Gold World News Flash |
- GoldSeek.com Radio Gold Nugget: Jim Rogers & Chris Waltzek
- The Dollar’s Double Decline
- Jim?s Mailbox
- "Gold and Silver Parabolics - Part II"
- Gold: Still Far to Go
- Fat-Tail Fatigue
- Utah Starts What Remaining States Should Finish
- The Dollar’s Double Decline
- Gold Seeker Closing Report: Gold Ends Slightly Higher and Silver Closes at a New 31-Year High
- Gold and Equities on the Verge of Breaking Out!
- SILVER MANIPULATION DAY OF RECKONING – David Morgan & Mike Maloney In Las Vegas Part 7
- In The News Today
- Jim's Mailbox
- What’s driving the Silver Price?
- Gold could go parabolic, Rob McEwen tells King World News
- Governments Are About To Lose Control
- Thieves snatch 100kg of gold worth £3million
- Rob McEwen - Gold Mania Will Rival Tech Bubble
- Until The Gold Price Beats $1,436 We Are Just Waiting For A Resolution
- The Second Runner-Up In This Year’s Financial Darwin Awards
- 4 Hour Gold Chart
- Sick & Tired of Risk
- Deficit On It: Watching the US Descend Into Bankruptcy
- A Birthday for the Bull Market
- Copper closes at 11-week low, gold higher
- Two Catalysts on the Verge of Transforming Colombia into an Investment Hot Spot
- Bernanke Tries To Explain Why A Ponzi Scheme Is A Perfectly Acceptable System For Post Civil-War America, Fails
- U.S. dollar's role not at risk from SDRs, says Geithner
- If The Gold/Copper Ratio Is Truly A Harbinger Of Market Weakness, Here Are Some Pair Trade Ideas
| GoldSeek.com Radio Gold Nugget: Jim Rogers & Chris Waltzek Posted: 09 Mar 2011 07:02 PM PST GoldSeek.com Radio Gold Nugget: Jim Rogers & Chris Waltzek
|
| Posted: 09 Mar 2011 06:04 PM PST Even silver and gold bears realize that the dollar is in decline, but few realize the extent of such a decline and how massive shifts in capital flows in 2008 will affect the dollar in 2011.
|
| Posted: 09 Mar 2011 05:52 PM PST View the original post at jsmineset.com... March 09, 2011 07:00 PM Jim Sinclair's Commentary The floating car rises from the ashes of the Pheonix from in my garage Thanks to CIGA Steve and others who found this ancient diesel engine in a junk yard in Britain. Dear Eric, QE is going to infinity because even a hint of cessation will kill the US Treasury market stone cold dead. Jim Pimco Goes to Cash, Exits Treasurys CIGA Eric Gross writes, who will buy Treasuries when the Fed doesn't?" There will be immediate economic and social consequences for not kicking the economic can down the road if QE ends in June 2011. Pimco is right to be nervous regardless of any official decision. The secular trends illustrate why. Long-Term U.S. Government Bonds Total Return Index (LTGBTRI) Long-Term U.S. Government Bonds Total Return Index (LTGBTRI) to Gold Ratio Headline: Pimco Goes to Cash, Exits Treasurys Pimco has dumped all of its US Treasury bond exposure ...
|
| "Gold and Silver Parabolics - Part II" Posted: 09 Mar 2011 05:52 PM PST As you will discover from the charts and information in this article, the previous three gold and silver parabolics (2004, 2006 and 2008) had a common characteristic. Each exhibited a midpoint consolidation - a resting place that separated the character of the first half and second half of the parabolic move. This observation is particularly relevant at this time, as both gold and silver have presently completed this midpoint consolidation and are already on their way to concluding the 2011 parabolics. More Here.. 
|
| Posted: 09 Mar 2011 05:46 PM PST Nichols on Gold
|
| Posted: 09 Mar 2011 04:48 PM PST by Adrian Ash BullionVault Wednesday, 9 March 2011 Back to early 2007, only with gold's fair value now at $3844 per ounce... FOUR YEARS AGO it felt like most finance journalists didn't know gold's color, let alone why their readers might want to read about it. Come Sept. 2007 however, and the credit crunch – first in Europe's money markets and then on Britain's High Streets as Northern Rock collapsed – made gold's rare indestructibility all too alluring. Within 18 months, Lehmans had gone but AIG had survived, as central banks moved from zero rates to money printing, and "Is gold a bubble?" had become a regular columnist's stand-by. That headline soon mutated into "Gold is clearly a bubble" as stock markets bottomed, quantitative easing worked its magic, and commodities began racing back to their record highs. Yawn...Next! Personal finance reporters in especial have since lost all interest in gold, pretty much taking us back to where we began. Only with gold pric...
|
| Utah Starts What Remaining States Should Finish Posted: 09 Mar 2011 04:40 PM PST It wasn't exactly headline news, but it wasn't a quiet event either. The Utah state house has passed a new bill that would allow the state to explore solutions to issuing its own currency, one made of gold or silver, and it seeks to allow its citizens to trade in gold and silver as bullion, not as arbitrary dollars. The bill, which many expect to fail in the state Senate, is certainly another small victory in the move toward sound money. All in Favor, All Opposed While many have focused purely on the politics of the matter, there are underlying elements of the bill that should be considered individually, if not part of some greater goal of expanding the uses for sound money. Under the bill, state sales taxes, income taxes, and capital gains taxes would be removed entirely from bullion. Opponents say the taxation changes would lead to lost revenues of up to $300,000 per year, but consider the greater effect. Thanks to a virtual hodgepodge of tax laws and ...
|
| Posted: 09 Mar 2011 04:39 PM PST Even silver and gold bears realize that the dollar is in decline, but few realize the extent of such a decline and how massive shifts in capital flows in 2008 will affect the dollar in 2011. The Flood into the US Dollar If you remember back to the days surrounding the credit crisis, you will probably first think of the massive opportunity to buy silver at $9 per ounce. However, now think more retail. Think of what happened when the world was struck by fear: they bought dollars. Despite its shortcomings, the dollar is still one of the best currencies in the world, which says a lot about the other currencies around the world. When the worst financial crisis in decades hit the markets, investors fled to safety, and so they fled into the US dollar. However, when you invest in dollars on a massive scale, it does not make much sense to just horde a bunch of paper, nor is it practical to store cash in a bank account of a possibly failing bank. Besides, at t...
|
| Gold Seeker Closing Report: Gold Ends Slightly Higher and Silver Closes at a New 31-Year High Posted: 09 Mar 2011 04:00 PM PST Gold went up to as high as $1436.25 shortly after the open of trade in New York before it fell back to $1426.41 by late morning, but it then bounced back higher in afternoon trade and ended with a gain of 0.13%. Silver rose to $36.41 and dropped to $35.62 before it also rallied back higher and ended with a 0.64% gain at a new 31-year closing high.
|
| Gold and Equities on the Verge of Breaking Out! Posted: 09 Mar 2011 03:20 PM PST In short, I don't think it is wise to jump the gun and take on any large positions until we see what happens on Friday overseas... Read More...
|
| SILVER MANIPULATION DAY OF RECKONING – David Morgan & Mike Maloney In Las Vegas Part 7 Posted: 09 Mar 2011 02:43 PM PST Share this:
|
| Posted: 09 Mar 2011 02:08 PM PST Thought For The Evening Have you seen pictures of the Libyan Freedom Rebels who have taken up arms against the evil ruler Gaddafi, putting down their ploughshares to fight for democracy and the end of rule of the resident potentate? You have to be kidding! These rascals, called Freedom Fighters, wear bandoliers stocked with 50 calibre cartridges worn on their heads or around their chest. These are trained, seasoned warriors that have appeared out of nowhere, certainly not out of Libya. Once again the West is making a bad situation worse. Wait until you see what these mercenaries do to the West. It will be something Gaddafi never even imagined.
Jim Sinclair's Commentary The headline should read "Major revelation concerning Chinese Economic Advisor. Chinese advisor found reading jsmineset.com" China adviser says Beijing should buy more gold BEIJING, March 9 (Reuters) – China should use some of its $2.85 trillion foreign exchange reserves to buy more gold XAU=, a government adviser was quoted as saying by local media reports on Wednesday. Li Yining, a senior economist at Peking University and member of the Chinese People's Political Consultative Committee, an advisory body to the national parliament, said that China should use the precious metal to hedge against risks of foreign currency devaluations. "China should increase its gold reserves appropriately, and China must take every chance to buy, especially when gold prices fall," Li was quoted by the official Xinhua news agency as saying. His view that Beijing should diversify its foreign exchange reserves, the world's largest, into commodities is nothing new. Many other academics have publicly called on Beijing to do so. But Li's views may carry more weight than most. Many of his former students are now high-ranking officials, including Chinese Vice Premier Li Keqiang, who is seen as Premier Wen Jiabao's likely successor in 2013. However, Yi Gang, head of the State Administration of Foreign Exchange, which is responsible for managing most of the country's foreign currency holdings, said recently that it was not possible for China to make big purchases in the spot gold market.
Jim Sinclair's Commentary The toll that has been taken by the financier Fat Cats is beyond belief. Add the present long term weather cycle to peak oil with a smattering of planned, coordinated events in the Middle East and the West is yesterday's news. Standards of living will not in this century, if ever, challenge the 2004-2006 period. Gold, as the last man standing, will go further in price for a greater length of time than most expect and few say. Like the average cost of regular fuel shown so often, where in hell did they buy those groceries? I want to go to that store. Why you're paying more for groceries
|
| Posted: 09 Mar 2011 02:00 PM PST Jim Sinclair's Commentary The floating car rises from the ashes of the Pheonix from in my garage Thanks to CIGA Steve and others who found this ancient diesel engine in a junk yard in Britain.
Dear Eric, QE is going to infinity because even a hint of cessation will kill the US Treasury market stone cold dead. Jim Pimco Goes to Cash, Exits Treasurys Gross writes, who will buy Treasuries when the Fed doesn't?" There will be immediate economic and social consequences for not kicking the economic can down the road if QE ends in June 2011. Pimco is right to be nervous regardless of any official decision. The secular trends illustrate why. Long-Term U.S. Government Bonds Total Return Index (LTGBTRI) Headline: Pimco Goes to Cash, Exits Treasurys Pimco has dumped all of its US Treasury bond exposure in its flagship Total Return Fund. The move makes sense given Pimco chief Bill Gross's public statements that Treasurys are over-valued. "It just gives people that follow him the bias not to bullish on the Treasury market," said Jefferies Treasury Strategist John Spinello. "He thinks rates are going higher." In fact, there was little reaction in the bond market when news of move leaked out Wednesday morning. http://www.cnbc.com/id/41988321
Dear Eric, I suspect that this arena of financial disaster will be referred to by the media as a weather problem only, a deep freeze. Regards, A Deep Freeze Hits Muni-Bond Market Capital always withdrawals when reward (yield) does not compensate for the risks taken. Yields must rise or the deep freeze will continue without the aid of another buy America program. Municipal-bond issuance is on pace for its lowest quarter in at least 11 years following a rush of borrowing late last year and as government borrowers struggle to get their budgets in order. Through March 4, issuers have sold about $31.5 billion in debt, according to Thomson Reuters. The last time so little in bonds was sold by this point in the calendar was 11 years ago. Depending on how much debt is sold this month—a figure hard to gauge since issuance calendars typically look only a week ahead—muni-bond sales in the first quarter may be the smallest amount since at least the same three-month period in 2000, which came in at $39.1 billion, according to Thomson. "The entire market has been amazed at the lack of volume," said Christopher Mier, managing director at Loop Capital Markets. Source: finance.yahoo.com
|
| What’s driving the Silver Price? Posted: 09 Mar 2011 01:00 PM PST The Silver Price is hitting new recent highs at $36.55 today in a more vigorous performance than even gold. Many in the developed world precious metal markets are amazed at the performance of silver and see this continuing, whereas others feel it is running away with itself. The "backwardation" in silver [when 'spot' – or immediate delivery prices are higher than for future delivery] has stressed just how much immediate demand there is for silver and clearly a physical shortage of the metal has arisen. There are two apparently conflicting pictures of the role of silver. The industrial side of silver demand, currently thriving and the investment side, which is also thriving and should continue to do so.
|
| Gold could go parabolic, Rob McEwen tells King World News Posted: 09 Mar 2011 12:54 PM PST 8:45p ET Wednesday, March 9, 2011 Dear Friend of GATA and Gold: Currency diversification will support gold and gold is such a tiny market that a substantial move into it by investors could take it parabolic, gold mining entrepreneur Rob McEwen tells King World News in an interview today. Excerpts from the interview can be found at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/3/9_Rob... 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
|
| Governments Are About To Lose Control Posted: 09 Mar 2011 12:48 PM PST Of all the catastrophes waiting around the corner that might be the trigger event for Collapse, most, like a Saudi uprising, Iranian nukes, or African food riots are simply possibilities that have as much or more chance of not happening as they do of actually occurring. Unfortunately, there is one scenario that has such a [...]
|
| Thieves snatch 100kg of gold worth £3million Posted: 09 Mar 2011 11:54 AM PST Real-life Italian Job: Thieves snatch £3million in gold from depot in rural Tuscany Share this:
|
| Rob McEwen - Gold Mania Will Rival Tech Bubble Posted: 09 Mar 2011 11:15 AM PST  With gold and silver consolidating recent gains, today King World News interviewed one of the greats in the mining world, Rob McEwen, former Chairman & CEO of mega-giant GoldCorp and current Chairman & CEO of US Gold. When asked if it will shock the world when the dollar takes a big tumble Rob stated, "Yes and the expression of that Eric in the monetary system is the price of gold going up, the price of silver going up."
This posting includes an audio/video/photo media file: Download Now |
| Until The Gold Price Beats $1,436 We Are Just Waiting For A Resolution Posted: 09 Mar 2011 10:50 AM PST Gold Price Close Today : 1429.30 Change : 2.40 or 0.2% Silver Price Close Today : 36.043 Change : 0.390 cents or 1.1% Gold Silver Ratio Today : 39.66 Change : -0.366 or -0.9% Silver Gold Ratio Today : 0.02522 Change : 0.000231 or 0.9% Platinum Price Close Today : 1805.00 Change : -1.00 or -0.1% Palladium Price Close Today : 783.50 Change : -7.50 or -0.9% S&P 500 : 1,320.02 Change : -1.80 or -0.1% Dow In GOLD$ : $176.64 Change : $ (0.30) or -0.2% Dow in GOLD oz : 8.545 Change : -0.014 or -0.2% Dow in SILVER oz : 338.85 Change : -0.07 or 0.0% Dow Industrial : 12,213.09 Change : -1.29 or 0.0% US Dollar Index : 76.72 Change : 0.079 or 0.1% The GOLD PRICE didn't resolve any controversies today, just because it rose $2.40 to close Comex at $1,429.30. The genuine resistance, the mark to beat, is $1,436; until gold beats that point, we are just waiting for a resolution. Downside $1,423.50 is holding, so far, and must hold (aww, it could slip to $1,418, but it would make me awfully nail-bitey). Above, gold proves it has broken out upside, confirms beyond all gainsaying, when it closes 2% above the January high, i.e., $1,451. Range-bound markets will kill your patience faster than waiting for the commercials to end in an episode of 24. The SILVER PRICE gained 39c on Comex, ending at 3604.3c, but that no more than re-stated what silver had already tucked under its belt in yesterday's aftermarket. On the five day chart silver has built a long needle-nosed triangle, which could resolve up or down. Overhead silver's big resistance is 3650, and holding it up below is 3550 (today's low fell on 3560c). It's very hard to parse action like this, let alone forecast from it. All depends on which direction it breaks out of this range. Crazy as it sounds, silver can continue to move higher, to 4000c anyway, gigantically overbought as it may be. The GOLD/SILVER RATIO is bumping along at the low, today 39.655 at Comex close. But there is no sign of a silver turndown yet. No indicator I can point to and exclaim, "There she blows!" And a trend in force remains in force until it is violated. US DOLLAR INDEX bounced yesterday, I note, off an uptrend support line that reaches back to the 2009 low. Thus some bounce is logical, almost obligatory, but not meaningful unless the dollar IMPROVES it, confirming by rising through successively higher resistance levels. Right now, that first gate stands at 77. Today the dollar index fell back 8 basis points (0.10%) to 76.719. 'Tis a great mystery to me today when I gaze upon the Euro chart and see a down-gap left yesterday. How did I miss that? Day before marked a clear key reversal (trade into new high ground with a lower close on the day), and confirmed by closing lower yesterday, and lower with a down-gap. Today did nothing toward repairing the wound. What does that all import? That while we are wondering whether the dollar has bottomed or not, it's mirror image, the euro, seems to have topped. STOCKS today looked like rags hung out on a line to dry. Strong forces were selling, and the buying couldn't keep up, fight as it would. Dow dropped 1.29 points to 12,213.09 and S&P500 lost 1.8 points to 1,320.02, but those measly numbers tell no tale. You'll see that bragging about losing "only" 1.29 points today would be like a bald man coming out of a fight with Shawnees bragging about keeping his hair. Hackles on my neck say stocks are about to go for a long downhill ski. 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 Second Runner-Up In This Year’s Financial Darwin Awards Posted: 09 Mar 2011 10:30 AM PST We've been talking a lot about the state of the state this week. The state, as a viable political concept, seems to be breaking down. At the very least, it is beginning to be called into question. Take a look at states in Africa…states in the Middle East…in Europe…even states within "The States." From toppled state governments in the MENA region to insolvent nation states across Europe's periphery and flat broke states back in the US. Whether ruled by tyrannical, autocratic minority or tyrannical, democratically elected majority, the model of The State just doesn't seem to work. The reason is simple enough: violence doesn't work. Voluntary trade does. The state – being, by definition, an agent of force – is always and everywhere a net detractor from a market's productive capacity. This rule holds equally true in the Libyan Desert as it does in fifty different state capitols scattered across the US. Which brings us to the main reason for this little interjection… The Second Runner-Up in this year's Daily Reckoning Financial Darwin Awards: The States Edition. Let's see… First we had ten finalists. We read them out over the weekend, in alphabetical order – California, Connecticut, Illinois, Louisiana, Massachusetts, Mississippi, New Jersey, New York, Ohio and Wisconsin. Then, on Monday, we announced fifth place: Connecticut. We just couldn't resist recognizing a state with the sometimes moniker of "The State of the Steady Habits" for out of control spending that saw it's debt/GDP ratio soar to within a fraction of a percent of Greece's. Great stuff, really. Yesterday, we gave a tip of the hat for New Jersey. Although the Tax Foundation has found that New Jersey homeowners pay three and a half times the national median, the state is still on schedule to deliver a $10.5 billion budget shortfall for the year. Then there's the union-won benefits, unfunded pension and healthcare liabilities, soaring debt/GDP level. Yep, Jersey for fourth. Today we raise a glass to this year's Second Runner-Up… Writes one reader from today's state: "I am appalled at the continued political patronage hiring here. A recently retired State Senator was, at 75 years old, just handed a job at the local community college…paying $120,000 per year! And we are laying off teachers, police, and firefighters. "Also, politicians refuse to give a Civil Service exam to fill state jobs, as required by law. They say there is no money for this. They then hire based strictly on political connections, disregarding any qualifications. They end up having to hire additional people to actually do the job. Budgets for some departments were actually higher than requested in exchange for political jobs – see the ongoing scandal in the Probation Dept. Some politicos may actually go to jail over this one." The state our Fellow Reckoner is referring to suffers under one of the highest debt/GDP ratios in all the land…a whopping 20.53%. Maybe you'll guess it from this email, from another local resident: "Our state and its 'Big Dig' has retired this dubious trophy years ago. When Tip O'Neil announced that he had 90% financing on our downtown boondoggle and we would only have to pay 100 million of the 1 billion cost, little did he know (or did he?) that the final cost would be $14 billion. Oh wait… We forgot the interest…dooooh… Make that $22 billion. And the screw-ups continue, whether it's the Big Dig, our caddy driving governor giving freebies to a company that left for China, drunken pols, druken firefighters, pols sticking cash down their bras that only the feds can seem to find while our AG is clueless, three consecutive speakers of the house that have been convicted of felonies or are awaiting trial and grossly incompetent judges and pols that come from a one party state." Couldn't guess? Here's our Reckoner again, with the answer in slogan form: "The new state slogan should be 'Massachusetts: Incompetence, corruption, criminal behavior… We've got it all!'" Congratulations go to Massachusetts, "The Bay State." You've earned this year's Second Runner-Up in our Daily Reckoning Financial Darwin Awards: The State Edition. That means there are still two more prizes up for grabs…and seven finalists still in the running. More tomorrow… Joel Bowman The Second Runner-Up In This Year's 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.
|
| Posted: 09 Mar 2011 10:21 AM PST ...
|
| Posted: 09 Mar 2011 10:03 AM PST |
| Deficit On It: Watching the US Descend Into Bankruptcy Posted: 09 Mar 2011 10:00 AM PST I was amused at the title "Cash Drains From Treasury as Republicans and Democrats Dither" by Terence P. Jeffrey, who is the author of the book Control Freaks: 7 Ways Liberals Plan to Ruin Your Life. The title seems to imply that if the Republicans and the Democrats were not busy dithering (which I assume mostly means idling their time away by acting like corrupt, imperious buffoons) then they could unite, in a glorious burst of powerful mutual cooperation, and heroically "solve the crisis" by doing something, and then everything will be fine. He does not, however, get into that whole political mess, which is unfortunate since the politics of it all is what got us into this mess in the first place, which is that the electorate learned that they could easily elect government representatives that would dip into the public purse for the benefit of greedy, self-serving voters, and for the benefit of the corrupt, self-serving government representative looking towards the next election. Instead, he gets right at the meat of the subject and announces that the Treasury Department's latest statement for its bank accounts is "available online now at http://fms.treas.gov/dts/index.html." Apparently, Mr. Jeffrey is also a keen observer of human nature, and he knows that I am not going to go to a website that has a lot of accounting and accounting tricks aplenty, where pretty soon numbers are swirling all around in my head, around and around, and then I get dizzy and bored and end up misunderstanding something important so that I look even more stupid and incompetent than I, unfortunately, am. Well, it must be important, because he refuses to let me walk away, and tries to tempt me with the tantalizing "The statement is like a fiscal snapshot of a nation rapidly descending into bankruptcy." At this point I kind of snickered, "Big deal!" to myself, as any person with a spouse and dependent children sees themselves descending into bankruptcy Every Freaking Day Of Our Lives (EFDOL) all the time. The speed of our familial "death spiral" is directly correlated with how rude and/or downright hateful the kids get, ranging from their usual low-key hostility ("I hate you!") to the extremes of throwing chicken bones and miscellaneous cutlery at me from across the table, while all I do is throw empty aluminum beer cans at them, which are so light they hardly even leave a red spot where it hits them! And this snotty, hateful arrogance of children is, itself, highly correlated with how many times the kids beg me ("Please, daddy! Please!") for more money which is, itself, highly correlated with me refusing their request ("Go to hell!"), but then having the spouse honor their requests and give them the money behind my back, which explains why they have those irritating smirks on their faces all the time, but not why they are always asking for more money, which is highly correlated with things costing more, which is highly correlated with the Federal Reserve creating more money, which is highly correlated with the federal government deficit-spending so much money. Out of the corner of my eye I can see Mr. Jeffrey looking at me like I have lost my mind. Since I get that kind of reaction a lot, I know just what to do! I say, "What are you looking at, moron?" To my embarrassment, it turns out he was not looking at me with a look of confusion and haughty condescension, but was just politely waiting for me to shut up long enough for him to say, "According to the Daily Treasury Report for Feb. 28, the federal government took in $851.47 billion in revenues in February – which included $63.7 billion in new net debt." Curious, I idly thought of getting out the calculator to try and multiply $851.47 billion by 12 to give me the government's annual tax haul, but my interest was overshadowed by him going on, "On the other side of the ledger, it spent $1.009 trillion over the course of the month, including $585 billion to redeem maturing government securities. That gave the government a deficit for the month of $158.5 billion." My brain exploded! Lapsing into a takeoff of the Mexican bandit in the movie Treasure of the Sierra Madre, I note that we don't need no stinking calculator to multiply a trillion dollars spent in a month times 12 months in a year to get annual federal government expenditures of over $12 trillion a year – Twelve Freaking Trillion Dollars (TFTD)! – which is a fact that becomes terrifying when compared to the $14 trillion, which is the entire GDP of the Whole Freaking Country (WFC). And if ever there was a time to immediately get into as much gold as possible as soon as possible as a defense against the horrific inflation that the satanic Federal Reserve is causing with this insane over-creation of money, this is it. And with something that blindingly obvious, then what can you say except, "Whee! This investing stuff is easy!" The Mogambo Guru Deficit On It: Watching the US Descend Into Bankruptcy originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
|
| A Birthday for the Bull Market Posted: 09 Mar 2011 09:49 AM PST Welcome to today's very special "Birthday Party Edition" of The Daily Reckoning! Our little bull market is two years old today… They grow up so fast! To begin the festivities, please put on your party hats and click on the following link: Two years old and just as cute a button!… Yessirree, that's our little bull market! As of today, the S&P 500 Index has produced a dazzling total return of 103% during the last 24 months. The NASDAQ, for its part, has delivered a total return of 121%. Those are some great, big numbers for an itty-bitty bull market. In fact, as The Wall Street Journal recently observed, the S&P 500 Index doubled from its March 2009 low in just 707 days – the fastest doubling of the S&P since 1936. Back then, it took a mere 501 days. The Dow Jones Industrial Average has not quite doubled, but almost:
"The chart above looks eerily similar to a chart of the Dow from September 1934 through October 1936," our colleagues at The 5-Minute Forecast relate. "In just over two years, the Dow doubled from 87 to 174:
"What the Journal failed to note was what happened after that 100% climb in 1936. Let's widen the scope a bit.
"Ugh… After reaching that double in October 1936, the Dow topped out in March 1937 at 194…pulled back…came within about 5% of that top again in August 1937…and then plunged by March 1938 back to where it was three years before. "This was the infamous 'Depression within the Depression.' As went the stock market, so went the economy. Whatever gains had been goosed by New Deal spending evaporated. By 1939, Treasury Secretary Henry Morgenthau conceded to Congress: 'We are spending more money than we have ever spent before, and it does not work… After eight years of this administration, we have just as much unemployment as when we started…and an enormous debt, to boot.'" But the stock market's tale of woe did not end in 1939. By April of 1942, the Dow had surrendered more than half its value from the 1937 top. Shortly after World War II ended, the Dow briefly revisited its 1937 high, before slumping anew and languishing for several more years. Bottom line: The Dow did not break above its 1937 high, for good, until December 1949! We're not saying history is destined to repeat itself. But the parallels are pretty obvious, and ominous. Happy Birthday, Bull Market! Eric Fry A Birthday for the Bull Market originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
|
| Copper closes at 11-week low, gold higher Posted: 09 Mar 2011 09:22 AM PST March 9, 2011 (MarketWatch) — Gold futures closed higher on Wednesday, while copper dropped nearly 3% as investors retreated from the industrial metal on concerns that Chinese demand is waning as stockpiles build. Gold for April delivery rose $2.40, or 0.2%, at $1,429.60 an ounce by the close of floor trading on the Comex division of the New York Mercantile Exchange. Gold was supported by renewed worries about Europe's debt problems after Portugal had to offer higher yields to lure investors to its bonds Wednesday. Copper for May delivery declined 13 cents, or 2.9%, to $4.21 a pound. It was the lowest close in 11 weeks. … Investors have been worrying the rally for oil could dampen the economic recovery, hurting copper's prospects at least in the short term. [source]
|
| Two Catalysts on the Verge of Transforming Colombia into an Investment Hot Spot Posted: 09 Mar 2011 09:02 AM PST by Addison Wiggin - March 9, 2011
 “Things must really be bad for you to visit Colombia," a reader writes, helpfully. "The known center for corruption, murder and much more.“My advice — get out while you can and look elsewhere.” Indeed, the day we arrived, the Revolutionary Armed Forces of Colombia (FARC) kidnapped 23 oil contractors working for the oil services firm Talisman in the east part of the country. Yesterday, one of the workers escaped and alerted the military, which then rescued 21 others. One of the workers is still missing.  But so far for us, the trip has been quite civilized. Of course, “civilized” a relative term when you’re being driven around a mountainous city of 7.4 million at breakneck speed in a euro tin can called a Chevrolet Optra.Regardless, as we hurtled around a hair pin turns at nearly 40 miles an hour, one tire in the drainage ditch, we realized we're developing a coherent answer to the questions: Why Colombia, and why now? If anything, we're starting to think we're a little late. We’ve gotten some critical insight in this regard from the good people at InterBolsa, a brokerage and investment banker that handles nearly 30% of the volume on Colombia’s stock market. Colombia has two near-term catalysts that make it worth looking at:
 The current security strategy got under way with presidency of Alvaro Uribe. And is being continued under the current administration of Juan Manuel Santos. Attacks on infrastructure of the state oil firm Ecopetrol are down from a high of 249 in 2001 to 20 in 2010. Progress, at least.Kidnappings are down too significantly. We'd give you exact figures, but right now they're in Spanish and we haven't had time to translate them.  The direct action against FARC comes with no small help from the United States; Colombia is the No. 3 recipient of U.S. foreign aid, after Israel and Egypt. (Right, because it's working so well over there, isn't it? Good point.)Decades ago, the FARC was a fearsome Marxist guerrilla movement backed by Moscow. After the Soviet Union broke up and the easy money dried up, the FARC turned to drug- and gunrunning… and kidnapping. The guerrilla movement merged with Colombia’s drug trade. And found their new occupation far more profitable. But from the standpoint of the government here, it’s made for a single, larger and easier target. Most of the change is for the better. A few years ago, the 250-mile drive from the capital Bogota to Medellin was a foolhardy, even life-threatening, endeavor, with modern-day highwaymen all along the way. No more. Cattle farmers can get their animals to market without worry. Oil firms can build pipelines from the fields to the ports. Prospectors are finding new places to mine gold.  “Colombia may be the best economic story in Latin America,” writes Chris Mayer, who's sitting at the bar next to me. “The economy is growing 5% per year and has a large middle class. In just the last six years, foreign investment in Colombia has gone up fourfold, and exports tripled.“The famous IMD survey recently ranked Colombia second best in Latin America in protecting private property, behind only Chile. And the World Bank rated Colombia third in Latin America in the ‘business friendly’ category, behind only Mexico and Peru. “The Colombian stock market has been on a tear since the ’08 financial crisis. But valuations remain reasonable, given the high growth rate.” That’s the flip side to our concerns yesterday about Colombia being the most expensive emerging market, going by forward price-to-earnings ratios.  “As a resource story,” Chris continues, “Colombia has huge potential for oil production. There have been a number of success stories already. The stock price in the largest independent oil producer in Colombia, Pacific Rubiales, for instance, is up 10-fold in the last two years!”  The biggest cloud on the economic horizon lies to the east. Next door in Venezuela, our favorite South American dictator Hugo Chavez shut the border and most of the trade with Colombia last year, after Colombia accused Chavez of harboring FARC rebels.Venezuela was Colombia’s largest export market. In nearly an instant, exports to Venezuela shriveled from $50 billion a year to $1 billion. Efforts are under way to find alternative buyers for Colombian resources, especially in Canada and China. We’re meeting the CEOs of several companies trying to make that happen in the next few days. Stay tuned.  Oil prices are pulling back slightly, but remain above $105. Apparently, someone at OPEC is whispering sweet nothings in the ears of the financial media about Kuwait, the United Arab Emirates and Nigeria joining forces with Saudi Arabia to fill the supply void left by Libya.We don’t buy it, any more than we bought the Saudi princes’ assurances. As we pointed out last week, the problem with “spare capacity” is not limited to Saudi Arabia… and whatever spare capacity does exist will likely be gone in two more years. Instead, we side with our resident geologist, Byron King, who predicts much higher oil prices. If your thoughts align with ours, you can learn how to protect yourself right here.  The dollar hasn’t completely given up its safe haven status yet. After showing weakness despite the turmoil in Libya over the last two weeks, the dollar index is firming this week between 76 and 77.And that comes despite continued strength in the euro, which makes up well over 50% of the index.  “Newton’s first law of motion essentially states that an object will stay in motion until an outside force moves it,” says our currency specialist Abe Cofnas, by way of a roundabout explanation. “In many ways, currencies follow the same law: A currency price will stay in a pattern until news moves it. “We saw a perfect example of this principle last week when European Central Bank President Jean-Claude Trichet said that ‘strong vigilance’ on inflation will be part of the bank's policy. This caused a surge in the EURUSD pair. As RBC Capital Markets’ David Watt told the Financial Times, ‘Dollar bears have become a marauding horde.’ “Clearly, there is a bullish dominant sentiment.” On Monday, Abe laid on a play to take advantage of the trend. As with most of his recommendations, readers won’t have to wait long to see how it works out. Abe is your guide to a market that no U.S. advisory service has covered before… in which every play takes five days or less to deliver a gain. This one-of-a-kind market also gives you ways to play stock indexes, even the Thursday morning report on first-time jobless claims… all playing out in the same five-day time frame. There’s nothing else like it. Give Abe a chance to walk you through it right here.  Uncle Sam just set a record monthly budget deficit — $223 billion in February, according to an estimate from the Congressional Budget Office.Sort of makes the squabbling in Congress over $60 billion in cuts look a little ridiculous, no? For what it’s worth, we also checked the Treasury’s figures. According to those, Uncle Sam went $63.7 billion in the red. But a lot of that is clever bookkeeping to try to stay within the $14.29 billion debt ceiling. As of this writing, it’s $14.18 trillion. Just another $110 billion to go…  At the risk of opening a whole new can of worms over Wisconsin, we couldn’t help but notice Michael Moore was opening his fat mouth at a rally in Madison a few days ago. “Money doesn't grow on trees,” he told the gathered crowd. “It grows when we make things. It grows when we have good jobs with good wages that we use to buy the things we need and thus create more jobs.” So far, so good. Not sure how a rally for public unions is the place to spout off about the need to "make things" again. But OK... “Contrary to what those in power would like you to believe… America is not broke. Not by a long shot. The country is awash in wealth and cash. It's just that it's not in your hands. It has been transferred, in the greatest heist in history, from the workers and consumers to the banks and the portfolios of the uber-rich.” After the era of fictitious capitalism, who are we to disagree? “For us to admit that we have let a small group of men abscond with and hoard the bulk of the wealth that runs our economy would mean that we'd have to accept the humiliating acknowledgment that we have, indeed, surrendered our precious democracy to the moneyed elite. Wall Street, the banks and the Fortune 500 now run this Republic — and until this past month, the rest of us have felt completely helpless, unable to find a way to do anything about it.” Uh-oh... “If those who have the most money don't pay their fair share of taxes, the state can't function.” OK, there it is... you won't find us coming to the defense of Lloyd Blankfein, Jamie Dimon, Hank Paulson or any of those jackasses. But when Michael Moore starts deciding how much wealth one “deserves” and what constitutes a “fair share”… watch out. Moore's not mad that the bailouts and stimulus happened. He's just pissed about who the recipients were this time around. One positive outcome: free entertainment. It's going to be a hoot parsing the rhetoric of statists and unionists alike over the coming years.  “I've been visiting Colombia up to five times a year for the last 18 years,” writes another, who offers some helpful insight into our latest target. “I've witnessed a rather amazing transformation that few other third-world countries have experienced, least of all in a democratic way.“I've never thought much about the stock market, but I have invested and made money with the oil operators there... they usually trade in Toronto or New York. “One of the most amazing things about Colombia is the safety issue. I've never had a problem there, even during its worst days. Nowadays, I walk alone at night in Bogota and feel perfectly safe. “If you need restaurant tips (especially the best steak in town), let me know.” The 5: Gracias. We’ve met with a few banks and several small Canadian-traded oil companies, which show us some promise down here. We’ve also met with officials of the Treasury and the lumbering state-owned oil giant Ecopetrol, which shows how much progress is yet to be made. More about all of that tomorrow.  “I think the reader has a point in saying, ‘Give me the ticker, and if it's a winner, I pay you for a subscription.’ But we are living in a world of ‘not so honest’; therefore, it's tough to please everybody. What if some reader makes money and forgets to buy?“I suggest that you find good tickers like you have done for me in Outstanding Investments, Energy & Scarcity Investor and so far in Penny Stock Fortunes. Your editors make me confident in buying selected stocks. Thanks, 5.  “You are not quite right about the price of a Swiss franc a long time ago. It USED to be 5 francs for $1 and 4 D-marks for $1, not 4 francs. Those were great days to be a North American student in Europe.“P.S. In terms of CHF, gold has not risen that much. In 1969, it was 175 CHF per ounce. Now it is about 1,295 CHF per ounce — that is, up only 7.4 times over the last 41 years. The 5: Ahh... the Great Dollar Standard Era: You gotta love it... while you still can. After all, what are we to make of the observation that the world "reserve" currency — the one used for trade and wealth preservation by most peoples and nations around the globe — is one whose purchasing power deteriorates by “only” 86% in four decades? Cheers, Addison Wiggin The 5 Min. Forecast P.S.: We'll have more thoughts for you from Colombia tomorrow. In the meantime, allow me to point out one final, but urgent, news item: Our resident stock market vigilante, Dan Amoss, just zeroed in on a fad stock that he believes will crash by March 15. “If you hold this stock in your portfolio, dump it before they release earnings,” Dan recommends. But it’s not all doom and gloom. Dan’s also found a unique way for you to make up to three times your money by betting against the company. He lays out all the reasons why he believes the stock will crash right here. Even if you’re not interested in trying to make money as this company crumbles, you’ll at least want to make sure you don’t own shares. Click here to learn the name and ticker of the play.
|
| Posted: 09 Mar 2011 08:55 AM PST
The following exchange between Ben Bernanke and Senator Kirk is a must watch for everyone who wonders how Ben Bernanke justifies the fact that America is now an open Ponzi scheme. Kirk's question "in laymen's terms this is one part of the government lending another part of the government money, which would not let to long term confidence once the American people understood the basics a little bit better" relates to the open monetization that the Fed does each and every day at least until the end of June. What Kirk did not ask is what happens when the American people realize just how truly preposterous the Ponzi is, and that all the interest "paid" by the Treasury to the Fed ends up being remitted as cash right back to the Treasury as revenue in essence incentivizing the Treasury to spend and borrow more in order to earn more! This is the most circular Weimarian nightmare scenario imaginable, and we can only hope that "the American people" understand this as soon as possible. As to Bernanke's surprise that the US had a currency without any Federal debt to back it up (yes, it is possible to live within one's means, even for a central bank) can we remind the Chairman that the gold on the Fed's balance sheet, all eight tungsten thousand tons of it, is actually Marked to Market to almost $300 billion, and can by definition be used as a pledge to any liability, such as a currency or excess reserves. But oh yes, how could we forget, using just gold as an asset would never afford us the kind of adamantium price stability that we have seen in recent times. Plus how on earth could one infinitely dilute the dollar if the Fed's balance sheet was limited by actual "assets" that do not require Hewlett Packard tech support every now and then.
h/t m33t3r
|
| U.S. dollar's role not at risk from SDRs, says Geithner Posted: 09 Mar 2011 08:38 AM PST Wed Mar 9, 2011 (Reuters) – The U.S. dollar's role as an international reserve currency could not be supplanted by the IMF's Special Drawing Rights because SDRs are simply a unit of accounting, U.S. Treasury Secretary Timothy Geithner said on Wednesday. "The SDR is not a currency; it is a unit of account and it can't provide the role that many people would aspire to it," Geithner told a House of Representatives subcommittee. [source] RS View: Geithner's protests aside, an intangible unit of account (such as the SDR) can indeed be employed to serve as a transactional currency — but only if that role coincides with society's will (which is a non-starter in this case). But to be sure, as both the dollar and the SDR are intangible units, neither are ideally suited to serve society in a role as a store of value. In its usage as a reserve asset for these past 40 years, the fiat dollar (and especially its bonds) has greatly exceeded its natural capacity. As the system undergoes its long overdue reform, it is truly this reserve (store of value) function that is up for grabs. It certainly won't be the notional SDR that usurps the notional dollar in that particular role. Rather, this is the key position to which gold is rightfully ascending.
|
| If The Gold/Copper Ratio Is Truly A Harbinger Of Market Weakness, Here Are Some Pair Trade Ideas Posted: 09 Mar 2011 08:06 AM PST
Two days ago we pointed out the dramatic change in the ratio of copper to gold, which moved at the highest rate of change since June of 2010. Today, the rate of change is even higher at 4.3%. And with copper starting to seriously take on water, a curious observation emerges: is the gold-copper ratio, which on an inverted basis was virtually a tick for tick correlation conjugate for the S&P, now simply a harbinger of where the stock market is headed. All else equal, once the Chinese exuberance dynamics which appear to have stalled out in copper, move to equities (which as Finisair demonstrated yesterday is only a matter of time) we believe, as the attached chart shows, that the fair value of the stock market is about 120 points lower. Since this is a relative comparison, those who do not wish to trade a single series, can put on a pair trade of short the Gold/Copper ratio (predicting it will decline from the current 3.4 - it is shown inverted on the chart below) and short the S&P in expectation of a compression.
And for those who wish to have nothing to do with the Fed's third mandate in the form of the stock market (which is all), another even more convoluted way to play the current multi-asset mispricing, is to go long the Gold-Copper ratio (expect gold to stay flat while copper declines), while shorting the Gold Miner/Copper Miner ETFs (GDX, COPX).
Lastly, those who just want to play with gold, an interesting observation is that Gold has marginally outperformed Gold Miner stocks. An appropriate and simple compression trade here would be short gold and long gold miners for a few basis points compression.
|
| You are subscribed to email updates from Save Your ASSets First To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment