Gold World News Flash |
- The November 24, 2010 edition of Casey's Daily Dispatch, now available
- Riding the Second Gold Bubble
- Monetizing Silver: Instant Prosperity
- Inflation-Related Thoughts
- Asian Metals Market Update
- Gold 1,500? The World Is Changing!
- Cheap Money, Speculation and Hoarding
- Check this our If You Think The Silver Spike Has Been Impressive
- Richard Russell - Gold to $6,000 as Media Ridicules
- Guest Post: Short Squeeze! Here Comes 50-dollar Silver
- Gold Seeker Closing Report: Gold and Silver Rise To New Highs Again
- This past week in gold - March 07, 2011
- Best Article on Silver in Ten Years!
- No Silver? No Problem: US Mint Would Like To Know If You Will Accept Brass, Steel, Iron Or Tungsten Coins Instead
- 4 Hour Silver Chart - update 9:30 PM Central Time
- Oil’s March Madness a Boost for Refiners
- Ted Kaufman's Friday Hearing Explains Everything That Is Broken With The US Financial System
- The Next Bull Run in Precious Metals is Here
- UNINTENDED CONSEQUENCES
- Sun’s up in PR? & Politics as Usual?
- Terraco Gold
- Battered Public Pensions Doing Better?
- Top Economists: Trust is Necessary for a Stable Economy ... But Trust Won't Be Restored Until We Prosecute Wall Street Fraud
- Jeff Nielson: Monetizing silver -- instant prosperity
- Heavy Hitters Talk About The Virtues of Gold
- The 5th Place Winner of This Year’s Daily Reckoning Financial Darwin Awards
- Siddharth Rajeev's Commodities Rundown, From Au To V
- Portfolio's true value is in ounces, not dollars, Embry tells King World News
- Which Gold Producer Best Mimics Gold Price? A Correlation Perspective
- Gold Price Completed Correction, Higher Prices Tomorrow Unless It Trades Below $1,428
| The November 24, 2010 edition of Casey's Daily Dispatch, now available Posted: 07 Mar 2011 08:20 PM PST The Trial of Gold, Revisited
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| Posted: 07 Mar 2011 07:21 PM PST UltraLong submits: No matter which gold price diagram you look, the price of gold seems to be going upwards. As we rise above old all time highs, is it just a huge bubble or is the price justified? 110 years of gold price history I wanted to look further than the customary 10 year charts available. Let's start by 110 years of gold price history: Click to enlarge The price of gold in dollar terms was pretty flat until 1934, when the dollar was devalued against gold by 69%. In the previous year Franklin D. Roosevelt declared gold ownership illegal and U.S citizens were required to sell all their gold to the Federal Reserve at the official exchange rate $20.67 an ounce. Gold ownership in USA was illegal until 1975. After the Second World War, a system similar to a Gold Standard Complete Story »
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| Monetizing Silver: Instant Prosperity Posted: 07 Mar 2011 06:16 PM PST BullionBullsCanada
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| Posted: 07 Mar 2011 06:09 PM PST "Don't fight the Fed" is an adage that's always worth remembering; however, this adage shouldn't be applied to all of the Fed's endeavours because the Fed is powerful in some areas and impotent in others. For example, the Fed can ALWAYS depreciate the US dollar -- that is, it can always cause dollar-denominated prices to rise -- if it chooses to do so, but it can't create real economic growth or sustainable employment (despite the fact that achieving "full employment" is part of the Fed's official mandate). Furthermore, although the Fed can always bring about a rise in prices by inflating the currency supply, it can't control which prices rise the most in response to its monetary inflation. In fact, the price-related effects of the Fed's inflation will often be the opposite of what the Fed intends.
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| Posted: 07 Mar 2011 06:00 PM PST Yesterdays fall of gold, silver, and crude oil was just a technical correction which if it continues only till Wednesday will result in a short term bear phase. Copper had a technical breakdown over fears that higher crude oil prices will slow global growth. Reports that US could use its strategic crude oil reserves to prevent gasoline prices from rising will be bearish for crude oil in the short term.
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| Gold 1,500? The World Is Changing! Posted: 07 Mar 2011 05:50 PM PST Gold Letter
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| Cheap Money, Speculation and Hoarding Posted: 07 Mar 2011 05:48 PM PST Bullion Vault
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| Check this our If You Think The Silver Spike Has Been Impressive Posted: 07 Mar 2011 05:18 PM PST Business insider
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| Richard Russell - Gold to $6,000 as Media Ridicules Posted: 07 Mar 2011 05:00 PM PST King world News
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| Guest Post: Short Squeeze! Here Comes 50-dollar Silver Posted: 07 Mar 2011 04:07 PM PST Smart Money Europe – http://www.smartmoney.eu Short squeeze! Here comes 50-dollar-Silver Silver is blasting through all barriers, topping $36.5 this morning! The white bullion market is tight, and the short squeeze in the futures market is exerting a constant upward pressure on the price. If current trends persist, the all-time high of $49.45/ounce will be reached in the near future. Silver is performing exceptionally, outstripping a vast array of commodities and stocks. Even unrest in the Middle East has not stopped the price increasing, whereas during similar circumstances in the past, silver would have taken some serious blows. As far as silver is concerned, we are living in exceptional times. Supply shortages have existed since the Fifties, but this deficit was traditionally eliminated with the (once strategic) reserves of central banks and other financial institutions, who wanted to get rid of their silver due to its lack of monetary use. Consequently, bank supplies have fallen rapidly. Today, the shortage on the silver market is mainly supplemented by recycling used silver, aka 'scrap'. Nick Laird of ShareLynx, who supplied the chart below, gave the following explanation in a recent MoneyWeek interview: "Since 1950, the demand for silver increased up to 925,000 tonnes, while the production only amounted to 570,000 tonnes. This equals a silver production deficit of 16 years!" 
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| Gold Seeker Closing Report: Gold and Silver Rise To New Highs Again Posted: 07 Mar 2011 04:00 PM PST Gold climbed as much as $16.60 to a new all-time high of $1444.50 by a little after 8AM EST before it fell back to unchanged at $1427.90 by about noon, but it then bounced back higher in afternoon trade and ended with a gain of 0.43%. Silver climbed to a new 31-year high of $36.732 before it also fell back off in New York, but it still ended with a gain of 1.76%.
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| This past week in gold - March 07, 2011 Posted: 07 Mar 2011 03:49 PM PST Jack Chan JACK CHAN's Simply Profits. Precision sector timing for gold, energy, and technology. Posted Mar 7, 2011 GLD – on buy signal. *** SLV – on buy signal. *** GDX – on buy signal. *** XGD.TO – on buy signal. Summary Long term – on major buy signal. Short term – on buy signals. We increased our exposure to the sector by adding to our core positions upon recent new buy signals and set ups. We also have stops at breakeven on our trading positions to remove risk. ### Disclosure We do not offer predictions or forecasts for the markets. What you see here is our simple trading model which provides us the signals and set ups to be either long, short, or in cash at any given time. Entry points and stops are provided in real time to subscribers, therefore, this update may no...
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| Best Article on Silver in Ten Years! Posted: 07 Mar 2011 03:45 PM PST (Not written by me!) Silver Stock Report by Jason Hommel, March 7th, 2011 This is probably the best article on silver (not written by me) in the last ten years. The Silver Bullet And The Silver Shield By Silver Shield, on February 25th, 2011 The Ultimate FREE Silver Investors Guide. http://dont-tread-on.me/the-silver-bullet-and-the-silver-shield This article covers so much, so well. I have almost no arguments with the author, and that's really saying something. I linked to this article once already, when I had scanned it, but after having read it, I can say you MUST READ THIS! The best argument for silver is that when you buy real silver, you own real wealth, with allodial title. Unlike your car, your home, or your bank account, or your brokerage. All the other stuff can be encumbered easily. Your car is registered annualy for a fee. On your home, you pay property ta...
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| Posted: 07 Mar 2011 02:48 PM PST
Wonder why the US mint has not sold a single ounce of silver so far in March? Here is a clue: United States Mint Seeks Public Comment on Factors to be Considered in Research and Evaluation of Potential New Metallic Coinage Materials WASHINGTON - The United States Mint today announced that it is requesting public comment from all interested persons on factors to be considered in conducting research for alternative metallic coinage materials for the production of all circulating coins. These factors include, but are not limited to, the effect of new metallic coinage materials on the current suppliers of coinage materials; the acceptability of new metallic coinage materials, including physical, chemical, metallurgical and technical characteristics; metallic material, fabrication, minting, and distribution costs; metallic material availability and sources of raw metals; coinability; durability; sorting, handling, packaging and vending machines; appearance; risks to the environment and public safety; resistance to counterfeiting; commercial and public acceptance; and any other factors considered to be appropriate and in the public interest. The United States Mint is not soliciting suggestions or recommendations on specific metallic coinage materials, and any such suggestions or recommendations will not be considered at this time. The United States Mint seeks public comment only on the factors to be considered in the research and evaluation of potential new metallic coinage materials. The recently enacted Coin Modernization, Oversight, and Continuity Act of 2010 (Public Law 111-302) gives the United States Mint research and development authority to conduct studies for alternative metallic coinage materials. Additionally, the new law requires the United States Mint to consider certain factors in the conduct of research, development, and solicitation of input or work in conjunction with Federal and nonfederal entities, including factors that the public believes the United States Mint should consider to be appropriate and in the public interest. Comments must be submitted on or before April 4, 2011. Interested parties may submit written comments by any of the following methods:
For further information, contact: Jean Gentry, Deputy Chief Counsel, United States Mint at (202) 354-7359 (not a toll-free call). h/t Alexander Gloy
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| 4 Hour Silver Chart - update 9:30 PM Central Time Posted: 07 Mar 2011 02:40 PM PST ...
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| Oil’s March Madness a Boost for Refiners Posted: 07 Mar 2011 02:17 PM PST March Madness is still a few weeks away for college basketball fans but the madness of March is in full swing for the oil sector. Turmoil in the Middle East sent oil prices up more than 6 percent last week. We also happen to be entering a time of year that has historically been good for energy prices and energy equities in recent decades.
Going back nearly 30 years, March has been the best month for crude oil. By the end of the month, the price of oil is nearly 4 percent higher on average than the closing price on the last trading day of February.
One reason for this increase relates to the demand pull created by refiners ramping up in advance of the summer driving season. You can see in the above chart that crude prices generally spike in March then continue at a lesser pace through the early summer before picking up again in the late summer. There is typically a big decline from September to October and weak price performance through year end. This year, oil prices jumped the gun on the seasonal rise because of the unrest in Libya and fears that it may spread to key producers such as Iran, Algeria, Nigeria and Saudi Arabia. Crude oil prices reached $104 per barrel today and we expect this near-term volatility to continue as the geopolitical situation works itself out. Short-term volatility aside, oil market supply/demand fundamentals were tightening before the turmoil in the Middle East began and we think historically high oil prices are here for the long-term. On Tuesday, the International Energy Agency's chief economist Fatih Birol supported this opinion when he indicated that "the age of cheap oil is over." PIRA, an oil industry analyst, is forecasting West Texas Intermediate (WTI) oil prices will hover around $104 per barrel in 2011 based on tighter oil supply/demand fundamentals, strong medium-term fundamentals and increased financial investment. The firm expects oil demand to grow by 1.6 million barrels per day in 2011 as global GDP growth averages 4.3 percent. Meanwhile, OPEC's crude output is only expected to increase by 960,000 barrels per day. Refiners are one of the energy sub-sectors that could benefit the most from higher oil prices. Historically March marks the end of a five-month stretch in which monthly crack spreads (value of refined products minus the prices of the crude oil feedstock) tends to increase. Spreads are generally 4 percent wider in March than February. This year, some refiners are getting an added bonus because of the significant price difference between WTI and Brent crude oil. Currently, Brent is trading about $15 a barrel higher than WTI, which means that some refiners are buying their oil $15 below global prices. This adds to the profitability of each barrel. The discount may remain wide for the time being because crude oil supplies from Canada and the mid-continental region of the U.S. have risen faster than demand. These supplies travel to storage facilities at the delivery hub in Cushing, Oklahoma, which makes it difficult to be exported overseas. This creates a supply glut unique to the region.
This is a very positive development for a sub-group that has struggled over the past few years. You can see from the chart that refiners have lagged the rest of the oil and gas sector over the past three years. While the S&P Energy Index is returning to peak 2008 price levels, the S&P Oil and Gas Refining and Marketing Index is barely halfway back. During this madness of March, the increased profitability gives refiners some catch-up potential with the rest of the energy sector. For these reasons, refiners remain an area of focus for the Global Resources Fund (PSPFX). Regards, Frank Holmes, P.S. For more updates on global investing from me and the U.S. Global Investors team, visit my investment blog, Frank Talk. Oil's March Madness a Boost for Refiners 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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| Ted Kaufman's Friday Hearing Explains Everything That Is Broken With The US Financial System Posted: 07 Mar 2011 02:10 PM PST
On Friday, free and efficient market champion Ted Kaufman, previously known for his stern crusade to rid the world of the HFT scourge, and all other market irregularities which unfortunately will stay with us until the next major market crash (and until the disbanding of the SEC following the terminal realization of its corrupt and utter worthlessness), held a hearing on the impact of the TARP on financial stability, no longer in his former position as a senator, but as Chairman of the Congressional TARP oversight panel. Witness included Simon Johnson, Joseph Stiglitz, Allan Meltzer, William Nelson (Deputy Director of Monetary Affairs, Federal Reserve), Damon Silvers (AFL-CIO Associate General Counsel), and others. In typical Kaufman fashion, this no-nonsense hearing was one of the most informative and expository of all Wall Street evils to ever take place on the Hill. Which of course is why it received almost no coverage in the media. Below we present a full transcript of the entire hearing, together with select highlights. The insights proffered by the panelists and the witnesses, while nothing new to those who have carefully followed the generational theft that has been occurring for two and a half years in plain view of everyone and shows no signs of stopping, are truly a must read for virtually every citizen of America and the world: this transcript explains in great detail what absolute crime is, and why it will likely forever go unpunished. Key highlights from the transcript: In a recent paper, professors in Dallas and a co-author estimated that the CPP program, along with the FDIC's Temporary Liquidity Guarantee Program, increased the value of banks participating in these two programs by approximately $130 billion, of which 40 billion represented a direct taxpayer subsidy to banks.
I estimated that the capital purchase program increased the value of banks debt by $120 billion at a cost of $32 billion for the taxpayers. Though in spite of the enormous value created by the government intervention, taxpayers ended up with a large loss.
There are exactly the issues you discussed with the previous panel in terms of additional losses coming through from major lawsuits and various kinds of put backs and so on. We don't know how much capital they're going to need to weather the next stage of the global cycle. And the Federal Reserve has not yet determined that, so why would you allow them to pay out any of this capital as dividends?
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| The Next Bull Run in Precious Metals is Here Posted: 07 Mar 2011 01:41 PM PST The Next Bull Run in Precious Metals is Here Gold has broken to new highs and now looks to be retesting forming resistance. If it bounces hard here then the next leg up for the precious metal has begun, as former resistance would now be support.
Having said that, the rising bearish wedge pattern in Gold remains in play. We bounced off the bottom trendline and now look to be on our way to the upper trendline. This indicates the target for this current rally is in the $1470-$1480 range. And if we break above the upper trendline… then it's "lift off" time.
Silver which has been leading Gold in the last six months seems to be indicating that this will be the case. Indeed, Silver broke out to new highs back in mid-February:
While Gold is only just breaking out to new highs now (2-3 weeks later):
A secondary reason for Silver outperformance is its pricing: at $36 per ounce, buying Silver is much more affordable than Gold which costs $1,400 per ounce. Consequently, Silver is a kind of "poor man's" inflation hedge and so is profiting from an influx of orders from those who are growing increasingly worried about inflation but cannot afford to buy an ounce of Gold. Finally, Silver also has some catching up to do in general. Historically, the Gold: Silver ratio has fallen into the low 30s if not the 20s during precious metals bull markets. Today, this ratio stands at 39. So we could easily see Silver go to $50+ or even higher within the context of historic price movements.
However, the precious metals aren't the only assets that are staging dramatic rallies. Indeed, commodities across the board are exploding higher as the Fed's funny money kicks off an inflationary storm.
All of these assets, particularly 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 the Inflationary Storm Pt 2 which I just released to the public last Wednesday. Already two of these investments are up 5% and 13%. That's in just 10 days! I fully expect they'll ALL be in the triple figures within the next six months (the first three inflation picks I suggested are up 6%, 38%, and 49% in just two months). 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: 07 Mar 2011 01:28 PM PST The recent rally in gold, oil, and commodities in general has been extremely powerful. Despite protestations to the contrary by our clueless Fed president, it's very clear what is driving this massive commodity inflation when you look at this next chart. That's right we are now seeing the unintended consequences of printing money.  At that point the market will no longer be able to delude itself that everything is OK. At that point inflationary pressures will surge out of control. At that point Bernanke will understand the magnitude of his catastrophic blunder when he ran QE2. And at that point it will be too late to stop. Actually this path was already determined when Ben opted for QE1 to abort the debt cleansing process that was underway in 08 and 09. Yes he bought us a little time but the ultimate cost is going to be much greater than anyone could have foreseen. It would have been much better if the depression was allowed to run it's course. We would be most of the way through the pain by now and ready to come out the other side into a golden age. Instead we have another decade or more of misery ahead of us. All because our leaders don't have the foresight to see the consequences of their actions. Now on a more immediate note the dollar is due for a dead cat bounce anytime now. When it does it should force a brief correction in gold, oil and commodities in general.  This will be your last buying opportunity before the final parabolic move begins in earnest. Once the dollar breaks below that November low all hell should break lose in the currency markets forcing all commodities, especially gold and silver into what will likely be one of the most powerful rallies in history.       
This posting includes an audio/video/photo media file: Download Now | ||||||||
| Sun’s up in PR? & Politics as Usual? Posted: 07 Mar 2011 12:58 PM PST
Good News In Puerto Rico! 
Puerto Rico’s GO credit rating could be “negatively pressured” if the island fails — in the next two years — to take on its $17 billion unfunded pension liability.
Tough Talk From CBO
If current policies are continued, the gap between spending and revenues will remain very large even after we return to normal economic conditions.
Fiscal policy cannot be put on a sustainable path just by eliminating waste and inefficiency; the policy changes that are needed will significantly affect popular programs or people’s tax payments or both. Popular Program AKA Social Security. Increases the likelihood of a fiscal crisis during which investors would lose confidence in the government's ability to manage its budget and the government would lose its ability to borrow at affordable rates.
Helps older generations by deferring the increases in taxes or the cuts in benefit payments they would face.
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| Posted: 07 Mar 2011 12:23 PM PST TEN 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 Terraco Gold Corp TSX.V - TEN is an aggressive junior exploration company with properties in Nevada and Idaho. The Almaden property, located in Idaho, has been drilled with 887 holes, and 60,000 meters of historical drilling and has a Measured and Indicated gold resource of 864,000 oz of gold and an inferred resource of 84,000 oz gold. This resource is likely open pittable and heap leachable. Almaden is similar to mines in northern Nevada which host bonanza‐grade gold in feeder zones below lower grade disseminated ores. High‐grade feeder system examples include; Midas (7.6M ounces), Mule Canyon, Buckhorn and Hollister A majority of the historic drilling has been only to a depth of 100 meters and the resource is still open along strike for several hundred meters and also at depth. Earlier metallurgical work done ...
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| Battered Public Pensions Doing Better? Posted: 07 Mar 2011 12:20 PM PST
Jeanette Neumann of the WSJ reports, Battered Public Pensions Do Better:
Wishire recently reported that the Master trusts rose nearly 6% in the fourth quarter, resulting in a median return of over 12% for calendar year 2010:
Strong returns in stocks and bonds bode well for public pension assets. The problem is that interest rates remain near historic low levels, so even if the funding gap is shrinking a little, it's still high and won't get better anytime soon. You would need a sharp rise in rates and continued strength in the stock market to see those funding deficits shrink substantially. In her article, Lisa Lambert of Reuters notes the following: Public pensions have recently sparked heated debates, from the halls of the U.S. Congress, where lawmakers have suggested allowing states to go bankrupt to undo pension promises, to the streets of Wisconsin's capital, where thousands of demonstrators are pitched in a battle over public employees' rights. Stock market declines drove down the value of many retirement systems' funds recently, and many states pulled back on putting money into the funds as they faced their worst budget crises in decades. The retirement systems have been caught short in paying for future retirees. Estimates of the shortfalls range from $800 billion to $3 trillion, depending on how much the systems' investments are expected to appreciate. All this to say that US public pension funds are doing better but are by no means out of the woods. If you want to know what the future might have in store for many public sector workers, have a look at what going on in the UK where a review by former Labour Cabinet minister Lord Hutton is expected to recommend an end to "gold-plated" final salary schemes. He is set to say that workers should instead receive payouts linked to average salary over their careers.
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| Posted: 07 Mar 2011 11:59 AM PST
Most policy makers still don't understand the urgent need to restore trust in our financial system, or the need to prosecute Wall Street executives for fraud and other criminal wrongdoing. But top economists have been saying for well over a decade that trust is necessary for a stable economy, and that prosecuting the criminals Is necessary to restore trust. Trust is Necessary for a Stable Economy In his influential 1993 book Making Democracy Work, Robert Putnam showed how civic attitudes and trust could account for differences in the economic and government performance between northern and southern Italy. Political economist Francis Fukiyama wrote a book called Trust in 1995, arguing that the most pervasive cultural characteristic influencing a nation's prosperity and ability to compete is the level of trust or cooperative behavior based upon shared norms. He stated that the United States, like Japan and Germany, has been a high-trust society historically but that this status has eroded in recent years. In 1998, Paul Zak (Professor of Economics and Department Chair, as well as the founding Director of the Center for Neuroeconomics Studies at Claremont Graduate University, Professor of Neurology at Loma Linda University Medical Center, and a senior researcher at UCLA) and Stephen Knack (a Lead Economist in the World Bank's Research Department and Public Sector Governance Department) wrote a paper called Trust and Growth, arguing:
Heap, Tan and Zizzo and others have come to similar conclusions. In 2001, Zak and Knack showed that "strengthening the rule of law, reducing inequality, and by facilitating interpersonal understanding" all increase trust. They conclude:
"Enforcing contracts", "raising civil liberties", and "reducing corruption" and "democracy" all have to do with the rule of law, which - as discussed below - in turn, means prosecuting violations of the law. Likewise, by "enhancing institutions", they mean regulatory and justice systems which enforce contracts and prosecute cheaters.
So once again, we are back to the importance of prosecuting fraud.
Forbes wrote an article in 2006 entitled "The Economics of Trust". The article summarizes the importance of trust in creating a healthy economy:
In 2007, Yann Algan (Professor of Economics at Paris School of Economics and University Paris East) and Pierre Cahuc (Professor of Economics at the Ecole Polytechnique (Paris)) reported:
Similarly, market psychologists Richard L. Peterson M.D. and Frank Murtha, PhD noted in 2008
In 2009, Paola Sapienza (associate professor of finance and the Zell Center Faculty Fellow at Northwestern University) and Luigi Zingales (Robert C. McCormack Professor of Entrepreneurship and Finance at the University of Chicago Booth School of Business) pointed out:
They quote a Nobel laureate economist on the subject:
In 2009, Time Magazine pointed out:
In other words, the government's political actions affect investments, such as gold, and thus the broader economy. In 2010, a distinguished international group of economists (Giancarlo Corsetti, Michael P. Devereux, Luigi Guiso, John Hassler, Gilles Saint-Paul, Hans-Werner Sinn, Jan-Egbert Sturm and Xavier Vives) wrote:
They noted:
Prosecuting the Criminals Is Necessary to Restore Trust Nobel prize winning economist Joseph Stiglitz says that we have to prosecute fraud or else the economy won't recover:
Robert Shiller said recently that failing to address the legal issues will cause Americans to lose faith in business and the government:
Economists such as William Black and James Galbraith agree. Galbraith says:
Galbraith also says that economists should move into the background, and "criminologists to the forefront". Government regulators know this - or at least pay lip service to it - as well. For example, as the Director of the Securities and Exchange Commission's enforcement division told Congress:
Nobel prize winning economist George Akerlof has demonstrated that failure to punish white collar criminals - and instead bailing them out- creates incentives for more economic crimes and further destruction of the economy in the future. Indeed, William Black notes that we've known of this dynamic for "hundreds of years". And see this, this, this and this. Of course, it's not just economists saying this. One of the leading business schools in America - the Wharton School of Business - published an essay by a psychologist on the causes and solutions to the economic crisis. Wharton points out that restoring trust is the key to recovery, and that trust cannot be restored until wrongdoers are held accountable:
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| Jeff Nielson: Monetizing silver -- instant prosperity Posted: 07 Mar 2011 11:50 AM PST 7:45p ET Monday, March 7, 2011 Dear Friend of GATA and Gold (and Silver): Your secretary/treasurer has often remarked that Mexico, like South Africa, is a fabulously rich country perversely insisting on being desperately poor. With his new commentary, Jeff Nielson of Bullion Bulls Canada proves the case. Nielson's commentary is headlined "Monetizing Silver: Instant Prosperity" and you can find it at Bullion Bulls Canada here: http://www.bullionbullscanada.com/index.php?option=com_content&view=arti... Or try this abbreviated link: 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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| Heavy Hitters Talk About The Virtues of Gold Posted: 07 Mar 2011 11:25 AM PST [U]www.preciousmetalstockreview.com March 5, 2011 [/U] It was a strong week for the precious metals especially Silver. We had a few large players in the world talk about Gold and the coming further weakness of the US Dollar and it’s lessening role throughout the world. All in all it was a great, constructive week. Metals did well and the US markets continued their consolidation before the next leg higher within a week or two. The S&P target of 1,440 I mentioned later on in 2010 is still very much in play once we get through this period of consolidation. It was volatile to say the least this past week but that’s a good thing as long as you recognize it and don’t get suckered into new positions without a good reason to. The S&P 500 is in a period of chop, or you could say trading in the middle of a range with no clear direction. These are the times that you must avoid trading as your account will be whipsawed...
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| The 5th Place Winner of This Year’s Daily Reckoning Financial Darwin Awards Posted: 07 Mar 2011 11:19 AM PST The state of the states is not good, Fellow Reckoner. Cracks are beginning to appear in their veneer. The illusion of vitality and control is coming into question. Even people with better things to do than pay attention to politics are beginning to sense that the charade may be up. They suspect their mayors and governors – and perhaps even their kings and queens – have no clothes on. Some have started pointing fingers and waving placards. They vow to stay and fight. Others are planning their exit…while they still can. We are not gathered here today to offer tears and condolences for failing and flailing states. By any measure one cares to employ, the very idea of "The State" itself has had a pretty good run. Forged in the crucible of ancient Egypt some 6,000 years ago, the state has morphed through iterations as many and varied as the seasons between them. From the Pharaohs through to warlords, kings and queens, generalissimos, barbarians, emperors, chairmen, führers, shoguns, sheiks, tsars, presidents, prime ministers and the rest of the scoundrels, nobody could say we humans didn't give The State a fair go. Quite the contrary. We gave it every opportunity to succeed. And more. Our forefathers tried hereditary rule, divine rule, rule by majority, minority, by power, money and force of every stripe and style. They drafted manifestos, constitutions, bills of rights and Little Red Books. Every conceivable form of "The State" has been given its turn. We've tweaked it, tortured it and tinkered with it for long enough. And now, after six millennia in the political lab, after countless wars and untold lives surrendered to whatever the "cause" of the day happened to be, we see what we have for our troubles. There are resources enough to feed every mouth in the world. Yet, most of one entire continent starves to death. People living in vast swathes of another are not much better off. Two more, at least, face imminent insolvency and surefire social upheavals, revolutions, even wars. Brutal, iron-fisted dictators rise in the poorest regions of our world, supported and installed by their democratically elected counterparts in far off lands, where people who call themselves good don't care to read bad news. And in the most powerful nation the planet has ever seen, a mighty behemoth with military arsenal enough to lay waste to the entire human population many times over, more than 40 million of its own citizens live on food stamps, barely able to get by. That many again are supported directly by the state, that grand experiment we've devoted six thousand years to testing, but which we still don't quite understand. But again, we are not here today to wallow in commiserations and condolences. As Vancouver favorite and good friend Doug Casey likes to say, the situation may be helpless, but it's not serious. Indeed. It is said that nature abhors a vacuum. The same is true of political and economic eco-systems. Where one species, one gene, one dollar staggers toward extinction, another evolves, emerging to fill the void. Financial crises, revolutions, bankruptcies and currency crashes are all part of the process. Rather than be feared, these occurrences ought to be celebrated as a necessary part of the cycle. A renewal, of sorts. It is the unleashing of productive capital and the freeing of minds for new and better ways to trade, think and arrange ourselves politically and economically. Of course, this is by no means a new idea. Charles Darwin, his focus more on the animal kingdom than the political thrones of man, called the process "evolution by natural selection." The weak perish at the hands, and to the advantage, of the strong as nature selects for and promotes the most efficient, adaptive species. Cruel as the system sounds, we simply wouldn't be here without it. Joseph Schumpeter, in his 1942 work, Capitalism, Socialism and Democracy, coined for the same economic process the term "creative destruction." Innovative entrepreneurs are the driving force behind long-term economic growth and prosperity, Schumpeter argued, but they occasionally, necessarily, displace the "value" of established companies and business models in the process. And in the political realm? What happens when a government spends too much of its citizens' money, or grows too inefficient, or simply loses the support of those who, knowingly or not, spend their efforts creating the means and circumstances for its existence? What becomes of that king, that governor, that political philosophy when those who fuel it lose faith in their leaders' power and the viability of the system in general? Communism, monarchism, fascism, feudalism…nothing lasts forever. Right now, across the Middle East and North Africa the sword is falling on some well-deserved necks. What started in the relatively minor economy of Tunisia has now spread to Kuwait and even threatens the House of Saud. What will fill this Middle East-shaped political vacuum, then? We've tried statism in every manifestation conceived. After 6,000 years and counting, isn't it about time for something new? Back in the US, we're keeping an eye on the states within The States. As you may have read, we're down to the finalists in our Daily Reckoning Financial Darwin Awards: The State Edition. We announced the final ten in the weekend edition (in alphabetical order) – California, Connecticut, Illinois, Louisiana, Massachusetts, Mississippi, New Jersey, New York, Ohio and Wisconsin. Each day this week we'll count down from fifth place to the winning state, which we'll announce on Friday. Today's State, coming in at fifth place, is rather small and not usually one to pop up on the radars. One reader, who has since relocated to warmer climes, described his former state of residence as a "financial basket case with a political class full of clowns." Ok…so we'll need more specifics… Although her projected budget shortfall for 2012 is "only" $3.7 billion, much less than some of the larger states, today's feature state suffers a debt to GDP ratio of 12.5%…only marginally lower than that of Greece. And, like the shaky Club Med economies, individual states don't have the option of printing/inflating their obligations away. Writes another reader: "No doubt you are well aware of the budget and jobs crisis circus in [this state]. Any intelligent person would think it should be right at the top of the priority list for our Senators and Representatives to act on. Not so! "Recently, the two clowns representing my district have introduced legislation to have the Tibetan Language put on our licenses, in addition to English. Although hard to believe, this is the type of legislation our Legislators consistently deem to be important and appropriate. "Needles to say, I believe our state is a prime contender for your Darwin Awards. "By the way, I'll be proposing our State's motto be changed from 'The Constitution State' to 'The State of Denial.'" In case you haven't guessed it yet, with almost $5,000 in per capita state debt and unfunded pensions per capita weighing in closer to $18,000, our fifth place choice for this year's Daily Reckoning Financial Darwin Awards is… Connecticut. That still leaves 9 contenders for the final four places. Tune in tomorrow to see if your state makes the list. Joel Bowman The 5th Place Winner of This Year's Daily Reckoning Financial Darwin Awards 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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| Siddharth Rajeev's Commodities Rundown, From Au To V Posted: 07 Mar 2011 11:14 AM PST Source: Brian Sylvester of The Gold Report 03/07/2011 There is more to the periodic table—and to investing opportunities—than gold, silver and copper. Siddharth Rajeev, vice president and head of research at Fundamental Research Corp., sums up the market prospects for rare earth elements (REE) and a host of metals. He unearths some new names and some historical finds in this exclusive interview with The Gold Report. The Gold Report: Sid, today we're going to talk about a number of different metals: gold, silver, vanadium, copper and rare earths. Could you handicap each of those metals for us, starting with gold, copper and silver? Siddharth Rajeev: Let's look first at the factors that have been driving up commodity prices. We think two key factors are responsible. Number one is increasing global demand; the second is the continued weakness in the U.S. dollar. Let's look at increasing global demand. We believe in the Brazil, Russia, India and China (BRI...
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| Portfolio's true value is in ounces, not dollars, Embry tells King World News Posted: 07 Mar 2011 11:13 AM PST 7:05p ET Monday, March 7, 2011 Dear Friend of GATA and Gold (and Silver): Sprott Asset Management's John Embry tells Eric King that demands for delivery could explode the derivatives-fueled suppression of silver, that other governments are likely to devalue their own currencies to support the U.S. dollar if it starts breaking down too much, that such devaluation can only send the precious metals upward, and that the true measure of an investment portfolio isn't any dollar figure but its total ounces of precious metal. The interview is 12 minutes long and you can listen to it at King World News here: http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/3/7_Jo... 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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| Which Gold Producer Best Mimics Gold Price? A Correlation Perspective Posted: 07 Mar 2011 11:13 AM PST Soner Kistak submits: As investing in gold becomes more popular in light of the latest macro developments, the stocks of gold mining companies also have come to the forefront. Obviously, some investors also wanted to focus on the gold theme indirectly to capture the catch-up potential of these gold miners. In this context, it is important to identify the main gold stocks with the highest correlation to gold. If one looks at the correlation between the stock prices of main gold producers traded in the U.S. market and the gold price on a weekly basis, the following observations can be made:
Complete Story »
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| Gold Price Completed Correction, Higher Prices Tomorrow Unless It Trades Below $1,428 Posted: 07 Mar 2011 11:07 AM PST Gold Price Close Today : 1434.10 Change : 5.90 or 0.4% Silver Price Close Today : 35.855 Change : 0.538 cents or 1.5% Gold Silver Ratio Today : 40.00 Change : -0.442 or -1.1% Silver Gold Ratio Today : 0.02500 Change : 0.000273 or 1.1% Platinum Price Close Today : 1818.80 Change : -16.30 or -0.9% Palladium Price Close Today : 788.65 Change : -21.00 or -2.6% S&P 500 : 1,310.13 Change : -11.02 or -0.8% Dow In GOLD$ : $174.27 Change : $ (1.86) or -1.1% Dow in GOLD oz : 8.430 Change : -0.090 or -1.1% Dow in SILVER oz : 337.19 Change : -2.28 or -0.7% Dow Industrial : 12,090.03 Change : -79.85 or -0.7% US Dollar Index : 76.47 Change : 0.075 or 0.1% I suspect-guess-reckon that from Thursday of last week through today the GOLD PRICE completed an up move. Today's high was $1,444.20, just before the New York market opened. It then dropped from the openings, bottoming at $1,428.05 just before noon, then climbing to a Comex close at $1,434.10, $5.90 higher than Friday. Gold appears to have finished a correction today, which makes it a candidate for higher prices tomorrow. Trading below $1,428 would gainsay that forecast flat-footed, and drag gold lower. Platinum and Palladium didn't behave well today. That doesn't help silver and gold. Dull day for the SILVER PRICE, it only gained 53.8c on Comex today, closing at a new high of 3585.5c. Silver's pattern today mimicked gold's. It made a new high at 3673c (not a typo), extending its rise from Thursday and probably making at least a short term top. Today's close was bumping along the bottom of the day's trading range. Below 3500c silver runs into trouble. Again, I put my hand over my mouth. In these crazy straight up rises, a market is liable to go anywhere or stop anytime. However, the backwardation in silver is much plainer now and more pronounced than it has been -- curve is flattening, if you will. That means it's about time for the exchange or the government -- or both -- to step in a pick the public's pocket before some of the banks and market makers begin to lose money on their short positions. Y'all cut me some slack. I write these commentaries at day's end, running like a scalded dog to get them written and sent, so proof-reading occurs, but at a minimal and hurried level. When you see some obvious, egregious error, it is probably just that, an error, so say to yourself, "Poor old fellow. He's just not as sharp as he used to be." Case in point was the silly error on Friday about the GOLD/SILVER RATIO plunge from its 84.329 reaction high in Autumn 2008. Friday the ratio had fallen to 40.439, which, as any 2nd grader could tell you, is NOT down 25.7% from its high (as I wrote), but rather 52.05% below it. Scanning over the day, my eyes catch on the stock market. Have y'all noticed how the Dow keeps on knocking on 12,050? Today was the third time, and there is no such thing as a triple bottom. Tomorrow, or soon, it will knock at 12,050 and the trap door there will prove rotten and give way. Believe me, I know how many people have hopes and dreams of retirement pinned on the stock market, and it give me no pleasure to warn you. Stay at your grievous risk. Dow today lost 79.85 points to close at 12,090.03. S&P 500 lost a little more percentagewise, down 11.02 to 1,310.13. Downtrend is established, and the plunge will come. US DOLLAR INDEX made a spike bottom today at 76.124, then rose above 76.40. This is merely a little intraday pattern, so it must walk ahead and confirm the bottom by climbing and continuing to gain. The Euro dropped to 1.3972. Yet the breakout to the upside remains on the chart, and the Euro must close below 1.3841 to change direction. Some time or the other, before too awful long, the dollar ought to turn around. Logically silver, gold, and stocks are due for a down phase, and a rising dollar helps drive that. Yet things happen in the fullness of their own time, and not to my order. Dollar could become much more oversold from here still before it turns. Behold, I am not a cynic, I am a realist. Every market in the US is run with government collusion for the benefit of the financial houses. Ned Schmidt even noted today that the Federal Reserve kept interest rates low to keep the cheap speculative money flowing to Wall Street. If there's a candid, honest financial market in this country, I don't know what it is. But I do not despair. I hope. Eleven states now have bills threatening to establish silver and gold as an alternative tender to Federal Reserve notes. Mercy! Just let that dance across your mind a minute. From 1981 to 2000 I was hounded, investigated, indicted, nearly killed, acquitted, convicted, and jailed because I insisted that the US and state constitutions and statutes and cases say that only SILVER and GOLD are US money. I was branded a monetary crank, a nut-case, a lunatic, and even The Most Dangerous Man in the Mid-South by an assistant US attorney-ess. Now, looky here, eleven states are trying to assert the same. I reckon the Nice Government Men -- bless their tiny, stony hearts -- are going to have to add a lot of new cells in jails and lunatic asylums all over eleven states, or else I'm in danger of becoming mainstream. 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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