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• A Must See Video: GoldNomics – Cash or Gold Bullion?
• Moodys Warns U.S. May Get Credit Downgrade in “Coming Two Years”
• 'Question of the Month' Winners
• Gold Shows "No Direct Link" to Mid-East Unrest as Beijing Advised to "Buy the Dips"
• ECB : No change in Gold assets last week
• Endeavour Silver 2010 Exploration Review and Exploration Plans for 2011
• Automakers Peel Out With a Strong January
• A massive government lie the media isn't reporting
• 2010 Was a Very Good Year
• Whats a Companys Gold Worth?
• Bargain Days are Here Again in Gold and Silver
• U.S. Mint Sells 6,442,000 Silver Eagles in January
• Strange Currency: Return to the gold standard? It's just crazy enough for some state legislators to propose it
• Afghan bank’s losses could reach $900 million
• Riots Over Food?
• Strong Growth
• Gold Wealth Tactics: India vs USA
• Chapter 2: Silver ETFs: Do Your Homework
• Gold is bottoming and longs soon to be rewarded
• “Gold Wealth Tactics: India vs USA” – Stewart Thomson
• Gold Loses 5.9% vs. Top 10 Currencies in Jan….
• The Double Whammy of Geopolitical Gold Games
• Silver Butterfly: An Option Trading Lesson
• Nothing Is Stable Anymore
• Casino Bernanke
• Tuesday February 1st, 8:30 pm EST
• Why Most Consumer Prices Aren’t Affected by Money Printing
• Hold Me Tight(er)
• ‘Unbelievable’ Pricing Seen & Silver Outperforming
• Gold is Bottoming & Longs to be Rewarded
• Lawrence Roulston: It's Time to Buy
• Egypt in turmoil, Riots in Algeria, Jordan, gold and silver rise despite actions by the banking cartel
• Gold Seeker Closing Report: Gold and Silver Gain With Stocks
• Indications of the Broadest Measure of Money Supply
• Got Gold Report – Part II, Silver Flag?
• Germany promised U.S. in 1967 not to convert dollars to gold

A Must See Video: GoldNomics – Cash or Gold Bullion? Posted: 02 Feb 2011 06:00 AM PST This is the most watched video on gold so far in 2011 and we believe it has the potential to be the most watched video on gold this year and for years to come. It is an educational piece with great quotations, facts and images. It is said that "an image paints a thousand words" and this educational video does just that. Watch and enjoy.

Moodys Warns U.S. May Get Credit Downgrade in “Coming Two Years” Posted: 02 Feb 2011 05:01 AM PST By Don Miller, Associate Editor, Money Morning The United States' AAA credit rating may be at risk sooner than previously thought as the nation fails to deal with its growing debt, Moody's Investors Service warned last week. Moody's said December's extension of the Bush-era tax cuts, combined with results from the November elections, may lead to further gridlock in Congress, increasing its doubts about the federal government's determination to reduce its debt. The credit ratings agency said it might put a "negative" outlook on the AAA rating of U.S. debt sooner than anticipated as the country's budget deficit expands. "Although no rating action is contemplated at this time, the time frame for possible future actions appears to be shortening, and the probability of assigning a negative outlook in the coming two years is rising," wrote Steven Hess, a senior credit officer in New York and the author of the report. The rating remains "stable," according to the report. The warning from Moody's came on the same day that Standard & Poor's lowered Japan to AA- from AA, signaling that the ratings firms are stepping up pressure on the world's biggest economies to curb their spending. U.S. debt has increased from about $4.34 trillion in mid-2007 to roughly $14.3 trillion currently, as the government supported a massive bailout of the financial system and spent trillions in stimulus money in order to bring the economy out of recession. The budget deficit has increased to 8.8% of gross domestic product (GDP) from 1% in 2007. "Because of the financial crisis and events following the financial crisis, the trajectory is worse than it was before," Hess told Bloomberg News in a telephone interview. A downgrade would significantly tarnish the world's faith in U.S. Treasury bonds. That would reduce the country's ability to borrow money on extremely favorable terms. A credit rating tells lenders and investors how likely it is that a borrower will default on a loan. A "AAA" rating means there is little for lenders to worry about. That leads to lower borrowing costs, whereas a lower rating typically results in bond investors demanding higher interest rates to take on riskier debt. Higher rates also can expand a country's overall debt burden, forcing the government to cut spending programs and raise taxes. That conundrum was recently demonstrated by the social unrest in Greece and Portugal, as citizens marched in the streets to protest tough austerity measures that directly reduced state welfare programs and entitlements. Even the threat of a lower rating could lead international investors to avoid U.S. assets. About 50% of the almost $9 trillion of U.S. marketable debt is owned by investors outside of the nation, according to Bloomberg's analysis of Treasury Department data. Moody's said it expects there will be "constructive efforts" to reduce the U.S. deficit and control entitlement spending. It predicted 10-year Treasury yields would rise toward 5% but not exceed that level. "Other large AAA countries have plans to reduce deficits substantially over the coming few years, indicating that this trend may continue," Hess said. Congress is currently bickering over whether to raise the debt limit above $14.29 trillion, which the Treasury estimates will be reached between March 31 and May 16. The debate over the debt ceiling, which was increased a year ago, has grown more rancorous since the November elections, when Republicans won control of the House of Representatives. Republican lawmakers have pledged to challenge the Obama administration on spending, and have told the president and Democratic legislators that they will insist on budget cuts as a condition of raising the U.S. debt limit. Moody's warning comes only a few days after President Barack Obama's State of the Union address, in which he called America's current situation a "Sputnik" moment. The speech caused consternation among analysts, including Money Morning Contributing Editor Martin Hutchinson, who analyzed President Obama's speech in a column last week. "President Obama's fascination with the 'Sputnik moment' goes way beyond rhetoric," Hutchinson wrote. "Just as the nation saw after Sputnik, President Obama wants to 'invest' more taxpayer money in research, hoping to find a new industry or two." During the hysteria surrounding the Sputnik scare, "Congress…embarked upon an orgy of public spending," Hutchinson wrote. "At a time of zero inflation, the federal spending total for the fiscal year that ended in June 1959 was a staggering 11.7% above that of 1958, the highest peacetime increase between 1949 and the inflationary year of 1976." And in a two-part interview last week, Money Morning Chief Investment Strategist Keith Fitz-Gerald stressed debt reduction as a fundamental piece of an eight-part plan to fix the U.S. economy. "There's a longtime axiom among professional traders: Big Government = Small Wallets. Pure and simple," Fitz-Gerald wrote. "There is no such thing as a multiplier effect and every government dollar spent actually replaces a dollar from the private sector. The very notion that the government can spend money more efficiently than private enterprise is badly flawed and robs this country of wealth at all levels." News & Related Story Links: Bloomberg: Moody's Says Time Running Out for U.S. as S&P Cuts Japan Money Morning: S&P Slashes Japan's Credit Rating Money Morning: State of the Union: Why You Should Fear America's "Sputnik Moment" Money Morning: The Real State of the Union: A Rescue Plan for the U.S. Economy

'Question of the Month' Winners Posted: 02 Feb 2011 04:46 AM PST It's that time again: time to announce our latest winners in our "Question of the Month" contest. Once again the selection process was challenging, as our members came up with several intriguing areas of interest. This time it was my turn to pick the winners, so my apologies to the worthy entrants who were not selected this time around. Now let's get down to "business". The January winners are: 1st prize: Bobbbny 2nd prize: Silverbullet 3rd prize: Mathnerd As has been the case throughout our contests, to date, the prizes for our winners have been donated by our generous sponsor, SilverGoldBull.com, and once again the prizes are as follows: 1st prize: (3) 1-oz silver coins + a Bullion Bulls golf shirt 2nd prize: (1) 1-oz silver coin + a Bullion Bulls shirt 3rd prize: (1) 1-oz silver coin On a less up-beat note, there has been a decided drop-off in member response over the past few weeks. As a result, we will be making February the last month for the Question of the Month contest. At this point, no firm decision has been made as to what we will do in March, but we already have some ideas under consideration, and will announce any new decisions in this area as soon as they are made. Here are the winning entries (and the answers). I hope everyone finds them equally interesting. 1st prize: Bobbbny: I consider myself to be sophisticated in finance, having been at it for close to thirty years. I have yet however, to understand the Federal Reserve...What I don't know is exactly who owns what pieces of it, how it operates, what it owns, and how the owners profit from participation. Jeff Nielson: Bobbbny, that's a little like asking for a brief summary of "The History of the World" (lol). However, a good starting point is to recommend reading up on the history of bankers - and you can't do better here than one of our Guest Commentators: Darryl Schoon. Check out a few of his pieces, and you'll quickly come to know that this is all an "old game" for the bankers. After that, there's a great clip (that was also posted on our forum). Among the details there, you'll hear about how the banking cabal decided that SECRECY was their most important ally - which is why the Federal Reserve has been reincarnated as a totally opaque entity. Most people still don't know that this central bank (and others) are private institutions - run by bankers, exclusively for the benefit of bankers. So regarding your specific question "What I don't know is exactly who owns what pieces of it, how it operates, what it owns, and how the owners profit from participation?", good luck. The bankers have taken great pains to make sure that no one knows the real answers to that question.

Gold Shows "No Direct Link" to Mid-East Unrest as Beijing Advised to "Buy the Dips" Posted: 02 Feb 2011 04:36 AM PST

ECB : No change in Gold assets last week Posted: 02 Feb 2011 04:18 AM PST

Endeavour Silver 2010 Exploration Review and Exploration Plans for 2011 Posted: 02 Feb 2011 03:52 AM PST Endeavour Silver Corp. (TSX: EDR; NYSE-Amex: EXK; DB-Frankfurt: EJD) released today its review of exploration results in 2010 and its exploration plans for 2011. The Company's exploration drilling programs in Mexico met with continued success in 2010, highlighted by the discovery of new, high grade silver-gold mineralized zones near Endeavour's two silver mining operations, Guanacevi Mines in Durango State, and Guanajuato Mines in Guanajuato State.

Automakers Peel Out With a Strong January Posted: 02 Feb 2011 03:23 AM PST Wall Street Strategies submits: By David Silver Remember all those year-end sales events that drove sales, and were supposed to be lessened moving into 2011? Well that didn't really happen as incentives continued to be high as automakers needed to induce consumers into showrooms, especially considering that the month of January seemed to be just one snowstorm after another. I remember when at the beginning of the winter, the first time it snowed, I said how much I loved the snow. Yeah, well, that isn't exactly the case anymore. Sorry, back to auto sales. Looking at the numbers General Motors (GM) came in above expectations, but the biggest surprise of the month was Chrysler. Sales were up 22.7% year over year on a 47% increase for the Jeep brand and a 22% increase in the Dodge brand. Jeep Grand Cherokee, which was recently revamped, saw sales increase more than 130% year over year. A good sign is also the 138% increase in the Dodge Viper (for the U.S. economy as a whole), however, the Company still lacks a small car lineup that will make it a successful IPO. Chrysler brand sales were 7% lower year over year, and that includes a 45% increase in the Town & Country. While January marked an improvement for car makers, it ranked as a poor showing by historical standards. Except for January 2009, last month was the weakest January since 1993. The industry is estimated to have sold approximately 800,000 vehicles, which is dramatically below that of December, Complete Story »

A massive government lie the media isn't reporting Posted: 01 Feb 2011 11:22 PM PST From Bud Conrad, The Casey Report: The amount of loans being provided by our banking system is a good reflector of the strength of our economy. Below is a big-picture view that shows the total loans in the U.S. as the Fed reports in its H.8 each week. We can see that loans outstanding declined at a rapid rate at the beginning of the current great recession, but there seems to be a recovery in the little jump at the end of the chart, as highlighted by the two small black arrows. A little closer look shows the Consumer Loans segment is the source of the optimism that we see in the total. The Consumer Loans figure shows an impossible jump of $360 billion in a one-time change in April 2010, in the dashed blue line. Just graphically you can see the jump is not consistent with history. The correct conclusion is that consumers didn't go on a $360 billion borrowing binge in one month. The change was from... Read full article... More lies from Washington: BUSTED: Ben Bernanke caught in a MASSIVE lie Gold SHOCKER: Alan Greenspan's stunning admission OUTRAGE: Former security chief making millions from new airport scanners

2010 Was a Very Good Year Posted: 01 Feb 2011 10:37 PM PST From the Economic Collapse comes this assessment of 2010: As bad as 2010 was, the truth is that it went about as good as any of us could have hoped.  Things are still pretty stable and times are still pretty good right now. But instead of using these times to "party", we should be using [...]

Whats a Companys Gold Worth? Posted: 01 Feb 2011 10:30 PM PST

Bargain Days are Here Again in Gold and Silver Posted: 01 Feb 2011 09:00 PM PST

U.S. Mint Sells 6,442,000 Silver Eagles in January Posted: 01 Feb 2011 08:21 PM PST Barrick Gold's chairman very bullish on gold's prospects.  U.S. Mint sells 133,500 ounces of gold eagles in January. 1.6 million ounces of silver withdrawn from the Comex on Monday. SLV down 683,700 ounces...and much more. ¤ Yesterday in Gold and Silver Gold spent most of Far East and London trading on Tuesday gaining about eight bucks...which wasn't a lot, considering how bad the dollar was doing.  Then, to add insult to injury, the New York bullion banks smacked the gold price moments after Comex trading began at 8:20 a.m...and by 10:15 a.m. Eastern, they had gold down about $15 from the open. At that point, gold began a recovery which, if you examine the chart below...did not go unopposed...and, by the time gold was through trading on the electronic market at 5:15 p.m. in New York, gold had managed to tack on less than ten dollars from its Monday close.  Gold's high tick of the day [$1,344.30 spot] came shortly before the close of floor trading...around 13:05 p.m. Eastern. The silver chart looks suspiciously similar to the gold chart...with the highs and lows coming at precisely the same times.  Silver's low at 10:15 a.m. was $27.87 spot...and it's high [shortly before the Comex close] was reported at $28.68 spot. Just for information purposes only...here's the platinum chart from yesterday.  The New York low and high for platinum occurred at the same times as gold and silver's lows and highs...but without the big sell-off at the Comex open.  So platinum didn't have a bullion bank-excavated hole to dig itself out of like silver and gold did on Tuesday.  The red trace [and part of the blue trace] is yesterday's price action.    However, one thing I would like to point out, is the fact that despite the less-than-terrific price action yesterday, both gold and silver printed a 'key reversal to the upside' chart pattern of sorts.  I've seen the bullion banks paint key reversals to the downside...but never to the upside.  If they have, I must have missed it.  We'll have to wait and see whether it develops into anything as the day wears on. The world's reserve currency is not doing well.  Since its open on Monday in Far East trading...the dollar has fallen about 140 basis points...with 70 basis points of that coming during the Tuesday trading day.  And, as of this writing, the dollar is now below the 77.00 cent level.  Considering how badly the dollar is doing, I'm underwhelmed at the current performance of the precious metals. Here's the dollar chart from Monday's open until midnight last night in New York.    The gold stocks pretty much followed the gold price action yesterday...and, despite the fact that the gold price didn't do all that well, the HUI finished up 2.73%.  Most, but not all, silver stocks did much better than that.    Tuesday's CME Delivery Report showed that 255 gold and 67 silver contracts were posted for delivery on Thursday.  The list of issuers and stoppers in both is worth skimming...and the link to that action is here. The GLD ETF had no report.  But, over at SLV, they reported another withdrawal...this time it was 683,712 troy ounces of the stuff. The U.S. Mint proved me a liar yesterday, as they revised their final January sales figures on February 1st...a trick they haven't pulled in a while.  Anyway, the final January updates are staggering.  They increased their gold eagle sales by another 50,500 ounces...and increased their silver eagle sales by an eye-watering 1,698,000.  Total January sales check in at 133,500 ounces of gold eagles...and 6,422,000 silver eagles.  Almost 20% of U.S. silver production for 2011 disappeared into silver eagles in just one month.  Words fail me. However, as I said several times during the prior month...1,696,000 of these sales were reported on January 3rd...and rightfully belong in December 2010 sales.  But, the big headline number will be the one that goes into the history books. For the month of January, silver eagle ounces outsold gold eagle ounces by a factor of 48 to 1.  Along with these record sales in January, the mint also reported some sales for the month of February as well...6,000 ounces of gold eagles, along with 50,000 silver eagles. Not to be outdone by all the action elsewhere, the Comex-approved depositories showed a big number of their own.  Their report yesterday showed that 1,164,019 troy ounces of silver were withdrawn in total from their four warehouses on the last day of January.  This activity is definitely worth the look...and the link is here. Sponsor Advertisement First Majestic is a producing silver company focused in México and is aggressively pursuing its business plan to become a senior silver producer by developing existing assets and pursuing acquisitions of additional assets that contribute to achieving our growth objectives. First Majestic owns three producing silver mines: La Encantada, La Parrilla and San Martin. The Company has an additional mine under pre-feasibility called the Del Toro Silver Mine which is expected to become First Majestic's fourth producing mine. In late 2009, the Company acquired the Real de Catorce Silver Project, an old mining district, and plans to launch a drilling and exploration program. With a Management team comprised of proven company and mine builders; shareholders are poised to capitalize on First Majestic's rapid evolution into a world class silver producer. Please visit our website to learn more and contact us for further information. ¤ Critical Reads Subscribe Wal-markdown: Inventory glut cuts giant retailer down to size I have a lot fewer stories today than I did yesterday...but it's still up to you to do the final edit.  The theme of the first four stories makes it hard to believe that the Dow punched through 12,000 yesterday...as the consumer is a dead duck. Today's first item [which I stole from yesterday's King Report] comes from the Monday edition of the New York Post...where the headline reads "Wal-markdown: Inventory glut cuts giant retailer down to size".  Wal-Mart is coping with a bad case of post-holiday indigestion.  After bingeing on Christmas inventory, the world's biggest retailer has been forced to take drastic steps in recent weeks to clear stores and warehouses of excess goods, according to sources close to the company.  The culprit: disappointing December sales.  The link is here. View full GSD edition Nearly 11 Percent of U.S. Houses Empty While I'm looting the King Report...here's a CNBC  story that's headlined "Nearly 11 Percent of U.S. Houses Empty".  Home ownership is falling at an alarming pace, despite the fact that home prices have fallen, affordability is much improved and inventories of new and existing homes are still running quite high.  Bargains abound, but few are interested or eligible to take advantage.  If you have the time, this is worth the read...and the link to this rather short story is here. View full GSD edition GM Parks 510,000 Cars With Dealers, 31% Higher Than Year Earlier Reader Phil Barlett provides out next story today.  It's a posting over at zerohedge.com that's headlined "GM Parks 510,000 Cars With Dealers, 31% Higher Than Year Earlier".  This is a very short must read...and the graph is great.  The link is here. View full GSD edition Bernanke's Poverty Effect: Food stamp Recipients Jump by 400K In November, Hit New Record Of 43.6 Million This next story continues to show the abysmal condition of the U.S. economy.  It's another zerohedge.com article...and this one's courtesy of Australian reader Wesley Legrand.  The headline reads "Bernanke's Poverty Effect: Food stamp Recipients Jump by 400K In November, Hit New Record Of 43.6 Million".  It's a one-paragraph read...and the graph alone is worth the trip.  The link is here. View full GSD edition Here Comes QE3: Hoenig Says "More Quantitative Easing May Be Discussed" Young Wesley, having nothing better to do, obviously spent a fair amount of time at the zerohedge.com website yesterday.  Here's his second offering from there.  It's headlined Here Comes QE3: Hoenig Says "More Quantitative Easing May Be Discussed".  One of the places that the Fed has asked the primary dealers to invest in, is the equity markets...especially the Dow.  The Fed has been in-your-face blatant about higher equity prices, so they are getting their wish...regardless of how the economy is going.  It's only one paragraph long, so please check it out.  The link is here. View full GSD edition Asia risks overheating and world risks imbalances warns IMF chief The next story is courtesy of reader Scott Pluschau...and is posted over at channelnewsasia.com...and was filed from Singapore yesterday.  The headline reads "Asia risks overheating and world risks imbalances warns IMF chief".  [The man has a keep grasp of the obvious. - Ed]  Asia faces the risk of overheating and "devastating" food inflation, IMF chief Dominique Strauss-Kahn warned Tuesday.  Widening imbalances across and within countries are also sparking tensions which threaten to derail the fragile global economic recovery warned the IMF chief. [I wonder what "fragile global economic recovery" he's referring to? - Ed].  The link is here. View full GSD edition IMF raises spectre of civil wars as global inequalities worsen The IMF report that spawned the above story, also drew a response from Ambrose Evans-Pritchard over at The Telegraph late yesterday evening...and I thank reader Roy Stephens for bringing it to our attention.  The headline reads "IMF raises spectre of civil wars as global inequalities worsen".  The International Monetary Fund (IMF) has warned that "dangerous" imbalances have emerged that threaten to derail global recovery and stoke tensions that may ultimately set off civil wars in deeply unequal countries.  At times it's difficult to tell that this story from The Telegraph is talking about the same thing that channelnewsasia.com is describing.  It's obvious that it depends on who's doing the reporting. The link to Ambrose Evans-Pritchard story is here. View full GSD edition A Million-Strong Festival for Freedom: Masses Celebrate Mubarak's Waning Power Strange Currency: Return to the gold standard? It's just crazy enough for some state legislators to propose it Posted: 01 Feb 2011 08:21 PM PST Link:  Strange Currency: Return to the gold standard? It's just crazy enough for some state legislators to propose it Image:  Reader "Dr. Strangelove" has our first gold-related story of the day.  It's a piece from slate.com that bears the headline "Strange Currency: Return to the gold standard? read more

Afghan bank’s losses could reach $900 million Posted: 01 Feb 2011 08:21 PM PST Link:  Afghan bank's losses could reach $900 million Image:  Reader 'David from California' provides our next reading material that's posted over at boston.com.  It's a reprint of a story from Monday's edition of The New York Times...and is filed from Kabul.  It bears the headline "Afghan bank's losses could reach $900 million".  Fraud and mismanagement at Afghanistan's largest bank have resulted in potential losses of as much as $900 million — three times previous estimates — heightening concerns that the bank could collapse and trigger a broad financial panic in Afghanistan, according to US, Eu read more

Riots Over Food? Posted: 01 Feb 2011 08:02 PM PST Analyst Forecasts Food Riots In USA Within 18 Months. "On Monday I wrote something that caused my coworkers to look at me even more sideways than usual.  I said, "I think we can expect the words "food riot" to enter the American lexicon sometime in the next 18 months, and I don't say that flippantly. Just to be clear, "lexicon" is a fancy word that means vocabulary – and "food riot" is a phrase that refers to a group of angry, hungry, violent people who destroy property because they feel (among other things) that food prices are too high. And yes, to answer any questions from the peanut gallery in my office, I do believe we'll see food riots in these United States of America sometime in the next year and a half." "I'm belaboring this point because I want to be crystal clear with this prediction, not because I especially like making predictions. Quite the opposite, actually – I detest making predictions because it's so easy to be wrong on the scope, specifics, time-frame, location, etc. In that vein, if I am wrong about this prediction, it will probably be a matter of my timing rather than anything else. But where am I getting these crazy ideas? Let's take a look at an interesting chart from the folks over at shtfplan.com:" "This chart shows us that food stamp participation has risen sharply – with no signs of slowing since early 2008. Currently, over 42 million Americans rely on food stamps – or 1/7th of the entire population. Okay, so the very fact that more people are on food stamps isn't cause for alarm. But what it means is that 14% of people in the United States already can't afford to feed themselves – and that number is rising. I don't know what number of people it would take to break the camel's back. The number already seems ludicrously high. The other side of the coin is that food prices are rising too – for three simple reasons:" "The first reason is just plain old bad luck. Bad weather around the world, including heat waves in Russia last summer and flooding in Australia right now, continues to put a crimp in global food stocks. The second reason is sustained levels of higher energy prices. Oil is a vital input to most food production in the developed world. Higher oil prices necessitate higher food prices. The third is a global currency devaluation race. Trillions of newly minted dollars will increasingly find themselves competing with trillions of Yuan, Yen, Euros, etc. to buy an already diminished supply of food." "Perhaps the most common response to these facts is to say something like, "wow that's scary!" But fear is something that children feel when they don't know how to deal with a situation, or they don't understand something. I'm a grown man and for that reason, I don't fear these trends. I am preparing myself and my family for the likelihood that these trends will continue down the same inevitable path. You won't see me in a food riot, because I've been positioning my portfolio for survival and maybe even profit during the times to come." "Don't wait for the Government to start talking about this problem. By then, it will be far too late. Start protecting yourself today, if you haven't already. Here's what I'm doing: I regularly buy physical gold and silver. I've stopped paying much attention to the price, though I do try to buy on dips if at all possible. (Both are in a dip right now!) I've been buying durable food goods like rice, beans, pasta, flour, salt, etc. It's impossible to buy "enough" of this stuff, but a 6 month supply isn't too difficult to amass. I recently bought a bunch of different fruit and vegetable seeds. We don't have much of a yard, but seeds are cheap and if stored correctly they remain viable." "I also own shares of blue chip companies that will probably continue to be profitable no matter what happens. I'm continuing to buy shares of precious metal miners, oil exploration companies, and other commodity-based securities. You'll notice that none of these things is really "crazy" to own, even in boom times. In the event that I'm 100% wrong, and everything's going to be A-okay-terrific, I can use or sell all of these different assets, and probably not take too much of a bath." -Kevin McElroy Seeking Alpha.com 1-16-11 This posting includes an audio/video/photo media file: Download Now

Strong Growth Posted: 01 Feb 2011 05:28 PM PST Mercenary Links Roundup for Tuesday, Feb 1st (below the jump). 02-01 Tuesday Manufacturing Notches Strong Growth – WSJ.com U.S. Economy: Manufacturing Grows by Most Since 2004 Inflation threat pushes dollar to two-month low Copper Surges to Fresh Highs – WSJ.com Oil Prices: Too Early For a Choke Point "The Virtuous Cycle Of Good News Risks Becoming An Epidemic" 'Al-Qaida on brink of using nuclear bomb' Muslim Brotherhood: 'Prepare Egyptians for war with Israel' Jordan's King Fires Cabinet Among Protests Mubarak Fails to Calm Protests With Pledge to Step Down – Bloomberg How Cairo, Washington Were Blindsided by Revolution – WSJ.com Dow and S.& P. Have Highest Close Since 2008 – NYTimes.com Best and Worst Performing Stocks of 2011 Here Comes QE3: Hoenig Says "More Quantitatve Easing May Be Discussed" Bernanke's Poverty Effect: Foodstamp Recipients Hit New Record ROI: Don't Trust the Inflation Numbers – WSJ.com Wall Street Pay Reaches Record $135 Billion – WSJ.com Visa and Mastercard try to salvage debit card fees | Reuters China Is Said Likely to Raise Rates Soon to Fight Inflation Weaker Than Expected Chinese PMI In China, Bunnies Are Multiplying Like Rabbits as Their Year Nears China Takes Lead in Race for Clean Nuclear Power U.S. Firms, China Are Locked In Major War Over Technology Google Accuses Microsoft's Bing of 'Cheating' – WSJ.com Larry Page's Google 3.0 – BusinessWeek IMF raises spectre of civil wars as global inequalities worsen Australia Bets Economy to Absorb Rebuild, Avoid Price Surge Surging Milk Prices Add to Case for N.Z. Commodity-Led Recovery BP to Pay First Dividend Since Gulf of Mexico Spill – NYTimes.com BP to Sell U.S. Refineries; Russian Deal Stalled by Court – WSJ.com GM's January U.S. Sales Rose 23% – WSJ.com Home Ownership Falls to Preboom Levels – WSJ.com Homeownership Rate at Lowest Level in Over 10 Years The Shrinking Second Home – WSJ.com Whitney Municipal-Bond Apocalypse Short on Specifics – Bloomberg To Cement Euro Rescue, Merkel Seeks Unity in E.U. – NYTimes.com Inflation Risk Puts European Central Bank In Tough Spot – NYTimes.com XXL Toys for the Super Rich: Yacht Building Business in Germany Booms Another Rajaratnam Named in Ring – WSJ.com Manhattan DA to Arrest Dozens in Cybercrime Case Huge Storm Pounds Midwest – WSJ.com The Path from Neoclassical to Behavioral Economics 2.0 8 Biases That Cripple Smart Decision-Making Cracking the Scratch Lottery Code The Geek Kings of Smut Scientists develop train that can go faster than airplane More Dentists Taking Pains to Win Back Fearful Patients ~ ~

Gold Wealth Tactics: India vs USA Posted: 01 Feb 2011 05:14 PM PST

Chapter 2: Silver ETFs: Do Your Homework Posted: 01 Feb 2011 05:00 PM PST

Gold is bottoming and longs soon to be rewarded Posted: 01 Feb 2011 04:49 PM PST

“Gold Wealth Tactics: India vs USA” – Stewart Thomson Posted: 01 Feb 2011 04:37 PM PST Feb 1, 2011 Into the month of "Feb", here we go.  Towards month 4 of getting richer, here you go. "Pardon me?  Stewart, get real.  I'm not getting any richer.  Gold stocks are down big time since October!  My bullion is way off the $1387 highs, never mind the highs of $1430! "    – You, Feb 1, 2011? In one corner, of your boxing ring, stands the Western investor.  He's pretty tough.  He clenches his fists ready to fight.  Well, ok, he doesn't clench a fist.  He clenches a photocopier and a calculator. The Western investor fighter has gold.  But all he thinks about is pricing that gold, over and over, and over and over again, in…. dollars. In the other corner stands the Indian man.  The investor from India doesn't think he got richer over the past 4 months. He knows he got richer.  He knows he got richer because he has more gold now than he did 4 months ago.  In his corner, he clenches his weapon of choice. The scale.  The Indian is 100% prepared not just to fight, but 100% prepared for victory.  What about you? Wealth is weight.  No man or woman has increased wealth by valuing a fixed amount of gold over and over again in paper currency.  I'm not here to not watch Team India take you apart, like a tank takes out a kid with a water gun, as entertaining as that may be.  I'm here to make you… richer.  Let's do it.  The Western investor, the Western man, has a long road to haul, to achieve what the Indian man has achieved as a permanent mindset in the wealth-building arena.  Maybe it takes you a day, maybe a month, maybe a year, or just maybe it takes thousands of years, which is the consistent time that the Indian wealth-builder has put in on this all-critical job.  My suggestion: Let's start the job, with ounce number one, today. All things must pass.  The US dollar is a broken entity.  I hear non-stop analysis of why the US dollar will collapse against gold, or at least fall hard.  I agree, but no wealth for you is built by bragging how a fixed amount of gold is punishing and beating the US dollar into the ground.  It's almost the case of the bully beating on the child.  The gold punisher will eventually destroy the dollar, but bragging about existing beat-downs and coming golden beat-downs on the dollar won't make you any richer.  Just a bully.  The dollar is a child holding a photocopier.  Gold is a man holding a machine gun. Measure your wealth in the currency of men, ounces, not the currency of delinquent kiddies with  toybox measuring kits, dollars. Embrace the word, "real", or embrace wealth destruction.  Let's apply that word, "real", here and now, to make you richer:  The choice is really…yours.  Growing your real wealth in ounces, versus living an emotional death ride of marked to USD toilet paper currency model, is your key to gold market victory.  Indian investors really got richer over the past 4 months, and they really know it.  Most important, they are really happy about it.  Now you know the real job you really have, to really be happy in the real gold market.  The job is really required because you are really in a real fight ring with a real Indian opponent.  I would suggest you really start fighting.  Really drop the photocopier water gun as your real weapon of choice, and really get into the scale (tank) and really open fire.  Or really lose against that very real Indian, by very real… knockout. I'll make you richer in gold.  First, I want to build you some wealth in one of gold's "buddies", Uranium.  This mighty asset dropped one of many nuclear bombs to come, on the US dollar yesterday.  I admit that a toilet paper photocopier versus a nuclear bomb may not be a fair fight.  Still, which side of the fight you are on, in terms of market action, is probably the only question that needs resolving.  Let's resolve that key issue today.  Click here now to view my Uranium Triple Play Chart. Those of you with "thunder-cash" from your businesses can be absolutely confident buying Uranium every 10 cents down, every 5 cents down, or even every 1 cent down.  All the way to zero.  I have drawn in the 3 current key areas of play (battle).  This is the Uranium fund run by Denison Mines Inc., US market traded, and as of the last NAV posting from the company on Dec 31, there was almost no premium in the pricing over the cash price of Uranium. It is more likely paper money that is going to zero against Uranium, than Uranium against paper, but I'll maintain my professionalism and manage that risk on the Uranium side of things for you anyways.  How?  By urging you to prepare now, to set aside risk capital to buy Uranium at much lower prices, if they occur.  With all major assets, your risk in them drops as price drops, a fact that few investors understand.  Shortages develop and production implodes, and price rises again as a result.  You mission is not to guess when production or price is going to move, but to respond as it moves, professionally. I've made solid money in Uranium.  If you look at my actions compared to my competitors, I might talk more forcefully.   I might ridicule financial advisors, and call them "golf ball advisors".  This is true, but the "golf ball advisors" have a very high understanding of what assets are, whereas most technicians have a very low understanding of what an asset is.  The problem, for both, is they are on their knees in front of Ben Bernanke's electronic photocopier machine, instead of standing side by side with the Indian master investor at the scale.  That pathetic action destroys most of the positives they bring to the market with their respective understanding of assets and charts.  In the Uranium market, there are two sides to the trade, and those who forget that reality for even a short period of time risk blowing up.  When you sell Uranium, you want to ask yourself if the dollar is a buy against Uranium, or a buy against anything, as you prepare to sell Uranium.  Why?  Because a sell on Uranium is a buy on the dollar.  The dollar is an asset, and it goes into play when you sell Uranium for dollars.  Those dollars are immediately moving in price against Uranium and against other major assets.  When you come back into Uranium, or another asset, you want to be booking a profit on those dollars.  Make that an obsession. Do not treat the dollar asset lightly.  It is not money.  If the Gman says jump, do you say, "how high?".  Just because the Gman follows the banksters' instructions and creates a photocopier and then calls the toilet paper coming out of it money, instead of calling it an asset that is currency, does that make what the Gman says real?  No! The US dollar (and all paper currency) is an asset, and an asset in play, if it is in your hands.  I'm not interested in seeing you book losses on any market action, including the dollar asset.  If you sold Uranium yesterday for dollars, you just entered a new position on dollars trade.  Look around you, hard, at other major assets.  From the time you got those dollars, are your dollars rising against those other assets? If your dollars are rising, then you are by definition booking profit on dollars as you next enter a new asset.  Think like a winner on both sides of all trades, but don't fall into the bankster propaganda trap that dollars are money, not with your market actions.  Dollars are assets and currency, not money.  If you are booking losses 50% of the time on dollars when you sell them for another asset, how can you seriously expect to be a lifetime winner in the market?  Those who bought stocks in the late 1990s from the banksters booked huge losses on dollars as they bought stock, but don't know it.  Look back at your major asset plays.  You will find massive loss booking on dollars as you "entered the new play".  Kill that behaviour now.  Think and act in the market as a winner.  All the time.  Not just some of the time, like when gold makes a new high, and team price chaser sends you their latest "juniors to Mars any day now" wiener report.  Juniors to Mars, maybe.  But are you booking a profit or loss on your dollars as you buy those juniors?  Take care of today, first, by booking a profit on whatever it is you are selling, because tomorrow…never comes. Last week was about booking profit on dollars as you entered the gold trade on weakness, or should have been.  My accounts surged to new highs in ounces, and yesterday to new highs in dollars.  Why are my accounts at new highs in both ounces and dollars, while my competitors are exploring the bottom of the financial mariana trench with a red lead anchor tied around their neck, in most cases? Three reasons.  First, I don't pick bottoms or tops; I buy weakness and sell strength and do it in a pyramid formation with a myriad of buys and sells, diversifying over price before anything else.  Second, I understand what an asset is.  Natural Gas isn't going off the board, but those who are manically obsessed with measuring their gas only in dollars, may well go off the board themselves.  Third, I understand the other side of most trades is dollars, and dollars are an asset and currency, not money.  Dollars aren't money any more than Corn is, and arguably less so.  I look to book profit on dollars from the point I get them, when I sell them, and I just did last week in gold currency. OK, let's roll with the gold ounces of wealth building show.  The ultimate wealth.  Here's the Gold H&S Bottom Chart. Gold is poised to blast higher against the dollar, probably above $1350.  My next sell gold/buy dollars points sit at $1345 at $1355, and my buys extend down from $1325 to $1275, for this pgen (pyramid of buys) buy program for bullion, which is also a profit-booking sell program for dollars.  Again, stay focused on both sides of the trade, if you have a dislike for sitting in frying pans, which I do. There is actually a double left shoulder on this h&s pattern, if you look at the left shoulder area.  Price could drift down to the right shoulder lows or just blast higher from this area.  That is the likely scenario, and a lot of leveraged speculators have recently shorted gold, which makes a loss-booking extravaganza by those price chasers very likely.  Obviously, all is possible, and while the daily charts of gold vs dollar clearly favour gold, the longer term charts are less clear about whether a rally from here is the start of a new leg of up, or just a $100 or so move up that will be sold heavily by institutional money managers who are intermediate term gold-negative, as they believe QE is ending/attempted to be ended/pretended to be ended. Here's a look at the Weekly Bond Chart. Notice the short term Stochastics indicator flat lining.  This type of action happens when an asset "should rally", but doesn't.  MACD fans should remember what happened to them when the US dollar gave a massive buy signal for the US dollar back around 2004 against Gold, and instead of rising, the dollar drastically accelerated its downtrend, wiping out team USD bottom caller. You won't build wealth by over-focusing on the long term charts being overbought technically in a major asset.  You can only focus on today.  Focus on getting into the rhythm of buying and selling, the rhythm of both sides of the trade.  Here's the Silver Chart. Your maniacal obsession should be with booking a profit on dollars when you enter Silver, and getting more ounces of Silver.  It makes sense that Silver is stronger than Gold in this correction than others, not because "the mainstream finally sees the light that the comex has no Silver!", but because the monster money institutions believe the economy is strengthening.  Whether it is or not will be resolved down the road and Silver will respond accordingly.  I expect this outperformance by Silver to continue for some time.  I personally trade Silver against Gold, not against the Dollar.  As Silver rallies, book profits in Gold ounces of wealth, keeping you in the metals game, with less volatility.  Hi ho, Hi ho, to the price gridlines we go!  Over and out, from the Indian Mind! Special Offer for Website Readers:  Send me an Email to freereports4@gracelandupdates.com and I'll rush you my new "Make Me Richer Now!" report.  I'll show you how to handle a typical $500,000 portfolio in the gold market against dollars in a scenario involving both $1100 and $1700 gold, so you get richer, both in dollars and in ounces!  Thanks! Cheers st Thanks! Cheers st Stewart Thomson Graceland Updates www.gracelandupdates.com Email: stewart@gracelandupdates.com Risks, Disclaimers, Legal Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line: Are You Prepared?

Gold Loses 5.9% vs. Top 10 Currencies in Jan…. Posted: 01 Feb 2011 04:33 PM PST

The Double Whammy of Geopolitical Gold Games Posted: 01 Feb 2011 04:00 PM PST

Silver Butterfly: An Option Trading Lesson Posted: 01 Feb 2011 02:56 PM PST One of the notes that I keep stuck to my computer reads "remember seasonality". For those just now becoming familiar with options, you may assume I am reminding myself not to forget deer season or the opening of the season for striper fishing. While these are important dates for many of us to remember, I am reminding myself that there are distinct periods within the options expiration cycle where certain trades work better and give a competitive advantage to the trader who recognizes and takes advantage of this seasonal pattern. As a quick review, remember that option cycles historically have been established with monthly expiration cycles. For the knowledgeable option trader, different time periods within this monthly cycle are known to have distinct characteristics. The primary reason for these different characteristics is the "non linear" decay of time premium. This "non linear" behavior simply means that the decay of time premium accelerates as expiration approaches; for us visual thinkers, envision a snowball rolling downhill. The recent arrival of weekly options has opened a whole new concept of seasonality for traders using those vehicles, but that is a discussion for a future time. The butterfly is one of the option constructions most affected by seasonality. The last two weeks of the monthly option cycle is even called "butterfly season" by many option traders. The classic behavior of butterflies is that they are only slightly impacted by changes in the price of the underlying early in the cycle and exhibit increasing response to price change late in the option cycle. This peculiar functional characteristic has frustrated many traders who have tried to employ butterflies early in the options cycle and have routinely seen the correctly predicted price action result in minimal or no profit in the position. For those of you unfamiliar with this construction, let's look at an example. First and foremost, we need to be aware of our position in the cycle. February options expire Friday, February18, this is 17 days from today. That is close enough to the mid point of the cycle to be open season for butterflies. The essential structure of a butterfly is to establish a spread in either calls or puts that has the structure +1/-2/+1. The spread uses options which all expire in the same month. A variant of the classic butterfly, the iron butterfly, uses both puts and calls but this metallic beast will need to be the subject of another post. Since a picture is worth "a thousand words", let's look at an example of a butterfly structure before we discuss some of the nuances of which the trader must be aware. Now, don't go out and put this on, it should be used only as an example and not a trade recommendation or financial advice! This trade is to demonstrate the butterfly structure and to lead us to some functional considerations. The trade is that of a put butterfly in SLV. As you can see the position is slightly bearish, with maximum profit occurring at expiration at the SLV price of 26. For those who are bullish or even neutral, a similar trade could be constructed to reflect that viewpoint. An important point is to notice the difference in the solid blue line, the expiration P&L graph, and the intermediate time frames indicated by the broken lines. As is readily apparent, the sensitivity of the position to price movement is much less at points in time prior to expiration. A key point to remember when trading butterflies is that maximum profit is ALWAYS when the price of the underlying, in this case SLV, is at the short strike at expiration. By remembering this fundamental characteristic, an option trader can center the butterfly on his projected price target in order to maximize profit. Another fundamental characteristic of the butterfly construction is that this structure usually works best in an implied volatility environment that is in the upper half of its historic range. What is the reason for this characteristic? The options we sell short in the center of the butterfly represent a major profit engine for the structure. If these options are somewhat "rich", as indicated by the calculated level of implied volatility, they provide a substantial boost as the time premium we are short decays into expiration. How does the butterfly under discussion fit into the volatility consideration? Below is the volatility chart for SLV. The brown line is the volatility actually demonstrated in the market recently, and the blue line is the implied volatility calculated from actual option trades. As you can see, we are currently in the mid range of volatility for this underlying. This is a good place to be for an options trade, and provides an additional "tailwind" for the trade together with our current position in the time of the option expiration cycle. Successful option traders understand the limitations and advantages of the vehicles available to them. The butterfly can deliver outstanding risk/reward scenarios, and the probability of its success is enhanced by understanding the nuances of its use. Get My Trade Ideas Here: http://www.optionstradingsignals.com/profitable-options-solutions.php J.W. Jones Comments are closed. Recent Articles Silver Butterfly: An Option Trading Lesson Friday's Panic in the S&P 500 & Gold Futures Warning to Options Traders Looking at NetFlix Earnings Gold, Oil, and the Contrarian Mindset Using Double Calendar Spreads to Capitalize on Earnings Past Articles February 2011 (1) January 2011 (7) December 2010 (6) November 2010 (5) October 2010 (3) September 2010 (2) August 2010 (6) RSS Feed

Nothing Is Stable Anymore Posted: 01 Feb 2011 02:31 PM PST The world is becoming a very unstable place, and the pace at which things are changing all around us has become absolutely mind-numbing.  In fact, change has become one of the only constants in today's world.  Once upon a time, people in the United States could actually make 20 or 30 year plans and feel confident about achieving them.  But now, nothing is stable anymore.  The financial crisis showed us that some of the biggest corporations on the globe can collapse in a single day.  The events of the past few weeks have shown us that entire governments can be brought down in a single week.  We live in a world where there are now very few "guarantees" that you can count on.  One of the only things that is guaranteed is that technology and information will continue to grow at exponential speeds.  This year, the total amount of information produced on electronic devices around the globe is projected to be more than a zettabyte.  A zettabyte is equivalent to one sextillion bytes.  In other words, imagine a one with  more than 21 zeroes following it. Many of the things that we take for granted today didn't even exist a few short years ago.  Facebook has only been with us since 2004.  YouTube has only been with us since 2005.  Can you imagine a world where those two websites did not exist? We live in a world of information overload.  Once upon a time it would have been possible to go to sleep for a decade and wake up and everything would still be pretty much the same.  But today if you were to do that you would be in for a case of severe culture shock. Do you remember when you could buy a set of encyclopedias and the information in them would still be good a decade or two later? Well, things do not work that way anymore. In fact, most of the articles on this website will be obsolete a month from now. In today's world, you really have to think twice before you say that something is "not possible". A few months ago, it was absolutely inconceivable that Egyptian President Hosni Mubarak would declare to the world that he has "spent enough time serving Egypt". Yet here we are. One week the government of Tunisia seemed perfectly stable and the next week it was toppled. Do any of you out there still think that you can make realistic "plans for the future" in today's world? Once upon a time in America, many of us were taught that if we worked really hard in school we could get a great job with a great company.  We were promised that if we were faithful to that company for 30 or 40 years that we would be treated fairly and given a good pension. Well, in today's world you might as well crumple up that plan and throw it into the wastebasket. There is no such thing as a stable job anymore.  Businesses are coming into existence and going out of existence faster than ever before.  Today, one out of every four Americans workers has been with their empl0yer for less than a year. Most Americans still don't really understand that they are now part of a global economy.  They keep thinking that things were the way they used to be.  They keep thinking that the U.S. economy is invincible. Well, those days are long gone.  The United States is being deindustrialized at lightning speed.  Tens of thousands of manufacturing facilities and millions of jobs have been sent overseas.  China, once a complete economic backwater, is now kicking the crap out of us on the global economic stage. Our financial system is certainly on incredibly shaky ground.  Will any of us ever forget what happened in 2008? Do any of us actually believe that it can't happen again? Our health care system is also incredibly unstable.  Today, 46 million Americans have absolutely no health insurance.  That means that 46 million Americans are just one major injury or illness away from financial ruin with no protection whatsoever. Not that those that actually have health insurance are protected.  According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States.  Of those bankruptcies that were caused by medical bills, approximately 75 percent of them involved individuals that did have health insurance. So just because you have health insurance does not mean anything.  One bad accident or one really bad disease and you could be totally wiped out. Isn't that comforting? But the truth is that our entire economy is on the verge of total collapse. World famous investor Harry Schultz recently published the last issue of his legendary financial newsletter.  After 45 years, the following is how Schultz summed up the economic collapse that we are now facing.... "Roughly speaking, the mess we are in is the worst since 17th century financial collapse. Comparisons with the 1930's are ludicrous. We've gone far beyond that. And, alas, the courage & political will to recognize the mess & act wisely to reverse gears, is absent in U.S. leadership, where the problems were hatched & where the rot is by far the deepest." David Stockman, the former director of the Office of Management and Budget under Ronald Reagan was quoted by Schultz as saying the following about how desperate things are about to become.... "Get some gold, beans, water, anything that Bernanke can't destroy. Ron Paul is right. We're entering a global monetary conflagration. If a sell-off of U.S. bonds starts, it will be an Armageddon." Millions of Americans have become "preppers" in recent years as they have come to realize that our economy is headed down a very dark road. But sadly, the reality is that the vast majority of Americans are not prepared for any kind of economic or natural disaster.  As this week has shown us, just the threat of a major snow storm can wipe out store shelves in a single day. So what would this country look like if a major disaster fundamentally changed life in America and suddenly people were desperate for food and supplies? It is a frightening thing to think about. As the pace of change has accelerated dramatically, the U.S. government and other governments around the world have responded by trying to get a tighter grip on everyone and everything. To get on an airplane in the United States today, you either have to allow a security goon to use a scanner to look over your completely exposed body, or you have to allow a security goon to feel up all of your private areas with the fronts of his or her hands. Not only that, but the U.S. government has now deployed VIPR (Visible Intermodal Prevention and Response) teams to set up security checkpoints at bus terminals, subway stations and on major highways. The America that so many of us once loved is rapidly disappearing. But it is not just our man-made systems that are rapidly changing.  Something seems to be happening to the entire planet.  Flooding of biblical proportions has hit Australia, Brazil, China and Pakistan over the past 12 months.  Scorching heat caused massive crop failures all over Russia last summer.  Record-setting cold temperatures and snowfalls all over the northern hemisphere have scientists scratching their heads.  On top of everything else, mass deaths of birds and fish are suddenly being reported all over the globe. Even the crust of the earth is becoming increasingly unstable.  Did you see that volcano go off in Japan the other day?  Over the past two years it seems like volcanoes have been suddenly erupting all over the world. Not only that, but sinkholes have become an absolute epidemic all over the planet.  Some of these sinkholes have been so large that they have swallowed entire apartment buildings. In addition, it seems like there is a magnitude 6 or magnitude 7 earthquake somewhere in the world almost every day now.  They have become so common that the mainstream media barely even takes notice of them anymore unless one happens near a very populated area. None of us really knows what the world is going to look like ten years from now.  What will the "new" Facebooks and YouTubes be?  Will Ben Bernanke's reckless money printing destroy our economy by then?  Will our U.S. dollars still be of any value ten years from now?  Will there even still be a U.S. dollar? Will we still be able to feed most of the people in the world by 2011?  Will shortages of food, water and oil start driving people crazy?  Could some amazing energy discovery completely transform society? Who will be the president of the United States?  Will there even be a president of the United States?  Will war have erupted in the Middle East by that point?  Will the United States be in another war by then? The truth is that things are changing so fast that it is hard to even come up with the right questions to ask.  The world is going to change faster this year than it did last year.  In 2012 the pace of change will be even faster. So buckle up and hold on tight because this is going to be one wild ride. For much more on how incredibly fast the pace of change is in our modern society, check out the video posted below.  It is entitled "Did You Know?" and it has been viewed more than 12 million times on YouTube....

Casino Bernanke Posted: 01 Feb 2011 01:03 PM PST --To paraphrase Leo Tolstoy, sound money is always sound in the same boring way. Unsound money is always unsound in an inflationary way. --Okay. Maybe it's a stretch to say that Tolstoy would have anything to say about sound money. He was, after all, in favour of getting rid of private property. But as a farmer, he might have something to say about wheat prices. That something might be, "Wow!" or the Russian equivalent of, "Wow!" --You can see from the chart below that wheat prices are in rare territory. Only once before has the monthly closing price for a bushel of wheat in the spot market been this high. That was back in early 2008 when wheat traded for nearly US$12 a bushel. The average price in the spot market for January was $8.52. --Bread jokes aside, rising grain prices are no laughing matter. Egypt, for example, is the largest wheat importer in the world, according to the Wall Street Journal. One in five people make less than $1 a day in Egypt. Bread is a subsidised commodity. --People are not gathering by the millions in Cairo complaining of high bread prices. But what's happening in Egypt is really, at its core, a currency story. It's the story of the disintegration of the global dollar standard. The great unravelling of the greenback has unleashed higher food and fuel prices. Those increases are seen and felt first (and most) in places where those commodities are still relatively scarce. --If wheat strength was really just U.S. dollar weakness, would you have anything to worry about? Well, yes! Why? We're glad you asked. --If the origin of record grains prices is in a weak dollar, it won't stop there. The weak dollar has driven up base and precious metals. Now it's pushing up food prices. Next and most destabilising of all is energy. --True, Brent crude prices fell slightly yesterday. But they're still over $100. And more importantly, there is this possibility: oil prices will spike as traders, speculators, and governments realise that the dollar standard is convulsing in its death throes and that physical ownership of energy is the most important strategic consideration now. --A simpler formulation of this idea is one we've been making for years: sell paper, buy stuff. But now it's getting pretty elemental. The paper with which the world trades commodities, the U.S. dollar, is in real strife. That strife is causing geopolitical wealth quakes.  And what's worse is that it may get worse! --Kansas City Federal Reserve Bank President, Thomas Hoenig, says that a new round of Quantitative Easing—cleverly dubbed "QE3"—"may get discussed" if U.S. economic data stays weak, according to Reuters.  And Hoenig is a hawk. He was at least verbally opposed to the first $600 billion monetisation of government debt. --But really, if it's resolved to be self-important and protect the interests of its banker owners, the US Fed has no choice but to keep buying government bonds. That keeps U.S. interest rates low, for now. And that keeps the U.S. housing market from total implosion. Also, the Fed is the buyer of last resort for U.S. Treasury Debt. And if the Japanese and Chinese choose not to fund U.S. fiscal deficits, someone is going to have to. --And you wonder why prices for real goods are now moving toward an inflationary tipping point? --Our colleague Dr. Alex Cowie gave his take on the food/agriculture story in the latest issue of Diggers and Drillers, published earlier this week. We can't tell you what share he recommended to his readers. But we can say that Alex agreed with the investment sentiment of BlackRock founder Larry Fink that you should, "Go long agriculture and water and go to the beach." --Fink reckons food and water are even better sector bets than energy. We're not so sure. It takes energy to grow food. And as an investment prospect, food and water are a lot harder to invest in than energy. --This is why we're focussing on the energy story in our own newsletter, the Australian Wealth Gameplan. If higher energy prices are the imminent result of the ongoing global currency quake, there MAY be a way to speculate on it and buy select Aussie energy stocks for a short-term gain. --The emphasis above is on speculation. Sadly, this is what the manipulation of the price of money turns investors into. When the money printers run over-time, all you can really do is keep track of what you think things are really worth and buy them if they look cheap. That's if you're an investor (this is what Greg Canavan does in Sound Money. Sound Investments and why we're so glad he agreed to join our team this year). --But if you're buying Aussie energy stocks based on gains you reckon might come from higher oil prices and a re-rating of local stocks, you're speculating. You can make money speculating, of course. But it's a reminder that Ben Bernanke has effectively turned the world's financial markets into a giant casino, in addition to triggering inflation in commodity markets. Similar Posts: The Great Grain Robbery Water Usage by Big Companies Bernanke Horror Picture Show Ben Bernanke Pays Homage to Milton Friedman's Theory Here's To Uncertainty

Tuesday February 1st, 8:30 pm EST Posted: 01 Feb 2011 11:45 AM PST My blog will not be composed of mega paragraphs and too complex statements. The idea is to guide my viewers in a simplistic way, similar to the bears videos and give them an edge of some sort in this fraudulent, decepticon market called the COMEX. That being said, today we saw about 600,000 oz of gold settle for fiat dollars at a fantastic fiat premium albeit. Silver arena was a little

Why Most Consumer Prices Aren’t Affected by Money Printing Posted: 01 Feb 2011 11:00 AM PST "Commodities head for longest run since 2000," says a Bloomberg headline. What gives? On Friday, stock markets sold off all over the world. But there was no follow-through on Monday. Instead, the Dow posted another 68-point gain. Gold, meanwhile, lost $7. There's a lot of money in the world. Central banks are printing it! Particularly, the Fed. So what happens when central banks print money? Well, prices move. If you believe the "quantity theory of money" you have to believe that prices will rise. More money in circulation means that there is more money available for every unit of output. So, things that can't be easily reproduced...and things that are priced on the international auction market...go up. Like wheat. Like copper. Like oil. And, of course, like gold. Markets are always discovering prices. Prices go up and down. But they usually find an equilibrium in a fairly narrow range. In a world of real money, prices don't vary that much. But with so much new, ersatz money in circulation, markets have a hard time keeping up. They get bubbly. They discover that yesterday's price was too low...so they move it up again. And then they worry that it is too high, so it drops back again. Generally, as central banks add money, prices move higher and higher...until the bubbles pop. Why don't local items react too? Like the cost of parking...or houses? Well, it's a long story. But the Fed's easy money doesn't lift all prices evenly. Because the money isn't distributed evenly. The Fed prints money, but it doesn't give the money to us. It gives it to the banks. And the banks put it into hedge funds, trading departments, and speculative portfolios. This is what is known as "hot" money. It never gets into consumers' pockets. So, it never is used to buy the ordinary stuff of a domestic economy. Instead, it goes into hot markets - markets for global, auction-priced goods. Those items are soaring...even as the core inflation reading in the US is nearly flat. Oil is at a 2-year high. And check this out. From the Telegraph: Christies auction house has best year in 245-year history. Christie's has announced record sales for 2010 after the auction house enjoyed the best 12 months in its 245-year history. Total sales rose more than 50pc to hit £3.3bn last year, as the company retained its position as the world's largest auction house. Christie's was involved in two-thirds of global artwork sales worth more than $50m (£32m). Works sold over the course of 2010 included Pablo Picasso's Nude, Green Leaves and Bust, which sold for an auction world record £70.3m, as well as the £35.2m sale of Alberto Giacometti's Grande tête mince, both of which were sold on the same day last May. Impressionist and modern art sales [were] Christie's most successful market, with sales [totaling] £767m, followed by post-war and contemporary art sales of £603m. Europe and the US were responsible for the lion's share of sales, but growth was fastest in the company's Asian business, with sales more than doubling to £499m. These price increases are not driven by consumer price inflation. People aren't desperate to get rid of money before it loses value. This phenomenon is driven by greed, not fear. And more thoughts... Juan came to help on Sunday afternoon. Juan is a short, sturdy man with a ready smile. All the gardeners, maids, cleaning ladies, field hands, pot and pan washers, car parkers and tree trimmers are Hispanic now. Juan is from El Salvador. We were pruning apple trees - about 100 of them. They've been let go for so long the branches grow every which way, but mostly where you don't want them - straight up. You have to prune them twice. First, we get up in the crotch of the tree with a chainsaw. We cut out big limbs growing up through the center of the tree - often big boughs, the size of a gypsy's thigh, bristling with little branches. Then, we go through the tree again with pruning shears, lopping off all the smaller, unwanted limbs. "Corte todos que suben por arriba," we told Juan. We don't know whether that was correct or not. Juan didn't try to improve our Spanish. Instead, he spoke English: "Juan, you mean, I cut the ones that grow up?" "Si..." "Why is he calling you Juan?" Edward asked later. "I don't know... I gave him my name. But my Spanish accent is so bad...somehow, I guess he heard 'Juan.'" "Well, why don't you tell him your name isn't Juan?" "Why? I don't mind being called Juan." "What's his name?" "Juan." "You've got to be kidding." "Nope. Two Juans." Juan (the other one) was pruning a tree. The field was covered in snow. The trees were icy. We slipped and fell out of one tree. Another tree attacked us. We cut off a big limb and it fell on us. It was nice to have Juan backing us up. When we checked on Juan, we realized that our instructions hadn't been specific enough. He had cut off all the limbs. All that was left were nubs and stumps. "You better give him another lesson," Elizabeth suggested. "Juan, no corte todas las ramas. Solamente los que crecen directement por arriba." "What did you tell him?" "I think I told him to cut off only those branches that are growing straight up. But we'll have to see what he does." Later, at lunchtime, Juan told us a little about his experience as an immigrant from El Salvador. "I came here illegally. But that was a long time ago. I've got my papers now. I've been here for 20 years. I lived in Houston first. And then, I heard about a job on a horse farm here in Maryland. So I came here. "We were 7 brothers in El Salvador. And there weren't any jobs. And there was a lot of fighting. It wasn't safe. My father told us all to go away. So my oldest brother came here. And then the rest of us came. Now, we're all in the US. "But it wasn't easy. I had to work hard. This fellow who hired me on the horse farm, he has 40 horses. And those horses are a lot to take care of. And he didn't have enough people to take care of them. So, when I came, I had to work every day, 7 days a week, for three years without a single day off. "It was rough. And I didn't earn much money. But I kept at it. Because it was a job. And he gave me a trailer to live in. Then, after three years, I got to take a Sunday off. And then it got better. My wife came to live with me. And now we have a family. And I take off every Sunday afternoon. "But I like to work. So that's why I'm over here helping you." Regards, Bill Bonner. for The Daily Reckoning Australia Similar Posts: Obama Considers New Job Tax Credit The Rich are Still Getting Richer U.S. Fed Now Accepts Credit Card Debt as Collateral The Role of Consumer Spending in Phony Economic Growth Inventory of Unsold Houses Will Probably Continue to Hold Prices Down

Hold Me Tight(er) Posted: 01 Feb 2011 10:00 AM PST More price weakness was manifest in spot gold trading as the midweek session's participants were confronted with a stronger US dollar, the apparent end of the Mubarak era in Egypt and a continuing string of decent news from the US economic front.

‘Unbelievable’ Pricing Seen & Silver Outperforming Posted: 01 Feb 2011 10:00 AM PST Gold and silver are marginally lower today in all currencies, but recent action suggests we may have seen capitulation and are in the process of bottoming out. Physical demand remains robust as jewelers and investors buy on the dip.

Gold is Bottoming & Longs to be Rewarded Posted: 01 Feb 2011 10:00 AM PST The long term views now are for $1,287 to hold as a worst case bottom in this fourth wave, and the fifth wave to begin – if it has not already – to over $1,500 per ounce at the next interim highs.

Lawrence Roulston: It's Time to Buy Posted: 01 Feb 2011 10:00 AM PST The editor of the Resource Opportunities newsletter and expert on mining investments explains why he loves the prospect generator model and why now is the perfect time to snub bullion and cozy up to mining equities.

Egypt in turmoil, Riots in Algeria, Jordan, gold and silver rise despite actions by the banking cartel Posted: 01 Feb 2011 09:50 AM PST

Gold Seeker Closing Report: Gold and Silver Gain With Stocks Posted: 01 Feb 2011 07:12 AM PST Gold climbed $7.45 to $1341.25 by about 8:30AM EST before it fell all the way back to $1325.54 by about 10AM, but it then spiked to a new session high of $1343.25 in the last few hours of trade and ended with a gain of 0.43%. Silver climbed 32 cents to $28.48 before it fell back to $27.858 by late morning in New York, but it also surged back higher in late trade and ended near its late session high of $28.655 with a gain of 1.17%.

Indications of the Broadest Measure of Money Supply Posted: 01 Feb 2011 07:00 AM PST The Gold Report interviewed John Williams of ShadowStats.com, who said, "I continue to track M3, the Fed's broadest measure of the money supply until it ceased publication in March of 2006. Generally, the broader the measure of systemic liquidity, the better it serves as a predictor. In terms of giving a signal for the economy, you have to adjust the growth for inflation." I admit I was kind of dozing off by this time, daydreaming of the bacchanalian excesses made possible by gold and silver shooting up in price as a result of the insane increases in new money being created by the foul Federal Reserve. My reverie seemed so much more interesting than what I thought would be one of those academic exercises where smart people talk about things I don't understand because I am stupid, and probably wouldn't care about even if I wasn't so stupid. With a sudden start, I realized I was wrong! There is quite a lot of useful information in, "What's happened historically is that every time the year-to-year change in the inflation-adjusted M3 has turned negative, the economy has followed in a recession, or if already in a recession, the downturn has intensified." Now, there is nobody more attuned than I to the potential catastrophe inherent in something that has happened "every time," mostly about how I can tell you sad, sickening, sorrowful stories about money lost by betting on "what's happened historically," stories that will make you cry if you have any compassion or empathy, which I suspect you don't, and neither does anybody else, and you are all secretly happy that I lost money and suffered a loss, which is what I always suspected about all of you deceitful bastards. However, this is not about my raging paranoia or that I am a cynical old man who sees treachery everywhere, but that the M3 money supply has turned negative, inflation-adjusted, which is, as in "every time," significant! I was planning on calling Mr. Williams on the phone to ask him, "Did you mean 'every time' literally, as in 'can't-miss guaranteed?'" But perhaps Mr. Williams demonstrates real paranormal abilities by anticipating my call and replying – before I even asked! – that "Those signals don't come very frequently; but when they do, they are extremely reliable." Extremely reliable! That's the kind of market timing I am looking for, man! And if you are looking for something else that is "extremely reliable," I note that gold and silver have performed admirably for the last 4,500 years! Mr. Williams' data points to an economy going down, even though I see the foul Federal Reserve creating $100 billion of new money per month so that the government can spend it, and it is all Very, Very Frightening (VVF) to those of us (me) who are (is) frightened (scared out of my freaking mind) by the prospect of catastrophic inflation in prices and economic collapse. This, in contrast to the seeming historical guarantee of gold and silver, makes it all so easy that you happily think to yourself, "Whee! This investing stuff is easy!" The Mogambo Guru for The Daily Reckoning Indications of the Broadest Measure of Money Supply originally appeared in the Daily Reckoning. Recent articles featured in The Daily Reckoning include the impact of quantitative easing and US debt.

Got Gold Report – Part II, Silver Flag? Posted: 01 Feb 2011 06:59 AM PST As a major winter storm bears down across the Plains and into Texas sending bitter, stinging arctic air into places where it doesn't belong and isn't welcome; a storm so powerful that forecasters say it could rival the 1967 deep freeze blizzards, farmers and ranchers throughout the Nation's mid-section pray the killing cold will be short-lived. Already expensive hay and grain will be in super-high demand if the cold persists as livestock needs the extra calories for fuel just to survive.

Germany promised U.S. in 1967 not to convert dollars to gold Posted: 31 Jan 2011 05:30 PM PST

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