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- Buy Gold to Protect Your Wealth – Not As Speculation! Here's Why
- New Video: Why Gold Is Money and Not A Speculative Commodity
- SLV and GLD starting to feel the heat, silver and gold look extrememly bullish
- Gene Arensberg : Full blown backwardation in Silver
- will the kitco forum load up for you today?
- Near Zero Contango in COMEX Silver Futures
- Weak jobs reporty/silver very strong/long bond plummeting
- Near Zero Contango in COMEX Silver Futures
- Smell a Rat? Then Buy Some Gold.
- China gold buying "stuns" precious metals traders - demand unbelievable
- Smell a rat? Then buy some gold
- Jim Rogers Tells CNBC To Change Its Name To CommoditesNBC, Sees Oil At $150, Is Short Nasdaq ETFs, Expects More Governments To Collapse
- Taleb Advises ‘First’ Avoid Treasuries, Then Dollar
- The first half of the decade marked primarily by world geopolitical dislocation
- It’s only our bond…
- Feb 4, 1965 De Gaulles threat to accept gold as payment for his dollar surpluses
- How to Profit From the New Oil Boom in Texas
- U.S. Housing Priced in Silver - last 40 years
- Inflation Alert
- The Government-Gold Screw Job of 1933
- Friday Video Day $5000 Gold, $500 Silver, just released
- David Skarica: "Bond Vigilantes" Ultimately Good for Gold
- Global Silver Exploration
- Newmont Buys Out Fronteer; Whats Next in Gold Mining Sector?
- What About the Yen?
- Must-see: Jim Rogers slams CNBC hosts on soaring commodity prices
- How to profit from the global resource war
- Gold Seeker Weekly Wrap-Up: Gold Gains the first Week in Five and Silver Soars Over 4% higher
- Short-Term Buying Spree in Gold
- COT Silver Report - February 4, 2011
- Fed can keep most gold secrets but must yield one, judge rules
- Gold and Silvers Daily Review for February 4th, 2011
- Egypt is Just the Beginning for Gold’s Next Move
- China to raise gold, silver reserves in 2011
- Can the US return to a Gold Standard ? (Alan Greenspan 1981)
| Buy Gold to Protect Your Wealth – Not As Speculation! Here's Why Posted: 05 Feb 2011 06:10 AM PST In our travels to the Middle East, the Far East and South and Central America [we have found that] most people in those parts of the world see gold as the protector of wealth [as opposed to] in the West where it is viewed as a commodity for speculation... [That shouldn't be the case. Let me tell you why.] Words: 2159 | ||
| New Video: Why Gold Is Money and Not A Speculative Commodity Posted: 05 Feb 2011 06:10 AM PST This new video by www.bmgbullion.com and www.FutureMoneyTrends.com identifies and discusses: 3 mid-term trends that will drive the fiat price of gold to heights western economists can not even imagine and 3 irreversible trends that will result in further currency devaluation and major drivers in the price escalation of gold. | ||
| SLV and GLD starting to feel the heat, silver and gold look extrememly bullish Posted: 05 Feb 2011 04:11 AM PST Good afternoon...I have some good news. I just saved 15% by switching to GEICO..LOL, sorry, it just hit me, so I had to write it down. Gold Complex: -OI rose, and speculators are starting to pile in, again. -Gold outstanding deliveries this month increased to 1, 085,000 oz or equivalent to 33.75b tonnes. -no withdrawals -COT report most BULLISH for Gold in 2 years, yup, thats not a typo: The | ||
| Gene Arensberg : Full blown backwardation in Silver Posted: 05 Feb 2011 03:59 AM PST | ||
| will the kitco forum load up for you today? Posted: 05 Feb 2011 02:12 AM PST i can get on the main forum page but cant link into any threads or forum. | ||
| Near Zero Contango in COMEX Silver Futures Posted: 05 Feb 2011 01:34 AM PST Saturday, February 05, 2011 Near Zero Contango in COMEX Silver Futures HOUSTON -- We are in the process of pouring over the data from this week, and just below is something we are going to be hearing a lot more about in the coming days and weeks. As of Friday, February 4, 2011, there was near zero contango in the COMEX silver futures market. More in a moment, but first, here is this week's closing table. Note the very strong outperformance of silver to gold this week. There is likely a very good reason for it. No Contango in Silver Contango, where the spot price of a commodity is lower than the following futures contracts, is the normal condition in the precious metals futures markets. Contango is a sign that a commodity is in ample or adequate supply. Backwardation means that the cash or spot price is higher than the futures price for the same commodity. Backwardation occurs when demand for immediate delivery outstrips the market's ability to deliver the commodity. Backwardation occurs when there are too few sellers of the physical commodity to accommodate all of the actual buyers, so a near-premium develops to compensate the sellers willing to part with metal in return for taking delivery later. When there is zero contango, it means that there is not even one futures contract that is higher than the current spot or cash price. Zero contango and structural backwardation (where each succeeding futures contract is lower for most or the entire strip) is also known as an "inverse carry" market because the futures no longer compensate holders for the cost of carry, capital, storage and insurance relative to the spot price. Continued… We cannot overemphasize how unusual and rare it is to have zero contango in the silver futures strip. As of the close on Friday, the spot price for silver was $29.07. The closing price for the December 2015 futures contract was $29.02 or 5-cents less, repeat less, than today's spot price – for delivery four years hence. The few futures contracts that were above the spot price were all within two cents of it. For all intents and purposes, silver is in a zero contango situation now. Just below is the closing strip from Friday, February 4, courtesy of InsideStocks.com. That means that there is heavy demand for immediate delivery silver. It means that silver players are earning a premium to sell physical for delivery now and to wait for the return of their metal until the March contract, the near active contract, which is trading at 1.6-cents lower than spot (blue circle). Full-blown backwardation has arrived in the COMEX silver futures market. Backwardation suggests that competition for whatever metal is available is heavy and most analysts consider silver backwardation to be a decidedly bullish condition. By the way, as of Friday, there was only enough silver metal in the Registered category in COMEX depositories to accommodate 8,680 COMEX contracts (43.4 million ounces), or about 6.6% of the 130,601 contracts open as of Thursday's tally. (Another 59 million ounces was listed as "Eligible" and some of that metal could conceivably be coaxed into the Registered category at some price. Some of the Eligible silver is likely already committed for other purposes and is merely stored in the COMEX system awaiting delivery.) Evidence of tightness in the silver market continues to surface in other words. In addition to the near zero contango in silver, we also noted some interesting developments in the commitments of traders report just released Friday. We plan to mention some of them as well as our own trading intentions in the notations in our linked graphs on the subscriber pages by tomorrow, Sunday at 18:00 ET. Vultures, (Got Gold Report subscribers) please log in and navigate to the GGR Charts section in the subscriber pages for more then. http://www.gotgoldreport.com/2011/02...r-futures.html | ||
| Weak jobs reporty/silver very strong/long bond plummeting Posted: 05 Feb 2011 12:56 AM PST | ||
| Near Zero Contango in COMEX Silver Futures Posted: 05 Feb 2011 12:51 AM PST We are in the process of pouring over the data from this week, and just below is something we are going to be hearing a lot more about in the coming days and weeks. As of Friday, February 4, 2011 there was near zero contango in the COMEX silver futures market. More in a moment, but first, here is this week's closing table. ... | ||
| Smell a Rat? Then Buy Some Gold. Posted: 04 Feb 2011 11:33 PM PST China gold buying "stuns" precious metals traders - demand unbelievable. Another 415,538 ounces of silver depart the Comex. Bank Participation Report shows bullion banks fleeing the short side...and much more. ¤ Yesterday in Gold and SilverStarting from the opening bell in the Far East on Friday, gold began a gentle decline...and by the Comex open at 8:20 a.m. Eastern yesterday morning in New York, the yellow metal was down about nine bucks. From there, the price turned on a dime and began to head higher, but ran into selling every step of the way...as the jobs report did not impress anyone, despite the spin from the White House. The gold price peaked about 10:35 a.m. when the seller became real serious...and drove the price down twelve bucks...and into negative territory on the day...and that was basically it for the rest of the New York trading session. Gold finished down an even seven dollars from Thursday's close.
If you look at the New York Spot Gold chart on its own, you can see that gold really wanted to fly once the jobs numbers were reported at 8:30 a.m. Eastern. But it's just as obvious that there was a not-for-profit seller there to make sure that didn't happen. And, since plan 'A' wasn't working too well, the not-for-profit seller went to plan 'B' at 10:35 a.m...and that was that.
Silver suffered the same fate, of course...but did recover somewhat after its 10:35 a.m. whipping...and managed to close up 19 cents on the day.
But the 10:35 a.m. New York pounding didn't stop with silver and gold. Even more breathtaking were the vicious attacks on platinum and palladium, as their prices went vertical before a New York bullion bank beat both of them into submission. Both these markets are very thinly traded, of course...and it doesn't take many contracts to affect the price one way or another. But it should be obvious to anyone that the price of both of these metals would have been materially higher if the New York bullion banks [read JPMorgan] hadn't been standing there with a big stick. Here's the palladium chart as a 'for instance'...and you can click here for the platinum chart.
The dollar was comatose right from the open in the Far East...and that condition lasted until the Comex open at 8:20 a.m. in New York. From there, the world's reserve currency rose about 40 basis points...reaching its high shortly before 11:00 a.m. Eastern. Then it proceeded to give back half those gains going into the close of electronic trading at 5:15 p.m. Not much to see here, folks...please move along.
Since gold was up on the day when the equity markets began trading...the stocks began on a positive note as well. It should come as no shock to anyone, that the high for the HUI on the day came at 10:40 a.m. in New York before JPMorgan et al laid into the precious metals complex. After the beatings had been administered, the stocks flopped around in slightly negative territory for the rest of Friday...and the HUI finished down a smallish 0.71%. Despite silver's positive close, the silver equities turned in a decidedly mixed performance. Here's the HUI's 5-day chart for the week that was.
For whatever reason, the CME Delivery Report was not posted yesterday. As of 6:39 a.m. Eastern time Saturday morning, they're still showing Thursday's data. The GLD ETF reported a smallish withdrawal yesterday. This time it was 13,302 ounces. The SLV ETF reported no changes. The U.S. Mint finally had another sales report...although it wasn't particularly large. They reported selling another 7,500 ounces of gold eagles...along with another 76,500 silver eagles. For the first week of February, the mint has reported selling 13,500 ounces of gold eagles, along with 126,500 silver eagles. It was another day of silver withdrawals over at the Comex-approved depositories on Thursday. They reported that 415,538 ounces were shipped to parts unknown. The link to the action is here. Well, the Commitment of Traders report in silver wasn't all sweetness and light like I had hoped, as the three big up-days that we had during the prior reporting week negated all the improvements that we had prior to that. The Commercial net short position in silver actually increased by 1,655 contracts. Ted Butler says that all of this number was the '9 or more' Commercial traders [which he calls the raptors] taking profits by selling long positions into the rally that began in earnest on Friday, January 28th. Selling a long position [in the Commercial category] has exactly the same effect on open interest as putting on a new short position in that same category. If these raptors hadn't sold these long positions, then the Commercial net short position would have shown no change...as the '8 or less' bullion banks showed no net change for the reporting week. From its absolute low tick on the January 28th...to it's high tick yesterday...silver is up $3.00 from the prior week's COT report...with no increase in the bullion banks' short position. The Commercial net short position in silver currently sits at 224.0 million ounces. The '4 or less' bullion banks are short 202.3 million ounces...and the '8 or less' bullion banks are short 253.1 million ounces of silver. In gold, there was a slight improvement in the Commercial net short position...as it declined by 4,286 contracts...and currently sits at 19.3 million ounces...the lowest its been for at least a couple of years. The '4 or less' bullion banks are short 16.7 million ounces of gold...and the '8 or less' bullion banks are short 21.9 million ounces. Here's Ted Butler's "Days to World Production to Cover Short Positions" graph...as updated by Nick Laird over at sharelynx.com...who managed to survive Tropical Cyclone Yasi in one piece.
Well, February's Bank Participation Report was issued on Friday morning...and it was an education. The U.S. bullion banks reduced their short position in silver by 3,405 Comex contracts during the month of January. The non-U.S. banks actually increased their net short position by 335 Comex contracts. As of Tuesday, February 1st...the U.S. bullion banks [virtually all JPMorgan] are short 94.7 million ounces of silver...and the remaining eleven non-U.S. banks are short 17.3 million ounces of silver. Some simple arithmetic shows that for every ounce that the foreign banks are short silver on the Comex...JPMorgan is short approximately 60 ounces of silver on the Comex. In gold, the four U.S. bullion banks reduced their net short position by 14,037 Comex contracts...and the fourteen non-U.S. bullion banks dropped their Comex short position in gold by a whopping 22,603 Comex contracts. In ounces, these four U.S. bullion banks are short 7.8 million ounces...most of it held by JPMorgan...and virtually all the rest by HSBC USA. The fourteen non-U.S. banks are short 3.46 million ounces of gold...or around 247,100 ounces each. It's not rocket science here, dear reader. The numbers show that the U.S. bullion banks run the precious metals show with JPMorgan being the tallest hog at the trough in both silver and gold. But the other thing it shows is that [for the second month in a row] just about everyone is heading for the exits across the board...and it will be interesting to see how the next BPR stacks up against this reporting period.
¤ Critical ReadsSubscribeDavid Stockman: Listen Up FolksAs I hinted at yesterday, I have a lot of reading material for you today...including several big reads and videos that I've been saving all week. All of it is going to be dumped in this column...and you can pick and chose. My first offering is courtesy of reader Roy Stephens...and it's a posting over at market-ticker.org. It's a CNBC video clip that features David Stockman. In it, he talks about yesterday's jobs numbers...and he just eats the talking heads alive. The interview starts at the 3-minute mark...and runs about 8:10 from there. It's worth watching...and is headlined "David Stockman: Listen Up Folks". The link is here. By the time you get around to reading this column, you may have to scroll down a bit to find the story.  Outside View: Jobs drought continues with little relief in sightBefore leaving the jobs report, here's a UPI piece on this issue that was also sent to me by Roy Stephens. The headline reads "Outside View: Jobs drought continues with little relief in sight". It's a short read that gilds no lilies...and the link is here.  Taleb Advises 'First' Avoid Treasuries, Then DollarToday's next offering is courtesy of Australian reader Wesley Legrand. It's a Bloomberg piece from Thursday that's headlined "Taleb Advises 'First' Avoid Treasuries, Then Dollar". Nassim Taleb, author of The Black Swan said the "first thing" investors should avoid is U.S. Treasuries and the second is the dollar. The link to the story is here.  Jim Rogers Tells CNBC To Change Its Name To CommoditesNBC, Sees Oil At $150, Is Short Nasdaq ETFs, Expects More Governments To CollapseToday's next CNBC video clip is imbedded in a zerohedge.com piece...and was sent to us by Washington state reader S.A. The longish headline reads "Jim Rogers Tells CNBC To Change Its Name To CommoditesNBC, Sees Oil At $150, Is Short Nasdaq ETFs, Expects More Governments To Collapse". Jim takes no prisoners...and carves the interviewers a new one. Tyler Durden's preamble...and the video clip itself, which runs 9:33...are more than worth your time...and the link is here.  Sovereign Credibility and Bank RunsHere's a piece that I stole from Friday's King Report that I feel deserves to be on your must read list this weekend. It's a blog [from January 5th] posted over at the Council on Foreign Relations that's headlined "Sovereign Credibility and Bank Runs". In the midst of the financial crisis of 2008, governments helped to prevent bank runs by guaranteeing bank debts. Yet, as sovereign solvency itself becomes an issue, such guarantees quickly lose their value. If Ireland provides a rule of thumb, bank runs can be expected once sovereign credit default swap yields pass 3%. The story contains an excellent chart and one paragraph of text, so it won't take you long to blast through it...and the link is here.  WikiLeaks cables: US agrees to tell Russia Britain's nuclear secretsHere's a real interesting story that reader Craig McCarty sent out yesterday evening. It was posted late last night in The Telegraph in London. The headline reads "WikiLeaks cables: US agrees to tell Russia Britain' | ||
| China gold buying "stuns" precious metals traders - demand unbelievable Posted: 04 Feb 2011 11:33 PM PST Image:  I only have two other gold-related stories today...and this one I received from many readers yesterday. It's a piece that's posted over at the mineweb.com. It's basically a re-hash of a Financial Times story that I ran in this column a few days back. I wasn't going to run it because of that fact, but decided to include it here at the last moment. It's only a handful of paragraphs in length...and if you decide to pass on it because you read the original FT story in the GATA dispatch I posted, you're probably not missing much. The headl | ||
| Smell a rat? Then buy some gold Posted: 04 Feb 2011 11:33 PM PST Image:  The other gold-related story is a Bill Bonner offering from The Daily Reckoning that's posted over at the Christian Science Monitor...and I thank reader Kevan Crozier for sharing it with us. The headline reads "Smell a rat? Then buy some gold"...and the link is here. | ||
| Posted: 04 Feb 2011 11:33 PM PST Image:  Today's next CNBC video clip is imbedded in a zerohedge.com piece...and was sent to us by Washington state reader S.A. The longish headline reads "Jim Rogers Tells CNBC To Change Its Name To CommoditesNBC, Sees Oil At $150, Is Short Nasdaq ETFs, Expects More Governments To Collapse". Jim takes no prisoners...and carves the interviewers a new one. Tyler Durden's preamble...and the video clip itself, which runs 9:33...are more than worth your time...and the link is read more | ||
| Taleb Advises ‘First’ Avoid Treasuries, Then Dollar Posted: 04 Feb 2011 11:33 PM PST Image:  Today's next offering is courtesy of Australian reader Wesley Legrand. It's a Bloomberg piece from Thursday that's headlined "Taleb Advises 'First' Avoid Treasuries, Then Dollar". Nassim Taleb, author of The Black Swan said the "first thing" investors should avoid is U.S. Treasuries and the second is the dollar. The link to the story is here. | ||
| The first half of the decade marked primarily by world geopolitical dislocation Posted: 04 Feb 2011 07:41 PM PST - Except book "World crisis - The Path to the World Afterwards" by Franck BIancheri, Director of Studies at LEAP and GEAB coordinator -  The crisis, because it wasn't anticipated by world leaders, is advancing at its own speed. In 2009 the financial efforts, without historical precedent, of the United States, Europe, China, Japan and other countries have allowed only two things to happen: to anesthetize the general population in various countries in order to postpone a violent political and social reaction and to save the major financial institutions without reforming them. All that done at the cost of an intolerable State debt burden, the conversion of a very large part (around 30%) of the world economy into a "zombie economy" (that's to say surviving only through direct or indirect state aid or even via the manipulation of accounting rules) and a growing distrust of Western public opinion vis-Ã -vis all the ruling classes rightly suspected of being no more than the representatives of the most powerful financial interests. Alongside these very visible events, and ultimately in the short or medium term, the crisis represents other secular trends profoundly changing the world order we know, in particular China and India's return to power and the end of a Western centric world. The decade now dawning will be the setting for the interaction between these two "stages" of the crisis which, whilst being correlated of course, are not identical. The secular trends can be seen, over a decade, as data, that's to say as events for which one can prepare without really being able to affect their progress while other events (lasting between two to five years on average) may on the contrary be directly affected by our decisions (those of the leaders and/or the people). The first part of this decade will be essentially marked, first, by the growing emergence of secular trends marking the end of Western-centrism and, secondly, by the consequences of the financial crisis and especially the reactions to it in 2009. Reactions that led to excessive state debt and, in particular, excessive debt of the mainstay of the world order in recent decades, the United States. China being the preferred vehicle for these secular trends in action and the United States being, at the same time, the country at the heart of the financial crisis and its consequences (1), we can say that it will be Sino-American relations that will determine the pace and the magnitude of the shocks that we will experience between now and the middle of the 2010-2020 period. Similarly, the other players (new, former or reinvented (2) powers) will of course act and react in the coming years, either according to the development of the USA China relationship and its consequences, or according to their own expectations for the world in the decades to come. It is most likely that this group that can give birth to the most fruitful initiatives and ideas to prevent the second part of the decade turning into a descent into hell for most of the planet and allow, between now and 2020, a lasting new world order to start to take shape. Given what has happened since the recognized beginning of the crisis, the USA-China duo has in fact very little chance of avoiding a sterile confrontation. Neither the Chinese leadership, nor the U.S. elite seem to be able to do anything but defend/promote their own vested interests. Their mutual conflict and its domestic consequences for both countries will also demand all their attention, leaving them little room to think about the future of the world. That said, there is no guarantee, of course, that the contributions of the other layers will be able to divert the world from the logic of a zero sum game and, therefore, conflicts between blocs such as those which will quickly establish themselves in the relationship between the USA and China. It is, moreover, for this reason that there are two accounts of the future in this book. The main difference between the two hinges on this factor: the divergence of assumed developments becoming more and more apparent during the second half of the decade. But let's not anticipate (for once) the end of the book. Let's first look at the likely developments for the main geopolitical players for the 2010-2020 decade, as well as the general framework oftheir interplay, in more detail. These likely developments will be a chain of events that will lead to the disintegration of the current international system, particularly through the collapse or paralysis of the major international institutions and the strategic links of the global monetary and financial system, and the beginning of a process of structural rebuilding of the major global players like the United States, the EU, Russia, Asia and Latin America, fluctuating between the beginning of disruption for some and the continuation of reorganization for others. "World crisis - The Path to the World Afterwards" by Franck Biancheri, Anticipolis Publishing Contents Presentation Author Anticipolis Publishing ----------- Notes: (1) This may seem surprising but I don't think that the United States would be a central player in the currently emerging secular trends. In the end they will only have been, at a global level, a substitute for European power for the time that it took the latter to complete it's painful metamorphosis from "European powers" to "the European power" during the twentieth century. It really is Europeans, as the EU, who make up one of the new potential powers of the twenty-first century, alongside China, India and Russia, not least because it was an entity that didn't exist in the world order until the 1990s. It took the fall of the Berlin Wall for the European community project to leave its experimental cocoon. We will come back to this later in the book. (2) We can put Russia, China, India ... and the EU in this latter category. In another guise, these powers were already major historical players. While Brazil or South Africa, for example, are actually new players. Today the United States is undeniably a former power. | ||
| Posted: 04 Feb 2011 05:22 PM PST Or put another way, it's only our obligations, our promises… ha ha ha. We're too busy taking the easy way out, like deadbeats. This is actually fairly disgusting to look at for some who ostensibly benefits from this process. Imagine what it will feel like to the non financial geeks when it dawns on them just what is going on here. Oh and on another – but related – topic, get a load of commercials and large speculators? I never want to put out hyperbole, but that is a lot of goons covering gold shorts and casino dwelling crack users getting less long. Have a great weekend.  http://www.biiwii.blogspot.com http://thedailygold.com/newsletter/
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| Feb 4, 1965 De Gaulles threat to accept gold as payment for his dollar surpluses Posted: 04 Feb 2011 04:45 PM PST | ||
| How to Profit From the New Oil Boom in Texas Posted: 04 Feb 2011 09:53 AM PST David Fessler submits: It was 1894 when a crew of workers in Corsicana, Texas, were drilling for water ... only to strike oil instead. The rest, as they say, is history – and Texas’ relationship with black gold since then is legendary. And today, there’s a brand new oil boom in Texas. Located just outside Dallas, Texas, the massive Eagle Ford oil and gas shale formation is roughly 20,000 square miles in size. It stretches some 400 miles long and 50 miles wide, from the Mexican border through San Antonio and up into East Texas. It’s believed to hold one of the largest oil and gas deposits in America, with a depth between 4,000 feet and 12,000 feet. And you’d better believe that America’s heavyweight oil and gas companies are all over this. Here’s how you can claim your share of the action, too ... The Big Boys Are on Board
So says Mark Papa, Chairman and CEO of EOG Resources, Inc. (EOG), one of the biggest leaseholders in the Eagle Ford area. He’s not the only one who thinks so. Oil and gas companies – large and small – are all scrambling to Eagle Ford, shifting their exploration and drilling resources to hunt for oil while natural gas prices remain soft. Royal Dutch Shell (RDS.A), BP (BP), Statoil (STO) and China’s CNOOC (CEO) are all snapping up leasehold acres in the region. Complete Story » | ||
| U.S. Housing Priced in Silver - last 40 years Posted: 04 Feb 2011 09:34 AM PST Forget the article, the chart says it all. From Doug Casey's Research company. How to Buy a Vacation Home By Jeff Clark, BIG GOLD For most people, there are some surefire luxuries that signify wealth, a few pearls of conspicuous consumption that say you've made it. For me, it's always been a second home. My grandparents owned a vacation home in Arizona and then Florida when I was a kid, and it was an annual highlight to travel there every year. But something happened on the way to my generation's version of the American dream. Of all the people I knew that had second homes, only one acquired it through their own hard work and success. The rest inherited them. With high unemployment, shaky business conditions, desperate governments, weak real estate demand, and a suspect stock market, owning a vacation home is not even on the radar these days for most Americans. Paying their existing mortgage is the primary concern, something millions of homeowners still aren't able to do. So, how is it that I can suggest a way to buy a vacation home in these conditions? Because there are two trends in motion that I believe will continue working in our favor. And it likely won't take long for them to reach a culmination point, allowing those of us with such a goal to see it realized. The chart below will give you an eye-opening visual of my claim. First, real estate. For those of you who have a glass-half-full prognosis for the near future of real estate, I'd like to challenge an assumption you may be making; namely, that real estate prices rise in an inflationary environment. While the massive amount of quantitative easing and buying of mortgage-backed securities will likely put a floor under prices, it's the black swan of rising interest rates that could derail any significant recovery. Once rates start climbing, home-buying will become more unaffordable, keeping demand low, especially when the starting point is a million-plus hangover of vacant houses. And if mortgage rates return to the 12-14% levels we saw in the last big inflationary period of the early '80s (they peaked at 18% in 1982), real estate prices aren't going anywhere but down in real terms. They may rise in nominal dollars, but after accounting for inflation, they'll still lose ground. Your half-full glass might not get filled for a long time. Second, hard assets. The amount of money being created from nothing and thrown at our problems right now is unprecedented in history, so inflation is a when question, not an if one. This process can and will result in a devalued currency unit, and a direct beneficiary of that is rising precious metal prices. In real terms, real estate will go down, precious metals will go up. It's interesting to look at this trend with gold, but it's absolutely fascinating when you plug in the numbers for silver. Not only may silver outperform gold before this is all over, but silver is more "affordable" to the masses. Take a look at how many ounces of silver have been needed to buy a median-priced home in the U.S.  In 1970, it took 14,067 ounces of silver to buy a median-priced U.S. home ($23,000). By January 1980, it had dropped all the way to 1,603 ounces, based on silver's average price that month of $38.80. The ratio bottomed at 1,258 at silver's record high of $49.45 (London PM Fix) on January 21. (We can argue later how much of that spike was due to the Hunt Brothers hoarding of the metal, but I will point out that gold and silver peaked on the very same day, implying the same forces were influencing both). The ratio peaked in 1990 at 22,616 due to silver's average price that year of only $4.06, and was still at 18,365 in July 2006, the pinnacle of the real estate boom. However, look what happened to the ratio in the four years and three months since: it's dropped 66.1%, to 6,213. You may think the ratio won't fall further since it's already declined 69.2% in the last ten years. But I would point out that it collapsed 88.6% during the 1970s – and that was amid a 170% rise in home values! Only economists on government-laced Kool-Aid could fathom home prices rising that much over the next decade. All this adds up to one thing: the number of ounces of silver to buy a median-priced home at some point in the near future will likely fall below 2,000. And given the unrelenting abuse to fiat currencies, it's very possible it could hit a measly 1,000 ounces. Now that's affordable. The fine print, of course, is that you actually sell when the silver price is high, and that you pay the tax on the gain from another source. But I would argue that even a modest budget could come up with a few extra ounces to offset the tax bill. Think silver is too volatile to use as a savings vehicle? The price fluctuates, no doubt, but ask yourself this: if you were to put ten grand into a savings account and another ten into silver, which asset will have more purchasing power five years from now? Even with the savings account earning interest, you'd be able to purchase much more with the stash of silver when you go to spend the proceeds. Doug Casey is insistent real estate hasn't bottomed because we're on the cusp of a depression. I'm convinced the silver price won't be stopping when it hits $50. If we're right about these trends, that million-dollar vacation home you spotted on Nag's Head five years ago could be had for less than 2,000 ounces of silver. Vacation home, here I come. --- [Are you convinced your portfolio is properly positioned to benefit from the rise in precious metals? Now that China, Russia and other countries are getting ready to dump the dollar, gold and silver prices are poised to go to the moon. To learn how you can profit, click here.] Home | Research & Analysis | Product & Services | About Us Privacy Policy | Sitemap © 2011 Casey Research The Casey Research web site, Casey's Investment Alert, Casey's International Speculator, BIG GOLD, Casey's Energy Confidential, Casey's Energy Report, Casey's Energy Opportunities, The Casey Report, Casey's Extraordinary Technology, Conversations With Casey, Casey's Daily Dispatch and Ed Steer's Gold & Silver Daily are published by Casey Research, LLC. Information contained in such publications is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. 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| Posted: 04 Feb 2011 09:34 AM PST [Editor's note: You are receiving this version of The Daily Reckoning Week in Review as part of your subscription to The Daily Reckoning Australia.] Imagine if the actual length of a metre shrunk each year. One day you're 1.80 metres tall, the next you're 1.84. You would constantly get speeding tickets, even though your speedometer would tell you you're under the limit. World racing records would be broken every year. Your GPS would think you're a complete idiot for missing turn-offs. Artillerymen would overshoot the enemy. And containers wouldn't fit snugly onto ships. In short, there would be chaos. And yet, central banks spend their time trying to achieve much the same thing, only with the currency. By changing its value each year, relative to goods and services, central bankers ruin the financial plans of the people and companies in their economies. More importantly to you, inflation erodes the value of the measure you use to gauge the performance of your portfolio. And the sustainability of your household budget. It throws everything out of whack and into the arena of uncertainty. In the future to come, what seems like a profit could turn out to be a loss. A carefully planned budget could go to where dead central bankers are. (The graveyard.) The thing to remember is this change could begin to happen quickly and unexpectedly. Like say ... now. Inflation alert! "Fruit and vegetables set to rise more than 70 per cent" according to IBISWorld. What you don't know yet (unless you clicked on the link) is whether this refers to global markets or Australian supermarkets. With floods (and now storms) ravaging many food producing areas of Australia, and Federal Reserve Chairman Ben Bernanke releasing even bigger torrents of money, it's hard to tell what's what. Of course, it could be that Wal-Mart's decision to stock healthier food is causing a jump in fruit and veg prices. In that case, you can blame your grocery bill on Ms Obama, who led the Wal-Mart initiative. Each of these changes in price are completely different in nature, yet they all show up in the same way. And people react to prices. Farmers decide how much to plant based on prices. How many people go into farming depends on prices. How many people are employed in farming depends on prices. How much money is spent on farming equipment depends on prices. And it's the same in all industries across an economy. Prices are the signals that allocate resources. If food prices are increasing by 70% because of flooding, it will compensate the farmer for crops lost, which allows him to plant next year's crop. If prices rise because Wal-Mart buys more food, then farmers will know to plant more next year. So, using prices and profits, the market adjusts supply appropriately. But don't go charging into the hinterland looking for farms to buy just because prices signal profits are being made. First consider what happens when a central banker prints money and causes prices to increase. A popular misconception is that all prices in the economy will rise simultaneously. But money doesn't appear everywhere at once. It ripples through the economy, causing increases in prices to happen in specific places before being fully absorbed by the global economy. If the global reserve currency is being printed, higher prices could show up outside the nation that is home to that currency. Like, say, hypothetically speaking, in wheat prices in Egypt or chilli prices in Indonesia. New money begins its life with privileged bankers, who deal with the central banks, where it is created. The money will either flow into financial assets or loans. Loans usually finance capital spending, so capital intensive industries find favourable lending standards because there is more money to go around. This encourages them to invest in projects that seem profitable. Usually these projects involve producing the goods that have gone up in price as a result of the new money rippling through the economy. They think the increase in price is a signal of profitability. But, as the money stops rippling through the economy, prices adjust and many of the investments made by companies turn out to be unprofitable. Sticking with our example, farmers who borrowed money on favourable terms to invest in food production will learn the price of food only went up because of inflation. Now that all other prices have risen as well, farmers won't profit the way they expected. What's more, there are now many other competitors who also spotted the high prices and went into farming. Soon, the farming sector and wider economy fall into a recession. Crucially, the economy experiences a credit crunch, as it is the industries that borrowed heavily that are struck hardest. This is how a change in the money supply causes a misallocation of capital and subsequent recession. If you look at the US money supply before the Great Depression and the recent recession, you will notice that it first increases, inciting a boom, and is then followed by a bust. This is why Austrian Economists are so good at predicting recessions. They see any boom triggered by monetary policy as an unsustainable boom based on malinvestments, which will be exposed when prices adjust for the inflation. As you will have figured out, the increase in food prices mentioned in the link above is due to the flooding in Australia. At least part of the increase, that is. The price will incite investment into food and the issue will solve itself. As it would on a global scale ... absent government interference. But not everyone agrees. Columnist Ambrose Evans-Pritchard thinks it will take strong leadership to solve the global food crisis. "Can the world head off mass famine? Yes, with leadership. The regions of the former Soviet Union farm 30 million hectares less today than in the Khrushchev era, and yields are half Western levels. Wait, wasn't it "strong" leadership that gave you the Soviet Union and its famines. And wasn't it grains in particular that were in severe shortages due to attempted management of the economy? It gets better: "There are untapped hinterlands in Brazil, and in Africa where land titles and access to credit could unleash a great leap forward." If those last three words didn't make you cough up whatever you were drinking while reading the Daily Reckoning (which is probably a good time to be drinking), then you might have missed some remarkable irony. Whether it was intentional or not, Pritchard referenced Chairman Mao's economic policy, known as The Great Leap Forward. It resulted in – you guessed it – grain shortages. Yes, that's what strong leadership gets you. The very thing you are trying to prevent. And there are currently few stronger leaders than central bankers. Considering themselves to be tasked with generating an economic recovery, they have taken remarkable steps attempting to do so. But with Bernanke creating dollars at unimaginable rates, you do have to wonder where they are going. The dollars that is. We mentioned above where central bankers go. The remarkable correlation between Bernanke's QE activities and stock markets is a symptom of the effects new money has on financial markets. To be honest, it has turned the American stock market into a complete farce. But the ASX seems impervious to the US's lead lately. Perhaps because the AUD/USD exchange rate is absorbing the move instead of passing it on to the ASX. But not all the money is going into financial assets. As you may know, banks aren't lending much recently, except to the government. By directing hoards of new money into Treasuries and financial markets, but not the real economy, the banks are still creating bubbles. Not unlike the one in housing. The misallocation of capital, then, can be found in stock markets, bond markets and especially government debt. This has allowed the massive government deficits of the world to be financed. Not only is government spending inherently wasteful (or the private sector would be taking its place), but the amount of spending that is supported by newly created money is unsustainable. At some point, the public sectors of the world will have a rude awakening, just like the building sector had in 2007 and 2008. Many will go insolvent. (Rumour has it that the EU, IMF and ECB have reached agreement on Greece's restructuring.) Some governments will attempt to print their way out of insolvency. Either way, bond markets will be routed. So you can be sure to see government spending go down. Unless some authoritarian form of government emerges. One where choices are limited to the bad and the really bad. And you only get to choose every couple of years. Oh wait, we already have that. Justin Jefferson at economics.org.au illustrates the absurdity of our governmental system with an excellent metaphor. In the world of Fast Food Democracy you can only choose one fast food chain every three years. During the three, you have to stick to that one only. Of course, you could always choose to eat something else, right? Sadly, the Fast Food Democracy forbids it. Anyone caught growing vegetables gets fined. If you can't pay your fine, you go to gaol. Sound fun? If you don't like the idea, what does that make you? Anti-democratic of course. Tut tut, you rebel. Of course, the fast food chains that never get started, because they aren't allowed to compete, don't get a mention. So not only is your choice of fast food limited during the election cycle, you don't get much of a choice when election time comes up. Most people realise that a democratic system of fast food wouldn't be very satisfactory. Yet we apply the same system to our government. Politicians only let you choose every few years. And you don't choose policies, you choose people. Once you have chosen them, who knows what they will "serve" up. The solution to both problems is of course to introduce competition. Let the people choose every day. No, every meal. And, all importantly, let them choose for themselves only. That's what they do with food, so why not do it with everything else? Until next week, Nickolai Hubble. About the author: having recently escaped from academia, Nick decided to drop his tights (the required attire of a trapeze artist) and joined Port Phillip Publishing. Instead of telling everyone about the Daily Reckoning, he now spends his time writing for the weekend edition. Similar Posts: | ||
| The Government-Gold Screw Job of 1933 Posted: 04 Feb 2011 09:00 AM PST Art Arbutine of Belleaircoins.com has a nice pamphlet titled "Everything you wanted to know about buying and selling precious metals, and then some!!!!!" I have to admit that I was certainly intrigued by the five exclamation points, with the result that my Super Mogambo Senses (SMS) switched to high-alert status, looking for signs of danger, at the sight of them. And fortuitously so, as I soon found dangerous things! Firstly, he writes of Roosevelt in 1933 infamously ordering that everyone turn in their gold at the nearest bank and receive fiat currency in exchange. Even then, it was a government Big Screw Job (BSJ) because "At the time," he writes, "a $20 gold coin contained over $20.80 worth of gold, but the citizens got only a $20 bill." Re-read the previous paragraph, and see if you detect a Big Screw Job (BSJ) in getting a $20 bill in exchange for $20.80 in gold, too. Being a paranoid, conspiracy-nut, lunatic whacko like I am, I contribute to the genre by declaring that Franklin Delano Roosevelt was a cripple who was confined to a wheelchair, and who was so angry about his infirmity that he said, "I may be crippled and in this wheelchair, but I can still give an instant 3.9% Big Screw Job (BSJ) to an entire country by forcing the citizens to accept a lousy $20 bill for $20.80 in gold! Up yours, Americans, walking around and laughing at cripples like me! Hahaha!" And, I reveal for the first time, Eleanor was right behind him, yelling, "Give it to 'em good and hard, Frankie, and maybe we can get Congress to give us some of the money to fix my huge teeth!" While that story is perhaps apocryphal, especially seeing that I just made it up, there is no question that the BSJ continued, as next, Mr. Arbutine writes, "Many of the big banking institutions shipped those $20 gold coins to Switzerland and other European banks where they received the full amount," giving the banks an instant 3.9% gain! Next, as part of the next Big Screw Job (BSJ), "By another executive order seven months later (after all the gold was confiscated) the dollar was revalued in terms of gold, making a $20 gold coin worth $35 in paper dollars," in effect handing Swiss and "other European" banks a nice, instant 68% gain! (($35 – $20.80) / $20.80)! Instantly! So, I figure something like that is "in the works" since there is nothing that can be done to save the economy, even by robbing the people with taxes, and/or killing enough old people and poor people so that Social Security, Medicare, Medicaid and all the welfare programs cost less, and/or constantly trying to print enough money to spend our way out of debt by adding to the debt. Most likely, it will be a little of all three, and more. And under any scenario you can name, including these three, gold, silver and oil will go up mightily in price, not only to match the roaring inflation caused by the Federal Reserve (and the other central banks around the world) creating so staggeringly much new money, but almost certainly with a huge premium because the future is so bleak! And so if you are NOT buying gold, silver and oil, then I gotta ask, "What in the hell do you want out of an investment besides virtually guaranteed huge gains and zero effort? I mean, you must be very hard to please, because, whee! This investing stuff is easy!" The Mogambo Guru The Government-Gold Screw Job of 1933 originally appeared in the Daily Reckoning. The Daily Reckoning recently published an article looking at the impact of quantitative easing. | ||
| Friday Video Day $5000 Gold, $500 Silver, just released Posted: 04 Feb 2011 08:48 AM PST I will have a full report on Saturday. Here's two of the latest from NIA just out. Enjoy. | ||
| David Skarica: "Bond Vigilantes" Ultimately Good for Gold Posted: 04 Feb 2011 08:39 AM PST
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| Posted: 04 Feb 2011 08:25 AM PST | ||
| Newmont Buys Out Fronteer; Whats Next in Gold Mining Sector? Posted: 04 Feb 2011 08:12 AM PST
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| Posted: 04 Feb 2011 08:11 AM PST Marc Chandler submits: Overshadowed by developments in the US and Europe, the Japanese yen has been largely sidelined and its movement more a function of the other side of the trade, like the euro, dollar and even the Australian dollar. The dollar appears poised to trade higher, with a move back toward the upper end of its Q4 range in the JPY84 area. This will require a change of drivers. Japanese investors are not the prodigious overseas investors that they were from mid-May through mid-Nov last year. In that period, Japanese investors were putting an average of JPY886 bln (~$11 bln) a week overseas. Since then Japanese investors have been repatriating an average of about JPY63 bln a week. As the fiscal year end approaches at the end of Complete Story » | ||
| Must-see: Jim Rogers slams CNBC hosts on soaring commodity prices Posted: 04 Feb 2011 07:55 AM PST From Zero Hedge: Jim Rogers, in his latest interview, cuts right to the chase: "I don't own many equities, because I don't know what is going to happen in the world economy. I expect more currency turmoil, more social unrest, more governments collapsing. So I am investing in currencies and commodities rather than stocks." Pretty much like everyone else, as we have been suggesting for quite a while. Rogers snaps at the trademark CNBC question of what he would be investing in: "I have been explaining to everybody on CNBC for a year and half or two now that food prices are going to go through the roof, they're going to explode. We have serious shortage of everything developing, including shortages of farmers..." ... Not surprisingly, Rogers see oil at $150, and the exchange between Rogers and some CNBC guy discussing the role of speculators (it is all the evil speculators' fault, never the Chairsaint) is worth watching the clip alone. Rogers' response to CNBC's desperate attempt to get him to list a stock or two for the lemmings to buy into, the response is priceless... Read full article (with video)... More from Jim Rogers: Jim Rogers: The only assets you must own today Jim Rogers: The U.S. should be worried about this Jim Rogers: Silver is one of the few safe refuges left | ||
| How to profit from the global resource war Posted: 04 Feb 2011 07:24 AM PST From Forbes: You must, must participate in the unstoppable trend in prices for food, energy, industrial metals, and precious metals. Otherwise, you will suffer sitting on the sidelines. So preaches many soothsayers ,including most prominently my friend Stephen Leeb, Research Chairman of Leeb Group,who has been pretty hot on the spot lately in his common stock recommendations. This may well be the most compelling theme in global investing... Read full article... More on commodities: Jim Rogers: Commodities will not fail you This is the fuse that could set off a global food crisis Forget gold... One of America's favorite commodities is headed to all-time highs | ||
| Gold Seeker Weekly Wrap-Up: Gold Gains the first Week in Five and Silver Soars Over 4% higher Posted: 04 Feb 2011 07:23 AM PST Gold fell as much as $6.10 to $1345.90 just after the jobs report was released before it rallied to see a $5.84 gain at $1357.84 by midmorning, but it then fell to a new session low of $1345.35 by midday and ended with a loss of 0.33%. Silver fell to $28.727 in Asia before it rallied to as high as $29.285 in New York and then also fell back off in late trade, but it still ended with a gain of 0.97%. | ||
| Short-Term Buying Spree in Gold Posted: 04 Feb 2011 07:05 AM PST
This essay is based on the Premium Update posted on February 4th, 2011 Political and social unrest in the Middle East was the most discussed topic during the week. Restlessness and riots could inflate food prices in the region and worsen the economic balance further. As a result, equity, currency and commodity markets have experienced fluctuations. The political disturbances have impacted the crude oil trade significantly as Egypt is a crucial link for oil and gas headed to Europe, Asia and the United States. There are large black swans paddling in the Middle East pond that could have a significant effect on precious metals, oil and stock markets. In the short-term Euro Index chart this week, we see a number of bearish signals, which will likely lead to a bullish sentiment for the USD Index as will be seen on the following chart. Here, we have originally seen that perhaps the right shoulder of the bearish head-and-shoulders formation has been invalidated at the beginning of this week. However, the price moved quickly below the rising dashed line, thus invalidating the insignificant breakout. Consequently, the head-and-shoulders formation is still forming. Our USD Index chart shows the close proximity at present to the long-term support level. This level has actually been touched and the index has once again begun to move higher. Based on this factor alone, a bounce would be likely, and we have another strong factor in favor of higher USD values – the cyclical turning points. The local bottom at the cyclical turning point is not likely to have any negative impact on gold, silver and mining stocks; there could, in fact, be a positive impact. A closer look at the above chart shows that at least a local bottom has been reached precisely as indicated earlier – at the cyclical turning point. Please note that the RSI indicator is also suggesting higher values of the index in the short run, as it reached the 30 level, which we view as a buy signal. The technical situation in these two currency indices is particularly interesting, as the USD Index is likely to rally, which would cause the head-and-shoulders formation in euro to be completed. That would be likely cause a decline in Euro and further upswings in the USD Index. We featured the SP Gold Bottom Indicator on as another measure for the technical analysis over a week ago, when we wrote the following: Previously we have seen it at the end of July 2010, right before the over-$200 rally, and before that we have seen it on May 21st, 2010 (another local bottom) Dec 9th, 2009 (insignificant bottom, however prices still moved briefly above it before the decline was over), and April 9th, 2009 (almost precisely at the bottom). As you may see, we don't get this signal very often, but when we do, it's worth taking it into account. The implications here are – of course – bullish. The reason we mention this indicator today is that this signal means gain not only in the short run. Please take a look below for details (the blue line in the middle of the chart): Taking other factors into account it is doubtful that the rally will be a straight line up, but the point is that this signal surely supports a rally from the current levels. Thank you for reading. Have a great and profitable week! P. Radomski Sunshine Profits provides professional support for precious metals Investors and Traders. All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mr. Radomski and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above belong to Mr. Radomski or respective associates and are neither an offer nor a recommendation to purchase or sell securities. Mr. Radomski is not a Registered Securities Advisor. Mr. Radomski does not recommend services, products, business or investment in any company mentioned in any of his essays or reports. Materials published above have been prepared for your private use and their sole purpose is to educate readers about various investments. By reading Mr. Radomski's essays or reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these essays or reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise that you consult a certified investment advisor and we encourage you to do your own research before making any investment decision. Mr. Radomski, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
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| COT Silver Report - February 4, 2011 Posted: 04 Feb 2011 06:34 AM PST | ||
| Fed can keep most gold secrets but must yield one, judge rules Posted: 04 Feb 2011 03:14 AM PST | ||
| Gold and Silvers Daily Review for February 4th, 2011 Posted: 03 Feb 2011 09:00 PM PST | ||
| Egypt is Just the Beginning for Gold’s Next Move Posted: 03 Feb 2011 09:00 PM PST
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| China to raise gold, silver reserves in 2011 Posted: 03 Feb 2011 08:30 PM PST SLV has another big silver withdrawal...and another big chunk of silver leaves the Comex as well. Newmont pays 37% premium to acquire Fronteer Gold. Go global, before it's too late...and much more. ¤ Yesterday in Gold and SilverThe gold price declined about eight bucks in fits and starts all through Far East and most of London trading yesterday. It then caught a bid at the Comex open...rising ten bucks in less than an hour...and then got sold off to its low of the day around 10:15 a.m. Eastern time...which was probably the London p.m. gold fix. From that spike low, gold rose about twelve bucks over the next hour and fourty-five minutes. Then, only minutes before noon in New York, gold spiked up over fifteen dollars in about ten minutes before basically trading sideways for the rest of the New York session. The high of the day was $1,356.60 spot...a price that gold bounced off of several times, but never penetrated.
Reader Scott Pluschau sent me the 10-minute bar chart for gold volume in New York yesterday. Needless to say, the volume spike [23,139 contracts] that went with the big noon price jump, stands out like a sore thumb. Scott said that "this is the most volume I have seen in a ten minute bar in a while. I don't even think that the first ten minutes of the Comex open has seen that many contracts in the past month." It's hard to tell whether this was short covering, or a brand new buyer showing up on the scene. Maybe the open interest numbers will shed some light on this when the CME posts them later this a.m.
Silver's price pattern was very similar to gold's. After the 10:15 a.m. New York low, silver went on a tear as well...with the high tick around $29.02 spot coming around 3:30 p.m. Eastern during electronic trading. The price backed off a few pennies going into the close, but finished close to its high of the day. Scott didn't send the volume chart for silver, but one can assume that the volume pattern would look similar. Once again the final open interest numbers will be of great interest...at least to Ted and myself.
The dollar was flat at the beginning of Far East trading on Thursday morning. It re-tested the 77.00 cent level around 8:00 a.m. in London...and then began a rally that went vertical at the Comex open at 8:20 a.m. Eastern. The dollar topped out minutes after 12:00 noon in New York...and then traded sideways for the rest of the day.
It's been a very long while since the dollar and the gold price rose together. We had a very long stretch of that early last year. Let's hope that this is the beginning of a repeat performance. The HUI followed the precious metal prices like a shadow yesterday...with the low of the day coming at the London p.m. gold fix at 10:15 a.m. Eastern...the only time the gold stocks were in negative territory on Thursday. From that low, the stocks added about 3%...with the interim high coming after the big price spike in New York at noon local time. From there, the gold stocks gained about another percent going into the close of the equity markets. When all was said and done, the HUI was up 3.09% from Wednesday's close. Most, but not all, silver stocks did appreciably better than that.
The strange thing about this graph, is that there was no spike in the share prices when gold and silver blasted to their highs of the day at lunchtime in New York. All there was, was a gentle rise from 10:15 a.m. until the secondary top at noon. It's almost like this price jump was not a surprise for the people who were buying shares after the low. It may be nothing...but it seemed like a strange reaction [or lack of it] for such a big spike in the price. The CME Delivery Report for Thursday showed that 418 gold and 3 silver contracts were posted for delivery on Monday. In gold, the big issuer was the Bank of Nova Scotia...and the big stopper was HSBC USA, with Goldman Sachs a very distant second. The action is worth a look...and the link is here. For a change, the GLD ETF showed an increase yesterday. This time they added a smallish 68,301 troy ounces. It was an entirely different story over at the SLV ETF...as they had a big withdrawal of 976,714 ounces. Someone needed a chunk of silver in a hurry. The U.S. Mint had no sales report again yesterday. The frantic activity continues over at the Comex-approved depositories...as more silver got shipped out of there on Wednesday. They reported receiving 7,046 troy ounces...but ended up shipping out 674,414 ounces of the stuff. It's been quite a number of years since the Comex's silver inventory is as low as it is now. As of their Wednesday report, they held 102,926,720 troy ounces...and almost all of it is very tightly held...and only for sale at far higher prices...if at all. The link to yesterday's delivery action is here. I'm delighted to report that I don't have a lot of reading material for you today. But I'm saving a lot for my Saturday column because I have some rather large reads that I don't wish to post until I feel that you might have time to give them the attention they deserve.
¤ Critical ReadsSubscribeMadoff Trustee Finds JPM Was Complicit in Ponzi FraudMy first story today is from Washington state reader S.A. It's a posting over at zerohedge.com that's headlined "Madoff Trustee Finds JPM Was Complicit in Ponzi Fraud" [Why am I not surprised! They can add this lawsuit to the 25+ they have against them for rigging the gold and silver prices as well. - Ed] It's not a long read...but very much worth your while. The link is here.  JPMorgan 'ignored Bernard Madoff red flags'The next story is exactly the same as the first one...but this one was filed in The Telegraph in London very late last night. The headline here reads JPMorgan 'ignored Bernard Madoff red flags': One of JP Morgan Chase's London operations ignored a series of red flags over fraudster Bernard Madoff, according to a series of allegations made against the bank in a lawsuit that was unsealed in New York on Thursday. It's only three paragraphs...and the link is here.  The Real Reason for Rising Commodity Prices ECB president Jean-Claude Trichet's rate retreat on commodity spikeWhile we're talking about commodity prices, here's a piece from The Telegraph that was also posted last night...and sent to me by reader Roy Stephens. It's an Ambrose Evans-Pritchard offering headlined "ECB president Jean-Claude Trichet's rate retreat on commodity spike". The European Central Bank (ECB) has taken a strategic gamble that the current surge in food and commodity prices is not a repeat of the inflation virus of the 1970s and will subside without the need for a monetary squeeze. If this isn't a classic case of 'whistling past the graveyard'...I don't know what is. The link is here.  Senate votes to repeal 1099 provisionHere's a story that I've been waiting patiently for, for quite some time now. Congress is one step closer to repealing the IRS 1099 reporting requirement that small-business owners were finding such a burdensome part of health care reform. Now we just have to wait and see what the house is going to do with it. The headline of the GATA release reads "Senate votes to repeal 1099 provision"...and the link is here.  Newmont pays 37% premium to acquire Fronteer GoldMy first gold related story today is a GATA release that was posted yesterday morning. Chris Powell's headline reads "Newmont pays 37% premium to acquire Fronteer Gold". The cash and stock transaction -- the latest in a string of deals targeting Canadian miners -- adds 4.2 million ounces of gold resource to the portfolio of the world's second-largest gold producer. This short read is well worth you time...and the link is here.  Gold Mining Acquisitions to Continue in 2011 & 2012Eric King over at King World News posted a blog that will certainly be of interest after reading the previous story about the Newmont buyout of Fronteer. His blog is headlined "Gold Mining Acquisitions to Continue in 2011 & 2012". It, too, is worth the read...and the link is here.  China to raise gold, silver reserves in 2011Casey Research's BIG GOLD editor, Jeff Clark, sent me the followi | ||
| Can the US return to a Gold Standard ? (Alan Greenspan 1981) Posted: 03 Feb 2011 03:00 PM PST |
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