Gold World News Flash

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• Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Almost 2% on the Week
• We're Rapidly Approaching the Crisis to Which 2008 Was a Warm Up
• Day of Reckoning on California Pensions?
• Wendy's Open Forum - Part 2
• Dollar precarious, silver backwardation grows, gold explosive, Turk says
• Gene Arensberg: Comex commercials not aggressively shorting silver
• Your Chance To Own A Tiny 3" Piece Of Hank Paulson
• Turk - Dollar Ready to Collapse, Silver Squeeze to Continue
• The Silver and Gold Price Rose This Week, The Dow, S&P, Dollar Index, Platinum and Palladium Fell, But What Does It Mean?
• What You Need to Know About Buying Silver
• The Well-Traveled Funds of Fed Money Creation
• S I L V E R
• The Bears Recreate... Charlie Sheen's Rant
• Gold posts 4th straight weekly gain on oil, unrest
• Funds Bet On Higher Gold, Silver Prices
• COMEX Commercials Not Aggressive on Silver Sell Side
• Guest Post: Here's How We Get to Energy Independence
• Of Government and Famine
• Superleverage: Limiting Your Risk While Boosting Your Returns
• When Government Debt Gets in the Way of the American Dream
• FMX Connect Afternoon Gold Fix: "Yesterday’s Sell Off From The 1415 Area Seemed Almost Orchestrated"
• Gold lower, breaks eight-session winning streak
• Stocks SPX Index, Crude Oil, Silver Technical and Geopolitical Risks Analysis
• Gold Daily and Silver Weekly Charts - Bear Raid Confirmed and the Silence of the Lambs
• Silver Retraces Entire Post Crude Margin Hike Loss, Even As General Collateral Rates Rise On Broad Liquidity Withdrawal
• Guest Post: 2011 Tipping Points
• Visionary Makes His Move
• COT Gold, Silver and US Dollar Index Report - February 25, 2011
• Oil Spike Creates Flight to Safe Havens in Precious Metals
• Gold Markets Channels & Volume Update
• SLV ETF Adds More Silver: 2,929,386 Ounces on Thursday
• Wayne Atwell: Mideast Mayhem to Drive Gold Higher
• Middle East Turmoil: Gold, Silver, Oil and Clean Energy Commodities
• How Much More Demand Can Silver Handle?
• After Predicting Global Anti-Gov’t Protests: What’s Next?
• Ted Butler Urges Everyone To Submit A Response To The CFTC On Silver Manipulation Schemes
• Mideast Mayhem to Drive Gold Higher
• Why Investors Continue to Find Comfort in the Stock Market
• Food Price Inflation Calculator
• Royal Canadian Mint struggles to get silver, King World News reports
• Turk, Vieira to speak at CMRE spring dinner in New York
• Oil disruption means more QE and higher gold, Rule tells King
• Freeport-McMoRan: In the Mining Sweet Spot
• Institutional Voyeurism: Gold and Gold Miners
• Gold One announces structure of future Goliath Gold board
• Judge rules in favour of ‘hijacked’ Ngwenda Gold
• Mideast Mayhem to Drive Gold Price Higher
• Long-Term Trend is Still Upbeat Despite Declines in Precious Metals
• The Daily Market Report
• LGMR: Oil Price Hit by Margin Hike, Libya Rumors & Global Demand Fears

Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Almost 2% on the Week Posted: 25 Feb 2011 04:00 PM PST Gold fell as much as $22.20 to $1392.90 in after hours access trade yesterday before it climbed back to $1409.89 in Asia and then dropped back to $1399.20 in early London trade, but it then rallied back higher for most of the rest of the day and ended with a loss of just 0.42%. Silver dropped $1.455 to $31.735 before it rebounded to $33.138 and fell back to $32.518, but it then climbed back higher in New York and ended with a loss of just 0.6%.

We're Rapidly Approaching the Crisis to Which 2008 Was a Warm Up Posted: 25 Feb 2011 03:05 PM PST Stocks broke down in a big way this week, falling below the trendline that has supported them since late August. Indeed, it looks as though we not only broke below this line but have since rallied to retest it: a classic pattern during corrections.     The question now is if this is just a minor correction or the start of something more. The S&P 500 appears to have formed a rising bearish wedge pattern (see above), which usually is a termination pattern that results in the underlying security falling to retest its base (in this case 1050 or so on the S&P 500).   However, with Government intervention in the markets being what it is, we could also simply see a minor correction here followed by yet another ramp job. Indeed, this is exactly what happened in 2009 when stocks broke a near perfect rising bearish pattern only to bounce back and begin yet another ramp job:     Thus, the BIG question for US stocks is whether the market has already digested all the QE hype to the point that threats of additional liquidity does nothing, OR if the Bernanke “Put” is still in play.   While this might not seem like a big deal, I can assure it is THE most significant issue the financial markets face right now. The reason for this is that IF the Bernanke “Put” is no longer relevant, that is additional liquidity and bailouts, doesn’t actually induce a rally anymore… then the entire financial system will collapse in one form or another.   Remember, the only thing that pulled us from the brink in 2008 was Bernanke printing like a lunatic. It’s the ONLY thing that has held the market together. And while it may have kicked off a major rally in stocks… it FAILED to address the underlying issues that caused the Crisis in the first place: namely excessive debt and leverage.   In fact, Bernanke has made the financial system even MORE leveraged than it was in 2008. So if the Fed’s moves no longer have an effect on the markets, then it’s time for the REAL Crisis… the Crisis to which 2008 was a warm up.   Why?   Because when the stuff hits the fan this time around, the Fed will be powerless to do anything. Bernanke’s already shot every bullet he’s got. So when he loses control this time around, not only will the market crater, but the belief that has kept the financial system afloat through every Crisis of the last 30 years (namely that the Fed can always save the day) will shatter.   And when that happens it will be the US financial system, NOT just stocks that goes down.   Prepare Now!   Graham Summers   PS. If you’re getting worried about the future of the stock market and have yet to take steps to prepare for the Second Round of the Financial Crisis… I highly suggest you download my FREE Special Report specifying exactly how to prepare for what’s to come.   I call it The Financial Crisis “Round Two” Survival Kit. And its 17 pages contain a wealth of information about portfolio protection, which investments to own and how to take out Catastrophe Insurance on the stock market (this “insurance” paid out triple digit gains in the Autumn of 2008).   Again, this is all 100% FREE. To pick up your copy today, got to http://www.gainspainscapital.com and click on FREE REPORTS.   PPS. We ALSO publish a FREE Special Report on Inflation detailing three investments that have all already SOARED as a result of the Fed’s monetary policy. You can access this Report at the link above.

Day of Reckoning on California Pensions? Posted: 25 Feb 2011 02:18 PM PST Via Pension Pulse. The LA Times posted an editorial, Day of reckoning on pensions: The housing bubble and subsequent Wall Street collapse wreaked havoc on the nation's retirement savings, as many pension funds and 401(k) plans suffered losses of 30% or more. State and local governments are now facing huge unfunded pension liabilities, prompting policymakers to scramble for ways to close the gap without slashing payrolls and services. But a new report from the Little Hoover Commission in Sacramento makes a more troubling point: Many state and local government employees have been promised pensions that the public couldn't have afforded even had there been no crash. The commission's analysis of the problem is hotly disputed by union leaders, who contend that the financial woes of pension funds have been overblown. The commission's recommendations are equally controversial: Among other things, it urges state lawmakers to roll back the future benefits that current public employees can accrue, raise the retirement age and require employees to cover more pension costs. Given that state courts have rejected previous attempts to alter the pensions already promised to current workers, the commission's recommendation amounts to a Hail Mary pass. Yet it's one worth throwing. A bipartisan, independent agency that promotes efficiency in government, the Little Hoover Commission studied the public pension issue for 10 months before issuing its findings Thursday. Much of the 90-page report is devoted to making the case that, to use the commission's blunt words, "pension costs will crush government." Without a "miraculous" improvement in the funds' investments, the commission states, "few government entities — especially at the local level — will be able to absorb the blow without severe cuts to services." The problem is partly demographic. The number of people retiring from government jobs is growing rapidly, and longer life expectancies mean that a growing number of retirees will collect benefits for more years than they worked. But the report argues that political factors have been at least as important in driving up costs, starting with the Legislature's move in 1999 to reduce the retirement age for public workers, base pensions on a higher percentage of a worker's salary and increase benefits retroactively. The increases authorized by Sacramento soon spread across the 85 public pension plans in California. Compounding the problem, the state has increased its workforce almost 40% since the pension formula was changed and boosted the average state worker's wages by 50%. Local governments, meanwhile, raised their average salaries by 60%. Much of the growth came in the ranks of police and firefighters, who increased significantly in number and in pay. There's nothing inherently wrong with generous pension plans. Pensions, after all, are just a form of compensation that's paid after retirement, not before. The problem, particularly for local governments, is that the plans are proving to be far costlier than officials anticipated or prepared for. By their own reckoning, the 10 largest public pension systems in California had a $240-billion shortfall in 2010. When the funds don't have enough money to cover their long-term liabilities, state and local governments are compelled to increase their contributions. In Los Angeles, the report says, the city's retirement contributions are projected to double by 2015, taking up a third of the city's operating budget. It projects that governments throughout the state will have to raise their contributions by 40% to 80% over the next few years, then maintain that higher rate for three decades. The more tax dollars governments have to devote to pensions, the more they'll have to take from other programs or from taxpayers. That means more layoffs or pay cuts for public employees, higher taxes, fewer services, or all of the above. The situation won't be so dire if the plans earn more on their investments than expected. But with the plans typically counting on annual returns near 8%, or twice the "risk-free" level suggested by some analysts, it seems just as likely that they'll earn less than that, forcing local governments to contribute even more. The Legislature and some local governments have sought to ameliorate the situation by reducing benefits for new hires and persuading current workers to contribute more to their pension funds. The commission's report, however, argues that these moves aren't sufficient. The savings from the lower pensions for new employees won't be realized for many years, and the increased contributions aren't nearly enough to close the funding gap. The only real solution, the report contends, is to reduce the benefits that current employees are slated to earn in the coming years. That's hard to do. California courts have held that pensions for current employees can be increased without their approval, but not decreased unless they're given a comparable benefit in exchange. Nevertheless, the commission calls on the Legislature to give itself and local governments explicit authority to trim the benefits that current employees have not yet accrued, without touching the amounts they have already earned. It also calls for a hybrid retirement plan that combines a smaller pension with a 401(k) plan and Social Security benefits, as well as the elimination of a variety of loopholes used to inflate pensions. The commission is right about the importance of reducing the liabilities posed by current employees. And though picking a fight with unions over unilateral reductions in pensions probably isn't the solution, the report should persuade both sides to do more at the negotiating table to prevent pension costs from swamping state and local budgets. As the commission notes, public employees in California enjoy some of the most generous pension plans in the country. Those plans won't do them much good, however, if their employer can't afford to keep them on the payroll. You can read the Little Hoover Commission's report for details. It basically sounds the alarm on pensions and states outright: "pension costs will crush government". From the report: The problem, however, cannot be solved without addressing the pension liabilities of current employees. The state and local governments need the authority to restructure future, unearned retirement benefits for their employees. The Legislature should pass legislation giving this explicit authority to state and local government agencies. While this legislation may entail the courts having to revisit prior court decisions, failure to seek this authority will prevent the Legislature from having the tools it needs to address the magnitude of the pension shortfall facing state and local governments. The situation is dire, and the menu of proposed changes that include increasing contributions and introducing a second tier of benefits for new employees will not be enough to reduce unfunded liabilities to manageable levels, particularly for county and city pension plans. The only way to manage the growing size of California governments’ growing liabilities is to address the cost of future, unearned benefits to current employees, which at current levels is unsustainable. Employers in the private sector have the ability and the authority to change future, unaccrued benefits for current employees. California public employers require the ability to do the same, to both protect the integrity of California’s public pension systems as well as the broader public good. Freezing earned pension benefits and re-setting pension formulas at a more realistic level going forward for current employees would allow governments to reduce their overall liabilities – particularly in public safety budgets. Police officers, firefighters and corrections officers have to be involved in the discussion because they, as a group, are younger, retire earlier and often comprise a larger share of personnel costs at both the state and local level. Public safety pensions cannot be exempted from the discussion because of political inconvenience. There is no doubt that pension reforms are needed in California and elsewhere in the US. But all stakeholders need to do their part. It's not just about cutting benefits. How about amalgamating all these dinky underfunded city plans into one large defined-benefit plan and introducing better governance on existing large plans, including better compensation for pension fund managers. Finally, I invite readers to carefully go through a recent presentation by Jean-Claude Ménard, Chief Actuary of Canada, to the Board of Directors of the Canada Pension Plan Investment Board. I quote Mr. Ménard: "Overall, the results confirm that the current legislated rate of 9.9% is sufficient to sustain the Plan over the long term, with assets projected to accumulate to $275 billion by the year 2020." If US states want to bolster their public pension plans, I urge them to contact the Office of the Chief Actuary of Canada. I consider this to be one of the best departments in the federal government of Canada made up of truly top-notch professionals who take great care in researching their findings. Moreover, they are transparent and welcome exchanges with actuaries from around the world. There is no reason why US public pensions can't be fixed. All the doomsayers who want to scrap public pension plans are just peddling fear and nonsense.

Wendy's Open Forum - Part 2 Posted: 25 Feb 2011 02:02 PM PST @ Wendy – Sorry I short-changed you on your last open forum. So here's another one. Apologies this time for invading your forum with a bit of tripe. (See below.)@ All – A few thoughts on "Black Gold." I hate to draw attention to ridiculous notions with no basis in history or logic. But apparently this notion of massive secret storerooms of gold is still providing some with the comfort they seek

Dollar precarious, silver backwardation grows, gold explosive, Turk says Posted: 25 Feb 2011 01:18 PM PST 9:15p ET Friday, February 24, 2011 Dear Friend of GATA and Gold (and Silver): Interviewed today by King World News, GoldMoney founder James Turk calls attention to the precarious position of the U.S. dollar on the dollar index chart, reports that silver's backwardation is deepening, and finds the gold chart explosive. From Turk's lips to the Great Market Manipulator's ear -- and we don't mean Bernanke. You can read excerpts from the interview with Turk at the King World News Internet site here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/2/25_Tu... Or try this abbreviated link: http://tinyurl.com/65r7lyy CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: World-Class PGM Deposit in Yukon 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 Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts 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: http://www.goldrush21.com/ 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: http://www.gata.org 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

Gene Arensberg: Comex commercials not aggressively shorting silver Posted: 25 Feb 2011 01:12 PM PST 9:10p ET Friday, February 25, 2011 Dear Friend of GATA and Gold (and Silver): Gene Arensberg of the Got Gold Report reports tonight that the big commercial shorts in silver didn't get much shorter even as silver rose this week. Arensberg's brief commentary in the clear is headlined "Comex Commercials Not Aggressive on Silver Sell-Side" and you can find it at the Got Gold Report's Internet site here: http://www.gotgoldreport.com/2011/02/comex-commercials-not-aggressive-on... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: World-Class PGM Deposit in Yukon 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 Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts 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: http://www.goldrush21.com/ 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: http://www.gata.org 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

Your Chance To Own A Tiny 3" Piece Of Hank Paulson Posted: 25 Feb 2011 11:28 AM PST As if adding insult to injury each and every day with wave after wave of POMO, even as the criminals on Wall Street continue to go about their business, collecting record bonuses, without even the remotest threat of prosecution, wasn't enough the US Mint is now openly micturating in the face of what little is left of US middle class with the issuance of the "Peregrine" Paulson (3 inches) bronze medal. That's right: starting today, everyone can own a tiny 3 inch piece of Hank: the same man who in October 2008 barged into congress with a three page proposal demanding Congress give him supreme dictatorial powers over this country, and to dispense an uncapped amount of money in rescuing his former company and anyone else he saw fit. The description of the reverse: " The image of the peregrine falcon represents Secretary Paulson’s commitment to conservation and his long-time interest in birds of prey." Wouldn't it be more fitting to find a creature celebrating Hank's commitment to fraud, communism, bail outs, and the Goldman way? We eagerly await William Banzai's take on the Silver Vampire Squid Paulson coin which, if we find an appropriate dealer, we would be happy to sell directly to readers (if there is any physical silver remaining of course). Failing that a coin showing Blythe Masters on the front and Gary Gensler on the back would be a perfect substitute. Of course, we jest: after the crackdown when everyone using the internet, parchment or ink is thrown in jail, who won't want to have a pallid bust of Paulson just above their chamber door...

Turk - Dollar Ready to Collapse, Silver Squeeze to Continue Posted: 25 Feb 2011 11:20 AM PST With gold higher and silver up almost $1.30, King World News today interviewed James Turk out of Spain. Turk had this rather frightening warning about the dollar, "The dollar right now is hanging on the precipice.  If we break below 77 on the dollar index, look out below.  I don't think people really appreciate how scary the dollar chart is here, or how ominous the implications really are.  There's no predicting how far the dollar could plunge if confidence breaks." This posting includes an audio/video/photo media file: Download Now

The Silver and Gold Price Rose This Week, The Dow, S&P, Dollar Index, Platinum and Palladium Fell, But What Does It Mean? Posted: 25 Feb 2011 11:04 AM PST Gold Price Close Today : 1,408.70 Gold Price Close 18-Feb : 1,388.20 Change : 20.50 or 1.5% Silver Price Close Today : 3289.8 Silver Price Close 18-Feb : 3229.8 Change : 60.00 or 1.9% Gold Silver Ratio Today : 42.82 Gold Silver Ratio 18-Feb : 42.98 Change : -0.16 or -0.4% Silver Gold Ratio : 0.02335 Silver Gold Ratio 18-Feb : 0.02327 Change : 0.00009 or 0.4% Dow in Gold Dollars : $ 178.01 Dow in Gold Dollars 18-Feb : $ 184.52 Change : $ (6.51) or -3.5% Dow in Gold Ounces : 8.611 Dow in Gold Ounces 18-Feb : 8.926 Change : -0.32 or -3.5% Dow in Silver Ounces : 368.73 Dow in Silver Ounces 18-Feb : 383.65 Change : -14.92 or -3.9% Dow Industrial : 12,130.45 Dow Industrial 18-Feb : 12,391.25 Change : -260.80 or -2.1% S&P 500 : 1,319.88 S&P 500 18-Feb : 1,343.01 Change : -23.13 or -1.7% US Dollar Index : 77.234 US Dollar Index 18-Feb : 77.642 Change : -0.41 or -0.5% Platinum Price Close Today : 1,803.30 Platinum Price Close 18-Feb : 1,835.30 Change : -32.00 or -1.7% Palladium Price Close Today : 790.55 Palladium Price Close 18-Feb : 850.50 Change : -59.95 or -7.0% The GOLD PRICE closed yesterday at $1,415.30, then in the aftermarket lost nearly $20. Today's Comex close, though down $6.50 from Thursday at $1,408.70, in fact stood $12 above yesterday's aftermarket low. Same thing for the SILVER PRICE: closed Comex at 3289.80, down 26.8c but 95c above yesterday's lows. What meaneth this moil? 'Tain't as good as it looks, and probably isn't more than a bounce off yesterday's fall. If you look at yesterday as the first half of a Key Reversal (break into new high territory with a lower close) then today put the other half into place (lower close next day). The road forks -- whither lead these forks? Both to correction, but may be the Shallow Road or the Steep Way. If Shallow Road, then the GOLD PRICE will stop at $1,390, mayhap $1,380, then roar back into a rally and cut through the 3 January old high ($1,422.60) faster than an earthquake wakes a weasel. Steep Way stretches out much longer and further down, back perhaps to $1,325, perhaps further, and lasts several months. It will announce its presence when gold falls through $1,370, then $1,355. Fall is likely to be fast, triggered by who knows what impertinent event. What worries at me like a terrier at a rat is the possible island reversal on gold's six month chart. (An island reversal leaps up leaving a gap, trades sideways forming the "island", then gaps down out of the island, leaving it isolated above the other trading.) Gold can nix that island by trading down (not gapping down) through $1,390, or by trading higher than $1,418 and rising more. Oddly, the weekly chart sports an island, too. On the other hand gold's 20 DMA is about to rise through its 50 DMA, hinting gold will rise. SILVER, silver! Silver rose to a new high -- 3433c -- on Monday when the big US market was closed. Tuesday it backed off that, but Wednesday and Friday bumped up on 3380c. Yesterday it fell out of the plane along with gold. Both silver and gold look like they will spend several days recovering, whichever fork in the road they eventually take. First couple of days next week ought to see them move sideways or lower, but of course if they blow thru the last tops -- 3433c and $1,422.60 -- then they took the Shallow Road and are running down it. Summing up the week is a binary task: it's either higher or lower than last week, and no argument. Silver rose, gold rose, Dow and S&P fell, US Dollar Index fell, platinum and palladium fell. But what does it mean?? Let's clean the dollar off our plate first thing. It dropped 1/2% from last week, and smashed hope of a rally soon by dropping out of its upside-down head and shoulders. However, it didn't follow through by crashing further. Low for the week came today as the dollar flirted -- if a scrofulous old hag like the dollar can be said to flirt -- with support around 77. This paints a double bottom with the last intraday low at 76.88, and gives the buck the chance to rally up off this double bottom. If the dollar falls through 77, then it will keep on falling to 75.63. Any other clues anywhere else in the universe? Yep, the euro appears to have double-TOPPED around 1.3820. Lending force to that conclusion is today's 0.56% drop. Go euro, one of the great Trash Currencies of the world, next to the yen and dollar! No confirmation of anything in currencies yet, but next move for the dollar ought to be up. As the proverb says, "The Market is NOT benevolent," and stocks learned that in bleeding, bandages, and iodine this week. BEHOLD! How long a-building was that fatal rising wedge! Behold, how patient a wedge is to wreak its vengeance. Behold! How sore sharp the breakdown! Today the Dow bounced 61.95, almost as rubbery as a dead cat, rising to 12,130.45. S&P 500 bounced, too, 13.78 points to 1,319.88. As yesterday I expected, stocks rose a little today. This corrects the fall this week from nearly 12,400 to 12,000, but 'twill probably rise a bit more, perhaps to 12,200. Lest y'all misunderstand, gaze upon the 6 month chart, and see how much damage the fall out of the wedge hath wrought. Ugly, ugly. Support lurks at round number 12,000, but next fall will cut clean through that like an acetylene torch through tinfoil. 'Tis already below the 20 DMA (12,154.97) and the 50 DMA at 11,877.74 is too close to help much, altho some lateral support dwells at 11,800. First strong lateral support appears at 11,451l, the last high. The chart is saying, shouting, screaming, "Lower! Lower! I must fall lower!" Y'all enjoy your weekend. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com Phone: (888) 218-9226 or (931) 766-6066 © 2011, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.

What You Need to Know About Buying Silver Posted: 25 Feb 2011 10:25 AM PST It's hard to believe that less than three years ago, silver was $8.80 an ounce. Since then it has nearly quadrupled in value (up 385%) and more than doubled in the last 12 months alone. That's great for those who already own the metal – but is it too late for the rest of us to get in? To answer that question, Big Gold Editor Jeff Clark sat down with our friends of The Daily Crux. Read what he had to say about the silver rally, and why you should view any correction as good news. Crux: Jeff, silver has had an incredible run over the past year or so. Where do you think it's headed next? Jeff Clark: Well, that's probably the most common question we get these days. Silver has definitely been very exciting. The price has basically doubled in a year, and many of the stocks have Complete Story »

The Well-Traveled Funds of Fed Money Creation Posted: 25 Feb 2011 10:00 AM PST Someone named Denis wrote to Mish Shedlock of globaleconomicanalysis.blogspot.com and asked, "I read many times on your blog how bubbles created by the Fed led to the overpricing of assets such as real estate and stocks. Someone paid those overpriced valuations." The question is, "So, where is the money? At some point will that money be used to mitigate the economic doom?" Before I could interrupt, Mr. Shedlock himself answers, "Most of the money went to 'money heaven' which is to say nowhere at all." Of course, I am delighted at the clever turn of phrase, even though I am not sure I understand it unless loans have defaulted, making money disappear. So unless it is actual currency that is physically lost or destroyed, money lives eternal unless the debt, from which the money sprang, is not paid back, and some debtor is saying to some creditor, "Hey! Screw you, you crooked bastard bankers that caused all this economic mess by creating So Damned Much Money (SDMM) over the decades that it produced bubbles in the stock market, the bond market, the housing market, a gigantic financial services industry, an enormous derivatives market and a monstrous, suffocating increase in the size and oppressiveness of local, state and federal governments! "Now it's my turn to screw you in a fit of Unthinking Mogambo Revenge (UMR)! I ain't paying you back the money I borrowed! Thus, your fiat money literally disappears! This is why, if you will remember, I said 'screw you!' at the beginning of my harangue! Hahahaha!" Well, this, despite its terrific sense of catharsis and vengeance, does not answer the original question, which is, "Where does the money go?" The answer is that the money goes (and you can quote me on this) everywhere! Hahahaha! I can see by the bored look on your face that you do not understand my glib explanation, you do not see what is so funny that I would laugh about it, you think I am an idiot and you are wondering why you are wasting your life listening to a moron like me. Well, to be completely honest, I personally have no idea why you are wasting your life, although I can tell you, in case you are interested, that if you are NOT buying gold, silver and oil stocks in response to the Federal Reserve constantly creating so unbelievably much money that it will cause inflationary catastrophe for the economy, then you will soon not HAVE any life worth living when inflation in prices destroys you and everything you love, and you will be forced down, down, down to nasty subsistence living, checking the garbage cans and dumpsters behind restaurants for food during the day, and sleeping in them after closing time to keep out the rats. You can tell by my use of terms like "garbage" and "rats" that I am obviously sinking into a Big Mogambo Funk (BMF) about the whole mess caused by the Federal Reserve creating so much money. But when I say the money "goes everywhere," that is exactly what I mean. Perhaps a simplified illustration will help. Suppose I borrow a dollar to buy something from you for $1. You pay the government (at a 25% tax rate) 25 cents, leaving you with 75 cents. Now you spend your 75 cents buying something from Amy, whereupon Amy pays the governments 25%, or 19 cents, leaving her with 56 cents. Amy spends her 56 cents by buying something from Bob, who pays the government 25%, leaving him with 42 cents. Extrapolate this out, and after awhile you can see that the whole dollar eventually goes into the coffers of the government, which spends the money everywhere! Therefore, the money goes everywhere! Just like I said! And that is why creating excess money causes inflation in prices, and that is why you should be buying gold, silver and oil, running around like a hyperactive lunatic buzzing your brains out on crystal meth, because when the Federal Reserve is creating so much money, gold, silver and oil will go up in price, which is such a deceptively simple investing scheme that you marvel at it and exclaim, "Whee! This investing stuff is easy!" The Mogambo Guru for The Daily Reckoning The Well-Traveled Funds of Fed Money Creation originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.

S I L V E R Posted: 25 Feb 2011 09:57 AM PST Silver Retraces Entire Post Crude Margin Hike Loss, Even As General Collateral Rates Rise On Broad Liquidity Withdrawal Share this:

The Bears Recreate... Charlie Sheen's Rant Posted: 25 Feb 2011 09:34 AM PST Who said the xtranormal cottage industry's only expertise is the Ben Bernank, the Tim Jeethner, the Goldman Sack, the JP Morgue, QE, BTFD, bond trading, gold and silver manipulation, the Chinese trade surplus and other typically incomprehensible by the lay person concepts. Sometimes they also tackle Charlie Sheen. Here is the result.

Gold posts 4th straight weekly gain on oil, unrest Posted: 25 Feb 2011 09:27 AM PST NEW YORK: Gold rose towards $1,410 an ounce on Friday, posting its fourth consecutive weekly gain as the crisis in Libya and soaring oil prices stoked inflation worries. Bullion gained 1.5 percent this week, with investors seeking a safe haven as a popular uprising against Libyan ruler Muammar Gaddafi closed in around him. French estimates say some 2,000 people may have died. Fears over supply disruptions from oil exporter Libya and potential unrest in other major producers in the Middle East have sent US crude futures 14 percent higher, their biggest weekly gain since March 2009. "The reality is, inflation is going to happen. It's just a question of when, with the rise of commodities prices and the budget deficit that we have right now," said Fred Demler, head of commodities at futures broker MF Global. [source]

Funds Bet On Higher Gold, Silver Prices Posted: 25 Feb 2011 09:23 AM PST NEW YORK (Dow Jones)–Money managers added to their net long position in gold futures and options in the week ended Feb. 22, according to data released Friday by the Commodity Futures Trading Commission. These large speculative investors, including hedge funds, expanded their net long position in gold for the third consecutive week. Traders in the category added 22,203 new long lots, or bets prices will rise, and sold 722 existing short lots, or bets prices will fall. This took the net long position to 182,739, from 159,814 last week. The net long position is the difference between the number of long and short positions held by traders in the category. These tactical traders also added to their silver holdings this week, buying 487 long lots and 208 short lots. This took their net long position to 35,438 from 35,159 a week earlier. Traders in the category have been growing their bets on higher silver prices over the past four consecutive weeks. [source]

COMEX Commercials Not Aggressive on Silver Sell Side Posted: 25 Feb 2011 09:19 AM PST HOUSTON – Silver almost but not quite made up for Thursday's knock-back, heading for a close near $33.38 as we write late Friday afternoon. That is about a $1.27 advance versus yesterday's $1.40 sell-down. For the week silver is a net winner, up at least $0.88 or about 2.7%. Meanwhile, the big sellers of silver futures "mailed it in" this week. They certainly didn't bring much of a "gun" to the futures gunfight – even with silver at a bull market high. ...

Guest Post: Here's How We Get to Energy Independence Posted: 25 Feb 2011 09:10 AM PST Submitted by Brad Schaeffer Here's How We Get to Energy Independence Respected columnist and author Thomas Friedman has been among the most audible voices in warning the USA about our dependency on foreign oil and our need to end our addiction to this commodity post haste. But his latest call for a $1.00 per gallon gasoline tax to curtail our fuel consumption, the proceeds of which would go towards deficit reduction, misses the mark. First of all, where Mr. Friedman is absolutely correct is his concern itself which is well founded. Consider: in 1970 the USA imported 30 percent of its crude oil. That figure has effectively doubled in the last thirty years to just shy of 60 percent. Not since the ill-fated Axis powers of World War II has such a powerful nation so relied on foreign entities to supply its daily energy needs. This is a potential national security nightmare. (Indeed, as much as losses in the field, Germany and Japan were brought to their knees by choking off their energy supplies and causing their military machines to grind to a halt.) However, Mr. Friedman’s proposal of imposing altered behavior on consumers via a $1.00 gallon gas tax, even one phased in over time, will unduly penalize many lower and middle class workers who have little choice at this time but to commute (this is not like a voluntary consumption tax on soda) and for whom their annual fixed costs would increase anywhere between $500-$1,000 depending on the location and vehicle gas mileage. Moreover, his idea places inordinate faith in the federal government to properly spend any new tax revenues they do receive with any modicum of discipline needed to pay down the deficit. Imposing a draconian gas tax at this time, with 15 million already unemployed, with the economy in a precarious position, is not quite the medicine needed at the moment. In fact, it could make matters much worse. I don’t think it takes an economics guru to conclude that $1.00/gallon on top of an already high $3.18 national average could negatively impact consumption in other areas (and we are still very a much a consumption-based economy). In just one example, an interesting study done by the Center For Business And Economic Research at Ball State University simulated the impact of a $1.00 price increase from a benchmark of $3.00 gallon (not via taxes, just a market rise) on the economy of Indiana. It concluded that the economic activity in that state would be lower by almost -2% and employment by roughly -1.3 percent. It also offered that tax revenues would decline by -.5 percent. When economic activity falls, tax revenues do as well. Human behavior is unpredictable and it is not a given that $1.00 tax on gasoline will translate into a $1.00 net increase in revenues to Uncle Sam. There is the law of unintended consequences to consider. I admit that this is just one report in one state, but I suspect similar studies will show the same. Even though numbers can be tortured to say anything to support a policy initiative, common sense dictates that a dollar steered towards higher commuting costs will have a negative impact on the rest of consumption and thus the overall economy all else being equal. The most far-fetched component of Mr. Freidman’s “one little gasoline tax” proposal is that the extra revenues (should they materialize) will be diverted towards “paying down the deficit.” A noble idea, but if Mr. Friedman honestly believes that Congress will take this windfall and actually use it to for its intended purpose rather than employ clever accounting tricks to steer the cash to their favorite pet projects, well, I have a Social Security “lock box” stuffed with IOUs I’d like to sell him. Still, if there was no other alternative to Mr. Friedman’s proposal, then I would give it serious consideration. But the fact is, we do have alternatives, both to give us some short-term relief and long-term stability. As of yesterday we need to immediately open up ANWR and the shallow off-shore regions to exploration and drilling. I love caribou as much as the next person, but this must be done. Even the most conservative estimates tell us that by 2018 if development were green-lighted today, ANWR could be producing as much as 780,000 and then slowing to 710,000 barrels a day by 2030. Also it is estimated that 18 billion barrels of crude oil are contained in areas currently off-limits to drilling for environmental reasons. No nation has denied itself so much abundance of its own domestic natural resources as has the USA. To be sure, there are environmental risks to an aggressive drilling policy. But environmentalists need to consider the consequences of the USA being cut off from 2/3 of its energy needs...unrealistic given that friendly Canada is our single largest outside supplier, but not impossible. There is no greater killer than the effects of poverty resulting from a collapsed economy. Rationing the transportation of goods due to lack of petrol means limited delivery of food to our cities, medicines to rural areas, heating oil for homes and businesses in the northeast during the winter, etc. The humanitarian and health consequences would soon be apparent to even the most ardent of green advocates. Beyond “drill baby drill” our real pathway to true energy independence lies in resurrecting the Synthetic Liquid Fuels Program. This program which began with such fanfare under Jimmy Carter was cancelled under the Reagan administration.

Of Government and Famine Posted: 25 Feb 2011 09:00 AM PST We never completed our reflections on why you need a refuge…a place to retreat…a family stronghold. As society becomes more complex, each man depends more or his neighbors…and on people he has never met on the other side of the world. The Arab demonstrators in Tripoli, for example, have to eat. Their bread may have been baked by a local bakery, but the wheat may have come from Australia, France or Canada. And the oven in which it was baked may have been assembled in Germany or Ireland…with parts imported from China or India. As each person becomes more specialized, the efficiency of the system increases. A man who focuses on a single thing is more likely to do it better than one who does several things. He is able to develop tools and tricks that help him be more productive, thereby defeating the generalist in market competition. Everyone gets a little richer. But specialization makes the world more vulnerable to systemic risk. Small problems become much bigger ones. Local famines, for example, have the potential to become global famines. Famines in Western Europe disappeared with the fall of Napoleon Bonaparte and the rise of better transportation systems. European wars closed borders and choked trade. Peace opened them up again. Then, canals and trains made it possible to move grain from one area to the next. The last major famine in Western Europe was in the 18th century. Since then, famines in Europe have been the result of politics. The great famine in Ireland, for example, was triggered by a blight on potato crops. But had their land not been taken from them, and had they been allowed to buy and sell freely, rather than only with Britain on terms it set, the Irish would have fared much better. Thanks to the curious set of political circumstances in the mid-19th century, Ireland remained a food exporter, even while a million Irish peasants died of hunger. Likewise, in WWII, the Netherlands suffered 30,000 deaths in the "Hongerwinter" because of punishing restrictions imposed by the occupying German troops. Since the beginning of the 20th century, many people have gone to bed hungry. Tens of millions have died of starvation. But almost all the deaths can be traced to the murderous intentions or incompetent administration of governments. In this regard, as in many others, the Soviet Union and China were world leaders. Goofy theories and bad policies reduced the amount of food available. Then, communist governments used food shortages as a weapon against their internal enemies. Obviously, the first protection against famine is wealth. There is almost always food available – at some price. Generally, but not always, it goes to the highest bidder. So, having some money is in itself a measure of safety. Always has been. But people with wealth can also be popular scapegoats when times get tough. The easy money policies of the Fed during the last two decades have made America's rich richer than ever, while the incomes and wealth of 95% of the population has barely risen at all. If food supplies were short, it wouldn't be at all surprising if the mobs turned against "the rich," intentionally withholding food from them. Hunger was largely responsible for the French Revolution. Mobs gathered in front the Tuileries Palace, protesting the high cost of food. Inflation and bad weather had driven up the price of a loaf of bread to almost an entire day's wages by an ordinary laborer. Marie Antoinette, wife of Louis 16th, is said to have asked: "What are they complaining about?" "They have no bread," came the answer. "Well, let them eat cake," was her witty, but ultimately fatal, reply. She lost her head in the Revolution. So did thousands of others. Mobs need scapegoats. And hungry mobs are not particularly careful about whom they choose. More to come… Regards, Bill Bonner for The Daily Reckoning Of Government and Famine originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.

Superleverage: Limiting Your Risk While Boosting Your Returns Posted: 25 Feb 2011 08:47 AM PST The greatest misconception about options is they are full of risk. But if you understand my secret technique called Superleverage, you'll quickly realize just how low risk options really are. Here's an example… Let's say you're looking at two different stocks, Widget Co. and ComTec. (I'm making up all these examples… as far as I know, there are no companies called Widget Co. or ComTec.) First, Widget Co. In October, the stock is trading at $38. A good price, but you're pretty sure the stock will be $50 at the end of the year. But "pretty sure" isn't good enough for you to risk your money. After all, the stock could collapse. How do you make sure you get the stock at a good price without the risk? Superleverage with options. There are many things you could do, because there are many options to choose from. They come with a variety of strike prices and monthly expirations, and each of those options cost a different price—and therefore offer different opportunity to profit. Let's say you want to buy a Widget Co. January $40 call option for $500 (or $5 a share, since each option represents 100 shares). The price you pay for the option—in this example, $500—is called a premium. The premium depends on a wide range of factors, most importantly the actual price of the stock, but other factors play a role. "Widget Co." in this example is the underlying instrument, the specific security the option is for. The "January" is the expiration month for the option. The "$40" represents the strike price, the price you will pay per share if the option is exercised. And buying the call option means that anytime before the third Saturday in January, you can buy 100 shares of Widget Co. stock for $40 a share… no matter what the market price of Widget Co. Meanwhile, ComTec is selling for $117 in October, but you think the stock is heading for a big fall come the new year. Rather than go through the expensive hassle of shorting the stock, however, you decide to buy put options instead. Again, options are available with a variety of strike prices and a wide range of expiration months, but you decide on the January $115 put option, also for $500. Any time between now and January you can sell (receive money for) 100 shares of ComTec for $115 a share. You or your broker are monitoring your position daily. Friday, January 19 rolls around, and you still have not exercised your options (you haven't sold them, either, but I'll get into that later).You go on the Internet and learn, as we'd expected, that Widget Co. has just made a major announcement, and its shares have skyrocketed… to $72 a share. But, because of your option, you are able to buy 100 shares for $40. If you exercise your option, you will pay only $4,000 for $7,200 worth of stock. Then if you sell immediately, your option will be worth $3,200. That is its real, or intrinsic value. You only spent $500—since technically the money taken out of your account is immediately put back in (this is known as offsetting your position)—and you're looking at a 540% return, minus commissions and taxes. Congratulations! You just used Superleverage to turn $500 into $3,200. Throughout the transaction, your risk was known and limited. By the way, if you had bought the 100 shares outright at $38 (for $3,800), your total return would also have been $7,200. But that's only a gain of 89%. Still nice, but paltry compared to the return on the option. That's the power of Superleverage. Now you check ComTec, and see we were wrong (that happens occasionally). ComTec has also made a major announcement today. And its stock is edging towards $149. Because your option is to sell the stock at $115, it is useless… and worthless. At the end of the day, you have a 100% loss of the $500 premium you paid. You may have lost $500, but that's far better than if you had shorted the stock. If you had sold short 100 shares at $117 and the stock went up 27%, covering the short would have cost you $3,200 ($14,900 – $11,700). Technically speaking, buying the option saved you $2,700. But you don't have to exercise options to make big profits. Options offer the promise of Superleverage—the potential to make large profits while strategically limiting your risk. That's why it's possible to make such huge profits in such a small time. Sincerely, Steve Sarnoff Editor, Options Hotline Superleverage: Limiting Your Risk While Boosting Your Returns originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.

When Government Debt Gets in the Way of the American Dream Posted: 25 Feb 2011 08:37 AM PST We can't allow the week to close without taking note of the spectacle in Wisconsin – seeing as it will hit all 50 state capitals tomorrow. In case your eyes are about to glaze over, here's a three-sentence update: The lower chamber of Wisconsin's legislature passed Gov. Scott Walker's emergency budget shortly after 1 AM today. It includes the provision that strips the government-employee unions of the collective-bargaining authority. Democratic senators remain camped outside the state, stalling the vote in that chamber. In our overstuffed inbox this morning is a press release trumpeting "'Save The American Dream' Rallies to Take Place in All 50 State Capitals This Saturday" organized by MoveOn and similar groups. Yes, because collective bargaining is the essence of the American Dream. Oy. And you thought it couldn't happen here? "Participants will protest the attack on workers' rights," reads the press release, "and proposed dangerous budget cuts, and demand an investment in decent jobs." Yes, because government checks and government "investment" in "decent jobs" is also the essence of the American Dream. "Bring it on!" we say. If there ever were a worthy public discourse, this is it: Is the American Dream about self-determination and political freedom? Or… The "right" to a decent job, education, home, health care and retirement…and government debt…? We suspect in the end it will all be a waste of time. Only one of these directions is within the government's power to deliver, regardless of what your local representative says before you cast your ballot. But it will sure be fun to watch the carnage along the way, don't you think? More bread. More circuses. And down we go. Addison Wiggin for The Daily Reckoning When Government Debt Gets in the Way of the American Dream originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.

FMX Connect Afternoon Gold Fix: "Yesterday’s Sell Off From The 1415 Area Seemed Almost Orchestrated" Posted: 25 Feb 2011 08:35 AM PST Submitted by FMX Connect Summary April Gold settled at $1409.30 per troy ounce, a loss of $6.50 for the day.  Volatility was offered today and risk reversals swung towards the puts. Active Options M 1500 C J 1400 C V 1100/1200 1 x 2 PS Q 1600/1800 1x2 CS ATM Volatility Curve:   Volatility Smile: Analysis: For the second day in a row there was strong two-way business in the front part of the term structure while the back part of the curve was alternatively ignored and sold. Funds continued to sell May options. Today they sold the 1500 C. Meanwhile the April 1400/1420 Strangle was purchased in size Over-the-Counter. In June the skew bubble surrounding the 1600 strike was squashed as speculators bought the 1500/1600 1x2 call spread. Bearish dealers bought the October 1100/12000 1x2 put spread and in general, sold back month straddles. Commentary: Options held up reasonably well in the fronts after yesterday’s post-close washout. Dealers came back buying puts in December and selling calls. Some speculators recommitted to the market by rolling their longs from April to June. This market is definitely a call skew market now with volatility firming in rallies and dropping in selloffs. What has changed and we see this in other markets as well, is the increase in fat fails (leptokurtosis); it seems that insurance must be bought at any price. In markets where the 20 delta call or put used to be king now it’s the 5 delta call or put that matters most. In gold it’s both: dealers continue to lean into the wings by buying 1x2 and 1x3 call spreads but the appetite for tails is insatiable. We don’t think this is temporary, the world is no longer pricing statistical probabilities, it is chasing after black swans. All markets seem correlated but at some point the risk-reward just isn’t there.  Just because a wing call trades at 30% volatility does not increase the probability it will go into the money; it’s just a reflection of unquantifiable fear. Editorial comment: It’s becoming increasingly annoying watching dealers buy call and sell puts the day before we rally $20, and then the next day buy put and sell call the day before we drop $20. Yesterday’s sell off from the 1415 area seemed almost orchestrated.  At the very least, the futures selling came in during the thinnest trading hours. While exchanges herald the benefits of electronic trading there is one thing wrong with it. Electronic trading minimizes the information leakage associated with using brokers, for sure, but it is also allows oligarchic organizations to anonymously manage price movement while hiding behind digital displays. We won’t use the word manipulate, in part because of our libertarian bent, but it’s getting ridiculous. Where there used to be 50 5-lot thieves on the floor now there are 5 Too-Big-To-Fail banks with infinite fed-sponsored balance sheets doing whatever they please. The idiot locals on the floor, fragmented as they were, served to keep the big banks in check because there was transparency of price and to a large extent, the players were known. This doesn’t exist anymore and we don’t see an end to it. Instead of thinning the forest for the trees, technology, regulatory and economic factors have killed the saplings and destroyed market diversity. This translates to a narrow and deep liquidity pool in trading venues; god forbid if one of them fails.

Gold lower, breaks eight-session winning streak Posted: 25 Feb 2011 08:34 AM PST SAN FRANCISCO (MarketWatch) — Gold futures on Friday retreated for the first time in eight sessions as investors shunned more safe-haven buying after steep gains earlier this week. Gold for April delivery was off $6.50, or 0.5%, to $1,409.30 an ounce on the Comex division of the New York Mercantile Exchange. [source] PG View: Have no fear, it was only the futures market that closed lower today. The spot market remains well bid going into the close at 1409.44 (+6.25), just off the intraday high.

Stocks SPX Index, Crude Oil, Silver Technical and Geopolitical Risks Analysis Posted: 25 Feb 2011 08:31 AM PST “You can’t lose what you don’t put in the middle.” Mike McDermott, Rounders While this week was shortened due to the President’s Day holiday, it has been quite a ride for traders and investors. The 24 hour news cycle certainly intensifies current market conditions as any news focusing on oil or the Middle East protests moves markets. Thursday the International Energy Agency came out and indicated that the expected drawdown in crude oil supplies coming from Libya was being exaggerated. Immediately upon the release of this information light sweet crude oil got hammered and stocks rallied from day lows.

Gold Daily and Silver Weekly Charts - Bear Raid Confirmed and the Silence of the Lambs Posted: 25 Feb 2011 08:29 AM PST This posting includes an audio/video/photo media file: Download Now

Silver Retraces Entire Post Crude Margin Hike Loss, Even As General Collateral Rates Rise On Broad Liquidity Withdrawal Posted: 25 Feb 2011 08:18 AM PST While the equity market resumed its now traditional (for the past 6 months) smooth levitation, with little to no volatility and even less volume, the most interesting asset class was silver, which after dropping to under $32 yesterday, following the various attempts by the administration to kill assorted commodities, rose by 4% today, closing at the day's highs and wiped out the entire loss from yesterday. Ironically, this happened even as general collateral rates rose today. "The reason for the rise is an increase in the volume of Treasury securities available to be used in the repo market as general collateral. The Treasury Department on Friday settled an issue of $25 billion in 49-day cash management bills, and the $99 billion in new notes it auctioned this week will settle on Monday." Of course, this was offset by another 56-Day CMB offsetting the winding down SFP (total SFP holdings are now cut in half to just $100 billion). So despite a major liquidity extraction from the market, not only did stocks rise (which can traditionally be attributed to POMO in a low volume environment), but the biggest beneficiary was silver, meaning that even in a tight liquidity regime, most investors now prefer to pursue commodities as an investment class, something which had not happened previously.

Guest Post: 2011 Tipping Points Posted: 25 Feb 2011 07:38 AM PST By Gordon T. Long of Tipping Points 2011 Tipping Points (pdf) Throughout my 2010 article series "Extend & Pretend" and "Sultans of Swap" I stressed that we were rapidly moving from the Financial Crisis of 2008, through the Economic Fallout of 2009 -2010, towards a Political Crisis in 2011 -2012. We are now clearly beginning to see the early emergence of the final part of this continuum.  From North Africa to Wisconsin all are fundamentally based on the single insidious underlying problem - excessive global debt and credit levels. The global macroeconomic environment appears to be rapidly unraveling. The situations in North Africa through the Middle East are blatant proof of social unrest and accelerating political instability. Food shortages and inflation pressures are now driving people into the streets. When you feel the hunger in your stomach and see it in the eyes of your children, it quickly erupts and motivates people to action.     It is now time to revisit our Tipping Points framework to see where this is leading. A framework that is clearly pointing to a global fiat currency failure and an emerging new world order which is detailed in our "2011 Thesis - Beggar-thy-Neighbor". Our Tipping Points which are outlined below are adjusted continuously based on daily news flow analysis.  Through a proprietary 'Process of Abstraction' news is tracked and consolidated around these potentially critical flash points. CHANGES OF SIGNIFICANCE THIS QUARTER INCREASES                                IS    WAS    CHANGE    1) Oil Price Pressures                 14    30    +16 2) China Bubble                           9    22    +13    3) Food Price Pressures               5    15    +10 4) Rising Inflation Pressures &     Interest Rate Pressures            6    14   +  8 5) Geo-Political Event Risk                          New 6) Social Unrest                                         New DECREASES 1) North & Southern Korea         30    12    -18 2) Financial Crisis Programs     Expiration Impact                   34    24    -10 The Tectonic Shifts from 2007 to 2013 are best shown in the following illustration which is closely tracking our expectations and projections from the early stage of the financial crisis. CONCLUSIONS We need to carefully watch: 1) The increasing & accelerated contagion of social tensions. Watch for Asia demonstrations in places such as North Korea. 2) How and if the Central Banks actually do unwind their  crisis ‘triage’ programs or are they realistically now permanent and necessary to maintain the illusion of financial stability? 3) New government public policy initiatives to combat growing inflation and price pressures 4) The financial sectors abilities to continue to hide massive nonperforming commercial and residential real estate loans through Federal Reserve endorsed accounting gimmickry. These events will allow us to determine if our roadmap is still valid or if we are going to see even sooner and possibly poorer financial outcomes than we predict in our free Monthly Market Commentary and Market Analytics reports. The public will soon wake up to the magnitude of money printing that is going on to support the economic recovery fallacy. When the public does become aware, “Money Velocity” will accelerate. When this happens, the likelihood is that the markets will dramatically rise, not because economic conditions are improving, but rather because of a depreciating US dollar.  We believe this expectation is presently being priced into the market. We are truly exposed to the potential of a “Minsky Melt-Up” or more correctly from an Austrian perspective, a Von Mises “Crack-up Boom”.  The risks are presently towards a SHORT TERM corrective consolidation. The Intermediate Term calls for higher market highs into June 2011 - then it gets ugly - fast! “The Federal Reserve historically was the lender of last resort in a crisis; Today, the Federal Reserve is the buyer of first resort in a crisis ..... and every day for that matter”

Visionary Makes His Move Posted: 25 Feb 2011 07:35 AM PST by Addison Wiggin Oil pioneer on the verge of his second big breakthrough… 3,800 miles away from his first Alan Knuckman with a chart showing how commodity prices have much more room to run Buying at the top? Chris Mayer with an indicator that might signal the start of a major sell-off Since when did the "American Dream" become all about collective bargaining and government checks? "It's not about the writing"… Readers explain the appeal of Atlas Shrugged   We interrupt our recent litanies — rising raw materials prices, Middle East uprisings, state and local government meltdowns — to note a signal event on the frontier of energy production: The Oil Kitchen is getting hot.   The Brazilian oil firm HRT — the brainchild of Vancouver sensation Marcio Mello — is buying out the Canadian-traded firm UNX Energy for $782 million. This is big news… for a select lot. If you're not hip to the story, here's the short version: Mello is the guy known in the oil business as "Mr. Drill Deep." His prodding led executives at the Brazilian oil giant Petrobras to explore the ocean at depths no one else had the guts to imagine — beneath 7,000 feet of ocean water… and another 16,000 feet of rock, salt and sand. The Petrobras payoff came in 2007 with the discovery of the Tupi field — the largest oil discovery in the Western Hemisphere for 30 years. Having blazed the trail, Mello left Petrobras to pursue the "next big thing." He founded his own firm, HRT, and acquired drilling rights off the coast of Namibia, in southwestern Africa. Back in the day — that is, 250 million years ago — the world's continents were smashed up together as a single land mass called Pangaea. Pangaea was, at the time, surrounded by a single ocean:   As time passed, the continents separated into the world map you recognize from your elementary geography class. The result: Geological formations found in one location — like off the coast of Brazil — can be very similar in another location far away — like off the coast of Namibia. That is, Mello knew if huge quantities of oil lay under the "pre-salt" formations off South America, there was a good chance the same was true off the coast of southwestern Africa. That's why he picked up the drilling rights to 920 square miles in a backwater almost no one else cared about. Now, with the UNX acquisition, HRT's territory nearly triples. Byron King recommended UNX to readers of his premium advisory Energy & Scarcity Investor in September 2009. The price was then 75 cents a share.   "If things play out with this offshore story," he wrote, "one of these days, you won't remember what you paid for the shares." HRT is offering $6.17 per share. That's a 723% gain. "Byron King is an extraordinary researcher and analyst," writes a reader. "He has managed to ferret out and unlock the hidden values of many companies that he has discovered well before other analysts and the market have, so I have profited mightily from his 'boots on the ground' approach and acute analysis." "I invested $41,030 in nine stocks," another reader wrote us late last year, "and they are now at $65,095, for a $24,071 gain, or 58%, since Oct. 13." "Energy & Scarcity Investor is without question my best advisory service," writes a third. "I have made more money with Byron than anyone else." Dig it. Oil prices are stabilizing after yesterday's run-up and pullback. WTI trades just below $97 a barrel and Brent a shade above $111, although nothing in Libya has changed fundamentally in the last 24 hours.   The blogosphere is rife with speculation that both the Nymex and ICE exchanges engineered the pullback by choosing yesterday to raise margin requirements. Then again, Col. Gaddafi's latest rants may have awakened traders to a sequence of three absurd truths… Roughly 2% of world oil production lies in the hands of Gaddafi.  Gaddafi blames the revolt in his country on teenagers whose instant coffee is spiked with hallucinogens — and he says Osama bin Laden is behind it all.  Gee, maybe that 2% was never very reliable in the first place and the world can get along without it until things settle down. "Oil is still 34% below its 2008 highs," says Alan Knuckman, by way of making a larger — and undoubtedly controversial — point. "I personally do not believe in the evils of inflation being an issue for the current economy. "Prices have recovered from catastrophic near-deflation lows with the increase overblown by renewed commodity attention. The last six months do not signal out-of-control spiraling rising costs. It is still difficult to name any specific goods that have become extremely expensive over the last five years. "One fact is that the soft commodity complex highs were made in the mid-1970s, over 30 years ago. Take a look:   Bottom line: There's still huge upside potential in the commodities space, says Alan — "not because of destructive inflationary forces, but a return to previous highs from decades ago." You don't have to buy into Alan's thesis to make money from his trades. In just one three-month stretch during 2010, he bagged nine winners in a row… for an average gain of 157%… in an average holding time of 14 weeks. So far this year, he's closed positions for gains of 95% and 217%… and his readers are holding out for bigger gains on a heating oil play already up 223%. For the next three days… you have a chance to snag a membership to Alan's Resource Trader Alert… plus Byron King's Energy & Scarcity Investor… plus our flagship resource publication Outstanding Investments — just named the top-performing letter over the last 10 years by the independent Hulbert Financial Digest — all for one low price… so low it makes me want to gag while writing this. The suite of services we call the Resource Reserve — everything you need to profit from the rising prices of raw materials. For a one-time fee, you get all three services for life — plus free admission every year to our confab in Vancouver. We're holding a limited number of slots open for the Resource Reserve… after all, there's only so much space in Vancouver. And the fact that it's so cheap, we'd bankrupt ourselves if every reader took us up on the offer. The slots will likely fill up before we close this offer on Monday. Take the opportunity to review all the benefits of Resource Reserve membership in this invitation. The Commerce Department issued its second guess this morning on GDP during the fourth quarter, revising it downward from an annualized 3.2% to 2.8%. Whoops, the Street was counting on an upward revision to 3.4%. Turns out consumer spending wasn't as robust as first thought. And the decline in spending by state and local governments was steeper than first thought. Notwithstanding that disappointment, stocks are generally up today — the Dow back above 12,100.   Investors who call the U.S. home are piling back into domestic mutual funds. Data from Lipper show $7 billion flowed into domestic equities funds in the most recent week. That's as much as flowed in during all of last year. That sounds about right… Joe Six-pack jumping in after the S&P has already run up 100% for only the third time in 100 years. "Mutual fund investors are the worst kind of investors, statistically speaking," Chris Mayer muses. "They don't even earn the posted returns on their mutual funds, because they have a tendency to take their money out after a fall and put it back in after a rise. "Thinking in contrary fashion, I'd say the market is due for a good pullback." Of course, there are always special situations that buck the overall trend. Chris shares one of his favorites with you — a company with a $1 billion market cap sitting on $51 billion in assets — right here. We can't allow the week to close without taking note of the spectacle in Wisconsin — seeing as it will hit all 50 state capitals tomorrow. In case your eyes are about to glaze over, here's a three-sentence update: The lower chamber of Wisconsin's legislature passed Gov. Scott Walker's emergency budget shortly after 1 a.m. today. It includes the provision that strips the government-employee unions of the collective-bargaining authority. Democratic senators remain camped outside the state, stalling the vote in that chamber. In our overstuffed inbox this morning is a press release trumpeting "Save The American Dream' Rallies to Take Place in All 50 State Capitals This Saturday" organized by MoveOn and similar groups. Yes, because collective bargaining is the essence of the American Dream.   Oy. And you thought it couldn't happen here? "Participants will protest the attack on workers' rights," reads the press release, "and proposed dangerous budget cuts, and demand an investment in decent jobs." Yes, because government checks and government "investment" in "decent jobs" is also the essence of the American Dream. "Bring it on!" we say. If there ever were a worthy public discourse, this is it: Is the American Dream about self-determination and political freedom? Or… the "right" to a decent job, education, home, health care and retirement… and government debt…? We suspect in the end it will all be a waste of time. Only one of these directions is within the government's power to deliver, regardless of what your local representative says before you cast your ballot. But it will sure be fun to watch the carnage along the way, don't you think? More bread. More circuses. And down we go. "I find it rather strange that The 5, along with most other financial newsletters, are crediting Julian Assange and his WikiLeaks for revealing that Saudi oil reserves are far less than claimed. "Apparently, you have all forgotten that Matthew Simmons revealed that fact in 2005 in a well-documented book titled Twilight in the Desert." The 5: We find it rather strange that you didn't actually read what we wrote before commenting on it. We share an editor at Wiley with Simmons, may he rest in peace. And his research was central to a report we first issued in 2006 called The Great Oil Hoax. WikiLeaks only confirmed that the U.S. State Department was and is aware of the sham too. What's even more interesting: Like you, the rest of the world seems to have the attention span of a flea: As soon as an anonymous Saudi lackey promised to fill the Libyan void yesterday, the oil price fell. Investing is not always about being right. "Perhaps I can explain Atlas Shrugged a bit to the reader who panned the book," writes another reader. "First, it's not about the writing. Rand's writing is only passable and, obviously, a style 50 years old. You read it for the ideas. "She writes her characters in this two-dimensional way to highlight the characteristics that illustrate her point. Ever seen a Bond movie? He's a bit two-dimensional, right? Because it's different from real life, and a form of idealism… "If you don't understand the point of productive people gathering, then yes, you should have read to the last page, or reread the first 300. "Rand's ideas for society are not perfect, but a society of producers is exactly what makes a country great. The leftist utopias, while similarly romanticized and two-dimensional, never celebrated the productive owning their output to the point of individual wealth, as Rand does, and as we strive to continue to in the U.S. and other free places. "I find it interesting that you say the two are similar — Rand's utopia and the leftist ones — since dropping the leftism and adopting more capitalism is exactly what has saved China, communist leadership or not. "Rand isn't perfect, and Atlas Shrugged is somewhat difficult reading for today's audience. But the messages are valuable, the primary one being that producers provide everything and most of the rest are, in Rand's words, looters, or, in Bill Bonner's parlance, zombies. "Love The 5. Keep it coming." The 5: No, Rand isn't perfect. Some of the passages in Atlas Shrugged and The Fountainhead are insufferable. And the whole "Cult of Rand" thing is… well, weird… as are allegations that Alan Greenspan was, while chairman of the Federal Reserve, intentionally leading the U.S. to the precipice of bankruptcy in order to fulfill some Randian fantasy he cooked up while bedding her. But her books do have legs, don't they? A testament to the ideas, perhaps, as you suggest. "There are truths in the book whether you can see them or not," a Reserve member chimes in. "Atlas Shrugged is a romantic novel in the heroic sense. As stated, the heroes are too perfect and the statists and bureaucrats are… well, exactly as statists and bureaucrats are. The villains in Atlas Shrugged are all too real. "Therein lies the 'truth' in Atlas Shrugged. The motivation of the statists is inherently ugly and dishonest. Although couched in compassion, it serves to cripple, and they know it. "Obviously, whether you'd enjoy it or not, a 'Galt's Gulch' would never exist, unless we evolved in a few million years. But the reader's assertion that this is a banal text is, I suspect, bred of lack of experience in dealing with people like Philip Rearden and the crony 'capitalists' from the book. "Being a physician practicing in the U.S. and having experience with all walks of life, I can tell you that the world is filled with people just like him. Those who would take responsibility are an ever-dwindling breed." "It is comments like this that make The 5 a priority on my reading list every day," says another reader who appreciated the final sentence of our riposte to the idealistic young lady currently living in Nicaragua yesterday. "Thanks (chuckle)."   Cheers, Addison Wiggin The 5 Min. Forecast   P.S.: We'll state it unequivocally: The Resource Reserve is by far the best deal in the industry if you want advice on making money from the rise in commodities and natural resources — a trend we suspect will be in place for several more years. We're closing this limited-time offer on Monday night, so dig in while you can. (This short window for enrollment was the first in four years… so you may want to jump on the offer right now. Go.) P.P.S.: "I've been taking some time over the holidays to reflect and catch my breath, and have been rereading Atlas Shrugged, "a friend wrote to me just after the holidays, "I don't know how long it has been since you've read it, but I assume you are a fan. It has been over 25 years for me, but the message has never been more appropriate for our culture. "With the perspective I now have after having battled bureaucrats and 'looters' for over two decades, Ayn Rand's message means more than ever. In particular, I have heavily underlined Francisco d'Anconia's speech at the wedding…" Forthwith, for your consideration, we reproduce Francisco's speech: Rearden heard Bertram Scudder, outside the group, say to a girl who made some sound of indignation, "Don't let him disturb you. You know, money is the root of all evil — and he's the typical product of money."  Rearden did not think that Francisco could have heard it, but he saw Francisco turning to them with a gravely courteous smile. "So you think that money is the root of all evil?" said Francisco d'Aconia. "Have you ever asked what is the root of money? Money is a tool of exchange, which can't exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil? "When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others. It is not the moochers or the looters who give value to money. Not an ocean of tears nor all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow. Those pieces of paper, which should have been gold, are a token of honor — your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money. Is this what you consider evil? "Have you ever looked for the root of production? Take a look at an electric generator and dare tell yourself that it was created by the muscular effort of unthinking brutes. Try to grow a seed of wheat without the knowledge left to you by men who had to discover it for the first time. Try to obtain your food by means of nothing but physical motions — and you'll learn that man's mind is the root of all the goods produced and of all the wealth that has ever existed on earth. "But you say that money is made by the strong at the expense of the weak? What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man's capacity to think. Then is money made by the man who invents a motor at the expense of those who did not invent it? Is money made by the intelligent at the expense of the fools? By the able at the expense of the incompetent? By the ambitious at the expense of the lazy? Money is made — before it can be looted or mooched — made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can't consume more than he has produced. "To trade by means of money is the code of the men of good will. Money rests on the axiom that every man is the owner of his mind and his effort. Money allows no power to prescribe the value of your effort except by the voluntary choice of the man who is willing to trade you his effort in return. Money permits you to obtain for your goods and your labor that which they are worth to the men who buy them, but no more. Money permits no deals except those to mutual benefit by the unforced judgment of the traders. Money demands of you the recognition that men must work for their own benefit, not for their own injury, for their gain, not their loss — the recognition that they are not beasts of burden, born to carry the weight of your misery — that you must offer them values, not wounds — that the common bond among men is not the exchange of suffering, but the exchange of goods

COT Gold, Silver and US Dollar Index Report - February 25, 2011 Posted: 25 Feb 2011 07:32 AM PST

Oil Spike Creates Flight to Safe Havens in Precious Metals Posted: 25 Feb 2011 07:30 AM PST Jeb Handwerger submits: Many of the great declines in the stock market over the past 30 years have been related to oil. This week we have seen the major indices plummet on geopolitical chaos throughout North Africa, especially large oil-producing Libya, as investors returned to gold (SPDR Gold Shares (GLD)), silver (iShares Silver Trust (SLV)) and oil (United States Oil ETF (USO)). As the market reached record overbought territory, Libya has been an excuse to begin a significant pullback in equities (SPDR S&P 500 (SPY)). At the end of January investors returned to precious metals. Gold has been on sale every six months. A January phenomenon occurs when mutual funds and institutional investors reposition their holdings, sometimes allowing investors to buy a sector on sale. At the end of January, gold and silver found support as geopolitical conditions worsened. The recent Libyan crisis has caused oil to join the run in gold and Complete Story »

Gold Markets Channels & Volume Update Posted: 25 Feb 2011 07:24 AM PST Super Force Signals A Leading Market Timing Service We Take Every Trade Ourselves! Email: [EMAIL="trading@superforcesignals.com"]trading@superforcesignals.com[/EMAIL] [EMAIL="trading@superforce60.com"]trading@superforce60.com[/EMAIL] Weekly Market Update Excerpt Feb. 25, 2011 UUP (US Dollar Proxy) Chart US Dollar Analysis: [LIST] [*]I issued a Super Force sell signal Feb 16. The dollar turned down almost immediately following that signal, and has continued down. I expect the dollar to fall to major new lows for the bear market in 2011. [/LIST] [LIST] [*]"Ultimately, creditors and investors are at the behest of a central bank that will rob them of their money." - Words from Bill Gross on the weekend, speaking at the Barron's magazine prestigious roundtable event. Gross is the world's largest bond fund manager, a currency expert, and he calls inflation a tool of robbery. Marc Faber also spoke at the event, and he said he no longer even regards the US dollar as a v...

SLV ETF Adds More Silver: 2,929,386 Ounces on Thursday Posted: 25 Feb 2011 07:17 AM PST "Ted Butler: Speak up and be heard by the CFTC one more time. Much Higher Gold Prices Because of Move in Oil: Rick Rule. Royal Canadian Mint Now Saying It's Difficult to Secure Silver...and much more. " Yesterday in Gold and Silver The gold price wandered around either side of unchanged for most of Far East trading on Thursday, before finally catching a bit of a bid shortly after 2:00 p.m. Hong Kong time. By the time that New York opened at 8:20 a.m. Eastern yesterday morning...gold was up about six whole dollars...and that was also its high of the day at $1,416.90 spot. From the Comex open, gold struggled right up until the end of Comex trading at 1:30 p.m...and then the roof caved in as the New York bullion banks pulled their bids. In the thin volume of electronic trading, this had its usual devastating effect...and the gold price cratered over twenty bucks. Gold's low tick [$1,391.40 spot] was around 3:15 p.m...but managed to recover back over the $1,4...

Wayne Atwell: Mideast Mayhem to Drive Gold Higher Posted: 25 Feb 2011 07:10 AM PST Source: Brian Sylvester of The Gold Report 02/25/2011 As Casimir Capital Managing Director Wayne Atwell sees it, further political unrest in the Middle East could push gold higher while inflation risk and sovereign debt issues in Europe are longer-term price catalysts. He also shares a few up-and-coming gold juniors that Casimir covers in this exclusive interview with The Gold Report. The Gold Report: In a recent interview with Bloomberg you said, "Gold's gotten stronger because it's no longer weak." Can you explain that concept to our readers? Wayne Atwell: Commodities and securities tend to trade on momentum. Gold had been exceptionally strong, but a lot of investors became nervous because gold appeared too strong and people started taking profits. Then the dollar strengthened and we received some more good economic news, which drove gold down again. Gold has corrected about 7% from its high late last year. Once it breaks through its support level, it could go mean...

Middle East Turmoil: Gold, Silver, Oil and Clean Energy Commodities Posted: 25 Feb 2011 07:09 AM PST Many of the great declines in the stock market over the past 30 years have been related to oil (United States Oil (USO)). This week we have seen the major indices plummet on geopolitical chaos throughout North Africa, especially the large oil-producing Libya, as investors returned to gold (SPDR Gold Shares (GLD)), silver (iShares Silver Trust (SLV)), and oil. As the market reached record overbought territory, any excuse could begin a significant pullback in equities (SPDR S&P 500 (SPY)). Investors are monitoring key assets in Egypt (Market Vectors Egypt Index (EGPT)). If either the Suez Canal or Sumed Pipeline come under attack, then we will see a major oil spike, possibly worse than in the late 1970s. Already Iran has taken advantage of the chaos and passed into the Mediterranean, further escalating potential conflicts between Israel (iShares MSCI Israel Cap Invest Mkt Index (EIS)) and the Iranian Allies of Hezbollah and Syria who want to take back control of the Golan Heights. This Middle Eastern instability may have deeper consequences and I don't believe it will end anytime soon. In fact, it may even eventually spread to Saudi Arabia where the royal family maintains weak control and extremists are gaining popularity. In late January in an article entitled, Will Gold, Oil Prices Soar on Revolts in Tunisia, Egypt? I wrote about the domino effect hypothesis, stating that chaos would not be contained in Tunisia and Egypt. This spread of chaos, causing volatile power vacuums, could have a significant impact on gold and oil, especially now that the domino hypothesis is being confirmed. At the end of January investors returned to precious metals. Gold has been on sale every six months. A January phenomenon occurs when mutual funds and institutional investors reposition their holdings, sometimes allowing investors to buy a sector on sale. At the end of January, gold and silver found support as geopolitical conditions worsened. The recent Libyan crisis has caused oil to jump which in turn has caused a decline in equities. As much as the financial crisis and record government spending has helped gold soar to record highs, terrorism and war have been major drivers of the price since September 11, 2001. The Middle East possesses approximately 65% of the world's oil reserves, and Egypt in particular has two key assets which effect the global oil trade: the Suez Canal and the Sumed Pipeline. Many analysts did not expect Libya to fall into civil war. Reports are showing that oil exports are being curtailed, sending oil into new 52-week highs. The "Sputnik" moment which President Obama spoke about in his State of the Union address may come faster than expected out of necessity. Washington is actively pursuing supply of North American heavy rare earth assets to fast-track into production as top-secret defense technologies depend on it. Sanctions on China from the WTO will not be enough to meet the growing demand. Even China, which produces over 97% of the rare earths, has expressed interest in heavy rare earth assets globally. Hyundai, the latest company on the electric-car scene, recently commented that it was pursuing a rare earth supply as well. Economies are growing and demand has increased since the last major Iranian Revolution in 1979 when oil spiked higher. An oil spike now could be much more detrimental 32 years later. The world is more dependent on fossil fuels and many nations are struggling with slow growth and huge debt burdens. An oil spike could cause a major setback for the global economic recovery unless governments initiate major alternative energy and clean energy programs. I believe these current events will create a more significant push into clean energy, non carbon energy. A few commodity sectors may benefit including uranium (Global X Uranium ETF (URA)), lithium (Global X Lithium ETF (LIT)) and rare earths (Market Vectors Rare Earth/Str Metals ETF (REMX)). President Obama has released this year's budget and it was shocking. Many analysts were surprised by the huge amount of capital allocated to clean, alternative energy in order to spur innovation and job growth. In the recent budget, a $7500 tax credit will be given to car buyers who purchase an electric car. Obama has a goal of putting 1 million electric vehicles on the road by 2015. Many analysts are predicting about a 10% increase in cars sold due to this legislation. However, tensions are escalating as Iran sticks out its tongue at Israel by passing through the Suez Canal. Oil prices could spike as turmoil spreads through North Africa and the Middle East. Legislators are sending a message that they want to wean themselves off of Middle Eastern oil and look into clean and independent energy. Investors should expose themselves to the potential supply-demand constraints and rise in oil prices by purchasing developers with major assets in these clean energy mineral sectors or by diversifying into these newly created ETFS, such as REMX or LIT, which track these sectors. As oil spikes, these clean energy commodities should receive a renewed interest by legislators and investors who believe in clean energy power generation. Make sure to click here to sign up for my free 30 day daily technical intelligence report.

How Much More Demand Can Silver Handle? Posted: 25 Feb 2011 07:00 AM PST The numbers for silver demand are starting to make some market-watchers nervous. The US Mint sold over 6.4 million silver Eagles in January, more than any other month since the coin's introduction in 1986. China's net imports of silver quadrupled in 2010, to 122.6 million ounces, roughly 13.7% of global production. Meanwhile, mine production can't meet worldwide demand; the only way demand gets fulfilled is from scrap supply. That is some very hungry demand. Which raises the question, how long can this pace continue? This question is important for various reasons, starting with how demand contributes to price. If demand falls off, silver investments would obviously suffer. While I've discussed the concern regarding the lack of supply before, which has its own implications for the silver market, let's focus on investment demand. Frankly, is there room for it to continue to grow? After all, how long can investors continue to set records? There are a number of ways to measure this – the amount of money available to invest, its percent of total financial assets, its contrast to demand in the last bull market, etc. – but I think the bottom line to answering the question is to compare the biggest silver investments to some popular equities. If they rival that of the stocks we always see on the news and analysts constantly talk about and every fund manager wants to own, then it might be reasonable to assume demand could be nearing its pinnacle. So how do the world's largest silver ETF and one of the biggest silver producers compare to the more fashionable equities? The largest silver ETF, iShares Silver Trust, has net assets of $9.6 billion (as of February 4). This pales in comparison to the more popular stocks trading in the US. In fact, SLV has roughly 3% the market cap of Apple. It would have to grow over 43 times to match Exxon Mobil. Pan American Silver, the largest pure silver producer trading on a major US exchange, has a market cap of $3.72 billion. This is 4.7% the size of McDonald's. The market cap would have to increase more than 53 times to match Wal-Mart. It is over 62 times smaller than Microsoft. This isn't to suggest SLV and PAAS will match the market cap of these other companies, but clearly the masses are still demanding much more of them than the biggest of silver's investment vehicles. So how much more demand can silver handle? As much as it takes to make it the household name I'm convinced it will be before this is all over. When SLV is a favorite of fund managers. When Silver Wheaton is a market darling of the masses. When Pan American is Wall Street's top pick for the year. Imagine what those bars on the right will look like when most everyone you know is talking about poor man's gold. The rise could be breathtaking. Remember that silver rose over 3,646% from trough to peak in the last precious metals bull market; it's up about 630% in our current run. A return matching the 1970s advance would push the price to $152. This price level is further supported by the fact that this is about where it would be when inflation-adjusted for its 1980 peak. When you look at the potential growth in market cap of the world's biggest silver investments, it becomes easy to view any downdraft in price as nothing but a buying opportunity. I know I do. Regards, Jeff Clark for The Daily Reckoning How Much More Demand Can Silver Handle? originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.

After Predicting Global Anti-Gov’t Protests: What’s Next? Posted: 25 Feb 2011 06:40 AM PST It is a matter of record! The spate of seething, youth-inspired Middle East uprisings that are toppling governments, reshaping the geopolitical landscape and roiling world markets blindsided the world's intelligence community. Not the CIA, Joint Chiefs of Staff or National Security Council saw it coming. Mossad and MI5 missed it! None of the mainstream media's star-studded stable of scholars, experts and think-tank policy wonks were thinking ahead. But what was breaking news to them was yesterday's news for Trends Journal readers. In the summer 2010 issue, we wrote: What's happening in Greece will spread worldwide as economies decline. There are no organizations behind this response, it's a public response. This is a 21st century rendition of 'Workers of the World unite' … Initially the strikes, riots and protests by unions, student groups, the unemployed, pensioners, and the outraged were sloughed off as predictable (but short-lived and ineffectual) responses that would either peter out on their own or be stomped down by the police … The unofficial reality was that, as Gerald Celente has repeatedly warned: "When people lose everything and have nothing left to lose, they lose it." By the Autumn of 2010, our Globanomic methodology pointed to socioeconomic conditions rapidly deteriorating to such an extent that we warned readers of an imminent explosion: "Off With Their Heads 2.0" read our headline, capturing the revolutionary impulse of people who could no longer ignore the toll financial hardship was taking on their lives. We subsequently identified the role the social media (a megatrend-in-waiting) would play in tipping the balance of political power and breaking the grip of government control. In December 2011, just days before the world tuned into Tunisia, we released our "Top Trends of 2011." Among them was "Journalism 2.0" which, we predicted, would put an arsenal of digital/Internet weapons into the hands of virtually every citizen via Facebook, Twitter, YouTube, etc. Deployed by youthful revolutionaries around the world, they would bypass corporate/government media, outwit intelligence agencies, outflank the military and police and rally the populace into the streets and onto the barricades. As we wrote before Tunisia and Egypt erupted, the outbreaks would go global and the reasons behind the unrest would be more about bread and butter issues than politics. As economies decline, unemployment rises, taxes are raised and services cut – while those at the top get richer and most everyone else gets poorer – revolutions will continue to spread. But that's not the way it's being represented by the same people who didn't see it coming. The media, pundits and politicians have misrepresented the historic geopolitical events that have occupied the news since the onset of the New Year. Virtually overnight, the revolutions have been glorified as courageous fights for freedom and liberty by democracy-hungry-masses. But it is not hunger for democracy that drives them. Democracy, autocracy, theocracy, monarchy – right, center, left – it is mostly a gut issue…an empty gut issue. When the money stops flowing down to the man in the street, the blood starts flowing in the streets. It's a simple equation. A few at the top have too much, and too many others have too little. What's Next: In response to the current Middle East uprisings, gold has broken above $1400 an ounce and Brent Crude climbed to $111 a barrel. There is no end in sight to market volatility. As the violence escalates and expands, the fallout will be felt around the world. From the onset of the financial crisis that began in August 2007, and through the ensuing Panic of '08, Washington, the Federal Reserve and central banks have managed to forestall a Great Depression-grade meltdown by way of a variety of multi-trillion dollar rescue packages, bailouts and stimulus programs. For three years the programs were able to induce an illusory and superficial recovery that, barring a major external geopolitical jolt, might have continued to run its course until the inevitable denouement. But now the jolt felt around the world is in the process of shattering the recovery illusion. Whether deliberately (as calculated policy) or as fallout from fear-based denial, the pieces are not being put together. The current unrest is not confined to the Middle East and North Africa, and as we had forecast, it will spread to Europe and other parts of the world. The more volatile and widespread the insurrections, the greater the probability that some combination of events (e.g., oil shock, terror attack, cyber wars and regional wars) will crash already fragile economies, and roil sound ones. Be prepared conditions are spinning out of control. Regards, Gerald Celente for The Daily Reckoning [Editor's Note: The above Trend Alert is available as part of a subscription to The Trends Journal, which is published by Gerald Celente. The Trends Journal distills the ongoing research of The Trends Research Institute into a concise, readily accessible form. Click here to learn more about and subscribe to The Trends Journal.] After Predicting Global Anti-Gov't Protests: What's Next? originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.

Ted Butler Urges Everyone To Submit A Response To The CFTC On Silver Manipulation Schemes Posted: 25 Feb 2011 06:36 AM PST By Ted Butler of Silver Seek Speak Up and Be Heard On several occasions over the past couple of years, thousands of you have taken the time to write to The Commodity Futures Trading Commission (CFTC) concerning the issue of position limits in COMEX silver.  Now the CFTC has solicited your opinion again for what will be the last time.  The current open comment period, through March 28, is the culmination of all the public hearings and commentary over the past two years.  Your comments on silver position limits make a difference.  Private legal counsel and even sources within the Commission have assured me that there can be serious consequences for the CFTC should they ignore the will of the public, when that public opinion is reasonable. The silver market has been manipulated by a concentrated short position.  You can’t have a manipulation without a concentrated position.  The only effective way to prevent concentration is by enacting legitimate speculative position limits.  The key is to set the speculative position limits at the right level; not too high, so that speculators control the market, not too low as to restrict trading liquidity. The proposed position limit for silver comes out way too high, over 5,000 contracts.  It’s too high because it gives speculators too much dominance over real world producers and consumers.  5,000 contracts is the equivalent of 25 million ounces of silver.  There are only three mining companies in the world who produce more than 25 million ounces of silver a year.  In addition, there are only a handful of silver consumers in the world who consume more than 25 million ounces a year.  There are hundreds of important miners and consumers who produce or consume less than 25 million ounces of silver a year.  Therefore, it makes no sense to empower any speculator who comes along with the ability to hold, long or short, more than the amounts most of the important world producers and consumers make or use in a year. The proper level for position limits in silver is about 1500 contracts or 7.5 million ounces.  That amount is still larger than what the vast majority of the world’s silver producers and consumers make or use in a year.  If you agree, please make your opinion known to the Commission.  It’s crucial that you do. Here’s my letter.  Use any part of it or just the last sentence on a copy/paste basis if you wish. Dear Chairman Gensler and fellow Commissioners: I urge you to approve the staff’s proposal on position limits, including limiting exemptions to bona fide hedgers.   I would ask you, however, to readjust the proposed formula in silver.  The current formula would result in a position limit of over 5,000 contracts for any single speculator, on an all-months-combined basis.  5,000 contracts is the equivalent of 25 million ounces of silver.  This is too high of a threshold in light of the realities of the world silver market. There are only three mining companies in the world who produce more than 25 million ounces of silver per year and only a similar number of industrial consumers using more than that amount.  Any speculator holding an amount of silver derivatives greater than what 99% of the world’s silver producers and consumers make or use in a year would have inordinate pricing power.  The purpose of speculative position limits is to prevent such a circumstance. Please institute a 1500 contract (7.5 million ounce) position limit for silver. Respectfully submitted, Ted Butler The instructions for submitting a comment can be found here http://comments.cftc.gov/PublicComments/CommentForm.aspx?id=965  All that is required is your first and last name and email address (repeated) and to use the validation code before submitting your comment. Your email address will not be published, but you will receive a confirmation that your comment was recorded. If you have difficulty entering your comment electronically, you can mail it in, but I just did it and I’m not a computer maven. Please remember that your comments and name will be published for the record. Accordingly, please be professional and limit your comments to position limits, the issue at hand. Also, please comment only once, but be sure to comment. It is important that the Commission knows your opinion on this matter. You can view the public comments on position limits here http://comments.cftc.gov/PublicComments/CommentList.aspx?id=965 Ted Butler February 23, 2011

Mideast Mayhem to Drive Gold Higher Posted: 25 Feb 2011 06:24 AM PST As Casimir Capital Managing Director Wayne Atwell sees it, further political unrest in the Middle East could push gold higher, while inflation risk and sovereign debt issues in Europe are longer-term price catalysts. He also shares his insights on small-cap investment in this exclusive interview with The Gold Report.

Why Investors Continue to Find Comfort in the Stock Market Posted: 25 Feb 2011 06:15 AM PST The Dow dropped another 122 points yesterday, while crude oil jumped 5.4% to $103.41 a barrel and gold surged to a fresh two-month high. But that was before lunchtime in New York, when traders got the chance to talk things over and decide that widespread Middle East turmoil, bloodshed and coup d'états aren't as bad as they sound. Shortly after lunch, the mood on Wall Street reversed. Stocks rebounded. "Enough of this sturm und drang," investors seemed to say to themselves. "By golly, we still love US stocks and we're going to buy them no matter how many Middle East tyrants flee their countries!" The Dow closed out the New York session with only a modest 37-point drop. The S&P 500 ended the day nearly unchanged and the NASDAQ Composite advanced about three quarters of a percent. By contrast, crude oil's early morning gains evaporated throughout the day. By the end of the New York trading session, the price of crude was down 82 cents to $97.28 a barrel – snapping a nine-day winning streak. The morning gains of gold and silver also evaporated, as gold slipped nearly one percent and silver tumbled nearly 5%. "The worst is over," Mr. Market seemed to say. He's the expert, but we still don't trust his judgment. Earlier this week, the lovers of US stocks began noticing the serial "Facebook Revolutions" unfolding in the Middle East. These investors seemed to decide that the violent images on their TV screens that started pre-empting Jim Cramer's "Mad Money" might mean something…perhaps something bad. So they decided to take a break from their habitual, manic stock-buying. The Dow dropped almost 200 points on Tuesday – its worst one-day decline since last summer. And the Blue Chips dropped another 100 points the next day. The "Risk Off" trade was on!…at least momentarily. Evidencing this momentary relapse into caution, the VIX Index stirred from its slumbers. This Index, known as the "Fear Gauge," bounced a bit during the last few days. But at its highest point yesterday, the VIX had merely regained its average level of the last 12 months. And already, the index has slipped back below that average level. Net-net, US investors continue to exhibit very little anxiety about stock price trends. They continue to cling to US stocks like a baby clinging to a "blankey." Presumably, these investors consider the recent events in the Middle East to be of transitory and/or minor significance. By extension, the resulting spike in oil prices must be nothing more than a pothole on the superhighway to robust stock market profits. Your California editor is not so certain that the "somethings" that are occurring in the Middle East mean next to nothing. Neither is he certain that the contagious revolutionary virus spreading throughout the region is bullish for anything other than the oil price…and Anderson Cooper. Interestingly, some of the investors who are closest to the action seem to share your editor's malaise. The cost of insuring 5-year government bonds issued by the State of Israel has jumped 50% during the last few days – the highest level in almost two years. By contrast, the VIX Index here in the US, barely reached its highest level of the last two months. Perhaps these conflicting impressions of investor anxiety mean nothing at all. On the other hand, we would not derive any comfort whatsoever from the fact that investors over here scarcely acknowledge the risks that terrify investors over there. Just sayin'… Eric Fry for The Daily Reckoning Why Investors Continue to Find Comfort in the Stock Market originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.

Food Price Inflation Calculator Posted: 25 Feb 2011 05:49 AM PST By The Mogambo Guru Mark Thornton of the Mises Institute writes, "The price of everything seems to have skyrocketed. Only housing, the dollar and inflation-adjusted income are negative." I immediately interrupt to wittily say, "Well, housing is going down because nobody wants to buy a still-over-priced-yet-even-lower-quality house that now needs painting, a new water heater, some leaky things fixed and a new roof, especially now that inflation-adjusted incomes are negative!" The stunned silence at my rudeness was all I needed to continue, "And the ridiculous fiat dollar is going down in purchasing power because the foul Federal Reserve is creating So Freaking Much Money (SFMM) that, vis-à-vis other dirtbag fiat currencies of other dirtbag countries running budget deficits, the dollar is going down in value faster than they are because the Federal Reserve is creating more new money than all the rest of the world's dumb-ass, dirtbag central banks put together!" Seeing that everybody is completely stunned by the way I just barged into the conversation with one of my patented Stupid Mogambo Remarks (SMR), I, thus emboldened, powered forward by thoughtfully stroking my chin as if contemplating something profound, whereupon I go on, my voice rising in a crescendo of pain and outrage, "But if you calculate all prices in ounces of gold, you will find that prices will have actually gone down! I'm not sure exactly how to prove it, but this has to mean We're Freaking Doomed (WFD)!" Apparently, Mr. Thornton is not sure how to calculate it, either, but is perhaps suggesting that the horror may be found in the fact that "World food and commodity prices are up 28% over the last six months." I was surprised that I did not edit his remarks to end with at least one exclamation point, and also surprised at his use of a 6-month time-frame, instead of annualizing it, at least in some simplistic linear manner that a dolt like me can understand. In doing so, he unwittingly provides an opening for Showoff Calculator Man (SCM), as I happen to be an absolute whiz at multiplying numbers by 2! Putting my calculator where my mouth is, I quickly crank out 2 X 28% = 56% inflation! See? I CAN do it! On the other hand, 1.28% X 1.28% = 1.64%, which would seem to be a massive 64% annual inflation when compounded, even more so than the simple 58%. Yikes! Mr. Thornton ignores me, and goes on, "Higher food prices set off the revolutions in Tunisia and Egypt and the mass protests in countries like Algeria, Jordan, Yemen, Bahrain and Iran. People in these countries buy more unprocessed foods and spend a much higher percentage of their income on food, so they have been severely impoverished by Bernanke's QE2." Of course, being an American, all I really care about is how it affects me, an American, and American prices, and how in the hell I am going to afford higher prices on my American income which has, as he said earlier, gone down when inflation-adjusted. In that regard, Joel Bowman, Managing Editor here at The Daily Reckoning notes, "Wholesale prices jumped 0.8% in January. The producer price index (PPI) has now jumped 3% over the last four months. And no, that's not an annualized figure." Again, Showoff Calculator Man (SCM) comes to the rescue, and multiplies 3 times 3% to get 9% inflation, which IS an annualized figure, and more than 9% inflation when compounded, and which is scary enough to send me running, running, running, like the paranoid little weasel that I am, to the safety of the Mogambo Secret Bunker (MSB). I was hurriedly shutting the bunker's door when I heard Mr. Bowman go on, "Note that the PPI headline number is for 'finished goods' – stuff that's ready to be sold direct to consumers. In the category of 'crude goods,' the figures are far worse – up 3.3% in January, and up a staggering 15.8% over the last four months." The last four months! That's almost 48% inflation a year! Man, if ever there was a time to buy gold, silver and oil, this is it! Whee! This investing stuff is easy! The Mogambo Guru for The Daily Reckoning Food Price Inflation Calculator originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.

Royal Canadian Mint struggles to get silver, King World News reports Posted: 25 Feb 2011 05:43 AM PST 5:48p ET Thursday, February 24, 2011 Dear Friend of GATA and Gold (and Silver): The ratio between commentary and actual journalism isn't very good in the gold and silver sector but Eric King of King World News does his part to rectify it some today. He gets the sales director of the Royal Canadian Mint to acknowledge that the mint is having serious trouble getting silver and expects even more trouble, likely for the long term. (Looks like Eric Sprott took what was left and hid it.) Of course the Royal Canadian Mint deals only with real metal. If you'll settle for imaginary silver, Jeff Christian of CPM Group can help you. He's got plenty and it has the advantage of incurring no storage costs. You can find excerpts from the interview with the Royal Canadian Mint's sales director at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/2/24_Ro… Or try this abbreviated link: http://tinyurl.com/4k5tfl6 CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16

Turk, Vieira to speak at CMRE spring dinner in New York Posted: 25 Feb 2011 05:43 AM PST 5:30p ET Thursday, February 24, 2011 Dear Friend of GATA and Gold (and Silver): GATA consultants James Turk and Edwin Vieira will be among the speakers Thursday, May 12, at the spring dinner meeting of the Committee for Monetary Research and Education, to be held in New York City. The venue isn't settled yet but the dinner is always outstanding, along with the company. Also speaking will be James Grant, editor of Grant's Interest Rate Observer; Daniel Oliver Jr. of Myrmikan Capital; Victor Sperandeo of Enhanced Alpha Technologies; Leonard Liggio, executive vice president of Atlas Research; and Robert Hoye of Institutional Advisers in Vancouver. Admission is $175 for CMRE members and spouses and $185 for others. You can view the meeting's program at the CMRE Internet site here: http://www.cmre.org/ A registration form is here: http://www.gata.org/files/CMREDinnerRegistration-Spring2011.htm_.txt CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 Attachment Size CMREDinnerRegistration-Spring2011.htm_.txt 3.71 KB

Oil disruption means more QE and higher gold, Rule tells King Posted: 25 Feb 2011 05:43 AM PST 5:15p ET Thursday, February 24, 2011 Dear Friend of GATA and Gold (and Silver): Rick Rule of Global Resources tells King World News that disruption in the oil market and the resulting higher prices will prompt more "quantitative easing" and probably much higher gold prices as well. You can find excerpts of the interview at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/2/24_Ri… Or try this abbreviated link: http://tinyurl.com/4tfookg CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16

Freeport-McMoRan: In the Mining Sweet Spot Posted: 25 Feb 2011 05:43 AM PST Mike Maher submits: Freeport-McMoRan (FCX) is in the sweet spot for mining companies. Copper and gold are both a few percentages off their highs, and neither commodity looks like it will cool off. Buoyed by a rebound in the global economy, rising middle classes in China and India, and QE2, both metals are in high demand. Add in a smaller, yet equally as profitable molybdenum operation, and it seems the company can do no wrong. This has led to record cash flows at the company, which has been used to slash the debt taken on from the Phelps Dodge acquisition at an incredible rate. Just this week, Freeport announced it would be redeeming $1.1 billion in debt. Now, with cash flows still strong and debt levels at their lowest levels in years, investors may be the new destination for this cash flow. Freeport-McMoRan reported Q4 and 2010 numbers on January 20, 2011 (see Read more »

Institutional Voyeurism: Gold and Gold Miners Posted: 25 Feb 2011 05:32 AM PST Leisa submits: Some years ago I wrote on institutional voyeurism. There is something fascinating about taking a peek under the hood of institutional holders' (IH) portfolios. I indulged this fascination this morning upon waking with the idea of wanting to look at the composition of IVs in both GLD and GDX that had these tickers as a top 5 position. My favorite place to go on IVs is J3SG My data is from their website. Here's the table that I prepared showing institutions group by the ranking of each ticker in their portfolio (click all images for enhanced viewing). What is this table saying? GDX: 52.5% of the dollars are held by 6.4% of the total IHs as a top five holding. GLD: 42.8% of the dollars are held by 16.6% of the total IHs as a top five holding. Let's take a closer look at this composition: Forty-nine percent of holdings Complete Story »

Gold One announces structure of future Goliath Gold board Posted: 25 Feb 2011 05:25 AM PST JSE-listed investment holding company White Water Resources' shareholders are expected to vote on the creation of Goliath Gold on March 22, Gold One said on Friday. Goliath Gold is a new gold exploration and development company which Gold One is setting up through the reverse takeover of White Water Resources. Read more….

Judge rules in favour of ‘hijacked’ Ngwenda Gold Posted: 25 Feb 2011 05:25 AM PST The "hijacked" corporate identity of Ngwenda Gold has been restored and a "falsified" sole directorship nullified. South Gauteng High Court judge Willem Wepener on Friday found in favour of the unlisted gold company in its case against Dennis Bernard van Kerrebroeck. Read more….

Mideast Mayhem to Drive Gold Price Higher Posted: 25 Feb 2011 05:18 AM PST As Casimir Capital Managing Director Wayne Atwell sees it, further political unrest in the Middle East could push gold higher, while inflation risk and sovereign debt issues in Europe are longer-term price catalysts. He also shares a few up-and-coming gold juniors that Casimir covers in this exclusive interview with The Gold Report. The Gold Report: In a recent interview with Bloomberg you said, "Gold's gotten stronger because it's no longer weak." Can you explain that concept to our readers?

Long-Term Trend is Still Upbeat Despite Declines in Precious Metals Posted: 25 Feb 2011 05:07 AM PST Summing up, the USD Index declined this week but is still above its long-term support line. It is approaching a cyclical turning point and is still likely to move higher soon. Gold and mining stocks have also moved lower in the past few days but are still above their respective support lines. Respective trends remain up and recent price declines appear to be attributed simply to a short period of consolidation.

The Daily Market Report Posted: 25 Feb 2011 05:06 AM PST Gold Remains Underpinned by Rising Global Price Risks Ben Bernanke has always made it quite clear that in his opinion, deflation is a far greater evil than inflation. Therefore, it should come as no surprise that the Fed under his leadership has attempted to orchestrate inflation by implementing extremely loose monetary policy and pumping the American economy full of liquidity. The latest FOMC statement from 26-Jan said: Although commodity prices have risen, longer-term inflation expectations have remained stable, and measures of underlying inflation have been trending downward. That statement seems to be reflected in the BLS CPI data, but consumers from Omaha to Oman are wising up to the reality that inflation is here. In the above chart, BLS CPI data (red line) is compared with the SGS Alternate CPI (blue line). The alternate CPI is calculated by Shadow Stats using the same methodologies the BLS used to generate CPI in 1980. Yesterday the US Agriculture Dept forecast that food prices could rise as much as 4% this year, well above expectations for CPI. Agriculture Secretary Tom Vilsack said, "We're keeping an eye on this, but I would suggest that as a result of what we went through in 2007 and 2008 we are better prepared to respond as a country and as a globe." The Food and Agricultural Organization of the United Nations reported in December 2010, that their food price index had risen above the 30-year peak established during the rampant inflation of 2008. By January of this year, the FAO food price index had increased by an additional 3.4%. It already seems to have been forgotten that the recent political turmoil sweeping North Africa and the Middle East began as a food price protest in Tunisia. Just today, Russia raised their benchmark refi rate 25bp to 8.0% in an effort to tamp accelerating price risks. Inflation in Russia is running at a 8.8% y/y pace, and rose 2.4% in January alone. Consumer prices in Vietnam were up 12.3% in February from a year earlier. Bond prices fell sharply this week in Vietnam as the government is under increased pressure to tighten policy as a means to reign in inflation. Rising inflation in the EU is proving problematic for the ECB. Germany announced than HICP inflation accelerated to a higher than expected 2.2% y/y pace in Feb. The Germans are very sensitive to inflation, and being the largest economy in Europe, exert a high amount of influence within the EU. While inflation concerns are rising, prompting heightened pressure to tighten, the ECB is reluctant to do so as the Continent continues to struggle with sovereign debt crisis. They fear that if they raise rates to hold down inflation, they raise borrowing costs for heavily indebted periphery countries, heightening the risk that further bailouts would become necessary. Fed chairman Bernanke is quick to dismiss the notion that his policies are to blame for rising inflationary pressures across the globe. However, there was a pretty damning op-ed in the Wall Street Journal this week entitled The Federal Reserve Is Causing Turmoil Abroad that refutes Bernanke's contention that high demand and tight supplies in emerging countries are to blame for higher prices. "Consider, for example, that much of world trade, particularly in basic commodities like food grains and oil, is denominated in U.S. dollars. When the Fed floods the world with dollars, the dollar price of commodities goes up, and this affects market prices generally, particularly in poor countries that are heavily import-dependent." One sure way to accelerate the loss of US global influence and hasten the demise of the dollar as the world's reserve currency is to destabilize other economies — both economically and politically — through our domestic policies. We did it by creating exorbitant systemic risks in the global financial system and now we're doing it again as we self-servingly try to bolster our own economy at the expense of the world around us. Not a good way to win friends and influence people, but a pretty good recipe for driving up the price of gold in the long-run.

LGMR: Oil Price Hit by Margin Hike, Libya Rumors & Global Demand Fears Posted: 25 Feb 2011 05:01 AM PST London Gold Market Report from Adrian Ash BullionVault Fri 25 Feb., 08:20 EST Gold Adds 1% But Silver Unwinds Week-on-Week Jump as Oil Price Hit by Margin Hike, Libya Rumors & Global Demand Fears BOTH GOLD and physical silver prices failed to hold onto a sharp overnight bounce in London trade on Friday, trading below $1404 and $33 respectively per ounce as volatility in crude oil remained at record levels but world stock markets rose for the first day in six. The US Dollar snapped its 7-day losing streak, bouncing against the Euro, Sterling and Yen and leaving gold prices for non-Dollar investors slightly higher again. Colonel Gaddafi's crackdown on anti-government protests in Libya was "escalating alarmingly" meantime, said the United Nations, with perhaps 1,000s dead in a near-civil war. Food prices rallied from a four-day drop as Bangladesh and Japan both moved to secure supplies of rice. "[Economic] demand is now recovering at home and abroad – quite st...

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