Gold World News Flash |
- GoldSeek.com Radio Gold Nugget: Bill Murphy & Chris Waltzek
- Gold Market Update
- Morgan Opens Gold Window
- Storm has Passed!
- Debt Crisis Hits Home
- Gold Seeker Closing Report: Gold Rises Slightly and Silver Surges Almost 2%
- China Forced To Deny It Will Experience HYPERinflation In 2011, As Russia Unexpectedly Hikes Interest Rates
- GoldSeek Radio interviews GATA Chairman Murphy, GoldMoney's Turk
- Gold is Already Predicting the Next Fed Chairman
- In The News Today
- CNBC On The Case For $130 Silver
- A Message to The Few, The Proud, The Real Gold and Silver Bulls
- A Look At The Lawsuit Against Michael Lewis, In Which We Find That Brad Pitt Has Bought The Movie Right To "The Big Short"
- The Gold Price and Silver Price Are Going Higher, Once Gold Confirms Silver's New Highs
- Is PIMCO The Fed's "Agent Provocateur" In Scuttling Billions In Legal Putback Claims Against JP Morgan And Bank Of America?
- Royal Mint gold, silver coin sales double
- Gold Daily and Silver Weekly Charts
- Gold Heading for Another Bull Run?
- FEMA Orders 1 Billion Worth Of Dehydrated Food?
- Gold Holds above 1400
- Bullion Report 2011
- Middle East Mayhem Driving Gold Prices Higher
- Commodity Run Changing, Not Ending
- The CBOE and the CFTC and the rest of these scumbags don’t think you want your freedom from their paper regime of fiat tyranny
- Tiex Inc. - Breaking News/Special AOTH Update
- Grandich Client Crocodile Gold
- No Rerun of 2008
- Chinese Treasury Holdings Revised $268 Billion Higher To $1.12 Trillion, Fed Still Top Holder Of US Debt
- Vikas Ranjan's Solid Gold Picks
- The Bond Market’s Search for the Bottom
- Insiders Buy a Gold Junior, Should You?
- Gold, Silver Firm On Mideast Tumult
- Pre-PDAC Vulture Updates From Several of our Faves
- Dollar’s haven status hangs in the balance
- How Ireland Can Leave The Euro: One Expert's View
- A Leverage Strategy for Goldcorp as Bull Run Seems Likely
- Jim Rogers: "Saudi Arabia Is Lying About Being Able To Increase Its Oil Production"
- Why Volatility in the Middle East is the Only Near-Certainty
- Dollar's safe-haven status hangs in the balance
- Drivers Influencing Precious Metal Prices
- CBOE To Add Another Layer Of Gold Price Volatility, Launches Futures And Options On Gold VIX
- Higher Inflation is on the Way
- Booming Global Auto Market Good For Many
- For week ending 25 February 2011
- Gold edges higher to cap off February rally
- The Market Is Telling Us That The Dollar Is Finished
- Golden Fireworks Are About To Begin
- Pan American Silver: Solid 2010 but Upside Appears Limited
- LGMR: Middle-East Turmoil Spreads, "Toxic Mix" Drives Global Liquidity
- To prevent gold market manipulation, Vietnam would outlaw the market
| GoldSeek.com Radio Gold Nugget: Bill Murphy & Chris Waltzek Posted: 28 Feb 2011 07:02 PM PST GoldSeek.com Radio Gold Nugget: Bill Murphy & Chris Waltzek
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| Posted: 28 Feb 2011 06:07 PM PST Gold hit its intra-day correction low prior to the start of US trading on Friday 28th January, and then reversed upward. As we explained at the time, although Egypt's revolution was the catalyst for this directional change the gold market was primed for a reversal prior to this event. We noted, for example, that evidence in the form of the Commitments of Traders (COT) data and the Market Vane survey indicated that sentiment in the gold market prior to the 28th January reversal was roughly the same as it had been in mid July of 2010 -- just prior to the start of a relentless 2.5-month advance that resulted in a $200/oz addition to the gold price.
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| Posted: 28 Feb 2011 06:05 PM PST Euro Pacific Capital
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| Posted: 28 Feb 2011 06:05 PM PST The silver storm is coming. Prepare. People ask some interesting questions when I point out that silver is headed to $500. They ask, "Gee, who will buy it when it's that expensive?" Did they not comprehend the argument? Only 1% of people will be buying silver when silver is $500/oz., (a hundred times more than today, when only 1% of 1% of people are buying silver) but yet, 99% of people won't have bought any silver in the recent year, at $500/oz.
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| Posted: 28 Feb 2011 06:02 PM PST I know that Something Very Bad (SVB) is going to happen when I find that I am using a lot of acronyms in my already acronym-filled Stupid Mogambo Writing Style (SMWS). So, we are all asking, "What will happen (WWH)?" Well, I am sure that I Don't Know What (IDKW). But Something (BS). Something Very Bad (SVB). Or worse (OW). And it is not made any better when Junior Mogambo Ranger (JMR) Terry L., probably aware of this bizarre Fascination With Acronyms (FWA), sent me a couple of new ones, which are, at once, both witty and profound.
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| Gold Seeker Closing Report: Gold Rises Slightly and Silver Surges Almost 2% Posted: 28 Feb 2011 04:00 PM PST Gold rose $7.21 to $1416.31 in Asia before it fell back to $1407.34, but it then traded mostly slightly higher in London and New York and ended with a gain of 0.02%. Silver climbed to $33.71 in Asia before it fell back to $33.28, but it then rose to a new session high of $33.982 in New York and ended with a gain of 1.7% at a new 30-year closing high.
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| Posted: 28 Feb 2011 03:44 PM PST
And now for this evening's stunner, via Dow Jones. "There won't be hyperinflation in China this year, the state-run China Securities Journal reported Tuesday, citing Yao Jingyuan, the chief economist of the National Bureau of Statistics. The abundant stocks of grains and main agricultural products in China are key factors in stabilizing consumer prices, the newspaper quoted Yao as saying. China's consumer price index rose 4.9% in January from a year earlier, picking up from December's 4.6%." So putting aside what official denial means about the validity of a story, not to mention this utterly bizzare and completely out of left field statement, China's best and only reason why it won't have hyperinflation is that it has "abundant stocks of grains and agricultural products."... We can, at best, hope that this has to be some early version of an April Fool's joke, or else things are truly far worse than anyone expected. Also, just where does China put the threshold cut off on "hyper" - 10%? 20%? 50%? Is it at least safe to say that China may well experience mega, turbo, or nitrous inflation (and we generously put all three terms to the left of "hyper" on the X-axis)? In the meantime, Russia, which will soon come out with comparable warnings, unexpectedly hiked interest rates by 0.25% to 8.00%:rest
Get used to many more such "confusing" decisions, as the Fed's policies force the developing world to stall their economies with preemptive tightening. And there are those who wonder why the currencies of these countries don't surge as a result, pushing the dollar lower. h/t London Dude Trader and themos mitsos
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| GoldSeek Radio interviews GATA Chairman Murphy, GoldMoney's Turk Posted: 28 Feb 2011 01:48 PM PST 9:47p ET Monday, February 28, 2011 Dear Friend of GATA and Gold (and Silver) GoldSeek Radio's Chris Waltzek today interviewed GATA Chairman Bill Murphy for nine minutes and, a few days ago, GoldMoney founder and GATA consultant James Turk for 18 minutes. You can listen to the interviews at GoldSeek Radio here: http://radio.goldseek.com/nuggets.php CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php Support GATA by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf
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| Gold is Already Predicting the Next Fed Chairman Posted: 28 Feb 2011 01:38 PM PST Gold is Already Predicting the Next Fed Chairman Gold is acting fishy. Indeed, while emerging markets are generally going up in flames (literally) Gold hasn't done much of anything since October 2010. Heck, we haven't even retested the previous highs despite all the turmoil.
It's odd, Gold should be above $1,500 per ounce by now given what's going on in the world. By all counts demand for the precious metal is increasing dramatically. Central banks became net buyers of the precious metal last year. China gold purchases rose five fold. Indian purchases of bullion are believed to have hit a record last year. Even the US mint ran out of Gold Buffalo coins in September 2010. So what gives? Why is Gold not EXPLODING higher yet? I have a sneaking suspicion the market is beginning to discount some MAJOR changes in the US Federal Reserve… changes that NO ONE seems to be talking about. Those changes are: 1) There will be no QE 3. 2) Bernanke will be dumped as Fed Chairman. 3) Kansas Fed President Tom Hoenig will be the next Fed Chairman Regarding #1, the whole QE game is over. I know that most folks believe Bernanke will issue QE all the way to infinite, but the actual likelihood of this is low given the public's outrage over the continued bailouts and the like. Obama and the rest of Washington can sell out to the Wall Street banks all they want. But when the US starts experiencing the sort of turmoil that is rocking the Middle East (and it will, mark my words) the QE game will end. Regarding #2, there are "three stooges" involved in the Great US Swindle occurring today. They are, the big banks, the politicians, and Bernanke. When the public starts rioting which one of these three is going to be sacrificed? Bernanke. The big banks have been in power in the country for most of its history. They might get broken up or rearranged, but the elite banker class will always exist no matter what reform. Ditto for politicians. But Bernanke? He's just an academic puppet. He can be replaced by another figurehead while the system remains in place. Indeed, I fully expect Bernanke is going to be canned as Fed Chairman before this term is up. Whether it's Obama making a "Hail Mary" play to attempt re-election by trying to look like he's actually engaging in reform or some other political move, market my words, Bernanke is the one who's going to be sacrificed. Regarding #3, Fed Kansas President Honeig recently uttered a series of absolutely INCREDIBLE remarks concerning the US Federal Reserve. He said the US has "deeply" undermined free-market capitalism and that the TBTF banks pose the "greatest" risk to the economy. These statements are absolutely extraordinary coming from a Fed insider. Remember, these guys are all ultimately politicians, so this kind of aggressive is a clear indication that Hoenig has seen the writing on the wall and is distancing himself from Bernanke as much as possible in order to present himself as a potential future Hawk Fed Chairman who would be called in to reign in inflation much as Paul Volcker did in the '80s. However, before all of this happens, I fully expect we'll see another bout of inflation similar to that which occurred in the 70s. You can already see this happening as inflation hedges explode higher across the board:
Both Gold and Silver will perform well in the coming months. However, their performance will pale compared to other, less well know inflation hedges. Why? Everyone knows that Gold and Silver are the most obvious inflation hedges out there. And to be blunt, anyone who invests in these two assets will likely do very well in the coming months as inflation erupts in the US. However, to make truly ENORMOUS gains from inflation you need to find the investments that are off the radar… investments that the rest of the investment world hasn't discovered yet. I'm talking about investments that own assets of TREMENDOUS value that are currently priced at absurdly low valuations: the sorts of assets that larger companies will pay obscene premiums to acquire. I detail the three best investments I know that fit these criteria in my new Special Report Inflationary Storm Pt 2 which I just released to the public last Wednesday. And I'm only making 250 copies of this second report available to the public. Any more than that and we'll blow the lid off these investments too quickly. As I write this, there are only a few copies left. And I fully expect we'll sell out shortly. So if you want to pick up a copy of the Inflationary Storm Pt 2 (including the names, symbols, and how to buy my three NEWEST extraordinary inflation hedges) you better move quickly. To reserve a copy… Good Investing! Graham Summers
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| Posted: 28 Feb 2011 01:11 PM PST Dear Friends, I took a major fall today and broke my wrist. As you can imagine, tonight will be hard to report. Consider how well gold is acting with a negative cyclical influence behind it. What that means is gold is super bullish and waiting for the right time to blast off. Respectfully yours,
Jim Sinclair's Commentary What OTC derivatives do not do to the international banking firms, litigation will. JPMorgan Fighting 10,000 Lawsuits NEW YORK (TheStreet) — JPMorgan Chase (JPM_) is a defendant in more than 10,000 legal proceedings and may be $4.5 billion short of reserves needed to cover those costs in a worst-case scenario, the firm said in a regulatory filing on Monday… The New York-based bank's legal woes range from individual actions against JPMorgan Chase to class actions with "potentially millions" of litigants to "regulatory/government investigations." The suits include common law tort and contract claims, statutory antitrust claims, securities claims and consumer protection claims, the bank said in its 10-K filing with the Securities and Exchange Commission. JPMorgan is the last of the four big U.S. banks to detail some of its exposure to litigation in its annual report. While the banks didn't say what their overall litigation reserves are, JPMorgan, Citigroup (C), Bank of America (BAC) and Wells Fargo (WFC) outlined a potential $11.2 billion shortfall in litigation reserves altogether. Last week, Citi said it might fall $4 billion short, while BofA said it might be $1.5 billion behind legal cost reserves and Wells Fargo said it might be $1.2 billion behind. Banks' legal woes have gotten much attention ever since the so-called "robosigning" scandal erupted last fall. Banks made a practice of letting employees sign off on thousands of foreclosure affidavits without properly vetting the underlying information. In some cases, homes were seized and in others there is doubt over who rightly owns the property – both in terms of mortgage-bond investors and in terms of occupants.
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| CNBC On The Case For $130 Silver Posted: 28 Feb 2011 01:03 PM PST
Nothing new for regulars here. Yet the fact that CNBC, following Cramer's endorsement of gold, is now apparently pushing silver on retail is very troubling: can't the fast money crew just stick with pitching Netflix or some other widowmaker to their demographic. That said, since per Nielsen, said demo did not even register in recent surveys, we are not all that concerned. That said, the people still demand Doug Kass to appear with an immediate rebuttal how he is all in short silver, just to neutralize the suddenly disconcerting feng shui.
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| A Message to The Few, The Proud, The Real Gold and Silver Bulls Posted: 28 Feb 2011 12:52 PM PST The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! February 28, 2011 05:11 PM Seemingly not a day goes by without another bearish call/attack against gold and silver. Despite multi-decade highs and defying one correction after another, neither metal can (and will never) garner the respect they deserve. I play this song often to not only remind me it’s truly a war, but to keep my spirits high as I wade through the steady stream of crap thrown at gold and silver. [url]http://www.grandich.com/[/url] grandich.com...
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| Posted: 28 Feb 2011 12:26 PM PST
Earlier today, some hilarious news hit the tape after it was made public that disgraced CDO trader Wing Chau has decided to go nuclear and sue Michael Lewis and Steve Eisman due to their all too honest representation of the Harding Advisory asset manager, in Lewis' book "The Big Short" (not spared from the lawsuit was even book publisher W.W. Norton). "Michael Lewis was sued by Wing Chau, president and principal of Harding Advisory LLC, who accused the writer of defaming him in his 2010 book. The book "depicts Mr. Chau as someone who ignored his professional responsibilities, made misrepresentations to investors, charged money for work that was not performed, had no stake in the CDOs he managed, was incompetent or reckless in carrying out his responsibilities, and violated his fiduciary duties by putting the interests of 'Wall Street bond trading desks' above those of his investors." It appears that Chau missed at least one additional defendant: Jody Shenn of Bloomberg, who in 2010 wrote a scathing article titled "How Wing Chau Helped Neo Default in Merrill CDOs Under SEC View" which provided just as damning and just as accurate a portrait of the (allegedly) pathologically greedy manager who presided at the "center of an epidemic of conflicts of interest." And while we present the key highlights from Shenn's piece which is a must read for anyone interested in what will surely be a recurring drama in the coming months (the Michael Lewis op-ed repartees will be worth the price of admission alone), what appears to have forced Chau to take this career ending step (sorry Wing, no more AUM for you) is that he is about to hit the silver screen. In the full lawsuit we read that "Brad Pitt's production company, Plan B Entertainment Inc., has bought the movie rights and is working with Paramount Pictures Corporation to produce [The Big Short] film." Well isn't that special... Here are some of the choicest quotes by Jody Shenn from his May 2010 article:
The bottom line.
And on to important things: such as the release date of the Brad Pitt production of "The Big Short"... Full filing against Michael Lewis:
h/t MM
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| The Gold Price and Silver Price Are Going Higher, Once Gold Confirms Silver's New Highs Posted: 28 Feb 2011 11:59 AM PST Gold Price Close Today : 1409.30 Change : 0.60 or 0.0% Silver Price Close Today : 33.804 Change : 0.906 cents or 2.8% Gold Silver Ratio Today : 41.69 Change : -1.130 or -2.6% Silver Gold Ratio Today : 0.02399 Change : 0.000633 or 2.7% Platinum Price Close Today : 1808.50 Change : 5.20 or 0.3% Palladium Price Close Today : 796.65 Change : 6.10 or 0.8% S&P 500 : 1,327.22 Change : 7.34 or 0.6% Dow In GOLD$ : $179.34 Change : $ 1.35 or 0.8% Dow in GOLD oz : 8.675 Change : 0.065 or 0.8% Dow in SILVER oz : 361.68 Change : 2.74 or 0.8% Dow Industrial : 12,226.34 Change : 95.89 or 0.8% US Dollar Index : 76.85 Change : -0.506 or -0.7% The GOLD PRICE and SILVER PRICE sent mixed signals today. On Comex silver claimed another 90.6 cents, climbing to 3380.4c. Gold, on the other hand, rose a massy sixty cents to $1,409.30. Now those closes made my mind itch, so I scrolled back through my closing prices and sure enough, I did recall something similar. On 7 February gold closed down seventy cents while silver rose 28.4c. Next day silver rose 92.3c and gold added $15.80. Whether that has any predictive value, I leave to y'all to work out. Gold is the unsteadier partner. The five day chart chows a clear uptrend since last Thursday, but it's choppy and hard to parse. Today's low hit $1,404.80 while the high reached $1,416.10, not quite last Thursday's high. No secret the GOLD PRICE still is struggling to clear $1,415 - $1,418 resistance, bulging down from that last high at $1,422.60. All will be well as long as gold doesn't stumble through today's low. Y'all do understand the riddle here, don't you? Gold and silver are supposed to move together and confirm each other. Today was a non-confirmation, signaling that one partner or the other has got it wrong. Either silver should be rising, or gold should be flat lining. That tension will lead to a snap-back of some kind, whether higher or lower isn't clear, but since silver is behaving so garlicky, my dime is on higher prices. The SILVER PRICE knocked so hard on 3400c today -- high was 3399c -- it liked to have blown out the top of the chart. Five day chart looks a little like a rising flat-topped triangle. Never mind, it appears ready to break through 3400c tomorrow. And what do you reckon all those croakers and critics and smart fellers with them Harvard MBAs up there on Wall Street are gonna do then? Why, they'll discover that silver is the smartest thing since sliced bread and they'll follow that trend like they always do. After 3500c, I can't even guess where silver might run. 3900c? More. Name a number higher, or it could drop like a rock tomorrow. Hot money don't hang around. Bottom line: silver and gold are going higher. Once gold confirms silver's new highs by posting a new high itself, all the brakes will disappear. If y'all will go to visit http://store.iotconline.com/index.php?search=sanders there you will find a DVD of my February presentation for the Institute on the Constitution's First Friday in Maryland, "The Only Cure for the Economic Depression, And It Ain't from Washington, DC." Costs ten Federal Reserve notes, a.k.a. "dollars." To get a free list of specific things you personally can do in the next 30 days to help your local economy, see www.iotconline.com/content.php?136-Specific-Things-You-Can-Do-To-Help-Build-Your-Local-Economy-Starting-Today-Right-Now for free. If y'all like surprises, you're going to love today. US DOLLAR INDEX wasn't really a surprise, dropping 50.6 basis points (0.65%) to 76.853, on its way to lower realms. Well, hang on a minute. This makes a double bottom with the early February low at 76.88. I reckon that means the dollar index could claw and scrabble and grab hold here and rally, but I, for one, want to see it myself, before I believe anything. Otherwise the dollar will merely keep on plunging toward the November low at 75.63. The euro, trashy currency of the bureaucratic dictatorship known as the European Union, stands at the top, yea, double top of its recent range, closing today at 1.3803. It could keep on rising or it could fall from here. Flip a coin. I bet they run through one of those industrial-sized bottles of Aspirin every day in the rooms where the Nice Government Men for the European Central Bank and for the Federal Reserve manipulate their exchange rates. I'm glad I only have to watch., On Friday I wrote that, correcting its 400 point fall (so far) the Dow would like rally to 12,200 today. It closed at 12,226.34, up 95.89 (0.79%). S&P rose 7.34 to 1,327.22. No surprise there. No geniu, either, behind that prognostication, just simple mathematics. A 50% correction of a 400 point fall is 200 points. A 62.8% correction is about 248. Dow has run out of correcting steam, and should resume its fall tomorrow. Sure, the Dow crossed above its 20 DMA today (12,175.10), and that will deceive the faithful into believing this 400 point drop was only a correction. Here's why they're wrong: if you draw a line from the 10 January low through the end- January low and extend it through today, you'll see that last Thursday's low broke that trend line. I call that "broke-down", but I will leave room for other calls. How about this one? BROADENING TOP, with higher or flat highs and lower lows resolved at last by a disemboweling plunge. Whatever you want to call it, hog or hen, the rising wedge pattern has now broken down and will probably claim 600 points from the top before it catches its breath. And the carnage will not stop there. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com Phone: (888) 218-9226 or (931) 766-6066 © 2011, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't. 
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| Posted: 28 Feb 2011 11:44 AM PST
Perhaps it is time for JP Morgan to revise its estimate for putback liability claims. As a reminder back in October, it was none other than JP Morgan which said: "We estimate putback risk to be approximately $23-$35bn for agency mortgages, $40-80bn in non-agency and roughly $20-30bn for second liens and HELOCs. However, there are a number of reasons why these estimates are on the high end, including losses already taken and loss reserves established." Well, there appear to be a number of reasons of why these estimates may have been on the very low end as well, the first one being that the bank itself just announced "it faces up to $4.5 billion in legal losses, in excess of its established litigation reserves, should its worst-case legal scenario occur." And if JP Morgan is seeing billion more in putback exposure, then what should Bank of Countrywide Lynch say, which just reported that the amount of debt which is being put against the firm for fraud of various types has just doubled from $46 billion to $84 billion. Luckily, according to a DebtWire report, PIMCO and BlackRock are actively doing the Fed's bidding in attempting to form a splinter group within the putback litigants and to settle with BofA for a nominal charge. Will the Fed be once again successful at subverting justice? From the WSJ:
Those who have been following the recent attempt by various plaintiffs to claim fraudulent misrepresentation using statistical sampling, which Allstate, and its lawfirm appears to have perfected, this will come as no surprise. Neither will it be a surprise that the litigation floodgates, as we have claimed since September, are about to blow open and drown the bank in hundreds of millions if not billions of legal settlements and fees.
Ironically, it is the biggest mortgage lender in the US, Bank of America which continues to blatantly misrepresent its putback exposure:
We wonder whether BofA's number accounts for the just disclosed doubling in putback claim notional against the bank as Bloomberg summarized:
What Bloomberg did not however discuss is the previously reported tidbit by DebtWire that Pimco (and naturally BlackRock) may be attempting to derail the attempt to actually extract some real damages from BofA. We quote from the piece by Allison Pyburn and Adelene Lee:
In other words, the Fed, through PIMCO and Blackrock appears to be aggressively attempting to sabbotage efforts to extract anything more than a token settlement from BofA (and thus the entire mortgage servicer industry). Luckily, as more and more institutions (all of whom were guilty of taking the world's biggest liar and fraud's word at face value) join in the fray, the ability of PIMCO to do the Fed's bidding gets progressively more diluted. We can only hope that for once the Fed will not get its way. h/t MM
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| Royal Mint gold, silver coin sales double Posted: 28 Feb 2011 10:00 AM PST
Demand for gold coins has risen sharply in recent years as investors have turned to bullion as a hedge against currency market instability and economic turmoil. [source]
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| Gold Daily and Silver Weekly Charts Posted: 28 Feb 2011 09:53 AM PST
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| Gold Heading for Another Bull Run? Posted: 28 Feb 2011 09:51 AM PST The price of gold is appearing as if it is set up for another bull run. Is this from any sophisticated technical chart analysis? No, it is merely from examining the chart of the gold price (using the GLD ETF as a proxy) and observing the similarity of patterns that seems to be matching the gold price's rise from the consolidations of last summer. Here and now, we have just witnessed gold's price gyrate up and down … gold just feels like it is headed for new highs.
[source]
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| FEMA Orders 1 Billion Worth Of Dehydrated Food? Posted: 28 Feb 2011 09:32 AM PST  Terror threats appear to be on the rise as FEMA has rushed a $1 Billion order of dehydrated food in the event of attacks on domestic targets in the US. This is also coming on the heels of one of the largest terror drills performed by the US Navy on American soil, as Operation Solid Curtain is taking place this week. In an article Tuesday from the Beaufort Observer, many of the largest suppliers of dehydrated foods in the country are dropping their distributors and customers to dedicate their resources to supplying a billion dollar FEMA request and purchase.
Are You Prepared For a Food Shortage? 
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| Posted: 28 Feb 2011 09:21 AM PST courtesy of DailyFX.com February 28, 2011 07:54 AM 480 Minute Bars Prepared by Jamie Saettele Trading to a new high would shift focus to the next big round figure at 1500. Keep an eye on weekly resistance lines as well (there are 2 lines – one extended from the December 2009 and December 2010 highs and one extended from the February 2009 and December 2009 highs)....
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| Posted: 28 Feb 2011 09:19 AM PST | ||||||||||||||||||||||||||||||||||||||||
| Middle East Mayhem Driving Gold Prices Higher Posted: 28 Feb 2011 09:12 AM PST | ||||||||||||||||||||||||||||||||||||||||
| Commodity Run Changing, Not Ending Posted: 28 Feb 2011 09:10 AM PST | ||||||||||||||||||||||||||||||||||||||||
| Posted: 28 Feb 2011 09:05 AM PST CBOE To Add Another Layer Of Gold Price Volatility, Launches Futures And Options On Gold VIX Share this:
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| Tiex Inc. - Breaking News/Special AOTH Update Posted: 28 Feb 2011 08:44 AM PST TIX on AOTH Richard (Rick) Mills Ahead of the Herd As a general rule, the most successful man in life is the man who has the best information The February 25, 2011 news regarding the DigHem airborne survey being presently flown by Furgo on behalf of Tiex Inc. TSX.V – TIX is very important. "Tiex Inc. is pleased to announce that the Company has signed a 2,405 line kilometer helicopter-borne DIGHEM frequency domain electromagnetic and magnetic survey contract with Fugro Airborne Surveys Corp. of Mississauga, Ontario. The survey is to take place on the Company's mineral property in the Quesnel trough area of the Cariboo Mining District of British Columbia. This airborne survey is currently underway and consists of three main block of mineral tenures in the Gold Creek, Viewland and McKaygold areas within the sedimentary hosted gold and the Viewland porphyry copper-gold project areas of the Company's land package." Contained in this news release are two maps – a copper anomaly map a...
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| Grandich Client Crocodile Gold Posted: 28 Feb 2011 08:40 AM PST The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! February 28, 2011 12:01 PM It’s fair to say in response to some negative emails regarding Crocodile Gold (not counting the ones that threaten life and limb and/or claim I’m Satan) that one could feel management was full of croc. Their over optimistic views of a year or so again have come back to “bite” them and have created a dislike and distrust (not in me but I can appreciate it in others) that won’t go away anytime soon. Having said that, I believe today’s update was a net positive despite the share price suggesting otherwise. I do think it could be the straw that breaks the camels back for some shareholders who sooner take their lumps and move on. Despite the usual biases, I’ve tried to come to a conclusion that makes the most sense. For me, it’s to give them a little more rope. Why? [LIST] ...
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| Posted: 28 Feb 2011 08:40 AM PST The 5 min. Forecast February 28, 2011 01:03 PM by Addison Wiggin - February 28, 2011 [LIST] [*]The important event that should have happened as oil rallied last week... but didn’t [*]A sector so beaten down, it still looks like early 2009... and a resulting opportunity [*]Byron King on a natural resource controlled by China that’s not a rare earth element [*]How to lose your life savings when you’ve put them in precious metals [*] Readers try to define the “American Dream,” explain the appeal of Atlas Shrugged [/LIST] Oil begins the new week off slightly from last week’s levels. WTI is at $97.64, while Brent trades a penny above $112. While oil’s gotten much of the attention in the last week, it has been easy to overlook something else equally important. “The dollar didn’t rally,” observes Chris Mayer. “You might recall that in 2008, when the world looked like it was going to end, the dollar rallied. ...
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| Posted: 28 Feb 2011 08:36 AM PST
Earlier, the Treasury International Capital website released its periodic update/refinement of Treasury holdings. Not surprisingly, the most impacted holders were China and the "UK" which as we had previously speculated was nothing but a custodian front for Chinese institutional accumulation. China, which according to the most recent TIC data, owned $891.6 billion in Treasurys as of December 31, is now said to hold $1,160 billion, an adjustment of $268 billion. This upward revision came almost exclusively at the expense of the UK, which saw its holdings decline by $269 billion, in other words a nearly dollar for dollar shift between the UK and China. Japan, the third largest holder, was virtually unchanged at $882.3 billion compared to $883.6 billion pre revision. Oil exporters also saw a modest drop to $212 billion from $218 billion previously (all numbers as of December 31). Still, even with this adjustment, the Fed continues to be, and likely will never be surpassed, at the top position in terms of Treasury Holdings.
Full release: Preliminary data from the latest annual survey of foreign portfolio holdings of U.S. securities are now available. The survey measured foreign holdings of U.S. securities as of June 30, 2010, to be $10,701 billion, with $2,813 billion held in U.S. equities, $6,930 billion in U.S. long-term debt securities (of which $1,167 billion are holdings of asset-backed securities (ABS) and $5,763 billion are holdings of non-ABS securities), and $959 billion held in U.S. short-term debt securities. The previous survey, conducted as of June 30, 2009, measured total foreign holdings of U.S. securities at $9,641 billion, with holdings of $2,252 billion in U.S. equities, $6,240 billion in U.S. long-term debt securities, and $1,149 billion in U.S. short-term debt securities. Long-term debt securities have an original term-to-maturity of over one year. Asset-backed securities are backed by pools of assets, such as pools of residential home mortgages or credit card receivables, which give the security owners claims against the cash flows generated by the underlying assets. Unlike most other debt securities, these securities generally repay both principal and interest on a regular basis, reducing the principal outstanding with each payment cycle. A detailed survey report, which will include final data as well as additional data detail, is expected to be available at end-April 2011. The survey was a joint effort of the Department of the Treasury, the Federal Reserve Bank of New York, and the Board of Governors of the Federal Reserve System. Three data tables are presented below. Each table presents holdings by country of foreign holder. The first table shows foreign holdings of U.S. securities split into holdings of equities, long-term debt, and short-term debt. The second table divides holdings of long-term debt securities by type of issuer as follows: U.S. Treasury, U.S. government agency asset-backed, U.S. government agency non-asset-backed, U.S. corporate and other asset-backed, and U.S. corporate and other non-asset-backed. The third table shows separately foreign holdings of short-term U.S. Treasury, U.S. government agencies, and corporate (and other) debt securities. It should be noted that in many cases it is not possible to accurately determine the country of residence of the beneficial owner of U.S. securities. Securities are often held in custody in countries other than the beneficial owner's country of residence. Respondents on this survey, in turn, may only know where the securities are held in custody. Thus, excessive foreign holdings may be attributed to countries that are major custodial centers, such as the United Kingdom, Switzerland, Belgium, and Luxembourg. Additional information on survey methodology and accuracy can be found in the article, Understanding U.S. Cross-Border Securities Data Surveys of foreign portfolio holdings of U.S. securities are conducted annually and measure foreign holdings as of end-June each year. Complementary surveys of U.S. holdings of foreign securities are conducted annually as of end-December. Questions about the survey can be directed to Contact TIC (this link is found also at the upper right-side of any TIC webpage). Questions from the news media should be directed to the Office of Public Affairs at the Department of the Treasury at (202) 622-2960. The Department of the Treasury, the Federal Reserve Bank of New York, and the Board of Governors of the Federal Reserve System wish to thank all of the institutions who participated in the survey, without whose efforts the survey would not have been possible.
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| Vikas Ranjan's Solid Gold Picks Posted: 28 Feb 2011 08:35 AM PST Source: Brian Sylvester of The Gold Report 02/28/2011 Toronto-based Ubika Research is making a name for itself on Bay Street. The firm launched its Gold 50 Index in February 2010 and by year-end, the high-potential gold juniors on that list were up a combined 99%. Ubika Cofounder and Analyst Vikas Ranjan returns to The Gold Report for a discerning look at the ongoing turmoil in the Middle East, its possible effect on metals markets and several promising junior explorers and producers in this exclusive interview. The Gold Report: The Middle East is always a hotspot for geopolitical tension. Those tensions escalated recently when Israel announced Iran was sending warships through the Suez Canal, which hasn't happened since 1979. And Egypt's new military rulers decided to let the ships pass. Is it safe to say that this situation has the potential to radically move the gold price as a result of the safe-haven bid? Vikas Ranjan: The situation in the Middle East is very f...
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| The Bond Market’s Search for the Bottom Posted: 28 Feb 2011 08:30 AM PST Psst…. Want to make some big money? We mean BIG money… Watch this space. Later this week we'll give you an update on our Trade of the Decade. It's looking better and better. Because the situation is worse than ever… "What's your view on the revolutions in North Africa," asked a Dear Reader. Generally, we avoid having views on things we know nothing about. Which is almost everything. As to what is going on, we have no idea better idea than the State Department or the CIA. Maybe the revolutions are driven tribal rivalries. More likely, increases in food prices – caused by Ben Bernanke – are to blame. And who knows? Maybe people really do crave liberty, democracy and Starbucks' frappacinos. But man is a restless beast. Often, he is content with the way things are. And then, a stone gets in his shoe…and he begins to limp and complain. Each has his own private itch. One man has a fat wife and wants a skinny one. One has a slender wife and longs for one with more meat. One wishes he could bring his deceased wife back to life. Another has a lively wife and wishes she were dead. Ask any of them and he will give the acceptable public line: it's "freedom" he is after, or so he'll tell the news media. But what kind of freedom? Most often it is the freedom to boss others around. He will want to vote, but only so he can tell other people how they should educate their children, which gods they should worship, and how much money they should send his way. The only sure thing is that no government survives forever. Francis Fukayama thought he saw the "end of history," when democracy got a toehold in Russia. Dictators need to be toppled, often in bloody revolutions. But democratic governments come and go, without making history. But democracy has a sell-by date too. Its fatal flaw was identified hundreds of years ago. When the majority realizes it can vote itself money from the minority –or from the next generation – the system is doomed. Elected governments change, but the system just goes deeper and deeper into debt –until it can go no further. What happens then? We don't know. But we're all going to find out. In the meantime… Stocks fell on Monday of last week…and continued falling until Friday. On Friday, the action reversed, with the Dow up 61 points and gold off $6. What to make of it? It's too early to say. By week's end it didn't look like the big break in the market that we've been expecting. But who knows? This is a new week. Anything can happen. But, no matter what happens, it's best to expect what SHOULD happen. And the way we see it, stocks and bonds should go down. The time for making money in stocks and bonds is over, in other words. This the time for getting out, hunkering down, and waiting until the crisis blows over. Why? There are just too many things wrong with the market…the economy…and the political situation… …and oh yes…the people trying to deal with these problems are a bunch of…what's the technical word? Oh yes, clowns. What's wrong with the market? Well… Bonds have been going up for nearly 30 years. Yields have fallen from near 20% for 10-year Treasury notes in the early '80s to 3.42% on Friday. Very nice, if you've been holding bonds. And it might lead you to think you can hold them forever. Thirty years is a long time. Unfortunately, nothing lasts forever…and certainly not a bull market in bonds. Instead, trends in the bond market tend to last about a generation. Yields generally fell from the '20s until the Eisenhower administration. Then, they rose until Paul Volcker finally got control of inflation in the early '80s. Next, they fell for the next three decades. Are they still falling? No one knows. But it looks to us as though they've found a bottom. And even if they haven't, you're probably better off thinking they have. Because the bottom can't be too far off…and there could be Hell to pay afterwards. Meanwhile, over in the stock market, stocks are expensive – close to the record highs of '29, '66, and '99. In fact, nominal prices are about where they were in the late '90s, after doubling over the last 2 years. If the bulls are right, these high prices are just the beginning. But what could drive them higher? The consumer economy runs on two important pistons of prosperity. Employment gives consumers more money to spend. And rising housing prices increases their net worth. Neither of those pistons is firing now. There are half a million fewer people with jobs now than there were 2 years ago. And house prices are still going down. How is it is possible for a genuine prosperity to develop under these conditions? But wait…it gets worse. The fed are still adding debt to the system – even while the private sector desperately needs to off-load it. Not only that, they are making the entire system dependent on negative interest-rate financing. The Fed lends below the level of consumer price inflation. Businesses, consumers, banks and speculators soon NEED cheap money just to keep going. Most of all, government needs it. You can easily see how this works. Zero interest rate financing allows the US government to run a deficit of $1.5 trillion this year. But the feds only have revenue of $2.2 trillion. So, they're spending roughly 60 cents more for every dollar they take in. And soon the official interest-bearing debt will be at $15 trillion – nearly 7 times revenues… Now, imagine that the feds had to pay interest at just 5%. Let's see, 5% of $15 trillion is what…$750 billion…or about a third of all tax revenues. Do you see the problem? Low interest rates permit the feds to borrow. They run up huge debts…and then they have so much debt that they can't afford to raise rates. They are stuck. They have to keep borrowing until it's too late to stop…until we're all busted. Bill Bonner The Bond Market's Search for the Bottom originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
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| Insiders Buy a Gold Junior, Should You? Posted: 28 Feb 2011 08:29 AM PST Hard Assets Investor submits: By Brad Zigler It's been a hard slog this year for holders of junior mining stocks. The five dozen exploration and development companies that make up the index tracked by the Market Vectors Junior Gold Miners ETF (NYSE Arca: GDXJ) have collectively fallen 6.3 percent since the top of the year. Not that gold's done all that well, but with bullion off only 1 percent, the juniors haven't been paying back their higher risk with higher returns. Gold Miners Relative Strength Vs. Gold Obviously, in an index made up of 59 equity components, some stocks will perform above average, some will be subpar. Among GDXJ's laggards this year has been U.S. Gold Corp. (NYSE: UXG), which has lost 10.5 percent since New Year's Day. Somebody, however—more appropriately, somebodies—thinks the stock's worth buying now. Granted, they're buying the stock at a discount to its market price, but they're buying nonetheless. UXG's Complete Story »
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| Gold, Silver Firm On Mideast Tumult Posted: 28 Feb 2011 08:23 AM PST NEW YORK (Dow Jones)–Gold futures rose slightly Monday and silver futures settled at a near-31-year high as investors continued to seek refuge amid Middle East tensions. "Continued nervousness about behavior in the Middle East is keeping a solid bid under gold right now," said Sterling Smith, market analyst at Country Hedging. Gold, considered a hedge against global political and economic instability, has been on the rise this month as unrest has spread in the Middle East and North Africa. [source]
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| Pre-PDAC Vulture Updates From Several of our Faves Posted: 28 Feb 2011 08:17 AM PST Gold and silver remain firm this Monday, the gold/silver ratio edged lower to a low 41 handle, the HUI is pacing with gold and the smaller miners have perked back up with both the GDXJ and the CDNX a light shade of green on the trading screens.
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| Dollar’s haven status hangs in the balance Posted: 28 Feb 2011 08:16 AM PST Long seen as a place of safety in times of turmoil, the dollar may be losing its haven appeal. Soaring oil prices, driven by upheaval in the Middle East, falling equities and elevated volatility have all made investors uneasy. A flight to the dollar usually accompanies increased risk aversion. This time, though, while the traditional havens of the Swiss franc and the yen have benefited, the US currency has suffered. [source] PG View: One need look no further than the recent record highs in USD-CHF — during a time of unprecidented geopolitical unrest — to see a clear illustration of the dollar's demise as a safe-haven.
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| How Ireland Can Leave The Euro: One Expert's View Posted: 28 Feb 2011 08:15 AM PST
Via adamsmith.org The following memo, which has fallen into our hands, is a draft of advice to the new Irish Minister for Finance from a British colleague who has a wealth of expertise on how to handle economic crises. He prefers to remain anonymous for professional reasons. Dear Minister, Congratulations on your new appointment. As you read the civil service briefings on the present crisis, you will come to appreciate that Ireland's problems would be much easier to manage if your administration could choose the country's own exchange rate and interest rate. However, your officials and your colleagues may believe that there is no practical way to leave the present European monetary union and so achieve this flexibility. In fact, there is. Leaving the euro is politically tricky and economically costly in the short-term. But it is far from impossible. The long-term advantages clearly outweigh the short-term costs, and the politics can be managed. The following outlines how it can be done: 1. Announce on a Sunday morning that Ireland is “temporarily suspending” its euro area membership. It is obviously vital that this announcement come as a surprise to markets. So you cannot discuss it with many people in advance. The Taoiseach and the Governor of the Banc Ceannais na hÉireann must obviously be informed and agree. However, even discussing the idea in a wider circle is likely to lead to leaks; in turn, this will cause a run on Irish banks and a complete collapse of deposits, destroying what is left of the economy. 2. As of L Day (Leaving Day), all Irish assets and liabilities are denominated in the ‘Irish euro’, initially at the exchange rate 1:1. This means that there is limited disruption of cash. People will continue to use euro coins with the Irish national side and euro banknotes with the letter ‘T’ (for Ireland) in the serial number. You thus avoid having to change ATMs or any other machines that take cash. For the initial period of a fixed exchange rate (see below), Gresham’s Law will operate and ‘non-Irish euros’ will disappear from circulation in Ireland. You may later wish to take a leaf from the successor states of the Austro-Hungarian Empire and stamp ‘Irish euros’ to highlight their national character further. 3. Announce that there will be temporary exchange controls pending a resolution of outstanding issues such as Irish euro-denominated debt. On this, you have a choice. You can announce that Ireland will honour its euro-denominated debt until roll-over. This puts the exchange-rate risk on you. Since a main reason for Ireland to leave the euro area would be to devalue, this move would increase your debt, but would facilitate any negotiations with your euro area partners. However, it is an expensive route. You may therefore prefer to announce that as of L Day (Leaving Day) all external Irish euro-denominated debts are also denominated in the ‘Irish euro’. That puts the exchange rate risk on your creditors. It is cheaper, though it leaves you open to substantial lawsuits. The exchange rate will of course not remain fixed for long. Nor would you want it to. But until the transition period is over, you may have to rely on the black market (which you will, of course, criticise) to provide you with accurate information about the appropriate Irish/euro are exchange rate. 4. You should in any case now go for a default – which of course you will describe as “a renegotiation of public debt”. Since you will in any case devalue (which is a form of default) you might as well get everything out of the way at the same time. Offer creditors a (say) 50% haircut on any debt that is maturing over the next few years; or a new bond maturing (say) 15 years down the line. With any luck, they will take the 50% and run. You will no doubt be told that if you do this, Ireland will be shut out of capital markets for years, perhaps decades to come. Perhaps. But if you have a primary budget surplus you will not need to borrow much anyway. Moreover, history clearly shows that when the only threat your creditors hold over you is that, should you default, they won’t lend you any more money, then you should default at once. In any case, knowing international markets, they will realise that the combination of default, devaluation and a return to being able to set a monetary policy suitable for Irish needs, will actually give a boost to the economy. They will therefore be eager to lend. 5. One last thing. You will eventually want to move away from ‘Irish euros’ to a proper national currency (you can still keep notes and coins looking the same to ensure that cash machines will work). When you do, I suggest that you do not tie your currency to any other currency – the whole point of this exercise is to be able to conduct an independent monetary policy in the interests of Ireland. Yours faithfully, (signed)
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| A Leverage Strategy for Goldcorp as Bull Run Seems Likely Posted: 28 Feb 2011 07:58 AM PST Marco G. submits: With the indications of a new Bull run for precious metals starting, it is time to examine the Gold miners to see which ones may offer the best opportunities. This author has not been a fan of the large Gold companies recently and has been particularly critical of Goldcorp (GG) after last year's purchase of Andean Resources. However, it seems that there may be a recent market anomaly involving the glamour boy - Goldcorp - that readers may be interested in. The situation may offer a way to profit from Goldcorp in the current run of the Gold bull. Goldcorp Status In the chart following, the black trace is Goldcorp's (GG) share price since September 2010, and the green trace are Goldcorp's warrants with a strike price of $45.75 that will expire June 9, 2011.
Note that Goldcorp's share price has not moved a lot in the Complete Story »
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| Jim Rogers: "Saudi Arabia Is Lying About Being Able To Increase Its Oil Production" Posted: 28 Feb 2011 07:40 AM PST
Jim Rogers joins Zero Hedge in being highly skeptical about just how credible Saudi's call for a 1MM + boost in its oil supply is: "Saudi Arabia has been lying about the reserves for decades. Saudi Arabia the last two times said they are going to increase production and they couldn't increase production. Don't fall for that. The reason oil is going up is the world is running out of known reserves of oil." Of course, then there is the question of does one trust the Quantum fund creator who retired at 37, or does one go with the sellside lemming brigade of monkeys with typewriters who will groupthink anything and everything to death, just to get paid another completely unwarranted bonus. As to those who are concerned that the commodity "bubble" is about to pop, Rogers says: "It's still years away." And some reinforcement for the gold and silver bulls: "Gold will certainly go over $2,000 by the end of the decade, and silver will pass $50." And as a hedge to his great commodity bull market call, Rogers continues to be short Nasdaq stocks. His thesis: "If the economy gets better I am going to make money in commodities, if it doesn't get better, I am going to make money in commodities cause they are going to print huge amounts of money." Call it the adjusted Tepper call. Rogers is also holding a contrarian all on the dollar: "I own some dollars now because there was a huge drop in the dollar. I do sometimes like to buy things when they collapse, and sometimes I don't. Sometimes I lose money." We assume this is merely a short-term revulsion trade as all the near-record USD shorts get flushed out as we highlighted in the latest Committment of Traders update. Full interview:
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| Why Volatility in the Middle East is the Only Near-Certainty Posted: 28 Feb 2011 07:30 AM PST "Buckle your seatbelts. You're watching history in the making," a journalist cautioned yesterday. Was this particular journalist referring to: 1) The Wisconsin "Tea Party Revolt;" 2) Ben Bernanke's history-making foray into dollar debasement; 3) The suspension of filming Two and a Half Men, due to Charlie Sheen's very public dispute with producer, Chuck Lorre; 4) The bizarre rift between child superstar, Miley Cyrus and her dependant father, Billy Ray Cyrus; 5) That ruckus going on in the Middle East; Although the journalist's quote could apply to any of the items cited above, the topic in question was not the long-standing hostility between Sheen and Lorre, but rather the long-standing hostility between the oppressed peoples of the Middle East and their oppressors. The revolutions sweeping across the Middle East are not merely one-off attempts to overthrow unresponsive autocrats or crazed tyrants, CNN journalist, Fareed Zakaria, asserts, these revolutions are a reaction to 1,000 years of subjugation by foreign powers and their hand-picked, domestic lieutenants. "[F]or the first time in 1,000 years, Arabs are taking control of their own affairs," Zakaria explains. "Since the 11th century, Arab lands have been conquered and controlled by foreigners… In fact, most of the Arab world was ruled by the Ottoman Empire for centuries. Then came the Europeans, who carved up the region after World War I – creating most of the states we know today… [These states were] all creations of the colonial powers." "Throughout this 1,000 years of foreign domination," Zakaria continues, "the Arabs always had local rulers. But these sheiks and kings and generals were appointed or supported by the outside imperial powers. Most of the Middle East monarchies, for example, were created out of 'whole cloth' by the British. "These local rulers were more skilled at negotiating up to the imperial rulers, than they were at negotiating down to their own people. They ruled their own people, not by negotiation, but by force and bribery… That game is in trouble…" Finally, says Zakaria, the winds of change are blowing across North Africa and regions to the East. As these winds gather intensity, socio-economic conditions in the region will shift as unpredictably as sand dunes in the Sahara. Volatility is probably the only near-certainty. "The Middle East is witnessing a revolt against the Old Order everywhere," Zakaria concludes. "Where it will lead, where it will fail, where it will succeed, all of this is totally unclear. But this is a big, system-wide and historic shift. So buckle your seatbelts. You're watching history in the making." If volatility is the likeliest course of the Mid-East revolutions, what would be the likeliest course of the oil price? Volatility, with a bias to the upside, would be our guess. And if the oil price is likely to spike higher, what would be the likeliest course of the global financial markets? Volatility, with a downward bias, would be our guess. As we remarked in Friday's edition of The Daily Reckoning, "We are not so certain that the contagious revolutionary virus spreading throughout the region is bullish for anything other than the oil price…and Anderson Cooper." Eric Fry Why Volatility in the Middle East is the Only Near-Certainty originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
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| Dollar's safe-haven status hangs in the balance Posted: 28 Feb 2011 07:29 AM PST By Peter Garnham http://www.ft.com/cms/s/0/d73c9258-435e-11e0-8f0d-00144feabdc0.html Long seen as a place of safety in times of turmoil, the dollar may be losing its haven appeal. Soaring oil prices, driven by upheaval in the Middle East, falling equities, and elevated volatility have all made investors uneasy. A flight to the dollar usually accompanies increased risk aversion. This time, though, while the traditional havens of the Swiss franc and the yen have benefited, the US currency has suffered. "It seems the dollar's haven status has vanished," says Steve Barrow at Standard Bank. "And even for long-term dollar bears like ourselves, this is a worry." The main reason for the dollar's underperformance, analysts says, is concern about the effect of rising oil prices. ... Dispatch continues below ... ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php The dollar has dropped to a record low against the Swiss franc and fallen 2 per cent to Y81.82 against the yen in the past two weeks, just shy of the all-time low of Y79.7 it hit against the Japanese currency in 1995. It has also lost ground against the euro and sterling. The fear is that higher oil prices will lead to a transfer of funds from oil-importing countries to the sovereign wealth funds of oil-exporting nations. Mansoor Mohi-uddin, global head of FX strategy at UBS, says such funds tend to keep a low proportion of their assets in US markets compared with traditional central bank reserve managers. "Thus the greenback is also being undermined by fears that higher oil prices will lead to increased sovereign wealth fund dollar diversification activity," he says. Kit Juckes, head of FX research at Societe Generale, argues that the dollar's underperformance reflects what he calls a "risk-averse but yield-sensitive" environment. While the yen and Swiss franc have been driven higher by haven appeal, the euro and the pound have at the same time been supported by increasing expectations that the European Central Bank and the Bank of England will deliver interest rate rises before the US Federal Reserve. And John Hardy, FX strategist at Saxo Bank, says the dollar is also suffering because of the Fed's lack of credibility on inflation, given the risks of a continued rise in oil prices. "The market assesses that the Fed will ignore inflation and launch a third round of quantitative easing, as it prefers to concentrate on its growth mandate, while the rest of the world's inflation-focused central banks hike rates to deal with the inflation threat," says Mr Hardy. But he says the market remains confused, with the rally in government bond prices triggered by haven demand hardly consistent with fears over inflation and very supportive of the Swiss franc and the yen, the lowest-yielding currencies. "Commodity currencies are somewhere in the middle, not sure whether they should celebrate higher commodity prices or fret about the risk-off environment. Something is going to change dramatically in the coming couple of weeks as a more logical set of themes emerges." Other factors are denting the dollar's appeal. Although it is considered an unlikely prospect, some analysts cite the risk of Washington becoming involved in military action in the Middle East as weighing on the US currency. Yet, Mr Mohi-uddin says, while there are risks of further near-term losses for the dollar, he would be wary of chasing it lower from current levels. After oil prices peaked at near $150 a barrel in the summer of 2008, for example, the dollar rebounded sharply. True, the currency's gain was triggered in large part by the collapse of Lehman Brothers in September 2008, but it had already began its upward trajectory as equity markets started to fall from the middle of the year. Mr Mohi-uddin says the events of three years ago serve as a warning against becoming too bearish on the dollar, especially given equities have only weakened slightly on the back of the recent tensions in the Middle East. The S&P 500 has fallen 1.2 per cent from its intraday high of the year of 1,344.02, sliding as much as 2.8 per cent last week from that high before rebounding over the past two trading days. Mr Mohi-uddin argues that if equity investors start to worry that higher oil prices will lead to sharply lower growth, the dollar is likely to rebound as stock markets decline, investors reduce their expectations of interest rate rises in Europe, and US portfolio managers repatriate funds from abroad. "Foreign exchange investors need to watch whether equity markets will continue to hold up or not in the face of rising oil prices," he says. Adam Cole, global head of FX strategy at RBC Capital Markets, agrees, saying the dollar's failure to rally in recent weeks does not reflect a shift in its status as a haven so much as a change in how investor risk appetite affects the forex market. Now, he says, risk is playing second fiddle to the varying expectations for interest rate moves by central banks. Were fears of Middle East instability to spread from oil to other markets, then those rate expectations could converge on each other, making risk appetite the dominant forex driver again. The corollary to this, says Mr Cole, assuming the US currency retained its haven status, would be a stronger dollar. Support GATA by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf
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| Drivers Influencing Precious Metal Prices Posted: 28 Feb 2011 06:57 AM PST Pater Tenebrarum submits: As a follow-up to our recent missive on gold, we want to take a look at the drivers influencing precious metals prices we have identified as relevant. There are three types of precious metals – gold, silver and platinum group metals (PGM's). There are six different PGM's, namely Platinum, Palladium, Rhodium, Iridium, Osmium and Ruthenium. The first three of these are used extensively in automotive catalysts, but only platinum and palladium sport exchange-listed futures contracts, as the rhodium market is extremely small (annual production is slightly less than 700,000 oz.). Iridium, Osmium and Ruthenium production is even smaller than Rhodium production, however, Rhodium generally tends to be most expensive PGM (it is indispensable in catalytic converters and as only tiny trace amounts of it are needed, demand is relatively price-inelastic). There are ways to invest in Rhodium via so-called pool accounts, but from a practical perspective one can state that Complete Story »
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| CBOE To Add Another Layer Of Gold Price Volatility, Launches Futures And Options On Gold VIX Posted: 28 Feb 2011 06:47 AM PST
It's not quite a triple forward (or inverse) ETF on gold just yet, but it's a start. Capitalizing on the surge in volatility in the commodity space, which together with FX has become the go to arena for day traders seeking volatility, which has been completely eradicated from stocks courtesy of the Bernanke Put, the CBOE and CFE have "announced plans to launch futures and options on the CBOE Gold ETF Volatility Index (Ticker - GVZ). Pending regulatory approval, CBOE Futures Exchange (CFE) will begin trading GVZ futures on Friday, March 25, and CBOE will introduce GVZ options a few weeks later." The reason for this product to be pushed on investors is that after peaking near 25 in December, the ^GVZ has plunged to one year lows as gold has steadily remained just off its all time highs. So if the first volatility derivative isn't generating the much needed commission broker P&L, it is time to break out 2nd and further vol derivatives. We expect a triple or more-leveraged ETF on gold and silver to arrive shortly, then followed by an ETF which tracks the theta in the first ETF , and so forth, until the entire market is dominated by "synthetic CDO-like" derivatives and nobody cares about the actual underlying, just so traders have something to keep them occupied. After all diversion, is half the battle. More from the CBOE:
And here is how hard the CBOE is working to satisfy the dmands of all vol addicts out there: Calculated and distributed by CBOE since 2008, the Gold VIX is one in a series of several VIX benchmarks created by CBOE. CBOE also calculates the CBOE Crude Oil ETF Volatility Index (OVX) based on United States Oil Fund (USO) option prices; and the CBOE EuroCurrency ETF Volatility Index (EVZ) based on CurrencyShares Euro Trust (FXE) options.
h/t themos mitsos
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| Higher Inflation is on the Way Posted: 28 Feb 2011 06:31 AM PST Reported inflation is headed higher – much higher. The stakes have seldom been higher. With the unemployment rate still above 9%, and federal debt at record levels, this latest error by the monetary authorities is likely to be the most costly since the Great Inflation of the 1970s. Monetary instability will slow employment growth and further erode confidence in government at the same time that higher interest rates will add billions of dollars to the interest cost on the national debt. Yet, failure to act in a timely basis will lead to an even greater crisis. When it arrives, the Federal Reserve and its defenders will call it "cost-push" inflation and blame it on economic growth, the weather, Arab sheiks, China, and perhaps greedy companies and labor unions. The actual cause of the looming crisis is the same as the cause of the Great Inflation of the 1970's: a too easy monetary policy that has devalued the dollar by 40% against gold during the past two years. I choose gold as the reference point for the dollar's value because it has the remarkable characteristic of maintaining its buying power in terms of other goods and services over long periods of time. As a consequence, the dollar price of gold is the best, though imprecise, real-time measure of the price level. Other, more traditional measures, such as the consumer price index (CPI) are merely lagging indicators of inflation or deflation that has occurred already. I also choose gold because I remember what happened after President Richard Nixon in August 1971 severed the link between the dollar and gold. At the time, those who warned that the rising price of gold was signaling higher inflation ahead were widely dismissed as "gold bugs." The conventional wisdom then, as now, is that economic slack would protect the U.S. economy from inflation regardless of what happened to the value of the dollar in terms of gold. But it didn't work out that way. At first, the conventional wisdom seemed to hold. The rate of inflation as represented by the CPI slowed in 1972 to 3.2% from 4.3% in part because of wage and price controls, and then rose 5.6% in 1973. But, in 1974, the CPI jumped 12.2% in the face of rising unemployment. Shocked and dismayed, the purveyors of conventional wisdom made the circular argument that the unexpected rise in the overall price level was caused by the rise in commodity prices, especially the tripling of the price of oil. In other words, they blamed rising prices on … rising prices! But, those who followed the price of gold were not shocked. For example, the sudden tripling in the price of oil between 1971 and 1974 roughly matched the tripling in the price of gold over the same time period. In other words, the rise in the price of oil was simply the mirror image of the preceding devaluation of the dollar against gold. In the last two years, the price of gold has increased around 75% – roughly half the increase of 1972 and 1973. Last week's inflation reports indicate that this devaluation of the dollar will hit the CPI in the year ahead just as it did in 1974. The price of crude materials in the Producer Price Index (PPI) increased by 3.3% in January alone and now stands 21% above where it was just six months ago. Moreover, during the three months ending January, the rate of advance in the producer price indices for intermediate products, and finished goods have all accelerated into double digit annual rates of advance. This upward adjustment of prices to the cheaper dollar is beginning to flow through to the consumer. For the past 3 months, the seasonally adjusted annualized rate of advance in the CPI is up to 3.9%, with food and energy prices – the items that have the greatest short-term impact on a family's budget – accelerating to 3.1% and 27% over the same 3 months. Given the relative magnitudes of the dollar's devaluation against gold, it is reasonable to expect consumer prices to be rising at a 5% plus annualized rate in the months ahead. Fed Chairman Ben Bernanke's assurance during last December's interview on 60 Minutes that he was "100% certain" the Fed could control an outbreak of inflation above 2% was hubris. These data show that inflation has already broken out, and that there is little the Fed can do to stop the price indices from reflecting the dollar's devaluation of the past two years. And, his statement last Friday in Paris at a meeting of the finance leaders of the Group of 20 that "resurgent demand in the emerging markets has contributed significantly to the sharp run-up in global commodity prices" ignores the central role of the dollar's devaluation on rising global inflation. Moreover, Bernanke's promise to respond to higher inflation by raising the Fed Funds rate carries with it significant additional risks. Slowing the economy reduces the supply of goods and services relative to the supply of money, which itself can be inflationary. In addition, higher short-term interest rates increase the opportunity cost of holding currency and checking accounts, and therefore will lead to an increase in the turnover or velocity of money. That too will add upward pressure to prices. The experience of the 1970s illustrates the danger. The Fed raised the Fed Funds rate from a low of 3.3% in February 1972 to more than 10% in July 1973. But consumer price inflation continued to accelerate for the next year. To avoid another extended period of high inflation and interest rates, the Fed and the Obama Administration need to acknowledge that the current, paper dollar system is deeply flawed and prone to error and instability. The alternative is a rules-based system in which the Fed begins to use quantitative tightening and easing to steady the value of the dollar as represented by the price of gold. A monetary system in which the dollar is as good as gold – for all of its imperfections – would quickly deliver price stability, low and stable interest rates, and increased financial security to the American people. Regards, Charles Kadlec, Higher Inflation is on the Way originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
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| Booming Global Auto Market Good For Many Posted: 28 Feb 2011 06:23 AM PST Perhaps no industry has experienced a stronger recovery from the depths of the recession than the global automobile industry. Around the world, cars are rolling off the lot at a pace not seen in years. Global car ownership is expected to rise 17 percent over the next five years, according to data from J.D. Power.
In the U.S., an improving job market is giving consumers confidence to purchase big-ticket items such as automobiles. A recent survey from the Conference Board shows a record number of people (13 percent) are looking to purchase a vehicle in the next six months. That's triple the amount of a year ago and the highest in more than a decade.
In China, the auto sector is really heating up. January total vehicles sales were up 13.8 percent on a year-over-year basis to 1.89 million vehicles, the highest monthly total on record, according to ISI Group. The firm is forecasting total sales of 20.5 million units this year, up nearly 900 percent since 2000. By 2015, ISI estimates annual sales will total 30 million units.
Two things really stand out from the rise: 1) vehicle sales rose despite a rollback in government subsidies, and 2) passenger vehicles drove sales. ISI says that "persistent double-digit per capita real income growth is creating a 'car culture' in China." While thriving, the car culture is China is still in its infancy. Currently, there are roughly 3.5 vehicles owned for every 100 Chinese citizens. However, that figure is very low compared to other countries with similar levels of GDP per capita.
You can see from this chart from Main First Bank that China and Thailand have relatively similar levels of GDP per capita, but the rate of vehicle ownership in China is significantly lower. If China were to catch up with the trend of other countries, the ratio would roughly be 10 vehicles for every 100 people. The same can be said for other countries where incomes are rising such as Turkey and India. When you spot such a powerful trend, it's important to look for the inter-market relationships. The demand for new automobiles is generating increased demand for auto supplies such as batteries, tires, sensors, aluminum and electronics. It is also driving demand for oil through gasoline and diesel consumption. The infrastructure needed to handle all these vehicles is also in great demand. Roads and bridges need to be built and congested streets and highways need to be expanded and widened, driving demand for cement and steel. The stage is set for a booming global auto market over the next several years. This could be a driver for the entire supply chain from basic commodities to high-end components. Regards, Frank Holmes, P.S. John Derrick serves as director of research for U.S. Global Investors and contributed to this commentary. Also, for more updates on global investing from me and the U.S. Global Investors team, visit my investment blog, Frank Talk. Booming Global Auto Market Good For Many originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
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| For week ending 25 February 2011 Posted: 28 Feb 2011 06:19 AM PST Technically Precious with Merv Despite all the turmoil gold was not able to get into new high territory. It will be interesting which way for gold next week. GOLD LONG TERM Looking at the long term P&F chart we still have not negated that previous bear signal although as mentioned at the time, the bear needed a move to the $1305 level for confirmation, which it did not do before the rally. The two P&F levels to watch would be the previous $1305 level for the bear confirmation or the $1440 level for the bull continuation confirmation. The two levels are some distant apart but that's the long term for you. As for the usual indicators, they remain very positive (surprise) with one cautionary indicator. Gold closed the week well above its positive sloping moving average line. The long term momentum indicator remains in its positive zone and above its positive sloping trigger line. However, the actions of this indicator give us reason to be cautious. Alth...
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| Gold edges higher to cap off February rally Posted: 28 Feb 2011 06:17 AM PST SAN FRANCISCO (MarketWatch) — Gold futures ticked moderately higher Monday, getting some renewed buying interest based on lingering concerns about Libya's uprising. Gold for April delivery added $3.90, or 0.3%, to $1,413.20 an ounce on the Comex division of the New York Mercantile Exchange. After a 6.1% slump in January, gold is on track to rise almost 6% in February. [source]
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| The Market Is Telling Us That The Dollar Is Finished Posted: 28 Feb 2011 06:13 AM PST (snippet) Clearly the dollar was beginning to fall out of favor.Fast forward to today. Mubarak. Gaddafi. Khalifa. Al Said. Ben Ali. Etc. There is no shortage of turmoil right now... yet we are seeing the dollar get clobbered while gold, silver, and smaller currencies like the Swiss franc rise. This represents a major shift in the way that the market views risk. It's true that nothing goes up or down in a straight line... but long term, the market is telling us that investors are washing their hands of the dollar as a safe haven asset. So what happens from here? In the long run, the law of one price will prevail; the US dollar cannot become so cheap relative to other currencies that a multimillion dollar home in Malibu only costs the equivalent of six month's wages in Switzerland... or that a new Corvette equals the price of an electric bicycle in Singapore. Foreigners will swoop in and mop up US inventory long before that happens, not to mention foreign governments will manipulate their own currencies in order to avoid missing out on a 300 million-strong consumer market. We're already seeing this now as the ridiculous game of international capital controls tries to masquerade as a free market. I suspect the regulatory environment will only worsen as the political lemmings follow one another off the cliffside. (yes I know it's a myth, but so is the notion of fiat currency as sound money...) More Here.. 
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| Golden Fireworks Are About To Begin Posted: 28 Feb 2011 06:12 AM PST The gold bull is now on the verge of launching the most spectacular up leg of this 10 year bull market. This spring we should see the final parabolic rally of the massive C-wave advance that began in April `09 with a test of the 1980 high at $860. First off let me explain gold's 4 wave pattern (and no it has nothing to do with Elliot wave). Gold moves in an ABCD wave pattern, driven not only by the fundamentals of the gold market (which I will get into in a minute) but also by the emotions of gold investors and the thin nature of the precious metals market. The A-wave is an advancing wave that begins and is driven by the extremely oversold conditions created during a D-wave decline (more on that in a second). A-waves can often test the all time highs but rarely move above them. Usually they will retrace a good chunk of a D-wave decline. The B-wave is a corrective wave spawned by the extreme overbought conditions reached at an A-wave top. The C-wave is where the monster...
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| Pan American Silver: Solid 2010 but Upside Appears Limited Posted: 28 Feb 2011 06:12 AM PST David Urban submits: Pan American Silver's (PAAS) goal is to be the largest low-cost primary silver mining company in the world. Historically, silver is mined as a byproduct of other metals but Pan American has been founded on developing primary silver deposits in North and South America. During the fourth quarter of 2010 silver production reached 5.7 million ounces and totaled 24.3 million ounces for the year. Net income increased to $112 million or $1.05 per share in 2010, from $62 million or $0.71 per share in 2009, while sales increased by 39% to $632 million in 2010 from $455 million in 2009. For the full year, cash costs, net of by-products rose by 3% to $5.69 an ounce of silver but below full year guidance of $5.90 per ounce. Fourth quarter cash costs, net of byproducts, were $6.61 per ounce. A cash dividend of .025 was instituted in the second quarter of Complete Story »
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| LGMR: Middle-East Turmoil Spreads, "Toxic Mix" Drives Global Liquidity Posted: 28 Feb 2011 06:08 AM PST London Gold Market Report from Adrian Ash BullionVault Mon 28 Feb., 08:30 EST Gold Up, Silver Flat as Middle-East Turmoil Spreads, "Toxic Mix" Drives Global Liquidity THE WHOLESALE PRICE OF large gold investment bars rose back towards Friday's 2011 highs early Monday afternoon in London, hitting $1415 per ounce as the Dollar fell and European crude oil rose towards new two-year highs above $112 per barrel. Eurozone stock markets rose but German Bund prices slipped – nudging interest rates higher – despite news that Eurozone inflation slowed to 2.3% in Jan. The gold price in Euros slipped to €32,750 per kilo, some 1.8% below last Tuesday's 6-week highs. Silver priced in Dollars meantime held flat at $33.50 per ounce, bucking its recent outperformance of gold investment. "Political turmoil in Libya continued to support gold and silver" in Asian trading, says a note from one Hong Kong dealer. "Amid ongoing unrest in North Africa and the Middle East, it is still qu...
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| To prevent gold market manipulation, Vietnam would outlaw the market Posted: 28 Feb 2011 05:55 AM PST This is what happens when the gold market is entirely physical and uncontrolled by derivatives: The price simply explodes and destroys the government currency. Kitco's Jon Nadler and CPM Group's Jeff Christian insist that central banks have no interest in controlling the gold market and little interest even in gold itself. This is hallucination at best, disinformation at worst. Vietnam's central bank doesn't seem to have fallen for it. * * * Vietnamese Weigh Impact of Bar on Gold Trade By Ben Bland http://www.ft.com/cms/s/0/667412aa-4352-11e0-aef2-00144feabdc0.html The desire among many Vietnamese to keep gold as a store of value is both a cause and a symptom of the fast-growing nation's economic trouble. Now the government has said it will ban the trading of gold bars in the "free market" as part of a package of measures designed to rein in soaring prices and tackle deep-seated economic imbalances. But it has befuddled investors and ordinary people alike. Buffeted by persistent inflation and weakness in their currency, many Vietnamese prefer to save in gold and dollars. Their fondness for gold, which is often used to settle property deals and other large transactions, and for dollars puts further downward pressure on their currency, the dong, in a negative feedback loop from which it is hard to escape. ... Dispatch continues below ... ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php Vietnam's central bank said on Friday that to prevent speculation and market manipulation, the government would issue a decree in the second quarter of this year banning the free-market gold trade and thereby preventing cross-border smuggling. But, given the government's tendency to issue decrees and circulars by the truckload, gold traders and economists say the real impact of this latest pronouncement will be determined by officials' actions rather than words. Cao Sy Kiem, a former central bank governor, told the Tuoi Tre newspaper that while the government needed to tackle the proliferation of gold and dollars in order to be able to make sound monetary policy, a "detailed road map" was needed to ensure the problems caused by unofficial gold trading were not made worse. A gold trader on Ha Trung street in Hanoi, one of the most popular locations for the gold shops that double as black-market dong-dollar exchange houses, questioned how effective this latest move would be. He said: "The government needs a clear definition of gold bars, or else gold shops will make whatever shape necessary to avoid the law." One economist said that, as transactions in gold and dollars were circumscribed by law, what was needed was serious enforcement and serious alternatives, not more decrees. Given much of the gold in Vietnam is held in people's home safes, accurate statistics on the amount of the metal in the country are nigh on impossible to collate. Last year the central bank governor denied speculation that there was as much as 1,000 tons of gold in Vietnam, equivalent to 45 per cent of annual gross domestic product. The onshore gold price, which trades at a premium to international prices, fell initially at the end of last week as news of the proposed trading ban broke. But it stabilised on Monday at 37.6-37.7 million Vietnam dong per tael, equivalent to 37.5 grammes or 1.21 troy ounces, according to Reuters. Evidence, if it were needed, that it will take a lot more than another decree to coax the gold out of Vietnamese savers. Support GATA by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf
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(PDF), from the Federal Reserve Bulletin, 2006.
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