||||||||||||||||
| "Get Ready For Margin Collapse" Goes Mainstream Posted: 13 Feb 2011 02:11 PM PST
First it was "Get Ready For Higher Food Prices" going mainstream... Now, logically following, it is "Get Ready For Margin Collapse." As Zero Hedge has long been warning, the one immediate consequence of surging commodity prices as a result of endless liquidity, is a collapse in corporate margins. Now, about 6 months after we first broached the topic, it has finally hit the mainstream media. The WSJ highlights what is so obvious, it is no wonder no sellside "strategist" is willing to touch the topic with a ten foot pole: "This earnings season has seen a much-welcomed return to revenue growth, giving investors another reason to push stocks to two-year highs. But beneath the surface lurks a fresh worry: For many companies, the cost of raw materials is rising at a faster pace than revenue. Blame it on soaring prices of everything from cotton to copper and corn. That has squeezed profit margins more markedly than many analysts anticipated—and is serving as a worrying sign for future earnings." But yes, aside from the painfully obvious collapse in margins, and thus plunge in net income (sorry, companies can't fire their skeleton crew workers any further) which will mean 2011 S&P 500 EPS will come far, far lower than prevailing consensus, everything is fine.. and don't forget to BTFD. The WSJ - about half a year behind the curve:
Stunningly, the computers doing all the trading are shocked, shocked, to find out there have been unpassable price increases going on in here.
This is the token chart presented by the WSJ, which anyone who lived through 2008 could have seen coming from a mile away:
Even that permabull among bulls, Morgan Stanley is issuing warnings:
Just who may Parker be envisioning? Why the pathological liars from Goldman Sachs of course, where displacing the truth by 179 degrees under the stern eye of Goebbels exhumated corpse has become a fetish. Cue David Kostin:
It gets much, much worse:
But wait. there's more - the punchline(s):
Hold on to your hats:
Those who wish to subject themselves to the aneurism inducing masochism of reading David Kostin's complete weekly note, can do so here. So going back from the never-never world of the Little Goldman Prince, here is what is happening in real life:
Luckily, the WSJ, where bonuses are not contingent on the size of the lie, has a slightly different view than Goldman:
Bottom line - margins are collapsing, and whatever companies can pass them off (for now), are desperately trying to do so. Those that can't, see their stock prices plunge by 10-15% the day after earnings (see Cisco). And with the myth of recovery not really doing much for consumer purchasing behavior, contrary to repeated lies otherwise (mostly emanating from the very same Goldman Sachs) soon even Goldman will be forced to acknowledge what is an incontrvertible truth. We expect that Jan Hatzius will do so in April (with the lemming Kostin following suit shortly), just in time for the QE3 chorus to hit the 100+ dB level.
This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||
| Posted: 13 Feb 2011 02:09 PM PST By Toby Connor, Gold Scents As most people know I'm mostly interested in silver during this bull market. I really doubt that I will ever buy another oz. of gold again. So let's start by taking a look at the long term chart of silver.  As you can see the consolidation principle works perfectly in the silver market. So far we've had three major consolidations and each one as been followed by a powerful rally driven by the size of the preceding consolidation. The relevant fact is that the longest consolidation has also produced the biggest breakout. If that continues to hold (and I think it will) then the current rally is probably only half over.  Ultimately I expect this breakout to launch silver to somewhere between $43 and $50 before the next consolidation phase begins.        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.
| ||||||||||||||||||
| Major Currency Trends For Major Gain – YEN and Dollar Posted: 13 Feb 2011 02:05 PM PST By Chris Vermeulen, TheGoldAndOilGuy Over the past few years Forex traders have really had to step up their game in order to continue making money in the currency market. Back in the day before currency trading was main stream, currencies used to trend in a direction for a long period of time with a low level of volatility. But with so many individuals now involved speculating on price action coupled with international concerns in most countries, the once slow and steady currency market now moves like the stock market with large price swings on a weekly and even daily basis. With currency trading growing at an incredibly fast rate, stock traders have been giving tools to trade currencies using ETFs. If you are familiar with leveraged ETFS then you have most likely seen the huge opportunities (100,200 even 400% gains) which they can provide during major trends. Below are a couple major trends that both Forex and ETF traders should be keeping their eye on. Japanese Yen – 30 year Monthly Chart
YCS 200% Short Yen Exchange Traded Fund – Daily Chart Setup
US Dollar Weekly Chart Setup Currently, the dollar is trading within a large range and is poised for a short term bounce. There will not be any major trends until a breakout of this trading range to either the up or down side.
Major Currency Trends for Major Gains Each year I find 3-5 major opportunities where I can put some money to work, not tie up much capital and if they move 150% or more in my favor then those small investments boost my overall yearly portfolio gains substantially. I do have another major trend setup forming which I'm calling the "Holy Cow" setup… which could be a real money maker this year. The exciting thing about it is that I have not seen ANYONE talk about this investment in years… Get my Trading Setups, Daily Pre-Market Videos, Intraday Analysis and Updates: Chris Vermeulen
| ||||||||||||||||||
| Posted: 13 Feb 2011 02:03 PM PST By Jeff Nielson, Bullion Bulls Canada This is the sequel which I promised readers following my previous piece, "The Bullion Bulls Basket". Before I get further into this, I want to remind readers that this is not an exercise in pointing readers toward particular companies, but rather in teaching/explaining to readers how to select and invest in these companies on their own. As I pointed out in the first commentary, we have been left with little choice when it comes to handling our investments. First, the vast majority of financial advisors demonstrated (via the Crash of '08) that they were utterly clueless as to the level of vulnerability they had created for their clients. Following that ugly episode, these "experts" (on a near-unanimous basis) pronounced that "buy and hold is dead" – this being the strategy which they had consistently recommended to these same clients in previous years. As I also observed, warning their own clients that they could no longer trust the investments which these experts chose for them (over any length of time) is nothing less than an admission of their own incompetence. Telling an investor to "buy something", and then whispering in his ear "…but don't hold it for too long" is not financial advice which inspires confidence. Having thus been forced to take responsibility for our own investments, the obvious question to ask is "how can we possibly justify paying trading commissions to these incompetent middle-men?" For those who are unable to come up with a good answer to that question, we offer investors guidance in becoming their own "financial advisor". The hypothetical, five-company "basket" of miners which the three members of our "team" each selected for the original piece is obviously not meant to be a comprehensive strategy in itself. Five companies is simply not a large enough number to provide the optimal degree of balance and diversity. Added to that equation is our own individuality: we all have different investment parameters and different levels of tolerance for risk. Thus, we chose our example-baskets to start the thinking process for readers/investors, rather than attempting to do their thinking for them. What could you add to those "baskets" to make them more balanced/diversified? What would you change in those baskets, to make them more suitable for your own portfolio? My most important objective in the original piece was simply to get people to start to look at these companies. This installment is dedicated to arming investors with the right questions to ask, as they examine individual companies as potential investments in accumulating their own baskets. However, before getting into specifics, those pondering self-investing must always adhere to 'The Golden Rule' for all would-be investors: know thy self. An investor can spend dozens (hundreds?) of hours pouring over these companies, and construct a "perfect" basket of miners for himself – and still end up self-destructing. Deciding on the appropriate level of risk (and stock-selection) for one's portfolio is not merely a function of age, income, and long-term investment strategy. Equally important in that "mix" is being honest about one's own psychology. Deciding that an "aggressive strategy" which incorporated a "moderate level of risk" is most suitable for your own portfolio is not an advisable plan if you are not able to cope with the high degree of volatility which such a strategy implies. Specifically, those investors who take on a level of risk which is higher than what they can be comfortable with are (by far) the most likely investors to self-destruct. They are more likely to dump their stocks in a "panic", and also more likely to "chase" stocks when the market surges. We all know that we are supposed to "buy low" and "sell high". However, investors who take on too much risk always end up being ruled by their emotions, and a century of market history shows us that "emotional investors" spend most of their time buying high and selling low. Thus, first we must pick an overall strategy which suits our personalities, then we adopt a particular "plan" to fit that general strategy into our individual financial parameters, and then (finally) we can start to select the right companies to execute that plan. Once investors reach that stage, here are some of the key criteria/questions which they should be examining as they evaluate these mining companies – and create a "diversified" basket of miners. More articles from Bullion Bulls Canada….
| ||||||||||||||||||
| Posted: 13 Feb 2011 02:02 PM PST I was planning to go into a bizarre and irrational rant against JP Morgan for its obvious scam of manipulating the silver market by massive naked-short positions, and including in my Loud Mogambo Diatribe (LMD) the scumbag government and "regulators" who are supposed to keep this kind of fraud out of the commodities markets. Preparing myself by taking a long pull on a bottle of tequila, rehearsing every curse word I could remember and loosening up the vocal cords ("Mi mi miiiiii! Get out of my yard, you stupid kids! Yo, Adrian!"), I was almost ready when I got a copy of an email from David Bond, in his role as First Lord of the Treasury for the Island Kingdom of Colemania, who reports the news that JP Morgan has announced that they will accept gold as collateral for margin loans. The part that saved me from denouncing JP Morgan is when he went on that "Whilst JP Morgan is pleased to now to accept physical gold as collateral for credit, it will NOT ACCEPT equivalent value (or any value) of shares in its own gold ETF in lieu thereof." Even I, jaded and cynical after a lifetime of watching one thieving bastard after another foist a screw-job on me, and watching one incompetent, corrupt government moron after another let them, I think that it is all encapsulated in his sentence that the lesson is that "Ergo (or is it ipso facto?) JP Morgan has great faith in physical gold, but concurrently has no faith in its own gold-backed paper." Its own ETF! JP Morgan runs an Exchange Traded Fund for gold, giving it complete control over the gold deposited there, and yet doesn't trust its own fund? Has JP Morgan actually sold the gold that the ETF buyers were told was in there? Hmmm! That would make ME lose faith in it paper, too! And as far as depositing gold with JP Morgan, Chris Powell of the Gold Anti-Trust Action Committee seems as cynical as I when he says, "Good luck getting it back." But suddenly everybody wants gold, especially as the Federal Reserve created more credit (which turns into money when somebody borrows it) last week, and Total Fed Credit went up last week by $19 billion. As to how much actual money this turned into is anybody's guess since the fractional-reserve multiplier used by banks ranges from here to, literally, infinity. But $18.4 billion of it turned into cash! I know this because the Fed used $18.4 billion of it to buy government securities to fund the loathsome Obama administration's deficit-spending insanity! And, in December, more money was created when revolving debt climbed by $3.5 billion. And more money was created to allow total personal debt to shoot up $6.1 billion in December, too. All in all, seemingly impossible amounts of money are being created, which means seemingly impossible amounts of inflation, which means seemingly impossible amounts of capital gains from buying gold and silver rising in price, which seemingly explains why I am seemingly always saying, "Whee! This investing stuff is easy!" The Mogambo Guru Losing Faith in Paper Money originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
| ||||||||||||||||||
| Gary North: Bernanke’s free ride is over Posted: 13 Feb 2011 02:01 PM PST 10:05a ET Sunday, February 13, 2011 Dear Friend of GATA and Gold: Economist and financial adviser Gary North writes that now that two important congressional committee chairmen are skeptical of or hostile to the Federal Reserve, Congress and the Fed will begin blaming each other for the collapse of the U.S. economy. North's commentary is headlined "Bernanke's Free Ride Is Over" and you can find it at Lew Rockwell's Internet site here: http://www.lewrockwell.com/north/north944.html 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
| ||||||||||||||||||
| Dan Norcini: Speculators are crucial to gold’s price advance Posted: 13 Feb 2011 02:01 PM PST 9:50a ET Sunday, February 13, 2011 Dear Friend of GATA and Gold (and Silver): Dan Norcini, whose futures market commentaries long have appeared at Jim Sinclair's Internet site, JSMineSet.com, has started his own blog, "Trader Dan's Market Views," to elaborate on market developments, even as he'll continue to contribute to JSMineSet.com. Norcini's most recent blog entry argues that investment by speculative funds has been and remains crucial to the prospects for the gold price. His commentary is headlined "Detailing the Necessity of Speculative Interest in Gold Price Advances" and you can find it here: http://traderdannorcini.blogspot.com/2011/02/detailing-necessity-of-spec… 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
| ||||||||||||||||||
| Metals correction remarkable for shallowness, Embry tells King World News Posted: 13 Feb 2011 02:01 PM PST 9:50a ET Sunday, February 13, 2011 Dear Friend of GATA and Gold (and Silver): Sprott Asset Management's chief investment strategist, John Embry, tells Eric King of King World News that the current gold "correction" is contrived, a matter of price manipulation, and remarkable for its shallowness compared to previous such contrived corrections. Embry believes that the strength of the U.S. stock market is largely a matter of Federal Reserve intervention through New York investment houses and says that to be negative about gold and silver one has to be confident in paper money, the control of debt, and the return of positive real interest rates. The interview is 17 minutes long and you can listen to it at King World News here: http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/2/12_John_… 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
| ||||||||||||||||||
| Gold Still Misunderstood by Many Analysts Posted: 13 Feb 2011 02:01 PM PST Pater Tenebrarum submits: It amazes us that in the 11th year of the gold bull market, there are still so many people around who fail to understand gold on the most basic, fundamental level. One of them is of course none other than the Big Cheese of the Fed himself, Ben Bernanke. However, while everybody should be slightly worried by the Fed chief's admission that he 'doesn't understand gold', and is 'puzzled by its price rally', he is at least admitting it. The irony is of course that he, Bernanke, through his actions, is one of the chief instigators of gold's price strength. Before we delve into this further, we would like to point out that there has been a proliferation of articles recently that bemoan the allegedly short term bearish technical condition of gold and gold stocks. Here are two well-reasoned examples – the first one is by Chris Vermeulen at Minyanville
| ||||||||||||||||||
| Options: Profit From Gold Regardless of Price Direction Posted: 13 Feb 2011 02:01 PM PST James Cordier submits: Of all commodities markets, there is none more emotional than gold. And unlike most other commodities, every investor is an expert on gold prices. Everybody knows where prices are going. For these reasons, gold market analysis lends itself well to extremists. Back in November, when the Fed made official it's plans for QE2, it was a mere certainty, according to many investors and pundits, that gold was going to $2,000 an ounce. Yet from the December highs to the January lows, Gold prices were down over $120 per ounce. What gives? It could be that the buildup to QE2 was more supportive to gold prices than the actual implementation itself – buy the rumor, sell the fact. It could be that a variety of international events (think European debt crisis, Egypt) have continued to bring "flight to quaility" buying to the US dollar, suppressing gold prices. It could be that
| ||||||||||||||||||
| Newmont Takeover of Fronteer: Evidence of Secular Bull Market in Gold’s Second Phase Posted: 13 Feb 2011 02:01 PM PST Bret Rosenthal submits: In our first installment of the 'Three Phases' manifesto we wrote:
| ||||||||||||||||||
| Gold, Silver & the Dow Progress from the Lows of the Credit Crisis Posted: 13 Feb 2011 11:52 AM PST Gold, Silver and the Dow Jones Industrials Their Progress from the Lows of the Credit Crisis Mark J. Lundeen [EMAIL="Mlundeen2@Comcast.net"]Mlundeen2@Comcast.net[/EMAIL] 11 February 2011 Let's take a look at gold, silver and the Dow Jones from their lows of the Credit Crisis, starting with the Bear's Eye View and price charts for silver. Silver Of the three, silver is the star performer, gaining 244% from its October low of 2008. Not shown in the silver chart below is the 57% crash from its high of $20.69 on 05 March 2008, to its bottom of $8.69 on 28 Oct 2008. What happened there? Well, I don't believe I'm compromising national security by revealing that our financial markets are a sea of stagnant "liquidity." This being the case, the steady rise of gold and silver prices from 2001 to March 2008 might have confused some people to the point where they might no longer see the US dollar as the "World's Safest Asset" in the months leading up to the Octo...
| ||||||||||||||||||
| Tiex Inc. – Green Fields and Blue Sky in BC’s Cariboo Posted: 13 Feb 2011 11:24 AM PST TIX on AOTH Richard (Rick) Mills Ahead of the Herd As a general rule, the most successful man in life is the man who has the best information Quesnel–Stikine Terrane The Quesnel–Stikine Terrane is a large regional depositional belt extending over 1500 kilometers through the central part of the province of British Columbia, Canada. It encompasses most of the operating mines in the province as well as most of the projects at the pre-feasibility and feasibility stages of development. Used with permission from Cariboo Rose Res TSX.V - CRB The lion’s share of exploration dollars in the province is being spent in this geological belt. The Quesnel–Stikine Terrane has become one of BC’s most sought after exploration/developmental targets. In the central portion of the province there are currently two types of deposits attracting the lion’s share of interest: [LIST] [*]Porphyry copper/gold deposits [*]Sediment Hosted Vein (SHV) deposit’s ...
| ||||||||||||||||||
| Modern Monetary Theory Part II: Money and The Limits of Empire Posted: 13 Feb 2011 11:20 AM PST The limit of the Fed's and Treasury's ability to create money is the value and acceptance of the dollar and the bond in market transactions. The Weimar government never 'ran out of money.' Zimbabwe never 'ran out of money.' And if interest is paid 'in your currency money' you can never fail to service your debt either.
| ||||||||||||||||||
| Crude Oil Steady Ahead of China Data, Gold Tests $1353 Support Posted: 13 Feb 2011 11:12 AM PST courtesy of DailyFX.com February 13, 2011 04:03 PM Both crude oil and gold may look to this week’s China CPI data for guidance. Commodities – Energy Crude Oil Steady Ahead of China Data Crude Oil (WTI) - $87.48 // $0.75 // 0.86% Commentary: Crude oil is kicking off the week slightly to the upside, as prices continue to consolidate recent gains that have established prices at or above the triple digit threshold. Key economic data will be reported in the coming week, the most important of which is the China Consumer Price Index for January. Expectations are for a 5.4% year-over-year increase, up from 4.6% in the prior month and the highest YoY reading since July, 2008. China has already raised interest rates three times since October in an effort to combat rising inflation. Markets will be closely examining the latest CPI report to gauge whether more rate hikes are in the offing. Technical Outlook: Prices are testing support at the January low near $85. A break ...
| ||||||||||||||||||
| Buying Homes with Cash… Gold Edges Closer to Currency Status Posted: 13 Feb 2011 11:11 AM PST Steve McDonald writes: Despite the gloomy housing numbers, many of the hardest hit areas in the real estate crash are seeing big new buying activity. And not only that, it’s happening in cash.
| ||||||||||||||||||
| China Takes Tentative Steps Towards Global Currency Posted: 13 Feb 2011 11:05 AM PST The move of the yuan as a global currency is a very important one in the long run, as it will have potentially dramatic effects on the U.S. dollar as the sole reserve currency but for now things are going along at a snail pace. In the interim, the Chinese currency is essentially pegged to the U.S. dollar (for better or worse). Until the % of growth in China from exports is reduced, and they are far more reliant on internal consumption I don't see this loose peg changing anytime soon. Longer term, with 3 ugly ducklings (euro, dollar, yen) dominating the world's FX markets, the cart will eventually be turned over when a country (or region) coming from a position of fiscal strength rather than weakness enters the fray. Via NYT:
| ||||||||||||||||||
| Guest Post: Democracy And Its Contradictions Posted: 13 Feb 2011 10:42 AM PST
The next in a continuing series (most recently: Evil and the State). Democracy and Its Contradictions Democracy, as Churchill said, “is the worst form of government except for all those other forms that have been tried from time to time,” the assumption being that because the state is the only conceivable form of government (and therefore necessary for civil society to exist), the democratic state is the best state, even if it is merely the best among bad ones. This flies in the face, of course, of the godlike esteem in which democracy is held around the world, both by those who are ruled by such states and by those who yearn to be. Democracy, after all, is based on “the proposition that the legitimacy of all political power arises from, and only from, the consent of the governed, the people”i – the assumption being that the democratic state embodies this noble proposition. The problem, however, is that while the people’s consent in a democratic state is supposedly expressed through the right to vote – through the so-called “ballot” – consent has little if anything to do with the process:
What does it mean, in other words, to vote within the confines of that which one had no vote in creating and when those confines, therefore, cannot legitimately – i.e., in a morally justifiable manner – rule over one? Even assuming that those confines are minimal (though none are, of course, even if they were so conceivedii), what moral authority or obligation can such confines have? What authority or obligation, that is, can political constitutions have? The answer, simply put, is none. The United States Constitution, for example,
Moreover:
Just as representative democracy is a farce, then, so is the constitutionalism that attends it. For what constitutions are based on is not self-determination but pre-determination, which, under the best of circumstances, merely provides the means by which such consent as is presumed to have been given can accordingly be withdrawn. Even so, the nation founded on this supposedly unalienable right no longer recognizes it. For notwithstanding the fact that there is no actual law prohibiting self-determination – up to and including secession – the United States Government has made it clear that it will pursue secessionists to the point of genocide on the presumption that preserving the Union is paramount to all other concerns. A “Civil War” was fought over this very point, after all,iii at a cost of over 600,000 lives and an untold destruction of property, at the conclusion of which the selfsame government was forced to abandon its prosecution of the secessionists’ leader, realizing that to do so would be to expose the fallacy of its argument: “The federal government knew that it could not try [Confederate President Jefferson] Davis for treason without raising the constitutional issue of secession.” iv Nonetheless, a century and a half later, the U.S. Government staunchly maintains its position (without having to openly defend it) and does so with full knowledge that its erstwhile adversary, the former Soviet Union, and its present one, China, each cited the Civil War as their authority for using force to keep their own governments intact:
But such is the logic of the state that it seeks to perpetuate itself at any and all cost, and thus does the democratic state fall victim to its own hypocrisy. For any state that denies its people the right of self-determination is totalitarian, the more so in accordance with how far it will go to deny that right. And while 600,000 lives are but a small fraction of those lost in the lie that was the USSR, insofar as the USA fell victim to the lie of forced union, its atrocities differ only in degree, not in kind. Moreover, insofar as forced union in America enabled the rampant statism that soon included the fraud of centralized, fractional-reserve banking, the death toll from decades of government-induced poverty might well be in the millions. After all, the Great Depression – which, contrary to the received truth, was both perpetrated and perpetuated by the U.S. Government’s own policies – caused the premature deaths of countless Americans, to say nothing of how many lives will be needlessly foreshortened and otherwise ruined by the time the present economic calamity – also a direct result of the U.S. Government’s own policies – finally exhausts itself. To its credit, the government of Canada did not prevent one of its constituent provinces from holding a referendum on secession. And no matter that the referendum failed (except, that is, to the 49.42% who voted in favor of it), the fact that it was allowed at all is commendable. Ask any official of the United States Government whether its citizens have this right, however, and they will be at a loss for words,vi knowing that to deny the right is to deny the nation’s founding principle, while to affirm it is to open the floodgates of the Government’s demise and thereby jeopardize the official’s sustenance through “the political means.” Many will argue, of course, that the contradictions of any particular democratic state are insufficient to deny the validity of the democratic ideal. And while the cynic might reply that just because the democratic state doesn’t work in practice doesn’t prove that it can’t work in theory, let us eschew cynicism and simply ask the question that Thoreau asked: “Is a democracy, such as we know it, the last possible improvement in government? Is it not possible to take a step further towards recognizing and organizing the rights of man?” Of course it is, and it begins with the recognition that the right of self-determination is just that – a right of the self and thus of the individual, the real, present, and perpetual acknowledgement of which is the only constitution that has any moral authority or obligation. For only then does “the consent of the governed” have any genuine meaning; only then can “the action of the organs of the state” be held in check; and only then can the stage be set for what would otherwise be impossible – “The Transition to a Free Society” – which we will address in my next submission.
i Robert Nisbet, The Quest for Community: A Study in the Ethics of Order & Freedom, ICS Press, 1990 (Oxford University Press, 1953), p. 220. ii “It is jealousy and not confidence which prescribes limited constitutions, to bind down those whom we are obliged to trust with power. ... Our Constitution has accordingly fixed the limits to which, and no further, our confidence may go. ... In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution." --Thomas Jefferson: Draft Kentucky Resolutions, 1798. iii There is no denying that slavery was an important issue, nor is there any defending the institution itself. Neither is there any denying, however, that the nation’s new president held slavery inviolate in the states where it was still practiced or that he was as racist as any other American of his time, Northern or Southern. iv Charles Adams, When In the Course of Human Events, Rowman & Littlefield, 2000, Chapter 12, “The Trial of the Century that Never Was,” p. 178. v Ibid., pp. 228 and 229. vi With one notable exception, of course.
| ||||||||||||||||||
| Posted: 13 Feb 2011 09:56 AM PST Gold is in an historic Bull Market because most nations are printing their paper currencies like they are going out of style (and maybe they are) as each nation tries to battle off the massive deflationary backdrop of debt that has permeated most of the world. This surge of debt monetization – this devaluing of the U.S. Dollar for one – has set the scene for a parabolic rise in $Gold to $1860, or higher, over the coming months before an intermediate-term correction takes place. Let me explain.
| ||||||||||||||||||
| Got Gold Report – Gold, Silver Correction Ahead? Posted: 13 Feb 2011 09:32 AM PST Two weeks ago we had our targets for reentry into the gold and silver markets all picked out and we had our trading trigger finger at the ready. Then we think the trouble in Egypt got in the way and interfered with a perfectly good garden variety pullback we intended to game. Gold and especially silver checked up above our comfort level for reentry.
| ||||||||||||||||||
| Is That a Pyramid in Your Portfolio or Are You Just Happy to See a United Egypt? Posted: 13 Feb 2011 08:16 AM PST
The market rallied on Friday as Hosni Mubarak abdicated his manipulatedly elected throne, walked out of the country like, well, like an Egyptian (yeah Money McBags fucking went there, shit, not every joke can end with a Harry Baals reference), and turned the keys to his Cairo over to the military (and nothing like a junta in the Middle East to make everyone feel better, and yes that was the sound of Money McBags punching himself in the nuts).
But it wasn't just Egypt that rallied the market because investors also reacted positively to macro news even though macro news was more mixed than Andy Dick's sexuality (but in Bernanke's Ponzeconomy™ we know the only news that matters is the health of Brian P. Sack's trigger finger, and as always, Money McBags said Pee-sack, hhuhuhuh), and to earnings even though earnings continued to more confusing and less helpful than the voynich manuscript or the word "no" to Ben Roethlisberger. That said, with the market not trading on news, fundamentals, or common sense, it is all more irrelevant than a syphilis test.
In macro news, consumer confidence reached an 8 month high as consumers finally got some hits on their diapermates profiles which made them feel much more confident about their life choices. The index of consumer sentiment climbed to 75.1 from 74.2 in January and sentiment data showed households’ perceptions of the economy and job market turned positive this month for the first time in seven years as everyone BUYS THE FUCKING RIP!!! Interestingly Olivia Wilde is hot, but slightly more interestingly, the index of consumer expectations six months from now decreased to 67.6 from 69.3, so hooray for buying the rip but oh shit for when the rip becomes a dip.
Even more interestingly though, the Bloomberg article to which Money McBags linked above contains this awesome quote from Credit Suisse witch doctors led by Chief Wiccan Neal Soss: “The sharp 0.8 percent drop in the unemployment rate the past two months is resonating across consumers’ current view and future prospects for the labor market." Oh Money McBags' fucking god, did an economist really just say that? Umm, has he not heard of something called the labor force particpiation rate which has artifically pulled down the made up unemployment numbers? Perhaps they didn't teach that in his coven. Money McBags can only suggest no one listen to anything this assclown says and that Mr. Soss and the rest of the Credit Suisse team read Money McBags' soon to be Pulitzer prize winning analysis of the jobs report to understand its irrelevance. And note to Wall Street recruiters, how the fuck does this guy have a job?
Elsewhere, the Obama administration wants the government to have a smaller role in mortgages and gradually abolish Fanny Mae and Freddie Mac within 10 years, so only about 20 years too late. The report gave Congress three options for reducing the government’s role in supporting home ownership with those options being shrinking the government’s role in insuring or guaranteeing mortgages by limiting it to only creditworthy borrowers with low and moderate incomes, having the government as an insurer of mortgages only in times of financial turmoil, or simply telling Barney Frank to eat a fat dick (and Money McBags means that in the most figurative, non-offensive way).
Also, the trade deficit widened almost as much as the income gap or that Coco chick's ass and hit its highest level in four months as imports from China hit record levels (who knew pee pee flavored coke would be such a big hit?). The US imported more than it exported by $40B which was inline with guesses, up 6% from last month's $38B, and included mostly products produced cheaper than in the US such as electronics, clothes, medical devices, and anything else that isn't just picked up off the ground and requires labor. The good news is that for the year, exports actually rose 17% (though below the 20% rise in imports) as the demand for the US's biggest products (anger, despair, lost hope, and Brianna Banks films) hit record highs. In all though, these numbers can be interpreted a number of ways (and as always, Money McBags prefers to interpret them using modern dance) as rising imports mean that consumer spend is going up (and likely inflation, though the numbers were driven by oil, so make like Peter North and drill baby drill), while rising exports mean that the global economy is picking back up (except for you Ireland, Greece, Spain, Portugal, and anyone else tied to the Euro).
The only other interesting bit of news was that Alan Greenspan talked to the Brookings Institute which is a think tank that apparently likes to think about things that suck (because if Money McBags were running a think tank, all he would think about is Nell McAndrew and how to get free HBO) and said housing prices need to rise 10%, so it's good to see the classics never go out of style. Lord Greenspan also said the rise in equities has created a “wealth effect” that is prompting consumers to boost spending and then added “In the last four or five months, these markets are beginning to look very much like they used to prior to the crisis” which would be great if the markets prior to the crisis hadn't also been artificially fucking inflated and led to the collapse of the ponzeconomy™.
In the market, earnings were mixed as Expedia crashed after reporting a 30% drop in net income related to a nearly 20% increase in costs, a ginormous jump in their tax rate, and something about an undifferentiated business model with barriers to entry lower than Hugh Hefner's balls. Elsewhere, Tata motors showed the market its tatas and apparently the market really liked them as the stock jumped 9% on a 22% increase in revenue driven by strong sales of their Jaguar and Land Rover brands. Finally, Nokia fell ~15% after announcing a deal to use MSFT software in their smart phones. In a related note, Hardees announced that RC Cola will be their drink of choice, MySpace said they will be teaming up with Napster, and M Night Shyamalan said his movies will only feature Dolph Lundgren.
As always, Money McBags has a fuckload more as yesterday he broke down the quarterly earnings from one of his favorite small cap shorts in a way that would make Warren Buffett's taint hurt. So check Money McBags out at the award winning When Genius Prevailed or even follow him on the twitter (where he put today's headline up for a vote with “Egypt Causes Market to Rise as if It Had Flashed its (Nefer)Titis” losing out by a nut hair).
| ||||||||||||||||||
| Posted: 13 Feb 2011 07:58 AM PST GoldRunner writes: Gold is in an historic Bull Market because most nations are printing their paper currencies like they are going out of style (and maybe they are) as each nation tries to battle off the massive deflationary backdrop of debt that has permeated most of the world. This surge of debt monetization - this devaluing of the U.S. Dollar for one - has set the scene for a parabolic rise in $Gold to $1860, or higher, over the coming months before an intermediate-term correction takes place. Let me explain.
| ||||||||||||||||||
| Gold Miners Index Suggests Even Lower Prices In Coming Days or Weeks Posted: 13 Feb 2011 07:43 AM PST Gold Miners Index May Be Warning Us… 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. Words: 530 So*says*Chris Vermeulen ([url]www.thegoldandoilguy.com[/url]) in an article* which Lorimer Wilson, editor of www.munKNEE.com, has reformatted*and edited [...]* below for the sake of clarity and brevity to ensure a fast and easy read. (Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.)*Vermeulen*goes*on to say: The Gold Chart Taking a look at the [following] daily chart of Gold you can see it has formed a bear flag with declining volume and the price has drifted up into a resistance level. This combination typically leads to lower prices. [IND...
| ||||||||||||||||||
| Are Pensions Planning to De-Risk Funds? Posted: 13 Feb 2011 07:15 AM PST
Ruth Sullivan of the FT reports, Pensions plan to de-risk funds:
The de-risking of mature pension plans is a long-term trend. As pension plans mature and start paying out more in benefits than they receive in contributions, they try to match assets-to-liabilities a lot more closely, meaning they start moving away from risky assets to get into other assets which provide more steady cash flows and less volatility. Of course, asset-liability matching isn't an exact science, but mature pensions can't afford to go through another severe drawdown like they did in 2008. As the article states, further reduction in pension deficits are needed. That's a big reason why central banks around the world (led by the Fed) have been targeting asset reflation and mild inflation. If inflation expectations pick up, rates will rise (hopefully) at the same time that assets are rising. This will help reduce pension deficits further. So far, stock markets around the world keep grinding higher which tells me pensions are in no rush to de-risk their portfolios anytime soon. Skeptics abound waiting for the next major downturn but I continue to believe that there is so much liquidity in the financial system that the risks of a melt-up outweigh those of a meltdown as another stock bubble gets underway. There will be corrections along the way as markets get overextended, but I think Chris Ciovacco of Ciovacco Capital Management is right, bears will be taken to the woodshed during the next correction. A couple of things to keep this in mind while reading this article on pensions 'de-risking' their portfolios. First, UK pension plans have the highest exposure to equities in the world. Second, mature pension plans have to reduce their deficits which means they still need to take on equity risk in both public and private markets. Asset-liability matching is easier to implement once pensions are close to fully funded status but most pensions are far from being fully funded. Finally, de-risking or taking on more risk hoping that markets solve the problem are not a long-term solutions for dealing with chronically underfunded pension plans. Without serious reforms, pension deficits will continue plaguing company and government finances, placing more stress on already fragile retirement systems.
| ||||||||||||||||||
| Guest Post: Preparing Accordingly II Posted: 13 Feb 2011 06:34 AM PST
Submitted by TF Metals Report Preparing Accordingly II A frequent topic here has been the ongoing and still-building food inflation crisis. The MSM is just now awakening and beginning to discuss the implications. By the time the great unwashed become fully aware of the magnitude of this problem, it will be too late. You, my dear reader, still have time to prepare.
 When did the index really take off? Last July. Why then? That's when the realization was made that QE2 was coming. Will it continue rising? As long as QE continues? Will QE ever end? No. It can't. 
I'll let you decide which is true. I know which one I believe. Back to corn. Look at this chart:  This near 100% move has occurred in the offseason. What happens if we get a little drought in the American midwest this summer? What the shills fail to recognize is the interaction between agricultural commodities. In this case, its the relationship between corn, cattle and hogs. You see, if you're a rancher or a pig farmer, your primary input cost is feed. (Ever heard of the term "midwest corn-fed beef"?) When feed costs double, your first move as you attempt to control costs is to sell some of your stock. As those cows and pigs come to market, their presence has the same impact as any other increase in supply...a temporary suppression of price. Yet, even in this environment, look at a cattle chart:  And look at hogs:  The only thing that has kept cow and pig prices from rising at the same rate as the grains is this temporary increase in supply. Replacement rate of a herd or barn is usually not much more than 1:1 so it follows that all of the excess supply currently in the market will lead to a commensurate drop in supply later this year. Add less supply to increased demand (due to QE) and you get explosive price increases. So, not only are the grains significantly more expensive, protein is, too. Not good. Not good at all.
| ||||||||||||||||||
| Rice Speculators Expect 50% Jump In Price Posted: 13 Feb 2011 06:24 AM PST
Analyzing last week's CFTC Commitment of Trader data continues to confirm our assumption that ever more speculators are honing in on rice as the fulcrum commodity. Jumping to a fresh year high of 6,652, non-commercial net spec contracts are the highest they have been since December 2009, when they hit 6,773, and approaching the record from early 2008. Yet while the price of rough rice in late 2009 was comparable to recent price levels in the $16 region, the peak from early 2008 was 50% higher, approaching $25. Therefore it is safe to assume that should speculative interest continue surging at the current rate, and if it were to approach the spec exposure of ~8,000 last seen in early 2008, then the price of rice has a long way to go...
And some other CFTC charts, confirming that spec exposure in grains and softs continues to be near recent all time highs:
Looking at the 2, 5 and 10 Year Treasury spec exposure, we see a huge plunge in 2 Year spec positions, which dropped by 100k in the past week, the biggest drop in over a year, as increasing more spec are worried that the short end is about to surge. There was also a pick up in 10 year spec contracts, confirming that specs are expecting a flattening of the curve.
Lastly, and no surprise here, dollar non-commercial net specs have dropped to a fresh multi year low, declining by 3.8K contracts W/W to -7.4K. There was a modest increase in Yen and GBP specs, and a modest decline in CHF and EUR positions.
| ||||||||||||||||||
| Silver in Backwardation and the Emperor, Once Again, Nearly Naked Posted: 13 Feb 2011 06:04 AM PST | ||||||||||||||||||
| VALUE IS WHAT THE FEDERAL RESERVE SAYS IT IS Posted: 13 Feb 2011 05:41 AM PST Another excellent post from Jesse http://jessescrossroadscafe.blogspot.com/. 13 February 2011 Modern Monetary Theory Part II: Money and The Limits of Empire The limit of the Fed's and Treasury's ability to create money is the value and acceptance of the dollar and the bond in market transactions. The Weimar government never 'ran out of money.' Zimbabwe never [...]
| ||||||||||||||||||
| Posted: 13 Feb 2011 05:35 AM PST February 12, 2011 – In precious metal bull markets, silver outperforms. Its price climbs at a faster rate than gold’s price. The reverse happens in bear markets. Silver’s price drops at a faster rate than gold’s price. The following chart of the gold/silver ratio illustrates this phenomenon. At the peak of the last precious metal bull market in January 1980, it took 17.4 ounces of silver to buy one ounce of gold. Thereafter, the ratio turned and started climbing higher. By February 1991, 101.8 ounces of silver were needed to exchange for one ounce of gold. Silver was trading at only $3.50 per ounce, down 93% from its previous bull market peak. Silver back then was “dirt cheap”, but it would not get any cheaper. Silver turned the corner as value oriented buyers recognized a bargain. Since then the price of silver has been generally rising, and has been doing so faster than the spectacular rise in the price of gold. The r...
| ||||||||||||||||||
| Bullion banks get Financial Times help in trying to talk silver down. Posted: 13 Feb 2011 05:25 AM PST "Comex silver inventories continue to decline. In New California Gold Rush, Old Mines Reopen. Interviews with Eric Sprott and John Embry...and much more. " Yesterday in Gold and Silver The gold price was pretty choppy...and carved out a bit of a low around the London a.m. gold fix at 10:30 a.m. in London. From there, it rallied to its high of the day at $1,369.90 spot, which was around 8:45 a.m. in New York trading. And it was, as they say, mostly downhill from there...with the low [$1,353.30 spot] coming at 12:50 a.m. Eastern. It didn't gain much of that decline back before the close of electronic trading at 5:15 p.m. in New York. The scale of Kitco's gold chart makes the action look worse than it really was, but it's quite obvious to me that the bullion banks were lurking about during the Comex session in New York. Silver was pretty stubborn yesterday...and traded in a twenty cent range virtually all day Friday. But once London closed for the week...
| ||||||||||||||||||
| Major Currency Trends For Potential For Major Gains, Yen and Dollar Posted: 13 Feb 2011 04:50 AM PST Over the past few years Forex traders have really had to step up their game in order to continue making money in the currency market. Back in the day before currency trading was main stream, currencies used to trend in a direction for a long period of time with a low level of volatility. But with so many individuals now involved speculating on price action coupled with international concerns in most countries, the once slow and steady currency market now moves like the stock market with large price swings on a weekly and even daily basis.
| ||||||||||||||||||
| What Part Of Bernanke's Secret FCIC Interview Constitutes A Disclosure Of National Secrets? Posted: 13 Feb 2011 04:16 AM PST
Now that the FCIC has declassified all of its interviews with the people responsible, or profiting, for the housing crisis (among which are those of John Paulson, Hank Paulson, Lloyd Blankfein, Dick Fuld, Jonathan Egol (the man who helped Fab Tourre construct Abacus), Alan Greenspan and of course Agent Orange himself - Angelo Mozilo), there is one interview strangely withheld. That of the man largely at the heart of everything - Ben Bernanke. From Bloomberg: "The Financial Crisis Inquiry Commission, created by Congress to investigate and report on the causes of the market meltdown late last decade, won’t publicly release its full 2009 interview with Federal Reserve Chairman Ben S. Bernanke, a commission spokesman said. The interview is quoted in the congressionally authorized panel’s final report, which cites the November 17, 2009, “closed-door” session in 11 footnotes. The Fed chief discussed a range of topics including the central bank’s failures and why the government rescued Bear Stearns Cos. and let Lehman Brothers Holdings Inc. go bankrupt, the FCIC report shows." And yet, it appears to contain information so sensitive it would once again rain fire and brimstone on everyone, and like an audio medusa, lead to widespread petrifying contagion everywhere it was heard. Once again we discover that the Fed has learned nothing from the Pittman episode, nor from the Paul campaign to bring some transparency to its actions. We do learn, however, that the Fed continues to believe it is above the people, and that the information it is privy to will never be voluntarily released to those whom it supposedly serves courtesy its three mandates, all of which have the words "Russell" and "36,000" in them. From Bloomberg:
But don't worry - Ben is not being singled out. There are other whose disclosure, were it made public, would destabilize the financial system, as nobody can trust those peasants for being able to think for themselves.
This tendency to classify Fed releases, however, is quite odd - because even the man who singlehandedly profited to the tune of $15 billion from Bernanke's lack of oversight and ability to think clearly, John Paulson, blames the Fed:
And now that the FCIC is shutting down after spending an $8 million budget to uncover absolutely nothing new, the only real question is what is in the unreleased "disclosure." But that would likely cost Phil Angelides another several million, in order to commission a San Fran Fed study on the impact of releasing the only information that is relevant. So, as usual, it is better to not ask questions, and to leave it to our betters and smarters to do what they are truly good at doing: stealing from the middle class in broad daylight, with threats that any change to that particular status quo would lead to global assured destruction, and a world in which the reason for the existence of central banks is, even more, put into question. We can't wait for the next iteration of the FCIC, some time in 2 years, when instead of housing, the topic under discussion is just when did we allow the market to be overvalued by a few million percent, and just why is the S&P at zero. Full collection of public interviews and transcripts from the FCIC.
| ||||||||||||||||||
| Currency Manipulators Created $7 Trillion, Causing the Global Economic Bubble Posted: 13 Feb 2011 03:31 AM PST The single most important development affecting the global economy over the past decade has been the creation of $7 trillion worth of paper money by central banks in developing countries. This explosion of money creation drove up the price of stocks, bonds and commodities – and drove down yields – all around the planet. It caused the Fed to lose control over interest rates and over the economy. In short, this new money (along with the US trade deficit which played a role in its creation) caused the global economic bubble that imploded in 2008. It is mindboggling that Washington, Wall Street and the financial press all failed to identify the source of the money inundating the world. Thousands of economists and financial journalists from dozens of nations watch the Fed's every move. Yet, somehow, they entirely missed the paper money revolution being carried out by other central banks. This failure is all the more incredible given that the IMF publishes the relevant information each month in its International Financial Statistics database, under the heading of Total Foreign Exchange Reserves. Foreign Exchange (FX) Reserves are owned by central banks. Central banks acquire FX Reserves in the same way that they acquire any other asset, they create paper money from thin air and buy them. Therefore, the increase in Total FX Reserves from $2 trillion in 2000 to $9 trillion in 2010 shows that central banks conjured up $7 trillion worth of new paper money during those years. To put $7 trillion into perspective, the entire amount of US government debt held by the public was less than $7 trillion when this crisis began. It is important to understand exactly how this process of Reserve accumulation works. Consider how China accumulates Reserves. China's central bank, the People's Bank of China (PBOC), holds nearly $3 trillion in FX Reserves, much more than any other central bank. Last year, China's trade surplus with the United States was $270 billion. When Chinese exporters sell their goods in the US, they are paid in dollars. They take those dollars back to China and convert them into the Chinese currency, the Renminbi (RMB). Were this done in a free market, the conversion of $270 billion into RMB would put extreme upward pressure on the value of the RMB; and the appreciation of the currency would reduce China's trade competitiveness and cause China's export growth and economic growth to slow. In order to prevent that from happening, the Chinese government instructs the Chinese central bank to buy all those incoming dollars at a fixed exchange rate. So, the PBOC "prints" $270 billion worth of RMB and buys the $270 billion from the exporters at a rate decided by the central bank. The exporters accept RMB from the PBOC in exchange for dollars and they deposit their RMB into the Chinese banking system. These very large deposits cause rapid deposit growth in China, which, in turn, necessitates very rapid loan growth. The rapid loan growth fuels very rapid economic growth. The central bank, meanwhile, has accumulated, in one year, an extra $270 billion in FX Reserves with no greater effort or expense than that involved in waving their central bank, money-making, magic wand. That is how China's central bank accumulated $3 trillion in FX Reserves. The central banks of many other countries – primarily those in developing countries with a trade surplus with the United States – have accumulate Reserves in the same way, by printing money and buying dollars. Like China, they have done this to hold down the value of their currencies in order to perpetuate their low-wage trade advantage. That explains how (and why) Total FX Reserves increased from $2 trillion to $9 trillion over the last 10 years. There have been numerous undesirable side effects to Reserve accumulation. All the countries that have experienced a rapid build up in Foreign Exchange Reserves – Japan in the 1980s, the Asia Crisis countries in the 1990s and China more recently – have been blown into economic bubbles as the result of too much exogenous money pouring into their banking systems and causing excessive credit growth. And every economic bubble pops sooner or later, leaving a great deal of damage behind. Moreover, not only has this widespread practice of currency manipulation destabilized the economies of its practitioners, it has destabilized the US economy as well. When central banks print money and buy dollars, they must then reinvest those dollars in US dollar-denominated assets in order to earn a return on them. Central banks prefer to invest their dollars in US government bonds. During the 12 years leading up to 2008, however, the amount of dollars being accumulated by central banks outside the US each year exceeded the amount of new bonds sold by the US Treasury Department. With an insufficient supply of new government bonds to absorb them, the dollar inflows went elsewhere and created a bubble in the United States. Every year from 1996 to 2008, the US trade deficit was larger than the US budget deficit. In other words, the central banks of the surplus countries accumulated more dollars than the Treasury Department needed to fund the US government's budget deficit. In 2006, for instance, the US trade deficit reached $800 billion. That is roughly the amount of dollars that the central banks in the surplus countries accumulated as FX Reserves. Those central banks would have liked to acquire $800 billion worth of US government bonds that year. However, the US government's budget deficit was only $160 billion in 2006; so the Treasury Department only sold $160 billion worth of new government bonds. Even if foreign central banks had bought every new government bond the Treasury sold that year, they still would have had $640 billion to invest in other US dollar-denominated assets. This left those central banks with two options. They could buy old government bonds (in other words, those the government had sold in earlier years) or they could buy other kinds of US dollar-denominated assets – such as the bonds sold by Fannie Mae and Freddie Mac. They did some of both. When they bought old Treasury bonds they pushed up the price and drove down the yield of those bonds. That caused the Fed to lose control over interest rates. Recall that between mid-2004 and mid-2005, the Fed had increased the Federal Funds rate numerous times, but the yield on 10-year government bonds kept falling. When a Senator asked Fed Chairman Greenspan why that was, Greenspan said it was a "conundrum." It wasn't really, however. Foreign central banks were buying enormous amounts of US government bonds and pushing down their yields, leaving the Fed powerless to rein in the out-of-control property bubble inflating in the United States. In addition to buying old Treasury bonds, foreign central banks also bought new bonds issued by Fannie and Freddie, since those bonds were understood to have the implicit guarantee of the government. Between 1998 and 2003, Fannie and Freddie (with the help of foreign central banks) issued nearly $3 trillion worth of bonds. As they expanded their debt, all that was required in order for their managers to earn multi-million dollar bonuses was for them to grow their assets, or, in other words, to buy up mortgages. And that is what they did, blowing the US housing market into a bubble in the process. To summarize, the US trade deficit, which peaked at $800 billion in 2006, threw dollars off into the global economy. The central banks of the trade surplus countries printed the equivalent amount of their own currencies and bought all the dollars entering their economies in order to perpetuate their low-wage trade advantage. Those central banks then reinvested their dollars into US dollar-denominated assets, causing the United States to bubble. Rapidly inflating house prices allowed Americans to extract equity from their homes and to spend more. Increasing consumer spending pulled in imports from abroad. Other countries expanded their industrial capacity to meet the inflating US demand. It was all good while it lasted. But eventually every bubble pops. When the US bubble popped, it left the world in a crisis characterized by excess capacity and insolvent banks. As a result, governments around the world have been forced to run enormous budget deficits and to create yet more paper money in order to absorb the excess capacity, bail out insolvent banking systems and stave off a new great depression. In retrospect, it is obvious that the creation of $7 trillion dollars worth of paper money in ten years could only end in economic catastrophe. Had the US government taken steps to prevent its trading partners from manipulating their currencies in this manner, the global economic bubble could have been prevented. Now, the bubble has popped, but little else has changed. Currency manipulation remains as widespread as ever and the US government continues to tolerate it. The ultimate cost of the failure of the US government to stop this abuse of the international monetary system is certain to be very high. Regards, Richard Duncan P.S. For more perspective from Richard Duncan you can visit his blog on economics in the age of paper money at www.richardduncaneconomics.com. Currency Manipulators Created $7 Trillion, Causing the Global Economic Bubble originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
| ||||||||||||||||||
| Posted: 13 Feb 2011 03:29 AM PST 
| ||||||||||||||||||
| Precious Metals - Week of 2.13.11 Posted: 13 Feb 2011 02:45 AM PST No Wonder Vietnam Can Never Get Enough Gold GATA (11 Feb 11) Possible Shift From Paper Gold to Real Sneaks Into Bottom of FT Story GATA (11 Feb 11)
| ||||||||||||||||||
| Gold Fails to Respond to Middle East Crisis, Looks Ready for More Downside Action Posted: 13 Feb 2011 02:45 AM PST The upheaval in the Middle East has done nothing for gold. It looks like gold is ready for more downside action. A move to $1305 would not be good. The “Penny Arcade Index” is still okay so any downside activity shouldn’t last for too long.
| ||||||||||||||||||
| Dan Norcini: Speculators are crucial to gold's price advance Posted: 13 Feb 2011 02:27 AM PST 9:50a ET Sunday, February 13, 2011 Dear Friend of GATA and Gold (and Silver): Dan Norcini, whose futures market commentaries long have appeared at Jim Sinclair's Internet site, JSMineSet.com, has started his own blog, "Trader Dan's Market Views," to elaborate on market developments, even as he'll continue to contribute to JSMineSet.com. Norcini's most recent blog entry argues that investment by speculative funds has been and remains crucial to the prospects for the gold price. His commentary is headlined "Detailing the Necessity of Speculative Interest in Gold Price Advances" and you can find it here: http://traderdannorcini.blogspot.com/2011/02/detailing-necessity-of-spec... CHRIS POWELL, Secretary/Treasurer 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
| ||||||||||||||||||
| Gary North: Bernanke's free ride is over Posted: 13 Feb 2011 02:12 AM PST 10:05a ET Sunday, February 13, 2011 Dear Friend of GATA and Gold: Economist and financial adviser Gary North writes that now that two important congressional committee chairmen are skeptical of or hostile to the Federal Reserve, Congress and the Fed will begin blaming each other for the collapse of the U.S. economy. North's commentary is headlined "Bernanke's Free Ride Is Over" and you can find it at Lew Rockwell's Internet site here: http://www.lewrockwell.com/north/north944.html CHRIS POWELL, Secretary/Treasurer 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
| ||||||||||||||||||
| U.S. silver term structure inverts as supply tightens Posted: 13 Feb 2011 01:48 AM PST By Frank Tang http://www.reuters.com/article/2011/02/11/silver-backwardation-idUSN1133... NEW YORK -- The tightest physical silver supplies in four years have tipped the U.S. silver futures market into backwardation this week, making near-term prices more expensive than more distant months. Market watchers said that it has been more than 10 years since silver futures were last in backwardation, an unusual term structure, associated with shortage of physical supply. Warehouse stocks of the white metal have dropped to a four-year low on surging demand, while miners have hedged their future production. Booming industrial demand for silver and record U.S. coin sales, combined with a surge in demand from mining companies to borrow the metal for their hedge programs have led to a squeeze in the physical silver market. "The problem is that there is great industrial demand for a specific grade of silver, and there is not enough coming fresh from the mines," said Miguel Perez-Santalla, vice president of Heraeus Precious Metals Management. "The stocks are being pulled for all the high-grade and better materials, and that essentially put a squeeze on the physical market," he said. ... Dispatch continues below ... 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 Perez-Santalla said that silver futures have not been in backwardation since billionaire Warren Buffett bought 130 million ounces of silver between 1997 and 1998. Backwardation is a condition where cash or nearby delivery prices are higher than the price for delivery dates further in the future. Usually, forward prices are higher than cash prices to reflect the costs of storage and insurance for stocks deliverable at a later date. "The extent of the backwardation in silver is unprecedented. It suggests that retail investment and industrial demand internationally is very robust and the small silver bullion market cannot cater to the level of demand for refined coin and bar product," bullion dealer GoldCore said in a note on Friday. Warehouse data from COMEX showed that silver stocks fell to a four-year low at 102.5 million ounces (3,188 tonnes) on Feb. 5, about 30 percent below a peak at over 141 million ounces (4,395 tonnes) in June 2007. "There are regional markets that are quite tight. Certainly, some retailers are saying they are juggling to replenish stock," said Suki Cooper, precious metal analyst at Barclays Capital Strong silver coin sales have more than offset outflow from the world's largest silver-backed exchange traded fund iShares Silver Trust (SLV), which notched its biggest one-month drop in its silver holdings in January. "This month, we have seen the retail interest has stayed strong but the exchange-traded product slowdown is not as negative," Cooper said. "If both of them slow down, I think silver could be in trouble," Sales of the one-ounce American Eagle silver coins by the U.S. Mint surged to a record at nearly 6.5 million, the highest since the coin's introduction in 1986. U.S. March futures advanced 15 percent to $30 an ounce in the past two weeks, near a 31-year high at $31.22. Year to date, the contract was 3 percent lower after the price of silver nearly doubled in 2010. Some precious metals dealers said that backwardation in silver was related to the forward sales program by silver producers. "When a silver mine company has to put on a hedge, it has to sell forward and borrow a lot of silver from the market, and that put a tremendous amount on the market," said Bruce Dunn, vice president at precious metals dealer Auramet. Silver six-month lease rates also spiked to their highest level in 18 months on producer buybacks. Hedging, which allows producers to guarantee prices for future output, tends to push up lease rates and nearby contract prices. Cooper, however, said that the global silver market should remain in surplus despite the current squeeze. She forecast the world market to end 2011 with an excess of 4,900 tonnes in silver, versus a surplus of 5,300 tonnes in 2010. 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
| ||||||||||||||||||
| Modern Monetary Theory: The Sophistry of the US Dollar and Debt Monetization Posted: 12 Feb 2011 11:51 PM PST soph&iddot;is&iddot;try (s f -str ). n. pl. soph&iddot;is&iddot;tries. 1. Plausible but fallacious argumentation. 2. A plausible but misleading or fallacious argument. This is a very well written and important piece by Mr. Cullen Roche at his site Pragmatic Capitalism. It does a good job of capturing the essence of modern monetary theory that I like to think of as post-Nixonian fiat, gaining its realization and fruition in Reaganomics and the Greenspan Fed.
| ||||||||||||||||||
| Newmont Takeover of Fronteer: Evidence of Secular Bull Market in Gold's Second Phase Posted: 12 Feb 2011 09:17 PM PST Bret Rosenthal submits: Update: Three Phases of the Secular Bull Market in Gold In our first installment of the ‘Three Phases’ manifesto we wrote: Phase II:
The Dec. 13 post concluded with our opinion that phase II had commenced. On Feb. 3rd, less than two months later, the following high profile acquisition occurred, offering conclusive evidence that our Dec. 13 proclamation seems wholly accurate:
Complete Story »
|
| You are subscribed to email updates from Save Your ASSets First To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment