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- Silver Train Is A Coming Are You Onboard
- Goldcorp: Jump in Cash Flow and Earnings Expected in Q4 Report
- TomTom: A Turnaround Telematics Market Stock
- Unrest in Libya Boosts Gold and Silver Prices
- Silver Default Looms?!
- Will Gold Give In to Stock Market Rally?
- The Gold Trade Nobody Wants to Talk About
- John Paulson's 20 Largest Holdings and Recent Performance
- Fractal Analysis Suggests Silver to Reach $52 - $56 by May - June 2011
- New Discovery by Extorre in Santa Cruz Province, Argentina
- A striking divergence in commodities you need to watch
- $32.50 Silver, Blythe has fangs, dont get biten
- View From the Turret: Shifting Conditions
- Death toll in Yemen mounts as police and protesters clash
- Meet The Objects Tunisia's Ben Ali Did Not Have Time To Steal
- Paper Silver and Gold markets Are "Nonsense" - John Hathaway
- Turk - Silver Backwardation Now “Unprecedented 73 Cents”
- Germany must choose EMU fusion or fission
- Time to Dump Stocks for Gold
- Ben Subletts Lost Gold Mine
- Silver Jumps 4.7% as Gold Unwinds New Years Drop, US Dollar Misses "Safe Haven Bid"
- Rivers of Blood
- Gas is the New Oil
- I guess James got his point across to Blythe
- Goldrunner: Fractal Analysis Suggests Silver to Reach $52 – $56 by May – June 2011
- Silver Breaks Out, Paper Market is Nonsense
- Growing Industrial Demand Buoys Silver Outlook
- Silver Poll Results: How high will silver reach in 2011?
- COMEX Commercials Nowhere Near Record Short Positions in Gold, Silver
- This past week in gold
- The Rally in Gold and Silver is Not Over Yet
- “Gold: Book Profits As Volume Disintegrates” – Morris Hubbartt
- Gold Drives Above $1,400, Silver Nears $34
- Confessions of a ‘Conservative’ Investor
- Silver Investing Hits ‘Irrational Exuberance’ as Price Swings 5.4%
- Imported Inflation Hits US Consumer Prices
- When Money Dies
- The perfect silver theme song !
- The BIS Recognizes the Problems With the US Dollar…Finally
- Is it getting closer and closer to a systemic commercial physical failure?
- Is London out of physical silver?
- Libyan Soldiers Executed for not killing protesters, silver $34
| Silver Train Is A Coming Are You Onboard Posted: 22 Feb 2011 02:51 AM PST The Silver Train. Are you onboard? Just about six weeks ago, at the January highs for Silver, the average daily movement for Silver was about 50 cents a day. What is it now? It's 50 cents an hour! I spoke yesterday about the new $30 to $40 Silver "Range Of Play". This morning you have approx. two dollars an ounce of visible weakness on the chart, in the range of play, to buy into. My suggestion: Do it now! | ||
| Goldcorp: Jump in Cash Flow and Earnings Expected in Q4 Report Posted: 22 Feb 2011 02:16 AM PST David Urban submits: Goldcorp (GG) was founded back in 1954 as a vehicle to allow investors to invest in a managed portfolio of gold-related investments. Over the years the company's focus has changed from being a managed portfolio to one of the largest gold mining companies in the world wit Complete Story » | ||
| TomTom: A Turnaround Telematics Market Stock Posted: 22 Feb 2011 02:02 AM PST Dutch Trader submits: In my recent article I recommended TomTom (TMOAF.PK), and I am still standing firm. The gold standard for telematics success is daily relevance. One of the greatest challenges for companies introducing telematics systems and solutions is to bring daily relevance to their offerings. Traffic data is something that is relevant five days a week to a substantial portion of the working public. Companies that get traffic data right have a huge competitive advantage not only in providing traffic data, but also for providing a wide range of data feeds and services Complete Story » | ||
| Unrest in Libya Boosts Gold and Silver Prices Posted: 22 Feb 2011 01:44 AM PST As unrest escalated yesterday in Libya, the pressure was felt in the oil world with WTI up $2.17 to $97.50 and Brent Crude up $2.26 to $108.00. Gold prices gained $17.50 to close in London at $1406.60/oz, with silver prices adding a huge $1.25 to close at $33.91. Libya is one of the world's major oil exporters, so the concern about the outcome of the current civil unrest is most certainly warranted. As the news comes in, a number of oil companies operating in Libya are starting to evacuate some of their staff as a safety precaution. We can only assume that essential services will be Complete Story » | ||
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| Will Gold Give In to Stock Market Rally? Posted: 22 Feb 2011 01:12 AM PST seekinGold submits: The yellow metal is on an uptrend move, supported mainly by social unrest in the Middle East and fear of worldwide inflation. In the past weeks, the democracy domino brought protests in Egypt, Tunisia, Bahrain, Yemen, Iran, and Libya, grabbing world attention and news headlines. The increase in food prices will further agitate the already angry protestors. To distract the world from beating its own people, Iran takes warships to the Suez Canal to get on Israel's nerves and affect its confidence in controlling the waterway. Israel's ally is gone; time to bind with the Egyptian military in power. The political uncertainty is bullish for precious metals. In the near future, gold is likely to make more gains supported by the momentum behind the rally that started on Jan. 28. Silver is above $30; you may think it is overbought, but renowned investor Jim Rogers says, "The metal is 40% Complete Story » | ||
| The Gold Trade Nobody Wants to Talk About Posted: 22 Feb 2011 01:08 AM PST Follow My Alpha submits: Gold is one of the oldest and most interesting asset classes due to the variables that affect its price. The pricing variables range from the economic laws of supply & demand to the real belief by some people that western governments could or will collapse in the future. To be sure no one person knows with one hundred Complete Story » | ||
| John Paulson's 20 Largest Holdings and Recent Performance Posted: 22 Feb 2011 12:57 AM PST Insider Monkey submits: John Paulson is one of the world's most famous hedge fund managers, earning more than $5 Billion in 2010, including fees and capital gains. Paulson got his BA from New York University's College of Business and Public Administration and his MBA from Harvard Business School. In 2007, during the real estate bubble, he shorted subprime mortgages and provided enormous abnormal returns. Paulson's 2010 profit was one of the greatest returns in investment history, and one of the reasons for his fame. In 2010 Paulson won Absolute Return's "Best Long-term Performance (over five years)" award for his Advantage Fund. Paulson's total assets under management are about $36 Billion, higher than his AUM in 2010, which was $32.1 Billion. Approximately, $29.3 Billion of his clients' money is invested in U.S. securities. At the end of September, this number was $23 Billion. Currently he has 88 different stocks in his portfolio. Here are Complete Story » | ||
| Fractal Analysis Suggests Silver to Reach $52 - $56 by May - June 2011 Posted: 22 Feb 2011 12:50 AM PST Dollar Inflation remains the driver of the pricing environment for almost everything denominated in U.S. Dollars as long as the Fed continues to monetize debt. The debt monetization creates Dollar Inflation that results in Dollar Devaluation. As the Fed ramps up the QE II that they have announced will end in June, I expect Gold, Silver, and the PM stocks to aggressively rise. | ||
| New Discovery by Extorre in Santa Cruz Province, Argentina Posted: 22 Feb 2011 12:26 AM PST Extorre Gold Mines Limited (TSX:XG)(Frankfurt:E1R)(Pinksheets:EXGMF) ("Extorre" or the "Company") is pleased to announce the discovery drill results from reconnaissance drilling on the Falcon property, located 80 kilometres to the northwest of Cerro Moro, and 6 kilometres to the northeast of Mariana Resources' Dos Calandrias project. Four of five initial holes have intercepted broad zones of gold - silver mineralization. | ||
| A striking divergence in commodities you need to watch Posted: 22 Feb 2011 12:15 AM PST From Pragmatic Capitalism: One distinct aspect of tonight's market action is the divergence between copper and oil prices. As oil surges almost 8% highe,r copper is dropping 1%. This is a clear sign that the rise in oil prices is causing fears of a global economic slow-down. The risk of turmoil in the Middle East has the potential to have a very real impact on the global economy... Read full article (with chart)... More on commodities: Why silver will beat gold now These commodities are now a one-way bet This little-known "con" could unleash a silver buying frenzy | ||
| $32.50 Silver, Blythe has fangs, dont get biten Posted: 21 Feb 2011 11:55 PM PST Okay, late last night, I said $32.50 would be a level, if I were in Blythe's shoes, that I would see it at. And we did just that. LARGE red candles, as I predicted, like I did it myself. I've been doing this for a while. I'll will take that anyday after 5% run. I'm hearing panic on the desk, and when there is panic, Blythe never used to sleep. With less sleep, she gets fuckin cranky, like | ||
| View From the Turret: Shifting Conditions Posted: 21 Feb 2011 11:05 PM PST
US equity markets were closed for President's Day on Monday, but that didn't stop globex traders from handicapping new pockets of social unrest in the Middle East. Libyans have taken to the street – and faced brutal violence – in an effort to overthrow Gadhafi's regime. The renewed violence and uncertainty is once again shifting the "risk-on, risk-off" market sentiment. Futures on oil and gold moved sharply higher on Monday with April crude oil futures hitting $96.60 per barrel, and gold futures back above $1400 per ounce. Heightened levels of fear will certainly shape the trading environment this week. Up to this point, US markets could largely be categorized as optimistic with a hint of complacency. It's difficult to know if the Middle East unrest will be enough of a catalyst to send the market significantly lower. But considering the fact that the Middle East seems to be unwiding rather than blowing over, the risk is significant. In the last few weeks, the majority of our profits have been booked on the bullish side. Our gross exposure has been trimmed significantly as risks are certainly in place. But at the same time, we have found opportunity to ride the trends in a few select long positions with tight risk points. Stepping back into the flow this week, it's likely that a number of our pending short positions will hit their trigger points. As is the case with most of our trades, price action has to confirm before our bearish positions are executed. With any negative follow through this week, we could quickly shift the balance of our exposure and begin generating profits as prices drop. Below, are a few of the key setups we're tracking this week… ~~~~~~ Oil Sands – Stability and Proximity The potential for disruption of oil supplies from the Middle East has crude prices hitting new recovery highs. While the unrest causes concern for investors of large-cap oil developers with significant exposure in less politically stable areas, the environment is great for companies with significant exposure to Canadian oil sands. As noted in our Strategic Intelligence Report, Canadian oil sands rival Saudi Arabia in terms of reserve magnitude, and higher oil prices make the process of mining these sands more economically competitive. More importantly, Canada enjoys one of the most stable political environments, and the US is directly tied in to Canadian production through a robust series of pipelines, refineries, and storage facilities In late January, we took a long position in Canadian Natural Resources (CNQ). From the Mercenary Live Feed, on 1/31:
Two weeks later, Mercenary portfolios took half profits off the table as CNQ broke to a new recovery high. This week, the remaining shares should continue to see additional profits as alternative sources of oil become more valuable in comparison to supplies that face political risk.
In addition to CNQ, Gulfport Energy Corp (GPOR) is another name with significant exposure to oil sands. GPOR stands to benefit not only from higher oil prices, but also from a ramp in production as oil sands projects are moving from development stages to full-on production. As of the last report, the company has 32% of its production for this year hedged at roughly $87.00 per barrel. But that still leaves more than two-thirds of this year's production free to trade at premium oil prices. I imagine management will also use today's prices to hedge additional exposure at even higher levels. After spiking higher in late January, the stock has consolidated a bit – giving bullish traders a minor inflection point between $26 and $27 on the chart. If GPOR breaks to a new all-time high this week, it would likely catch the attention of major energy traders. With a market cap of $1.2 billion, there is enough liquidity for large funds to justify a significant position. But at the same time, the firm is small enough that a large inflow of capital could continue to push the stock sharply higher over the next several months.
Emerging Markets: Back to Risk-Off On the bearish side of the ledger, we have been tracking a number of emerging market ETFs that will be vulnerable if commodity prices continue to climb. The Guggenhiem China Small Cap (HAO) topped out in November, and has been developing a very bearish pattern. A series of continual lower highs and lower lows has attracted trend-follower traders. If the Chinese economy faces significantly higher energy prices, small-cap companies will have a hard time hedging out these costs. Inflation is already a significant problem for the global growth champion, and the addition of an oil shock to already out of control food and housing costs could be very tough to deal with. Shorting any weakness in HAO looks like an attractive trade, because we can use a tight risk point above last week's high. If that resistance area is broken, we will be out of the trade without too much damage. However, if HAO reconfirms its bearish trend this week, the profit potential is much higher than the capital we will have at risk.
In addition to a couple of China ETFs, we also have pending shorts set up for Malaysia and Mexico. As traders begin to migrate back to the "risk-off" side, these growth areas will likely see capital outflows and could breach support levels. The potential short trades could pick up momentum quickly as investors have been chasing beta – embracing volatility in an effort to keep up with rising markets. If higher levels of risk forces fund managers to take capital out of volatile emerging market positions, these areas could be hit hard – and very quickly.  Solar Offers a Mixed Perspective It will be very interesting to see how solar stocks react to heightened Middle East tensions… One one hand, the industry is an obvious alternative to traditional fossil fuel energy sources. As oil prices climb, solar energy becomes more competitive – leading to more long-term investment in the sector. But the solar industry has been traditionally viewed as a growth industry – vulnerable to economic shocks. Typically, a broad market correction will hit solar names, even if long-term profit dynamics still look attractive. We have a number of profitable solar positions in play, with tightened risk points and half profits already taken in some instances. Today's action will be a key test as to whether these names can hold up under difficult conditions. If the industry remains strong, we will likely be adding more exposure, with the opportunity to add vertical exposure to names already on the books, or horizontal exposure into additional candidates. JinkoSolar Holdings (JKS) could be particularly interesting as the Chinese manufacturer is trading at the top of a consolidation pattern. A breakout above last-week's high would be a strong move considering the environment. Taking a long position would also be helpful as a counterbalance to our pending China ETF shorts in play. The stock is currently trading at about six times earnings – quite a low price for a company that has been showing significant earnings and sales growth over the last four quarters. JKS has access to plenty of capital to fund growth, and its easy to make an argument for a much higher stock price in the context of a bullish energy market.
LDK Solar (LDK) is on the cusp of breaking to a new recovery high after gapping higher in early January. The stock has a single digit earnings multiple which could catch the attention of value investors looking for energy exposure. At the same time, growth investors have plenty of rationale for picking up a position, considering year-over-year revenue growth of 148% and 140% in the last two quarters. On a daily chart, the stock may look a bit extended, but the weekly pattern shows a much longer basing period that could lead to a much larger breakout this year. This is a trade that would require a bit more room in terms of a risk envelope, but over a period of several weeks, we could see the value and growth metrics converge and lead to great risk-adjusted returns.
Goldman in Transition? Goldman Sachs (GS) has been a dominant force, due to strong proprietary trading and an extremely profitable investment banking platform (oh, and a few billion from Uncle Sam too…) But is the global economic uncertainty catching up to the industry titan? While other major investment banks are hitting new recovery highs, GS has been hitting overhead resistance. A recent high-profile article in Bloomberg Magazine discussed how the company is falling behind its competitors when it comes to investment management for wealthy clients. This kind of publicity can have a significant effect on customer confidence and could actually cause the issue to become worse as clients jump-ship. We're considering a short position if the stock breaks below the 20 and 50 EMA, and this week's turbulence could be just the right catalyst to send the stock below key support areas.
Despite the short duration, this week should have plenty of action and profit potential. Jack and I are shaking off the sore ski / snowboard muscles and we're ready to carve up some new profits as the conditions continue to shift. Trade 'em well! | ||
| Death toll in Yemen mounts as police and protesters clash Posted: 21 Feb 2011 08:00 PM PST Image:  Besides the price activity in both silver and gold yesterday, the other reason I'm doing a report today is the large number of stories that I have to post...and I don't want to drop three days worth on you all at once...as two days worth is bad enough. | ||
| Meet The Objects Tunisia's Ben Ali Did Not Have Time To Steal Posted: 21 Feb 2011 08:00 PM PST Image:  As the Al Arabiya News Channel reported, "Tunisia's ousted president stashed diamonds, gold and wads of cash in secret spots around his palace in the impoverished country's capital, according to video shown by state television on Saturday." The story is English...and the video clip is in Arabic. But it doesn't matter, as 'a picture is worth a 1,000 words' in any language. I thank Washington state reader S.A. for sharing this zerohedge.com story. | ||
| Paper Silver and Gold markets Are "Nonsense" - John Hathaway Posted: 21 Feb 2011 08:00 PM PST Mass withdrawals from South Korean banks continue. Blood runs in the street of Bahrain. Oil shock fears as Libya erupts...and much more. ¤ Yesterday in Gold and SilverWell, it appeared that the precious metals markets were open for business in New York yesterday. And if not the Comex, then certainly the Globex system was up and running after the London close. Volume was very light, but that was almost beside the point after looking at some of the gains during Monday's trading day...especially in silver. The price of gold climbed slowly but unsteadily for most of the Far East and London trading day...with the high tick [around $1,408 spot] coming shortly after high noon in New York. It closed the Comex trading session less than two dollars below that high. The low of the day was at the open of Far East trading during their Monday morning.
Except for the odd surge here and there, the silver price climbed slowly but steadily all during the Monday trading session...through the Far East, London and the U.S. Silver briefly climbed to $34.03 spot on Monday just before the markets closed in New York. The low was at the Far East open...which was basically Friday's closing price of $32.66 spot.
Although the world's reserve currency traded yesterday...with the U.S. closed for the day, the dollar didn't do much...as the graph below indicates.
With the equity markets closed in both Canada and the U.S. yesterday, there's not a thing to report on the gold and silver equities front. But if Monday's silver gains make it through to the New York open tomorrow...and maybe even add to them in early Tuesday trading...it would be a good bet that all p.m. shares will do well. But the silver stocks will certainly outshine the gold stocks once again. With America shut tight, there was no report from the CME, the gold and silver ETFs, the U.S. Mint...nor the Comex-approved depositories. Reader 'Silver Steve' sent me this very interesting chart that I thought was worth sharing. It's the 60-minute chart for silver for the first three weeks of February trading [plus yesterday's holiday-shortened session]. Note the high volumes during the New York trading sessions. It's almost as if what happens elsewhere in the world doesn't matter when New York is open which...according to silver analyst Ted Butler...it doesn't.
¤ Critical ReadsSubscribeDeath toll in Yemen mounts as police and protesters clashBesides the price activity in both silver and gold yesterday, the other reason I'm doing a report today is the large number of stories that I have to post...and I don't want to drop three days worth on you all at once...as two days worth is bad enough. Reader Roy Stephens leads the parade today with this piece out of last Friday's france24.com website. A hand-grenade attack killed two anti-regime protesters and left 27 injured in the Yemeni city of Taez on Friday, while deadly clashes broke out in Aden, witnesses said. There's also a 1:10 video imbedded that's worth watching. The government in Yemen is another U.S. 'client state'...as are most countries in the Middle East...if they know what's good for them. Link here.  Blood Runs Through the Streets of BahrainThis next story from the Middle East is courtesy of Washington state reader S.A...and was posted in the Friday edition of The New York Times. This kind of brutal repression is normally confined to remote and backward nations, but this is Bahrain. An international banking center. The home of an important American naval base, the Fifth Fleet. A wealthy and well-educated nation with a large middle class and cosmopolitan values...which is also a 'client state' of the U.S.A...whether they want to be or not. Link here. There's also this very ugly [and very graphic] video of the 'blood in the streets' in Bahrain that was sent to me by reader Scott Pluschau. So, along with the story, here's a short youtube.com video from ground zero. It's brutally graphic...so don't say you weren't warned. It runs 43 seconds...and the link is here.  Meet The Objects Tunisia's Ben Ali Did Not Have Time To StealAs the Al Arabiya News Channel reported, "Tunisia's ousted president stashed diamonds, gold and wads of cash in secret spots around his palace in the impoverished country's capital, according to video shown by state television on Saturday." The story is English...and the video clip is in Arabic. But it doesn't matter, as 'a picture is worth a 1,000 words' in any language. I thank Washington state reader S.A. for sharing this zerohedge.com story. Link here.  Five Stories from LibyaThe situation in Libya has gone from nothing...to all-out rebellion in just a few days. The situation is extremely fluid...and is obviously changing by the hour. I have five stories...courtesy of readers Roy Stephens, U.D...and Mike Molleur. Here are the hyperlinked headlines... 1] Libya protests: 140 'massacred' as Gaddafi sends in snipers to crush dissent - The Telegraph 2] Libyan protests reach Tripoli as Gaddafi son warns of civil war - The Telegraph 3] Libyan unit "defects" as more Arab protests simmer - Yahoo News 4] 'I'm HERE in Tripoli': Gaddafi's claim as he emerges to defy protesters while capital burns at the hands of his troops - Daily Mail 5] Revolt in Libya: West Warns Gadhafi Against Escalation of Violence - Der Spiegel  Mass withdrawals made at savings banks despite government's assurancesLast week I ran a story about a couple of South Korean savings banks being suspended. Well, the situation over there has gone from bad to worse. A total of 490 billion won was withdrawn from 98 savings banks Monday, despite the financial regulator's assurance that there will be no more shutdowns of such institutions. It appears that a bank run is on in earnest in South Korea. It's a story posted over at koreatimes.co.kr...and it's worth your time. I thank reader David Crofton for sharing it with us. Link here.  Germany must choose EMU fusion or fissionThis next story [along with the one following] is courtesy of Roy Stephens. It's Ambrose Evans-Pritchard up on his high horse in the Sunday edition of The Telegraph. He starts out the column thusly..."For the sake of peripheral nations, Mrs. Merkel has to stop paying lip-service to monetary union. For all her fiery language in defence of the euro - as if a currency trading so high against the yuan, dollar, and sterling could be under meaningful external attack - Chancellor Angela Merkel has not yet agreed to pay one cent in help to crippled debtor states. Nor has she faced up to the elemental question hanging over monetary union." Ambrose is one of the glamour boys from the "New World Order" crowd...and he shows his true colours in this article...and it's a bit on the long side. Link here.  Walker's World: The real G20 crisisOnce again, the weekend summit of the Group of 20 lived down to the sinking expectations this purported new system of global governance has already inspired. But there was one significant exception. Meeting for the first time in Paris, under this year's chairmanship of French President Nicolas Sarkozy, they at least discussed the elephant in the room: the rise in food prices and the consequent threats of inflation and unrest. I noticed that they didn't discuss one of the other reasons for high commodity prices...and that's rampant money printing on the part of all nations...or the nature of money itself. This is worth the read. Link here.  Oil shock fears as Libya eruptsAmbrose Evans-Pritchard has one last offering for us today. This story was posted at The Telegraph late Monday evening...and was sent to me by reader Roy Stephens...and it's his last contribution to today's column. The spectre of full civil war in oil-rich Libya and reports of the creation of an Islamic emirate in country's "Barqa" region has moved the Mid-East crisis into a more dangerous phase, setting off an explosive rise in US crude prices. Link here.  Turk - Silver Backwardation Now “Unprecedented 73 Cents” Posted: 21 Feb 2011 08:00 PM PST Image:  GoldMoney founder and GATA consultant discusses the growing backwardation in silver with Eric King...and wonders why arbitrageurs are not playing it. Turk thinks the answer must be either that nobody wants fiat money anymore or there simply isn't enough silver to deliver to allow arbitraging. | ||
| Germany must choose EMU fusion or fission Posted: 21 Feb 2011 08:00 PM PST Image:  This next story [along with the one following] is courtesy of Roy Stephens. It's Ambrose Evans-Pritchard up on his high horse in the Sunday edition of The Telegraph. He starts out the column thusly..."For the sake of peripheral nations, Mrs. Merkel has to stop paying lip-service to monetary union. For all her fiery language in defence of the euro - as if a currency trading so high against the yuan, dollar, and sterling could be under meaningful external attack - Chancellor Angela Merkel has not yet agreed to pay one cent in help to crippled debtor states. | ||
| Posted: 21 Feb 2011 06:41 PM PST The S&P 500 has rebounded about 100% in 100 weeks. What crisis? What new normal? The economy is recovering and happy times are back again. Old normal is back. Stocks for the long run! Permabears be damned! The permabulls are back! Rates are low, core inflation is low, its Goldilocks time! US stocks are only following the same pattern they've followed in the last three bear markets. The midpoint crash (1907, 1937, 1974, 2008) gave way to a furious rebound in each case. Following 1937, the market retraced 62% of its losses. Following 1907 and 1974, the market peaked three and a half years later after retracing roughly 95% of the losses. Three and a half years and a 95% retracement equates to the S&P 500 peaking at 1500 in April of this year. Before you assume I'm a permabear gold-bug, take a look back to an article from February 2009. With the S&P 500 at 764, I called for a 15% decline before the market bottoms and rallies for months and significantly in percentage terms. In our 2011 Market Outlook we called for the market to peak in April or May possibly as high as 1500. That forecast is on track as the market gains momentum yet as bearish forces quietly accumulate. We'll start with sentiment. The following chart is from data from a Bank of America Merrill Lynch survey of asset managers and hedge funds who cumulatively manage nearly $1 Trillion. The data shows what percentage are overweight or underweight US equities. The percentage of managers overweight US equities has soared in recent months and is basically at a 10-year high. Here are two more charts courtesy of the Short Side of Long. The data is from the AAII and Investors Intelligence. The 12 week-MA of the bullish sentiment is well north of peaks in the past five years. The 12-week MA of Investors Intelligence bulls is at its highest level since January 2007. There is good chance it will surpass the 2007 level in the coming weeks. This growing bullish sentiment will coincide with the S&P 500 hitting major multi-year resistance. Excessive bullish sentiment coupled with multi-year resistance is not exactly a recipe for a major breakout. It's a recipe for the end to this cyclical bull market. Moreover, as we've noted time and time again, the factors that will cause stocks to reverse are the same factors that will propel Precious Metals into the early stages of a bubble. Increased monetization will be required as interest rates begin to rise and as the economy fails to grow fast enough to mitigate the debt burden. New debts and the rollover of old debts will be financed at higher rates, thereby increasing the debt burden which in turn, impacts the governments ability to juice the economy. Higher rates won't be good for stocks and higher rates won't mitigate inflation or inflation expectations. The reason being, when you have a super high debt load (as most Western nations do) higher rates only exacerbate the debt burden. It will force local, state and the federal government to cut back, which has an impact on GDP. Higher inflation will also cut into corporate margins. We are expecting a mild bear market and not the 40%+ decline we've seen recently. Moving along to Gold, we see a lack of interest in the market yet it is currently only 3% from its all time high. Sentimentrader.com, a great website that tracks sentiment for various markets said this about Gold: The pullback in gold has generated a ton of media attention, and that has impacted sentiment among Rydex traders, futures traders and the public in general, all of which are showing at least modestly extreme pessimism toward the metal. Overall, sentiment has become its least optimistic in gold in over two years. Furthermore, a survey of wealth managers in Canada showed only 33% of advisers as bullish on Gold. That figure was 64% as recently as Q4 2010. This doesn't mean Gold will immediately soar. More so, it tells us that Gold's downside is limited as sentiment has shifted significantly. With stocks nearing major resistance carrying excessive bullish sentiment and Gold's downside limited, let's take a look at the Gold/S&P 500 chart. The 2009-2010 price action has some similarities to the 2006-2007 price action. The chart shows that this is likely a good time to increase positions in Gold and reduce positions in stocks. After all the bubble bursts of the past decade, everyone wants to be a contrarian. If you are a regular Joe investor, now is your opportunity to be a contrarian and look smart in a few years. Mainstream managers now feel vindicated and feel a chance to promote stocks again. Don't make the mistake many have already made twice. I'm writing this for the mainstream investor and the retirement investor because I don't want to see them get sucked back into the market at the wrong time courtesy of asset managers who will find any reason to promote stocks. Meanwhile, Gold is providing an excellent opportunity. Its holding up well while the focus is currently elsewhere. The hot money is out of Gold, yet its only 3% off its highs. In the long run, that is scary bullish. In the coming months look for stocks to peak and for Gold to regain its leadership. If you'd like to learn more about how you can profit from the Gold bull market then consider a free 14-day trial to our premium service. Jordan Roy-Byrne, CMT
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| Posted: 21 Feb 2011 05:33 PM PST | ||
| Silver Jumps 4.7% as Gold Unwinds New Years Drop, US Dollar Misses "Safe Haven Bid" Posted: 21 Feb 2011 04:57 PM PST
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| Posted: 21 Feb 2011 03:14 PM PST
Mercenary Links Roundup for Monday, Feb 21st (below the jump).
02-21 Monday
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| Posted: 21 Feb 2011 02:27 PM PST --Yesterday's Daily Reckoning left off with a tantalising question. Will the regime-toppling global inflation wave hit Australia's shores? And if it does, what will it mean to your investments? For every variable rate mortgage holder in Australia (and that's most of them) this is probably the most important question of 2011. --But you'll have to wait one more day to get our considered answer to that question. We're a day behind on the weekly update for Australian Wealth Gameplan and there's news afoot that needs reporting. Most of that news is influenced by what's going on in the Middle East. How? --Well, no one knows, politically, what shape things will take in Libya (or Iran). But we do know generally that when there's approaching civil war in a major global oil exporter, it's going to put the spotlight on energy. On cue, Brent crude prices spiked to $108 a barrel for the first time since 2008. Nerves. --The last time oil prices hung around the $100/barrel zip code, natural gas and other conventional energy substitutes got a lot of attention from investors. Yesterday's biggest conventional energy investor was BHP Billiton. It announced a $4.7 billion punt on the Fayetteville shale assets of U.S. based Chesapeake Energy. --Now is that the best use of BHP's cash war chest? We'll ask our resource guru (Dr. Alex Cowie) and our value guru (Greg Canavan). But as a self-styled big-picture guru, your editor likes the story because it confirms the investment idea in our most recent issue of Australian Wealth Gameplan: shale gas assets. --That's as much as we can say about it without giving away the store. But if you're looking for one strategic investing take-away from the rising oil price it's this: large, untapped energy reserves and the companies that own them are going to command a premium in the coming years. Invest accordingly. --Let's hit the mail box now. It's been awhile since we've done so. With over 60,000 readers, we don't have time to respond to every letter you send. But we read as many as we can. In today's mailbag a claim that we've accused Australians of being lazy and that our advertising is appalling. Read on... --In today's DR ((Monday, 21 February 2011) Dan makes a pretty good argument against royalties. No royalties, no money for dictators to buy weapons to enslave their people. No royalties, no money for governments to create the welfare state and make the populations lazy (and useless). And maybe the recognition that the value of resources is acquired by the effort to get it out of the ground and make it useful. Well done. Keep it up. Cheers Nick B. --Dan Really somehow we are now lazy. I work in the mining industry and I work hard. We work a 12 hour nightshift for 7 days straight and then another 7 by 12 hour day shifts and when the average temperature hits 45 degrees plus outside (and it does regularly) not to mention how hot it gets in mills and furnaces I believe I can appreciate the notion of a hard day's work for a hard day's pay. I normally like your stuff but I believe even as well intended as you're comments were they were written poorly. Further I would suggest to you that these comments are in fact ill informed. For example you know as well as I that Australia has had natural resources for a very, very long time and it has only been in very recent times that the mining industry has even looked like returning a positive return on their investments. The mining industry has historically returned a negative return on capital investment. BHP were lucky to achieve a 7% rate of return on their iron ore investments and were thinking of selling the business off. Please look up these statistics because they are very interesting especially given your thoughts on the Dutch disease. I do however agree with you insofar as pointing out that YES my parent's generation had it tough no doubt and their parent's generation had it tougher and that at the end of the day it is because of the hard work of previous generations that has allowed us to live a much better life. I certainly agree with that sentiment. And yes I believe we need to invest our time and effort educating our children that life is tough and teach them the value of hard work and especially the value of money. But Dan the importance of free market economics is to allow people, companies to take risks and invest capital in industries like the mining industry to try and make a buck. Should we fight the Dutch disease by lobbying government to incentivize the manufacturing sector? Free market encourages people to take risks, invest capital and they should expect a return on their investment. How can doing this very well somehow create a "lazy" populace? Go figure! Regards --Michael, we're making the same point. For-profit enterprises can't afford to be lazy if they want to survive. They have to create value for customers. That takes industry, skill, and intelligence. There's no doubt about that. Our point was that in resource-rich countries, it's everyone outside the industry (and especially those in government) who take wealth creation from extractive industries for advantage. They forget about the down years in the commodity cycle when there are no profits. They only see the bumper years and that's when they become acquisitive and grasping. In Libya, the Gaddafi regime got "lazy" because it relied on one source of export income to fund all the promises of the State (and the graft and theft of the establishment). The same is happening in Venezuela, where Hugo Chavez is methodically wrecking the economy and squandering his country's energy wealth. The bigger point is that making a profit in the free market is difficult to do. The "resource curse" is that it gives some people the impression that resource profits are effortless and don't require any long-term planning, delayed gratification, and prudent investing. Of course you wouldn't expect the government to understand how to create wealth. It doesn't create a single penny of wealth, ever. It can only redistribute money it's taken from someone in the private sector. When you have that coercive power, making money is as easy as taking money. And that's lazy, in addition to being theft. --Finally, here's the kind of note we get periodically questioning our integrity, credibility, marketing sense, and a whole lot of other things. Our response follows.
--Yeah we were overdue for this kind of broadside. It contains a number of recurrent criticisms against our editorial message, our business model, and our general moral fibre. So from time to time, we try to address these issues. --Our prediction that Australian house prices are going to crash isn't based on envy. We don't own a home in Australia. Never have and never will. So we have no personal wish to see housing fall to a price where we sold, or where we could buy. You're completely deluded about the motivation of our analysis. --The motivation is to warn people about making what could be the single biggest financial mistake they'll ever make: taking on massive debt to buy a home at the top of the price cycle and the bottom of the interest rate cycle. We could be wrong, of course. But since we've seen it happen before in the UK and the US, we doubt it. --The prediction is based on the extraordinary growth in household debt levels over the last 30 years. Nearly all of that is mortgage debt. Australians carry a heavy, interest-rate sensitive debt burden. And right now you have historically low interest rates, historically high house prices, and full employment. This is as good as it gets. And when it can't get better, it usually doesn't. --Are we early? Maybe. But so what? That doesn't make us wrong. And frankly you're an idiot for saying so. If house prices are seriously unaffordable and overvalued in Australia, then not alerting our readers to that would be dishonourable. We're happy to be early. It will give people time to avoid the big loss when the crash happens. --And it will happen. Sooner or later, in response to an external credit crunch, the house price correction is going to come. If we're wrong in our precise timing it does not make us wrong in our underlying observation. And getting the big trend right in asset prices is just as important as timing. --There must be some underlying resentment or grudge you have for thinking our publications are useless and require apologising for. What is it? Maybe you misunderstand what we're trying to do. So we'll clarify: our aim is to tell you investment stories that you're not going to find elsewhere, or until much later (like LNG and rare earths, to name two examples on which our subscribers were many months ahead of the popular curve). --Nobody needs to be told to buy the big banks or miners. You get told that every day. Nobody needs to be warned about the threats they already know about. Our business is to explore the opportunities and threats that are outside the mainstream press and investment establishment. --That's the only real way you can have an advantage as an investor, by knowing something somebody else doesn't. In order to do that, you have to be willing to think about the world differently, imagine what might happen, and then investigate it more thoroughly to see who the winners and losers are, and then take a punt. --Of course we won't always get it right. But we have a team of people now dedicated to doing that work in their respective sectors. And we have tens of thousands of happy subscribers, many of whom have made a profit from this kind of thinking. Why would we apologise for that? --If it were possible to refund your free subscription to the DR, we would. But here's an alternative: if you don't like it and don't find it valuable or thought provoking, unsubscribe! It won't cost you a thing. And there's a good chance it will make you a lot happier. LOL Similar Posts: | ||
| I guess James got his point across to Blythe Posted: 21 Feb 2011 01:37 PM PST This is expected, would like to see a further consolidation to $32.50 please. It would be healthy, and would attract triple the amount of people to go buy physical. You cant have the Dollar's nemesis run up 5% without the Ben Bernank calling his peeps...seriously, don't count these fuckin lunatics out yet. Note: At any point did you hear me say 'buy' today...no can do. Gotta wait for the | ||
| Goldrunner: Fractal Analysis Suggests Silver to Reach $52 – $56 by May – June 2011 Posted: 21 Feb 2011 01:10 PM PST
Dollar Inflation remains the driver of the pricing environment for almost everything denominated in U.S. Dollars as long as the Fed continues to monetize debt. The debt monetization creates Dollar Inflation that results in Dollar Devaluation. As the Fed ramps up the QE II that they have announced will end in June, I expect Gold, Silver, and the PM stocks to aggressively rise.
Fractal analysis provides us with:
Let's look at the potential for the next intermediate-term move in Silver in relation to the 2006 fractal period and then in relation to the 1979 fractal period using ratio analysis. Today's Silver Price vs. the 2006 Fractal Move Suggests the Next Top at 52.8 - The black lines in the chart below show the approximate slope for the current intermediate-term move as related to the similar fractal move in 2006.
I have done a rough count in terms of "time" from Point A to Point B. The current ratio in terms of time for "A to B" versus the 2006 period is around 1.8. Using the ratio times the 2006 time periods yields a range of ~ 18 to 23 weeks to each of the double tops of 2006. That estimate in time would put us into late May to early June. In terms of price, my confidence in the use of the 2006 fractal comes from how closely the 05/ 06 fractal worked off of the "recent prime 2002 fractal." The move from point B to Point C in 2006 was almost precisely 2 times the rise from Point A to Point B. Thus, we would expect the coming run up into the next intermediate term high to be about 2 times the rise from the last bottom before break-out up to the recent high. The current period "A to B" is approximately ~ 14. So, 2 times 14 = 28 added to 31 gives us a potential rise, spikes included, up to about $59 for the coming intermediate term top. This is only a comparison off of 2006. I would be quite happy to see a rise up to $48 to $52 yet the move in Silver in the 1979 parabolic move suggests a spike to a point a bit higher as the psychology of a parabolic move would suggest. Gold Denominated in South African Rand If Gold priced in Rand rises out of the ascending triangle to the upside as shown in the chart below, then SA gold stocks could start to rise in a momentum run analogous to their runs in early 2002 and in 2005/ 2006. The RSI has already broken out while price sits at the top of the huge ascending triangle. It is "3 touches and out for the PM sector" (as per Ciga Eric), and if so, this is the 4th attempt at the top of the triangle. In the 2006 fractal period I showed with Silver, above, Gold in Rand rose sharply higher out of a triangle formation sending the SA Gold Stocks into an upward momentum run which, historically, have very large 3rd wave runs that tend to move in sync with the HUI Index. The PM sector upside looks like it could be explosive in the coming months just as in the 1979 fractal. I think is time to get positioned to take full advantage of the coming move. For the moment………………….Goldrunner Goldrunner has also posted this article on the public side of www.GoldrunnerFractalAnalysis.com which will soon be a subscription website. (Please note that the subscription button on the site is not active at this time.) To be informed as to when the subscription service is available please contact GOLDRUNNER44@AOL.COM. Lorimer Wilson is the Editor-in-Chief of www.FinancialArticleSummariesToday.com and www.munKNEE.com and will soon be offering a FREE weekly "Top 100 Stock Market, Asset Ratio & Economic Indicators in Review". To sign up contact him at editor@munKNEE.com .
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| Silver Breaks Out, Paper Market is Nonsense Posted: 21 Feb 2011 12:18 PM PST John Hathaway - Silver Breaks Out, Paper Market is Nonsense With silver trading at a new multi-decade high trading above $34 and gold up almost $20 breaking above $1,400, King World News today interviewed John Hathaway, Senior Managing Director of the Tocqueville Gold Fund. Hathaway stated, "What I strongly believe is that the amount of paper we are seeing traded in both gold and silver on the Comex and in the derivatives market is nonsense. It has to be something in the order of 100 to 1. The fact that the market is moving today when the Comex is closed tells me it is not New York that is doing this, it is physical demand." "I think it is just a tight market. There have been reports of some difficulty regarding physical availability of silver. Retail interest is being driven even further by the price action in silver. Silver has broken out to the upside and because of that you have technical buying and short covering. This could in fact be a short squeeze. When you look at the COT, the spec gold longs are below their norm for the last year. Their net long in gold is only 126,000 contracts which is in the 30th percentile of the last 52 weeks. Circling back around to the paper markets, I cannot stress enough that the paper to gold ratio is out of whack. The huge disparity between the amount of paper contracts traded versus actual physical gives a complete misread on the market reality." When asked about gold stocks specifically Hathaway stated, "The shares are way behind, and that is a reflection of the skepticism that still exists in this market." John Hathaway is one of the few fund managers willing to tell it like it is regarding the paper market in both gold and silver. On a side note, those who have been claiming there is no shortage in silver have been completely discredited by the price action. As far as the gold market is concerned, I agree with Hathaway that there is a long way to go on the upside. Eric King KingWorldNews.com http://kingworldnews.com/kingworldne..._Nonsense.html | ||
| Growing Industrial Demand Buoys Silver Outlook Posted: 21 Feb 2011 11:57 AM PST
Irrespective of the concerns over financial tightening, talks of a gold bubble and economical weakness, gold marked its tenth straight annual gain in 2010. Not only gold, other members of the precious metal group such as silver and platinum were also up last year. At this juncture, last year's bull run appears to be running out of steam. However, both technicals and fundamentals indicate improved investment options in precious metals, particularly silver, if you have a long-term investment horizon. Electronics and Electricals; Plus Growing Demand from New Uses In addition to the growth in mature industrial bastions such as the electrical and electronic industry, silver demand has grown by leaps and bounds in new areas such as conductive silver inks and new applications in the field of nanotechnology. If silver demand was to be the only factor driving prices, one could close his eyes and simply go long silver for long term. Demand prospects are robust and incisive – few other commodities are finding new uses as much as silver has over the recent past. Talking of alternative uses of silver, it is also employed in the production of chemicals for the USD 300 billion global plastics industry. Well over 700 MT (metric tons) of silver every year is required for the production of plastics. As a catalyst, silver is used in the production of ethylene oxide (required for the production of synthetic textiles). Silver demand in industrial applications is diverse and is set to improve with the influx of new technologies. The diversity of demand sources also make it shock-proof i.e. even if one leg of demand weakens the surge in others make up for the weakness. China and India – Emerging Electronics and Electricals Markets China's silver market has emerged as a key determinant of international prices because of its significant influence on production and consumption. Since 2000, the Chinese silver industry has been growing both in terms of production and consumption, rewriting records every year. With massive investments in the heavy industry, Chinese consumption of silver alloy, soldering and silver paste has soared in the recent years. Thank you for reading. Mike Stall 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 or his associates' essays or reports you fully agree that they will not be held responsible or liable for any decisions you may 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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| Silver Poll Results: How high will silver reach in 2011? Posted: 21 Feb 2011 11:51 AM PST Poll: How high will silver reach in 2011? #1 Result: $50+ (41.39%) LIVE Survey: Do you favor investing into Gold and Silver Stocks or Physical Metal? | ||
| COMEX Commercials Nowhere Near Record Short Positions in Gold, Silver Posted: 21 Feb 2011 11:32 AM PST As silver reacts with gold higher given very unsettling news out of the Middle East, particularly out of Libya, it is interesting to note some of the changes in large commercial futures trader positioning as of last Tuesday. On Friday afternoon the Commodity Futures Trading Commission (CFTC) issued its weekly commitments of traders report (COT) which captured a snapshot of trader positioning as of the close on February 15.... | ||
| Posted: 21 Feb 2011 11:11 AM PST  GLD – on buy signal.  SLV – on buy signal. The fact that silver is leading gold, is bullish. GDX – on buy signal. XGD.TO – on buy signal. Summary Disclosure
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| The Rally in Gold and Silver is Not Over Yet Posted: 21 Feb 2011 10:45 AM PST
As per the World Gold Council, precious metals demand will stay high this year with growing Indian and Chinese appetite for the yellow metal, but fresh buying in developed markets of jewelry will depend on economic outlook. At this juncture, market news suggests positive momentum for precious metals. Investment and industrial demand are set to witness an upsurge in the upcoming months. Let's have an outlook on the present status of precious metals market. Gold has recently touched its rising resistance level but no confirmation of a local top has been seen. The current short-term trend therefore has not been invalidated and the outlook remains bullish. Silver has broken out above previous highs on strong volume and this too is a bullish development. In fact this is what we wrote to our Subscribers on Monday, Feb 14th: The recent rally in the general stock market has greatly contributed to silver's strong performance relative to gold and – based on the fact that stocks have decisively moved above their August 2008 highs – the continuation of the outperformance [of silver] appears probable also in the days ahead. Amid anticipations of positive moves in precious metals, let's have a close look into gold market moves. Relationship between currencies and precious metals, gold in particular, is one of the major indicators in predicting market direction, so let's take a look how gold moved in comparison to the key currency indices (charts courtesy by http://stockcharts.com.) In the short-term Euro Index chart this week, the bearish head and shoulders pattern continues. Nothing has really changed since last week and further development of this pattern gives us a bearish outlook for the euro which is bullish for the USD Index and precious metals overall. Gold has been moving along with the dollar and has been somewhat "euro weakness driven". It seems that perhaps many European Investors in the Euro-zone are protecting themselves against the weakness of the euro. This contributes to the bullish outlook for the dollar and also for gold. Moreover, we can see the same on the medium-term USD Index chart. The uptrend is continuing here although a bit of sideways movement has been seen within the trend channel. It's important to note that the short-term trend is up as proven by higher highs and higher lows seen in the past weeks. Concerning the cyclical turning points, we are just past the midpoint of the two turning points: last local bottom and the next local extreme. No bearish signs have been seen yet which implies we are not likely close to a local top. It will likely be seen in two to three weeks. Overall, the Euro – USD Indices suggests positive momentum for precious metals in the upcoming weeks. Precious metals depict a positive correlation with gold and a negative correlation with Euro, indicative of bullish market trend at this time. While the influence of the currency market is important, an insight into gold market seasonality at this moment is also promising. On 10th February, we wrote that, based on the findings of our new tool – True Seasonals, a rise in the price of gold was possible in mid-February. As a matter of fact, these findings turned out to be accurate in the past few days. After the publication, one of our Subscribers, who was particularly interested in True Seasonals (note that this is not the same pattern as you see on other websites – in fact we don't know of any other source that provides seasonal patterns while taking into account expiration of options/futures – that's why we call them True Seasonals), made a request to include the seasonal chart for March in the next Premium Update. Today, we are pleased to make a positive response to that request. The chart below presents the seasonal pattern corrected for the expiration of derivatives for March. As the price of gold for March 1st, 2011 is yet to be known, we have assumed that this price is equal to the last known price of gold ($1379 – February 17th, 2011). The use of True Seasonals is particularly important when there are no other market signals about the possible direction gold might go. When there are no clear signals, one should resort to the seasonal pattern. In other words, the analysis of the current market situation and the use of True Seasonals are complementary – when the current market situation is inconclusive, True Seasonals may offer you the clarification you need. The chart also implies that the recovery of gold in the second part of the month might be relatively slow (compared to the possible decline) and bumpy (please, notice the slight decline after March 18th). Another implication is that gold might not be able to reach the price level from the beginning of March by the end of the month. Please note that this outcome would be in tune with the cyclical tendencies present on the USD Index and the fact that the dollar and precious metals have been moving mostly together in the recent months. On a side note, we strongly believe that providing True Seasonals for April and following months in the above form will not be necessary, as by the time they are needed, the interactive version will be available on our new website (please take a look at our homepage for a short video featuring it). Summing up, the USD Index is likely to move higher as the bullish sentiment prevails here. In the Euro Index, a continued downtrend is likely and the outlook is bearish. The situation in the USD Index and the general stock market is positive for the precious metals as a whole. Consequently, we believe that the rally in gold, silver and mining stocks is not over yet. To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, we urge you to sign up for our free e-mail list. Sign up for our gold & silver mailing list today and you'll also get free, 7-day access to the Premium Sections on my website, including valuable tools and charts dedicated to serious PM Investors and Speculators. It's free and you may unsubscribe at any time. 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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| “Gold: Book Profits As Volume Disintegrates” – Morris Hubbartt Posted: 21 Feb 2011 10:27 AM PST "Throw the old rule book away. Metals are going much higher. I have said for weeks that this Gold correction is a gift. Use the gift while it's yours. We are on the verge of seeing all time highs and you will likely never see these prices again." – Morris Hubbartt. Feb 18, 2011. US Dollar Analysis:
Gold and Precious Metals
Gold Juniors GDXJ Chart
SIVR (Silver Proxy) 6 Mth Chart
Unique Introduction for Web Readers: Since mid October I have now booked 95 wins and zero losses for subscribers and I've taken almost every single trade myself. Send me an email to alerts@superforcesignals.com and I'll send you 3 of my Super Force Surge Signals, as I send them to paid subscribers, to you for free! Thank-you! Morris Hubbartt 25 SuperForce Buy or 25 SuperForce Sell: Solid Power. Stay alert for our SuperForce, sent by email to subscribers, for both the daily charts on Super Force Signals at www.superforcesignals.com and for the 60 minute charts at www.superforce60.com About Super Force Signals: Frank Johnson: Executive Editor, Macro Risk Manager. Email:
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| Gold Drives Above $1,400, Silver Nears $34 Posted: 21 Feb 2011 10:00 AM PST Gold surged $16.92, or 1.22%, to settle at $1406.45 with the same Middle East factor that is pushing up crude oil boosting gold and silver prices. Silver surged to yet another 30-year high, settling at $33.89, up $1.24, or 3.81%. | ||
| Confessions of a ‘Conservative’ Investor Posted: 21 Feb 2011 10:00 AM PST So what did I, a conservative investor, do with the cash kitty from the sale of my house and my other savings? I bought precious metals – gold and silver bullion as well as major, mid tier and junior mining companies. | ||
| Silver Investing Hits ‘Irrational Exuberance’ as Price Swings 5.4% Posted: 21 Feb 2011 10:00 AM PST Silver dropped nearly $2 per ounce, erasing Monday's 5.4% gain, only to rally again as world stock markets and commodity prices also hit massive volatility | ||
| Imported Inflation Hits US Consumer Prices Posted: 21 Feb 2011 09:59 AM PST The big news at the end of the last week was barely noticed. Inflation – which had been going down for the last 30 years – may have finally bottomed out. It's too early to know for sure. But January showed an up-tick. Prices rose 0.4% during the month, say the number crunchers at the BLS. Last year, the core rate of consumer price inflation in the US was only 0.7%. Nothing, in other words. The feds were desperately adding to the base money supply. But the banks didn't lend. And people didn't have jobs. So the money never got into the consumer economy. It was, after all, a Great Correction. Instead, the hot money went overseas, where it bid for hot foreign stocks and hot "auction-priced" global goods – like food and energy. Commodities soared. Food riots broke out. Cotton just hit a new record high. Oil is trading over $100 a barrel, for Brent Crude. And then what happened? What goes around, comes around. Inflation began leaking back into the US. Inflation went out of the US – courtesy of the feds. Foreign central banks had a hard time keeping up with it. They had to increase supplies of their own currencies to soak up the US dollar liquidity. Pretty soon, the whole world seemed to be bubbling up. But now, the foreigners are re-exporting inflation back to us. How do you like that? Surely there is some congressional committee ready to investigate. Surely there's some member of Congress ready to make a jackass of himself by calling for a ban on it. In the meantime, if you want to buy a food item imported for abroad you'll pay about 30% more than you did a year ago. Or, if you want to buy a barrel of oil, that will cost you about 60% more. And now this imported inflation is raising consumer prices across the USA. Almost every business in America uses imported energy. Every American eats. As far as we know, you can't buy home-grown pineapples or coffee beans – not in the 48 states! And so, what do you know? Prices are going up. In January, core consumer prices – not including food and energy, directly – rose 0.4%. Wait a minute. If that happened every month, it would put the CPI at 4.8% for the year. That would be a lot higher than the 2% maximum allowable CPI that Ben Bernanke will permit. If it gets any higher – he promised on national television – he'll put a plastic bag over its head...just as he would to an aged relative. Of course, we don't know whether disinflation has really bottomed out or not. And we remember the early '80s, when inflation topped out. Nobody knew for sure that Paul Volcker really had the matter under control. It took years before the new trend was clear. Most likely, we'll see the same phenomena again...but distorted, as though reflected, grotesque and absurd, as in a bent-up mirror. This time, we'll find out that Ben Bernanke has lost control completely. He may want to raise rates. But with 30 million people unemployed...will he be able to do so? And let's imagine that this inflation squeezes corporate profits – it's already happening. How long will it take before investors begin to dump stocks? In the early '80s, they slowly, cautiously began to buy stocks...this time they'll be selling. So, Ben Bernanke – guardian of the nation's money, guarantor of full employment, promissor of a bull market on Wall Street – will be in a very uncomfortable position. He'll have the plastic bag in his hands. He'll want to stifle inflation. His hands will shake. His voice will quake. And he won't be able to do it.... But heck, that's still in the future...maybe far in the future. If disinflation has bottomed it could still be years before we're sure of it...and months or years before Bernanke's bluff is called. In the meantime... And more thoughts... The Zombie Wars have begun. Social welfare governments are in trouble. They've made promises they can't keep. Will they own up and scale back the spending? Or will they go broke? We've seen the massive strikes in France and fighting on the streets of Athens. We've seen the Prince of Wales attacked on the streets of London. And now the battles have begun in the US too. Look at what happened in Madison, Wisconsin. Rep. Paul Ryan put it in perspective for MSNBC's "Morning Joe":
And here's the New York Times' report:
*** World improvers are nice people. But they are egotistical morons. They always want the best for humankind. How do they know what's best for people on the other side of the planet? Well, they don't. But they're vain enough to assume that everyone wants to be like they are. So, if there are riots in Bahrain...it's because the locals in the desert want to be more like the locals in, say, Madison, Wisconsin. From Byron King, editor of Outstanding Investments, rated #1 by Hulbert for the last 10 years.
Regards, Bill Bonner | ||
| Posted: 21 Feb 2011 09:59 AM PST I didn't come up with the phrase, "when money dies," though I like it a lot. The phrase captures an important idea. It is that money – I refer to that paper kind issued by governments – has a finite life. At some point, it becomes worthless, or dies. The death of a currency is often a protracted affair. It often takes decades. And as it unfolds, the people who experience it hardly believe it. That is the tale told by Adam Fergusson in his book When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany. First published in 1975, it had been out-of-print for years and much sought after. A used copy on Amazon cost $300 recently. The book is a history of the death of the German mark in the 1920s. It is also a scary reminder of the devastating effects of inflation and, therefore, a cautionary tale for US central bankers and politicians who play so fast and loose with US Dollar. If you don't know what happened to the German mark, here's what you need to know from When Money Dies: "In 1913, the German mark, the British shilling, the French franc and the Italian lira were all worth about the same. Four or five of any of these would buy you a US Dollar." By 1923, you could exchange one shilling, franc or lira for up to 1 billion marks. "Although," Fergusson writes, "in practice, by then, no one was willing to take marks in return for anything. The mark was dead, one million-millionth of its former self. It had taken 10 years to die." How did that happen? The short answer is that post-Imperial Germany found itself with a crushing load of debt. Raising taxes or cutting spending is politically difficult in any age. And so it was in Germany. To deal with these debts, Germany chose the path of least resistance. It printed lots and lots of money. Sounds like the fiscal position the US government finds itself in today. Bleeding deficits with no end in sight. Piling on debt and entitlements with no end in sight. The solution so far? Why, "quantitative easing." In a new introduction, Fergusson writes:
But back to Germany... Eventually, prices started to rise as the mark lost purchasing power. One of the great strengths of the book is the on-the-ground view you get from the people who lived through it. It gives you an unsettling look at German society as it starts to dissolve and as inflation starts to wreak havoc. It started slowly, with commodity prices starting to rise everywhere. But as the years wore on, prices kept going up in big steps. Soon the damage was remarkable. In just eight years since 1913, the price of rye bread rose 13-fold. Beef rose 17-fold. Sugar, milk, pork and potatoes went up 23-28-fold. Butter went up 33-fold! And these were official prices. As a practical matter, real prices were often a third higher. It's hard to fathom. All this brought out the worst in people. Germany became an ugly society, looking for blame. As Fergusson writes: "They picked upon other classes, other races, other political parties, other nations." There was a long list of villains: "the greed of tourists, or the peasants, or the wage demands of labor, or the selfishness of industrialists and profiteers, or the sharpness of Jews or the speculators making fortunes in the money markets." Erna von Pustau, who lived through it, described what it was like:
As we know what would happen later in Germany, her comments are particularly chilling. Each year, people thought it couldn't get worse. "And yet things always did, from bad to worse, to worse, to worse," Fergusson writes. "It was unimaginable in 1921 that 1922 could hold any more terrors. They came, sure enough, and were in due course more than eclipsed, with the turn of the following year." Germany plunged into hyperinflation. The price changes get ridiculous to talk about – the numbers so large that they are practically meaningless. Who can imagine paying 500 billion marks for a dozen eggs? It's also interesting to see how society dealt with this breakdown in the currency. The idea of real wealth became very important. Not the kind of wealth denominated in abstract printed marks, but real wealth that one could use. People bought things. Hugo Stinnes, an industrialist, bought factories, mines, newspapers. The man on the street bought what he could trade. Fergusson ends with a powerful observation: "In war, boots; in flight, a place in a boat or a seat on a lorry may be the most vital thing in the world, more desirable than untold millions. In hyperinflation, a kilo of potatoes was worth, to some, more than the family silver; a side of pork more than the grand piano." Despite the awful experience of the 1920s, Germany would repeat its errors again and again. In the 1930s, Hitler would crank up the money presses. By 1948, the reichsmark (which replaced the old mark) died. So Germany created the deutsche mark. Yet it wasn't much better. It lost two-thirds of its purchasing power by 1975. Such is the fate of all paper money. I will leave it to you to decide how much relevance Germany's experience has to the US today. I find many alarming parallels. I would point out, too, that the US dollar has lost 95% of its purchasing power since 1913. And the US dollar is among the best currencies of the last hundred years. That says something about paper currencies, doesn't it? It's also why staying ahead of inflation is one of the chief tasks of investing. The monetary puppet-masters at the Fed will have you believe inflationary pressures are inconsequential or a far off mirage. Don't believe it for a second... QE2 is humming along with the prospects of a QE3 right around the corner ready to pump untold billions into an already cash-flush banking system. Now is the time for investors to take action and protect capital from the inflationary pressures building up in our economy. Regards, Chris Meyer | ||
| The perfect silver theme song ! Posted: 21 Feb 2011 09:36 AM PST This is what silver would be singing to crimex and the jp morgue right now if it could : | ||
| The BIS Recognizes the Problems With the US Dollar…Finally Posted: 21 Feb 2011 09:00 AM PST Naturally, I was aghast that things have gotten so bad that even the Bank for International Settlements (the infamous BIS) finally got around to noticing that the results of three decades of central banks creating more and more money is not, as they thought, A Truly Wonderful Thing (ATWT). They write that "drastic action" is now needed, and that "the fiscal problems currently faced by industrial countries need to be tackled relatively soon and resolutely." Instantly I jump to my feet and shout, "Whereas yesterday, nothing needed doing, nor was there any need for any action at all, except to idly sit by as things got worse and worse as central banks created more and more money so that governments could deficit-spend? But now we need drastic action, you BIS morons?" Nobody notices my rude objections, and the BIS blithely goes on that "Failure to do so will raise the chance of an unexpected and abrupt rise in government bond yields at medium and long maturities, which would put the nascent economic recovery at risk." Well, duh! Let me write this down! Higher interest rates will put the economy at risk, but creating so much money, for so long, by so many central banks, to accommodate so much more government and government spending, to keep nominal interest rates at literally zero and real, inflation-adjusted interest rates negative, will not? Hahaha! Well, perhaps I am being scornful and disrespectful only out of the long habit of being scornful and disrespectful of all central banks, including the execrable BIS, which is so worthless that it has created its own fiat currency, the SDR! I mean, how low can you go? On the other hand, they seem to understand that high interest rates cause slowdowns in the economy, so maybe there is hope that they will say something else intelligent! No such luck. The very next sentence from these incompetent, neo-Keynesian, fiat-currency loving morons is that failure to take "drastic action" to cut government spending "will also complicate the task of central banks in controlling inflation in the immediate future and might ultimately threaten the credibility of present monetary policy arrangements." Hahahaha! You can tell that I am upset by the way my fists are clenched into Mogambo Fists Of Rage (MFOR), an action seemingly at odds with how I laugh – Hahahaha! – the dreaded Mogambo Laugh Of Scorn (MLOS) in a perfect demonstration of Utter Mogambo Contempt (UMC): Monetary policy has no credibility, you morons! None! Zero! In fact, it makes me chuckle and shake my head in dismay to consider how in the hell can any half-witted, leftist, neo-Keynesian, econometric idiot, like these BIS idiots, possibly think that the Federal Reserve would have any, any, ANY credibility after achieving Total Freaking Failure (TFF)? Again I laugh the Mogambo Laugh Of Scorn (MLOS)! Hahaha! If they wanted respect and credibility, the bankers would have insisted upon re-instituting the gold standard, or actually stabilizing the money supply as if we were on a gold standard! And then we would not have any of these catastrophic economic problems, and the sun would shine, and somewhere men would laugh, and somewhere children shout, but, until then, there is no joy in Mudville, the Bernanke has struck out. But those betting against Bernanke and the Federal Reserve by buying gold and silver will see the sun shine, and men will laugh, and children will shout, "Whee! This investing stuff is easy!" The Mogambo Guru The BIS Recognizes the Problems With the US Dollar…Finally originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation. | ||
| Is it getting closer and closer to a systemic commercial physical failure? Posted: 21 Feb 2011 08:50 AM PST Straight from my Harvey's Post, ENJOY: "Gold closed in London (12 noon est) at $1408.50 a rise of $20.30. Silver exploded northbound with a rise of $1.70 to finish at London closing price of $34.00 flat. There was a sense of panic on the shorts to cover as there were only buyers present and no sellers. It is getting closer and closer to a systemic commercial failure. The comex was closed | ||
| Is London out of physical silver? Posted: 21 Feb 2011 04:24 AM PST lease rates above 1% + investment rate in the 3 month .09% = backwardation over 1%..? London is out of metal folks. You know how to thank me | ||
| Libyan Soldiers Executed for not killing protesters, silver $34 Posted: 21 Feb 2011 03:59 AM PST Well, not very long (I'd say 12 hours tops) when I posted about Israel and the massive problems they are about to face, I claimed the violence would get worse. Well, I guess it has. Libyan Soldiers were executed for not killing protesters. Damn son. Results of escalated violence (which should soon be spreading far beyond these boarders, and maybe to a boarder near YOU)= a. Gold $10 from |
After a beautiful long weekend 
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