Gold World News Flash

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• Rethinking “Buy on the Dips”
• As Silver Prices Rise, Silver Volatility will Grow
• Gold and Silver Breaking New Highs, As U.S. Dollar Loses Appeal As Safe Haven
• Swiss Franc: Beyond Dollar Parity
• Gold Seeker Closing Report: Gold and Silver Fall Almost 1.5%
• Golden Years?
• HOENIG TELLS TRUTH; BERNANKE LIES
• Utah Pushes To Accept Gold, Silver As Alternative Currency
• This is a FREAKING Disaster… And It’s Happening Right NOW!
• In The News Today
• Jim?s Mailbox
• In Colombia, new gold rush fuels conflict
• What Do China’s Economy and GM’s Sales Have in Common?
• Unless The Silver and Gold Price Crash Through Their Lower Supports, They Will Keep On Rallying
• The Benefits of Working for the Government
• Gold, Silver Set to Soar
• Gold retreats from record high
• More QE could send silver above $50, Hathaway tells King World News
• Jim's Mailbox
• Take Out Dividends and Stocks Return Less That Treasuries… Since 1900
• Better get yours before availability runs out
• Gold Daily and Silver Weekly Charts - Emperor Nakedly Monetizing, Desperately Seeking Stability
• Treminally Ill Alert
• Making a Case for Gold in 2011!
• "Wars, Rumors Of Wars, Skyrocketing Oil Prices And Global Economic Chaos – Why Is All Of This Happening?"
• A Conspiracy with a Silver Lining
• Gold and Silver Breaking New Highs As U.S. Dollar Loses Appeal As Safe Haven
• Guest Post: Bernanke’s Unstoppable, Self Reinforcing Feedback-Loop
• Consolidation at Yearly Highs
• The Implications of The U.S. Dollar Testing Lows While Precious Metals Soar to New Highs

Rethinking “Buy on the Dips” Posted: 03 Mar 2011 06:28 PM PST Perhaps no more do we hear this common phrase “buy on the dips” than in raging bull markets. Investors who have long sought to price themselves into strong markets have used this phrase to justify their patience. However, truthfully, “buying on the dips” isn’t at all rational. Consider for one moment what buying on the dips means; it means to ease into a particular investment with several smaller investments intended for only times when the market had dipped or made a very small decline against a general bull market. What makes this strategy so attractive is that investors can buy into the market at its lowest point routinely, and thus lower their average cost per unit as far as is reasonable, given their individual timeline. But does it make sense? If we are to assume for a moment that silver has nowhere to go but up in the long-term, why is it that investors want to buy at…say, $30 per ounce instead of $33 per ounce? Certain...

As Silver Prices Rise, Silver Volatility will Grow Posted: 03 Mar 2011 06:26 PM PST It does not seem uncommon to log online or turn on a TV and see silver head higher. Save for a few weeks in January, the trend toward higher prices has been in effect since August, when most people were still thinking silver at $20 was overvalued. At $33, it's still a bargain. For a moment, it would be important to discuss market theory and market thinking. Realize that investors are subject to what the market believes their silver to be worth, and in many ways, the market can be unforgiving. Even John Maynard Keynes understood that, "the markets can stay irrational longer than you can stay solvent," a message to anyone that is playing in a game with six billion other people, many who may not ever value the same things you do to the same degree. Volatility Ahead If you haven't realized by now, there is plenty of retail money making its way into the silver market. While this is not necessarily a bad thing, it is money that is made up mostly with inexperienc...

Gold and Silver Breaking New Highs, As U.S. Dollar Loses Appeal As Safe Haven Posted: 03 Mar 2011 06:08 PM PST GoldStockTrades

Swiss Franc: Beyond Dollar Parity Posted: 03 Mar 2011 04:00 PM PST [click on the image for a larger version] Continue reading the article . . .

Gold Seeker Closing Report: Gold and Silver Fall Almost 1.5% Posted: 03 Mar 2011 04:00 PM PST Gold fell as much as $24.32 to $1411.98 by early afternoon in New York before it bounced back higher in afternoon trade, but it still ended with a loss of 1.42%. Silver fell to as low as $34.05 before it also rallied back higher in the last hour or so of trade, but it still ended with a loss of 1.46%.

Golden Years? Posted: 03 Mar 2011 03:24 PM PST Via Pension Pulse. Ronald Brownstein reports in the National Journal, Golden Years?: One big reason public employees are under siege in Wisconsin and other states is because they now enjoy more secure retirement benefits than most private-sector workers. The question is whether the right way to close that gap is by reducing security for government employees or increasing it for everyone else.   For private-sector workers, retirement security is unmistakably eroding. The change is rooted in the shift from “defined benefit” pensions, under which employers guarantee their workers a fixed payment after retirement, to “defined contribution” pensions, such as 401(k) plans, under which employers commit only to contributing a fixed amount that employees must invest on their own.   In 1985, about four in five workers at medium- and large-sized private firms received a defined-benefit pension, according to federal statistics. Today, less than one-third are covered under such plans. Instead, most workers at large and medium private companies who receive pension benefits at all obtain them in the form of defined contributions. In small companies, defined-benefit plans are virtually extinct—and only about one-third of those workers receive even a defined-contribution retirement benefit.   This replacement of traditional pensions with 401(k)-type plans amounts to a massive shift of risk from employers to individuals. Under defined-benefit programs, employers bear the primary financial risk: They are obligated to provide the benefits regardless of how their investments perform. Under defined-contribution programs, workers invest their own money and suffer if the markets tank, as anyone with a 401(k) discovered in the 2008 meltdown.   But one group of workers has largely avoided this shifting of risk: public employees. Defined-benefit plans still cover fully 87 percent of public employees (compared with the one-third of private-sector workers at larger companies). In fact, the share of public-sector workers with traditional pensions now substantially exceeds the two-thirds of private-sector workers at bigger companies with access to either a defined-benefit or defined-contribution plan.   That advantage creates understandable resentment among workers who have lost such certainty. “The taxpayer who is hurting does not have a defined-benefit pension and is saying, ‘Why should my taxes go up so this other group can have this very generous retirement?’ ” says John Rother, executive vice president of policy at AARP, the giant seniors’ lobby.   Some of the pension benefits that public employees have negotiated are indefensible (particularly those allowing excessively early retirement). And over time, it’s unsustainable for public employees to enjoy so much more retirement security than most of the taxpayers who fund their benefits. But the escalating conflict over whether public employees have won too much retirement security is obscuring the larger issue of whether everyone else has lost too much. “The question is, should we bring everyone down to what we’ve done in the private sector where the level of insecurity is [rising]?” says Alicia Munnell, director of the Center for Retirement Research at Boston College.   Using conservative assumptions, and including all potential sources of income (including Social Security, traditional pensions, home equity, and 401(k) plans), the Center for Retirement Research calculates that fully half of Americans will fail to generate enough postretirement income to approach their preretirement standard of living. The vulnerability is greater for younger than older baby boomers and greater still for Generation X. Those who rely on defined-contribution plans are substantially more exposed than the dwindling number with access to traditional pensions. The overall level of risk, Munnell warns, “is shockingly high.”   The 401(k) has several virtues: flexibility, portability, autonomy. For the vast majority of workers, however, it is not producing enough assets for a secure retirement—either because they didn’t invest enough, made bad investment choices, or simply suffered from market volatility. In all, workers who retire during the next 20 years can expect to replace only about two-thirds of their preretirement income, compared with about four-fifths for their parents’ generation, the liberal-leaning think-tank Demos calculated in a recent study. “It’s a tougher future than we’re expecting; it’s a tougher future than our parents had; and I think it’s going to be demoralizing,” Munnell says.   Public employees need to accept reasonable concessions as states confront big budget deficits. But the impulse to take government workers down a peg might be better channeled toward increasing retirement security for everyone else in fiscally responsible ways.   Most Americans will need to contribute by working somewhat longer. Beyond that, one option is to provide bigger Social Security benefits for lower-income retirees by restraining them for the affluent. Another, as President Obama has proposed, is to establish automatic retirement-savings accounts for workers without pension plans, with matching federal contributions for lower-income savers. These contributions could be funded by limiting the tax break for 401(k) plans, because those deductions most benefit the wealthy (and are projected to cost $360 billion in lost federal revenue through 2015).   Public pensions may be attracting the headlines, but the unraveling of private-sector pension security poses a much greater long-term challenge, even if it lacks a pyrotechnic confrontation to galvanize the media. Let's be clear on something, taxpayers are not footing the bill for public sector pensions, at least not yet. Workers contribute to their pensions and funds invest these monies on their behalf to be able to pay future liabilities. But because public pensions are guaranteed, if the state doesn't have the funds to make up any shortfall, then taxpayers could be on the hook. One thing that should be done away with is early retirement. I was talking to a senior federal government employee in Ottawa who told me that he knows of people retiring at 55 after 30 year service and collecting a pension of $100,000 a year. That's a pension for the rest of their life! Alright, these are exceptional cases, but it's ridiculous. If my 79 year old father can still work ten hour days as a psychiatrist, which he fully enjoys, then why should government workers be allowed to retire at 55? We need to instill some common sense and realize that the system isn't going to be able to support these benefits in the future. As for private sector pension security, Mr. Brownstein is right, it doesn't garner the media's attention but this is what poses the real long-term challenge. If policymakers don't address this problem, then pensions apartheid between public and private sector workers will only get worse.

HOENIG TELLS TRUTH; BERNANKE LIES Posted: 03 Mar 2011 02:57 PM PST Jesse http://jessescrossroadscafe.blogspot.com/ with the fact that Ben is printing money. Hoenig confirms that Ben is printing money. Ben says he isn't printing money. Who do you believe? 03 March 2011 Gold Daily and Silver Weekly Charts – Emperor Nakedly Monetizing, Desperately Seeking Stability The Fed is monetizing debt, colloquially known as 'printing money.' At this point [...]

Utah Pushes To Accept Gold, Silver As Alternative Currency Posted: 03 Mar 2011 02:10 PM PST A month ago we reported that the state of Virginia has established a subcommittee to study alternatives in the case of a terminal "Fed" breakdown, and would propose gold as a sound alternative to the existing fiat currency. Now, the state of Utah has gone a step further and is actually voting, as early as today, on whether to recognize gold and silver coins, issued by the federal government, as legal currency, a move that would send a huge signal to the Marriner Eccles building that Americans have had enough of the Fed's dollar debasement. "The coins would not replace the current paper currency but would be used and accepted voluntarily as an alternative." Reports Foxnews: "The legislation, which has 12 co-sponsors, would let Utahans pay their taxes with gold and also calls for a committee to study alternative currencies for the state. It would also exempt the sale of gold from the state capital gains tax. The bill cleared a state legislative committee on Wednesday, the first of 11 similar bills in statehouses across the country to do so. If the bill clears the House, it would have to pass the Senate before the governor could sign it into law." Paying taxes in gold? Interesting. We certainly hope this was not highlighted due to being the only viable use of funds, as one would question the legitimacy of the entire proposal. Finally: "Attorney and Tea Party activist Larry Hilton, author of the original bill, said he doesn't foresee any roadblocks." We shall see about that, but in the meantime it is worth highlighting that the onslaught against the dollar is coming not only from China which as we reported yesterday is pushing to convert the renminbi to a global reserve currency, but from within, as more and more states realize that the viability of the dollar is now crippled, thanks to the Chairprinter. From FoxNews: "There's enough uneasiness going on in the economy to trigger people to feel that, hey, having a little Plan B, kind of a backup system, is not a bad idea," he told FoxNews.com. The U.S. used some version of the gold standard from 1873 until 1933, when President Franklin D. Roosevelt outlawed the private ownership of gold amid the Great Depression. An international monetary system based on a gold-exchange standard continued until 1971 when President Richard Nixon stopped the U.S. from redeeming dollars for gold altogether. Critics of the gold standard say it limits countries' control over its monetary policy and leaves them vulnerable to financial shocks, such as the Great Depression. But supporters argue that the current financial system's dependence on the Federal Reserve exposes the value of U.S. money to the threat of inflation. Not surprisingly, Ron Paul is all over this proposal: Rep. Ron Paul, a longtime critic of the Federal Reserve who has called on a return to the gold standard, has praised Hilton's efforts. "Efforts such as yours in states around the country highlight the importance of returning to sound money," Paul wrote in a letter to Hilton. "Even if such efforts fail to achieve legislative success on their first try, their importance lies in bringing to the public's attention the problem of the ever-weakening dollar and the necessity of returning to a sound monetary system." While the original bill proposed by Hilton also required foreign minted coins to be accepted as legal tender, the revision only limits US produced coins. Even with this setback, Hilton said that he's "willing to take it step-by step." As we reported yesterday, Bernanke told the Senate yesterday that he does no envision the gold standard as a viable alternative to the disastrous fiat system currently in place, which has resulted in revolutions across the development world. "It did deliver price stability over long periods of time, but over shorter periods of time it caused wide swings in prices related to changes in demand or supply of gold. So I don't think it's a panacea." Supposedly Bernanke has not seen the VIX in 2008. The bill, once passed will be a critical stepping stone to not only undermining the dollar but to further stablishing gold as a true reserve currency alternative: Jeff Bell, a policy director for the Washington-based American Principles in Action (APPIA), which helped shape the Utah bill, told FoxNews.com that passage of the bill would send a message to Washington and other states. "People sense that in the era of quantitative easing and zero interest rates, something has gone haywire with our monetary policy. But people are afraid to say it," said Bell, who was an adviser to Ronald Reagan's 1976 and 1980 presidential campaigns. "If one state recognizes gold as a valid currency, I think it would embolden people not just in other states but in Washington." Bell credited Tea Party activists for advancing the legislation this far. Rep. Brad Galvez, who introduced the legislation, is a freshman legislator backed by the Tea Party. "Saying we now recognize gold as money is a big step forward," he said. And once Utah proves a successful test bed of this near-revolutionary refutation of the Chairman's ideology, everyone else will follow: Twelve other states have offered similar proposals: Georgia, Montana, Missouri, Colorado, Indiana, Iowa, New Hampshire, South Carolina, Tennessee, Washington, Vermont and Oklahoma. It goes without saying that we will track these developments closely, and carefully observe who(and why) voices any opposition to comparable proposals elsewhere.

This is a FREAKING Disaster… And It’s Happening Right NOW! Posted: 03 Mar 2011 01:52 PM PST A few weeks ago I warned you that the US Dollar was about to collapse.   At that time, many investors scoffed at the idea. After all, the Euro is in much worse shape than the US Dollar, right?   Wrong.     As you can see, the US Dollar has taken out its long-term mutli-year trendline. This is an absolute freaking disaster. It is literally a chart version of “GAME OVER” for the greenback.   Indeed, we now have only two lines of support: 75 and 72, the  2009 and 2008 lows respectively.     The BIG picture is even worse. The below monthly chart of the US Dollar going back 20 years shows a massive Head & Shoulders pattern. Once this pattern is confirmed, we’re heading to 40 on the US Dollar index: a 50% DROP from current levels.     If you haven’t already taken steps to protect yourself from a US Dollar collapse, you need to start RIGHT NOW. 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.   Look for the hidden gems and you could make a fortune from this disaster.   Good Investing!   Graham Summers   PS. If you’re getting worried about the future of the stock market and have yet to take steps to prepare for the Second Round of the Financial Crisis… I highly suggest you download my FREE Special Report specifying exactly how to prepare for what’s to come.   I call it The Financial Crisis “Round Two” Survival Kit. And its 17 pages contain a wealth of information about portfolio protection, which investments to own and how to take out Catastrophe Insurance on the stock market (this “insurance” paid out triple digit gains in the Autumn of 2008).   Again, this is all 100% FREE. To pick up your copy today, got to http://www.gainspainscapital.com and click on FREE REPORTS.   PPS. We ALSO publish a FREE Special Report on Inflation detailing three investments that have all already SOARED as a result of the Fed’s monetary policy. You can access this Report at the link above.

In The News Today Posted: 03 Mar 2011 01:40 PM PST View the original post at jsmineset.com... March 03, 2011 06:36 PM Thought For The Day Rumors are flying once again about substantial improvements in the Jobs number. This is again supported by ADP's projections. The gold price is a product of debt, not business....

Jim?s Mailbox Posted: 03 Mar 2011 01:40 PM PST View the original post at jsmineset.com... March 03, 2011 02:08 PM Dear Jim, How do you read today’s move in Gold versus the euro rising? Is it all Trichet related? Should we expect a larger fall in the price of gold after another breakout (even with price almost touching $1444)? Besides TIME, what are we missing for a run to your $1650 target? Respectfully, CIGA Virgilio Dear Virgilio, I have a feeling that gold at $1400 is all the Fed can presently tolerate. The Fed does not control the price of gold, but via the Exchange Stabilization Fund and gold banks can throw meaningful blocks. The Exchange Stabilization fund is not a fund in the normal sense. It is a trading account, I believe at Goldman Sachs, with some partner there as the designee of the Secretary of the Treasury who is able to trade in gold as they sees fit. The Secretary of the Treasury is in charge of the actions of this fund, but is able to appoint a designee. Therefore, the fundamental of today is mor...

In Colombia, new gold rush fuels conflict Posted: 03 Mar 2011 01:40 PM PST By Simon Romero The New York Times Friday, March 4, 2011 http://www.nytimes.com/2011/03/04/world/americas/04colombia.html CAUCASIA, Colombia -- Officers pored over intelligence reports describing the movements of two warlords with private armies. Then the helicopters lifted off at dawn, carrying an elite squad armed with assault rifles to the newest front in this country's long war: gold mines. Seizing on the decade-long surge in gold prices, combatants from multiple sides of the conflict are shifting into gold mining, among them leftist guerrillas from the Revolutionary Armed Forces of Colombia, or FARC, and fighters from the shadowy armed groups that rose from the ashes of right-wing paramilitary squads. Their move into gold underscores the many difficulties of ending Colombia's devilishly complex four-decade war. Even as the Colombian authorities claim victories in bombing top rebel commanders and eradicating vast tracts of coca -- the plant used to make cocaine, long the financial lifeblood of the insurgents -- resilient factions are exploring new sources of money. "These groups are metamorphosing to take advantage of the opportunities they see," said Jeremy McDermott, a director based in Medellín of InSight, a research organization that focuses on criminal enterprises in Latin America. "They know there's a huge new revenue stream within their grasp, and they're grabbing it." ... Dispatch continues below ... ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: World-Class PGM Deposit in Yukon Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php The result is a gold rush unlike any now under way in South America, both feeding off Colombia's evolving conflict and keeping it alive. Up and down the sweltering river basins around Medellín, miners from across Colombia are flocking to sites where backhoes are tearing up forest and tree canopies, leaving behind lunaresque landscapes. Some of these small mines have existed for decades, echoes of frenzies that stretch back centuries to the plundering by conquistadors in search of fabled gold deposits. Newer mines emerge on almost a weekly basis, reflecting efforts to find gold while its price remains high. Gold futures climbed this week to a noninflation-adjusted record of $1,441 an ounce. The gold rush here is just a part of a broader mining boom in Colombia, with gold production climbing more than 30 percent last year and attracting an array of fortune seekers, from multinational corporations to farmers who have left their fields and picked up shovels. Guerrillas and their paramilitary adversaries have long been involved in mining, often using it and related businesses like cattle ranching to launder money and to extract extortion payments. But military intelligence officials and residents here say that new factors, like the success of American-financed coca eradication projects and the price of gold, have pushed rivals in Colombia's long drug war to focus elsewhere. The role of guerrillas and the new criminal syndicates in the pell-mell opening of new mines has made Antioquia -- the department, or province, whose capital is Medellín -- one of Colombia's deadliest and most environmentally devastated regions. Miners in lawless backlands use liquid mercury to separate gold from river sediments, giving Antioquia one of the highest levels of mercury pollution anywhere, according to United Nations researchers. An estimated 67 tons of it are released into the province's environment each year, by about 30,000 miners taking part in the gold rush. "Colombia has the shameful first position as the world's largest per-capita mercury polluter from artisanal gold mining," said Marcello Veiga, a mining engineer who led a United Nations study of mercury contamination in Antioquia. More than 60 grenade attacks were carried out last year in Caucasia, a city of about 100,000 with a downtown district of gold-buying shops. They largely involved two armed groups, the Urabeños and the Rastrojos, vying for control over gold mines and, to some extent, the cocaine trade. Both groups are thought to have more than 1,200 fighters in their ranks. Each emerged from the paramilitary groups that were supposed to have demobilized years ago. At times, these heirs to the paramilitaries work with FARC, illustrating the post-ideological nature of today's conflict. But score-settling between these groups and urban FARC operatives also takes place, lifting Caucasia's homicide rate to 189 per 100,000 inhabitants last year, compared with a national average of only 35 per 100,000, according to federal officials. "It's hard for anyone to say this out loud, but one reason why the guerrillas and criminal gangs are moving into gold is because it is not just profitable" but because it deals with a legal product, unlike cocaine, said Leiderman Ortíz, the publisher of a small newspaper here who survived a grenade attack on his home last year after he described the new dynamics of the region's gold trade. "It's a way for them to keep their war alive," he said. In January, President Juan Manuel Santos said communications intercepted from FARC showed that gold mining had become a source of financing for rebel group. Mr. Santos said that FARC had named a commander with the nom de guerre Mauricio to oversee the group's gold mining activities, which include outright ownership of some mines and extortion at other mining sites. In a new strategy, Mr. Santos has ordered raids on more than 50 illegal mines in recent weeks. In one day of coordinated raids in February, security forces fanned out in helicopters from Caucasia into Antioquia and the neighboring region of Córdoba. Members of an elite police squad descended on a mine near the village of Cargueros, where about 100 miners labored under the hot sun. Wearing sandals and ragged clothing, they watched the helicopters land. Sweat dropped from their brows. They shrugged when asked about the risks of mercury exposure, which damages the brain and central nervous system. "It's now much harder to grow coca because of eradication, so what are my options?" said one miner, Elkin Jimenez, 30. In a good month, he said, he could earn $1,000, about three times Colombia's minimum wage. In hushed tones, several of the miners said that they had to pay protection money to work at the mine. Exhibiting palpable fear, none came forward to name the group that controls the site, which military officials say is located in an area disputed by two warlords, Sebastian Chancí of the Urabeños and Luis Enrique Calle of the Rastrojos. Clinging to their work, the miners reacted fiercely when soldiers tried to arrest one of the men at the site. Grasping sticks, they rushed toward soldiers armed with machine guns, demanding his release. Military helicopters buzzed like angry wasps above the scene. Soldiers pointed their rifles at the miners, who shouted demands in return. Tension hung in the air until the soldiers released the man. South of here, more than 5,000 peasants marched to the town of Anorí in January to protest military operations against gold mining and coca cultivation. Protesters said that while FARC had forced them to go, their complaints were real. Miners and security consultants describe how the area has emerged as a FARC bastion, with the guerrillas charging extortion fees with an accountant's precision: $3,800 a month for each backhoe in operation, $141,000 a month for permission to mine a certain site, and so on. One miner in Anorí, Octaviano Hernández, put in simple terms how power functioned in the region as the gold rush continued: "All I can say is that he who has the gun gives the orders." ----- Jenny Carolina Gonzalez and Toby Muse contributed reporting from Bogota, Colombia. * * * Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf

What Do China’s Economy and GM’s Sales Have in Common? Posted: 03 Mar 2011 01:32 PM PST What Do China's Economy and GM's Sales Have in Common? Both look great until you realize they're based on bogus metrics. China measures its GDP based on any kind of economic activity, not end sales. If China chooses to build a skyscraper to the moon, it will count as economic growth even if the whole thing collapses two days after completion. In fact, China has been using this ploy for years. As ZeroHedge has noted one of the more staggering activities the People's Republic has engaged in is actually blowing up buildings and then constructing new buildings on the property in order to maintain its economic "miracle." ZeroHedge notes that the below building was actually blown up BEFORE it was competed in a kind of GDP "two for one" deal. In this context, China's GDP "miracle" needs to be taken with a LARGE grain of salt. Do I actually know what REAL GDP is there? No. But I know for certain it's not what China claims. What's this got to do with GM's auto sales? GM engages in similarly deceiving fuzzy numbers. As the mainstream financial media trumpeted the other day, GM announced incredible sales growth of 49% for February. Of course, they didn't bother reporting on the second half of the GM's sales announcement. As Bill King noted in a recent King Report the full sentence from GM's press release was: General Motors total sales in the United States rose 49 percent in February, as dealers reported 207,028 deliveries for the company's four brands… Month-end dealer inventory in the United States stood at about 517,000 units, which is … about 101,000 higher than February 2010. If you dig deeper into GM's recent releases, you'll find that GM's YoY deliveries rose 45% in February. So total sales rose 49% and deliveries rose 45%? Which one of these truly represents ACTUAL money GM made? Either of them? It's hard to tell, check out this little snippet from GM's 10-K: …we generally recognize revenue upon the release of the vehicle to the carrier responsible for transporting it to a dealer, which is shortly after the completion of production. Vehicle sales data, which includes retail and fleet sales, does not correlate directly to the revenue we recognize during the period. So GM counts a car as sold the moment it leaves a production facility on a shipping truck, NOT when it's actually sold to a consumer. So the more cars and trucks GM makes… the greater its sales numbers. Sounds a bit like China's GDP numbers doesn't it? At this point I can't help wondering if China and GM should form a strategic alliance to attain truly "miraculous" growth. China could build dealerships, let GM fill them with cars, then blow them up only to build a NEW dealer to which GM could deliver a new load of cars, thus insuring record sales for GM and record GDP for China. Yeah, that's nuts, but it's not that much more nuts than what these two are already doing. Speaking of nuts, the US Dollar is imploding. As you can see, the US Dollar has taken out its multi-year trendline. The markets have noted this and already sense that it's the END GAME for the US currency. Indeed, you can sense the coming inflationary collapse as inflation hedges explode higher across the board: 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 the Inflationary Storm Pt 2 which I just released to the public last Wednesday. Already one of these investments is up an incredible 13%. That's in just ONE WEEK! And the other two aren't far behind either. 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… CLICK HERE NOW!!! Good Investing! Graham Summers

Unless The Silver and Gold Price Crash Through Their Lower Supports, They Will Keep On Rallying Posted: 03 Mar 2011 11:49 AM PST Gold Price Close Today : 1416.00 Change : (21.20) or -1.5% Silver Price Close Today : 34.333 Change : (0.512) cents or -1.5% Gold Silver Ratio Today : 41.24 Change : -0.002 or 0.0% Silver Gold Ratio Today : 0.02425 Change : 0.000001 or 0.0% Platinum Price Close Today : 1827.90 Change : -12.30 or -0.7% Palladium Price Close Today : 813.15 Change : -3.10 or -0.4% S&P 500 : 1,330.97 Change : 22.53 or 1.7% Dow In GOLD$ : $178.95 Change : $ 5.41 or 3.1% Dow in GOLD oz : 8.657 Change : 0.262 or 3.1% Dow in SILVER oz : 357.04 Change : 5.63 or 1.6% Dow Industrial : 12,258.20 Change : 191.40 or 1.6% US Dollar Index : 77.02 Change : 0.131 or 0.2% Well, yesterday I was a mite stingy with my allowance for the GOLD PRICE to fall today. Instead of stopping at $1,422 gold today fell $21.20 all the way to $1,416. Now 'tis always a dangerous practice to change a target. It's like shooting skeet while running through a newly plowed field, and you're liable to shoot yourself in the foot or someplace else. HOWEVER, today's retreat to that second line of support at $1,415 is not bad performance. Low today was $1,409.90. Here we are facing another fork in the road, that lead to two different terrains, one into the hills, the other into the lowlands. First fork, leading to the lowlands, means that gold simply could not punch through the old high at $1,422 more than a few dollars, and has fallen back, preparing to fall further yet. We'll know gold has taken this route if it falls under $1,405 - $1,400. The other fork leads up into the mountains. Gold will attack that $1,422 gate again, break through that and the last high, then confirm by closing above $1,450.50, that is, 2% above the last close. Having warned y'all and stuck that burr under your saddle, I add that most likely gold is headed into the mountains, taking silver with it. The SILVER PRICE gave back 51.2c on Comex to close the day there at 3433.3c. The fall began at midnight Eastern time, and touched as low as 3404c, then closed well above that. 3360c is the next resistance, but if this is nothing more than a minor correction, silver shouldn't reach that level, but ought to hold 3400c. Unless silver and gold crash through those lower support boundaries, they will keep on rallying. US DOLLAR INDEX only confirmed today that it's a low-life, headed for a low-life dive. Dropped 0.23% or 18.1 basis points to 76.49, on its way to 75.60 or 76. STOCKS rallied today, but only to the 50% correction point. Dow grabbed 191.40 points to close at 12,258.20 and SYP500 rose 22.53 to 1,330.97. Lower prices await. 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.

The Benefits of Working for the Government Posted: 03 Mar 2011 11:00 AM PST It looks like American people are getting tired of government employees making about twice – twice!  – as much in wages and benefits as we taxpayers make, and there are movements to strip government-employee unions of their collective-bargaining authority, which only makes sense since there is obviously nobody on the other side (the taxpayer side) of the bargaining table! I mean, would sober, intelligent taxpayers, negotiating on their own behalf, really say, "OK! We agree to give you wages that exceed ours, and a benefit package that is so generous that it is literally unknown in the private sector"? Hahaha! Don't make me laugh! I laugh, even though I asked you not to make me laugh, because it is humorous, just as humorous as some bizarre "Save The American Dream" rallies being organized by unions, MoveOn and similarly-disposed groups, all dedicated to pressure governments to ignore governmental insolvency in order to continue the lavish gravy train of making a lot of money and a carload of benefits, but without, apparently, any accountability at all, while half – half! – the employees in the Whole Freaking Country (WFC) already have some stupid job that makes no profit because he, or she, works for a local, state or federal government, a non-profit organization, a tax-supported private agency, or the education system!  Half! The funny part is that this "American dream" crap is not "American" at all. It is old, old stuff.  In fact, it predates America, probably going back to the time of the Cro-Magnon era, where all the cavemen wanted to be supported by all the rest of the cavemen, and so they invented central banking and fiat currency so that they could constantly create more and more money to give to people so that they could hire someone to bring them bananas and groom their fur for parasites, which was supposed to grow the banana and grooming economy, but did not, and the fiat currency went to zero value due to its over-creation, causing  the social structure to disintegrate, which is probably why there are no Cro-Magnon people still alive, although I am not sure, and, unfortunately, proving it would entail me doing actual work, so it ain't a-gonna happen. However, because I am a generous man, I can take you back to the years before the Civil War, back to the famous economist and statesman Frederic Bastiat, 1801-1850, who observed that, according to brainyquote.com, "Everyone wants to live at the expense of the state.  They forget that the state wants to live at the expense of everyone." I assume it was later when he combined them into "The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else." And so, it is not surprising that government employees are upset, as they have grown accustomed to realizing Bastiat's Dream that was only made temporarily possible by the enormous increases in credit (and thus debt and thus money) provided by the satanic Federal Reserve so that the government could grow enough on the monetary inflation to provide these huge legions of people with unbelievable incomes and benefit packages. In fact, there are now millions of people everywhere who "lived large" as pieces of this "Federal Reserve Money Giveaway" action rolled around and around, producing bubbles in stock markets, bubbles in bond markets, bubbles in housing markets, bubbles in derivatives markets, and huge, cancerous bubbles in the size of governments. And a lot of the money went to bubbles in the financial services industry, as Doug Noland, in his Credit Bubble Bulletin at Prudentbear.com, notes that Bloomberg reported that Wall Street handed out $20.8 billion in bonuses to themselves in 2010, which was actually down 8% from the year before, when financial firms disbursed "$22.5 billion in 2009…" Note that three-dot ellipsis as the end of that last sentence, as if Mr. Noland's voice kind of trailed off when he started to realize, to his horror, that Mogambo The Magnificent (MTM) was right after all, and dividing $21 billion in bonuses by 300 million men, women and children in the Whole Freaking Country (WFC) country means that the financial services industry got $70 for every one of those aforementioned men, women and children! And when money like that is being created to reward people who basically function as accountants and middlemen, and yet the financial services industry produced 70% of the profits of the WFC, you must know intuitively that you should be buying gold, silver and oil stocks against the roaring inflation in prices that must, because it always does, result from the evil Federal Reserve creating so much money. And while they say that nobody rings a bell to signal time to get in or get out of markets, this is all a series of huge gongs, going "BONG! BONG! BONG!" to signal that it is time to get into gold, silver and oil! And with that kind of warning, man! This investing stuff could not get any easier! Whee! The Mogambo Guru for The Daily Reckoning The Benefits of Working for the Government originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.

Gold, Silver Set to Soar Posted: 03 Mar 2011 10:52 AM PST The 5 min. Forecast March 03, 2011 03:00 PM by Addison Wiggin & Dave Gonigam - March 3, 2011 [LIST] [*]"Upside blowout" in gold, "explosive action" in silver...Resource guru Rick Rule's latest outlook [*]Wall Street cheers jobless claims, service sector numbers...The 5 offers a cautionary note [*]Food prices reach another record...Chris Mayer on the "white rock" poised for profit [*]The pitfalls of currency trading, from a guy who wrote the book (two, actually) on forex [*]Readers indulge in freewheeling (but civil) discussion of labor unions [/LIST] Oil and precious metals are taking a breather on rumors of a peace plan for Libya. We'll believe it when we see it, but for the time being, the black goo is off nearly a buck...back to $101.30 Gold has pulled back from this week's record highs too, but again not by much. The spot price as we write is $1,424. “Gold it is no longer a contrarian buy,” warns our friend and Vancouver stalwart Rick ...

Gold retreats from record high Posted: 03 Mar 2011 09:41 AM PST CHICAGO, March 3 (Xinhua) — Gold futures on the COMEX Division of the New York Mercantile Exchange declined from its record high on Thursday, as Venezuela offered to mediate a resolution to the crisis in Libya, which helped dampen safe-haven demands. The most active gold contract for April delivery shed 21.3 dollars per ounce, or 1.5 percent, to settle at 1,416.4 dollars. The Arab League said it's weighing an offer by Venezuelan President Hugo Chavez to mediate the civil conflict in Libya. "Peace, if it happens, may be bearish for gold, as this could eroded some of the safe-haven demand that has pushed gold price all the way to the record," said a trader. [source] PG View: I don't think anyone — other than Xinhua — seriously believes Venezuelan President Hugo Chavez is going to broker a peace deal in Libya.

More QE could send silver above $50, Hathaway tells King World News Posted: 03 Mar 2011 09:11 AM PST 5:07p ET Thursday, March 3, 2011 Dear Friend of GATA and Gold (and Silver): Silver could rise to $50 or $60 if quantitative easing continues into July, Tocqueville Gold Fund manager John Hathaway tells King World News today. Excerpts from the interview can be found at the King World News blog here: http://tinyurl.com/46ydpcn CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: World-Class PGM Deposit in Yukon Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf

Jim's Mailbox Posted: 03 Mar 2011 09:08 AM PST Dear Jim, How do you read today's move in Gold versus the euro rising? Is it all Trichet related? Should we expect a larger fall in the price of gold after another breakout (even with price almost touching $1444)? Besides TIME, what are we missing for a run to your $1650 target? Respectfully, CIGA Virgilio Dear Virgilio, I have a feeling that gold at $1400 is all the Fed can presently tolerate. The Fed does not control the price of gold, but via the Exchange Stabilization Fund and gold banks can throw meaningful blocks. The Exchange Stabilization fund is not a fund in the normal sense. It is a trading account, I believe at Goldman Sachs, with some partner there as the designee of the Secretary of the Treasury who is able to trade in gold as they sees fit. The Secretary of the Treasury is in charge of the actions of this fund, but is able to appoint a designee. Therefore, the fundamental of today is more an excuse for the gold banks and Exchange Stabilization Fund to draw a picture on charts. I anticipate extreme violence in a pull between world changing events in the middle East and the Exchange Stabilization fund as gold establishes itself firmly above the $1400 round number. I do not see gold significantly below $1400. Respectfully, Jim  Click chart to enlarge in PDF format

Take Out Dividends and Stocks Return Less That Treasuries… Since 1900 Posted: 03 Mar 2011 08:58 AM PST Are you getting paid?   For much of the 20th century, investors bought stocks for one reason: dividends. In fact, before the SEC act of 1934 was passed, dividends were THE ONLY reason you’d buy a stock.   Prior to this, there was no such thing as accounting standards or SEC filings AT ALL. You literally had no idea if a company even MADE money. So the only reason you’d even consider putting your money into the stock market was because a company paid out a dividend (you got some kind of return).   Dividend or income investing continued to dominate the investment landscape after the SEC Act of 1934 was implemented. In fact, many of the most popular valuation methods used for valuing stocks involved dividends (stock dividends vs. yield on Treasuries, Price to Dividend, etc.). And it wasn’t until investors became “growth” obsessed in the last 30 years (thanks to the mega-bull market from 1982-2001) that Earnings superseded Dividends in terms of importance.   Which is a HUGE mistake.   It’s common knowledge that stocks return an average of 6% a year (at least going back to 1900).  However, Elroy Dimson, Paul Marsh and Mike Staunton from the London Business School recently revealed that when you remove dividends, stocks’ gains drop to a mere 1.7% a year (even lower than the return from long-term Treasury bonds over the same period).     Put another way, dividends account for 70% of the average US stock returns since 1900. When you remove dividends, stocks actually offer LESS reward and MORE risk than bonds. If you’d invested $1 in stocks in 1900, you’d have made $582 with reinvested dividends adjusted for inflation vs. a mere $6 from price appreciation.   That’s only 600% in gains… over 109 years.   I want to be clear, this article is not meant to imply Treasuries are a better investment today than stocks. Everyone knows, deep down, that the US is going to default on its debt. It’s only a matter of time. And personally I believe both stocks and bonds are in massive bubbles that will both collapse within the next 24 months.   However, my point is that when it IS time to buy stocks again (maybe in several years or more) you need to focus on stocks that pay hefty dividends. This is the only way to make the real serious gains from the market for the long-term.   However, it’s likely going to be a long-time before stocks are a long-term buy.   Good Investing!   Graham Summers     PS. If you’re getting worried about the future of the stock market and have yet to take steps to prepare for the Second Round of the Financial Crisis… I highly suggest you download my FREE Special Report specifying exactly how to prepare for what’s to come.   I call it The Financial Crisis “Round Two” Survival Kit. And its 17 pages contain a wealth of information about portfolio protection, which investments to own and how to take out Catastrophe Insurance on the stock market (this “insurance” paid out triple digit gains in the Autumn of 2008).   Again, this is all 100% FREE. To pick up your copy today, got to http://www.gainspainscapital.com and click on FREE REPORTS.   PPS. We ALSO publish a FREE Special Report on Inflation detailing three investments that have all already SOARED as a result of the Fed’s monetary policy. You can access this Report at the link above.

Better get yours before availability runs out Posted: 03 Mar 2011 08:58 AM PST U.S. Mint reduces delivery of silver eagles Share this:

Gold Daily and Silver Weekly Charts - Emperor Nakedly Monetizing, Desperately Seeking Stability Posted: 03 Mar 2011 08:54 AM PST

Treminally Ill Alert Posted: 03 Mar 2011 08:51 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! March 03, 2011 01:10 PM Alert – The U.S. Dollar Index is breaking some key support. One is always best to wait a couple days and/or at least a further 2% move (but this is flying under the radar market-wise) but never-the-less has major implications. If the employment numbers come in as expected or stronger and the dollar can’t rally, watch out below. In the end it’s watch out below anyway. [url]http://www.grandich.com/[/url] grandich.com...

Making a Case for Gold in 2011! Posted: 03 Mar 2011 08:46 AM PST [COLOR=#666666][FONT=Arial]This issue we systematically build a case for a bullish 2011 for gold using some key charts. We then turn our attention to the shorter term outlook. The Australian scene has that familiar though unusual look right now where the gold price in Australian dollars looks ready for a substantial move, whilst the gold shares appear vulnerable to some short term downside. The Money Supply (measured by M3) has hit double digit annual growth rates again whilst Aussie interest rates remain on hold. This supports our bullish technical outlook for gold in Australian dollars. For those of you who are not GoldNerds subscribers we have decided to add some new GoldNerds interest groups to our subscription section. If you are interested in seeing some of our older (typically 6 months) PDF reports which GoldNerds Pro subscribers have had exclusive access to, I encourage you to register. From time to time we will be sending these reports so that you can ge...

"Wars, Rumors Of Wars, Skyrocketing Oil Prices And Global Economic Chaos – Why Is All Of This Happening?" Posted: 03 Mar 2011 08:34 AM PST Michael Snyder writes about "Wars, Rumors Of Wars, Skyrocketing Oil Prices And Global Economic Chaos." He argues that, if we're not running on empty already (though we probably are), we will be if the price of oil continues rising.   Ilene  Courtesy of Michael Snyder at Economic Collapse  Did anyone out there anticipate that 2011 would be such a wild year?  The year is barely over two months old and we have already seen multiple civil wars erupt, rumors of more wars all over the mainstream media (potentially even including the United States), riots and revolutions breaking out all over the globe, oil prices soaring into the stratosphere and chaos on global financial markets.  So why is all of this happening?  Is all of this one big coincidence or is there a reason why we are witnessing such global chaos right now?  Is it just coincidence that revolutions have broken out in over a dozen countries in the Middle East all at the same time?  Is it just a coincidence that global prices for oil, food and precious metals are all skyrocketing?  Is it just a coincidence that world financial markets suddenly seem more vulnerable than at any time since 2008?  Looking at what is going on in the world right now, it is very tempting to use the phrase "a perfect storm" to describe it.  Unfortunately, this "perfect storm" is very likely to plunge the global economy into yet another financial collapse if it continues to get even worse. After decades of relative stability, the Middle East has erupted in chaos in 2011.  In the post-World War 2 era, we have never seen a time when there have been so many major internal revolutions all at once.  All of these simultaneous revolutions are driving the price of oil rapidly upwards. The price of West Texas crude is now over $102 a barrel and the price of Brent crude is now over $116 a barrel and if the chaos in the Middle East continues those numbers are likely to go a lot higher. Meanwhile, gold has set a new all-time record this week and the price of silver is absolutely exploding. In fact, just about every kind of "hard asset" that you can possibly name is going up in price.  Investors don't like all of this instability and they are looking for safe places to put their money. Unfortunately, the global situation looks like it may become even more heated. The calls for military action against Libya are rapidly reaching a crescendo. The U.S. Senate has unanimously passed a resolution calling for the UN Security Council to impose a no-fly zone over Libya, and many members of Congress are openly declaring that the U.S. and NATO should take unilateral action no matter what the UN ultimately decides. But implementing a no-fly zone is not a simple thing.  It is not just a matter of telling Libya not to fly their planes.  Rather, imposing a no-fly zone over Libya would constitute a major military operation. U.S. Secretary of Defense Robert Gates is even admitting that enforcing a no-fly zone over Libya would begin with a huge military strike..... "Let's just call a spade a spade. A no-fly zone begins with an attack on Libya to destroy the air defenses ... and then you can fly planes around the country and not worry about our guys being shot down." U.S. commander General James Mattis made a similar comment on Tuesday.... You would have to remove the air defense capability in order to establish the no-fly zone so it - no illusions here, it would be a military operation. Essentially, imposing a no-fly zone over Libya would be an act of war. Most of our representatives in Washington D.C. seem to be quite ready to go to war in Libya, but it is another story entirely when it comes to the American people.  A recent Rasmussen poll found that a whopping 67 percent of Americans do not want the U.S. to get more involved in the unrest going on in Arab countries and only 17 percent of Americans do want the U.S. to get more directly involved. But the American people don't get to decide whether we go to war or not.  Our leaders in Washington D.C. do.  The USS Enterprise and other major warships are on their way to Libya, and U.S. forces throughout the Mediterranean are on high alert. So could the U.S. really get involved in another war in the Middle East? Well, if the U.S. and NATO choose to get involved they will do it without the approval of the rest of the world. On Wednesday, the Arab League issued a statement which specifically rejected "any foreign interference within Libya on behalf of the opposition". Not only that, but any military action by the UN will most likely be blocked by both China and Russia. Russia's ambassador to NATO, Dmitry Rogozin, says that any military action against Libya without UN approval would be a violation of international law.... "If someone in Washington is seeking a blitzkrieg in Libya, it is a serious mistake because any use of military force outside the NATO responsibility zone will be considered a violation of international law." But Libya is far from the only crisis point in the Middle East. In fact, a much larger problem may be brewing in Saudi Arabia. On Facebook, a "Day of Rage" is being hyped for March 11th.  Other dates being promoted for "revolution" in Saudi Arabia include March 20th and March 21st. But if Saudi Arabia sees the same kind of chaos that we have seen in other countries in the Middle East there is no telling how high the price of oil could go. Could we see $125 oil? Could we see $150 oil? Could we see $200 oil? Saudi Arabia exports more oil than anyone else in the world, so if their oil production gets interrupted it is going to have a dramatic impact on the global economy. For example, are you ready to pay 5 dollars for a gallon of gasoline in the United States? For decades, the entire globe has been blessed with very cheap oil and this has resulted in a massive economic boom. But times are changing. The economic situation over in Europe is already deteriorating and any additional bad news could plunge that entire continent into a major crisis.  A recently released report from Ernst & Young is warning that if oil goes up to 150 dollars a barrel and it stays there, "at least" one eurozone country will default and the entire eurozone will be plunged back into recession. A much higher price for oil would obviously not be good for the U.S. economy either.  Do you remember what happened back in 2008?  The price of oil hit a record high in June and then the entire financial system came unglued just a few months later. But if we see a repeat of 2008 it may be a lot worse this time because the global financial system is now more unstable than ever. The truth is that the entire world is still trying to recover from the last financial crisis.  The Federal Reserve is pumping massive quantities of dollars into the U.S. economy in an attempt to stimulate it back to life, but so far it is not working too well. The rest of the world does not appreciate all of this "money printing" and the inflation that this is causing is beginning to create massive imbalances on global financial markets. The world is starting to lose faith in the U.S. dollar.  Right now, approximately 85% of all foreign-exchange transactions in the world involve the U.S. dollar.  Not only that, 60% of all the currency reserves in the world are in U.S. dollars.  With the U.S. dollar rapidly becoming less stable, many are now wondering if it should continue to be used as the reserve currency of the world. The truth is that if the U.S. dollar falls, it is going to create a tremendous amount of financial chaos in almost every nation on the globe. Unfortunately, as I have written about so many times previously, the U.S. economy is dying.  The U.S. government is absolutely drowning in debt, and leaders all over the planet are calling for the establishment of a new global reserve currency. The days of the United States being the "economic engine of the planet" are rapidly coming to an end. The U.S. economy is not ever going to fully "recover".  In fact, the U.S. economy is basically "running on empty" at this point as Gerald Celente recently noted during an interview on RT television.... The entire U.S. economy was designed to operate on massive amounts of very cheap oil.  Americans do more driving than anyone else in the world.  Many of us are so lazy that we won't even walk to a store if it is on the other side of the parking lot. If oil hits record levels in 2011, it is going to be a massive shock to the U.S. economic system.  Any hopes for an "economic recovery" will be completely dashed. In fact, if one wanted to "take down" the U.S. economy, driving up the price of oil would be a perfect way to do it. And if one wanted to drive up the price of oil, a perfect way to do that would be to create all kinds of chaos in the Middle East. So is all of this craziness that we are seeing in 2011 just a big coincidence or is there a reason why all of this is happening? Please feel free to leave a comment with your opinion on the matter below....

A Conspiracy with a Silver Lining Posted: 03 Mar 2011 08:25 AM PST "SLV adds 2,277,591 troy ounces of silver. U.S. Mint reduces delivery of silver eagles. Royal Canadian Mint no longer taking orders for silver Maple Leafs. China "Attacks The Dollar"...and much more. " Yesterday in Gold and Silver The gold price trading action on Wednesday was pretty quiet. The low came during the lunch hour in Hong Kong...and from that point, didn't do much until just after the London a.m. gold fix. Then the gold price began to rise slowly but steadily...hitting its zenith [$1,441.30 spot] just minutes before lunchtime in New York. From there it got sold off, but recovered a bit going into the close...and finished up about three bucks from Tuesday. Silver's trading pattern was virtually a carbon copy of gold's...except that silver's low price print occurred around the London open at 8:00 a.m. GMT. Silver's high tick [$35.02 spot] was at the same time as gold's...and the post-high price action in silver was identical to gold's...exce...

Gold and Silver Breaking New Highs As U.S. Dollar Loses Appeal As Safe Haven Posted: 03 Mar 2011 08:17 AM PST The gold (GLD) and silver (SLV) meteor keeps soaring in the skies over Wall Street as the US dollar (UUP) is parachuting into new lows. The spot price of silver this week broke $34.40, zooming into a record high area unseen since 1980. On March 1, gold followed its poorer brother by breaking out at $1425. The US dollar is challenging all-time lows. It does not take a PhD from Princeton to realize that there may be a problem here. Maybe the recent radical central bank actions should be reconsidered? True, 401(k)'s look good, but it has come at the expense of significant dollar debasement.

Guest Post: Bernanke’s Unstoppable, Self Reinforcing Feedback-Loop Posted: 03 Mar 2011 08:06 AM PST Submitted by Davos Sherman Okst Bernanke’s Unstoppable, Self Reinforcing Feedback-Loop Our economic death spiral into the Second Great Depression Wracked up by both parties over many decades our debt has evolved into a yearly deficit that can no longer be serviced with tax revenue and borrowing. To avoid default Ben Bernanke chose to monetize the un-payable portion of our deficit. Each month about 100 billion dollars are created out of thin air to cover our government’s bills. This has set forth an unstoppable, self reinforcing, feedback-loop whereby: Debt monetization (printing money out of thin air to cover the portion of governments spending not satisfied by tax revenue and borrowing) reduces the value of the dollar. The debt monetization triggers dollars to flow out of bonds and into commodities. This increases demand, commodity prices rise. As commodities make their way into the supply chains businesses and consumers realize higher prices. Since globalization has caused wages to stagnate at 1970 levels, and with 23% unemployment, businesses try to eat increases, this in turn reduces hiring, causes layoffs and kills expansion. Consumers reduce their purchases, case in point: Wal-Mart is losing market share to the Dollar Store - that right there spells retail health (read: it’s terminal). Nations whose citizens spend 32%-52% of their entire budget on food are especially affected. In those nations where citizens spend 32%-52% of total their income on food; food riots erupt, social unrest breaks out, governments topple. Geographically speaking, many of these nations are in the Middle East where about a third of the world's oil supply comes from - so oil production is adversely affected, the price of oil increases. Drastically increases. The empire must then send in troops and warships to protect oil assets from being wiped off the map. Oil is an integral part of everything from farming to manufacturing to transportation, therfore the prices of all goods and services rise. This of course creates more stress on our economy, which drives tax revenues down, whic creates a greater deficit, which causes idtiot Ben to lean on the print button and monetize even more debt. Like an infinite loop in some errant computer code we go back to #1 above and iterate back through this unstoppable, self reinforcing, negatively-insane-Ben Bernanke-code that we call a negative self reinforcing feedback loop. Bernanke's Crimes Against Humanity Exporting Higher Food Prices to Poor Nations: The price of grain and many other foor comodities are set in US Dollars. Creating more dollars reduces the dollars purchasing power. Creating more dollars makes investors flee securities and rush to hard assets, like grain, corn, soy, oil, cotton, coffee, sugar and so on. In Tunisia on December 17, 2010 a 26-year-old man who tried to supported his family by selling fruits and vegetables doused himself in paint thinner and set himself on fire in front of a local municipal office. Police had confiscated his produce cart, the cart he needed to earn a living in order to feed his family. With rising prices he coldn't afford a permit. They also beat him when he objected. Local officials then refused listen to him. His desperation highlighted the public's frustration over living standards and increasingly higher food prices which accounted for 32.4% of their entire earnings. A month later the ruler of Tunisia was gone, its government collapsed. Now it is Libya’s turn. In Lybia 37.2% of a families budget goes to food. Many other oil producing nations have citizens who face the same income to food budget ratios. Map of many of the countries that are experiencing protests. Organic bond sales have been anemic. Money is flowing out of securities and into commodities. Bernanke’s plan to have Quantitative Easing reduce interest rates has so far been a failure because of these outflows. That was Bernanke's first mistake. Rising commodity prices, which for the most part peg global food prices was his second misstake. Actually, if you count: Bear Stearns, the housing bubble, subprime contageon, unemployment contageon and recesion contageon they are respectively Bernanke's 6th and 7th blunders. Add to that the fact that he is following the steps that Greenspan used to explain how Great Depression One was created and it soon becomes apparant that Ben Bernanke is, without a doubt, the worlds biggest economic imbicile and shouldn't be allowed to balance a checkbook - let alone run the world's (now thanks to him and Greenspan) third largest economy. Bernanke couldn't find cause and effect in a dictionary. He is an economic moron, and a master of global disaster. The only bigger fools are our leaders who: Haven't fired him. Still listen to him. Now we have 2008 redux. Commodity prices and oil prices are headed up. Will they crash or will the dollar crash? If commodity prices and oil prices crash again this time I’ll be surprised if money flows into securities again. The dollar is no longer looked at as secure now that Bernanke is monetizing the debt. The gig is up, the game is almost over. When High Frequency Algorithmic Trading (insider trading) became responsible for 70% of stock trades I tossed the term “stock market” out of my vocabulary and replaced it with “rigged casino.” When Bernanke began monetizing insane amounts of money the term “Bond Vigilantes” got tossed into that same trash heap. “Bond Vigilantes” are like ants with Bernanke counterfeiting over a trillion a year. There are no more Bond Vigilantes. Ben Bernanke IS the bond market and so far he hasn't even stepped in enough to keep yields down, but he'll have to. It is not the smartest or the fittest that survive, it is those who notice change first. Ben Bernanke cannot stop Quantitative Easing. Stopping the monetization of debt means that the United States of America defaults on its obligations. That’s right, the government stops sending out Social Security payments, government workers stop getting checks, companies who do business with the government stop getting paid, Medicare stops - well, you get the picture. The other fallacy is that we can make cuts and balance this mess. When 23% of the deficit is debt service and 57% goes to keeping grandma eating. With those two facts in mind, we quickly realize that the deficit can’t be cut. Not without default and total restructuring. Debt is monetized when the Fed creates money with a computer and credits the Treasury Department for the Bonds it “purchased”. The treasury takes this “money” and pays the government's bills so it can stay open. So those thinking there is no velocity may want to think that through again. With 23% unemployment and with 43 million Americans on Food Stamps and a 1.5 trillion dollar deficit the Fed can not let interest rates rise. Rising interest rates would create massive deficit pain and inflict more debt servicing nightmares. There will be no Paul Volckler's this time. Bernanke will – en-masse – drive bond prices back up and rates back down by creating massive fake demand for bonds at auction when interest rates get too out of hand. When he does that the value of our dollar will really tank, investors will step up their continued flight to safety by purchasing commodities and commodity prices will increase even more. Higher oil prices will likely cause investors to flee the stock market, but with thin volume and 70% HFAT who knows what the rigged casino will do. They’ve made a sincere joke of the market, which for people in retirement with funds chained to the rigged house — well this is nothing but a sorrowful situation. Saudi’s king is buying time on his remaining years – he’s 87 - by handing money out. Like the fine ZeroHedge piece said: “Unfortunately for Saudi, Bahrain tried this and failed. Also, once you start down this path, there is no turning back, as people demand more and more.” China is faced with its Jasmine protest. Bernanke, the other central banks, our leaders and the leaders of the rest of the world still have time to exit this endless loop. Just about every country is broke and needs to re-value their dollar and let the people, the local and state and federal governments get out of debt. The concern I have is that other countries may exit the loop by announcing a new world reserve currency, which may be composed of one or several [other] currencies - all but ours - or with ours being a fraction of the total reserve. "If" (please read: When) the United States loses the reserve currency its printing and current debt levels will equate to an ugly and very weak exchange rate. In short, food priced in some other currency will leave us looking like Libya. You can go back through thousands of years of economic history and realize one fact: No country has ever printed their way to prosperity, all who have tried have wound up in hyperinflation, war or demise. How a guy can teach himself calculis, get into Harvard, become a professor at Princeton and NOT understand that - well it totally defies logic. The idiot was asked about the one time in our history that we had no debt. (Please don't think we balanced the budget during the Clinton years - for you can't debt (apply IOU's in the Social Security Trust Fund) as income.) Andrew Jackson balanced the budget and wiped away our debt by using non debt based money. Bernanke was asked about this during a recent hearing and he scoffed at it - his merit? Because it happened before the Civil War.

Consolidation at Yearly Highs Posted: 03 Mar 2011 08:01 AM PST The LFB submits: Global commodity markets have held the higher ground in trade during March, driven higher in part by the continued civil unrest from Middle Eastern regions, which have impacted food, precious metals, and oil supply and demand sentiment. The daily news headlines in regard to food shortages, and record increases in food prices, have been the main instigators of the civil unrest. In turn, that has allowed speculative interest to build on the long side of most commodity markets, which is something that has been empowered by continued weakness in the US dollar. Gold is holding steady, with bullion trade finding support at 1420, as well as revealing resistance at 1440. It would seem that a break of either price point will not be easy to achieve ahead of the US Non-Farm Payroll release on Friday. Silver bullion trade looks to be the more bullish of the precious metal markets, and Complete Story »

The Implications of The U.S. Dollar Testing Lows While Precious Metals Soar to New Highs Posted: 03 Mar 2011 07:55 AM PST Jeb Handwerger submits: The gold (GLD) and silver (SLV) meteor keeps soaring in the skies over Wall Street as the US dollar (UUP) is parachuting into new lows. The spot price of silver this week broke $34.40, zooming into a record high area unseen since 1980. On March 1, gold followed its poorer brother by breaking out at $1425. The US dollar is challenging all-time lows. It does not take a PhD from Princeton to realize that there may be a problem here. Maybe the recent radical central bank actions should be reconsidered? True, 401(k)'s look good, but it has come at the expense of significant dollar debasement. The million dollar question: Stampede or showdown? Will gold and silver continue to stampede into new highs making considerable gains or will the struggling dollar reaching record lows make a showdown, putting a ceiling on the precious metals rise? Some naysayers claim that there is Complete Story »

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