Gold World News Flash |
- Opportunities & Peril in the Gold-Food-Oil-QE Connection
- New Milestone for the Gold-Silver Ratio
- Eric de Carbonnel: The Fed is selling put options on Treasury bonds
- Gold's Inverse H&S: Rocket Time! Continued
- Chris Berry: Opportunities Emerge in the Americas
- Lease Rates Show Greater Silver Interest
- It's official, BidBullion is the cheapest place to get SILVER!
- The Great Con of the Recovery: The Stock Wealth Effect
- Silver shorts feel the burn
- Expatriate Your Wallet
- Where to Find the “Anti-Dollar” (Hint: It’s Not Gold)
- Gold - What to Watch out for in Early May
- Forlorn Hope
- 50 Factors Launching Gold
- Gene Arensberg: Gold-silver ratio nears first action target
- “Instead of investigating fraud and corruption at banks, and instead of questioning the Fed's policy of US dollar debasement, and instead of pondering the role his administration's budget deficits have on the price of commodities, Team Obama Targets
- Emerging Market Growth and Prosperity from Brazil to China
- Eric Sprott and Andrew Morris: Follow the money into silver
- Warning: Investors Still Confident in the US Bond Market
- China Looks to Invest More in the Eurozone
- Making Sense of Gold’s Strength and Goldman’s Weakness
- Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Over 1% and 8% on the Week
- Gold hits yet another dollar high, but on thin trade and weak dollar
- Gold hits new record for sixth straight session
- High gold prices taking jewellery from babies
- Sorry Folks, Uncle Sam Can’t Solve This One
- Gold gains for third week on debt concern, trades near record
| Opportunities & Peril in the Gold-Food-Oil-QE Connection Posted: 24 Apr 2011 03:00 AM PDT Yes, indeed there are two possible economic financial futures. Either the Citizens/Investors of Fiat Currencies Countries take a Huge hit through the Degradation of the Purchasing Power of those Currencies (already happening is the U.S. Dollar – the trade weighted dollar adjusted value of the S&P has actually dropped this year) – OR The Mega Bankers (whom we citizen/Investors Bailed Out) will have to take a substantial Haircut on the money "owed" to them.
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| New Milestone for the Gold-Silver Ratio Posted: 22 Apr 2011 04:29 PM PDT SOUTHEAST TEXAS -- As we prepare to return to our Houston-area HQ, we couldn't help but notice that the gold/silver ratio (GSR) marked a new milestone as of the close on Thursday. The graph below shows the lowest weekly-close gold/silver ratio since 1980, as the important ratio closed just slightly below the lowest weekly close level marked in 1983. Details are on the graph. ...
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| Eric de Carbonnel: The Fed is selling put options on Treasury bonds Posted: 22 Apr 2011 01:54 PM PDT 9:55p ET Friday, April 22, 2011 Dear Friend of GATA and Gold: In commentary posted at 24hGold, market analyst Eric de Carbonnel of MarketSkeptics.com reviews evidence from the Federal Reserve's own minutes that the Fed is manipulating the government bond market using derivatives, particularly the sale of put options on government debt. This, de Carbonnel writes, is a mechanism by which U.S. government bonds are insured against default by the U.S. government itself, which isn't insurance at all but rather a fraud. The Fed's admission in 2009, as it resisted GATA's demand for access to the Fed's gold records, that it has secret gold swap arrangements with foreign banks (http://www.gata.org/node/8192), along with the Gold Reserve Act of 1934 (http://www.law.cornell.edu/uscode/html/uscode31/usc_sec_31_00005302----0...), which authorizes the U.S. government's secret intervention in the gold market and other markets through the Exchange Stabilization Fund, combine with much other official evidence in GATA's documentation file (http://www.gata.org/taxonomy/term/21) to make surreptitious market intervention by the U.S. government seem probable in all major markets. De Carbonnel's analysis is headlined "Fraud: The Fed is Selling Put Options on Treasury Bonds to Drive Down Yields" and you can find it at 24hGold here: http://www.24hgold.com/english/news-gold-silver-fraud-the-fed-is-selling.... Or try this abbreviated link: CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Canuc Resources Pursues Ecuador and Nova Scotia Gold Projects Canuc Resources Corp. (TSX: CDA) has confirmed high-grade gold and the potential for large-tonnage, low-grade copper and gold mineralization at its primary asset, property in the historic Nambija gold mining district in southeastern Ecuador. Last November Canuc took an option on the Mill Village gold property in southwestern Nova Scotia, which includes two past-producing mines. Canuc plans to begin surface and underground exploration at Mill Village in the next several weeks, financed by $2 million recently raised through a private placement. To generate immediate income, Canuc is acquiring MidTex Oil and Gas Co., owner of a producing gas well and a lease on 320 acres in Stephens County, Texas. Canuc's CEO, Gary Lohman, has more than 30 years of experience in the mining industry, primarily as a geologist, and the company's officers include similarly experienced people. For more information about Canuc, please visit http://www.canucresources.ca/. Join GATA here: An Evening with Bill Murphy and James Turk World Resource Investment Conference Gold Rush 2011 https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or 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 The Gold Standard Now: It Can Work Today a dollar is worth 80 percent less than it was 40 years ago, and less than 5 percent of its value a hundred years ago. We deserve a dollar that is as good as gold, a dollar that will hold its value from year to year so we can be financially secure and our economy can generate more and better jobs. For most of America's history, our dollar was literally as good as gold. But on August 15, 1971, our politicians destroyed the link between gold and the dollar. They destroyed the foundations of our economic system. A new Internet site, TheGoldStandardNow.org, provides news and cutting-edge analysis about this most important issue and explains how the gold standard worked in the past and how it can work in the future. Visit us today: http://www.thegoldstandardnow.org/about/137-welcome-newsmax
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| Gold's Inverse H&S: Rocket Time! Continued Posted: 22 Apr 2011 12:23 PM PDT [B]Super Force Signals - A Leading Market Timing Service We Take Every Trade Ourselves Gold's Inverse H&S: Rocket Time![/B] Morris Hubbartt Weekly Market Update Excerpt posted Apr 22, 2011 UUP (US Dollar Proxy) [LIST] [*]On Monday Standard & Poor's downgraded the outlook for our nation to negative. The chart below indicates that perhaps a name change for our nation is in order. One of my readers suggests we change it from the United States of America, to the United Credit Cards of America. If the shoe fits, we're going to have to wear it. [/LIST] [LIST] [*]The S&P warning is too late. Money printing is destroying the purchasing power of the lower and middle class. This dollar proxy chart paints a horrifying picture. The capital bleed on my technical indicators is shocking. Many are flat lining. I marked Wednesday as the latest "dollar rally failure" day. The dollar chart looks like an attic with a dollar sitting on the trap door. That door is very close t...
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| Chris Berry: Opportunities Emerge in the Americas Posted: 22 Apr 2011 11:44 AM PDT Source: JT Long of The Gold Report 04/22/2011 From Quebec, Canada to Sonora, Mexico, House Mountain Partners Founder Chris Berry constantly uncovers new opportunities in the Americas. In this exclusive interview with The Gold Report, Chris outlines the geopolitical changes that are driving renewed interest in areas considered too risky or not profitable enough in the past. The Gold Report: Investing in junior mining companies across the Americas requires balancing risk and reward. What has changed in countries like Colombia, where violence and corruption hampered investment in the past, that make it worth considering investing in gold and nickel companies today? Chris Berry: Historically, Colombia has been one of the largest gold producers in South America; strife brought on by the FARC (Fuerzas Armadas Revolucionarias de Colombia, or the Revolutionary Armed Forces of Colombia) rebels changed that. It wasn't long ago that many considered Colombia to be on the ...
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| Lease Rates Show Greater Silver Interest Posted: 22 Apr 2011 11:42 AM PDT In December of 2010, we looked at silver lease rates to see how a recent spike might affect metals. Then, it was out of the norm to see a spike in the lease rate, which often corresponded with a bid to borrow silver for the short-term. Today, silver lease rates are starting to normalize above zero, which means that demand to borrow silver in the short-term is becoming a constant, and that investors are now starting to price in recent history into the future. Lease rate data from Kitco implies that leases for silver are beginning to pick-up after a recent spring slump. The cost to borrow silver for one year now rests at .50%, which shows that investors are seeking a positive return for leasing their silver to others, and investors have in some ways priced in an increase in the cost of borrowing. Lease rates out to 12-months have exposure to February 2012, which is the time at which most investors are saying the Federal Reserve will begin winding down its Treasury h...
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| It's official, BidBullion is the cheapest place to get SILVER! Posted: 22 Apr 2011 11:36 AM PDT BidBullion just ended it's first auction for a 1oz Silver Keiser for the Whopping price of 37 cents. Share this:
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| The Great Con of the Recovery: The Stock Wealth Effect Posted: 22 Apr 2011 10:30 AM PDT
At this point, I seriously don’t know how anybody in their right mind can be happy that stocks are rallying. Back in 2009, when the market was staring into the abyss, it made sense. But now, after seeing the market double from its 2009 lows… is this really something to be happy about?
Especially when it’s occurring on the back of the Dollar’s collapse?
In case you missed it, the Dollar officially this week the US Dollar officially broke below its 2009 low on its daily close…
And it’s weekly close…
We now have only one line of support left (the 2008 low) before the greenback breaks into uncharted territory, triggering the long-term Head and Shoulders pattern that everyone is aware of and which forecasts a 50% devaluation in the coming years.
Stepping back from this, you really can’t help but notice how stupid the whole “stock wealth effect” ideology is. Setting aside the fact that MOST of the gains stocks have produced since 2009 are due to US Dollar devaluation, it strikes me as odd that someone would think they were richer because their stock portfolio was up… while the cost of just about everything has ALSO gone up tremendously.
Since March 2009, stocks have doubled. However, oil has nearly TRIPLED in price.
In order for people to actually make money with stocks, they have to SELL the stocks. Agricultural commodities have nearly doubled in value too. In fact, the only thing that HASN’T gone up is home prices and incomes.
So the idea that you’ve made money by owning stocks since 2009 is a little hard to swallow as all those paper gains are eaten up by the higher cost of living.
On top of this, in order for you to MAKE money with stocks you have to SELL the stocks. So technically, all the money the “buy and hold” crowd has made going long since 2009 remains paper gains until they cash out. And when they do cash out… they’re cashing out into… US Dollars… which continue to drop like a stone.
Has the Fed really succeeded in generating wealth for anyone? Certainly not anyone who doesn’t work for a big bank. All the Fed’s really done is crank up inflation in the financial system while telling world investors that the US Dollar is trash (which further exacerbates the inflation).
Can the Fed stop this? Not a chance. A Dollar collapse is now guaranteed. The only reason we haven’t had it already is because the US Dollar priced against a basket of equally ugly paper currencies (Euros and Yen).
One by one, these various paper currencies will turn into confetti. The world’s central banks know only one thing and that’s MONEY PRINTING. The idea that they can somehow rein in inflation is absolutely laughable.
So if you’re not preparing for mega-inflation already, you need to start doing so NOW. The Fed WILL continue to pump money into the system 24/7 and it’s going to result in the death of the US Dollar.
If you’ve yet to take steps to prepare your portfolio for the coming inflationary disaster, our FREE Special Report, The Inflationary Disaster explains not only why inflation is here now, why the Fed is powerless to stop it, and three investments that absolutely EXPLODE as a result of this.
All in all its 14 pages contain a literal treasure trove of information on how to take steps to prepare AND profit from what’s to come. And it’s all 100% FREE.
To pick up your copy today, go to http://www.gainspainscapital.com and click on FREE REPORTS.
Good Investing!
Graham Summers
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| Posted: 22 Apr 2011 09:43 AM PDT Silver has stolen the spotlight among investors in recent days after surging nearly $50/oz. Lost in all the commotion, however, are the wildly disparate rumors accompanying silver’s rally. It’s hard to believe that it has been only a week since a widely circulated story concerning a large hedge fund which supposedly made a “gargantuan” bet against silver. This story, which smacked of being planted by speculative interests, was circulated by some otherwise reputable financial publications. As we’ve talked about in past commentaries, whenever extremely bearish news stories are circulated in the financial press it carries a contrarian implication in most cases. In an established bull market like the one for silver, it’s dangerous to sell short based on a rumor since the major trend is up and a large buildup in short interest can create explosive rallies when everyone decides to short the market at the same time. This is what appare...
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| Posted: 22 Apr 2011 09:00 AM PDT If everything you own is held in your own name in your own country, then you are not merely exposed, you are vulnerable absolutely, to whatever decisions the government might make about how you should behave and who gets the wealth you've earned. Tomorrow's new government measure, which might land out of the blue, could be a law that affects everyone, or it could be a rule devised to deal with people like you. Or, it could be an administrative action aimed at you alone. In any case, with all your assets at home, you'd find out how the lobster feels when his trap is being hauled out of the water. Nothing he can do about it. The only way to protect yourself against the risk of being boiled in a government pot is to keep some of your assets in another country. Depending on how you go about it, the specific benefits you might achieve are:
There are many ways to go about getting those benefits. None is right for everyone, and they all come with some element of cost or inconvenience. Here's the main menu. Small bank account. A small account at a foreign bank gives you a ready and private landing spot if you ever decide you want to move a large amount of money in a hurry. If you're a US person, the account is non-reportable, so long as the balance (together with any other foreign financial accounts you own) never reaches $10,000. Large bank account. A large account at a foreign bank also provides a landing spot for anything you want to send later. If foreign exchange controls are ever imposed, the new rules may require you to repatriate the money – or they may not. Depending on the specifics of the new rules, your account may be grandfathered. In that case, the overseas funds would enable you to travel outside your own country while others are forced to stay at home. A foreign bank account also slows things down if you're ever under attack. It's safe from an instant seizure by functionaries of your own government or by the unassisted order of a court in your own country. The disadvantage of a large bank account vs. a small bank account is the loss of privacy. If you're a US person, you are required to report your foreign financial accounts if their aggregate value reaches $10,000. Physical gold. Gold stored in a safe deposit box in a foreign bank is not a foreign financial account, nor is physical gold in segregated storage with a non-bank safe-keeping facility. So a US person can store an unlimited amount of metal that way without triggering any reporting requirements. Avoiding a need for annual reporting is a plus, but don't rely too heavily on the privacy you get with a safe deposit box, since the steps the gold takes to get there may create records of their own. Foreign variable deferred annuity. As with an annuity issued by a US insurance company, a variable annuity issued by a foreign company is tax-deferred for a US investor until he withdraws the earnings. The annuity can be invested in major currencies or in portfolios of international stocks and bonds. If the annuity is big enough (a minimum of $1 million or more, depending on the insurance company), it can be invested in real estate, a private business, or just about anything else. It's only conjecture, but if foreign exchange controls are imposed, they are unlikely to disturb any foreign annuity that's already in place, which is a big plus for an annuity vs. a foreign bank account. A foreign variable deferred annuity isn't private for a US investor. When you buy one, you generally must file an excise tax return and pay a 1% tax, and you must report the annuity as a foreign financial account. Swiss immediate lifetime annuity. A Swiss annuity that begins paying you an annual income when you buy it isn't a foreign financial account, which may save you a reporting burden. And under a tax treaty with the US, Swiss annuities are exempt from the 1% excise tax. There's nothing private about it, however, since part of each annual payment you receive will be taxable income. You can make it difficult for a creditor (such as someone who won a lawsuit against you) to get his hands on a Swiss immediate lifetime annuity by electing not to have the option to cash it in. A forced assignment to a creditor generally would not be valid under Swiss law. Offshore mutual funds. The array of mutual funds available internationally is even broader and more varied than what's available in the US. And, like a foreign bank account, your share account with an offshore fund is safe from a lightning seizure by your own government. But for a US investor, an investment in a foreign mutual fund comes with certain tax disadvantages. They are tolerable if you handle the investment properly or truly ugly if you don't. And your shareholder account would be a foreign financial account and so would be reportable. Offshore LLC. You can use a limited liability company formed outside your home country as an international holding company. It, not you personally, would buy and hold the overseas investments you want. An offshore LLC can be designed to be very unfriendly to your potential future lawsuit creditors, even more so than an LLC formed in the US. An additional plus is that while many banks, mutual funds, insurance companies, and other financial institutions shun business from individual Americans, many of the shunners will welcome business from a non-US LLC even if it is American-owned. An offshore LLC owned by a single US person (or by husband and wife) can elect to be treated as a disregarded entity for US income tax purposes, which makes it absolutely income-tax neutral. Or it can elect to be treated as a partnership, which makes it almost income-tax neutral. The LLC also can be used for estate-planning in the same way as a US LLC. By the ratio of benefits to cost and complexity, an offshore LLC rates especially high. But it does not eliminate your reporting burden. If the LLC owns a large foreign bank account, you will be required to report it. And there will be annual reports for you to file about the LLC itself. Foreign real estate. A direct investment in foreign real estate is free of any special US tax or reporting rules. It's just like buying a farm in Kansas. It would also present added difficulties for a lawsuit creditor looking for ways to collect. And it is unlikely that any regime of foreign exchange controls would touch existing foreign real estate investments. Foreign real estate can also pay you a psychological dividend. Knowing you have a place to go to, should you ever want or need to go, provides a sense of security. That apartment in Buenos Aires or the acreage in New Zealand means you'll never be a lobster. Foreign real estate partnership. By investing in a private foreign partnership or LLC that owns foreign real estate, you can achieve all the advantages of a direct investment. In addition, you increase your protection against foreign exchange controls and lawsuit creditors because there is no ready resale market for your partnership interest. International IRA. An IRA or a solo 401(k) is permitted to own anything other than life insurance and so-called "collectibles." Anything. Some IRAs and solo 401(k) plans own a domestic limited liability company and use it as a vehicle to buy and hold other investments. Such an LLC can own an offshore LLC that does the real investing. As with your direct ownership of an offshore LLC, this does nothing to reduce your reporting duties; in fact, it adds to them. The advantage of such an arrangement is that it allows you to internationalize your retirement plan. Anything international you might do with your personal investments, you can do with your IRA's investments. And it's the ideal structure if you want to invest in offshore mutual funds. The IRA short-circuits the special tax rules that apply to investments in offshore funds, and the offshore LLC's shareholder account application is likely to get a warmer reception from the fund than would your own American hand knocking on the door. Private international investment contract. Depending on your circumstances, it may be possible to structure an investment contract between you and an international financial institution that is tax-deferred, non-reportable, and protected from future exchange controls or prohibitions on owning gold. This is custom work, so, of course, it's only practical for large chunks of capital. International asset protection trust. A properly structured international asset protection trust provides the maximum level of protection from anything that happens in your own country. It does so by leaving you with a measure of influence, but not control, over the trustee. The trustee is outside of your home country and thus is not subject to its laws. And you don't possess the authority to compel the trustee to invest or distribute the trust fund in any particular way. Thus there is no direct means for your own government to impose any regime of exchange controls or investment restrictions on the trust fund. An international asset protection trust is far and away the most powerful of all financial planning devices. Handled properly, it is virtually impenetrable to future creditors and is especially helpful in estate planning. It is also the most complex device and hence the one most likely to be handled ineptly. And of all the tools mentioned in this article, it comes with the heaviest reporting burden if it is funded by a US person. Of course, this is the briefest of overviews of a complex topic. For specific guidance on each of the menu items listed, and pros and cons related to your own circumstances, you'll need to seek qualified counsel. Regards, Terry Coxon Expatriate Your Wallet originally appeared in the Daily Reckoning. The Daily Reckoning recently featured articles on stagflation, best libertarian books, and QE2 .
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| Where to Find the “Anti-Dollar” (Hint: It’s Not Gold) Posted: 22 Apr 2011 08:15 AM PDT There's a currency I think of as the "anti-dollar" that continues to appreciate against the US dollar. Unlike gold, the "anti dollar" can be used to maximize other investments. I'll reveal this currency in a moment. But first, why would you want an "anti-dollar" in the first place? The US has a multi-decade history of borrow and spend. Worse than that, it's more extreme today than ever before. The government has to borrow about half of what it spends. And policy makers are printing money like crazy to "stimulate" the economy (even if they do give it fancy names like "quantitative easing"). If there is more money but the same amount of things to buy with it, prices of the things go up, measured in money. This is inflation, and it shows up in different places at different times. Whether its food, gasoline or house prices. This might sound a bit weird at first, but money has a price like everything else. Looked at in reverse, inflation means the "price" of money has gone down, when measured in "things." Money has lost value. It buys less. One way to protect yourself from inflation is to have investments in stronger currencies. These can be held as cash, bonds, stocks, or real estate. Where I live in Argentina, the locals keep their savings in dollars, because they keep their value better than Argentine pesos. Everything's relative. But there are much stronger currencies than the US dollar. One such strong currency is the Singapore dollar (SGD). A hedge fund trader who is a friend of mine recently described it to me as an "Asian version of the Swiss Franc". This is a big compliment. Switzerland's currency has been strong for decades, and is well known as a safe haven in times of trouble. The reason that Switzerland, and now Singapore, have strong currencies is that these countries live within their means. While the US borrows and spends, these countries earn and save. This is how people get rich, and it's the same for countries. No one got rich by spending money faster than they earned it. In 2009, Singapore's current account balance – the net money coming into or going out of the country – was a surplus of $26 billion. That was just behind Saudi Arabia, the world's biggest oil exporter. By comparison, the US had a deficit of $420 billion! Singapore has very low external debt. That means it owes very little to people overseas. Again this is the opposite of the US, which owes trillions to places like China, Japan and Saudi Arabia. And foreign exchange reserves – the country's rainy day piggy bank – work out at $40,000 for every man, woman and child. In the future, Singapore has a crucial advantage over Switzerland. Switzerland sits in the middle of the "old continent" of Europe, which looks set for a decade of slow growth and stagnation. But Singapore sits in the middle of Asia – in fact right on some of the busiest shipping lanes in the world. And Asia is home to 60% of the world's population, and with many decades of fast economic growth ahead of it. This means that over time the Singaporean dollar is likely to gain value against the US dollar. In fact over the past five years it's gained over 23% in value, measured in US dollars. That's a really useful kicker to any type of investment. So I'm on the hunt for ways to profit from the Singaporean "anti-dollar". You should be, too. Regards, Rob Marstrand Where to Find the "Anti-Dollar" (Hint: It's Not Gold) originally appeared in the Daily Reckoning. The Daily Reckoning recently featured articles on stagflation, best libertarian books, and QE2 .
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| Gold - What to Watch out for in Early May Posted: 22 Apr 2011 08:10 AM PDT We have written before that institutional investors are going to wake up one day and realize that they need to buy gold for their portfolios. Well, that's beginning to happen. This week the Texas teachers' pension fund, one of the largest ... Read More...
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| Posted: 22 Apr 2011 07:57 AM PDT syndicate: 1 Synopsis: David Galland examines the best-, medium- and worst-case scenarios that could come out of the potential Fed policy shift when QE2 officially ends in June. Dear Reader, If you've read pretty much anything I've written in the last few weeks, you are aware that I've become particularly "attentive" to the intentions of Fed policy makers following the scheduled June end date for QE2. I mention it again here because this is no small matter; an actual shift in Fed policy – as opposed to the smoke and mirrors sort – could temporarily play havoc on equities and commodities markets alike. How could it be otherwise, when under QE2 the Fed has been writing checks to the Treasury in amounts of upwards of $100 billion a month since last November? As a point of reference, at the end of April 2007, the monetary base of the U.S. was $822 billion. At the end of April 2011, it will be $2.5 trillion, a three-fold increase. Call it what you want, "quantitative easing," "stimulus," "political payola," "madness," but monetary inflation is the correct term. And monetary inflation on this scale invariably leads to price inflation of a similar scale. It is this "money," steadily ginned out of thin air, that provides the fuel to keep the spendthrifts in Washington spending and props up the wounded economy. It is also this "money" that sends equities and commodities soaring as investors look for higher returns and things more tangible to hold ahead of the rising inflation. Removing the stimulus, therefore, will almost certainly have consequences. Yet, because the politicos and their pets at the Fed have taken things so far beyond the pale at this point, so would a decision to keep the monetary petal to the metal past June. As friend, reader and correspondent Dominic G. pointed out in an email earlier in the week, and you can see in the chart below, technically speaking, the dollar is breaking down.
This steep downward slope of the dollar's trend line over the last year fairly begs for the Fed to attempt something to slow the dollar's descent. Were they to signal a continuation of the same level of monetization now underway, past June, can anyone doubt that the dollar's steep fall would only worsen, risking even collapse? To my way of thinking, therefore, the logical starting point is for them to let QE2 expire in June, as planned, in order to show the world some monetary spine. That is not to say that the Fed will leave its seat empty at Treasury auctions post-June – various members of the inscrutable institution have already made clear the intent to continue reinvesting the proceeds of maturing securities in the Fed's portfolio back into Treasuries. Yet, even with that ongoing action – resulting in Treasury purchases to the tune of $17 billion a month – the net result will still be a monthly gap on the order of $80 billion.
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| Posted: 22 Apr 2011 07:54 AM PDT By Jim Willie CB, Golden Jackass Subscribe: Hat Trick Letter Edification is not the word that comes to mind when observing an interview with Larry Fink of Blackstone this morning on network financial news. It was inspirational if not humorous, and somewhat pathetic. Of course the interviewer treated him like royalty, when just a syndicate captain, a Made Man. As a cog within the US financial hierarchy, he was asked why Gold is approaching record price levels near $1500 per ounce. He gave his best 10-second answer, showing no depth of comprehension but an excellent grip of propaganda laced with simplistic distortion. He said, "GOLD IS RISING FROM ALL THE GLOBAL INSTABILITY, AND NOT FROM INFLATION AT ALL." Sounds good, but it lacks much reflection of the world of reality burdened by complexity and interconnectivity that the enlightened perceive. At least he did not babble about Gold being in an asset bubble. It cannot, since Gold is money. It is curious that all the analysts, bankers, fund managers, corporate chieftains who did not advise on Gold investment over the last ten years are precisely whom the financial network news appeals to for guidance in the current monster Gold bull run. They knew nothing before, and they know nothing now. The major US news networks carry the Obama water while the USCongressional members carry theUSBanker robes and show respect with genuflection before the priests. But guys like Fink are their harlot squires. Poor Ben Bernanke, despite his high priest position, does not gather a fraction of respect that Alan Greenspan did even though Alan presided over the collapse. The wild card possibly later this year or 2012 will be a national movement to force mandatory wage gains, and thus avert a national economic collapse. The squeeze is on in a powerful manner to both businesses and households. ANOTHER STRONG GOLD BREAKOUT As long as Quantitative Easing programs are in place and actively pursued, Gold & Silver prices will soar. The programs are urged by exploding budget deficits and absent USTBond demand. That translates to a ruined USDollar currency. Gold & Silver respond to the debasement and ruin. Efforts will become ridiculously stretched to save the USDollar, but will fail. QE will go global and secretive, assuring tremendous additional gains in the Gold & Silver price. No effort to liquidate the big USbanks will occur, thus assuring the process will continue until systemic breakdown then failure. The more extraordinary the measures to save the embattled insolvent fraudulent USDollar, the more the Gold & Silver price will soar. It is that simple.Gold & Silver will soar as long as central banks continue to put monetary inflation machinery to work. They are attempting to provide artificial but coordinated USTreasury Bond demand. In the process their efforts will continue to push the cost structure up further. In my view, since the Japan natural disaster hit with financial fallout, the Global QE is very much in effect, but not recognized as a global phenomenon. It pushes up Gold in uniform fashion worldwide.
50 FACTORS POWERING THE GOLD BULL 1) USFed is stuck at 0% for over two years and printing $1.7 trillion in Quantitative Easing, otherwise called monetary hyper inflation. They are not finished destroying both money and capital. 2) USFed tripled its balance sheet, with over half of it bonds of exaggerated value, while it gobbled up toxic mortgage bonds as buyer of last resort. The mortgage bonds have turned worthless. The USFed waits for a housing revival to bail itself out, but it will not arrive. 3) Debt monetization has gone haywire, as over 70% of USTBond sales from the USFed printing press. The QE was urgently needed, since legitimate buyers vanished. Even the primary dealers have been reimbursed in open market operations within a few weeks. 4) PIMCO has shed its entire USTreasury Bond holdings, seeing no value. They joined many foreign creditors in an unannounced buyer boycott in disgusted reaction to QE which is essentially a compulsory unilateral debt writedown. 5) Growing USGovt deficits have run over $1.5 trillion annually, with absent cuts, obscene entitlements, endless war. The prevailing short-term 0% interest rates are out of synch with exploding debt supply and rising price inflation. 5) Unfunded USGovt liabilities total nearly $100 trillion for medicare, social security, pensions, and more. The obligations are never included in the official debt. It represents insult to injury within insolvency. 6) Standard & Poors warned that USGovt could lose AAA rating in lousy credit outlook, one chance in three within the next two years. Ironically, the announcement came on the day when the USGovt exceeded its debt limit. The network news missed it. 7) State & Municipal debt have collapsed, as 41 states have huge shortfalls, and four large states are broken. They might receive a federal bailout. It could be called QE3, maybe QE4. 8) Coordinated USTBond purchases from Japanese sales have relieved theUSFed, as other major central banks act as global monetarist agents. The sales by Japan are vast and growing. Witness the last phase in unwind of Yen Carry Trade, where 0% borrowed Japanese money funded the USTreasuryBonds and US Stocks. 10) Quantitative Easing, a catch word for extreme monetary inflation and debt monetization, has become engrained into global central bank policy, soon hidden. It is so controversial and deadly to the global financial structures that it will go hidden, and attempt to avoid the furious anger in feedback by global leaders. This is the most important and powerful of all 50 factors in my view. 11) The FedFunds Rate is stuck near 0%, yet the actual CPI is near 10%, for a real rate of interest of minus 9%. Historically a negative real rate of interest has been the primary fuel for a Gold bull. This time the fuel has been applied for a longer period of time, and a bigger negative real rate than ever. 12) The USGovt claims to have 8000 tons of Gold in reserve, but it is all in Deep Storage, as in unmined ore bodies. The collateral for the USDollar andUSTreasury debt is vacant. It is in raw form like in the Rocky Mountain range or Sierra Nevada range. 13) Fast rising food prices, fast rising gasoline prices, and fast rising metals, coffee, sugar, and cotton serve as testament to broad price inflation. So far it has shown up on the cost structure. Either the business sector will vanish from a cost squeeze or pass on higher costs as end product and service price increases. 14) The entire world seeks to protect wealth from the ravages of inflation & the American sponsored QE by buying Gold & Silver. The rest of the world can spot price inflation more effectively than the US population. The United States is subjected to the world's broadest and most pervasive propaganda in the industrialized world. 15) The European sovereign debt breakdown with high bond yields in PIIGS nations points out the broken debt foundation to the monetary system. The solutions like with Greece in May 2010 were a sham, nothing but a bandaidand cup of elixir. Spain is next to experience major shocks that destabilize all of Europe again, this time much bigger than Greece. The Portuguese Govtdebt rises toward 10% on the 10-year yield, while the Greek Govt debt has risen to reach 20% on the 2-year yield. 16) Germany is pushing for Southern Europe bank climax in their Euro Central Bank rate hike. Europe will be pushed to crisis this year, orchestrated by the impatient and angry Germans. They have no more appetitive for $300 to $400 billion in annual welfare to the broken nations in Southern Europe. 17) Isolation of the USFed and Bank of England and Bank of Japan has come. The small rate hike by the European Central Bank separated them finally. The Anglos with their Japanese lackeys are the only central banks not raising rates. With isolation comes all the earmarks on the path to the Third World. 18) The shortage of gold is acute, as 51 million gold bars have been sold forward versus the 11 million held by the COMEX in inventory. Be sure that hundreds of millions of nonexistent fractionalized gold ounces are polluting the system. Word is getting out that the COMEX is empty of precious metals. 19) Such extreme Silver shortage has befallen the COMEX that the corrupted metals exchange routinely offers cash settlement in silver with a 25% bonus if a non-disclosure agreement is signed. The practice cannot be kept under wraps, as some hedge funds push for fat returns in under two months holding positions with delivery demanded. 20) China has begun grand initiatives to replace its precious metal stockpiles. They are pursuing the Yuan currency to become a global reserve currency. As they build collateral for the Yuan, they are also elevating Silver as reserves asset. 21) A global shortage of Gold & Silver has been realized in national mint production. From the United States to Canada to Australia to Germany, shortages exist. Many interruptions will continue amidst the shortages, which feed the publicity. 22) The Teddy Roosevelt stockpile of 6 billion Silver ounces was depleted in 2003. He saw the strategic importance of Silver for industrial and military applications. The USEconomy and USMilitary will turn into importers on the global market. 23) The betrayal of China by USGovt in Gold & Silver leases is a story coming out slowly. The deal was cut in 1999, associated with Most Favored Nation granted to China. But the Wall Street firms broke the deal, betrayed the Chinese, and angered them into highly motivated action. No longer are the Chinese big steady USTBond buyers, part of the deal also. 24) Every single US financial market has been undermined and corrupted from grotesque intervention, constant props, and fraudulent activity. The degradation has occurred under the watchful eyes of compromised regulators. Fraud like the Flash Crash and NYSE front running by Goldman Sachs is protected by the FBI henchmen. 25) The USEconomy operates on a global credit card, enabling it to live beyond its means. The USGovt exploits the compulsory foreign extension of credit inUSTBonds, by virtue of the USDollar acting as global reserve currency. Foreign nations are compelled to participate but that is changing. 26) The USMilitary conducts endless war adventures for syndicate profits. They use the USTreasury Bond as a credit card. The wars cost of $1 billion per day is considered so sacred, that it is off the table in USGovt budget call negotiations, debates, and agreements. 27) Narcotics funds have proliferated under the USMilitary aegis. The vertically integrated narcotics industry is the primary plank of nation building in Afghanistan. The funds keep the big US banks alive from vast money laundering. 28) No big US bank liquidations have occurred, despite their deep insolvency. Any restructure toward recovery would have the liquidations are the first step. The USEconomy is stuck in a deteriorating swamp since the Too Big To Fail mantra prevents the urgent but missing step. 29) The unprosecuted multi-$trillion bond fraud over the last decade has harmed the US image, prestige, and leadership. The main perpetrators are the Wall Street bankers and their lieutenants appointed at Fannie Mae and elsewhere. They bankers most culpable remain in charge at the USDeptTreasury and other key supporting posts like the FDIC, SEC, and CFTC. 30) The ugly daughters Fannie Mae and AIG are forever entombed in theUSGovt. They operate as black hole expenses whose fraud must be contained. The costs involved are in the $trillions, all hidden from view like the fraud. Fannie Mae remains the main clearinghouse for several $trillion fraud programs still in operation. 31) The US banking system cannot serve as an effective credit engine dispenser, an important function within any modern economy. It is deeply insolvent, and growing more insolvent as the property market sinks lower in valuation. The banks lack reserves, and hide their condition by means of the FASB permission to use fraudulent accounting. 32) The big US banks are beneficiary of continuous secret slush fund support from the USGovt and USFed. Their sources and replenishments have been gradually revealed. The TARP Fund event will go down in modern history as the greatest theft the world has ever seen, easily eclipsing the biggest mortgage bond fraud in history. 33) The insolvent big US banks continue to sit at the USGovt teat. The vast umbilical cord of banker welfare has not gone away. Goldman Sachs still is in control of the funding machinery. 34) The shadow banking system based upon credit derivatives keeps interest rates near 0%. The usury cost of money is artificially low near nothing. As money costs nothing, capital is actively and rapidly destroyed. 35) A vast crime syndicate has taken control of the USGovt. A vast crime syndicate has taken control of the USMilitary. A vast crime syndicate has taken control of the USCongress. A vast crime syndicate has taken control of the US press networks. 36) A chronic decline of the US housing sector keeps the USEconomy in a grand decline with constant deterioration. With one million bank owned homes in inventory, a huge unsold overhang of supply prevents any recovery of housing prices. Home equity continues to drain, and bank balance sheets continue to erode. 37) Over 11 million US homes stand in negative equity. The sum equals to 23.1% of households. They will not participate much in the USEconomy, except when given handouts. They have become downtrodden. 38) The USEconomy will not benefit from a export surge. The US industrial base has no critical mass after 30 years of dispatch to the Pacific Rim & China. The industry must contend with rising costs in offset to the fallingUSDollar, which is cited as providing the mythical benefit. Then can export in droves if they do so at a loss. 39) A global revolt against the USDollar is in its third years. The global players work to avoid the US$ usage in trade settlement. Several bilateral swap facilities flourish, mostly with China. If China supplies products, then the Yuan currency will be elevated to global reserve currency. 40) Global anger and resentment over three decades has spilled over. The World Bank and IMF have been routinely used by the US bankers to safeguard the USDollar and Anglo banker hegemony. Neither financial agency commands the respect of yesteryear. 41) A middle phase has begun in a powerful Global Paradigm Shift. The transfer moves power East where the wealth engines of industry lie, far from the fraudulent banking centers. The next decade will feature the Chinese as bankers, since their war chest contains over $3 trillion. 42) The crumbling global monetary system was built on toxic sovereign debt. Legal tender has been nothing more than denominated debt posing as legitimate by legal decree. That is what word FIAT means. The system is gradually breaking in an irreversible manner. 43) The global central bank franchise system has been discredited. It is a failure, which is not recognized by the bank leaders still in charge. The stepwise process of ruin continues with a new sector falling every few months. Next might be municipal bonds. 44) Witness the final phase of a systemic cycle, as the monetary system has run its course. It is saturated with debt from faulty design. The deception cited in the mainstream media focuses upon the credit cycle which will renew. It will not. It will break of its own weight and lost confidence. 45) The recognition has grown substantially that suppression of the Gold price has been the anchor holding fiat system together. The Chinese realize that Gold, when removed, leads to the collapse of the US financial system. They realize it more than the US public. But the syndicate in control of the USGovtunderstands the concept very well, as they designed the system. 46) The institution of a high level global barter system might soon take root. Gold will sit at its central core, providing stability. No deadbeat nations will participate. That includes the United States and several European nations. The barter system will be as effective as elegant. 47) The movements spread like wildfire in several US states to reinstitute gold as money. In a few states, led by Utah and Virginia, progress has been made for Gold to satisfy debts, public & private. Consider the movement to be in parallel to the Tenth Amendment movements. 48) Anglo bankers have lost control in global banking politics. The phased out G-7 Meeting is evidence. China has wrested control of G-20 Meeting, and has dictated much of its agenda in the last few meetings. The US has been reduced to a diminutive Bernanke and Geithner being ignored in the corner. 49) New loud stirrings by Saudi Arabia seek a new security protector. If security is no longer provided by the USMilitary, then the entire defactoPetro-Dollar standard is put at risk. Remove the crude oil sales in USDollarsexclusively, and the US sinks into the Third World with a USDollar currency that cannot stand on its own wretched wrecked fundamentals. 50) The IMF solution to use SDR basket as global reserve is a final desperate ploy. By fashioning a basket of major currencies in a basket, they attempt to enforce a price fixing regime. It is a hidden FOREX currency exchange rate price fixing gambit that will invite a Gold price advance in uniform manner across the currencies bound together. This ploy is being planned in order to prevent the USDollar from dying a horrible death at the expense of the other major currencies. By that is meant at the expense of the other major economies which would otherwise have to operate at very high exchange rates. THE BIGGEST UPCOMING NEW FACTORS Introduction of a New Nordic Euro currency is near its introduction. The implementation with a Gold component will send Southern European banks into the abyss, marred by default. The new currency has the support from Russia and China, even the Persian Gulf. In my view, it is a USDollar killer. The first nations to institute a new monetary system for banks and commerce will be the survivors. The rest will slide into the darkness of the Third World.
Gold & Silver seem to be the only assets rising in price, an extension of a terrific 2010 decade. The exceptions are farmland and the US Stock market. However, stock valuations are propped by constant and admitted USGovt support. Their efforts are mere attempts to keep pace with the USDollar decline, as stocks merely maintain a constant purchase power.
A hidden overarching hand seeks the global Gold Standard as the bonafide solution. Darwin is at work, but Adam Smith turns a new chapter. The crumbling monetary solution demands a solution. Further investment in the current system assures a devastating decline into the abyss of insolvency and ruin. Jim Willie CB Home : Golden Jackass website
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| Gene Arensberg: Gold-silver ratio nears first action target Posted: 22 Apr 2011 07:45 AM PDT 3:40p ET Friday, April 22, 2011 Dear Friend of GATA and Gold: While the Sprott group expects silver to keep outperforming gold, trader Gene Arensberg of the Got Gold Report is wondering whether silver has done so well lately that some of its profits should be shifted into gold. You can ponder this lovely dilemma with the latest edition of the Got Gold Report, headlined "Gold-Silver Ratio Nearing First Action Target," which you can find in the clear here: http://www.gotgoldreport.com/2011/04/gold-silver-ratio-nearing-first-act... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT The Gold Standard Now: It Can Work Today a dollar is worth 80 percent less than it was 40 years ago, and less than 5 percent of its value a hundred years ago. We deserve a dollar that is as good as gold, a dollar that will hold its value from year to year so we can be financially secure and our economy can generate more and better jobs. For most of America's history, our dollar was literally as good as gold. But on August 15, 1971, our politicians destroyed the link between gold and the dollar. They destroyed the foundations of our economic system. A new Internet site, TheGoldStandardNow.org, provides news and cutting-edge analysis about this most important issue and explains how the gold standard worked in the past and how it can work in the future. Visit us today: http://www.thegoldstandardnow.org/about/137-welcome-newsmax Join GATA here: An Evening with Bill Murphy and James Turk World Resource Investment Conference Gold Rush 2011 https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or 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 Canuc Resources Pursues Ecuador and Nova Scotia Gold Projects Canuc Resources Corp. (TSX: CDA) has confirmed high-grade gold and the potential for large-tonnage, low-grade copper and gold mineralization at its primary asset, property in the historic Nambija gold mining district in southeastern Ecuador. Last November Canuc took an option on the Mill Village gold property in southwestern Nova Scotia, which includes two past-producing mines. Canuc plans to begin surface and underground exploration at Mill Village in the next several weeks, financed by $2 million recently raised through a private placement. To generate immediate income, Canuc is acquiring MidTex Oil and Gas Co., owner of a producing gas well and a lease on 320 acres in Stephens County, Texas. Canuc's CEO, Gary Lohman, has more than 30 years of experience in the mining industry, primarily as a geologist, and the company's officers include similarly experienced people. For more information about Canuc, please visit http://www.canucresources.ca/.
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| Posted: 22 Apr 2011 07:42 AM PDT Team Obama Targets Oil Traders and Speculators; Scapegoating 101 Share this:
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| Emerging Market Growth and Prosperity from Brazil to China Posted: 22 Apr 2011 07:29 AM PDT We're a bit foggy-headed this morning, Fellow Reckoner. We blame the locals. Unlike their Argentine cousins who, despite growing some of the best wine in the world, barely drink, the Brazilians really know how to party. Not that they don't have good cause to… Brazil is on top of the world these days. And the whole world is coming to its cities to catch the view. They'll host the soccer World Cup here in a few years, and the Olympics a couple of years after that. Head down to Ipanema Beach on any given afternoon and you'll quickly discover that the whole country has taken to the running tracks and the volleyball courts. Everybody is in training. They must think hosting the Olympics means everyone gets to compete in it! Well, at least they'll all look good in the grandstands…something the impossibly beautiful people here don't have too much trouble doing. Oh yes, and their economy is booming too. Their currency, the real (BRL), goes from strength to strength. Offshore oil discoveries are coming online thick and fast. And, on the world stage, the Brazilians are carving out a larger slice of the geopolitical pie, pressing hard for more favorable trade deals alongside their "BRIC" brothers and sisters. Just this week the four emerging juggernauts – along with newly christened member, South Africa – agreed to begin transacting more in their own currencies, shunning the once mighty dollar. "If China buys up Brazilian soybeans," explained Addison in The 5 a couple of days ago, "or Brazil buys finished goods from Russia, such as they are…the countries have unilaterally agreed to transact their deals in real, yuan, or rubles…and now rand…bypassing the greenbacks you have stuffed in your wallet." Addison's takeaway from the deal? "Get used to it." Yes, Fellow Reckoner, the world is turning. The "mighty" are fast becoming the "once mighty"…and the "once fallen" nations are registering growth figures the developed world can only dream about. That's one of the reasons we love to travel. There's something about being in a country with real growth, with real economic expansion and activity that you just can't read about in the pages of a magazine or see on TV. It's real…and it's exciting. You can feel it in the air and hear it in the people's voices. They know that better days are to come, that every sunrise brings with it a new opportunity, a new day to seize. That's not to say there aren't bumps and hurdles along the way, of course. But they are the kinds of bumps and hurdles that one scales on the road to a bigger and better future…not the kind that precede a fall from great heights…to even greater depths. The world economy today is a tale in two parts. One is the story of the weakening, faltering developed world. It is a tale familiar to readers of these pages, one mottled with debts and deficits and all that goes along with political chicanery and bumbling bureaucracy. It is a story, increasingly, of frustration and despair. The other gives cause for hope and optimism. This is a tale of graduating middle classes, rising wages and living standards and opportunities for the tens of millions who are daily striving to capitalize on them. Thanks to the age we live in – where one can be in Buenos Aires for breakfast and New York for dinner…where individuals can transact with others anywhere in the world with the click of a mouse – we have an opportunity, largely, to choose which story we wish to take part in. You can invest your money – and your time, your life – playing a part in a "first world" tragedy…or a "third world" rags to riches story. Joel Bowman Emerging Market Growth and Prosperity from Brazil to China originally appeared in the Daily Reckoning. The Daily Reckoning recently featured articles on stagflation, best libertarian books, and QE2 .
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| Eric Sprott and Andrew Morris: Follow the money into silver Posted: 22 Apr 2011 07:24 AM PDT 3:23p ET Friday, April 22, 2011 Dear Friend of GATA and Gold (and Silver): Eric Sprott and Andrew Morris make the case for silver in Sprott Asset Management's latest essay, titled "Follow the Money." Sprott and Morris conclude: "What the so-called silver experts neglect to account for in their models and projections is that the fiat money experiment has failed. And in this context, we believe the Market has assigned world reserve currency status to gold -- not USD, not EUR, and not JPY. In our opinion, gold's continued appreciation vis-a-vis every currency is assured because the great flight from fiat has only just begun. "Like gold, silver also has a long monetary history, and, as such, investors are now also buying silver as protection from the ravages of fiat currency debasement. Yet when compared to gold, it is silver that offers the most attractive value proposition by virtue of the gross mispricing of its scarcity, which, we might add, has existed for many years. "Thus, in our opinion, as this new bimetallic standard takes root, silver investors will continue to be justly rewarded with marked outperformance. We truly believe that this is the investment opportunity of a lifetime, and, increasingly so, others are taking heed. What is clear to us is that with equal investment dollars now flowing into silver and gold, the current 35-to-1 ratio is unsustainable and has only one direction to go: lower." Of course Sprott Asset Management, long so heavily invested in silver, is only talking its own book. But what a book, what with the Sprott Physical Silver Trust being up 120 percent since its first issuance last October: http://www.sprott.com/Docs/MarketsataGlance/2011/0311%20Follow%20the%20M... Indeed, more than any other factor, the Sprott silver fund's huge challenge to the fraud of paper silver seems to have been responsible for the fraud's sudden failure. You can find "Follow the Money" at the Sprott Internet site here: http://www.sprott.com/Docs/MarketsataGlance/2011/0311%20Follow%20the%20M... 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 Join GATA here: An Evening with Bill Murphy and James Turk World Resource Investment Conference Gold Rush 2011 https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or 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 The Gold Standard Now: It Can Work Today a dollar is worth 80 percent less than it was 40 years ago, and less than 5 percent of its value a hundred years ago. We deserve a dollar that is as good as gold, a dollar that will hold its value from year to year so we can be financially secure and our economy can generate more and better jobs. For most of America's history, our dollar was literally as good as gold. But on August 15, 1971, our politicians destroyed the link between gold and the dollar. They destroyed the foundations of our economic system. A new Internet site, TheGoldStandardNow.org, provides news and cutting-edge analysis about this most important issue and explains how the gold standard worked in the past and how it can work in the future. Visit us today: http://www.thegoldstandardnow.org/about/137-welcome-newsmax
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| Warning: Investors Still Confident in the US Bond Market Posted: 22 Apr 2011 06:31 AM PDT First let us catch up with a news report from earlier this week. Bloomberg: April 18 (Bloomberg) – Standard & Poor's put a "negative" outlook on the AAA credit rating of the US, citing a "material risk" the nation's leaders will fail to deal with rising budget deficits and debt. "We believe there is a material risk that US policy makers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013," New York-based S&P said today in a report. "If an agreement is not reached and meaningful implementation does not begin by then, this would in our view render the US fiscal profile meaningfully weaker than that of peer 'AAA' sovereigns." Well, the press described the news as a "warning shot" or a "wake-up call." Both of those descriptions are fairly positive. You get a warning shot…and you can turn around. You get a wake-up call and you wake up. But what do you do when you're running the world's biggest Ponzi scheme? Do you stop? Do you "wake up"? No, you deny it! "Don't worry," you tell investors. The New York Times: …Treasury secretary, Timothy F. Geithner…said on Fox Business Network there was "no risk" that the United States would lose its AAA credit rating, disagreeing with Standard & Poor's negative assessment, and said that investors were still confident in government bonds. Well, yes. Investors are still confident in US bonds. Then again, investors were still confident in US houses in 2007…and still confident in US tech stocks in 1999. It is only because they are confident that bond yields are so low. But what would bond yields do if investors began to be less confident? Imagine where the price of gold would go! Well, it turns out that confidence goeth before a fall. Especially in the bond market. Bond market cycles move so slowly that a whole generation of investors is led into great confidence…and then another generation mistrusts them forever. The proof comes to us from a report from Credit Suisse, by way of our Family Office strategist, Rob Marstrand. Rob is looking for real returns over long stretches of time. Bonds work…but like everything else, only sometimes. And this is not one of those times. If you go to an investment manager and tell him you want to invest some money for your children, safely, securely, most likely he'll tell you to buy bonds. And he'll be right – but only when the bond market is in one of its boom phases. When it goes into a bust phase, watch out. You could be looking at losses for 50 years. Or maybe even permanent losses. Rob reports: The [Credit Suisse] report highlights two major periods when US bonds were in bear markets in real terms. The first was between August 1915 and June 1920. Bond values declined 51% and then remained underwater until August 1927. The recovery period from start to finish was 12 years. Or about the same as the recovery periods for stocks. But far worse was the second bear market. Between December 1940 and September 1981 bonds fell 67% in real terms. And they took until September 1991 to get back to even. In other words, the bond market recovery period was over 50 years! And some countries have had negative real returns in their bond markets for the entire 111 years covered by the study – including Belgium, Finland, Germany, Italy, and Japan. US bonds have been going generally up in the US ever since Paul Volcker tamed inflation in 1983. That's a long period in which to form opinions. Not surprisingly, the opinion shaped by this upward stretch is that investors have nothing to fear from US bonds. Confidence is high. But so is the risk of disappointment. Today, the feds are committed to EZ money. We look around. We don't see a Fed putting on the brakes after a "warning shot." Instead, we see America's central bank going full speed ahead. We don't see a "Tall Paul" Volcker raising rates. Instead, we see "Short Ben" Bernanke holding them down at zero. We don't see an administration "waking up" to the need to cut spending; we see the Obama Team dead asleep on the job, dreaming of more income redistribution, more social programs, more tax-the-rich money raisers…with no real idea of what is going on. What we see is a huge Ponzi Scheme…where old debts are serviced only by raising new ones. The schemers don't know it, but they're on the road to Hell. Bill Bonner Warning: Investors Still Confident in the US Bond Market originally appeared in the Daily Reckoning. The Daily Reckoning recently featured articles on stagflation, best libertarian books, and QE2 .
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| China Looks to Invest More in the Eurozone Posted: 22 Apr 2011 06:25 AM PDT Good day… And a Happy Friday to one and all! It's Good Friday, to boot! That means the stock market is closed today, and the bond market will close at noon. Banks, however, are open… Most of Europe is closed today, and will be again on Easter Monday… But, the big thing to me, is simply that it's Good Friday… Well… The two consecutive nights of ambushing the dollar came to an end last night. In fact, the profit taking began yesterday during the day… Not a lot of profit taking, but some, which took the bloom off the rose for the currencies… Gold and silver on the other hand are still kicking sand in the dollar's face… Yesterday, I said something about the gold/silver ratio… I misspoke when I said that the ratio had fallen below 20… No worries, it'll get there in my opinion, in due time… In due time… But there's no denying that the ratio has fallen, eh? So… Speaking of gold and silver, how does $1,509.60 and $47.10 respectively sound, this morning? I thought you would like that very much, unless, of course, you've been waiting for a pull back to buy! Geo-political problems persist, money printing continues on, and near zero interest rates in the US and Japan continue to work in gold and silver's favor… And, let's not forget the deficits in the US and Japan, and that S&P fired a warning shot across the US's bow this week… Did you see this? Americans have turned more pessimistic about the outlook for the US economy, according to a New York Times/CBS News poll. The number of participants who said the economy is getting worse increased 13 percentage points in one month. Confidence that a recovery is under way has nearly disappeared, the poll found. Maybe, just maybe, those people that changed their minds, became realists… And quite frankly, I have to say that it's a good thing… Because if you are a realist, you don't sugarcoat things, you simply call them the way you see them. The price of oil is up another buck ($1) this morning, at $112.29… This is the level it reached a couple of weeks ago, and then plummeted back down. So, it will be interesting to see where this goes now… My guess is that it bounces off that and goes back down again… But then on the third try, it soars past $112, and we all see what it's like to pay $5 per gallon for gas! UGH! Hey! Am I imagining this? Was it a dream, or do I truly remember about three years ago, when the price of oil soared to $140, that lawmakers were screaming bloody mercy, strapping themselves to gas tanks, and pointing the blame finger at those "awful" oil company executives? Hmmm… If that really happened, and I really don't believe I was dreaming, where are they now? Why isn't this as big a deal as it was three years ago? So, as I said yesterday or the day before… Today is a tricky day, with not a lot of volume, with Europe closed, and the US stock market closed… We could be in for some really crazy wild swings today, and then again, maybe the Big Shot currency traders have already headed to the Hamptons, and left the book with the Junior people, with instructions to not take any positions… And if that's the case, then today's price action will be very muted. As I look at the currency screens I see that for the most part, the currencies are trying to mount a charge on the dollar, but just don't have the leg strength to make the push. Every time I see the currencies begin to gain, they fall back this morning… Which is a great indication that there's no volume to carry these moves further. And, unfortunately…it indicates to me that by the end of the day, we could very well see the currency levels lower… OK… Yesterday, Canada received some good news, when they printed February's retail sales figure, which rebounded to +0.4%… Canada's retail sales had printed negative numbers in December and January, so, it was important to see this turnaround. The Canadian dollar/loonie (CAD) is trading around $1.05, and we all know that the Canadian government – in the past, that is – doesn't like the loonie above parity, as it hurts tourism… But, I think the Canadian government is looking past this now, as they see the carnage of an economy in the US and want to put 100 miles of desert between their hides and that of the US! And remember, how I've told you that China wants the next reserve currency of the world to be their own renminbi (CNY)? There are a number of reasons I believe this, and you need to come hear me talk in Las Vegas in three weeks to hear those reasons! But, here's a thought for you on this Good Friday… China has loaned the US more than you can shake a stick at… And now China is helping the Eurozone out… I mentioned this at some time before, but why not? If I were China, I would be unloading those dollars they have on reserve, and loaning them to Europe… Then China will have the US and Europe in their back pocket, right? OK.. Then I read this on Reuters last night… China signaled on Thursday it was ready to buy more debt from the euro zone's weaker states, in a move to help stabilize the bloc's fragile finances and protect its business interests. After investing billions of euros in Portuguese and Greek bonds to [diversify] its "huge" foreign exchange reserves away from the dollar, China was now considering buying more, Song Zhe, Beijing's ambassador to the European Union, said. This past week, I was reading about the BRICS meeting last week, and a lot of things were said at that meeting, and I've mentioned a few of them here… But something that Brazil's Mantega (Finance Minister) said, kind of just flew right past me, until… I read this statement by Australia's Finance Minister, Rudd… First, Mantega claiming that the "Currency War was still on" didn't register with me, for I'm not a believer of the currency war… But then Australia's Foreign minister Rudd's says: "Australia won't manipulate its currency and countries that do will pay a price." WOW! That's right, Mr. Rudd! You tell 'em! I feel like singing the words from "The Wall"… We don't need no intervention…. We don't need no trade controlled… Nor dark closed back door deals… Hey, central bankers, leave those currencies alone! OK… That was fun! What's not fun, is seeing the Weekly Jobless Claims here in the US remain above 400,000 each week, like they did last week at 403,000… This unemployment problem here in the US remains in a dark hole, and there's very little climbing out of the hole going on… Unemployment and housing are two HUGE hickeys for the US to deal with… And in the past, we would have taken those challenges and made them a positive… But that was before we were burdened with debt coming out of the country's ears… All time and effort is steered toward dealing with the deficit, and how to finance it, etc. I think that I'll go to the Big Finish here, and make this somewhat short-n-sweet, as there's just not a lot of new stuff to talk about, with Europe closed, and it already being the weekend down under… Then there was this… There's been lots of rhetoric lately about a "one-off revaluation" of the renminbi… Some people believe this will be a large revaluation for the renminbi… I'm just not on that train… The train I've boarded is the one that believes that if China does decide to revalue the renminbi it would be a small revalue if they do it at all! Instead, believing that China will just decide to open the dam a bit more, and allow more appreciation of the renminbi… I could be on the wrong train, but I don't think so… To recap… It's Good Friday, so most markets are closed, or will be closing early. The nightly ambushes the dollar was experiencing this week ended last night, with a bit of profit taking, after the currencies had moved quite far and quite fast this week. Gold and silver continued to shine brightly versus the dollar, with gold reaching yet another all-time record high, and silver trading to $47! Chuck Butler China Looks to Invest More in the Eurozone originally appeared in the Daily Reckoning. The Daily Reckoning recently featured articles on stagflation, best libertarian books, and QE2 . More articles from The Daily Reckoning….
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| Making Sense of Gold’s Strength and Goldman’s Weakness Posted: 22 Apr 2011 06:25 AM PDT The stock market "rallied huge" yesterday…and it continues rallying today – lifting the Dow Jones Industrial Average to a new three-year high. But the shares of market leader, Goldman Sachs (NYSE:GS), haven't been doing much of anything. The conspicuously feeble performance of GS is not the only curiosity of recent trading action… In no particular order: Gold has jumped decisively through $1,500 an ounce to new all-time highs, silver is on a moon-shot that won't quit – rising to new three-decade highs almost every trading day, the dollar is imploding faster than a Tokyo sidewalk, and sovereign financial conditions – from Athens to Lisbon to Washington – remain disasters-in-progress. Your editors have no idea what these freakish macro-economic juxtapositions portend. But if forced to guess, we would guess that the strongest trends in the marketplace are the most important trends…and the ones most deserving of attention…and investment. The strongest trends on the planet right now remain what they have been for more than a decade: "precious metals up." A related trend – and almost as strong – would be "oil up," followed closely by an all-encompassing "commodities up." These robust trends are both chicken and egg to a very strong, offsetting trend: "dollar down." As these strong trends interact with one another, a variety of other financial markets thrash around in the resulting crosscurrents. Stocks, for example, are probably as much a "dollar down" trade as anything else. We have suggested this idea numerous times here in The Daily Reckoning. In a world of near-zero interest rates and a rapidly declining dollar, coincident with rising inflation and rising inflation expectations, the precious metals are the most obvious refuge for capital. Oil and the rest of the commodity complex offer similar appeal. But commodities are not the only game in town for dollar-phobic investors. Stocks provide a different kind of refuge. While inflation tends to punish stocks over the short term, stocks do "re-price" to inflation over longer time frames. Furthermore, stocks, as partial shares of capitalistic enterprises, provide growth potential that commodities do not. Net, net, a great, big ugly bear market in stocks does not seem very likely very soon…as long as you are measuring the performance of stocks in dollars. Year-to-date, the Dow is up a robust 8.7% in dollar terms, but up only 2.5% in Brazilian reals…and down 1% in Norwegian kroner terms. Heaven forbid, you conduct this calculation in terms of gold or silver! Since the end of 2009, the Dow has chalked up a hefty total return of 24%…in dollar terms. But in gold terms, the gain flips to a 10% loss, and in silver terms, a 50% loss! However, since most folks count their stock market winnings or losing in dollars, we'll do the same. Thus, in dollar terms, an imminent, great, big ugly bear market in stocks seems unlikely…at least not until and unless Ben Bernanke discontinues flooding the financial system with dollars. However, a series of small, annoying bear markets seems very plausible. From a technical standpoint, the shares of Goldman Sachs seem to portend stock market weakness. The shares of the market-leading, world-beating financial wizard have been conspicuously weak lately.
According to a variety of Wall Street analysts, the stock is weak because of "earnings-sustainability concerns." But the analysts here at The Daily Reckoning offer an alternative analysis: the stock is weak because the stock is weak. The growth profile of Goldman Sachs has been taking a beating for months, and yet the stock continued rising. No matter that widespread public contempt for the firm arose from the ashes of the 2008 crisis, and that the SEC sued the firm for a variety of fraudulent activities and that the Dodd-Frank law forced Goldman to divest extremely profitable operations and/or discontinue extremely profitable corporate activities, no matter that various banking reforms have forced the firm to reduce the leverage that contributed to its strong results, the shares of Goldman Sachs continued rising…day after day. But now that the shares are falling, everyone's got a reason why. We say the stock is falling because it is falling. And the only other thing we would say is that when market-leading stocks fall for no reason – or for any reason – while the rest of the stock market is continuing to rise, bad things often happen. Eric Fry Making Sense of Gold's Strength and Goldman's Weakness originally appeared in the Daily Reckoning. The Daily Reckoning recently featured articles on stagflation, best libertarian books, and QE2 . More articles from The Daily Reckoning….
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| Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Over 1% and 8% on the Week Posted: 22 Apr 2011 06:19 AM PDT Gold climbed to a new all-time high of $1509.01 in London before it fell back to $1500.20 at around 9AM EST, but it then rallied back higher into the close and ended with a gain of 0.34%. Silver surged to a new 31-year high of $46.34 in the last half hour of trade and ended with a gain of 3.27%.
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| Gold hits yet another dollar high, but on thin trade and weak dollar Posted: 22 Apr 2011 06:18 AM PDT The gold price surged to hit yet another new high above $1510, although dollar weakness meant that this was not necessarily the case in other currencies.
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| Gold hits new record for sixth straight session Posted: 22 Apr 2011 06:18 AM PDT In holiday-thinned trade, spot gold rose to a new lifetime high on Friday, helped along by continued geo-political uncertainty, inflation worries and a weak dollar
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| High gold prices taking jewellery from babies Posted: 22 Apr 2011 06:18 AM PDT Surging prices for the yellow metal have forced South Koreans to cut down on the tradition of giving a gold ring as a gift to mark the first birthday of the children of friends and relatives
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| Sorry Folks, Uncle Sam Can’t Solve This One Posted: 22 Apr 2011 05:34 AM PDT
When the 30+ years of credit fueled frenzy imploded in 2007, the US Government stepped in and tried to pick up the slack in the private sector. On the surface appeared like a noble intention (Uncle Sam will save the day) except for the facts that:
1) it wasn’t actually a solution to anything 2) It didn’t really help the average American all that much 3) 99% of the money/ aid went to Wall Street… whose business practices are what destroyed the financial system in the first place
This same policy of taking over the private sector also occurred in the US monetary system with the US Federal Reserve allowing Wall Street to dish their junk debts onto its balance sheet in a kind of “cash for trash” program where Wall Street sells crap no one wanted for 100 cents on the Dollar to the Fed… and then the Fed doesn’t try to get its money back… EVER.
Doing this had a profound psychological impact on the financial world. By swapping US Dollars for trash assets, the Fed sent a clear signal to all of us that cash was in fact becoming trash.
The world has taken note in a BIG way. Russia and China are no longer using the US Dollar for trade between each other. Saudi Arabia is sending representatives to China and Russia to strengthen trade ties (which hints that oil may not be priced in Dollars in the coming years). And the BRICS (Brazil, Russia, India, China and now South Africa) recently staged a conference in southern China to discuss trading in their domestic currencies rather than the US Dollar.
In simple terms the world has already begun shifting away from the US Dollar. When it came between choose to maintain the reserve currency of the world vs. giving trillions to Wall Street crooks, Ben Bernanke chose the latter.
That one decision literally changed the course of the US’s future. Bernanke literally bet the Republic and the US Dollar that the world would tolerate it. The world isn’t.
The US already had a debt problem before Bernanke did this. But he made sure that this problem would become an absolute disaster. There is now only one way out of this mess and that is default. The US cannot EVER pay back its debts. A US default is going to happen GUARANTEED (hyperinflation induced by endless money printing is just another form of default). When this happens, the US Dollar will collapse, lose reserve currency status, and inflation will rip through the system destroying the purchasing power of anything paper-related.
So if you’re not preparing for mega-inflation already, you need to start doing so NOW. The Fed WILL continue to pump money into the system 24/7 and it’s going to result in the death of the US Dollar.
If you’ve yet to take steps to prepare your portfolio for the coming inflationary disaster, our FREE Special Report, The Inflationary Disaster explains not only why inflation is here now, why the Fed is powerless to stop it, and three investments that absolutely EXPLODE as a result of this.
All in all its 14 pages contain a literal treasure trove of information on how to take steps to prepare AND profit from what’s to come. And it’s all 100% FREE.
To pick up your copy today, go to http://www.gainspainscapital.com and click on FREE REPORTS.
Good Investing!
Graham Summers
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| Gold gains for third week on debt concern, trades near record Posted: 22 Apr 2011 05:29 AM PDT By Sungwoo Park and Jae Hur Gold for immediate delivery rose 1.4 percent this week and was little changed at $1,506.85 an ounce at 6:48 p.m. in Paris after climbing to an all-time high of $1,512.47 earlier today. June-delivery futures touched a record $1,509.60 yesterday on the Comex in New York, the 10th all-time high this month. The exchange is closed today for the Good Friday holiday. "The weak dollar is having the most influence on gold at the moment," said Chae Un Soo, a Seoul-based trader at Korea Exchange Bank Futures Co. … The dollar slid to the lowest level since August 2008 against a basket of six major currencies this week on speculation that the U.S. Federal Reserve will be slow to raise borrowing costs. … Standard & Poor's this week cut its debt outlook for the U.S. to negative from stable. Violence in the Middle East, sovereign-debt turmoil in Europe and Japan's nuclear crisis have helped propel bullion 31 percent higher in the past year. [source]
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