Gold World News Flash

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• Wall Street Journal Editorial calls for a Return to a Gold Standard
• Data misses lead to small range in risk today, while silver looks toppish after almost hitting key $50 oz level
• James Turk - Silver Still in Backwardation, Headed Higher
• Don’t Fear a Pullback in Prices
• Crude Oil, Gold and Silver Set Sights on US Yields Ahead of 2-Year Bond Sale
• CME Group hikes margin requirements for Silver
• Physical Silver Investors Are Being Hoodwinked by the Futures Market
• The Federal Reserve Note is Dead, Long Live the Dollar
• Is 40 The New 20?
• Having risen from an average price of $5.00 to $46.05 an ounce, it is only reasonable that one question what may be occurring in the silver market
• GATA's Powell to be interviewed on Jay Taylor's Internet radio show
• Despite doubling in 3 months, silver still in backwardation, Turk says
• QE2 is Damaging the Economy and Reducing GDP Growth
• Don't Fear a Pullback in Prices
• Paul to announce exploratory committee for presidential campaign
• Ron Wortel: High Gold Prices Raise Old Mines
• Silver - 8 hour chart update
• Eric de Carbonnel: Acquiring AIG, U.S. govt. assumed huge commodity shorts
• APMEX offers big premiums to purchase gold and silver eagles
• Parabolic Silver
• The Dollar's Omnious New Record
• Sell Silver
• Apmex Starts Reverse Inquiry: Seeks To Buy "Any Quantity" Of Silver From Clients At $3 Over Spot
• Ron Paul Launches Presidential Campaign, Tells Truth To Whoopi's View
• Gold settles at record; also hits intraday record
• No Passport For You?
• In The News Today
• The Comfort of Low Interest Rates
• Capital Context Update: Debt Down on a Dull Day
• QE 3 is Coming… It’s Just a Matter of What Form It Will Take

Wall Street Journal Editorial calls for a Return to a Gold Standard Posted: 25 Apr 2011 06:13 PM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] The headline from the commentary says it all: APRIL 26, 2011 Monetary Reform: The Key to Spending Restraint This is no small development. Although it does not reflect the view of the editors of the paper itself, since it is an editorial written by a Mr. Lehrman, of the Lehrman Institute, I find it extremely noteworthy that an article calling for a return to a gold standard would actually grace the pages of that prestigious leading financial newspaper. The WSJ is not a "Wild West" newspaper but is an establishment periodical, which is why I was quite surprised to see an article of this nature. Perhaps the paper will find room to allow for some other writer to make a case against a gold convertibility statute, but for now this just goes to show that the debt crisis that is engulfing our nation is resulting in serious discussion about the role of gold in any future monetary system or in the c...

Data misses lead to small range in risk today, while silver looks toppish after almost hitting key $50 oz level Posted: 25 Apr 2011 05:21 PM PDT Original piece here. 2011 04 26 - Data Misses Lead to Small Range in Risk Today, While Silver Looks Toppish After Almost Hitting...

James Turk - Silver Still in Backwardation, Headed Higher Posted: 25 Apr 2011 05:00 PM PDT With gold and silver surfing the wave of volatility, today King World News interviewed James Turk out of Spain. When asked about the reason for the increased volatility Turk stated, "There are some earthshaking events coming, that's what the precious metals are telling us.  That's what the dollar chart has also been telling us and that is why I am expecting a waterfall decline in the dollar index.  The dollar has a unique position as the world's reserve currency and as people lose confidence in it they will go to other moneys they consider safer." This posting includes an audio/video/photo media file: Download Now

Don’t Fear a Pullback in Prices Posted: 25 Apr 2011 04:40 PM PDT The S&P credit agency sent shockwaves through the global financial system on Monday when it issued a warning on U.S. debt and changed its outlook on the U.S. sovereign credit rating from "stable" to "negative." This sent markets lower and the prices of commodities such as oil rocketing back above $110 per barrel and both gold and silver to new highs. It should be clear the S&P announcement was just a warning, not a lowering of the U.S. debt rating, which was affirmed at AAA (the highest level possible). The fears quickly subsided and U.S. markets hit fresh three-year highs. Essentially there's only a one-third chance of a downgrade and anyone who's ever listened to the weather man knows that a 33 percent chance of rain means you probably don't need your umbrella. However, the warning validates what we already know: The U.S. needs a plan to address its debt and budget issues…and fast. Due to the fact that future fiscal austerity measures will likely act as a drag on the economy, we also think this opens the door for a third round of quantitative easing (QE3) heading into next year so we'll have to keep an eye on Bernanke and the Federal Reserve's next move. These factors will likely produce downward pressure on the U.S. dollar and upward pressure on commodity prices. This is why we emphatically believe the bull cycle for gold still has a long way to run. Last week, one of my fellow presenters at the Denver Gold Group's European Gold Forum was Dr. Martin Murenbeeld from Dundee Wealth who put the notion of a "gold bubble" in context with the following chart. If you compare the current bull cycle for gold against gold's run from the 1970s and 1980s, you can see that today's run has been slow and steady. It's also missing the sharp spikes typical of a bubble. Also, a key difference in this gradual move higher is the growing affluence of the developing world. There people have traditionally turned to gold as a store of wealth and we are seeing that in unprecedented numbers in countries such as China and India. One of the things we recently pointed out was the effect money supply growth can have on gold. Dr. Murenbeeld also presented this fascinating chart showing how much gold would need to increase in order to cover the amount of money that has been printed since gold was revalued at $35 in 1934. Using that as the cover ratio, gold would need to climb all the way to $3,675 an ounce to cover all paper currency and coins. If you use a broader—and more common—measure of money (M2), gold would need to rise all the way to $7,931 in order to cover the outstanding amount of U.S. money supply. With gold pushing through the $1,500 level and silver above $46, many investors are questioning whether we'll see a pullback. Going back over the past ten years of data, you can see that gold's current move over the past 60 trading days is within its normal band of volatility, up about 7 percent over that time period. Silver, however, has traveled into extreme territory. Over the past 60 trading days, silver prices have jumped over 58 percent and now register nearly a 4 standard deviation move on our rolling oscillators (see chart). Based on mean reversion principles, odds favor a correction in silver prices over the next few months. We should be clear: If a correction occurs, this would not mean the rally is over. It would just be a healthy bull market correction and reflect the normal volatility inherent with these types of investments. Investors must anticipate this volatility before participating in these markets. This volatility also brings along opportunity. We believe we're only halfway through a 20-year bull cycle for commodities and investors can use these pullbacks as an opportunity to "back up the truck" and load up for the long-haul. Regards, Frank Holmes, for The Daily Reckoning P.S. Director of Research John Derrick contributed to this commentary. For more updates on global investing from me and the U.S. Global Investors team, visit my investment blog, Frank Talk. Don't Fear a Pullback in Prices originally appeared in the Daily Reckoning. The Daily Reckoning recently featured articles on stagflation, best libertarian books, and QE2 .

Crude Oil, Gold and Silver Set Sights on US Yields Ahead of 2-Year Bond Sale Posted: 25 Apr 2011 04:33 PM PDT courtesy of DailyFX.com April 25, 2011 07:11 PM Crude oil, gold and silver have set their sights on the upcoming US 2-year bond sale, with traders keen to gauge the impact of rising yields on growth and inflation. Commodities – Energy Oil Focused on US Consumer Confidence, 2-Year Bond Sale WTI Crude Oil (NY Close): $112.28 // -0.01 // -0.01% Prices put in a bearish Spinning Top candlestick below resistance at $113.44, the April 11 high, a barrier reinforced by support-turned-resistance at a rising trend line set from the lows in mid-February. A pullback from here sees initial support at $109.37, the 23.6% Fibonacci retracement of the 3/16-4/11 advance. Risk sentiment trends remain in focus, with short-term correlation studies pointing to the strongest link between the WTI contract and the MSCI World Stock Index in four months (0.71). Over the next 24 hours, this puts the spotlight on US Consumer Confidence figures as traders size up the toll that recent...

CME Group hikes margin requirements for Silver Posted: 25 Apr 2011 04:33 PM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] After the extreme volatility in silver, it comes as no surprise to see the CMEGroup raise margin requirements for trading silver yet again. Speculators now need to pony up $12,825 to buy or sell a single full sized silver contract - that is up from $11,745. Maintenance margin now rises to $9,500 from $8,700. Some of what you are witnessing this evening in silver is due to this change being instituted as brokers are calling clients advising them of the coming change at the end of trading tomorrow (Tuesday). Emini silver and miny silver futures are also affected by this change. Hedgers' margin requirements are being increased to $9,500 from $8,700. Wouldn't it be nice to get hedger margins when the truth is that much of what occurs at the Comex is not hedging but is pure speculation on the part of the perma bear firms....

Physical Silver Investors Are Being Hoodwinked by the Futures Market Posted: 25 Apr 2011 04:18 PM PDT By Dian L. Chu, EconMatters The Silver market is in a bubble stage right now. No one really knows how long this will last, whether Silver goes up another $5, 10, 20 doesn`t really matter for investors who are buying the physical metal in the form of coins because when the bubble ends they are going to be sitting on a depreciating asset. Sure, long term, Silver will be worth more sometime in the future compared with the average price of the last 30 years in the next 30 year segment. But Silver prices have risen far too fast in to short of a time for this to be sustainable longer term. Silver's QE2 Juicing Cycle For example, wasn`t Silver just $18 an ounce last August 2010? Guess what also corresponded to this same time period, you guessed it--QE2 (See Chart).  What happens to Silver prices when QE2 ends? Physical Silver investors have been tricked into buying the physical because of what the speculators are doing in the futures market. Hot Money - Easy Come, Easy Go  I have news for you, physical buyers, those are not buy and hold investors, and they can go just as quickly as they came. Remember, the futures market is determined by fund flows, and right now there has been a lot of money to be made in a hot commodity market. But markets and especially commodities are very cyclical in nature, and money flows into these instruments during parts of investing cycles, and out during others. Physcial Buyers Holding The Bag However, the physical buyers of coins are not looking to flip these investments; they are going to hang onto the physical coins for 5 years or more. Guess what, you have seen how fast Silver can rise, and you probably know that it can fall just as fast. But the one element that physical buyers of Silver are missing is that they are buying at the top of the market at many standard deviations above the average price of the past 30 years. Miami Condos & Silver This is a recipe for disaster, and no different than buying Miami condos at the height of the housing bubble. If you’re flipping the condo, and are lucky enough to not get stuck holding the bag is one thing, but to have bought a Miami condo just before prices fell off a cliff is another matter entirely. Whenever prices of any asset go up this high in such a short time span, it is a bubble, and unsustainable. And no, I am not calling for a top in Silver prices, but what I am saying is that the Silver market is in a bubble, and unsustainable unless a couple of doomsday scenarios happen. Which is always a clue for your investing outcomes, if you need a doomsday scenario to have a long term profitable trade that you’re going to hold for five years, then you really are putting on a low probability trade. Bought at The Top of The Market The bigger problem with buying at or near the top of the Physical Silver market is that the US is in an unprecedented low interest rate environment. What happens when interest rates go back to their historical averages? They were just 5.25% less than 5 years ago, what happens in the next 5 years when interest rates go back up? What do you think is going to happen to the value of your physical Silver coins? They are going to depreciate in a steady but sure fashion. Worse Than the Housing Bubble In short, because you bought so much above the 30 year average price for the physical market, your asset will depreciate, and be heavily under water once the next rate tightening cycle begins. And we are not talking about a little under water. Your under water will make Miami condos look good by comparison. You think there was a housing bubble? Compare your asset to a house, and look at the precipitous drop to those assets. You cannot even live in your depreciating asset. My advice to any purchasers of the Physical metal is to sell while prices are still going up, before the futures market busts. Remember The Past Bubbles Don`t get tricked by Wall Street momentum traders who will bid up any kind of asset if they think they can profit from it. Remember, how hot housing stocks were? Remember those Nasdaq Dot Com stocks, where every day another new internet company was doing an IPO even though they had no proven revenue streams? Does that sports streaming venture that Mark Cuban sold yahoo come to mind? Bubbles exist in markets; traders take advantage of them, while bag holders pay the price. I bet yahoo wishes they could undo that trade, Time Warner wishes they could have a “do-over” on that AOL partnership. US Is No Greece or Japan Yes, there are a couple of scenarios where holding the physical Silver might be profitable 5 years from now. If the US goes into default, a very unlikely scenario, given our incredible resources, and the fact that when we get serious about cutting the budget, with even a modicum of discipline we will be fine. We spend like drunken sailors, and that can be fixed. The real problem is if you can`t produce revenue, and the US has only scratched the surface of producing technological innovation, which means we have a lot of revenue generating capabilities. A lot of countries cannot say the same, the US isn`t Greece. The US doesn`t have an aging demographics problem like Japan either. The US has a spending problem, if worse comes to worse the US will just have to cut back on military spending, and with how far we are ahead of every other country in terms of military spending and expertise, there is a lot of budget tightening room to spare in that area and many other areas. When push comes to shove the US will get their fiscal house in order. Dollar Devaluation Will Be Limited Now, on to the other commonly referred to doomsday reason for holding physical Silver. The age old Dollar devaluation argument. Well, I have news for you Silver bugs, all currencies around the world are devalued with time. But the US Dollar is not going to be any more devalued than it was last year when QE1 ended, and the Dollar Index was in the 80s. US Is No Zimbabwe Eithter The currency fluctuates depending upon several factors, but Silver investors are taking a very low period in the dollar, and extrapolating this level of detioration pace forward for the next 5 years. It doesn`t work that way, unless you are Zimbabwe. The US may be a lot of things, but it isn`t Zimbabwe, and you shouldn`t base investment decisions comparing the most successful Business Country in the world to a country the size of Zimbabwe. Carry Trade Unwind Remember, the US Dollar is temporarily being used by the "Risk On" Carry Traders to go long assets, and short the dollar, thus artificially making the dollar weaker than it really is.  When they unwind this trade guess what the US Dollar will start rising again. Remember last summer, what do you think will happen to Silver prices when Gold starts selling off because the US Dollar is getting stronger? Yes, the US Dollar will lose its value to some degree, this is why a coke used to cost 35 cents at one time, and now it is over a dollar. But this is a normal rate of depreciation over several decades. And not the rate of depreciation being currently priced into the physical Silver market. Physical Silver - Pros & Cons   Just remember the pressures pro and con for the physical Silver trade: A low interest rate environment – Not going to be this way in 5 years  The 30 year average price of Silver versus the current price of Silver Investment fund flows now versus a portion of these same funds being applied to different markets, say real estate in 5 years  The US Fed versus Global Monetary Policies: What happens when the US starts tightening, and China and India are done tightening? The monetary policy gap starts to narrow.   These high Silver prices will bring a lot of the “precious metal” online; will there be a glut of physical Silver on the market once prices start to drop?  Do assets that have this meteoric rise in price? Is it usually sustainable longer term?   Do our financial markets have a long and storied history of unsustainable prices, i.e., bubbles?  Are there more attractive markets for value at this point then buying Physical Silver from a valuation standpoint? There's Time To Buys It makes no rational investing sense to buy Physical Silver during a low rate environment, because the investor will be stuck with a well under water investment in a 5% rate environment. The time to buy Physical Silver was when the Fed Funds Rate was 5.25%, and the time to sell Physical Silver is now during the last vestiges of an equivalent Zero Fed Funds Rate. QE2 Induced Irrational Investing  This irrational investing in the Silver Market, based upon concerns regarding the long term stability and security of the US Dollar, is one of the unintended consequences of the QE2 Initiative. And much of this irrational investing in the Silver Market will reverse itself once QE2 is finished, and the US Dollar strengthens. Silver & Subprime - No Difference To Wall Street I am not trying to rain on anybody`s Silver parade. And who knows where the top is in Silver. But don`t get caught up in the hysteria of another Wall Street trade. Remember, the Silver market is just another trade for Wall Street. They don`t have any special affinity for this shiny metal, any more than they had for subprime mortgages, and when the writing was on the wall, they packaged these assets up, and pawned them off to other bag holders. The Silver market will be no different, when they are done with this trade, they will run from this market faster than they came. And if you bought physical Silver based upon the meteoric price rise occurring in the futures market, you may end up having an asset that declines in value by more than half what you originally bought it for. So you can buy a Silver American Eagle for over $50 today, and have it be worth less than $20 in the future. This is the epitome of a bad investment. You’re supposed to buy low and sell high, not the other way around. Remember, you are an investor not a trader if you’re buying the Physical Silver Coins. Thus you have to be a “Value Investor”. And I am here to tell you there are no ‘Values’ in the Physical Silver Market, or any other Silver Market for that matter. EconMatters, April 25, 2011 | Facebook Page | Post Alert | Kindle

The Federal Reserve Note is Dead, Long Live the Dollar Posted: 25 Apr 2011 02:44 PM PDT This new order, the one that has made possible every major war since the founding of the Federal Reserve, impoverished countless millions and destroyed untold wealth, is coming to an end. Read More...

Is 40 The New 20? Posted: 25 Apr 2011 02:37 PM PDT Via Pension Pulse. On Tuesday, April 26th, I turn 40 years old. Every man I've talked to tells me "turning 40 is easy, wait till 50 hits you -- that's a tough one!". There are some excellent blog posts on turning 40, like this one, but I decided to write something different and hopefully this post will give young and old food for thought as I jot down my thoughts on life, health, relationships, work and investing. Before I get to "turning 40," I want to go back to my last blog post on the big secret to clarify a few things. First, I never heard of Joel Greenblatt nor of his hedge fund, Gotham Capital (it vaguely rings a bell). Second, even though I agree with him that most small investors are better off investing in Value Index ETFs in their stock portfolios, I also recognize that it all depends on where markets are at the time. For example, when I wrote my Outlook 2009 on post-deleveraging blues back in January 2009, I totally missed the boat on US banks but was spot on about high beta stocks and recommended some gems like Priceline (PCLN) that turned out to be one of the top performing large cap stocks since then, going from $40 to over $500. I think what Mr. Greenblatt is recommending makes sense over a very long period because with small cap value stocks, you shouldn't experience the volatility of large cap growth stocks. Having said this, nobody knows what the future holds, where the next bubble will be and how long it will last, which means that things can get really out of whack for a lot longer than people expect. In my last post, I also mentioned that I prefer investing in a few stocks which I track very closely. I'm a risk taker. My personal P&L swung from -50% to +80% in the last year because I tripled down on a position at the right time. Did I get lucky? You bet I did, and admit it, but at the end of the day, I had the balls to do what most institutional investors (even hedge funds) would never do (not that they can do it even if they wanted to because they're constrained by investment management agreements). And forget prop traders, they would never triple down on any position that they're losing money on. That's suicide in their world where they're focused on making money day in, day out, trying to avoid having a risk manager breathing down their neck. I did what I did because I read the overall market correctly, understood that liquidity would push risk assets higher, and also understood that the solar stock I tripled down on was heavily manipulated by top hedge funds which were naked short-selling it to scare retail investors away so they can scoop up more shares at lower prices. They're still at the naked short-selling game, using high frequency computers to scare retail and other institutional investors away. These markets are not for the feint of heart, which is why I believe most small investors are better off investing in low cost value ETFs and laddered bond portfolios and sleep well at night. The gold bugs will tell you to buy gold but I'm uneasy recommending gold because I don't see any reason to chase it higher. In fact, as the US economy improves over the next few months, gold prices will likely get hit even if oil prices keep climbing higher and Inflationistas warn of looming hyperinflation (won't happen without wage inflation). The other thing I mentioned in my last blog post is that I track quarterly filings of elite hedge funds, some of which I listed in a previous blog post on why small is beautiful. I also track top long-only funds that are not afraid of taking concentrated positions (ie. they're not closet indexers). Guys like Bill Miller of Legg Mason Capital Management didn't beat the S&P 500 16 years in a row by being a closet indexer. Sure, he got slaughtered in 2008 -- and so did Ken Griffin's fund, Citadel -- but these funds came roaring back in the last two years. I wouldn't have hesitated a minute to increase allocations to these funds at the bottom when most institutions were redeeming from them because I knew they'd come roaring back (even recommended institutions invest in Citadel in the middle of the storm). All this to say that even "elite" managers can experience a terrible drawdown, but over a long period, these elite managers know how to adjust their risk taking accordingly. You won't find many managers with the track record of a Warren Buffet, George Soros, Bill Miller, Ken Griffin, Seth Klarman, Jim Simons, Ray Dalio, Bruce Covner, Alan Howard, and a handful of other "elite" managers. But now that I'm turning 40, let me introduce you to two of my favorite investment managers of all-time. The first is Monroe Trout, arguably one of the best traders ever. There is a whole chapter dedicated to him in Jack Schwager's book, The New Market Wizards, with the title of the chapter "The Best Return That low Risk Can Buy". According to Schwager, over a five-year period surveyed, Monroe Trout's average return was 67% "but, astoundingly, his largest drawdown over that entire period was just over 8%." That's simply incredible, almost doubling his money every five years with little or no risk. Mr. Trout quit the business early and remained humble throughout: "Some people make shoes. Some people make houses. We make money, and people are willing to pay us a lot to make money for them." I referred to the second investment manager I most admire, Andrew Lahde, in my post on Jesse Livermore, Boy Plunger's Pivotal Point Theory: A hedge fund manager who made what is thought to be one of the biggest percentage profits of all time bowed out of the business on Friday with a fierce attack on the “idiots” running big banks who were willing to take the other side of his bets. Andrew Lahde, founder of California’s Lahde Capital, used his farewell letter to investors to round on the US “aristocracy” able to pay for their children to gain a top-class education. Mr Lahde, who has made tens of millions of dollars from his highly successful bets against the financial and property sectors during the past two years, also called for the legalisation of cannabis and said he was now dropping out to spend time with his money.   Saying he was “in this game for the money”, Mr Lahde went on to mock those who traded with him.   “The low-hanging fruit, ie idiots whose parents paid for prep school, Yale and then the Harvard MBA, was there for the taking.”   “These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government.   “All of this behaviour supporting the aristocracy only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.”   Mr Lahde is one of the few hedge fund managers to have correctly predicted the subprime crisis. One of his funds made a return of 870 per cent last year. Money is now being returned to investors as the remaining business is shut down.   On Friday, Mr Lahde said he would no longer run other people’s money, preferring to concentrate on managing his own, and urged wealthy hedge fund managers and corporate chieftains to “throw the Blackberry away and enjoy life”.   “I will let others try to amass nine, 10 or 11 figure net worths,” he said. “Meanwhile, their lives suck . . . What is the point? They will all be forgotten in 50 years anyway. Steve Ballmer [Microsoft chief executive], Steven Cohen [founder of hedge fund SAC Capital] and Larry Ellison [chief executive of Oracle] will all be forgotten.” Why do I admire guys like Andrew Lahde and Monroe Trout? Because you probably never heard of them and more importantly, they understand that there's a lot more to life than making a lot of money. They understand Pete Peterson's meaning of enough and how hopelessly meaningless it is to make the Forbe's list of ultra wealthy. If you've been following my blog closely, you'll notice I talk a lot about the importance of health. I've been feeling very good lately, and don't know if it's because of my recent CCSVI procedure or my vitamin D intake. I recently cut it down to 10,000 IUs a day from 30,000 IUs because I was losing too much weight and muscle mass, but I feel great and my blood tests were all normal. I also follow a common sense diet: no junk food whatsoever, fish, white meats and poultry, steamed broccoli and asparagus with lots of olive oil, limit my bread and pastas, drink lots of water (no soft drinks, juices or milk), and steer clear from sugar as much as possible, and no artificial sweeteners found in chewing gum and other products whatsoever (if you want fresh breath, brush your teeth, gargle alcohol free mouthwash or hydrogen peroxide and water without swallowing, and use a tongue cleaner like the one from Orabrush). We all know our health is critically important but few people take measures to address it. Even I talk the talk but haven't been walking the walk. That's why today I was fed up of talking about going to the gym and decided to sign up at a gym near my house. Tonight, I went for a nice workout and it felt amazing (I'm a nut and started bench pressing like crazy -- definitely not 20 anymore!). It's a quiet and clean gym and I have a few friends that workout there so I can count on them if I need someone to spot me. I told the guy at the gym that for the longest time I was scared because I have MS, but now I'm fed up of procrastinating and decided I'll do whatever I can. He told me not to worry as there are women battling cancer who go to that gym and they often workout with no wigs. Also, his sister has MS for over 20 years and even though hers is very progressed, she's thinking of joining the gym too. A lot of the battles you face with disabilities are all in your head. You can make all the excuses in the world for not doing something, but the biggest fear you have is fear itself. Last week, I was talking to a fixed income salesman from HSBC in Montreal that I admire. He suffered a spinal cord injury that left him partially paralyzed. Through intense rehabilitation, he was able to gain strength and walk using crutches. I like what he told me: "The minute I accepted my disability, I never looked back. It was truly liberating." He added: "I fundamentally believe that the disabled can do as good or better job that someone fully functional because they apply themselves harder." I mention this because it's true but unfortunately too many organizations are lagging when it comes to hiring people with disabilities. It's one of my biggest pet peeves and not because I have MS. Forget me, I do not consider myself disabled -- far from it. I got enough fight in me to last several lifetimes. But I know that the unemployment rate for people with disabilities is abysmally high. And I blame governments for not doing enough to promote all inclusive work environments. I'm not just talking about the token person in a wheelchair, but a lot more disabled people at all organizational levels, even upper levels and board members. I would force all government organizations, including Crown corporations to publicly disclose the percentage of employees at all levels have self-identified as disabled people. It really isn't a big deal to hire someone with a disability and trust me, a few accommodations are all that's needed (when I did my contract at the Caisse, they put me in an office near the washrooms and allowed me to use the service elevator, and scheduled meetings at my bloc so I wouldn't have to walk all the way to the other end of the building. All little things I appreciated because I wasn't as strong as I am now). That brings me to another topic, work. My friend Tom Naylor said it best, "work is a four-letter word". If you're lucky, your work is very stimulating, you're well compensated, and your work environment and the people you work with are all incredible. Unfortunately, it's rare to have it all. Either you'll have one or the other, but the sad fact is that most people don't have any of these success elements. Looking at my field, finance, there are really good people, but there are far too many weasels at all levels who consistently violate Ray Dalio's principle #11. To be fair, it's not just finance. Any competitive field will have its share of unscrupulous weasels, but because finance is all about money, it has a disproportionate amount of weasels. What do these weasels have in common? Fragile egos. They're basically insecure, slimy politicians who will step on anyone who gets in their way. It's absolutely disgusting. I can right a book on stuff I've seen and experienced. In fact, I think I am going to write a book and try to sell the movie rights. Those of you who are unfamiliar with the snakes in finance should pick up Michael Lewis' classic, Liar's Poker. He talks all about those "Big Swinging Dicks" on Wall Street. And that's another pet peeve of mine. Why don't pension funds and banks promote local talent? Why is Royal Bank's main trading floor in London, New York, then Toronto? Why is Bank of Montreal's main trading floor in Chicago? Why don't the large Canadian pension funds deal with local brokers, preferring instead to deal with the guys in London and New York? It's all bullshit! The large Canadian pension funds should insist that these firms open up offices in the main Canadian cities and train and promote local talent. They should publicly disclose what percentage of their brokerage activities goes to non-Canadian shops and start dealing more with Canadian brokers (not the guys from New York!!). This field is all about egos and politics. It makes me sick but there are good people. There are exceptional people with the highest level of integrity and professionalism. They're rare but if you find a mentor in this field, count yourself extremely lucky (pension funds should have mentorship programs for their junior employees). I count myself extremely lucky to have worked with a few of these individuals, some as recently as my experience at the Caisse. Unbelievably smart and good people who have no malicious bone in their body and are willing to share their knowledge. That's my philosophy in life. Maybe because my father and mother taught me to be good and help people. Of course, they also tell me I'm too trusting and naive and should be less open when talking with people in my personal and professional life. When I recently hooked up with my former boss at PSP Investments, Pierre Malo, we discussed process over performance, but we also spoke about life and friendship. Something he told me that stuck with me: "In this world, I can count on one hand my true close friends, people who would jump on a plane and fly half way across the world to come help me if I really needed them." (Pierre is one of the good guys I had the pleasure of working with and even though we don't always see eye to eye, I consider him a friend). He's absolutely right. I know my family loves me unconditionally but when it comes to close friends, I can count them on one hand. Lots of people talk the talk, but few walk the walk. Unfortunately, that's the harsh reality of life and the older you get, the more you see who your true friends are because they stick with you through thick and thin. Not empty words but real concrete actions, especially when the going gets tough (that's when you realize who your true friends are. My dad calls this "egotistical friendships" where other people are your friends as long as they get something from you or you make them feel good.) Let me wind this comment down by sharing some of my dreams and aspirations. A friend of mine got me hooked onto this stupid horoscope application which for some reason I now read religiously. Anyways, on Monday it read the following: If there is something you have been longing to do, Taurus, hop to it! During this period of renewal, you have an excellent chance of succeeding at a new venture that is close to your heart. But if you choose to procrastinate instead - figuring that your goal can wait on this or that - then you may not have the advantages you have now. If you begin to take steps to make your dream a reality, the universe will provide you with all of the support and resources you require. I've been giving a lot of thought on monetizing my blog. I put a lot of work in building this blog -- the links alone are worth keeping it on your bookmarks, especially if you work in asset management. I'm continuously adding to these links and updating them. I also try write insightful comments almost every night by analyzing articles and adding my thoughts. Blogging seems easy but those who do it properly know it takes a lot of dedication and a lot of work. You have to find interesting topics, analyze articles, add comments, and often have to reread your own material to edit and correct typos. I love blogging and it shows. Instead of watching television, I prefer keeping my mind busy at night blogging. After almost three years, I recently surpassed over 400,000 page views on my blog (my stats are all public on the bottom right-hand side). I'm grateful to other bloggers like Yves Smith at Naked Capitalism, Tyler Durden at Zero Hedge and Tadas Viskanta at Abnormal Returns who helped me gain visibility. I'm also grateful to Jack Dean of Pension Tsunami and Pierre Daillie at AdvisorAnalyst.com who also post my comments on their wonderful sites. I want to continue blogging on Pension Pulse and take this blog to another level, exploring new options, including money management. I've set up a donation button at the top of my blog on the right-hand corner under the pig. I would like my friends (and foes) to support me in this and other new ventures. It's time to dream big and start a new chapter in my life. If it flops, it flops, but at least I had the guts to try it. What are some of the other ideas I'm toying with? I'm thinking of trading for a living, partnering up with some good people on a new venture, institutional sales jobs (but I'd really have to believe in the product I'm selling), offering niche research, and continuing doing contract work for pension funds. I'd also like to do more interviews with senior pension fund professionals from all over the world (not just Canada), as well as interviews with asset managers in public and private markets. I also want to set up an annual Pension Pulse dinner where I invite senior pension fund managers from all over the world, as well as asset managers from public and private markets, and moderate a discussion on a topic of interest. Turning 40 isn't the end of the world. It could be the beginning of something more meaningful in my life. I want to explore all my options but most of all I want to take control of my destiny, taking baby steps to reach my ultimate goal of setting up a fund where I manage money with a group of good people who I've known for a long time. There is lots of untapped talent in Canada that is being underutilized. And my dream is to give money back to worthy charities, many of which are listed on the bottom right-hand side of my blog. So for my birthday on Tuesday, I would welcome your advice and donations to my blog. I'm not ashamed to publicly ask for your help in making this one of the best financial blogs on the net, along with a few others I've mentioned above and listed on my blog roll. As I stated above, no matter what, I'll continue blogging and take it up a notch, but I would appreciate your financial support. Finally, thank you for reading my lo

Having risen from an average price of $5.00 to $46.05 an ounce, it is only reasonable that one question what may be occurring in the silver market Posted: 25 Apr 2011 01:49 PM PDT More silver than you imagined Share this:

GATA's Powell to be interviewed on Jay Taylor's Internet radio show Posted: 25 Apr 2011 01:21 PM PDT Press Release from Thomson Reuters ONE / COMTEX News Network via Stockhouse.com Monday, April 25, 2011 http://www.stockhouse.com/News/CanadianReleasesDetail.aspx?n=8140573 Jay Taylor, publisher of the J Taylor's Gold, Energy & Tech Stocks newsletter, will interview Chris Powell, co-founder of the Gold Anti-Trust Action Committee, on his weekly, three-hour VoiceAmerica Internet radio show, "Turning Hard Times into Good Times," which begins at 2 p.m. ET Tuesday. The Gold Anti-Trust Action Committee was organized in January 1999 to advocate and undertake litigation against illegal collusion to control the price and supply of gold and related financial securities. The committee arose from essays by Bill Murphy, a financial commentator, and Powell, a newspaper editor in Connecticut. Murphy's essays reported evidence of collusion among financial institutions to suppress the price of gold. Powell, whose newspaper had been involved in antitrust litigation, replied with an essay proposing that gold mining and investor interests should act on Murphy's essays by bringing suit against the financial institutions involved in the collusion against gold. The response to these essays was so favorable that the committee was formed and formally incorporated in Delaware. Murphy became chairman and Powell secretary/treasurer. Jay is hoping to have a surprise anti-GATA spokesperson on this week's show as well. Jay is scheduled to have several other guests, including Terry Coxon, an expert in legally investing money offshore; Dr. Mark Cruise, CEO of Trevali Resources (TSX:TV); and InvestmentPitch.com's Ted Ohashi, who will be discussing Colombia Crest Gold (TSXV:CLB) and Fischer-Watt Gold (OTCQB:FWGO), two companies that recently presented at the Chicago Resource Expo. "Turning Hard Times into Good Times" can be heard at: http://www.voiceamerica.com/show/1501/turning-hard-times-into-good-times 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 Sponsored by Deutsche Edelmetall-Gesellschaft Friday, April 29, 2011 Hofbrauhaus, Munich, Germany http://www.goldmoney.com/munich-2011-april-29.html World Resource Investment Conference Sunday-Monday, June 5-6, 2011 Vancouver Convention Centre East Vancouver, British Columbia, Canada http://cambridgehouse.com/conference-details/world-resource-investment-c... Gold Rush 2011 GATA's London Conference Thursday-Saturday, August 4-6, 2011 Savoy Hotel, London, England http://www.gata.org/goldrush2011-london Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT 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/.

Despite doubling in 3 months, silver still in backwardation, Turk says Posted: 25 Apr 2011 01:06 PM PDT 9p ET Monday, April 25, 2011 Dear Friend of GATA and Gold (and Silver): Despite doubling in three months, silver remains in backwardation, GoldMoney founder James Turk told King World News in an interview today. As a result, Turk said, any declines in silver's price should be brief. Meanwhile, according to Turk, the gold chart looks ready for an explosion. An excerpt from the interview has been posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/4/26_Ja... Or try this abbreviated link: http://tinyurl.com/4345fjo CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: World-Class PGM Deposit in Yukon Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php Join GATA here: An Evening with Bill Murphy and James Turk Sponsored by Deutsche Edelmetall-Gesellschaft Friday, April 29, 2011 Hofbrauhaus, Munich, Germany http://www.goldmoney.com/munich-2011-april-29.html World Resource Investment Conference Sunday-Monday, June 5-6, 2011 Vancouver Convention Centre East Vancouver, British Columbia, Canada http://cambridgehouse.com/conference-details/world-resource-investment-c... Gold Rush 2011 GATA's London Conference Thursday-Saturday, August 4-6, 2011 Savoy Hotel, London, England http://www.gata.org/goldrush2011-london Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT 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

QE2 is Damaging the Economy and Reducing GDP Growth Posted: 25 Apr 2011 12:52 PM PDT By Dian L. Chu, EconMatters QE2 is going to go down as one of the worst monetary policy initiatives in the history of the modern Federal Reserve era. On almost any metric applied, QE2 ends up not only falling well short of its proposed goals, but actually turns certain metrics like GDP growth negative compared with the prior quarter, and heading in the wrong direction. Costs Eat into Corporate Profits = No Hiring Analysts all over Wall Street are starting to revise their 2nd quarter GDP forecasts down, and some like Goldman Sachs have made several downward revisions as higher input costs due to a weak dollar are creating an additional burden on businesses and consumers and thus slowing economic growth. A weak dollar (Fig. 1) to a point can help exports, but an extremely weak dollar which in combination with QE2 liquidity juicing up commodities even further, turns out to be a net negative on the economy, and risks sending the economy into another recession. The reason for this is if businesses are having to eat higher input costs, and start to have lower margins, guess what? They start cutting costs again, and that means either stagnant employment practices or workforce cuts in the future. This would start sending the employment figures in the opposite direction, and negate much of the recent progress made over the last year. Increase Cost of Living = Consumer Pullback These higher commodity prices negatively affect consumers as well because they have to apply more of their income to food and energy needs, which means they have less discretionary income to spend for entertainment, retail shopping, vacations, traveling, and discretionary consumption which infuses the economy and creates jobs in the overall economy. And since the US is largely a consuming nation, if the consumer pulls back, then businesses are going to pull back as well. This linkage of events does not bode well for employment growth, and this shows how rising input costs not only hurt one of the fed`s mandates for price stability, but can also have a negative impact on their other mandate which is to increase employment. Increase Consumer Debt…& Defaults There is another angle we saw back in2008 with these same level of gas prices. Namely, consumers were feeling pinched by the jump in costs for food and energy (see charts below), so they started filling out credit card applications, and charging up their credit cards in order to pay for the additional costs to their weekly and monthly budgets for food and energy. In short, the higher costs for these items resulted in more debt for consumers. This means that the recent gains of consumers paying off their debts, and having more money to spend at retailers over the past year will start to reverse as consumers pay a higher percentage of their monthly budget in finance costs. The real damage starts to add up as consumers start to default on their credit cards as the high food and energy costs continue to be financed on credit cards until the consumer hits the breaking point, and just defaults. We saw a lot of this in 2008, and this is where we are heading again unless commodity prices start to come down in a rapid fashion. There are a large group of consumers whose monthly budget doesn`t allow for a 30% increase in gasoline prices at the pump, or a 10% rise in food costs at the grocery store. So they just pile up debt until they max out their credit cards. Dominos to Credit Card Issuers These increases in credit card defaults hurt businesses like banks and credit card firms as they have to write off more accounts, and thus their margins start to get squeezed. This means additional contractionary effects as they respond by cutting costs, and you can readily see how this starts to become a vicious deflationary cycle. Deflation by High Commodity Prices This is why high commodity prices are actually deflationary in the long run. Something the fed should think about the next time they embark on a dollar weakening campaign, whether intended or not QE2 has been a dollar weakening campaign. And for those of you who still do not understand the chain of events, and how the Federal Reserve is responsible in large part for higher commodity prices here is the chain of events. The Fed undertakes QE2 Initiative – States goal to raise asset prices  Assets trade as a group: Equities, Silver, Gold, Oil, Gas, Corn, Soybeans  The US Dollar is used as a carry trade with such low fed funds rate (0-.25%)  The Fed encourages investors to take more risk: Go out of safe assets like bonds, and go into riskier assets like commodities and stocks.  When traders take on more risk, they use more leverage-This means shorting the dollar, as part of the carry trade like a funding bank, to use these additional funds (leverage) to invest in risk assets like Gold, Silver, Oil and Dow Stocks.  The trade starts to work, reinvest profits to buy more risk assets.  Strong Trends emerge, attracting other traders looking to capitalize on trending markets.  Technical Analysis confirms the validity of the trade –The trade becomes self-reinforcing  The dollar is shorted more for leverage, other currencies strengthen against the dollar  Dovish Fed talk serves to reinforce the trade further, dollar weakens more.  OH NO! The US Dollar is falling apart, fear spreads: Investors really buy Commodities as an inflation hedge.   Other countries like China start worrying about a falling US Dollar: They hedge by investing in Commodities.  Higher Commodities = Higher Input Costs for Businesses and Consumers  Results in Lower Business Margins and Less Consumer Discretionary Income   Higher costs, lower profits, less consumption, less goods being sold and produced  Lower GDP Growth Rate as a result of QE2 once the US Dollar reaches critical level where commodity prices rise to the breaking point where businesses and consumers pull back.   QE2 Actually damaging the economy right now. Currency Crisis Looming So you ask, and I am sure this is the Fed`s thinking on this matter. Well, what can just another two months of QE2 do to hurt the economy? It is almost over anyway. Let`s just continue it through to the end. Well, it is that very thinking that has investors and foreign governments concerned about the future and stability of the US Dollar. A lot of countries and investors rely on the dollar as a store of value for their assets because it has the Reserve Currency Status. It can be weak, but if global investors start to have legitimate doubts about the safety of their assets parked and backed by the US Dollar, then we have a much bigger problem than just a slow recovery. We could end up in a currency crisis that takes down the entire global economy, thus sending us right back to where we were in the depths of the financial crisis. Silver Market Signals Irrational Investing But that is more macro analysis, and things would really have to spiral out of control to get to that stage, but it is possible, and that is why people are worried enough to buy physical Silver at $50 an ounce when it very well could be worth less than $20 an ounce once the rate tightening cycle begins. It makes no rational investing sense to buy Physical Silver during a low rate environment, because the investor will be stuck with a well under water investment in a 5% rate environment, unless there are legitimate concerns about the long term stability and security of the currency. The time to buy Physical Silver was when the Fed Funds Rate was 5.25%, and the time to sell Physical Silver is now during the last vestiges of an equivalent Zero Fed Funds Rate. This irrational investing in the Silver Market, based upon concerns regarding the long term stability and security of the US Dollar, is one of the unintended consequences of the QE2 Initiative, and from a macro standpoint should raise a few eyebrows within the Federal Reserve. Micro & Macro Effects The Federal Reserve should weigh not just the Micro benefits to a policy initiative, but also the macro effects as well. Furthermore, there are many unintended consequences and macro concerns created by the QE2 Initiative that merit careful study to avoid some of these same mistakes being repeated in the future by monetary policy initiatives. However, the more practical concern for the Fed is this--If they leave QE2 to finish out on course, and attach some dovish language to boot, investors will add another 50 cents to the price of gasoline at the pump, food prices will go up another 3 to 4%. After all, they have to pass on higher transportation costs to consumers. Businesses can expect higher commodity input costs for the next two months. The US Dollar will get even weaker, and GDP will be affected even more, as two additional months of damage will be pushing through the US Economy and Supply Chains. So this could result in the third quarter GDP be even more significantly revised down by economists. Benefits of Ending QE2 Early This is all to be juxtaposed with the alternative of ending QE2 early, which would lead to the US Dollar strengthening, and send a strong message to speculators, driving them out of commodities, and immediately reducing input costs for businesses and consumers. This cycle becomes reinforcing which leads to a further lowering in commodity prices as funds flow out of this asset class, thus providing an instant and even greater stimulus for the economy. In essence, the ending of QE2 this month, serves to jumpstart GDP Growth for the remaining two months of the 2nd quarter, which will then build some momentum going into the third quarter, and should boost 3rd quarter GDP growth, and set the stage for a robust 4th quarter GDP number. Significant Two Months  The momentum is the key; you either have an accelerating economy or a decelerating economy. And right now due to the effects of QE2 we are starting to decelerate, and another two months of deceleration makes it twice as hard to restart the acceleration process. So two months could make a huge difference in either creating or destroying momentum, and setting the growth rate pace for the remainder of 2011. The choice is obvious when asking the question regarding would the economy be better off without QE2 for the next two months? It is a resounding yes! Why this is even an issue at this stage seems more to do with the Federal Reserve saving face, than based upon any sound economic analysis of the facts at hand. Give Consumers a Break If President Obama wants to address the speculators for raising gasoline prices for consumers, he might want to investigate the real culprit in QE2. The easiest way to give consumers a break at the gas pump would be to end QE2 this month. The price of Oil, priced in Dollars, would drop like a rock as the US Dollar strengthens if QE2 is suddenly stopped, and Gasoline prices also trading opposite a weak dollar would start dropping immediately at the pump as the US Dollar strengthens. In summation, if President Obama wants cheaper gas prices for consumers over the next two months, then all he has to do is make a call over to the Federal Reserve. I hear they are having a meeting this week and are deliberating over the future of QE2. EconMatters, April 25, 2011 | Facebook Page | Post Alert | Kindle

Don't Fear a Pullback in Prices Posted: 25 Apr 2011 12:50 PM PDT If you compare the current bull cycle for gold against gold's run from the 1970s and 1980s, you can see that today's run has been slow and steady. It's also missing the sharp spikes typical of a bubble. Read More...

Paul to announce exploratory committee for presidential campaign Posted: 25 Apr 2011 12:47 PM PDT By The Associated Press via Yahoo News Monday, April 25, 2011 http://news.yahoo.com/s/ap/20110425/ap_on_el_ge/us_paul2012 DES MOINES, Iowa -- Texas U.S. Rep. Ron Paul plans to announce the formation of a 2012 presidential exploratory committee at an Iowa event. Drew Ivers, Paul's 2008 Iowa caucus campaign manager, says the Republican congressman will announce his plans Tuesday at a Des Moines hotel. An exploratory committee would allow Paul to raise and spend money toward a 2012 candidacy. Ivers says Paul also plans to name an Iowa campaign team. Paul finished fifth in the 2008 caucuses and has visited Iowa seven times since. He headlined an event in Sioux Center two weeks ago for a social conservative group, and he spoke at a rally for Christian home-school advocates at the Iowa Capitol in Des Moines last month. Paul is a favorite among libertarians and enjoys strong backing by many tea party supporters. 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 Join GATA here: An Evening with Bill Murphy and James Turk Sponsored by Deutsche Edelmetall-Gesellschaft Friday, April 29, 2011 Hofbrauhaus, Munich, Germany http://www.goldmoney.com/munich-2011-april-29.html World Resource Investment Conference Sunday-Monday, June 5-6, 2011 Vancouver Convention Centre East Vancouver, British Columbia, Canada http://cambridgehouse.com/conference-details/world-resource-investment-c... Gold Rush 2011 GATA's London Conference Thursday-Saturday, August 4-6, 2011 Savoy Hotel, London, England http://www.gata.org/goldrush2011-london Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: World-Class PGM Deposit in Yukon Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php

Ron Wortel: High Gold Prices Raise Old Mines Posted: 25 Apr 2011 12:42 PM PDT Dramatic rises in metals prices over the past 2 years could bring 10 or more past-producing mining camps back to life. MineralFields Group's Engineer and Investment Analyst Ron Wortel shares how he finds promising gold juniors working these mines and structures tax-advantaged, flow-through investments to finance Canadian resource development.

Silver - 8 hour chart update Posted: 25 Apr 2011 12:42 PM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] The chart shows a very large volume spike on the big down candle suggesting the presence of long liquidation in a large way as many bulls rang the register once it appeared that the market was not going to take out $50. It is however a bit tricky reading this because we are also now into rollover activity where traders begin moving positions out of the May contract, which will soon be going into delivery, and into the July, which will then become the most active contract. Some of that activity tends to distort the overall volume readings. Nonetheless, the big volume down day is technically significant. Open interest in the July is now larger than the May by the way so I will soon be shifting my analysis to that contract once its volume exceeds that of the May. I should note two significant occurences here. First of all, there STILL IS NOT SHORT COVERING on a large scale occuring in silver base...

Eric de Carbonnel: Acquiring AIG, U.S. govt. assumed huge commodity shorts Posted: 25 Apr 2011 12:41 PM PDT 8:35p ET Monday, April 25, 2011 Dear Friend of GATA and Gold (and Silver): In commentary posted tonight at 24hGold, Eric de Carbonnel of Market Skeptics discloses that in taking over the bankrupt insurer and derivatives game player AIG the U.S. government apparently inherited a huge commodities short position -- which, of course, doesn't include the short positions in gold and silver nominally held by J.P. Morgan Chase and HSBC, which in all likelihood also are U.S. government market-manipulating positions. De Carbonnel's commentary is headlined "AIGFP's Massive Short Position In Commodities (Which Now Belongs to the Government)" and you can find it at 24hGold here: http://www.24hgold.com/english/news-gold-silver-aigfp-s-massive-short-po... Or try this abbreviated link: http://bit.ly/i6F6qC CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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 Sponsored by Deutsche Edelmetall-Gesellschaft Friday, April 29, 2011 Hofbrauhaus, Munich, Germany http://www.goldmoney.com/munich-2011-april-29.html World Resource Investment Conference Sunday-Monday, June 5-6, 2011 Vancouver Convention Centre East Vancouver, British Columbia, Canada http://cambridgehouse.com/conference-details/world-resource-investment-c... Gold Rush 2011 GATA's London Conference Thursday-Saturday, August 4-6, 2011 Savoy Hotel, London, England http://www.gata.org/goldrush2011-london Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT 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

APMEX offers big premiums to purchase gold and silver eagles Posted: 25 Apr 2011 12:31 PM PDT 8:30p ET Monday, April 25, 2011 Dear Friend of GATA and Gold (and Silver): Zero Hedge reports tonight that a major precious metals dealer, American Precious Metals Exchange (APMEX) in Oklahoma City, today began offering a $38 premium over the spot gold price to purchase any amount of 1-ounce U.S. gold eagle coins and a $3 premium to purchase any amount of 1-ounce U.S. silver eagle coins. The APMEX flyer reproduced at Zero Hedge says the premiums are offered so the firm can meet "incredible" demand from buyers. After all, even imaginary Comex gold and silver are getting a bit pricey lately. The Zero Hedge report is headlined "APMEX Starts Reverse Inquiry: Seeks to Buy 'Any Quantity' Of Silver from Clients at $3 over Spot" and you can find it here: http://www.zerohedge.com/article/apmex-starts-reverse-inquiry-seeks-buy-... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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 Sponsored by Deutsche Edelmetall-Gesellschaft Friday, April 29, 2011 Hofbrauhaus, Munich, Germany http://www.goldmoney.com/munich-2011-april-29.html World Resource Investment Conference Sunday-Monday, June 5-6, 2011 Vancouver Convention Centre East Vancouver, British Columbia, Canada http://cambridgehouse.com/conference-details/world-resource-investment-c... Gold Rush 2011 GATA's London Conference Thursday-Saturday, August 4-6, 2011 Savoy Hotel, London, England http://www.gata.org/goldrush2011-london Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT 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/.

Parabolic Silver Posted: 25 Apr 2011 12:06 PM PDT It's the hot topic of the moment, and everyone is offering an opinion, so I'll be succinct. The question I am asking myself is, do I want to take partial profits on silver here?

The Dollar's Omnious New Record Posted: 25 Apr 2011 12:04 PM PDT Clusterstock (25 Apr 11)

Sell Silver Posted: 25 Apr 2011 12:00 PM PDT Appears Scotty got it wrong again. We said to beam us up, and he beamed us back. All of a sudden we seem to have returned to 2008. Perhaps, though, we should not be so tough on Scotty. The Federal Reserve had a hand on the controls too, continuing the longest running stretch of asset price distortions in all of history. Think of 97-year-old sports team with one winning season, 1953.

Apmex Starts Reverse Inquiry: Seeks To Buy "Any Quantity" Of Silver From Clients At $3 Over Spot Posted: 25 Apr 2011 11:22 AM PDT Over the past hour Zero Hedge has been inundated with reader comments notifying us that Ampex has, validating the earlier post speculating about a possible silver shortage at the metals distributor, launched a "reverse ïnquiry" in which it will pay "you $3.00 over the current spot price of Silver for your Silver American Eagles. ANY year, ANY quantity!" and "We will pay you $38.00 over the current spot price of Gold for your Gold American Eagles. ANY year, ANY quantity!" So aside from this first public confirmation that one of the biggest wholesale retailers of precious metals is now inventoryless [sic], we can certainly see why Asia has decided to take silver down in the afterhours electronic session.

Ron Paul Launches Presidential Campaign, Tells Truth To Whoopi's View Posted: 25 Apr 2011 11:17 AM PDT Well, it's official: Ron Paul has launched his 2012 presidential campaign. Per the National Journal: "Rep. Ron Paul, R-Texas, whose outspoken libertarian views and folksy style made him a cult hero during two previous presidential campaigns, will announce on Tuesday that he's going to try a third time. Sources close to Paul, who is in his 12th term in the House, said he will unveil an exploratory presidential committee, a key step in gearing up for a White House race. He will also unveil the campaign’s leadership team in Iowa, where the first votes of the presidential election will be cast in caucuses next year." More: Paul, 75, ran as the Libertarian Party candidate in 1988, finishing with less than one half a percent of the vote. After more than a decade as a Republican congressman, Paul gave it another shot in the 2008 presidential election, gaining attention for being the only Republican candidate calling for the end to the war in Iraq and for his “money bomb” fundraising strategy, which brought in millions of dollars from online donors in single-day pushes. Paul took 10 percent of the vote in the Iowa caucuses and 8 percent in New Hampshire’s primary. He finished second, with 14 percent of the vote, in the Nevada caucuses, and eventually finished fourth in the Republican nominating process with 5.6 percent of the total vote. Paul’s campaign book, The Revolution: A Manifesto also reached No. 1 on The New York Times best-seller list in 2008. Unfortunately, with the ridiculous publicity stunt that is the parallel campaign of Trump, whose only redeeming feature is that he knows more about bankruptcy and nuisance value than any other human being alive, a feature that will come in very handy to the US over the next 5 years, it would appear that Paul's campaign has the usual snowball's chance in a corrupt 7th circle of hell... Which is sad, because Paul, with all his faults, really continues to be the only sane alternative to completel meltdown of this once great country. That said, we hope Paul has more appearances such as this on The View, where he did not pander to his female hosts, and told the truth about many contentuous issues including the military industrial complex, planned parenthood, and the US outlook. One piece of advice for Ron: stay away from Bruno please.

Gold settles at record; also hits intraday record Posted: 25 Apr 2011 10:59 AM PDT By Claudia Assis and Chris Oliver, MarketWatch April 25, 2011 (MarketWatch) — Gold settled at a record and silver rallied 2.4% Monday as inflation fears kept investors attracted to precious metals, which were also helped by a weaker dollar. Gold for June delivery added $5.30, or 0.4%, to end at $1,509.10 an ounce on the Comex division of the New York Mercantile Exchange. Earlier, it hit an intraday record of $1,519.20 an ounce. That was gold's sixth consecutive high-water mark and its eighth straight day of gains. May silver rallied $1.09, or 2.4%, to $47.149 an ounce. It had traded as high as $49.82 an ounce. … Investors booked some profits in both metals Monday, said Bart Melek with TD Securities in Toronto. For silver, "the trajectory might be too steep," bringing to some investors' minds an asset bubble, Melek added. … Meanwhile, news reports in China said Beijing is considering the setup of an investment fund targeting sectors such as energy and precious metals, as well as a special fund geared toward foreign-exchange stabilization…. The fund would be structured to intervene in the foreign-exchange market and buy foreign-currency notes without the government having to print new yuan-denominated currency notes, the report said. The reports said the central bank's balance sheet would also be extended to support investment in precious metals and other commodities. [source]

No Passport For You? Posted: 25 Apr 2011 10:20 AM PDT The 5 min. Forecast April 25, 2011 12:39 PM by Dave Gonigam – April 25, 2011 [LIST] [*]Busybody Alert: State Department wants to know all your former addresses and employers before handing out a passport [*]"A ridiculous notion"… It's Doug Casey's turn to take a whack at the "gold is a bubble" blather [*]Abe Cofnas on the currency market's "balancing act" going into Fed-Wednesday… and how to play it [*]Termites destroy $220,000 in paper currency, police looking at bank officials for "negligence" [*]Readers chime in on taxing and spending… plus a "pie" chart that really puts things in perspective [/LIST] We can't vouch for the verity of the following story, relayed to us by a reader. But in light of our item last week about Congress considering withholding passports from people who owe money to the IRS, it has the ring of truth: "Was on a flight from Costa Rica last week. The plane was delayed for 30 minutes or so on ta...

In The News Today Posted: 25 Apr 2011 10:01 AM PDT View the original post at jsmineset.com... April 25, 2011 08:29 AM Afternoon Thought The risk of supporting the dollar at such an obvious point at USDX .7400 is to make that number more important than .7200 in market terms.   Jim Sinclair’s Commentary The choice is simple: QE or default, because there is no solid balance sheet economic recovery in the Western world. The dollar will go down in flames before the US defaults on anything. US default could be disastrous choice for economy WASHINGTON (AP) — The United States has never defaulted on its debt and Democrats and Republicans say they don’t want it to happen now. But with partisan acrimony running at fever pitch, and Democrats and Republicans so far apart on how to tame the deficit, the unthinkable is suddenly being pondered. The government now borrows about 42 cents of every dollar it spends. Imagine that one day soon, the borrowing slams up against the current debt limit ceiling of $14.3 trillion...

The Comfort of Low Interest Rates Posted: 25 Apr 2011 10:00 AM PDT In this video that makes up in content for what it lacks in production quality, Bruce Krasting asks some of the same questions that others are asking about U.S. borrowing and the comfort – false or otherwise – currently provided by low long-term interest rates. Recall from this item last week that interest rates are surprisingly terrible at predicting debt crises in the near-term since, for a very long time, things seem to be going along smoothly until you wake up one day and borrowing costs are rising about as fast as the silver price.

Capital Context Update: Debt Down on a Dull Day Posted: 25 Apr 2011 09:48 AM PDT From Capital Context Only Asian FX is weaker against the USD since Thursday's close but Silver was the clear star of the day with some serious swings Somewhat impressively, volumes managed to tail off even more incredibly on this RoW holiday as S&P futures traded 1mm contracts less than the recent average, and NYSE aggregate volume was around 75% of recent average levels. Stocks managed to hug the VWAP (and unch line) as we pointed out in the Midday Movers today was a huge possibility and credit markets stayed at their wides of the day all afternoon - just barely wider. Equities (unch) managed to algorithmically outperform credit (wider) and un-sync from correlation and vol on the day amid rather tepid conditions. Silver was the star of the day (until NFLX earnings after-hours generated some serious rebates) with an always predictable margin hike adding to the excitement into the close. The USD is still weaker vs all of our comparisons from Thursday's close (as seen in the upper chart) except for Asian FX which is very marginally weaker (ADXY in the chart). We discussed the relative selling pressure we were seeing in CDS and secondary bonds and the relative strength in Treasuries early on today and that theme remained all day though the afternoon saw some buyi8ng come back into financial bonds. Putting two and two together with modestly stronger FX and weaker Silver makes for an interesting derisking perspective but on such a low volume day, we are not easily convinced.   Macro prints were anything but supportive and while we did sell-off a little in stocks early on, the machines were in charge as we reached back up to VWAP and clung within 1-2pts of it for the afternoon. We have shown these charts many times (and discuss them with some of our clients) but it is fascinating just how many times the VWAP-reversion algos and standard-error bands (of VWAP) will contain price action on both quiet and active days. S&P futures clung to VWAP and its standard error bands - in our view showing more algo-driven sensibilities than any marginal risk-taking human. The reason we highlight it is simple - all too often equity indices provide little real insight into the real action occurring under the covers in global risk allocations - or put more simply, following shifts in the capital structure context (debt, equity, and vol) from a bottom-up perspective intraday (and on broader time-frames) can often signal interesting shifts in regimes. This is why we spend so much time looking at intra and inter-asset relationships and furthermore enables us to scrape away some of the noise in search of signals. On a day such as this, we trust the credit markets more than the equity markets (with their lack of algo-driven reversion behavior and potentially larger more professional players involved). In credit we opened modestly tighter from Thursday's close and did nothing but widen all day long to end the day at the wides of the session and a tad wider close-to-close in IG for the widest close since last Tuesday. HY opened unch and slipped very minimally lower in price (wider in spread), also ending at its widest since last Tuesday. Perhaps most interesting was the flattening in 3s5s curves that was evident in both the indices as well as a majority of single-names today. HY saw 3Y 8.5bps wider vs 5Y 4bps wider (yes small moves but still). HY perhaps was driven by some index arbitrage at the 3Y level but the reflection in HY secondary bonds mirrored this with net selling in HY relative to net buying in IG (though we do note that much of the improvement from our Midday Movers comment in IG net flow was due to a reawakening of demand for financials debt. Morgan Stanley and Wells Fargo issues were the most bid with longer-dated issues dominating short-dated - 7-12Y most bid versus <3Y most offered. Somewhat cleaning up the picture we note that MS CDS underperformed today and this region of maturities looked a little rich earlier on today relative to CDS-implied valuations - i.e. someone liked the look of some longer-dated basis trades. For this reason, we would not read too much into the re-emergence of the bid for financials - especially since Treasuries continued to rally into the close - extending the rotation theme that we discussed this morning. Monolines, Builders, and broad finance names were weaker today in CDS land with insurers more mixed (looking like low beta preference) as breadth was quite negative in credit - around 3 wideners to each 2 tighteners and the same ratio in flatteners to steepeners in 3s5s - another concerned theme we have been highlighting recently. ABX tranche prices also dropped quite handily today making us wonder if that was maybe a little behind the moves in monolines/builders for hedgers. Our broad credit index is marginally wider overall and it was clear that higher beta names were underperforming today in credit land (examples include Sabre Holdings, Community Health, MBIA, Amkor Tech, and Eastman Kodak). Some consumer finance names seemed to outperform (SLM, SFI) but there was little thematic move to talk of aside from high spread underperformance and more up-in-quality rotation in single-name credit. Telecoms, Tech, and Media were the worst performing sectors in aggregate while Capital Goods, Energy and Utilities were the best performers - certainly not the most risk-on of days. In vol land, VIX was up on the day but it was all gap from the open and while implied correlation was up earlier, it drifted off as the day went on implying taht single-name vols were relatively bid as the day wore on. Interestingly this vol bid was most apparent in the lower beta names in our universe - suggesting some protection being bought on the 'safer' names while the riskier names (as we have already discussed) were being marginally unwound. SPY skews rose once again (OTM vols rose more than ATMs) and remain near record steeps in three-month (though less so in six-month) - QE2 end?   Credit and Equity moves normalized today showing Financials and Consumer Cyclicals credit outperforming and Transports disconnected. Contextually , 51% of CDS were wider in our capital structure universe while 60% of equities were down since Thursday's close. 92% of single-name vols rose though and that vol move was more evident in lower beta names (on average) than higher beta. We do point out that the largest rises in vol were in the crossover space (BBB to B rated names) with the better quality names seeing far less of a bid in vol - more rotation into quality. Equity was pretty mixed across qualities as was CDS with litle discernible credit quality theme bottom up. Based on our framework, Basic Materials and Consumer Non-Cyclicals saw the best relative performance of credit over equities today while Transports, Utilities, and Consumer Cyclicals saw the worst credit performance relative to equity performance. CSCO, YUM, HSP, PLD, and WEN were among the most divergent in terms of credit underperforming expectations based on equity and vol moves. AVT, ABX, HIG, KMB, and CLX were moang the most divergent in terms of credit outperforming expectations on the day relative to the rest of their capital structure. Bottom line for us today was such a low volume day leaves us a little non-plussed with anything in equity-land and the fact that credit underperformed equities at the same time as Treasuries outperformed equities (beta-adjusted) makes us wonder if some risk-off was on hand ahead of Wednesday's Bernank-a-palooza. Up-in-quality remains in cash and synthetic credit and protection in vol seems bid again (for now) and for those that prefer their wealth effect in real terms, we kindly remind you that the S&P is now -0.12% YTD (adjusted for DXY). No European or Asia coverage since markets were closed. Index/Intrinsics Changes CDX16 IG +0.4bps to 93.65 ($-0.01 to $100.24) (FV +0.08bps to 91.11) (58 wider - 52 tighter <> 53 steeper - 70 flatter) - No Trend. CDX16 HVOL -0.86bps to 150 (FV -0.24bps to 149.9) (10 wider - 19 tighter <> 11 steeper - 19 flatter) - Trend Tighter. CDX16 ExHVOL +0.8bps to 75.86 (FV +0.17bps to 73.25) (48 wider - 48 tighter <> 54 steeper - 42 flatter). CDX16 HY (30% recovery) Px $-0.14 to $102.42 / +3.4bps to 440.5 (FV +2.42bps to 422.97) (60 wider - 35 tighter <> 45 steeper - 55 flatter) - Trend Tighter. LCDX15 (70% recovery) Px $0 to $101.375 / -0.19bps to 232.27 - Trend Tighter. MCDX15 -3bps to 141.5bps. - Trend Tighter. ITRX15 Main +0.25bps to 99bps (FV-0.01bps to 101.48bps). ITRX15 HiVol -0.13bps to 137.5bps (FV-0.39bps to 135.78bps). ITRX15 Xover +0.2bps to 364.2bps (FV-0.53bps to 353.89bps). ITRX15 FINLs -0.85bps to 133.9bps (FV+0.52bps to 135.98bps). DXY weakened 0.12% to 74.02. Oil fell $0.1 to $112.19. Gold rose $0.4 to $1506.65. VIX increased 1.08pts to 15.77%. 10Y US Treasury yields fell 3.5bps to 3.36%. S&P500 Futures gained 0.02% to 1331.3. Spreads were mixed in the US with IG worse, HVOL improving, ExHVOL weaker, and HY selling off. IG trades 1.8bps wide (cheap) to its 50d moving average, which is a Z-Score of 0.6s.d.. At 93.65bps, IG has closed tighter on 122 days in the last 595 trading days (JAN09). The last five days have seen IG flat to its 50d moving average. HY trades 18.1bps wide (cheap) to its 50d moving average, which is a Z-Score of 0.8s.d. and at 440.45bps, HY has closed tighter on 60 days in the last 595 trading days (JAN09). Indices typically underperformed single-names with skews widening in general. Comparing the relative HY and IG moves to their 50-day rolling beta, we see that HY underperformed by around 1.1bps. Interestingly, based on short-run empirical betas between IG, HY, and the S&P, stocks outperformed HY by an equivalent 3.4bps, and stocks outperformed IG by an equivalent 0.4bps - (implying IG underperformed HY (on an equity-adjusted basis)). Among the IG16 names in the US, the worst performing names (on a DV01-adjusted basis) were Transocean Ltd. (+7.53bps) [+0.06bps], Barrick Gold Corp. (+5.25bps) [+0.04bps], and MDC Holdings Inc (+3.83bps) [+0.03bps], and the best performing names were SLM Corp (-8.94bps) [-0.07bps], RR Donnelley & Sons Company (-5bps) [-0.04bps], and Whirlpool Corp. (-3.53bps) [-0.03bps] // (absolute spread chg) [HY index impact]. Among the HY16 names in the US, the worst performing names (on a DV01-adjusted basis) were Sabre Holdings Corp (+40.42bps) [+0.39bps], Community Health Systems Inc (+27.56bps) [+0.26bps], and MBIA Insurance Corporation (+37.19bps) [+0.26bps], and the best performing names were Boyd Gaming Corporation (-15.83bps) [-0.15bps], Realogy Corporation (-15.93bps) [-0.14bps], and Goodyear Tire & Rubber Co. (-12.99bps) [-0.13bps] // (absolute spread chg) [HY index impact].

QE 3 is Coming… It’s Just a Matter of What Form It Will Take Posted: 25 Apr 2011 09:40 AM PDT The Fed will absolutely have to engage in some kind of QE. It might be a toned down version like QE lite (which supposedly doesn’t involve additional money printing). Or the Fed might try to make it a QE that would be more palatable to homeowners (targeting mortgage rates or some such thing).   However, the fact remains that the Fed HAS to continue with QE of some kind. The reasons for this are:   1)   The $180+ TRILLION interest rate based derivatives market (90+% all of which are owned by the TBTFs) 2)   The debt implosion a spike in interest rates would have 3)   Having become the primary buyer of US debt, the Fed must continue to buy or risk a debt collapse in the Treasury market   Whether or not you like QE (yes, there are some insane people who think it’s a good idea… unfortunately they work for the Fed), this is the reality our financial system faces.   Indeed, if the Fed were to quit QE for good the resulting crisis would make 2008 look like a picnic (the 2008 collapse was triggered by the CDS market which was only $50-60 trillion in size, les than one third of the interest rate based derivatives market).   So more QE is on the way. Which ultimately will result in the US Dollar collapsing. In fact, the only reason the Dollar hasn’t collapsed already is because it’s priced against a basket of similarly flawed currencies.   In other words, we’re pricing junk (the Dollar) with other junk.   The whole point of all of this is that inflation is coming in a BIG way. What we’ve seen so far is nothing compared to what’s going to hit once the US Dollar breaks to new all-time lows (at the pace we’re going this will hit within two months).   So 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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